Why Charles Stross Wants Bitcoin To Die In a Fire 691
Hugh Pickens DOT Com writes "SF writer Charles Stross writes on his blog that like all currency systems, Bitcoin comes with an implicit political agenda attached and although our current global system is pretty crap, Bitcoin is worse. For starters, BtC is inherently deflationary. There is an upper limit on the number of bitcoins that can ever be created so the cost of generating new Bitcoins rises over time, and the value of Bitcoins rise relative to the available goods and services in the market. Libertarians love it because it pushes the same buttons as their gold fetish and it doesn't look like a "Fiat currency". You can visualize it as some kind of scarce precious data resource, sort of a digital equivalent of gold. However there are a number of huge down-sides to Bitcoin says Stross: Mining BtC has a carbon footprint from hell as they get more computationally expensive to generate, electricity consumption soars; Bitcoin mining software is now being distributed as malware because using someone else's computer to mine BitCoins is easier than buying a farm of your own mining hardware; Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination and drugs and child pornography; and finally Bitcoin is inherently damaging to the fabric of civil society because it is pretty much designed for tax evasion. "BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions," concludes Stross. "The current banking industry and late-period capitalism may suck, but replacing it with Bitcoin would be like swapping out a hangnail for Fournier's gangrene.""
Pay for Laundry jobs with it (Score:5, Funny)
Re:Pay for Laundry jobs with it (Score:4, Interesting)
I don't understand this at all. I've never heard of Charles Stross and after skimming the Wikipedia article about him I fail to see why his opinion on Bitcoin is relevant.
To me this seems like the articles where some psychology professor bitches about why engineers should program robots with morality without understanding jack shit about automation and the precautions taken to make sure that failure happens in a controlled fashion.
In what way is Charles Stross opinion about Bitcoin more relevant than any other dudebro that doesn't know anything about economy, cryptography or anything else that would be relevant in understanding Bitcoins?
Seems to me that he have just heard someone who also doesn't know anything talk about it and formed an opinion from that.
Re:Pay for Laundry jobs with it (Score:5, Insightful)
Well, he's a sci-fi author, so he's probably spent a lot of time thinking about disruptive technology. He's a geek at heart, with a sysadmin and programming background, so his opinion probably isn't any worse than most of Slashdot's subscribers. On the economy? Well, none of us are probably very qualified to discuss it.
I would highly recommend his Laundry series, though.
Read the "Neptune's Brood" (Score:5, Informative)
Re:Pay for Laundry jobs with it (Score:5, Interesting)
The reason Stross' opinion might be worth paying attention to is his writing often revolves around economics, and people like Economics Nobellist Paul Krugman think he's solid on it: http://boingboing.net/2009/08/11/charlie-stross-and-p.html [boingboing.net]
Re:Pay for Laundry jobs with it (Score:5, Insightful)
All I know about your opinion on bitcoins is what you've posted about it in this comment (that you think it's worthless).
Charles Stross, on the other hand, has posted more than merely his opinion: he's also posted a cogent rationale for that opinion - one that contains details (with specific citations) that many a technically qualified geek may not have yet considered.
Taken in the context of his demonstrable interest in and fondness for the idea of decentralized societies and you have a critique that's worth considering - particularly by his reasonably large fan base (many of whom are slashdot readers, as evidenced by many of the above comments).
Re:Pay for Laundry jobs with it (Score:4, Interesting)
It's definitely worth considering, and if you haven't read the original article, you should. I don't agree with ALL of his points. E.g., I'm not at all convinced that an untraceable currency is a bad idea. Other of his points, however, are plausible. And one reason I came here was to see if anyone had and counters.
E.g., an inherently deflationary currency (becoming arbitrarily expensive to generate new values as the easy ones are computed) does seem like a bad idea. What would be better would be a currency where each new value required a fixed amount of effort, and where it would slowly decay in value if it weren't being transferred. (A half-life of 20 years seems about right, if the original creation of the value isn't too difficult.) But actual radio-isotopes aren't desirable, because you don't want it to be dangerous. Also it would be nice if trading it increased it's value.
N.B.: I don't say that such a currency is any ideal. Or has any plausibility. But I have my doubts about a currency with a fixed number of tokens of value.
