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Topic: Why Bitcoin is doomed to fail, and there's nothing you can do about it. - page 15. (Read 39330 times)

newbie
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Excerpts from Bitcoin Revolution: Ending Tyranny for Fun & Profit below.  (BTW if the author wants me to delete this post I will readily comply.)

The first thing to understand about governments is that they grow by stealing the wealth of their citizens. Without money to pay for bureaucrats, police, spying agencies, tax collectors, military machines of aggression, and propaganda like the mainstream media and the education system, the government would pose little threat to the freedom and prosperity of its citizens. So, assuming you believe the growth of government is the cause of the increasing poverty, unemployment, and misery that we see around the world today, you must ask, “What is the best way to reduce the size of government?” Well, it seems to me that there are 2 possible solutions.

You can try politically to reduce the size of the government. That is, elect politicians who will reduce the size of the government, or

You can stop funding your government and starve it of the wealth that it so greedily steals from you. The first option is surely the most desirable… if it is achievable. But, that is a big “if” in today’s society that is already so far gone. By “so far gone,” I mean that the education system, media outlets, and the general population are so enamored with big governments that only a “punch in the face” blow like an economic collapse will wake people up to the dangers of big governments.

if you want to know where the US and the rest of Europe will be in a few years, just look at Greece and Spain. Every week, millions of people march in the streets, protesting what the Euro technocrats are doing to them. Every week, the police come out with batons, water canons, pepper spray, and rubber bullets and beat the crap out of people. It never even enters the heads of the politicians to help the citizens they represent and give into their requests.

Exactly the same thing will happen to the rest of Europe and in the U.S. in the next few years. Once a ruling class has amassed that much wealth and power, there is simply no way that they are willing to give it up. Citizens can petition their governments all they like; they can protest, hold strikes, throw Molotov Cocktails, and anything else, but the ruling class will never give up their power voluntarily. It did not work for Soviet citizens. It did not work for Chinese citizens. It did not work for the Argentineans, the Cubans, the North Koreans, or anyone else who was unfortunate enough to allow the ruling class to become that powerful. Almost without exception, there are only two things that cause the ruling class to lose their power:

1) Force; or
2) Bankruptcy

Both are colossal disasters for the citizens. In the case of force, the cost in blood and life of waging war against a modern army and police force will be horrific. (Think Tiananmen Square massacre, times a million .) Also, think of what is happening in Greece and Spain at the present moment.

Still, the people of Greece and Spain are nowhere near winning the battle. If the people of America and Europe were to win via violence and protesting, it would be at a cost of tens, if not hundreds of millions, of civilian lives. A truly tragic set of events that could very likely happen.

So, what about bankruptcy ? Governments are experts at bankrupting themselves; we’ve seen throughout history that they all do it eventually. The problem is usually that they bankrupt the citizens first. Once a government has run up significant debt, they eventually turn to their citizens and take whatever they have left. They raid pension accounts, bank accounts, and investing pools. They nationalize real estate, businesses, gold and silver, food, energy, telecommunications , and means of production. They call it taxes, levies, contributions, buy backs and bailouts, but it all amounts to the same thing: Theft. In addition , they also have the biggest theft of all up their sleeves: the ability to inflate the money supply. Eventually, every bankrupt nation resorts to turning on the printing presses to pay interest on the massive debt they have accumulated. That process escalates more and more until every piece of fiat currency is worthless.

Bankrupt governments are replaced only after the citizens have lost their life savings and suffer greatly. Even at this point, some governments manage to stay in power. The sad thing is bloodshed is nearly always required. The cost to the average citizen on the street is atrocious. The hunger, poverty, corruption, and gang violence that follow a government overthrow is truly horrific. Bitcoin potentially offers a new alternative by allowing citizenry to create an economy beyond the reach of the government theft. Their wealth cannot be stolen through inflation , their bank accounts cannot be raided, and their retirement accounts are safe from bureaucratic hands. In fact, as the people flee the national fiat currencies, it is the private Bitcoin owners and business that will flourish. It is the entrepreneurs and employees in the Bitcoin community that, having successfully built a resilient economy, will see the masses flood toward it. It will be the Bitcoin community, if it can grow fast enough, that will be there to save the world, when the western economic world collapses in a debt riddled heap. That is why I say that transferring a portion of your wealth to Bitcoin and using it to pay for goods and services is the most patriotic thing you can do. While Bitcoin is building an alternative, functioning economy, it is also doing something very powerful. Something that people so often fail to learn during a collapse: more tyranny. Even after all of that suffering in the transfer from a failed government to a new government, people frequently just choose a slightly different form of tyranny. All too often, the country slips straight back into totalitarianism of a slightly different form, until the new system corrupts completely and the process repeats itself. The key to lasting worldwide peace and prosperity is a limited government. Until a mechanism can be found to limit the government, the government is sure to grow and grow and continue to cause the suffering we see across the world today.

