Topic: Bitcoin will NOT solve all problems but will make rich people richer! - page 2. (Read 4282 times)

I like having this asked me because it is not one I can answer as cleanly and as certainly as I would like to so it makes me think!  I think if we had a clean slate, say a bundle of us found ourselves on a previously uninhabited piece of land, I would not feel I had the right to be part of the establishing an organisation that would prevent others from doing anything other than abusing others.  And if we ended up with more than one competing organisation doing crime prevention/justice I really don't know - but I can see problems.

But I'm guessing neither of us are in that position!  I guess we both live in lands that are currently governed.  Now if we stripped these governments' powers back to the extent that we both agree and strip their funding back to the extent we both agree I know we still have not gone as far as you want but we still have one government.  In this situation if a bundle of people (or one very rich person) decided they wanted to fund an army or a police force and do justice their way and for the sake of argument, at the risk of offending muslims out there, they decided the law they considered to be just was sharia law, would I trust them to respect the rights of suspects or to treat believers and non-believers with equal respect?  Mmm.  I think I would prefer to support the government in saying, "No you can't have your army" which of course means being prepared to prevent the army from being formed by force.  So I don't know if I would go as far as saying I have a 'right via proxy to threaten' but I think I would nevertheless take that step in the given circumstance.

I will give you the same consideration if you want to live, trade, rent and conduct your free life without owning land.  What's more, regardless of your wealth or lack thereof, regardless of your not electing to contribute to the public purse the police, the courts and the armed forces will protect you irrespective of who you are.  However if you decide to own land you do so under the understanding that whilst any increase in value that arises out of improvements you make is yours, any increase that happens as a consequence of others' efforts will not by right be yours and you will therefore be obliged to pay rent on it.

Please note I am not saying I have 'THE ANSWER' but i think I have AN answer that is a world away and is more just by orders of magnitude than what exists today.  I suspect by the time we got to having stripped away the powers and funding to the extent that we both would agree the differences in the connotations and likely outcomes of the remaining options would become clearer and I doubt very much we would come to blows over it!

Lexically government does not imply coercion (although I fully empathise with those that think otherwise).

In theory one could build a governing system that is P2P and fair (of course people unable to own a node would not have a voice).

But the problem would arise of peers grouping together "offgrid", talking etc., forming subroups that work on coerceing other peers into voting a certain way, larger groups could control the media etc. So in effect the government system escapes its mathematically perfect existence in the network and spills out into individual minds and we are back to square one; a pyramid heirachy emerges and eventually dominates, again enforcing laws chosen by those higher up.

Bitcoin itself has no defenses against this behaviour either. Business intrinsic to BTC is mining and transaction processing (and loans), in time mining/transacting will be carried out by a diminishing number of mega-nodes (eventually 1) as that configuration is the optimal solution both energy and hardware wise. This optimal solution is inevitable in a competitive market, and so the chance for corruption increases over time.

When you consider the above; the concept of a Borglike hive mind kind of makes sense (unless you're near the top of the existing pyramid). Should a hive mind arise in humans I think it would be favoured by evolution and we would be exploring the galaxy sooner. Also I dont think a borg mind has to be grey and unfeeling as portrayed on startrek, maybe it would be wonderful?

I think centralisation is certainly part of the cycle, part of the picture but in the examples I'm thinking of if centralisation becomes excessive it get's lazy then competition springs up and shakes things up again

I think those who believe centralisation as an inevitable consequence of profit will tend to filter out signs that what is happening doesn't conform to that picture.

Let's look at mining first:

If ASIC mining gear generally keeps the same price per hash regardless of the scale of purchase (which is essentially where it is at at the moment) there is no economies of scale that will drive out the hobby ASIC miner.  And if the growth of the bitcoin user network is growing exponentially the proportion of those deciding to mine needs to decrease by even more for the distribution of mining to decrease - and I just don't see it.

As for the pools I think we're all aware of the dangers of some pools having too much power and it is simple enough to use another means, not least p2p, to mitigate those problems. I will not comment on the transaction capacity issue with SD and dice because I don't understand the technical issues nor proposed solutions well enough to form an informed judgement.

Do you, either in person or via a proxy, have the right to threaten other people with violence for disagreeing with you?

I fully support your right to fund any organization you want to fund with your own money, and to refrain from funding any organization you disagree with. Will you grant me the same consideration?

