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To put this in context, Varoufakis' idea plan of how to solve the greek crisis after closing the banks was as follows: His team would break into the central bank to steal the tax id archives and issue a new "parallel" currency of IoUs that might be on blockchain, but would be completely controlled by him. So obviously the idea of currency not controlled by a central authority is not one he would accept.
His plan was for Greek government debt to be restructured (so it can be paid at some point in the future), for many reforms to be implemented and to reject "bailouts" and strict austerity that would only increase debt and decrease ability of Greek government to service the debt.
The plan for "parallel" currency of IoUs was made so that Greece could continue functioning in case European Central Bank forced banks in Greece to be closed.
Varufakis was only vocal about these things in the media. During the Euro meetings, he kept silent, talking general nonsense, eating by himself, taking selfies and filming in secret. He is a cartoon character, who the populist prime minister of the time kicked out of the government after almost risking a GrExit. Please stop taking him seriously. The GPT-3 is just as smart or smarter.
I thought ad hominems were looked down on here. Has something changed?
But his point that Bitcoin is also essentially controlled by a central authority, i.e. the Bitcoin community, has merit.
(Even if the control isn't formal, owning a large percentage of a finite "thing" still counts as control, if the "thing" is the unit of exchange for people's work, property, etc. A BTC economy would depend on what the large holders decide to do with their portion).
With Bitcoin, the community that controls the money supply is not at all democratic; it is the early adopters with large holdings that carry all the weight.
From the perspective of a non-early adopter, the Bitcoin world would be even worse then the central bank and government world. Banks can be regulated and governments can be thrown out. Bitcoin would create a tyranny of "hodlers" protected by intractable mathematics.
> With Bitcoin, the community that controls the money supply is not at all democratic; it is the early adopters with large holdings that carry all the weight.
The mechanism according to which Bitcoin upgrades has nothing to do with decisions of whales or democracy. Read about how soft/hard forks and UASF specifically works.
I wasn't referring to upgrades, I was referring to control of the existing, finite supply of Bitcoin.
In a Bitcoin-centered economy, a relatively small community of "whales" would have de-facto control of the supply, because the supply available for circulation would depend on what they decide to do with their holdings.
True. Although their control of money supply would be limited, and they would lose some part of that control every time they decide to "increase" the money supply.
But Bitcoin has inflation though. The supply doesn't become limited until the inflation curve runs out in years to come. The early adopters will find the same financial pressures as with fiat currency.
except that people can always vote with their wallet against bitcoin, while his currency was unfairly advantaged by becoming tender for paying tax.
I dont think currency should be democratic, it should be impersonal and outside the whims of any group of people. Gold is like that. Cryptocuyrrencies may reach that stage after they solve all their bugs and their source code becomes fossilized.
Voting with your wallet has worked in several isolated instances where there is a clear divide and an ability to coordinate large groups of people. Meanwhile it has failed in areas with obfuscation and unclear understanding of complex processes (most of the companies/organizations in the world). Technical understanding of Bitcoin and crypto in general is so limited it certainly falls into the latter category.
Nothing which responds to interactions with humans operates outside the whims of any group of people.
> technical understanding of Bitcoin and crypto in general is so limited
Agreed, this is something to fix. The current crypto bubble is driven by clueless hype
> Nothing which responds to interactions with humans operates outside the whims of any group of people.
Science does and so do mathematics.
> I dont think currency should be democratic, it should be impersonal and outside the whims of any group of people. Gold is like that.
If gold (or some other precious metal) is such a fantastic currency for a modern economy to use, why are no modern economies pegging their currencies to gold? Why didn't Nixon keep the dollar convertible to gold?
I don't know. And looking at the current state of fiat currencies, they don't know either.
Gold is not like that. When my country, France, floated the idea to maybe sell our reserves now that it's useless to pay for things people may need, the pressure from Russia and other very large holders was so heavy we dropped it: not worth the amount of enemy we would have made crashing its price.
People who advocate for gold... wait for it ... have gold ! It's the same as bitcoin.
The best currency is worthless and fleeting and represent work effort today and must be quickly converted back to work. Invest in schools to pay for a productive future that can afford your retirement, instead of clutching your precious metal.
Good point, gold is like a PoS system nowadays. Still, the ease with which bitcoin can be exchanged makes it a better alternative
This is why bitcoin is not the answer. Bitcoin is v0.1. It kickstarted everything but isn’t shaped up to the the gold standard. For that we need a more distributed and chain using the fundamentally same consensus strategy. Chia looks way more poised to address this problem and become the foundation for a real economy.
Long story short: Varoufakis dislikes the inflexibility of Bitcoin's supply. Varoufakis wants currencies with flexible supplies safely under the control of technocrats like him. This should come as no surprise. What is surprising is that anyone would think differently.
What Varoufakis doesn't get is that he has no control over the future direction of Bitcoin. It's in large part an escape hatch for those who are fed up with technocratic debasement of money. Neither Varoufakis nor anyone else will be able to prevent people from using Bitcoin. They'll try, but lose enormous credibility when they fail.
