I'm most bullish on bitcoin when I read articles such as this one, and most skeptical when I read the thoughts of the bitcoin believers. It's truly the most interesting technological development in years, if only because it reveals how little anyone really understands money or economics.
Here's another interesting (though imperfect) way of thinking about bitcoin: it's a decentralized corporation, where bitcoins are ownership shares and the business is money transfer, like a decentralized Western Union. And for further thought, could other types of businesses also be structured in this way?
It is amazing how one word "COIN" added to this word has shaped everyone's thinking. Would we treat it the same if the guys behind it named it "Bitcard" or "Bitpoint?"
That one word is what set apparently most people to speak of it, and treat it as money.
BC is nothing like Money. BC is a card trading game where the players make the cards, the difficulty to make cards increases , and the value of the cards is decided by the market. It's a fun geek game. Awesome.
BC is everything money as we know it today is not. Money followed value creation (something made, something done).
Bitcoin was created, valued at X, AND THEN looking for value to replace.
> It is amazing how one word "COIN" added to this word has shaped everyone's thinking.
Yeah, Bit-distributed-public-ledger doesn't have the same ring, but I feel like there are a million problems that can be solved with this technology that are barely being explored.
Namecoin is one example, a distributed DNS system, but it feels like that's just scratching the surface of problems that require allocating sparse control over many decisionmakers.
Because you can circumvent the centralized authority of DNS registrars. Look at the Pirate Bay, who keeps having its domain names revoked by central authorities. Namecoin's ledger allows people to agree on who has what domain name without using a standard registrar
In that case I don't get it... do I basically get a random name when I mine a namecoin? And then I try to buy names I actually want from someone who has the name I want? And if no one has the name yet then I have to wait until someone mines it?
I don't know the details, but you do still mine coins into a wallet and all that stuff, there are just special types of transactions where you post a bit of data to the blockchain and that data is the domain name you want registered.
Exactly this! Bitcoin is much more interesting as way of representing CREDIT, not MONEY. Credit is much older and much better way of representing of how humans make contracts with each other. Money is a sideline invention we did to make it possible to pay soldiers for fighting. (Soldiers are inherently bad credit risks because they kill and die for a living).
People perceive money to be something of intrinsic value (Or that it _should_ be that. Krugman's complaint about arguing normative versus positive is at play here, for sure). People perceive credit as merely a record of a debt.
The gold-standard freaks seem to not understand this non-difference. A large subset of folks who ideologically back Bitcoin also indulge in this fantasy.
"BC is nothing like Money" - care to explain this?
What does it mean to be money? I like the definition that money is what we value not for its usefulness in itself - but because we speculate that we'll be able to exchange it for something useful. And bitcoin fits this definition perfectly.
Bitcoin has a funnel, just like any other business or technology platform. Branding is a form of marketing, and it's marketing's job to raise interest. This is the first tier of the funnel. Interest gives way to being able to understand how a given technology is important to us. This is the second tier. Next, those of us that fully understand how Bitcoin works begin to spread the word about how it's reliable and how it could possibly change the world. This is the third tier. As implied trust comes online for Bitcoin for the general population, it will move to wide-spread adoption. That's the fourth and final tier.
We're still in the second tier, which means people are still asking "why should we care?" and vocalizing their fears about something they don't understand. With technology adoption rates increasing over the last year (due to the greater interconnects we have via the Internet) I'd suspect we'll see the start of the third tier in 3-6 months, tops. As fears give way to trust, we'll all settle into a routine with the technology by the end of the year.
The fact that your comment is correct and wrong at the same time is what really raises red flags for me with regards to bitcoin.
Let's look at what you find if you were somebody searching up bitcoin for the first time. You would eventually land on http://bitcoin.org/en/. bitcoing.org describes bitcoin as open source P2P Money. It says "Bitcoin is an innovative payment network and a new kind of money". You go on Wikipedia and you get "Bitcoin is a peer-to-peer payment network and digital currency based on an open source[6] protocol, which makes use of a public transaction log".