I'm still not convinced by the idea of competing law enforcement agencies etc. that I've seen anarchists argue for.  I would prefer police, armed forces and justice system to remain under one agency.  I would call that a government regardless of whether they are 'evil violent mafias' or not.  I understand purist anarchists say unless you're allowed to raise your own army you are 'oppressed' and the regime preventing you are therefore oppressive and evil.  I'm not saying they're wrong.  I just don't agree.

I don't believe it does 'distort' the market when it comes to land.  I agree with the principle of not interfering with markets relating to capital and labour because yes, it does distort prices making it an uneven and unjust playing field.  But the reason people mostly apply the same to land is because neo-cons and ancaps tend to bundle capital with land and call them both capital.  But classic economics differentiates between land, capital and labour, recognising land to be a special case.

At the risk of derailing this thread (I could go on about LVT till the cows come home - as I have over in the politics subforum) it is the fact of landowners reaping the benefits of the increase in value of their land as a consequence of the combined efforts of others that distorts and creates injustices.  LVT or other forms of GeoLibertarianism or Georgism look at means of minimising or eradicating those distortions.

As for VAT I can see what you're saying about sales tax being a much easier one to monitor and enforce than income or wealth taxes.  However it is still a tax on the productive and is still prone to a certain extent to avoidance whereas land tax simply isn't.  I own the land, I have title to it there is no argument.  It can not be hidden.  My land is valued the same as that of my neighbours and that's how their and my 'location levy' (a term I prefer) is determined.

You ask why should [holding] land be rendered less useful than other goods?  Because it is!  Well actually it is worse than 'less useful'; it is harmful.  Comparison with Bitcoin makes the essential difference easiest to see.  In common, hoarding Bitcoin and hoarding land both mean less is available for everyone else.  But regardless of how little Bitcoin is left it is just as useful for newcomers to use for trade, for international transfer or for hoarding.  It doesn't matter how much you scale it essentially it still works.  You try getting the same crop out of, or building the same house on a plot that is 0.00001 the size of what an 'early adopter' bought for the same price!

Same thing. Without the coercion they aren't governments any more. We have other words for organizations which do the same job without the violence, like "charity", "insurance companies", "business", etc.

So far, it is still an experiment, both technically and politically

Centralization is the natural end of any profit driven system, so how to limit the centralization tendency is the core question

At the begining, when resource is aboundant, bitcoin is quite distributed, this might be the best time, but that period is almost coming to an end, mining operations will be more and more specialized and centralized to several large pool, bandwidth and storage limitation will put most of people out of the mining, and satoshi dice like automated trading bots will abuse most of the transaction capacity...

Well, either they will cease to be evil violent mafias or they will cease to exist.  Time alone will tell.

Governments are evil, violent mafias. When people stop believing it's virtuous to point guns at their neighbors to get what they want governments will be extinct.

Unfortunately VAT on goods is almost impossible to avoid, in spite of having or not a way to spy on people's finances. Merchants have a strong incentive to declare it in order to reimburse the VAT they payed on input.

And even for VAT on services, some nasty techniques may considerably reduce evasion, like forcing merchants to allow customers to provide their fiscal number to be attached to the "fiscal receipt" (what's the correct English term?), and then reimburse these customers of a % of the VAT they payed. The government of the state of São Paulo is doing this right now. You may get back as much as 30% of all the VAT (there called ICMS) that you pay. As the default VAT percentage is 18%, it means by default you can get back ~5,4% of the price of everything you buy just by adding your fiscal number to the receipt. It's not a negligible amount, so most people do give their numbers. As a consequence, the state avoids a significant amount of tax evasion and also happens to gather an immense amount of financial data about its subjects. Total Big Brother, and would work quite well even in a cryptocurrency world.


Land tax creates price distortions. Why land should be rendered less useful to hold, relative to other goods? Interfering with market prices is never a good thing.
(of course that every tax does such interference, but a general flat VAT affects all consumption equally, so the distortion effects are less bad)

The way they 'milk' makes a massive difference.  I don't see this being a painless transition, especially to the mainly poor who believe they should pay their 'fair share' of taxes whilst the smarter and those who pay the smarter take more and more income and wealth out of reach of the taxman.  However I see governments being forced to totally rethink their income (and their expenditure) as inevitable eventually.