> It's in large part an escape hatch for those who are fed up with technocratic debasement of money
Those fed up with technocratic debasement of money, and organized crime. I just read here [0] that Bulgaria is the second largest owner of Bitcoin, after Satoshi Nakamoto, due to "a crackdown on organized crime by the Bulgarian law enforcement in May 2017 resulted in the seizure of a stash of 213,519 Bitcoins".
Same article claims FBI is number 4 owner, after "they brought down Silk Road, the infamous dark web drug bazaar, and seized 144,000 Bitcoin owned by the site’s operator Ross Ulbricht, better known as, “Dread Pirate Roberts”, in 2013.
I do not know how correct this information is, though, so take it with a grain of salt. In any case, it makes one wonder how much more cryptocurrencies are owned by organized crime.
[0]:
https://usethebitcoin.com/top-10-richest-bitcoin-owners/
The FBI coins were auctioned off, Tim Draper took the first batch of 30,000
https://www.reuters.com/article/us-usa-bitcoin-idUSKBN0F7199...
Microstrategy and the Winklevoss twins have bigger stashes than that
How does one "debase" a fiat currency, considering that a fiat currency is simply an abstract unit of account not a physical quantity of anything?
Are the long term goals of crypto-enthusiasts for crypto to completely replace fiat currency?
I can’t imagine a world without fiat currency, for the simple reason that governments operate in a deficit. A world without fiat currency would imply that all government workers are paid with crypto, all roads are funded with crypto, the military is funded with crypto, etc. And since this currency is limited and deflationary, this would imply that the only people who can fund these governments are the crypto whales. This sounds like a dystopian nightmare.
Further, it seems obvious to me that many of the decisions made by the Ethereum community are only intended to benefit wealth hoarders and early investors (PoS and the deflationary aspect). Their decisions don’t seem to have the larger global community in mind, at least in an authentic way. They seem to see it, simply, as a store of value.
It doesn't mean that governments are going to be funded by crypto whales, it just means that government spending will be kept on check and limited by the amount of money they can tax from people.
Politicians not being able to fund wars using a money printer is a good thing, not bad.
> it just means that government spending will be kept on check and limited by the amount of money they can tax from people
Governments can borrow money with or without fiat currency, so I don't know where you got the idea that a crypto-currency would stop governments from borrowing.
The difference is that without fiat currency, the government can't inflate it's currency to pay off the debts. At the very least it means that the population does not have the risk of their savings becoming worthless anymore, and it probably also disincentives the lender to give money for such purposes.
So you admit that your whole point about governments not being able to borrow was nonsense? Good.
Yes. The governments would still be able to borrow, but they won't be able to do it in an unchecked manner.
Since the lender would know that they are not guaranteed to get their money back at the expense of the borrower country's population.
If anything, the inability to print money would make governments more dependent on borrowing, since the ability to print your own money eliminates the need for borrowing.
Governments would try to borrow more, but would there be enough willing lenders?
The endgame is forcing governments to be more fiscally conservative and generally less bloated.
Different people have different preferences with regards to the level of government spending. In general, the actual level of spending will be some sort of average of society's preferences. You, as an individual, will have a hard time imposing your individual preferences about government spending on the rest of society, and "crypto" is not gonna help you achieve that goal in any way shape or form. That doesn't mean to say government spending is unconstrained. Of course, it's constrained, by the government's ability to tax and to borrow, but generally not by its ability to print money. If governments were to lose their ability to tax, we would end up with a bunch failed states, which is a considerably worse situation than having "bloated" governments. And their ability to borrow depends on their creditworthiness. To me nothing suggests that crypto-currencies can have any impact in any of this, to be honest.
Depends who you ask.
I agree that it is unlikely that cryptocurrency replaces fiat currency entirely. What is more likely is a return to fiat money backed by an asset. A Bitcoin standard as opposed to the (relatively) recently abandoned gold standard.
Fiat currency as the world is experiencing it now is just as grand and uncharted of an experiment as Bitcoin.
I have read in a few places (example below) that Bitcoin hash power is highly concentrated. Given that Bitcoin is controlled by hash power it would be good to know who those people are.
https://nypost.com/2021/10/26/bitcoin-ownership-concentrated...
Miners can't do anything outside of what is already allowed by the Bitcoin protocol.
https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners
Thanks. This is a helpful link. If the majority of good/honest nodes and the Bitcoin developers decide to implement a change, presumably this change will occur. My understanding is this happened recently with Taproot for example so one must infer that this is possible. Obviously such changes only impact new blocks but naturally this can still have an impact on the general ecosystem.
Here is a hypothetical situation for consideration (please shoot holes in it!).
The year is 2105, Bitcoin is the defacto world currency. Everyone is paid in Bitcoin and all transactions are performed in Bitcoin. Democratically elected world governments control the majority hashrate since they have decided that it is too risky to allow private individuals to control the network.