The creators and early adopters of Bitcoin clearly wanted it to be used as a currency and as money, but it is being done in an unconventional way, to say the least. Unfortunately, none of us seem to understand this so everyone thinks that if it is supposed to be money at its root, it should behave like money does.
Bitcoin is such new and uncharted territory that most of us do not know what to expect. We are all wondering how these virtual coins are able to stand and hold value on the mere fact that people are exchanging them among one another for nothing other than speculating that they will benefit from the exchange in a future exchange (their really is no benefit you feel right away, such as their would be if you bought something with cash, as many places do not accept bitcoin). But at the same time, I feel that when money in the form of paper bills was first introduced, there had bound to be people wondering the same thing. After all, taking a step back, who would consider putting such value to pieces of paper that we do in today's day and age?
At the end of the day, I see what Bitcoin is trying to be and would be real happy to see it get there, but I also see what people think it is, a glorified internet point, their ticket to wealth.
> I feel that when money in the form of paper bills was first introduced, there had bound to be people wondering the same thing. After all, taking a step back, who would consider putting such value to pieces of paper that we do in today's day and age?
The thing with paper money, at least recently, was that it originally started out as being tied to gold. Instead of having to carry around gold for exchange, you would exchange these pieces of papers which were the equivalent amount in gold. However, once the idea of paper money became so entrenched governments realised they could remove the actual backing without many people saying "Hey wait a minute. These pieces of paper are now worthless."
If people had tried to introduce paper money originally without the gold backing, there's no way it would have caught on in the same way.
No, backing implies that someone has a legal obligation to supply something in exchange for the thing backed. Gold originally backed USD because paper dollars were literally a contract to pay the bearer a certain amount of gold. Gold and USD now have the same sort of relationship that USD and bitcoin do: neither USD nor bitcoin is backed by anything.
Both are still worth something, at the moment, though, which is all you need for an exchange to be possible.
Given how often Bitcoin is advertised, by its genuine proponents, specifically as a currency, this feels like an attempt to move the goalposts when someone points out that it doesn't do so hot at being a currency.
I am not a libertarian and do not have a political agenda, but it is imaginable that certain parts of the government could be replaced with the structure like this one.
I don't know how the transition could happen, but at the end, the mining in the network will be done by citizens, bitcoins will be named "bitvotes", and every citizen will mine those bitvotes, or they could be distributed fairy (one bitvote to each citizen). Then, the citizens could vote about anything with those bitvotes, and the bitcoin technology ensures that the voting is provably fair and verification of the correct voting results doesn't require any third party.
But again, this is not my agenda and I don't know if it would be good; I just say that the bitcoin technology invention allows this to happen.
Such a scheme has a huge flaw: it allows extortion/coercion. Suppose I am a mob boss and I wish to become (insert position here). I send my goons to inform you that voting for me is a wise decision because I can offer you protection from the vicious thugs in the area. It would be a shame if the vicious thugs burned your house down, wouldn't it?
So, you'd be forced to reveal your bitvote address to me under threat of violence. Once you vote, I just check that you voted for me. And if you didn't...
A real cryptographic voting system goes to great lengths to prevent this scenario. In such a system, a voter can prove to himself that his vote counted toward the proper party, but crucially the voter cannot prove such to anyone else. This prevents coercion.
Of course, real cryptographic voting systems have a bunch of other nice properties, but this is a really major one that most people overlook.
Example of a cryptographic voting system: Helios (https://vote.heliosvoting.org/). Also see the tech docs (http://documentation.heliosvoting.org/verification-specs/hel...). Helios is an online system, so it's not ready for prime-time voting --- it would need to be adapted into an in-person scheme, which cryptographers have already created --- but it does demonstrate the concepts involved.
I think there is a simple way to counter-act vote buying/coercion: if the voter has a mechanism to cheat the cheater. If I can accept a hundred bucks to vote A, then walk around the corner and change my vote to B in secret, it creates sufficient disincentive to buy or coerce votes.
It's not a huge flaw, since our current voting system (in any country you care to name) allows exactly that, and your scenario is not observed in the wild, since it is illegal.
