Add to that the huge blindspot that people seem to have in equating “open” with “accessible”. Cryptocurrencies are currencies of privilege.
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Congratulations on getting “logical”, “consequence” and “Brexit” in to one sentence.
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I expressed myself poorly. There’s a difference between failing to balance the books on negative externalities, but recognising that they exist (and hopefully, working towards improving them) and being in denial about their existence because they expose your ideology as incompatible with reality.
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It’s a pretty convoluted way to end up at Nixon’s petro-dollars, isn’t it?
I think that the comparison to gold is quite apt - not because the instruments are similar (gold is a physical commodity which has some utility value, even if that is quite minor relative to the amount that is used speculatively) but because investors behaviour around it is quite similar. Bitcoin has to a great extent supplanted gold in the swivel-eyed end of speculative behaviour - all the libertarians and conspiracy theorists I know used to chunter on idiotically about gold, and now they chunter on about bitcoin. Some of them, no doubt, are making money off bitcoin - in some cases, lots. But it’s not through rational decision-making. The instrument seems to me to lack fundamental value. I’ve no doubt that many of the bitcoin investors that I know will miss the jumping off point because their attachment is ideological rather than borne of market understanding. It looks like a classic bubble, and as usual, I’m hearing a lot of noise about how it’s different this time.
Then again, BTC continues to defy my expectations, so what do I know?
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Right, so bitcoin isn’t perfect. I fully agree with you there. But even with all it shortcomings the technology does hold a lot of promise. And considering the current state of the regular financial system, even if the only thing bitcoin does is offer a alternative that scares banks into becoming more customer oriented that could be a net positive. If there is one market that can use some disruption it’s the financial system.
Let’s not forget that at it’s core the financial system is just like bitcoin, just a way to track digital tokens we ascribe value to. Both systems produce a abstract thing that makes trade easier.
I think some of the things you mentioned are legitimate concerns for bitcoin, however I think most of them apply to cash money in at least some degree, whether or not you’d consider it lying is more a matter of degree if you ask me.
There are quite a few fiat currency that lost a lot more then 25% of their value over a short period. Sure the dollar and euro are doing quite well at the moment, I don’t know that this holds true for all currencies worldwide. Also, bitcoin just happens to be the first, biggest and most visible cryptocurrency, if we ever see widespread adoption of cryptocurrency payment will most probably be done with a less volatile one.
I don’t see why crypto exchanges have to be any more or less sketchy then fiat money exchange companies. When I exchange anything outside of my own bank I always feel quite certain that I’m getting screwed over, heck even when I do it with my own bank I have to pay a non zero fee just to go from one currency to another. When your in less regulated countries they are also the best location to pay full price for counterfeit bills. I don’t think it’s crazy to assume there will be some form of cryptocurrency in widespread use as a sort of world wide accepted second currency next to all national ones, this will practically eliminate the need for exchanging in untrusted locations.
The police has recovered bitcoin after rolling up the silkroad market on the darkweb, why could they not recover your coins if they were stolen and they find the person who did it? Sure it may be hard but how often do they find the person that mugged you, or the one that burgled your home?
I never insured my cash money, can you do that? I know my home insurance covers me somewhat against stolen money when my house is burgled, the same with a travel insurance working against muggings or pickpockets on a holiday. I don’t really see why the same couldn’t apply to bitcoin but maybe I don’t know enough about insurance to not see the crucial difference.
What happens if you lose you physical wallet? Some good Samaritan could bring it back to you but just as easily it could end up in a trash bag and incinerated or on the bottom of a lake. Lost money does have the benefit over bitcoin that if someone finds your lost wallet (without a way to get it back to you), he still gets to spend the money. Doesn’t really benefit you personally but is arguably better for society as a whole.
Bitcoin strives to be an alternative to central banks. Bitcoin is unable to perform many of the basic services performed by banks, such as making loans at interest. Therefore, the fair comparison of energy use by bitcoin is to energy us by, for example, the US Federal Reserve.