A major financial crisis emerges in which prices of goods relative to Bitcoin are on a severe downward trend. Individuals realize that if they simply delay purchases, their own purchasing power will increase - further reducing demand for goods and services thus further decreasing price. Since businesses cannot make a profit in this situation, workers need to be paid less continuing the deflationary cycle.
Democratically elected world governments decide that inflation is necessary in Bitcoin in order to avoid an exceedingly long painful and unnecessary economic depression. World governments work with Bitcoin developers to start rewarding miners with 20 Bitcoin per block mined thus devaluing the currency. 99.9999% of citizens of the world agree with this move. After the financial crisis is abated, world governments determine that a 2% inflation rate should be built into the Bitcoin in order to avoid such problems in the future and virtually everyone is happy with this.
Is such a scenario impossible?
Changing the miner subsidy amount would require a hard-fork, so the chain would split in two chains with a shared history, the original with only 21M coins and the new chain without the cap. And once that happens, it would be in everyone's financial interest to get rid of their inflationary coins and sell them for original Bitcoin.
So unless all the world governments decide to make it illegal to mine the old chain, it wouldn't work.
I don't believe that a hard fork necessarily results in a split of the chain. If all miners accept the hard fork then there is no split in the chain - new blocks require miners. My understanding is this has happened before.
https://phemex.com/academy/bitcoin-hard-fork-vs-soft-fork
Yes, but as long as _some_ miners stay on the old chain, it will live. Hard fork also requires the users to switch to that new client, otherwise they won't be able to accept the new blocks from the forked chain.
Basically exchanges and whales determine the outcome of a hard fork. In a "hyperbitcoinized" world there wouldn't really be exchanges and it's not clear who the whales would be, but that scenario is so unlikely that I don't think about it.
I suppose that leads back to my original question. What are the names of the people that control Bitcoin? Should we wait until this group does something that is not in the best interest of Bitcoin holders to find out?
You can look on github for code commits. Those have IDs with the code.
Not sure how you would determine how to contact all the full node owners.
It is a problem IMO that Bitcoin has no documented governance process so it's basically "if it prosper, none dare call it treason". As for who the CEOs and whales are, you can Google them.
That's a good thing. Having an established governance process would be an attack vector.
No, individual users decide the outcome of a hard fork.
Coinbase, BitGo, Bitmain all tried to force Bitcoin to use larger blocks because that would've gave them more power, and look where we are.
Nope, the 2X upgrade was derailed by an exchange that decided to list both sides (IIRC it was going to be BTC1 and BTC2) and they were motivated by a (possibly rigged) futures market.
How exactly was it derailed? Creators of 2X stopped the fork because it was clear that majority of users were against it and that miners would be forced to mine it at their expense.
The will of the majority of users was not at all clear to me.
They could rewrite the protocol at-will if a cabal of miners holds a clear majority of the hash power.
If that cabal would require hundreds of groups with no common cause on every continent, then no problem. If it's just a handful of individuals who could make that call, that's a potential problem.
And we just don't know which end of that spectrum the current hash rate distribution actually looks like.
Admittedly, there's no reason a private investor would want to tank their holdings like that I can think of. But, if significant hash rate is being held by state actors as some have suggested, economic warfare comes into the picture.
No, that's literally not how it works. Read the article I linked.
Even if the cabal of miners decided to make a change in the protocol and print themselves bunch of free coins, those mined blocks would get rejected by the full nodes, which compose the Bitcoin network and validate all the transactions.
Hashpower doesn't confer any control; you can see this in the case of Segwit2X.
Massive bubbles denominated in Bitcoin will build up and they will burst just as they did in the 19th century under the Gold Standard.
Does anyone know about bubbles under the gold standard? Seems interesting and is a piece of history I've never read about before.
I was curious too and found some examples here
https://en.wikipedia.org/wiki/Economic_bubble
- Panic of 1819
- Panic of 1837
- Railway bubble ~1840
- US farm bubble and crisis (1914–1918, crash 1919–1920) prices rapidly escalated during WWI and crash after war's end
.
- Roaring Twenties stock-market bubble (US) (1921–1929)
- Florida speculative building bubble (US)(1922–1926)
Were these actually related to the gold standard as such? Or were they just bubbles that occurred during that time. For instance the railway bubble seems to have nothing at all to do with being on the gold standard.
The gold standard meant that QE style answers were not possible. It didn't cause the bubble or the crash, but it meant that there were stronger constraints on what the government could do in response.
The Great Depression? Many countries had to abandon the Gold Standard to get out of it. In my country we also had a real estate bubble in the late 19th century.
Wait, isn't it obvious that cryptocurrencies like bitcoin are:
fully unchecked capitalism
Socialism is (at least in theory) about regulating the market in a way which puts social aspects in the foreground to maximize benefits for the society as a whole even if it's at the cost a a few.
This requires regulation.
Cryptocurrencies like bitcoin are all about avoiding regulation.