It's also true that malware that mints bitcoins has already been discovered. So that worry about them isn't a hypothesis. One might wonder just how common such malware would become, but if they increase in value, one can expect that it will become more common. So that point of his is plausible.
Etc.
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Also look at the expanding nature of human activity around you then consider how poor a fit a deflationary currency would be to that. If you've got a lot of time the Neal Stephenson Baroque trilogy about
Re:Pay for Laundry jobs with it (Score:5, Informative)
Re:Pay for Laundry jobs with it (Score:5, Insightful)
Re:Pay for Laundry jobs with it (Score:5, Insightful)
I view with suspicion anyone who tries to use bogeyman arguments such as drugs and child porn as excuses to not adopt stuff.
0) Bitcoin transactions aren't magically anonymous.
1) HSBC laundered BILLIONS for the drug lords and got away by paying just 11.1% of their net profits. Other big banks did similar things and got similar weak "punishments". So I can safely say that bitcoin will never be as big a part of the drug problem as the US Government is.
Re:Pay for Laundry jobs with it (Score:5, Informative)
0) Bitcoin transactions aren't magically anonymous.
What is more anonymous than bitcoins? Paying an assassin a wad of cash. That is how these things have been done for centuries.
Bitcoins are harder to trace than say a wire transfer or a bankdraft but they are not perfectly anonymous. A fist full of cash is far more anonymous.
The only reason that bogeyman was brought up was because The Silk Road moron tried to pay for one with bitcoins. As for the rest of it, traditional means of payment have bought more assassins and child porn than all the bitcoin transactions, period.
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Sure they have serial numbers but good luck on tracing a envelope full of random twenty dollar bills that picked up all over the place.
Re:Pay for Laundry jobs with it (Score:5, Insightful)
That's what I understood, but even so, this part in the synopsis: "...with a Libertarian political agenda in mindâ"to damage states ability to collect tax and monitor their citizens financial transactions," really bothered me.
WFT does the state have any reason whatsoever to monitor my financial transactions.
If you think something illegal is going on with me, get a warrant, but otherwise, just fuck off and leave me alone, eh?
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The US federal government is constitutionally restricted from anything that can't be interpreted as an income tax (so my VAT suggestion fails as well).
No it's not. The 16th amendment authorized an income tax, but it's not like the feds subsisted off donations before that. Besides, when was the last time the federal government was meaningfully constrained by the limitations supposedly imposed on it by the constitution?
Re:Ending tax evasion (Score:4, Informative)
The US federal government is constitutionally restricted from anything that can't be interpreted as an income tax (so my VAT suggestion fails as well). The US constitution is fairly short, but mentions twice that any taxes collected by the federal government must be given to the states (proportion to population). Income taxes are specifically exempted from that requirement by the 16th amendment, but it remains for any other tax.
Only direct taxes [wikipedia.org] must be apportioned. Indirect taxes (things like tariffs, income tax, VAT) are allowed under Article I, Section 8, Clause 1 [wikipedia.org]. The Fuller [wikipedia.org] court did cause some complexity when they ruled that some income tax (specifically that derived from property) was a direct tax (previous understanding was that it was indirect). The 16th Amendment specifically patches the issue created by the Pollock case [wikipedia.org].
Mod Parent Article Down. (Score:5, Funny)
Bigger than Jesus? (Score:5, Informative)
BitCoin is bigger than Jesus.
How so? Google returns 124 million results for Jesus Christ and 40 million for Bitcoin.
Comment removed (Score:5, Funny)
Re:Bigger than Jesus? (Score:5, Funny)
Plus Jesus is more deflationary than Bitcoin since the world supply dropped from one to zero, briefly peaked at one again and then dropped back to zero and stayed there.
Just imaging if the church had also thought to hoard their Jesus. Due to the low supply, it would be worth so much that they'd have more money than Je... uh god.
Re:Bigger than Jesus? (Score:5, Funny)
Re:Bigger than Jesus? (Score:5, Funny)
That's because forgery is a big problem with the Jesus market.
Re:Bigger than Jesus? (Score:5, Funny)
Plus Jesus is more deflationary than Bitcoin since the world supply dropped from one to zero, briefly peaked at one again and then dropped back to zero and stayed there.
Spoken like a true heretic.
Any true believer [wikipedia.org] would tell you that the body of Christ is exactly like bitcoin:
It's thin, widely distributed, and turns to shit a few hours after its creation.