The typical US voting system allows coercion? When I voted, I went into a publicly visible booth, recorded my vote, pressed submit, and went about my business. I suppose I could have been forced to take a picture with a cellphone, but I could have just selected the option they wanted, taken the picture, and then swapped back to the candidate I wanted. Is there something I'm missing here? Any way you slice it, even if the current system allows coercion, if we're talking about cryptographic voting systems, we might as well use ones that don't suffer the same issue.
> your scenario is not observed in the wild, since it is illegal.
I don't mean to be snide, but I've witnessed a great deal of illegal things, so "since it is illegal" is not that convincing.
Even if you discount the threat of violence because of the possibility of police intervention (e.g. you report being threatened), consider the notion of vote buying: a rich person just says they'll pay you lots of money to vote for them. This isn't necessarily something people would want to report, given the possibility of financial benefit, especially if the person is down on their luck.
At any rate, if electoral fraud is something that is "not observed in the wild", people sure do make a big fuss over it (see http://en.wikipedia.org/wiki/Electoral_fraud for some references).
Ah! Of course. You're right. I've never used an absentee ballot, so it completely slipped my mind.
This is actually why Helios voting (which is end-to-end auditable) doesn't prevent coercion either: your voting is done 'at range' (online), so a coercer can just stand over your shoulder. Just about the only surefire way to prevent coercion is to somehow physically give someone security while voting.
Okay, well, anyway, my point still stands; even if coercion is possible in the current-day low-tech system, if we're going to discuss a cryptographic replacement, we might as well restrict ourselves to the baseline "best-studied" ones so far, virtually all of which include coercion-defeating mechanisms.
At a minimum, if a physical presence were the norm with cryptographic voting and there was an option to be absent (like today), then we would be in an identical scenario with regard to coercion while gaining the end-to-end auditability of the cryptographic scheme. It seems like a net positive, although many critics of cryptographic voting see the increase in complexity as unworkable.
You're missing the fact that it's very possible to use coercion to discourage certain groups from voting at all. Just target the groups that are likely to vote for your opponent, and you've essentially used coercion to manipulate the election.
This is a problem which would be solved, somewhat ironically, by the US adopting mandatory voting. Shift a really nominal fine onto "not voting" (like $30), and it will become politically impossible to get away with marginalizing groups from voting.
Because people might ultimately think "well my vote probably wouldn't have mattered" when the line is 8 hours long on a Tuesday, but they will definitely care when they get fined $30 - but they're not going to simply argue the fine should go away, because it will be a little reminder of "oh yeah, and you didn't get a say in your government either!"
If I were Australian, I would have a problem with it, because I am what you might call a principled abstainer. But apart from personal issues regarding perceived rights violations, there are several obvious advantages and disadvantages, similar to any aspect of election design. I'm not saying compulsory voting is game-breaking, but merely that it's a compromise that one could argue is not desirable.
You're under no obligations to actually vote in Australia, just to show up. You can freely get your name ticked off, put a line through all the candidates and write "try harder" and walk out.
Fair enough. It's hardly the worst idea I've ever hear of, nor the most upsetting to be personally (the fact that "modern" Western governments still reserve the authority to perform military conscription is far worse). I would still prefer not showing up for paying the fine.
When I lived in Ecuador long ago, voting was mandatory. The people with your views ran a spirited campaign with posters that said "VOTA NULO", vote null. I'm not sure exactly how it worked there, but in some places there's an explicit "vote for nobody" choice, and those choices are counted and reported: http://es.wikipedia.org/wiki/Voto_nulo
Actually, people can and do sell votes this way in places in Italy. How they do so is extensively documented. It's one of the reasons that cameras are supposed to be strictly forbidden in voting booths - so they can't take a picture verifying how they voted.
>it allows extortion/coercion. Suppose I am a mob boss and I wish to become (insert position here). I send my goons to inform you that voting for me is a wise decision because I can offer you protection from the vicious thugs in the area. It would be a shame if the vicious thugs burned your house down, wouldn't it?
