When researchers and policymakers begin to have even an inkling of Bitcoin’s deeper significance – more than “anonymous digicash created by evil hackers to buy contraband from drug dealers” – there’s a better chance that banks and governments of the world will start to get serious about cleaning up the global mess they’ve created.
Can bitcoin's unregulatable nature really provide an example for how establishment financial systems should be better regulated? Bitcoin can be an alternative, it seems, but not a "city on a hill" to fiat currencies, and their financial systems.
1. Politicians make the rules, and the rules can dictate the seizure of the places that offer the government-free version of Bitcoin. (Well, for now the governments may not agree to cooperate on this, but the scenario has realistic prospects.) In this way the governments gets access to Bitcoin's evolution. After this, they can in time change it in wherever way they want and make it at some point incompatible with government-free versions. Mind you, that the bulk of the Bitcoin users will update their version from the most seemingly trusting source, which may be government's.
2. Don't underestimate people in this overly-motivating subject. And the motivated people can become very ingenious.
3. I am not sure if there can be a reason for censorship (a powerful actor can act in other ways against the undesired Bitcoin users), but what it is possible is to learn to filter out Bitcoin activity in particular or everything unknown in general. What is this binary stream? Encryption? Want privacy? Here's the government-provided solution that assures you (government-surveyed) privacy! ;)
2) The Silk Road bitcoins were confiscated by police just fine. In fact Bitcoin is in some ways easier to trace and therefore confiscate. If the cops can trace a transaction to you they just apply some rubber hose cryptography.
More than 90% of gold value is speculative. This all will move to Bitcoin as it's superior by all measures. Storing and transporting gold is just way too expensive. The universe wants one money: http://blog.oleganza.com/post/54121516413/the-universe-wants...
Rubber hose is more expensive than QE. You can steal one person's stash, but cannot steal from millions at once (well, you can, but it'll be too obvious and very expensive). Just watch zebras crossing the river infested with crocodiles. The fiat currency is when all zebras find themselves in the slaughterhouse.
What is Bitcoin's deeper significance? I don't know much, but here are some sketches.
1) Bitcoin has the potential to destroy the tools of monetary policy.
2) Bitcoin has the potential to hide taxable income from governments.
3) Governments with dwindling tax bases may react by printing traditional currency, hastening the flight to Bitcoin in a vicious cycle.
4) Traditional currencies may collapse as people rush to convert them into Bitcoin.
5) Unable to tax coercively, traditional governments may collapse.
What might replace them? Toll roads and kickstarter philanthropy in Randian democracies?
(Is this in the ballpark for Bitcoin's potential impact or not?)
If we're talking about deep significance, I also think Bitcoin could be a tool to help support world peace (hear me out!)
My understanding of one facet of the UN is that by promoting trade between UN nations it makes war between these nations more costly and difficult thus reducing the chance that war would break out.
If correct a globally accepted and popular currency which can be freely transferred across borders between citizens of every nation could help depopularise outbreak of war between nations.
You can criticise this view in many ways, but I think it's undeniable in principal that open trade between nations would serve as a barrier for initiation of war and conflict. And raising barriers against this behaviour is only a good thing.
In the WW2, USA was safest place in the reasonably-developed world. If you were wealthy and had the ability to move your assets from one country to another, USA was a safe bet for you. Obviously, the movement of wealth was also convenient for the host country's government. Nowadays USA may not appear as the only good place to be, but if you understood the underlying idea of the above reasoning, you may also understand that at any moment a conflict/war can induce a differentiating factor for perception of safety. If the environment becomes risky with a war to be unleashed, you won't risk keeping your wealth in a system whose very existence is endangered, you'll move to a greener pasture. A greener pasture, preferably in a powerful country, with no risk of having a war carried out on its territory and therefore with a minimal exposure to any conflict.
Those greener pastures usually are in the very countries that seek war in the first place. The war itself is a profitable business in many ways.
Bitcoin makes no difference against this. Actually in the regard to world conflicts, Bitcoin carries an insulating effect. It makes you more mobile and more willing to get yourself to a safe and peaceful place to live (and spend your Bitcoins there).
If things continue going as they were for the last years: government printing money and people trying to move savings anywhere but in the currencies, then yes, all printed currencies will become worthless and if people run to Bitcoin, it will be impossible to have "budget deficits" and very hard to tax many people.
Without government people would have to find ways to voluntarily pay for things they like to have. E.g. roads, insurance etc. Some roads will be paid, some roads will be sponsored by merchants that do business on the streets, some roads will be owned by big malls etc. The market is different from the state not in that it does something differently, but that there are millions of ways to satisfy demand instead of just one.