Bitcoin zealots have also been known to chant "Hoc est corpus meum, hic est calix sanguinis mei" while participating in the creation of bitcoins.
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BTW, I believe the reference is to when John Lennon said the Beatles were bigger than Jesus.
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Re:Mod Parent Article Down. (Score:5, Funny)
Whether or not Charles Stross is correct is irrelevant; BitCoin is bigger than Jesus.
So, what, it has 13 followers?
Yawn. Wake me when Bitcoin becomes something millions of people are willing to kill each other over.
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Since when is 6" x 4" x 4" a cube?
Since when are coffins only a hands-breadth in size?
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Since when is 6" x 4" x 4" a cube?
When you're travelling near the speed of light?
Re:Mod Parent Article Down. (Score:5, Funny)
Dune (Score:5, Insightful)
“Control the coinage and the courts -- let the rabble have the rest.” Thus the
Padishah Emperor advises you. And he tells you: "If you want profits, you must
rule." There is truth in these words, but I ask myself: "Who are the rabble and
who are the ruled?"
-Muad'Dib's Secret Message to the Landsraad from "Arrakis Awakening" by the
Princess Irulan
Re:Dune (Score:5, Funny)
Re:Dune (Score:5, Insightful)
That quote is basically paraphrasing Rothschild, "Let me issue and control a Nation's money and I care not who makes its laws" only with the acumen to correct at least one part of the reason for the decline of his dynasty, his failure to realise that retaining control of the money supply from your competitors means controlling the courts as well.
Science fiction is as legitimate a artistic expression as anything else, if not more legitimate because it is generally written by people who have a better understanding of nature than your average artist. If you are saying 'ignore all art when it comes to generating ideas', then I think you very closed minded. If you are saying 'science fiction is not art', then I think you are an idiot.
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Re:Dune (Score:5, Interesting)
One of the most blatant examples of foolish political ideas by science fiction authors is Gene Roddenberry's idea that advanced civilizations would have no money.
I'm not so sure Gene was that far off the mark. If you think about it money is basically a bartering tool to assist with the distribution of scarce resources. If you reach a point where resources are no longer scarce (sometimes called a post-scarcity society) then what would be the point of money? You want a mansion, order it up! You want a rocket ship to fly to Mars? Submit the requisition and the machines build it out for you. Too crowded on Earth? Grab a new residence on the ring-world being built around Alpha Centauri. And on and on. The Culture series of novels by Iain Banks envisions such a society, and I have to say it makes a lot of sense.
The part where Roddenberry's idealism got ahead of reason was in thinking it would happen that soon. I get the sense that we're still at least 1000+ years away from getting rid of money entirely. But if we don't blow ourselves up and we keep on developing tech at the current breakneck pace, I would say we will definitely eventually reach a point where money is no longer a necessary concept.
Re:Dune (Score:4, Interesting)
Except that some things will remain scarce.
There's limited amounts of land to put mansions on. There's limited amounts of mass to work with. There's limited numbers of other people to work with.
In Star Trek (TOS), there were a very limited number of starships, suggesting that they weren't free. (I never did understand the difference between a starship, like the Enterprise, and a spaceship capable of interstellar travel, usually offscreen.) The Enterprise was constantly running into people who didn't have unlimited material wealth. Cyrano Jones was negotiating tribble prices in "The Trouble with Tribbles", and seemed anxious to get free drinks, suggesting that alcohol was at least treated as a scarce resource. No Enterprise crew member worried about money, but they had demanding jobs that took them anywhere in the galaxy whether they wanted to or not, and could (and sometimes did) get them killed.
Moreover, we are in what would look like a post-scarcity economy to previous eras. If we had the political will, and wanted it so, we could easily provide everybody with shelter, food, medical care, etc., that would look almost miraculous to anybody from the Renaissance. We could give everybody a sword as good as anything a king had in those days, no problem. Most of our poor people live much better than 99% of medieval people. About the only advantage a 14th-century king would have over me was the ability to boss people around.
The only way we could have a true post-scarcity economy would be if we were able to manufacture robots for any need (including therapy, sex, and general companionship), and rationed out scarce things like land without money.