How is this different than what currently happens?
Our current voting system has an emphasis on the secret ballot.
There are records of which polling place a person voted at,
and whether they showed up to vote, but (in theory) there's no way to tell which of the thousands of ballots from that polling place match to which individual voter.
But there is also no way for us the verify a valid and safe vote. Especially with our lively die bold machines. I'll take the thugs, give me a fair vote.
People from several parties, in a public, observed location. It's not hard; it works here in the UK, and it worked in the US before all this voting machine nonsense started.
Voting is a solved problem. I’m not saying that the idea of using bitcoin technology to solve problems beside monetary systems is a bad idea (in fact, I think it’s a very interesting concept), but really, democracies around the world already have established and efficient voting systems that work well enough.
But I probably didn't explain it well enough. I didn't mean that you would vote which politicians will rule, you would vote on concrete decisions state such make. Nowadays, you vote politicians and they make decisions, and with blockchain network, you would directly vote for such decisions, making the politicians an unnecessary layer. ;-)
If what you're saying is true, then I'd like to know why Instant Runoff Voting seems so superior to binary voting schemes (like "democratic" or "republican" with the occasional "green" candidate acting usually as "democratic spoiler") and yet hasn't been widely implemented.
I'm not sure Bitcoin is money, at least not in the traditional sense. As I said on another thread: one of the reasons I think Bitcoin is probably a fundamental innovation is that nobody quite seems to know what it is, including me.
Nearly all Bitcoin's critics criticize it for being a poor replacement for cash, or for gold, or for some other traditional monetary unit. Automobiles are poor carriages too, and engines are poor horses.
I sympathize with some leftist critiques of deflationary currencies and libertarianism, but since I'm not sure Bitcoin is a currency I am not sure they are applicable. It is true that many bitcoiners have a libertarian/anarchist ideology, but I am not sure that matters much. A thing is what it is. Bitcoin is... whatever it is.
My current answer to that question is that any industry that relies on trust could be structured in this way. If DNS were implemented on a blockchain, purchasing that chain's currency would be betting on increasing demand for that chain's transactions, domain names. What other industries are fundamentally about trust?
In case you're not aware: there is a BitCoin fork which seeks to compete with DNS, called NameCoin. Though the primary purpose is domain resolution, it's also a generic key-value storage system using the block chain.
Verification and validation. Bitcoin gives us a way to change and extend the trusted third party system Cryptography has been built on since the 80s. Those schemes worked great in theory, but it turns out there are no trusted third parties to build them on.
Virtually any service that can feasibly be arranged and delivered online is fundamentally about trust, and you don't even need Bitcoin to solve many of those.
I'm reminded of an example which I believe was given by some libertarian writer, perhaps David Friedman. One big role of governments and private institutions is the regulation of service industries through testing and licensing. In many places it is illegal to provide legal advice without an official license, often from the government. But all you need is email and public key cryptography to solve that issue. A certain legal expert, known only by his public key, could develop a good reputation for providing good service in some jurisdiction, let's say California. He need not be legally licensed in California or even live in California. You can just email him your question, arrange some electronic payment (okay, Bitcoin could work here), and he can respond with legal advice signed with his private key. Bingo. You know for a fact that you received legal advice from someone with a good reputation for providing legal advice, which is precisely the point of government licensing for lawyers.
Yeah, just gonna be a suckers game for all those people who get burned by people who provide bad legal advice while we churn through figuring out who knows what they're talking about it and can build up that "good" reputation.
EDIT: I mean sure, some people are going to die of contaminated food. But once the trustworthy labs are known, everything will be fine! It's not like companies or people ever change in quality either so it will be good for all time.
Surely you know that government regulations in every industry also came after bad incidents in that industry. Similarly, cures for diseases tend to be invented after those diseases come into existence, and poor product reviews come after people have already bought the products.
You seem to be implying that government regulation prevents any bad incidences from ever occurring, when that is absolutely not the case. Heck, even with government licensing, most people still turn to non-government sources of information (namely reviews from previous customers) to determine which providers to use for things like lawyers and doctors.