Also in cryptocurrencies in the end the wealthy have all the power, because they can use the wealth to dominate the mining and with this can control which changes are accepted by a blog-chain and which are not (this is a bit more obvious for PoS chains, but applies to PoW chains too).
Socialism is also about every natural _person_ in society (theoretically) having the same power, which is in direct conflict with how modern crypto currencies work.
So IMHO crypto currencies are an aspect of hyper capitalism pretending to be something else.
> So IMHO crypto currencies are an aspect of hyper capitalism pretending to be something else.
Yes, exactly! The "problem" cryptocurrency solves is people with wealth having too many restrictions on that wealth.
I think blockchain technology is super interesting, and insofar as cryptocurrencies are an implementation of that technology they're interesting, but I'm very much not in agreement that they're solving any real problem that needs solving, and in fact the concept of cryptocurrency as money actually exacerbates an already bad situation. If one is worried about a small number of economic elite having undue influence over society, crypto is part of the problem, not the solution.
A couple real problems solved:
. censorship resistance
. government theft/seizure
There are more, though these two have helped me.
If controlling money means controlling speech, and so keeping money free from regulation is a strike against censorship, then I'd suggest the problem isn't over-regulation of money, but rather that somehow money == speech. Cryptocurrency seems to make that worse, focusing on protecting the freedom of wealth but doing nothing to break the unhealthy premising of freedom on wealth.
You can't have freedom of speech without freedom of wealth. The more Money is controlled by the government, the more it will be able to censor opposition and incentivize loyalism.
The problem is that the same tools which helps with "censorship resistance" also prevent certain forms of well intended "moderation"* similar "government seizure" isn't necessary theft at all as it might e.g. "seizure" of stolen money (e.g. through hacking) or "seizure" of money earned through serve crimes (murder, human traffican, etc.).
*like e.g. removing videos of a rape used to blackmail a innocent person.
I don't believe that you can magically/blindely solve problems of society with technical solutions.
Tools are amoral. A 90 pound woman using a tool built of metal to defend herself from home incursion and possible rape implies no morals to the metal tool. Tools can be a defensive equalizer, and should be readily available.
> Tools are amoral.
That's a red hering argument. (In my opinion.)
Tools are designed for a use case.
Tools are also widely used for some (potentially different) use case.
As such tools are often not amoral _at all_.
A assault riffle is designed to kill people and potentially many of them (self defense per gun doesn't require killing). As such it's not a amoral tool. Even through you might end up using it in a "good" way, or as "hobby" it's design makes it fundamentally a "weapon for killing, not self defense".
Through this is kinda getting off-topic.
Because whatever moral you want to attach to tools is irrelevant for aboves discussion.
Crypto currencies are a tool for unchecked Kaptialism, which has nothing to do with moral nor does it mean others can't use it for other purposes.
When did private money / store of value become 'unchecked Kapitalism'? Is gold also unchecked Kapitalism?
Seems we both can agree USA-funded murderer Lon Horiuchi did an evil thing when he pulled the trigger and killed an unarmed mother using an assault rifle.
https://lmtribune.com/northwest/fbi-sniper-is-at-the-center-...
'which Horiuchi said was aimed at Weaver's friend Kevin Harris, instead killed Weaver's wife Vicki. It then hit Harris, lodging in his chest.'
when it wasn't designed as a tool to "just" store value but to circumvent any "checks" on value transfer/ownership etc.
I mean that's the whole point of crypto currencies.
Both for good and bad.
Cryptocurrency governance basically boils down to one dollar one vote. That’s, um, not what you want if you are looking to empower the working class
Let's compare it with the baseline alternative, the fiat currency called the US dollar - Call it $1USD, no vote.
With USD, the long-run target inflation rate as stated by the Federal Reserve is 2% per year. Seems small, some would argue - a small price to pay to avoid the dreaded risk of deflation. (Side note: why is deflation expected and approved of in computers and electronics but not healthcare or higher education?)
What if I told you that the average worker who works for wages for 40 years, will lose 40% of the value of their lifetime earnings if inflation was 'only' 2% per year? What if I told you that the current inflation rate according to official sources is over twice the target inflation rate and all signs indicate it will remain elevated for years to come?
What if I told you that the real problem with fiat currency is all the trust required? What if I told you that as a worker you now have an alternative to store a portion of your wages in a currency that is engineered using properties of digital scarcity, incredible security, and ingenious game theory to preserve, store, and even grow the purchasing power of your savings at a long-term rate of return that greatly exceed the rate of inflation or the performance of even the riskiest stocks.
Why is it bad for workers to have another option for storing their savings, an option that doesn't leak value due to manipulation by centralized actors? No one is forced to use Bitcoin. Bitcoin is a choice. IMO Bitcoin is the better choice. YMMV.
> Side note: why is deflation expected and approved of in computers and electronics but not healthcare or higher education?