Re:Dune (Score:5, Insightful)
Well, if you outlawed every form of argument a simpleton can misconstrue, you might as well cut your own tongue out.
Literature is great way of raising questions. It's a lousy way of *answering* them. You should never walk away from a book convinced of anything, whether it is science fiction, historical drama, or a Harlequin romance. That's because an author controls the domain of discourse in fiction. He creates the fiction world and as much of its history, natural science, and society as suits his purpose. He can produce a socialist utopia or a Galt's Gulch, whichever serves his story -- or his biases.
As for the science fiction fan's supposed knowledge of nature, I'd be suspicious of it. While it's true that sci-fi fans often have familiarity with physical science and technology that exceeds the general public, that's hardly a ringing endorsement. In my writing group, I recently critiqued a manuscript in which Shiite terrorists, working under a Wahhabist imam, build a lithium deuteride super-warhead and launch it on an ICBM into equatorial orbit to cause world-wide destruction of electronic equipment via EMP. Now virtually *every* aspect of this scenario is demonstrably *wrong*. When I pointed this out, the author's reaction was "It doesn't matter." Now there's something to be said for this. All he really needs is the set-up for his post-apocalyptic adventure, and it could just as well be magic and pixie dust as EMP and lithium deuteride. But I feel that as far as you explain anything, that explanation ought to hold water.
The thing about scientific literacy is that it isn't knowledge of a bunch of random, disconnected facts (e.g. lithium deuteride is used in thermonuclear warheads) as it is a capacity to figure things out, like whether it is remotely feasible to take out the entire world with EMP from a single warhead. Basic fact-finding and simple computation.
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Summary is a troll (Score:5, Informative)
The link to Fourier's gangrene on Wikipedia is totally unnecessary, and the article includes an image that is decidedly not safe for work.
Captcha: unclean
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The image of Fournier's Gangrene on the Spanish Wikipedia is far, far worse, trust me.
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If education is not safe for work, you're in the wrong workplace.
If pictures of dicks are OK at work, you have the wrong job!
Re:Summary is a troll (Score:5, Insightful)
If pictures of parts of the human body presented for education are a problem, you're in the wrong society.
I long ago concluded that I am indeed in the wrong society.
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no advantages whatever over any other system.
Have you ever tried making a wire transfer? It takes days.
change the algorithm so it could create more bitcoins.
You'd have to convince all bitcoin users to use the new algorithm. Hard sell getting them to devalue their own money.
No, you need to convince enough people hosting bitcoin servers (read, *miners*) to devalue their currency... in exchange for a renewed gold rush. Pretty easy bait, really. The thing about BTC is that unless a state (or states) takes over administration of the code (it can still be open, just subject to more rigorous change control) then the will of the majority (of people running a BTC transaction host) will win out. Sure, those holding bitcoin with no interest in mining could start up hosts to "win" the
OMFG (Score:3, Insightful)
This article has been flying around for the past couple of days, and it's so riddled with misconceptions and pure falsehoods about Bitcoin that this guy should be laughed out of his job.
You know what has a carbon footprint from hell? The whole payments industry, and industry that could go away overnight if retailers, service industry, and wholesalers switched to digital currency.
Anti-malware software simply hasn't caught up yet, but sucking someone's power for pure financial profit sure is better than sucking someone's power to barrage others with email. Sure, there's still evil here, but Bitcoin itself is not the problem: there will always been viruses doing something.
Bitcoin's lack of regulation is not a Bitcoin deficiency, but rather a legal one. Blame government for treating Bitcoin as a commodity instead of as a currency, subject to the same laws as cash. Oh, wait, it basically is subject to the same laws as cash, except it's a whole lot easier to carry and the government can't create more of it out of thin air (which is a good thing, if you want your money to have the same or better purchasing power tomorrow as it did today).
At least he didn't give the argument "There isn't enough Bitcoin to go around." I'm sick and tired of defending that. There's 21 quadrillion units of Bitcoin (That's enough for 3000 satoshis per person on the planet), and it would be very easy to convince miners to further subdivide it.
This author reads like the worst kind of Keynesian: the kind that misleads and lies about alternatives, rather than attacking the principles and stability of the system itself.
Re:OMFG (Score:4, Insightful)
You know what has a carbon footprint from hell? The whole payments industry, and industry that could go away overnight if retailers, service industry, and wholesalers switched to digital currency.