None of those is remotely in the realm of possibility, except maybe #2 and the difference in scale (at least in the US) between total tax receipts and the float of BC is so vast that it limits it to a very small percentage of the total. All bitcoin currently in circulation amount to 0.1% of one year of US tax revenue ($2.5T v $250M).
Two and a half years ago 1 BTC was 200 times less valuable - around $1. Give it two more years and it will be 10% of US tax revenue. Than everything will be possible.
I don't understand why people think Bitcoin necessarily leads to governments collapsing. Bitcoin can be regulated in many ways:
1. If you buy a house you must show evidence that you earned the money. You can't earn all your Bitcoins Breaking-Bad (or Silk-Road) style and expect that the government will think your new-found fortune is ok. Thanks to the blockchain you kind of can't lie too much, unlike, say, cash.
2. If the government wants to ban certain activities it can do so easily. Suppose that the government wants to keep its citizens from gambling or from using mixer services, it could declare that it won't recognize Bitcoins that passed through those services as legal tender. Good luck paying property taxes with your tainted bitcoins.
... and so on. Things are not that different. In fact the blockchain may mean that the government has more, and not less, access to information: for example governments generally can't access information from other countries except in rare occasions. With Bitcoins that information is accessible by default.
Now what the government can't do with Bitcoin is play games with the money supply. People in places such as Argentina could perhaps tell us why that would be a good thing.
Except that finite money supply in a growing economy with positive interest rates is both deflationary and a driver of increasing inequality.
Sensible active monetary policy and "lender of last resort" activities are vital to functioning modern economies. That's why they had to be enacted in Europe during the financial crisis despite not being properly provided for by the existing Euro framework.
The inflationary economy already created huge inequality. Do you think all Fed's printed dollars are equally distributed to the poor? In reality, they all go to banks that loan them to the poor. Increasing prices on energy and food + mortgage and other credits prevent poor people from saving money and becoming economically independent.
Bitcoin holders, on the other hand, have to sell bitcoin below tomorrow's price to eat something today. It is reversed trend: the more people want bitcoins, the more "equally" they will become distributed. Everyone who holds and doesn't spend bitcoins does not participate in the economy and thus doesn't earn his wealth yet. But to earn it he has to part with part of his stash, thus leaving less for himself in the future.
( I am rather trying the argument, rather than actually believing it myself.)
There are not only BTCs, but also forks and other crypto currencies. So if BTCs hording becomes a problem the incentive to adopt one of the alternatives will rise. Diminishing the value of BTC relative to some other currency and therefore suppressing ( at least to some extend) hording.
Hoarding (saving) will never become a problem because the value of currency is derived from all savers willing to hold it. Why would I store money in an altcoin if Bitcoin has bigger number of savers and I project that it will only increase (and thus increasing my own wealth)?
That would be very expensive for government. First, it will basically give away a lot of money and invite 100 times more people and capital in the bitcoin economy. Then, after selling its stash it will affect the price much less (because it will also have been driven up by many additional speculators) and simply earn back much less USD than they have spent.
Of course, it will destabilize prices for some period of time, but only at great expense to itself and making millions of people aware of Bitcoin and thus accelerating its long-term growth.
You are saying you don't think government manipulation would have negative (long term) impacts. That's a separate thing from the government not being able to play games with the currency.
Part of the reason I said 'a few billion' is that several governments can afford to spend that, no problem. If they think they are facing an existential threat (as you seem to believe), it is basically a certainty that they will try it.
As a speculator the government is no better than any other speculator. It will compete on par (more cash is simply more risk). And big players trading bitcoin is a good reason for many more players to jump in this market. The governments are unique in their ability to apply guns. When guns are not used, it's no different from big investment firms playing on markets.
"Tainted Bitcoins" can be trivially laundered and mixed in with normal Bitcoins. This will only become easier in the future, and conceivably make it into the protocol itself with something like ZeroCoin.
It's funny but there is a lot of similar discussion on the other side of the fence, too: "Now that the FBI has a hold of DPR's Bitcoins, how do we blacklist these tainted Bitcoins so that we don't fall for honeypots/undercover agents?"
You can't, unless you want to fork the blockchain and start a new genesis block sans the Bitcoins you don't like, but that would be disasterous and no one would agree to it. It would defeat the whole premise of Bitcoin—why are your Bitcoins more special than my Bitcoins?
Truth is, tax collection works largely on the honour system, cooperation from employers, and through audits/investigation. Bitcoin is no different. The only real benefit the blockchain could give is to help automate some of the consensual tax collection further.