That's... not deflation? It's literally building wealth. Cheaper computers means more people can afford them/ people can afford more of them. This is a good thing! Cheaper healthcare (or higher ed) would also be a good thing. But for it to be a good thing, you would have to make it objectively easier for more people to access the same-or-better-quality healthcare or higher ed! If by "deflation" here you simply mean "there's the same overall quality and quantity of higher ed, but older people (who had time to hoard money) can access it a lot easier, to the detriment of young people"... that would clearly be a bad thing.
Money is not like that, though. There's no economic advantage to be gained from people hoarding money - they're supposed to be a medium of exchange. If money increases value, you're not spending or investing them, which means less economic activity, hence less wealth for everyone. Money is just a vehicle, never an end-goal.
Tl;dr: wealth is, largely speaking, "more and better stuff for everyone!". More and better computers, electronics, higher ed, healthcare. And money, too, I guess? Except that "more money" is typically associated with "inflation" - which shows you that money doesn't really count, it's just a vehicle.
> That's... not deflation?
Isn't inflation/deflation about _purchasing power_? I.e. how much housing you can buy for a month's salary (for example), how much computing power, how much food you can buy? If you hoard money you can buy more computing power down the line. Isn't that "deflationary"? While if you hoard money and buy food down the line you'd get less of it. So food would be "inflationary".
> Isn't inflation/deflation about purchasing power?
No, that is _the exact opposite of inflation/deflation_.
Inflation/deflation are about nominal prices of goods and services.
If you want to talk about the price of a good in terms of a real quantity, then that is not measured by inflation or deflation and you need to specify what your measuring stick is, whether ounces of gold, or gallons of gasoline, or a median hourly wage in a specific labor market. There is one special term, called "real" prices, where the measuring stick is a weighted consumption basket, but that too is not going to represent purchasing power, which suggests deflating by either household income, or wages, or wealth.
> What if I were to tell you that the average worker who works for wages for 40 years will lose 40%
I'd point out that this was true only of workers who stored all their earnings over those 40 years in cash, and approximately 0% of workers do this. The actual average worker spends a portion of their income pretty quickly on goods and sticks savings into some combination of pension, savings accounts and a house.
> Why is it bad for workers to have another option for storing their savings?
Because "workers" aren't the people with vast reserves of wealth, they're the people who are paid by people with vast reserves of wealth. Make the vast reserves of wealth a zero or negative sum game, and they'll store that wealth in deflationary currency instead of businesses that generate less revenue each year, and the workers will find that their ability to get paid goes down every year.
The workers, unlike capitlists, earn a fixed salary. Inflation makes this salary have increasingly less buying power. This way workers are forced to negotiate a raise every year just to keep up with inflation and don't become poorer.
So, to be able to save, workers are forced to buy real estate that they don't need, making it less affordable for people who actually need to buy a house or get exposed to stock market risks.
All these problems caused by absence of hard money.
"Workers are forced to buy real estate that they don't need"
No, the average worker definitely isn't forced to buy more houses than they live in :D
I mean, it's always been obvious that the "lack of Gold Standard is the real reason workers are poor" is an astroturf movement by the ultra rich who have successfully lobbied for tax breaks for the rich and elimination of worker protections to blame something else [which removing would further benefit them] for the logical consequences of their actions, but the complete failure to understand what an average worker actually does with money is particularly amusing in this subthread. Strong _people who don't work for a living cosplaying people who do_ energy here...
Since falling wage levels literally _are_ deflation it's a bit hard to argue with a straight face that what the workers really need to be better off is a good old dose of deflationary currency.
Do you disagree that real estate is used as a hedge against inflation, which artificially increases the prices?
And you can call "lack of Gold Standard is the real reason workers are poor" an astroturf, but it's something that actually makes sense to me when I look at the arguments.
To the extent capitalist speculation on housing as an inflation hedge drives up the prices of assets workers store much of their wealth in, it benefits them a lot more than "not bothering to invest in anything at all, least of all job creation" being the rich's hedge against _de_flation
If it "makes sense to you" that the lack of Gold Standard is the real reason workers are poor, it probably helps to consider that workers were much poorer for the vast majority of human history with a Gold Standard...
>If it "makes sense to you" that the lack of Gold Standard is the real reason workers are poor, it probably helps to consider that workers were much poorer for the vast majority of human history with a Gold Standard...
That doesn't tell much. Anyone was much poorer for the vast majority of human history.
How do you explain the wealth inequality trend change starting from 1971?
https://wtfhappenedin1971.com/
It doesn't, for the most part. In most of the graphs its pretty obvious the rich getting richer bit happened in the 1980s, not the 1970s. It's also obvious their share of wealth was particularly large in the 1920s, when there was a very pure gold standard. (And of course back when _most_ people were so much poorer there wasnt even enough food to go around, the rich still had palaces, servants and mountains of gold to fund wars to engage in the most profitable economic activity of capturing other people's gold)
But obviously the people who advocated the tax cuts for the rich in the 1980s are highly, highly motivated to pretend it was leaving Gold Standard several years earlier that did it. Not least because going back to a gold standard would allow them to make that gap even bigger - the 1% could HODL the 30% their wealth in risk free, liquid, appreciating coins instead of having to take actual risks and create actual jobs. But the deflation that preserves their wealth as they withdraw from funding productive activity is - quite literally - everyone else's wages and sales revenues going down.
