Topic: [2014 - 05 - 21] HARVARD ECONOMICS PROFESSOR MAKES THE CASE FOR BITCOIN (Read 2257 times)

I'm not sure it is good, this is what the government will want to do, so everyone should be alert and against it now.
Anyway, no publicity is bad publicity

What is most interesting to me is that academia are even talking about adopting it. To me, that's an important first step. Many of them will get it wrong of course, but after watching how MIT handled introduction to Bitcoin I'm not worried at all - 'here's your wallet, go create stuff.' I don't care if they get it wrong, Bitcoin (and the network) will eventually set them right.

Because Bitcoin protocol can be adopted to so many things, we should expect all manner of power brokers believing they need to or even can 'control' its usage. If I had to pick one thing that wrongful thinking economists need to figure out it is the power of the decentralized trust network effect - I don't think they comprehend what it means to the seat of power. To me, these economists are like people assembling a bridge out of popsicle sticks, debating how traffic will flow and what tolls they will charge while Bitcoin simply doesn't care as it it too busy moving boulders and pouring concrete.

If the greatest feature of Bitcoin is building trust where trust never existed before, we should welcome any and all debate between untrusted parties and hash it out on the blockchain. Even if they think they can control Bitcoin, welcome their efforts. The moment any of those controls become abusive to the greater number of users that blockchain will cease to exist and another will sprout up to take its place.

I agree 100% with Andreas Antonopoulos, the cat is out of the bag. Consider many of the uninformed modern economists as little children who we've given toy hammers and we let them play with the concept until they suddenly realize that economies and everything they knew about them are about to be redefined. This is World Changing thinking, out with the old rules and in with the new rules - it's just going to take a little time.

As far as a totally paperless/coinless currency that is dependent 100% upon electricity, I believe the Professor is wrong as there will always be coins, commerce can't stop simply because the power went out. There's always a handshake or a promise. Iif pressed I imagine a local script could be created based on the blockchain - one can manually create a transaction (on paper) if they wish:

http://www.righto.com/2014/02/bitcoins-hard-way-using-raw-bitcoin.html <- This is what the good Professor may some day be teaching.

That means that he is not exactly supporting Bitcoin, but only to some of the aspects of the digital currency. Right now, that is a good start. Even government controlled digital currency can give some boost to Bitcoin.

I've read his argument several times,
https://www.project-syndicate.org/commentary/kenneth-rogoff-examines-two-ways-to-beat-the-zero-bound-on-nominal-interest-rates

It seems he wants to do away with paper money, and replace it with digital currency that GOVERNMENT has absolute control... isn't that the polar opposite of bitcoin?

I know that the mainstream TV stations will turn down the offer to broadcast such a debate. But if Mark Williams agrees to it, we can have a debate, and then upload it to video sharing sites, such as YouTube.

I am a fairly ardent anti big government person, but you could collect a reasonable amount of sales tax that businesses can build into cost. The pay off would be having a public block chain so we can see how government is spending what we send them. You can then vote with your economic activity and government would be forced to live within it's means. You can't start constant wars if you can't afford bullets.   

Because in any legitimate debate where they are made to answer difficult questions about Bitcoin the anti-Bitcoiners would lose badly and they don't want that to happen, it's like how mainstream politicians don't get into debates with the 'crazy' minor parties because they know they'd lose. It's much easier to trash talk and insult an enemy from a high up tower where they can't reach you than actually go out and fight them one on one which is essentially what these people have done, they've created a system where it's impossible for anyone but their allies and friends to talk to them.

I like Kenneth Rogoff... and I have a grand idea in mind. Why can't we have a live televised debate between Kenneth Rogoff (on the pro-Bitcoin side) and Mark Williams (on the anti-Bitcoin side) on the future of the digital currency?

EditP Trading, I liked your question so much I answered it twice.  

Bitcoin will change government more than government will change Bitcoin. Forget taxes on services. It's gone. Instead tax the consumption of those who've earned money through servicing. There would be a basic living exemption.

The loophole is this: A person could claim poverty and cheat the system of food, water, shelter and medical care by claiming they are flat broke. Those all would be affordable costs to a government operating at peak servitude. An efficient government, not at war, married to consumers instead of industry (DAC) can afford it. Imagine government when taxation is voluntary. Don't like government, don't ride the public block chain.

The moment that greedy wealthy person (described above) acquires and attempts to transport something (borders) it becomes apparent they consumed. That's the most efficient point of taxation.

If I believe bitcoin will change the world I believe bitcoin will change government. The question is bitcoin brothers and sisters, do you believe? 

A bitcoin wealth effect might allow something similar to universal living wage. I truly believe that the bitcoin protocol will eliminate so much waste from government, privatizing much of it in the form dedicated social contracts within the block chain, that the cost of government will plummet. In super optimist mode, I believe that taxes could eventually move to a totally voluntary status. Get your name on a park bench for example.

Tax robots and software and machines and distributed autonomous corporations not humans. If 'government' stops serving the people, they bite the hand that feeds and that form of government goes offline, landing in some archive while society rewrites the contract with amazing speed.

"Harvard  [Cock]..." -Penn Jillette

Even if that kind of change was made, the lack of banking records, the relative anonymity of bitcoin and of several exchanges, would make very hard to tax services, digital goods or small companies that don't have organized accountability. If bitcoin reaches the masses, the state will have to fight for their financial survival, probably adopting measures of online control of the use of cryptocurrencies.

And take in account that consumption tax is unfair, because taxes rich and poor on the same terms. Alright, the rich spend more money, but he will be paying under the same tax rate of the poor.

I believe it will pressure them to change the nature of taxation relieving pressure to tax income and increasing pressure on consumption tax. One of the changes I've been hesitant to speak of is that Bitcoin protocol will likely strengthen borders. That is, money may pass through borders as if invisible but the things you purchase will be highly visible.

This is all speculative, imagine handing someone one of the first credit cards in 1950 and ask them to speculate how they'll be using it 20 years later when the first ATM is to be introduced, few could imagine.

Well, people have to tell those things in order for bitcoin to be more accepted, but I doubt any Government will believe that bitcoin can be tax friendly. On the contrary, bitcoin can provoke much more headaches for the tax men than off shores do.
Take in account that the bitcoin can be changed in order to introduce higher levels of anonymity, taking in account advances introduced by other alt coins.

Are you talking about this paper ?

http://www.nber.org/papers/w20126.pdf

Why should anyone listen to this guy again as he's always wrong?

You have to drone bomb entire nations & kill thousands of men, women & children to get awarded one of those coco tin lids.

Personally, I hope that coin mixers and dark wallets will demonstrate the futility of attempting to collect taxes on the virtual economy and to tax income. Instead, tax collectors will focus on actual consumption. Because 'government' projects will be handled in the block chain through dedicated alt chains / side chains, a major portion of government funding will become voluntary.

If bitcoins can be traced to individuals and therefore taxed then they can also be red-listed which will destroy their utility as a fungible currency. Coin mixing, dark wallets, etc. will become an essential tool.