Regulatory bodies were invented after it became apparent no one can trust private industry to act in the best interests of the public. The FDA was invented because blue milk was being mixed with wall plaster and sold anyway.
The onus, now, is to prove your product is safe. Not that it doesn't contain wall plaster. You have to prove you've taken precautions against deleterious outcomes at the outset.
And that's the problem you're not addressing: how, in providing legal advice, does a new player enter the game? And what do you do if everyone in it is actually really bad at what they do, but see no money in improving it?
You've managed to say "well the system as it is kind of works that way" and so your conclusion is "hey, let's strip away some protections, and definitely stop trying to think ahead about what outcomes we're trying to achieve."
Because you know, what could go wrong? Just hope you're not in the "learner experience" losses I guess. You sign up for unlicensed drug trials right?
> Regulatory bodies were invented after it became apparent no one can trust private industry to act in the best interests of the public.
Perhaps, but by now it should be apparent that no one can trust regulatory bodies to act in the best interests of the public either.
> And that's the problem you're not addressing: how, in providing legal advice, does a new player enter the game? And what do you do if everyone in it is actually really bad at what they do, but see no money in improving it?
How do things work now, in industries that are less regulated (like babysitting), or even in industries that are highly regulated (like restaurants)? I'm not an entrepreneur or a businessperson, so I don't really know, but I suspect that if I wanted to offer legal advice for a living, I would attempt to get statements from well-regarded individuals or organizations (perhaps experienced lawyers, or law schools) affirming my ability. I would use those statements to advertise my services. This is just a guess, based on what inexperienced lawyers already do in our current system.
> your conclusion is "hey, let's strip away some protections, and definitely stop trying to think ahead about what outcomes we're trying to achieve."
No, my solution is to strip away political authority, and with it the possibility of regulatory capture, a drawback which I think far outweighs the benefits.
> Just hope you're not in the "learner experience" losses I guess.
I've been to several bad restaurants, but my reaction is to give them a poor review rather than to wish for the government to ban them.
> You sign up for unlicensed drug trials right?
I don't sign up for any drug trials, but I might if there was an illegal drug I thought was necessary for my health but which was banned by regulatory agencies. And that has actually happened with the FDA.
Seems it's only decentralized to a degree. Go to the Bitcoin Foundation website, they say they want to keep Bitcoin decentralized. So how much influence does this Bitcoin Foundation have over the future of Bitcoin? No idea. There's only one (unpaid) Bitcoin developer responsible for the whole thing? Sounds like a tremendous responsibility for one person, considering what's potentially at risk. How are changes rolled out, how are changes vetted and to what degree are new changes a threat to Bitcoin's supposed ideals?
Whoever who convinces 50+% of the miners to adopt their version of the software wins.
The core developers can commit code and make releases that do whatever they want, but if they e.g. tried to pay all transaction fees to themselves, miners wouldn't install the new version and someone would fork the project.
How much control does any open source developer have over the projects they work on? Linus seems to have pretty tight control over Linux, but if he started messing up, he'd lose his position pretty fast. Likewise, the developers have a lot of control, as long as they are effective and behave well.
If a bunch of miners decide to change the protocol but the majority of users stayed on the old protocol then those miners would be mining a worthless (or at least less valuable) fork of the blockchain.
How many of the miners know how to evaluate updates? Most of these miners I read about, they bought some expensive hardware and just plugged it in. Is there some evaluation period before updates go live? Also, what if a seemingly innocuous change has unforeseen consequences? Nothing like Bitcoin has ever existed.
So far, changes seem to happen fairly slowly. Things are discussed ahead of time. Some kinds of changes are proposed ahead of time in the form of a BIP (Bitcoin Improvement Proposal) -- https://github.com/bitcoin/bips. Even tiny changes, that seem entirely reasonable to me, can generate controversy. Core developers ask each other to acknowledge each pull request.
If the developers tried to push something through that many miners wouldn't like, I'm confident people would notice and it would cause a large outcry.