Sure, it's possible that the wealth disparity rise happened for other reasons, not related with gold standard.
However, I can still look at those charts and say that the gold standard does not harm the poor the way you imply it does.
Sure, but the original discussion wasn't concerning the rare exception to the rule the gold standard hurts the poor (a brief period between 1958 and 1971 in the US which started with half the world's gold supply, and so growth and inflation took occurred as normal).
The original discussion was concerning the insane fantasy that the US economy would be better off backed by a deflationary cryptocurrency than the US dollar.
I'm a worker. I can buy a bigger house than I need as an investment. Or I can buy the size I need, and take the money that I would have invested in the bigger house and put it in the stock market instead. Sure, some people do buy bigger houses as investment. They sure aren't "forced" to, though - not even for investment reasons.
And, the fact that an argument makes sense to you is a really poor response to an argument telling you why your position is wrong. (Of course, calling it an astroturf isn't much of an argument against it, either...)
Lack of a gold standard means inflation can happen. Is inflation why workers are poor? It's part of the reason, and it works this way: Inflation happens, then _later_ workers' wages go up. The price increases come first. That makes workers poorer to some degree.
But workers are still pretty poor during periods of low inflation. Why? _Because they aren't paid enough_. And why is that? Lack of unions, lack of individual bargaining power, greedy owners, lack of ability to produce enough value to be worth more. (I think that all of the above are true at least to some degree.) Which of those does the gold standard fix? Does it create unions? Does it give individual employees more bargaining power with their employers? Does it make owners less greedy? Does it give workers the skills to do more valuable things? No, no, no, and no.
So the gold standard won't really fix worker poverty.
Sure, I'm not "forced" to buy real estate, but I think it's fair to say that I'm forced to invest and buy speculative assets, otherwise my savings will slowly melt away.
And of course I also don't think that once gold standard is established, there will be absolutely no poverty.
I don't think traditional economic models think of 2% inflation in terms of "40% of the value being lost over a career." It's more this is where, from experience, we have an socially positive balance between economic rictus (a deflationary economy tends to discourage discretionary spending) and undermining real-world projects (high or volatile inflation makes long term project financing difficult or expensive)
> What if I told you that the average worker who works for wages for 40 years, will lose 40% of the value of their lifetime earnings if inflation was 'only' 2% per year?
how did you come up with this number? rational people don't just accumulate a big pile of cash over forty years. to the extent they have a surplus that doesn't immediately go towards expenses, they purchase assets.
by the way, I don't think it's "bad" that crypto exists as an option. having options is great! but I do think you'd be a fool to park an amount of money that matters to you in crypto.
> Call it $1USD, no vote.
USD is managed by the federal government, which despite all its flaws, is still a democracy.
> What if I told you that the average worker who works for wages for 40 years, will lose 40% of the value of their lifetime earnings if inflation was 'only' 2% per year?
You'd be lying. The average worker spends the majority of their earnings immediately meaning that inflation doesn't cut into them, and puts most of the rest towards assets that track inflation (houses) or exceed inflation (stock market / retirement accounts).
Bitcoin has no formal governance system, on chain or off chain. Could you be more specific?
Unless you're talking about blocks/hashing power. But that's consensus, not governance of protocol.
No formal governance does not mean no governance. It just means obscured governance with more hidden power structures.
If people haven't read it, I highly recommend reading The Tyranny of Structurelessness, even if the political context of its writing is uninteresting to you, because the lessons are deep:
https://en.m.wikipedia.org/wiki/The_Tyranny_of_Structureless...
And if course, there's value in the critiques of it too. Libertarians can learn a lot from anarchists attempts at building social structures that don't have rulers.
Bitcoin does not have "structurelessness." It has a clear structure. A better word for what it has is "tensegrity."
I believe that he is referring more broadly to forms of governance in DAOs (though I believe they're all on turing complete chains). For example, OpenZeppelin provides some quickstart governance contracts[1] that are all coin-based voting systems. There are some simple ways around this, like to make voting power proportional to the square root of token ownership but obviously one address != one human voter.
Vitalik wrote about some alternatives[2] on his blog, such as proof of humanity, proof or participation or staking based solutions primarily but most significant projects are still using coin-voting.
[1]:
https://docs.openzeppelin.com/contracts/4.x/governance
[2]:
https://vitalik.ca/general/2021/08/16/voting3.html
In most cases mining and PoS-schemes can’t really be meaningfully called “governance”. The miners hold very limited decisionmaking power, in the case of Bitcoin they can’t do much more than censor transactions (and even that is hardly practical).
Who decided the block size? Who decided to adopt SegWit?
Not the miners. They’re only one of many parties with influence over Bitcoin development.