You mean the system that is processing many, many orders of magnitude more transactions that bitcoin? So many that bitcoin as it currently exists couldn't even begin to handle them without major overhaul?
Bitcoin is tiny, and is already wasting massive resources during meaningless busywork. If it was expended to that size, it would be far, far larger and even more wasteful.
It's hilarious how its proponents have zero sense of perspective about their favourite little toy.
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The amount of mining done is irrelevant to transaction loads, it essentially controls the risk ratios for any given specific transaction that might be reversed. You get the same level of security for the same amount of mining regardless of whether that mining protects 100,000 transactions or 10 million.
Bitc
Re:OMFG (Score:4, Insightful)
I actually do have a sense of perspective, as blockchain growth is a frequent discussion topic among protocolists such as myself. It's a legitimate problem and it's something that is slowly working toward being solved with the advent of SPV clients and decentralized clients.
To say that Bitcoin will never be able to cope with the velocity and volume of transactions is to underestimate the technical ability of the entirety of the open source community, because Bitcoin is open to contributions from everyone, not some secluded banking group or government agency with selfish motives.
You also fail to account for Garzik's Theory, which states that a modification to the set of base facts (limits, hash algorithms, etc.) that comprise an alternative coin, such as Litecoin, Namecoin, and Primecoin, that causes that currency to challenge the value of Bitcoin can and likely will be adopted by every other currency. I mention Primecoin because it is doing something "externally useful" with its hashing, and that is to find prime numbers. If that work proves useful, then Bitcoin is free to adopt it, as well, of course only with the vote of 51% of the miners.
Moreover, it's not wasteful when someone is extracting value from it.
Now a review without reading TFA? (Score:4, Interesting)
So the above poster doesn't even know Charles Stross is a writer - that's a pretty HUGE sign that they didn't read the thing that is being suggested as full of holes.
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Same here on that "There isn't enough Bitcoin to go around".
I just don't get that people don'd understand that bitcoin is divisible to something like 7 decimal places (or is it 8?)
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Oh, wait, it basically is subject to the same laws as cash, except it's a whole lot easier to carry and the government can't create more of it out of thin air (which is a good thing,
My main response to "but but but gold/silver/bitcoin" is to point and say
"Look! No government in the world does that anymore! It couldn't keep up!"
I've never heard a compelling rebuttal that doesn't completely ignore the history of metallic standards.
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Don't you realize that the latter argument invalidates the former?
Since Bitcoin is deflationary, it makes more sense to sto
Re:OMFG (Score:4, Interesting)
Hoarding a currency is natural when its purchasing power is increasing and there's nothing worth spending it on. Deflation makes people wiser spenders. Businesses and governments don't like this because they need cash flowing, and would rather devalue the currency to incent spending than produce products that people really want enough to spend their money.
We may have a philosophical difference here, so there's not a whole lot of point in going on at length.
Re:OMFG (Score:4, Informative)
If the purchasing power is increasing by more than the risk-adjusted return on investment for all the things you might spend it on, then it's never worth it.
Let me give an example: say the real rate of return on US dollars is assumed to be -3%, with zero risk. It is easy to find investments whose risk-adjusted rates of return exceed that (e.g. US treasuries risk-free at 0%, stocks with risk at 7%, venture capital with a lot of risk at (some big number)%, etc.). And the key thing about all of these is that they're investments, not commodities -- i.e., paying people to create something, rather than stockpiling something that already exists.
In contrast, if the real rate of return on Bitcoins is +3% with zero risk, then it's a lot harder to find an alternative investment worth making. Therefore, much less investment gets done (i.e., much fewer new things get created) and economic and technical progress is stifled.
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But what is the point of stockpiling something if you never intend to use it? You're making the same argument as waiting until next year to buy a computer because it will be cheaper, but for some reason people buy computers anyway. At some point the holder of Bitcoins will value whatever can be bought with those Bitcoins more than the Bitcoins and a
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You know what has a carbon footprint from hell? The whole payments industry, and industry that could go away overnight if retailers, service industry, and wholesalers switched to digital currency.
So you're saying massive widespread adoption of bitcoin would eliminate the need for the gigantic hashing network that bitcoin requires, a network that supposedly dwarfs the computational capacity of all top 500 supercomputers in the world combined? Or are you saying that the payments industry currently requires even more computational capacity than this? Or are you saying you have no idea what you're talking about?