> Seemingly innocuous changes can indeed have unforseen consequences.
The core Bitcoin developers seem conservative, reasonable, skilled, and they test things quite heavily. That said, changes are risky, and they've caused problems in the past. Bitcoin is risky!
Although I don't consider economics to be a science by any means, what I'm seeing generally on HN is that programmers have a very good understanding of the possibilities and applications of bitcoin (the protocol) but don't understand much about economics. Not even the basics and I'm not talking about Friedman, Marx, Aristotle, Smith, Keynes, etc.
It'd actually be possible to build distributed voting systems into this applications, such that changes require majority approval. It's also possible for new decentralized corporations to raise money by "IPO"-ing with a currency (Mastercoin raised ~5 million this way).
Searching for "distributed autonomous corporation" will find you all sorts of half-interesting, half-totally ridiculous garbage information on this topic. It's really fascinating.
It's all in the brainstorming stages. Distributed Autonomous Government is also theoretically possible, offering voluntary participation, transparent workings and direct democracy.
The problem that I have heard being stated before is that Bitcoin is associated with real money. This basically leads to the value of each Bitcoin increasing, and then early adopters making gains that they shouldn't really be making. I don't know how a system would look, where everyone starts off with X Bitcoin, though the current system feels wrong where some people now have $100s millions of Bitcoins and didn't do anything for them. This value should be re-distributed somehow.
... Why? It seems to me that it works the same as any system with early adopters willing to take on risk. People that got into twitter early make more than people who get in later, without any necessary correlation to how much work they've contributed. Early investors in a company often put in no work beyond their capital, should their shares be redistributed after it becomes a sure thing?
If bitcoin fails, the losses of those that went into bitcoin certainly won't be "redistributed", so why should the gains? Not to mention the current monetary system also has huge disparity so it doesn't really seem to be a property exclusive to bitcoin per se.
A system that offers no rewards to early adopters makes no sense because everyone is incentivized to just wait until it proves itself since the gains will be redistributed anyways, so why bother with the risk before it's a sure thing?
Bitcoin as an ecosystem is extremely complex, and even after trying to learn actively its pieces for about 6 months now, I feel I'm not very far passed the surface. I imagine most people will only dedicate the time and mental energy to basic micro- and macro-economics. People in general, the brain, is very bad in general at understanding and seeing the exponential effects of systems. It's nice to see contributions like yours that help balance out and show another part of reality. :)
I feel your comparison is apples and oranges, other than that the current structure of Bitcoin gives gain to early adopters, and early adopters / investors in a business potentially allows investors to have higher gains. However they are different systems.
Why can't the system exist just based on the incentive of the value that system brings? Why can't that be reward enough? The issue here is allocation of resources - to build and implement this structure and have it being adopted. The reason this is getting exposure is because businesses can make a profit, in a de-centralized Ponzi-scheme like structure - and with it being de-centralized giving it a huge amount of momentum and putting it to a holistic scale, where there can be lots/"unlimited" players perpetuating the system in different ways.
An alternative is the government implementing this system - and then why not the government (society as a whole) make those gains/rewards that occur? And I'd more imagine an international government than individual nations.
What I am trying to contrast it to is how it would look if everyone was already in this system, and then furthermore, if they were all brought into the system at once - having it mirror current resources and ownerships. This isn't easy to conceptualize either, as people's time is a resource - and what's the minimum value of a base unit of time?
Yes, giving reward speeds up how quickly the system will exist or seemingly be adopted by people, though it doesn't mean it's actually implemented in a secure and stable way. Its competitor is essentially money, so people who want to keep the status quo of money in place will be a very strong friction against Bitcoin. When people buy Bitcoin with real money, if they are the last ones, what they get from each Bitcoin will be less than what the early adopters do - which I feel is a very large disincentive for Bitcoin ever being fully adopted by everyone. And if 90% of people are now using Bitcoin for transactions, how much is real money actually worth? Those "late" adopters will not have places to spend that money, fewer and fewer, and so they end up absorbing the downside or rather they end up paying for the upside that current investors / early adopters are gaining. Is this wrong logic? If not, how is this fair? Simply saying "don't be the last!" isn't really an adequate response either. The value of real money won't decrease any time soon, though as a system similar to Bitcoin has higher adoption rate there will become a tipping point where people just won't accept real dollars in exchange for Bitcoin because they won't have as many places to spend it, it won't be as easily "liquidated."