The high-speed trading super computers are used by private banks that do not issue their own currencies and are therefore not a reasonable point of comparison.
Do you have any specific examples? It seems like bitcoin requires computer hardware and software and technological know-how that are systematically not possessed by the very same demographics that have traditionally been underserved by banks, and which are systematically possessed by those who have actually been served just fine by banks.
(Also, as mentioned above, bitcoin can’t actually do the basic things banks do like make loans at interest, which is what the underserved need more than a checking account in most cases.)
Unless you mean drug dealers, child pornographers, and slavers – certainly bitcoin benefits those demographics. But then again, so have traditional banks.
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Umh, that’s kind of a big “if”. Each mined block is “winner takes all”. You can’t mine any faster than 1 block/ten minutes, but if you double the number of 1 block/ten minutes you win from the other miners by having twice as much mining capacity as you did before, you double your take.
I feel like you’re just disagreeing for the sake of disagreeing, here. The observation you’re rebutting is true, even if it’s not for exactly the right reason.
Following on from my previous “blockchain is interesting, but cryptocurrencies aren’t” thoughts.
Yet there remain implications for socialists. DLT (Distributed Ledger Technology) suggests a mechanism for a dynamic and decentralised model of socialist democracy and production which avoids the ‘double-give’ problem in distribution while offering a flexibility and adaptability not associated with traditional centre-periphery structures. More immediately, it could change how workers today understand the word ‘organisation’. In the same way that a future subscription-based capitalism could alter mindsets over the need for money (Pathfinders, October), DLT shows how you can decouple regulatory oversight from centralised authority. If you don’t need a state to ensure that things work properly, but can utilise the ‘power of crowds’, then an important prop in capitalist ideology is kicked away. Leaders and centralised elite structures engender cronyism, corruption and monolithic thinking yet many workers remain wedded to the supposed need for them, convinced that anything else would result in chaos. DLT may make them think again by showing them the power and flexibility of distributed democracy in action, and not just in socialist theory.
I would like to see more research along this line of thinking, but discussion of blockchain and other DLTs is dominated by currency speculators.
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Don’t disagree!
And in fact ‘big government’ has a key role in solving those kinds of negative externality-issues when they arise and - as you say - individuals are incapable of appropriate action. Examples of this include leaded petrol and CFCs. In many instances, any individual who would like to take action would experience disadvantage relative to individuals who continue on a business-as-usual basis. By regulation that affects everyone, the disincentive to behave more responsibly is mitigated.
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This has been true historically, but it seems to not be the case anymore. Governments seem less concerned about these issues right now. 
Ain’t no one minding the chicken coop anymore…
That’s a trend due to neoliberalism, I think. just because governments don’t exercise a power, doesn’t mean that they aren’t basically the only institution that can.
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Actually, there are dozens of alternatives, all of which are more accessible to the vast majority of the world than Bitcoin. Xoom. MoneyGram. PayPal. Probably each has its pros and cons. Wiring money is a problem that can be solved without inventing a speculative currency.
How is that remotely comparable? The financial sector isn’t making currency, it’s doing stuff with currency. It could be trading stock with USD or BTC, it wouldn’t use any less energy. The advantage of USD, of course, is that they just sit there at the end of the day on a hard drive, the don’t need millions of computer farms spinning to keep them working.
Nope, I looked through that list and the only one of those you could say about paper money is that it could fall 25% in a day. But the rest of it (insurance, shady exchanges, wallet passwords) was not.
If I lose my bank password, I can go in person and show my ID. If I’ve lost that, or they don’t accept it, I can go through a legal process of proving my identity, and even resort to the courts, if necessary. And if my bank folds in the meantime, my deposits were insured. Sure, all of those steps could fail if this country collapses, but with BTC I have no legal recourse if I lose my password.
I was wrong. It’s more like a real currency than I was giving it credit for:
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Bitcoin can be improved, and its energy consumption radically curtailed, by shutting the damn useless thing down.
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