So, can Bitcoin be that mechanism to limit the growth of government? That may be hard to say, but it is showing some very promising signs. At the very least, it will remove the possibility of that most insidious practice of money printing from ever occurring again. That is a huge step forward. That alone will severely hamstring the government from growing. The next way to restrict government is to reduce its ability to steal your wealth. To understand why, it is important to understand that the government embodies violence. All of its power comes from its ability to force, at the point of a gun, the dictates of its leaders. If you did not know full well that men with guns would come and throw you in prison for not paying your taxes, then you probably wouldn’t pay them. Every law, rule, or guideline is enforced through violence or the threat there of. It all comes down to force and violence. And, if force and violence is wrong, how do people take power back from their government when that government is wrong? Bitcoin provides a peaceful, non-violent answer to this problem because Bitcoin is not susceptible to violence.

As we have discussed in previous sections, and as the black marketers of Silk Road prove, Bitcoin is extremely resilient to violence. You can shoot at, beat, and kick a math equation all you like, and it does not respond. There is no way to storm the Bitcoin depository and confiscate it, or make Bitcoin worthless through inflation. It is anonymous and underground. Each and every one of us can move a portion of our transactions each month to Bitcoin. Each one of us can slowly but surely reduce our use of fiat currency and increase our use of Bitcoin. Each one of us can, little by little, eliminate the government’s ability to steal our money through inflation, by not using their money. The government requires those funds to be the insurmountable force of destruction that it is. The police officers beating their citizens in Spain and Greece are cowards, doing it to protect their own jobs and income.

They don’t care about the thieves in suits they protect, and they don’t care about the people they are beating. Take away the state’s ability to pay for the thugs, and the thugs go away. So, Bitcoin has the potential to be both the mechanism to limit the growth of government and provide a prospering functioning economy. The best part is we don’t have to convince 51% of the world to vote this in. One at a time, without seeking anyone’s permission, people can opt out of funding the over reaching government without destroying their own prosperity. And, they can do this without destroying the economy or the prosperity of their fellow man. This is huge. Never before in human history has man had this opportunity. For Atlas shrugged fans, the Bitcoin community is Galt’s Gulch, Mulligan Valley, or Atlantis.

When the fiat currencies collapse, imagine if society just got up, dusted off its knees, and the economy continued to thrive by ignoring the government, politicians, and their silly solutions of a world-wide fiat currency. Just think of that possibility. Take a second and just opt out of the government; ask the question, “Who is John Galt?” Whether or not Bitcoin really does become the mechanism to limit the government by taking away its ability to inflate the money supply remains to be seen. However, one thing is certain. Bitcoin will reduce the revenue of governments, and attempts to police the Bitcoin community will create a massive for the government. In either situation, the government will be reduced. So what if this idea takes? What if the Libertarian or small government community takes hold of this idea? What if Ron Paul fans stop campaigning for Ron Paul and start campaigning for Bitcoin? What if they wave signs for Bitcoin instead of Ron Paul? What if they go door-to-door knocking not for Ron Paul but to businesses, saying, “Who ever accepts Bitcoin will get their business?” What if spokespeople start touring your country giving pep rallies for Bitcoin? Just how fast could this grow? In my opinion: Very, very fast.