Miners are the only people who decide the rules of Bitcoin. They vote with their mining power. (this is in the paper)
Bitcoin isn't bound by the white paper.
> Who decided the block size? Who decided to adopt SegWit?
Users running bitcoin nodes doing transactions validations, not miners creating transactions.
Miners/Pools could go on strike. PoS schemes will require you to pool as well, meaning there will be centrally controlled staking pools. These pools will yield great power too.
There are huge economic incentives that make miner strikes pretty unrealistic. It’s hard to imagine a situation where this wouldn’t backfire big time.
Depends on the change specific EIP brings...
varufakis should reade graeber's Debt. the most glaring problem of bitcoin (and the whole crypto world) is that it has this naive "scarcity view" of currency whereas it is an in-your-face reality that a most important role of currency is to boostrap a _credit system_.
cryptobros have an obsession with inflation and rates side of government regulation and they seem to be completely oblivious to the credit system side of regulation - the two-tier private/central bank etc. maybe because they actually have no clue how the current system works)
so besides the inflation/deflation challenge I have yet to see any proposal how one could have stable decentralized unregulated credit markets and would be quite interested if people have serious relevant references.
Varoufakis is a pretty sensible economist and understands perfectly what money's role in society is. If you read his book on confronting the EU he shows how eg Greece abandoning the Euro and moving to the Drachma wouldn't work out... It shows his understanding of macroeconomics.
I am pretty sure he understands credit money but he needs to show his work :-)
The point of my comment is that cryptobros are largely financially illiterate and when an economist undertakes the thankless task to discuss the possibility of a "cryptoeconomy" its important to make a list of all the missing parts
Varoufakis and Graeber actually gave a few talks together
Yanis Varoufakis has read Debt, he talks about it often and he and Graeber spoke together many times.
https://twitter.com/yanisvaroufakis/status/13015406941594869...
I too think it would be the opposite of a socialist empowering currency. The main enabler of socialism in a non willing populace is the government forcibly extracting taxes from people who would otherwise not donate freely to that cause. To that point without some kind of change in the current status of Bitcoin (in the USA) the ability of government to track and tax Bitcoin is greatly hindered.
Taxation was invented before money. Like all bitcoin nonsense, it’s hyperbole.
The actual value of bitcoin is pretty tenuous, hanging by a “tether” that is mostly built on fraud and untrustworthy accounting.
I agree with that. My point was simply that if bitcoin were successful it could provide an untraceable haven that the government would have a difficult time in taxing.
Socialism is about workers taking power in the workplace and in their lives. It's not about "big govt" or welfare
Socialism (noun): a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.
Sounds like big government to me.
It doesn't need to be. It could be organised locally around councils, which coordinate with each other.
> The main enabler of socialism in a non willing populace is the government forcibly extracting taxes from people who would otherwise not donate freely to that cause
So.. taxes? What’s that got to do with socialism?
Maybe my understanding of socialism is incorrect then. When I think of socialism the face of Bernie Sanders comes up. That equates to me of government subsidized everything. As anyone knows the government does not have anything it does not take from her citizens by force (taxes or printing money). Capitalism on the other hand, to me, puts the responsibility of life in the hands of the citizens directly. While not perfect by a long shot it was working well here. I think what has changed over the years is liberals slowly chipping away at capitalism and the two don’t mix well.
Yes, it is incorrect. Taxes has very little to do with socialism. You can have socialism without taxes and most non socialist system rely on taxes to some extent.
If you think the uneven distribution of fiat currency is out of whack, wait until you learn about cryptocurrency!
You're right that the best that a cryptocurrency distribution could hope for is to mimic fiat ownership.
But Bitcoin distribution is so heavily tilted toward the initial years that it's much more uneven than fiat. And other cryptocurrencies are worse yet, especially those with huge premines (which include all coins lacking PoW), concentrating all the wealth on its creators.
The Decentralization Movement, in the Web3 sense (three Internet prongs: consensus, messaging, information persistence), is (or ought to be) ultimately a vehicle for fostering subsidiarity[+], working opposite to the efforts of socialism to subordinate the individual to the state, _and_ opposite to the extremes of _laissez-faire_ capitalism.
[+]
https://en.wikipedia.org/wiki/Subsidiarity_(Catholicism)
In a way bitcoin is a socialist's dream since it allows tracking of all transactions and tracing of all assets so taxation and surveillance can be nearly perfect.
My gosh
This post is a mess filled with sweeping statements and outright bullshit
Anything that is not socialist is called ultra right. Bezos is called a robber baron (in relation to too good to be true gov contracts sure, but no one is forced to use aws or Amazon)
This is a daily reminder of the cognitive dissonance of someone who calls himself socialist but ignores how many times it failed with the murder of tens of millions. And you don't have dig your history books for examples of failures, all you have to do is to look at the oil rich Venezuela right now. But that's not really socialism, right? Let's try again one more time. "If I were the one in power I'd have brought upon the utopia!" - cries in dictator
_> no one is forced to use aws or Amazon_
Sure they are. I’d probably have to stop using the Internet entirely to avoid using a service powered by AWS.
