Bitcoin philosophical musings and pressures 7 years in [drifted from: txrate, forking, etc]

Tue Jul 7 20:07:12 PDT 2015

On Wed, 08 Jul 2015 00:08:40 +0000
Sean Lynch <seanl at literati.org> wrote:

> 
> This is not what most people mean when they say "rich get richer."
> They're talking about 1%ers or whatever. In any case, you still seem
> to be making unfounded claims about the intent behind Bitcoin,

	Let's say I was being cynical =)

> when
> we have statements of intent in the creator's own words. 

	I know. 

	"A purely peer-to-peer version of electronic cash would allow
	online payments to be sent directly from one party to another
	without going through a financial institution." 

	(Come to think of it, I wouldn't say btc is cash, but that's
	yet another philosophical discussion)

> Many believe
> Satoshi is also rich, Bitcoin-wise, but we don't even know for sure
> that they have the key to the account or that they will ever spend
> that Bitcoin. Personally, I hope they do. The creator of Bitcoin
> deserves to be rewarded.
> 

	Yes. Anyway, grarpamp comment sounded to me like "We're doing
	it for the poor children of africa" which struck me as somewhat
	hollow. But nevermind, I'll drop the subject. 

> My apologies. I was confused by your use of the phrase "government
> cash." Government cash is fiat, but not all fiat is cash. But the
> cashless societies already being proposed and implemented are fully
> centralized and much easier to trace than Bitcoin, because they
> require bank accounts with their concomitant "know your customer"
> regulations. Bitcoin doesn't make this situation worse, 

	True. My comment or observation is that bitcoin may have
	catalyzed the move towards a cashless society. Whether a
	cpunk-like currency will be used, or a
	goldman-sachs-like currency will be used remains to be seen, I
	think. 

	But so be it I guess. If governments are forced to show their
	true totalitarian colors to an even larger extent than they
	do now, there will be some good in that. 

> and by
> enabling other applications on top of it, including untraceable
> e-cash, will only make it better.
> 

	I pledge the "wait and see" amendment =P  I hope you're right. 

>  
> Can you elaborate? Does your use of quotes around the word "popular"
> indicate sarcasm? My understanding was that a number of merchants had
> started using a payment system that used dollars from foreign credit
> cards to buy Bitcoin so that they did not have to accept the
> government-imposed exchange rate. 

	Actually, there are some people who use credit cards to buy btc
	(or other stuff abroad) using a government subsidized exchange
	rate. 

	The are a couple of official exchange rates. One is set at ~8
	pesos = 1 dollar. The other is at ~10 pesos = 1 dollar. If you
	buy stuff using an international credit card, you get the 10:1
	exchange rate. 

	Finally there's the real or black market exchange rate at
	~13.5 pesos = 1 dollar. 

	So, some people can buy btc (or, say, pay travel expenses
	abroad) using the 10:1 rate. The benefit you get doesn't really
	come from btc but from the distortions created by govt. By the
	way, the subsidy is, of course, financed with more inflation.
	And yes, the poorest people here are subsidizing people who
	travel to disneyland. 

	If on the other hand you want to buy btc in a local exchange
	the price you will be asked in pesos is something like the
	price at bitstamp multiplied by the $:US$ black market exchange
	rate. 

	https://www.unisend.com/  

	I'm seeing 1 btc = 3800 pesos. And 1 btc = us$ 265. So, that
	gives a price of 14.3 pesos per dollar (hm - even more
	expensive than black market)

---------

	I think there's a service here that allows you to pay utility
	bills using btc. I'm not sure what's the point because they
	(obviously) charge fees so you end up paying more than if you
	used pesos directly. I guess it's handy for people who already
	had btc but I doubt that number of people is significant. 

---------

	And then there are a few bars and stores that accept btc, in
	argentina's capital (~10 million population). Where I live
	(rosario) I don't think there's a single store that accepts
	btc. 

---------

	Now, there probably are people who use btc to move money in
	and out of the country although btc's exchange risk
	and spread arent't small.

	I know that if you want to move fiat accross borders using
	black market services, doing so isn't too expensive. So btc has
	to face efficient competitioni in that area. 

> I'm definitely interested in your
> insights on this, since I've never visited a country that was
> experiencing rampant inflation, unless you count the US in the late
> '70s, about the time I was entering grade school.

	There was hyperinflation in argentina in 1989-90 - I was 19 at
	that time and I don't really recall much of what happened in
	everyday life. I know the prices of stuff in the supermarket
	changed each day but I didn't pay much attention. I wasn't
	really interested in political economy at that time. 

	Then after that 1990 'crisis', the peso was pegged 1:1 to the
	dollar for ~10 years, until 2001 when the gov't defaulted and
	the banking system blew up. 

	Since 2001, the a$/us$ rate went from 1:1 to 13:1 and you can
	use that as a relatively good proxy for inflation, although
	interestingly, the prices of things like food are at something
	like 20:1, prolly reflecting both the inflation of the peso AND
	the dollar, plus the fact that the local economy is a fucking
	mess ran by fucking protectionists.