So, what do you think ? Will Bitcoin explode over the next 5 years with a flurry of people making fortunes fighting for freedom? Will the hard crash landing of the fiat currency collapse be softened by the Bitcoin economy taking its place? Is Bitcoin a reasonable solution to limit the size and power of the government? Is it a reasonable solution to creating prosperity? Would a reduced state bring about more peace and less war? This book is a call to action to people who believe the answer is yes to those questions. Your fellow citizen will need your help to keep goods and services flowing when the banking system collapses. Think of those poor people suffering in Greece and Spain right now. Youth unemployment is over 50% in both of those countries. Poverty and hunger are rampant. The same thing is headed to where you live. The most valuable contribution you can make to your community right now is to build an economy outside of the reach of your government.








member
Activity: 70
Merit: 10
Such a flawed reasoning.
So you expect the blockchain to grow exponential but you also expect the bitcoin user base to grow to just 3 millions in 5 years.
newbie
Activity: 17
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full member
Activity: 168
Merit: 100
Yes bitcoin has no incentive to be spent. And people only buy it because they hope it will increase in value and alot of people appearently believe it will become the new world currency and they will become the equivalent to dollar millionaires/billionaires.


Thats called speculation. Thats what bitcoin is used for these days. A while back its primary use was actual as an currency to buy and sell black market goods.

It is great for that but is has no advantage for the white market in this Statist system.


If you want to protect your saved fiat money from inflation buy land/gold/livestock/guns because these things do have value.







legendary
Activity: 3878
Merit: 1193
3. FLAWED ARCHITECTURE

Size

11 GB today.
100 GB 1.5 years from now
1 TB 3 years from now
10 TB 4.5 years from now
100 TB 6 years from now
1 PB 7.5 years from now
10 PB 9 years from now
100 PB 10.5 years from now

One flaw is your estimates of blockchain growth. The blockchain cannot grow exponentially like that. It can only grow 1 TB every 20 years!
sr. member
Activity: 350
Merit: 253
This thread is a tribute to all the haters in modern history:

1.  The car is a fad.  Horses will never stop seeing use.
2.  Telephone?  that's a child's toy, it'll never become mainstreem.
3.  Television?  People will get tired of staring at a little box in their house.

Could go on forever.

This quote sounds kind of familiar. Just replace bitcoin with helicopter Smiley Much like the modern helicopter (which has a relatively narrow, but valid, range of utility in air travel) bitcoin will likely fill a role of some type as a store of value or remittance currency, but nowhere near what proponents want (or wish) for it.

Quote
Automobiles will start to decline almost as soon as the last shot is fired in World War II. The name of Igor Sikorsky will be as well known as Henry Ford's, for his helicopter will all but replace the horseless carriage as the new means of popular transportation. Instead of a car in every garage, there will be a helicopter.... These 'copters' will be so safe and will cost so little to produce that small models will be made for teenage youngsters. These tiny 'copters, when school lets out, will fill the sky as the bicycles of our youth filled the prewar roads.

-Harry Bruno, aviation publicist, 1943.
sr. member
Activity: 560
Merit: 250
First of all Money is a means of exchange. Bitcoin has just as much value papermoney by itself. In only can attain value if it is a means of exchange.

The only thing that has real value is human labour and tangible assets.

Money is an agreed upon method of exchange to make trade easier.

You can trade in sticks or toenails if you want to.

A government can force you by law and under threat of violence and jailtime to trade in whatever they want you to trade it.

Bitcoin cant make fiat worthless. If a state imposed laws that restrict trade to a certain currency that it controls there is nothing you can do about it.

How are you going to to use bitcoin if government has imposed laws that restrict coorporations to trade in bitcoin?

Also inflation itself is not a bad thing, its an incentive for people to spend money and create economic prosperity.

What you see now is just a wealth transfer where insane amount of money are created by an elite and distributed and kept by a small number of the population.

If that money where to be seen increased wages inflation would be great.



Yea inflation is seen as bad by usually the uneducated and lazy. Ohh I actually have to learn skills and gain knowledge on how to properly keep my money growing, and not lose it's value. I have to invest? Instead they wan't the easy way out, which is Bitcoin.

I buy coins, keep for 20 years, sell at massive profit. No need to learn anything, Buy, hoard, sell. Deflation is good, because it makes me richer, they could care less about other people besides themselves.

Inflation is only bad when governments get out control with money printing, or when it is controlled by a small group of people to their advantage which it is. Things like Bitcoin are not bad because it allows poorer people to gain an economic advantage. It's only good on a limited scale, but if the whole world economy was based on deflation, it would be a total disaster everybody would hoard and work minimally and just become richer and richer, until they would all stop working.