The point is you as a business don't have to use aws, there are alternatives out there.
For consumers it is irrelevant because they aren't buying "aws" directly.
You don't have to live in your house, you are free to live outside.
You don't have to have a job, you are free to starve.
You don't have to live in your country, you are free to go.
You see, freedom is not absolute, there are power relations involved.
You can work for a bit, save up for a sailboat, live on it, fish for food, travel from country to country.
This is a false comparison
Because freedom is not absolute it does not mean I'd want to give whatever freedom I have away
Under socialism you do not get do pick jobs at will. And you better show everyone how happy you are at the job assigned to you.
"You don't have to live in your country, you are free to go."
Many have died for this freedom alone. And you don't have to go to North Korea to know this. Right in the heart of (now) western Europe people were shot dead for running away through the Berlin wall.
How come people risk death to run away from the utopia? They must be counter-revolutionaries better murder whatever family they left behind
> Under socialism you do not get do pick jobs at will. And you better show everyone how happy you are at the job assigned to you.
Socialism might mean you have more choice of work, because there is greater social mobility and access to education. Perhaps also you might work for a "cooperative" firm, where every employee is a part owner and gets to vote on issues and a take on the profits.
Yeah because those are dictatorships which have no meaningful socialism. I measure it in terms of _worker power_, not how authoritarian the state is or what it calls itself.
It’s _not_ irrelevant to me, the consumer, because there is a causal relationship between my use of a service and AWS making money.
Hang on a minute, while what you are saying is true, the article is not trying to convince you that socialism is good. It's trying to convince you that bitcoin does not solve socialist goals. i.e. Bitcoin is still a capitalist tool even if it often uses narratives like "it breaks up central banks".
I agree with your perspective on socialism, and that yes, the is messy. It's just not the point here. It's simply what the other camp thinks of bitcoin. (assuming the writing is truthful and all that jazz)
> Anything that is not socialist is called ultra right.
Could it be that you have misunderstood this? He was talking specifically about ultra-right / far-right like "National Front"/"National Rally" in France and Vox in Spain. That economic crises benefit parties like that (And you can see that parties like that are/were on the rise in popularity after 2008 crisis in Europe).
you should take a look at the venn diagram of failed socialist states and right-wing coups planned and/or supported by the United States.
here's a starting point:
https://en.wikipedia.org/wiki/United_States_involvement_in_r...
I could equally well claim that capitalism is evil and destroying lives (and the planet). But such a view would be just as one-sided as yours. The Nordic model, especially Finland, gives a good example of how socialist ideas can work. Socialism is about collective ownership, not authoritarian regimes.
Just to clarify, socialism is about _government_ ownership. Communism is about ownership of the _people_. As I see it no society has ever reached communism. Those that have gone full socialist have failed. There seems to be a fair amount of success in halfway there "socialist-capitalist" (essential services socialist, regulated capitalism for the rest) countries like Finland.
This article proves that "socialism" only represents the powers that be, like the World Bank, the IMF, the ECB, and the Federal Reserve. How out of touch they are, scaring people with problems from 1929 as if that was the last time the economy went sour. Life must be pretty dreamy for these “working class people” if that’s their biggest concern.
Socialism is no one's friend. It only exists because lawless barbarians use it as a facade to deceive and take the first steps to power. marxists do not believe in socialism. They believe that along with charity and happiness are things for fools and children. That there will always be animals brutally devouring one another and humans are no exception.
The USA achieved it's success by recognizing there's no compelling people. Make you case. Try to convince them. If it doesn't work, walk away. World's big enough. Nature always wins and no one is immune. If you are going to act, never make things worse than they are. That's where socialism fails. You end up forcing people to do what you want no matter how much you dress it up. Life is a very complex thing and we are very impotent in the face of it. There's a reason people are poor or sick or in need. Leave them alone. You could end up feeding the very wolves that end up eating you.
Bitcoin is absolute nonsense and loved by morosn
I'm Venezuelan. All I can say is: I know, and that's why I dedicated ten years of my life to help Bitcoin succeed, mostly in the form of Bitcoin Cash these days. I oppose socialism and understand how Bitcoin can help prevent elitists from gaining control over the economy.
Bitcoin is totally elitist and mostly a vehicle for speculation.
Look around, everything is a vehicle for speculation, from houses to baseball cards to oil.
Of any network that exists over the internet, Bitcoin is the least elitist. Participation is permissionless; anyone can spin up a wallet, and it requires no identification. Transactions are borderless, code is open source. No one can prevent you from sending/receiving at a protocol level.
> Bitcoin is totally elitist and mostly a vehicle for speculation.
I agree, but the parent poster does have a point. There are places where the economic situation has deteriorated to the point that using Bitcoin can solve some problems. Some things are worse than Bitcoin, but it's a rare phenomenon.
Fully agree. Commies can hfsp.