How long? (Score:2)
How lone before we substitute that silly block chain with work units from BOINC or Folding@home? Lack of inherit value in the currency was another complaint, wasn't it?
Where Internet Libertarians come from (Score:5, Insightful)
I liked the comment [antipope.org] explaining where Internet Libertarians come from:
And if you grow up in your parent's basement, then you are shaped by an environment where the fundamental constraints on what you want to do are shaped neither by scarcity nor malignance, but _by genuine good intent_. Your relatives probably don't wan't you to spend all day smoking pot and playing video games; in some cases they will over-estimate just how much of a bad thing that is. And even if they _are_ right, it's not like anyone facing such hectoring is going to admit it.
Pretty much every libertarian position can be understood in that frame of restrictive but benevolent authority being the root of all 'real' problems. It's a rare parent who literally tortures their kids, so torture is, at best, not a 'real' issue, not a priority. But many make them do stuff for their health, so mandatory health insurance is a big deal. Pretty much no parents kill their child with drones, many read their diaries. And so on.
So to libertarians, Bitcoin is like wages from a fast food job as opposed to an allowance; lets you buy what you want without someone else having a veto. Only money that doesn't judge you can be considered entirely yours...
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I liked that comment too, because it told me that the writer's viewpoint can be dismissed immediately, saving me time. (If you've got actual logic, then I'm all ears. If all you've got is a petty grudge, then I'll catch you later -- meaning never.)
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Limited money supply is a problem? (Score:2)
I thought the whole purpose of currency is as a store of value. It's not an effective store if the amount of that store's unit count can be varied at will the way it is with Federal Reserve money. And how is it different from the gold standard? Sure, mining gold gets harder as the supply runs out too.
Re:Limited money supply is a problem? (Score:5, Funny)
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In which case Bitcoin fails massively as a store of value. For instance, if you try to sell something in bitcoin, the value of the bitcoin you got paid with may have changed by 30% by the time the transaction is confirmed, it is so massively volatile. Bitcoin - at this stage - is suitable only as an instrument of speculation.
It is all those things and more ! (Score:5, Interesting)
It's also a commodity. There is nothing to stop someone else from starting their own currency, just as there was nothing to stop BtC from appearing out of nowhere its own line of "value" . As BtC get more expensive and mining get harder we can expect to see "me too" currencies whose "selling" point is to early adopters you can get in on the ground floor and whose "trading / accepting" point is, it hasn't hit its deflationary peak yet, so accept it, it will be worth more tomorrow than it is today.
What's good for the goose is good for the gander. This is the real fundamental flaw in all unregulated fiat currencies. Fiat currencies are worth something because , by law, there is a governed amount of money and no other competing monies which themselves are not also so governed.
With Bitcoin, not so much. The exodus to "other" Bitcoiny type currencies hasn't happened yet, but there's no reason to think it won't and ever reason to think it will.
Oh wait, I spoke too soon. Or not soon enough. Or something.
http://www.coindesk.com/litecoin-silver-bitcoins-gold/ [coindesk.com]
Bitcoin is only version 1.0! (Score:5, Insightful)
Every time there are arguments made like this I remember something I read in the late 90s. It was a scholarly book by a broadcaster (I believe it was about HD TV) that had a section about why Internet video wasn't going to take off. It stated things like "postage stamp-sized video," jumpyness, bad audio... all those problems that were inherent in the early versions of Quicktime and MPEG.
The flaw in the argument comes in the unspoken assumption that what they are looking at is a final version. I personally don't think bitcoin will ever "replace" monetary systems across the world and there is a lot of reasons to hope that it doesn't, but a lot of these arguments make the assumption that no adjustments will ever be made and the ideas and tech. will never improve. And that just *doesn't* happen.
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The problem was not Quicktime and Mpeg. Mpeg has always supported all the way up to 1920X1080p Mpeg2 Was designed for this, Mpeg1 was designed to support up to 720X480 the full video resolution of it's time.
the problem was that the only low bandwidth video at that time was the horrid "realmedia" format that was designed to be crap from day one.
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Bitcoin is not anonymous (Score:5, Informative)
I agree with some points, but in general he seems to be only somewhat correct.