The why is so you can create a system that doesn't punish or put "later adopters" at a disadvantage. If putting $1 in of current money into the system, and then the equivalent of $1 into the system 5 years from now gains you the same value, then that would be fair and balanced. There being a fixed amount of Bitcoin, that isn't structured to be immediately distributed to 100% of existing money, is a problem. It's currently structured to be a land grab, where land is a finite resource.
Perhaps I am missing some foundational understanding of how Bitcoin works and that is skewing my understanding and answers.
Who's an early adopter? Before December, every single day in bitcoin's history was a good day to invest and be an early adopter. But nobody knew at the time. They could have lost everything. Nobody knows when the final peak will be and if today is part of the early or late adopters stage.
Another point - Even late adopters can obtain millions of dollars worth of bitcoins just buy buying them with millions of dollars. In other words, people who are enormously rich with real money (by whatever unfair ways) can be enormously rich with bitcoins too. All we have is those same rich people plus a few new ones (early adopters). Someone who inherited a fortune can buy bitcoins and be another "unfairly" rich person. What difference does it make if they got their money from bitcoin luck, inheritance luck, or anything else?
It has to be structured such that there is first mover advantage otherwise there is no incentive for anybody to get on board and make it a thing in the first place.
The redistribution of wealth is something that we've learned to deal with once already (progressive taxation) so hopefully we can learn how to do it again with cryptocurrencies.
> people now have $100s millions of Bitcoins and didn't do anything for them. This value should be re-distributed somehow.
That is ridiculous. Those people invested early, which drove the price and popularity up, which adds legitimacy and publicity to the system. This is a perfectly fair reward for being on top of technological advances and understanding them enough to want to invest, I see no reason to rescind any of it.
Addressing inequalities of opportunity created as a result of historical factors which predate the adoption of a libertarian system is one of the problems with adopting a libertarian system (aka, the "Libertarianism, starting right now" problem). As Bitcoin is generally promoted from a libertarian orientation, Bitcoin must also face this issue.
Replacing one system of "I or my ancestors were smart enough to do this a long time ago" with another one does not particularly improve matters.
Indeed, they didn't do anything for those values to be increasing 'exponentially.' And landlord and rents cause problems such as gentrification and a reduced quality of life for all, among a few of the core problems.
"I'm most bullish on bitcoin when I read articles such as this one .... it reveals how little anyone really understands money or economics."
That is an incredibly arrogant statement, considering the article is from a Nobel prize winning economist and you did nothing to refute or undermine his actual points or references.
The point is about dismissing a Nobel winning economist with a two paragraph comment on HN concluding "how little anyone really understands money or economics". If you are going to play judge of economic expertise, a little more analysis is in order.
lol this this thisssss! bitcoin culture in a nutshell. the major economists & finance analysts say stuff like "explain how this is not a speculative bubble", for example, because they outright see it as one & the bitcoiners dismiss them as hacks because they didn't use a bunch of crypto buzzwords
More likely than either being particularly more likely than the other is that neither economists nor cryptographers are particularly likely to understand the other field.
yea but my view here is that you don't need to understand cryptography to derive the value of a Bitcoin. It is akin to other currency systems that have come before it. the crypto aspects are new, sure, & provide a good infrastructure that may give it staying power but the cryptography shouldn't actually be where the value comes from.
I think a sound economic analysis of the market can be done regardless of the transactional method. sure, it's clever but its a feature of a value store, not actual value
Here's another interesting (though imperfect) way of thinking about bitcoin: it's a decentralized corporation, where bitcoins are ownership shares and the business is money transfer, like a decentralized Western Union. And for further thought, could other types of businesses also be structured in this way?