	Anyway, the current inflation rate, by argentine standards, 
	isn't too high, as crazy as that may sound.

	Usually the government cycles in argentina last 10 years or
	less, but these shitbags are somehow still clinging to power.

> I think you overestimate the government's ability to exert control,
> something many of the participants in this list have devoted their
> lives to reducing. It's the whole point of Bitcoin, so it seems like
> you're basically just saying "Bitcoin will fail at its mission and
> instead just get coopted by the powers that be." 

	Yes, that is what I'm saying. Furthermore, I think that is
	already happening. 

	https://blog.xapo.com/announcing-xapos-advisory-board/

> Or maybe you think
> that Bitcoin is just a reckless toy created by greedy first worlders?

	No. I don't consider it a toy. I don't know how robust (or
	scalable...) it actually is (apart from hashing power haha), but
	it's not a toy.

	As to motivations, I always assumed that the cypherpunk bunch
	was composed of *at least* anarchists, although what I see in
	this list is a sizable amount of self-parody (dan geer and
	accomplices for instance).

	However, the bitcoin phenomenom is complex, there's a lot of
	people involed the vast majority of whom I don't know at all,
	so I can't hardly known their motivations. Greed can certainly
	play a part here. 

	(and notice that absent government we wouldn't need
	something like bitcoin to protect us from government attacks)

> 
> > > they're not going to have a choice. Cryptocurrencies
> > > don't have to be legal to be disruptive.
> >
> >         And yet there seems to be a fair amount of people in the
> > bitcoin 'community' who are quite eager (or desperate) to have
> > bitcoin 'regulated' so that it becomes 'respectable', 'legal'...and
> >         usable.
> >
> 
> Indeed, something I have repeatedly ranted against. So far the
> regulation has not had much impact on Bitcoin itself. No legally
> "tainted" or "whitelisted" coins yet.

	True. Regulation hasn't affected the technical/protocol side of
	bitcoin.

	Since you mention so called colored coins, wasn't that an
	idea of that guy mike hearn, ex member of the google mafia?
	You think that kind of people are to be trusted? <---rhetorical
	question...

	The thing is, regulation will affect how bitcoin is used, and
	that's not necessarily related to any technical issue. Whether
	you'll need 20 licenses to use bitcoin, or none. That kind of
	thing.

> 

> 
> Perhaps, but that actually seems to be the crux of what we're arguing
> about here, and of many arguments on this list. What are the actual
> capabilities of the adversary? You don't want to underestimate, but
> at the same time, if you overestimate, you may miss a potential
> solution. 

	Maybe. Or you waste some resources. 

	But if the actions of government were relatively easy to
	counter I think we would be looking at a political system rather
	different from the one that exists now. 

>Some are probably living as hermits because they think
> they're being monitored and/or given cancer by the smart meter mesh
> network. Personally, I tend to doubt that the government's
> capabilities significantly exceed what's available to the general
> public, except in terms of the money they're able to bring to bear,

	Yeah, well. That might make a little difference, perhaps? =P 

	But actually, the main issue is not even that they have access
	to lots of resources. What makes the difference is 

	1) guns
	2) willingess to use them
	3) better organization*

*military organization - it doesn't matter if even the majority of
government bureaucrats cant put 2 and 2 together.

> which is blunted somewhat by the extreme inefficiency of government
> contracting/spending/operations/etc.

	You know, I'm rather familiar with libertarian theory if that's
	where you're coming from. I don't think that the fact that
	government organization in some areas is inefficient means
	anything. 

	Government is (very) efficient at its core criminal businesses.

> 
> A "litmus test" issue might be whether you think the NSA's expressed
> surprise over Snowden's leaks was genuine. I tend to think it was,
> and that his documents are genuine. 

	Which documents? =) The very few that have been published? =)
	(....)

	Yes, they may be genuine, but surely you realize that we don't
	have access to the vast majority of them. You think that's
	because of government incompetence...?

>I see no reason for the NSA to be
> substantially more competent than, say, the OPM. They're each large
> organizations with no bottom line that attract people of flexible
> moral character who are attracted to power and/or job security.

	Yes. So, they are good in those two areas, especially in the 
	wielding of power. 

> I
> don't think those traits tend to lead to effective organizations, as
> much as a number of Hollywood movies would like us to believe.

	I don't really watch hollywood movies =P. 

	And I don't think hollywood movies mention this kind of thing 

	https://en.wikipedia.org/wiki/United_States_incarceration_rate

	Do you think a government that efficiently kidnaps millions
	of its own subjects for fun and profit is not an exceedinly
	efficient criminal organization? 

> 
> A kind of fun book on the OTHER side of the spectrum from what I
> believe about government's capabilities is Daniel Suarez's book
> Influx, about a government agency tasked with keeping technologies
> out of the hands of the public. 

	I don't think they necessarily have any magical secret weapon.
	They don't really need them anyway. All they need is ordinary
	lead bullets. 

> I think you'd need a pretty
> substantial head start before technological advantages can overcome
> organizational and general human disadvantages, though. I.e. leaks,
> infiltration, etc.

	See above...

	(ufff - sorry about the really long message)

J.