I'm sure free markets would even themselves out, but inflation gives people an incentive to be productive as you mentioned above.
sr. member
Activity: 560
Merit: 250
Hi,

I read the OP with interest, considering argument #1. It is also the most important threat I see concerning BTC, and those who don't see it are blind. It doesn't mean fatality, but this power really exists.

Here is an interesting point of view about the future of money.  
http://www.youtube.com/watch?v=I8JhmQ73Vq8

I'm more optimistic than OP concerning the future of BTC, but it is not my purpose in this reply, I just wonder how can you compare BTC users growth to Facebooks ? Both of them take place on the grid but IMHO the comparison stops here. Facebook is free and does not require (apparently) involvement. You sign in and you let uncle Sam doing the rest, while BTC by essence is costly, you have to pay for it, then to take care of it, and take the risk on you. Big difference isn't it ? 

drgyoza

drgyoza Facebook was used as an example of growth, you can use google, paypal, Apple for example. Apple actually requires you to spend money on it. Most things that are going to "take over the world" have high user growth within the first 5 years. I was just comparing growth in general.

Also, their press is positive, Apple was like it's the best thing since the wheel. Facebook was like, it's so amazing I can talk to all my friends everybody get on facebook.

What is Bitcoins press? It went to $1000 today it's a shitty bubble, the government is against Bitcoin, all the press is negative. This influences the normal potential users, hence why that argument was made. It's about growth generally speaking, if after 5 years you only have 3M users something is seriously wrong, and most likely you won't be gaining many more even if you double those numbers. You either grow insanely or you don't.
full member
Activity: 168
Merit: 100
First of all Money is a means of exchange. Bitcoin has just as much value papermoney by itself. In only can attain value if it is a means of exchange.

The only thing that has real value is human labour and tangible assets.

Money is an agreed upon method of exchange to make trade easier.

You can trade in sticks or toenails if you want to.

A government can force you by law and under threat of violence and jailtime to trade in whatever they want you to trade it.

Bitcoin cant make fiat worthless. If a state imposed laws that restrict trade to a certain currency that it controls there is nothing you can do about it.

How are you going to to use bitcoin if government has imposed laws that restrict coorporations to trade in bitcoin?

Also inflation itself is not a bad thing, its an incentive for people to spend money and create economic prosperity.

What you see now is just a wealth transfer where insane amount of money are created by an elite and distributed and kept by a small number of the population.

If that money where to be seen increased wages inflation would be great.

sr. member
Activity: 560
Merit: 250
No, it's a fake out dude. Obama's really in charge.

I assume that means you do not know the answer, or cannot articulate the answer, to my question?

Henry, don't mind them this is what the Bitcoin community is Elitist's who think they are better than everybody. Kind like the Environmentalist who feel morally superior because they protect trees, and if you don't do the same you are worthless scum.

To answer your question since nobody is going to. Yes Gavin and the foundation have this much power. Basically everyone only trusts the Bitcoin foundations client, because imagine if you download a random client off the internet, you can't trust it, it can steal your wallet ect.

The problem is other community members can get together and work on solutions and fix Bitcoin, but then there will be 2 different versions and it will ruin Bitcoin even more, as some people would run a different version.

So basically people are stuck with Gavin and the Foundation, unless they decide to start their own foundation work very hard, create an awesome update, and hopefully people will adapt it, but as mentioned above it will cause problems most likely.
sr. member
Activity: 560
Merit: 250
The fact that fiat is created out of nothing and bitcoin is finite doesnt mean anything if people with guns can force you to use one over the other.

If Bitcoin makes the fiat worthless, and thus starves the government of funds, how will they pay the men with guns?  Government "power" is only possible because they steal money from the citizens though income taxes and inflation. They cannot inflate Bitcoin. And if they try to tax too high, people will refuse to pay, that would be much easier to do in a Bitcoin economy than it is now.

Bitcoin is not going to starve anyone with .0005% market share. Secondly, people will love paying taxes, like they did in Cyprus, where the banks legally stole 70% of their money, and they did nothing. Same in Greece, people might protest but that's about it when the army comes with weapons, people usually run.

Hence why guns are useful, and anyone who is for gun control is dooming themselves. Why do you think only the arab nations are having revolutions because the people actually have guns to fight with. In Europe, everyone has pretty much been disarmed and is at the mercy of their government.

