[liberationtech] Bitcoin and The Public Function of Money

[Maxim Kammerer]

On Mon, Nov 5, 2012 at 4:34 PM, Yosem Companys <companys at stanford.edu> wrote:
> While I (and probably others) find the discussion on this thread
> interesting, it appears to lack the necessary technology component to be
> deemed liberationtech.

I am not sure the situation is that simple. I believe (this is a long
thread) that the underlying question discussed here is whether Bitcoin
has a potential as a viable alternative unregulated currency. In order
to answer that, one has to first answer the question of what Bitcoin
is backed by. There are lots of demagogical claims on Bitcoin-related
discussion venues, but ultimately gold is backed by its scarcity,
longevity, and subcortex appeal of shiny things; fiat currency is
backed by state-protected ability to pay debt; MMORPG currencies are
exchangeable for game items; and Bitcoin, if one discards the time
period when it was worthless, is backed by its capacity to be
exchanged for illicit drugs on international black markets, due to
lack of better alternatives. *If* black markets are Bitcoin's claim to
fame, then it has absolutely no chance of becoming anything but a
small-scale under-the-radar drug trade currency, the reason being that
a thriving black market is an early sign of stagnating economy, chaos,
anarchy, and civil war, in which case people will revert to more
tangible currency alternatives like jewelry and food. There is a
widespread opinion that one of the major *economic* reasons for the
fall of Soviet Union was producers of goods (i.e., factories,
collective farms, etc.) establishing a massive black market between
them, avoiding the inflexible system of planned economy.

And this is where economic ideology and religious faith become
relevant, because according to libertarian views (which are at the
core of faith in Bitcoin) post-USSR republics, with their
well-educated population that was highly receptive to capitalistic
ideals, abundance of resources (natural and factories), extremely weak
governments, huge territory, etc. etc., should have somehow formed a
libertarian utopia with people-supported militias, thriving free
markets, and whatnot. What happened, however, was theft of all
available resources, rise of oligarchs who took control of factories,
dismantled them and sold the components abroad, organized banditism,
pervasive racketeering, demographical catastrophe, several civil wars
and population transfers, shortened life expectancy, and all other
complete opposites of an utopia. Contradiction? Only if one doesn't
use religious faith to reason about economic reality.

-- 
Maxim Kammerer
Liberti Linux: http://dee.su/liberte
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