First of all, BitCoin is not anonymous. BitCoin is pseudonymous. Once mining dies out (which also solves a lot of his other qualms), you need to trade bitcoins some way. You have to exchange your real money to bitcoins. ALL transactions are public which means it's really easy to start profiling people. In the future it's probably easier to trace a person's bitcoin transactions than normal ones.
Use of possessives (Score:4, Insightful)
I hate being a grammar nazi but, this Stross guy being a writer, I think it's warranted. Lack of mastery in his own craft makes me distrust his research a bit, even if it's a bit of an ad hominem on my part.
to damage states ability to collect tax and monitor their citizens financial transactions, as seen both in TFA and the Slashdot summary, lacks possessives [commnet.edu] and looks just plain bad.
Um.. (Score:2)
> Bitcoin's utter lack of regulation permits really hideous markets to emerge, in
> commodities like assassination and drugs and child pornography;
Emerge? Yeah, lets ban Bitcoin before those markets turn up.
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I think his point -- though not as well written as you might expect from a guy whose job it is to work with words -- is that Bitcoin would allow those markets to flourish as their transactions would be untraceable. ``Real'' monetary transactions for something like an assassination can be traced, even if they flow through a bank that likes to keeps its customers' business private. (Recall that UBS, if memory serves, had customers hiding money from governments in ``secret'' accounts to avoid taxation and they
What is this guy's problem? (Score:2)
"BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks"
This is a GOOD thing, a very VERY good thing. Central banking is designed to only make a very very small number of people insanely wealthy and powerful. Only power hungry scumbags bent on world domination would be against this.
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It's not a good thing. If bitcoin truly does threaten TPTB, they can and will squash it. Yes, I know there will also be criminals using it for Silk Road, money laundering, and tax evasion, but as a legitimate currency, it will be dead.
Incredibly poor logic here (Score:5, Insightful)
Bitcoin comes with an implicit political agenda attached
Whose?
Libertarians love it because it pushes the same buttons as their gold fetish and it doesn't look like a "Fiat currency".
One, any currency is a fiat currency. People have to agree to use it, be it beads, dollars, bitcoins or polished turds. Just because you have a problem with libertarian views (I do on some), does not mean an insulting argument is valid or appropriate
Mining BtC has a carbon footprint from hell as they get more computationally expensive to generate, electricity consumption soars;
Printing and minintg currency has a big carbon/environmental footprint as well.
Bitcoin mining software is now being distributed as malware because using someone else's computer to mine BitCoins is easier than buying a farm of your own mining hardware;
It is always easier to steal someones wallet than work for it. There will always be those that try to do just that. Your point?
Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination and drugs and child pornography;
This one really gets my goat. These markets (whether hideous or not), exist already, regardless of the currency. It doesn't matter if you by crack with blowjobs or acid with BTC, the market is there.
and finally Bitcoin is inherently damaging to the fabric of civil society because it is pretty much designed for tax evasion. "BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions," concludes Stross.
The blockchain is public. Once a wallet is tied to an individual, all its transactions are public, be they income that is untaxed or 'hideous market' purchases. Even years down the road, if a wallet I used to buy ecstasy in 2012 is tied to me in 2042, that purchase is now and forever tied to me (as well as all other transactions done with that wallet).
Libertarianism (Score:2, Insightful)
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+1 for the first (Score:3, Insightful)
Tit meets tat (Score:3)
His point about lack of regulation allowing disgusting markets is valid. However, I suggest tolerance for this is partially the result of bad regulation creating disgusting markets of its own.
The inability to regulate is what drew me to bitcoin originally, its why I said "Aha! This is great" and what made me want to support it, even if it might be doomed to fail (I am not convinced one way or the other actually, which infuriates some people who have less btc than me who hang on every swing while I shrug it off.... making money was never why I was interested in btc)
Thing is, for all this talk of regulation being good, its also done absolutely terrible things. Terrible things, which drive people like myself to say "good, fuck the regulator scum". Their regulations created the gang problems in this country with their monumentally stupid drug war. Tally the body count on that boondoggle and then complain to me about assasination markets that have never verifiably produced a body.
All the while "regulation" has created the most perverse markets ever, driving safer drugs off the street, and making the worst abuses the most profitable.