Same thing they are trying to do in the US, commit staged school shootings every week so they can pass gun laws to outlaw guns and control them as much as possible. This is another discussion on it's own.

It's nice in theory that people will do this and that, but when it comes time to go to jail, prison, or physical harm people will do nothing.
legendary
Activity: 2156
Merit: 1393
You lead and I'll watch you walk away.
No, it's a fake out dude. Obama's really in charge.

I assume that means you do not know the answer, or cannot articulate the answer, to my question?

No, it means that you don't really know what open source is. It means you don't know what a pull request is. It means you don't know what the fork & pull model of open source development is. It means if I told you he was completely fucking powerless to make changes that the community doesn't support you wouldn't understand why.
newbie
Activity: 59
Merit: 0
The fact that fiat is created out of nothing and bitcoin is finite doesnt mean anything if people with guns can force you to use one over the other.

If Bitcoin makes the fiat worthless, and thus starves the government of funds, how will they pay the men with guns?  Government "power" is only possible because they steal money from the citizens though income taxes and inflation. They cannot inflate Bitcoin. And if they try to tax too high, people will refuse to pay, that would be much easier to do in a Bitcoin economy than it is now.
newbie
Activity: 59
Merit: 0
No, it's a fake out dude. Obama's really in charge.

I assume that means you do not know the answer, or cannot articulate the answer, to my question?
full member
Activity: 168
Merit: 100
It's funny how the OP posted a well thought out and articulate write up of bitcoin flaws, and most people here just tell him he's an idiot or dismiss him as a troll. That's a pretty strong indicator that there's a problem, and the reason I'm bearish long term.


Exactly the rebuttlers in this thread have just reinforced my bearish outlook on BTC.

When talking about bitcoin you hear about grandios future scenarios where 1 BTC is worth tens or hundred thousands of dollars. When it has peacefully replaced states and central banks and the world has transformed into a libertarian peacefull society.

I think I said it earlier but ill say it again. Although governments cant eradicate bitcoin and bitcoin use they can certainly push it back to the fringe where it had an actual practical use in this system that we live in.

Bitcoin does not beat guns and people will not go to extreme lengths and pay premiums out of idealism.

The fact that fiat is created out of nothing and bitcoin is finite doesnt mean anything if people with guns can force you to use one over the other.

I would love to live in a future where people are free to choose to trade in whatever they wish but thats not where we live.
newbie
Activity: 23
Merit: 0
Hi,

I read the OP with interest, considering argument #1. It is also the most important threat I see concerning BTC, and those who don't see it are blind. It doesn't mean fatality, but this power really exists.

Here is an interesting point of view about the future of money.  
http://www.youtube.com/watch?v=I8JhmQ73Vq8

I'm more optimistic than OP concerning the future of BTC, but it is not my purpose in this reply, I just wonder how can you compare BTC users growth to Facebooks ? Both of them take place on the grid but IMHO the comparison stops here. Facebook is free and does not require (apparently) involvement. You sign in and you let uncle Sam doing the rest, while BTC by essence is costly, you have to pay for it, then to take care of it, and take the risk on you. Big difference isn't it ? 

drgyoza
sr. member
Activity: 350
Merit: 253
It's funny how the OP posted a well thought out and articulate write up of bitcoin flaws, and most people here just tell him he's an idiot or dismiss him as a troll. That's a pretty strong indicator that there's a problem, and the reason I'm bearish long term.

I've long wondered what the incentive is going to be for consumers to start using bitcoin. And here we are 5 years later and the user base is still tiny (relatively speaking). And of those, most are using it only as a speculative instrument or for gambling online.

To all those who think consumers will be stirred with a revolutionary passion to ditch the banks and migrate to bitcoin, you're seriously delusional. You need to realize that every democratically elected president and leader in the US and Europe has won their office by promising to give the most "free stuff" to voters. The majority of people unfortunately look toward government to solve their problems. As a group of libertarians, you guys should really be the first to recognize this.
NWO
sr. member
Activity: 392
Merit: 250
legendary
Activity: 2156
Merit: 1393
You lead and I'll watch you walk away.
Do Gavin Anderson et al really have that much control over BTC and the network?

No, it's a fake out dude. Obama's really in charge.
newbie
Activity: 59
Merit: 0
Do Gavin Anderson et al really have that much control over BTC and the network?
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