People propose flat tax or high VAT as alternatives but both are still taxes on the productive and both are among the taxes that become more difficult to impossible with the rise of anonymous currency.

Tax on land on the other hand does not.  Governments can, and should, give up on trying to keep tabs on how much people earn and how much wealth they own.  Tax on land is taxation without 'milking'!  Taxation as a rent on the increase in land value that is as a consequence of others' efforts (businesses, workers and 'public works' such as infrastructure) is not only not negative, it has a positive impact by ensuring land is used more effectively.

I happen to think Land Value Tax is part of a family of solutions that includes and goes hand in hand with Bitcoin.  But regardless of whether it is or not the eventual solution the fact that taxation via inflation will be impossible whilst taxation on wealth, on income and on sales will be very difficult will push the conversation towards better solutions.

Bitcoin will certainly be the currency of future "internet states/country"

it certainly may bring happiness, and code of values come out of thermodynamics

you start in a deep well that others dug before you were alive and you were born in the well. You have no climbing tools of any kind, or digging, the owners/people at the top of the well drop scraps of food down to you and sometimes water, but really don't care except that when they throw down documents for you to process/write (white collar) and things to assemble (blue collar) these jobs are done. These products are hoisted up in a bucket connected by razorwire so you will never be able to climb it and anyway its not strong. They only keep you alive when you make them profit, this may mean sometimes they drop medications down to you but these are mainly anti depressants so you can feel better about your true situation. They may offer 1/10000000 well people a lotto ticket out, but only do this by making you return more work or eat less for that lotto ticket, so it not really an out it was a regressive tax. But it gave you [false] hope

Can you not see It does not matter how smart, hard working, enthusiastic, kind, optimistic or lucky you are, you are structurally you are still and always will be in the well, with no way out ever.

So keep believing hard work and smarts will get you there, it wont.

yeah but the special ones, you know the ones that pee strawberry juice and have long flowing rainbow manes.

Operationally, a switch from gold to rhenium (to use one of the few vaguely theoretically possible alternates) would be a significant undertaking.  Mining, processing, minting, distribution, etc.  A crypto-currency, OTOH, could achieve a much more satisfactory drop-in replacement solution with an effort of one man-evening of hacking in his den.

That said, I am sure that there is some element of 'tradition' in Bitcoin and other crypto-currencies, and it is a big question mark in my mind as to how much of a factor that will be in practice as we move forward.

I'm afraid you've been misinformed. The wealthy are not risk-averse at all. Sure the core money (often in trusts or invested by near-blind portfolio managers) will be boringly held, but at the edges they have play money that they enjoy gambling. They could happily drop 50k on a party or maybe a bitcoin punt just for the chance to look clever later. IMO its the first sightings of some of these that are fuelling the current rise

Maybe I should note: the last sentence in my post above was not meant sarcastic.

About gold.....  why don't you buy some Rhenium (there is 5x less in the Earth crust but it is currently 15x cheaper than gold) and make it the new gold?

Gold gets its value only by tradition and so might bitcoin.

There is no realistic direct replacement for gold, for instance.  OTOH, a clone of Bitcoin is mainly indistinguishable from the 'original' once a blockchain is reasonably developed.  Except that some more inflation is possible, the shit-heads who hold value in the abandoned chain are SOL, and whatever secret keys they buried in a hole are as worthless.  So, the take-away for the owners of a dominant crypto-currency would be don't be shit-heads...distribute the wealth or the masses will do it for you.

Now do you see my point better?

But not to buy bitcoins. Loosing a couple thousand bucks is not a risk for rich people but playing.

    You can not speculate on the price of the internet, though.   Things might equal out but it will be a long time.


Oh but it's going to be different! Why? Because bitcoin is a different kind of money (money based on a scarce commodity as opposed to fiat money that can be printed up).

Yes, there will be rich people and some of them will get richer (the ones who make the right choices). But some of the will get poorer (because they make the wrong choices). This is good. Money isn't fair: if it was fairly redistributed every month evenly to every person on earth there would hardly be any incentive to acquire more.
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limited redistribution is an interest of rich people, too. keep the balance, keep the 99% off the streets.


? seems pretty easy to hide bitcoins in a hole.


You mean all or nothing politically? Either a totalitarian or a small state enlightened society? Sounds reasonable to me.