Regulators can't be trusted and are typically blind to the destruction they leave in their wake. If bitcoin should die, I, for one, will support the next cryptocurrency that makes regulation hard or impossible. Its what the track record of regulators deserve.
Bitcoin will die because (Score:3)
The only real currency in this world is power.
The more power you have, the more you can take away from others ("borrow"). The US dollar is only backed by power of the US government to coerce people and other nations, nothing else.
Bitcoin has no such backing. It is worthless.
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I personally love his Laundry series (modern day Lovecraftian/spy horror stories) and haven't read too much of his other stuff.
You should really hand in your geek card if you haven't heard of him.
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How dare the price of things go down over time!
There is a good reason that modern economists pretty consistently oppose deflation.
How would you react if your cash was going to be worth more a year from now? You'd probably avoid spending unnecessary cash on anything. You'd also be more reluctant to invest, because you know that if you get, say, less than a 2% return you'd do better holding cash. So what you're going to do with your cash is hoard it, as much as possible.
So far so good - you've encouraged saving, right? But there's a problem: Everyone else
Re:Anyone Who Talks About Deflation...... (Score:5, Insightful)
I have. It would suck. The rich can avoid debt and sit on their wealth while it accumulates. The poor however can watch as their mortgage increases with value alongside their wages rather than gradually getting smaller. Deflation encourages hoarding wealth and inflation encourages investment and wealth creation. Ideally you don't want a huge amount of either, but a small amount of deflation is certainly better for the economy than deflation.
The idea that someone who owns a £10 million property would hate deflation is nonsense. If he thought that cash would get a better return than property he could sell the asset and hold cash instead. Look at the median networth of an American. It's pretty much sweet FA so who cares if their savings are going to go uup by a couple of % a year when their debts will as well and they often have debts that outweigh savings. Deflation is no use to anyone who isn't able to accumulate, or hasn't already accumulated, money.
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Deflation encourages hoarding wealth and inflation encourages investment and wealth creation.
What a load of shit.
Re:Anyone Who Talks About Deflation...... (Score:4, Insightful)
With deflation, it's difficult to get people to spend money because the "something valuable" will be cheaper if they buy it later.
Like computers. No wonder they failed so epically.
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Banks being discouraged from loaning is a good thing, as shown by the most recent financial crisis which had as its biggest intermediate cause excessive poor quality loans. Everybody was hurt, banks and people encouraged to take loans they couldn't afford, and the world in general as the side effects expanded.
Loans are profitable to banks without regard to either inflation or deflation. With deflation, they get back more dollars than they loaned out, and the dollars they get back are worth more. PROFIT!. (T
Re:Anyone Who Talks About Deflation...... (Score:5, Insightful)
Thought experiment:
Alice, Bob and Charlie constitute a complete economy, each have one T-dollar.
It is determined that there are not enough T-dollars for their growing economy, it is decided to increase the number of T-dollars by one.
What is the fair way to distribute this T-dollar?
Know how it happens currently?
The government gives that T-dollar to Charlie.
Every time.
You are not Charlie.
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Another who understands that "deflation" is simply a conspiracy by the Trilateral Illuminati, who meet in Davos each year to develop new methods of sapping our vital bodily fluids.
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Re:I'm a Libertarian (Score:4, Insightful)
So you are going to pay for a loaf of bread with your American eagle gold coin? Awfully expensive bread, because I'm not making change. A lot of libertarians are pretty dumb going nuts buying gold and silver, you are buying it at the highest inflated prices and IF the economy collapses it will drop in value like a stone. so your $1000 an ounce gold becomes worth about $5.00 an ounce as trading coins.
Worst investment in your life is gold and silver right now because it is overinflated.
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Well, not infinitely. They have a smallest possible base unit, the satoshi, which is 0.000 000 01 BTC. Still far more divisible that US dollars and pennies.
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They are currently divisible to 8 decimal places, but it shouldn't be that hard to tweak the client software to allow smaller transactions if needed.
That said, it's like a COBOL programmer from the 1970's worrying about a Y2K bug. We're still a long way from needing that kind of precision.
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Why does this argument get so much traction? I don't get it. It's a great argument against the USD as well if you want to take it seriously.
You forgot (Score:3)
Also, its conductivity. Though bested by silver & copper, these both tarnish.