You are insisting on your own definition of tainted here. Your parent comment is using a definition where coins that pass through a mixer with tainted coins themselves become tainted. An aggressive party might do much the same thing with a service like Zerocoin (that is, once it watched a tainted coin go it, it would assume that only tainted coins can come out).
But anyway, the government accepting any bitcoins for tax payments should probably be considered a win for the ecosystem.
> You are insisting on your own definition of tainted here.
How do you figure?
> Your parent comment is using a definition where coins that pass through a mixer with tainted coins themselves become tainted. [...]
1. The aggressive party would have to stop accepting any coins that come from Zerocoin altogether.
2. Mr. Taint can go about his day sending Satoshi's to random addresses in the blockchain, effectively tainting every address he can find.
3. It would require collaboration from every single Bitcoin service, otherwise a single non-collaborating service would end up mixing tainted coins with non-tainted coins over time and the whole population would become tainted.
Because under a stronger definition of tainted, they cannot be trivially mixed, they pass on the contagion.
The US government can ostensibly stop accepting Zerocoins. In that event, so would any party that wanted to trade with them. There wouldn't be any need for a new blockchain, possessors of clean coins would simply have to decide how much extra value that part of ecosystem provided.
That last sentence mixes up with your point 3, tainting all the coins would be a collaboration between owners of clean coins and service providers, there is at least room for owners of clean coins to be careful with them.
2. If the government wants to ban certain activities it can do so easily. Suppose that the government wants to keep its citizens from gambling or from using mixer services, it could declare that it won't recognize Bitcoins that passed through those services as legal tender. Good luck paying property taxes with your tainted bitcoins.
Bitcoins aren't actual "things", they're just values that get debited from an account and credited in another, so you can't have tainted bitcoins.
You could have tainted addresses, by checking if there's a path between a certain address and the blacklisted ones,
but then anyone could taint anyone else's address by just sending them a Satoshi.
The only thing that governments would need to do to stay in business is to tax things that can't be hidden, like land and real estate. I'm hoping they go with a single land value tax.
Then, governments cannot longer be "socialistic" by promising something for nothing. To do new awesome "government service" they'd have to raise taxes and then the lie will become obvious. Since no one really wants governments if they don't get free stuff, governments will quickly lose any moral support and will be viewed as plain thugs.
Yeah, sovereign debt will become a thing of the past and that's a good thing. Not sure how this is related to socialism though, at least in the strict sense of the word. It's more about short term thinking than anything else.
So you are saying you have evidence that without government you necessarily end up with pirates running around with guns? Remember that Somalia is in this state due to utter failure of government in the first place.
Right - the government stopped working, and people realized they don't need it. Mysteriously, this has lead to decades of chaos, despair and starvation rather then an economic boom.
Bitcoin is not a threat to centralized currencies, there is room in the financial world for both. A government controlled currency has some clear advantages, relative stability being one of them. I wouldn't accept paychecks in bitcoin for the same reason I wouldn't accept paychecks in gold bullion, although both have a demonstrable value, government issued currency provides a stable way for the average person to store wealth at scale. Although everyone sneers at the federal reserve, their financial engineering plays a real role in perpetuating western affluence (though it clearly has serious problems; a topic for another day).
The significance of bitcoin is that it's an unrestricted option for anyone at any time. Just because you won't accept your paychecks in bitcoin doesn't mean you won't want to use them from time to time, if only for the freedom to bypass the astonishingly ubiquitous banking institution. I'm not even talking about anything illegal (though illegal doesn't always mean wrong), I'm talking about the minefield of wealth draining fees and bullshit (frozen accounts, chargebacks, spending limits, really slow transfer times) that bitcoin lets you avoid when you want to.
> This past June Dutch Finance Minister Jeroen Dijsselbloem gave a Bitcoin-friendly report to Parliament. He said: «Bitcoin is not electronic money… At present its eventual I'mpact on the real economy seems negligible…Bitcoin is not a financial product as defined by law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply.»
> there’s a better chance that banks and governments of the world will start to get serious about cleaning up the global mess they’ve created
Never gonna happen. Bitcoin is the cleaning we need. There's absolutely no incentive for governments or banks (which are in bed with governments) to make things better for those, who are not in the club.
I don't think Bitcoin's gonna wipe out the very idea of government, but it certainly has a potential to give rise to free economic zones, where no government can have its way. And their success can, in turn, convince even more people that they don't really need anyone to govern them.
Some economists suggest a better measure: establish a coercive currency and print it as they like to pay for public goods. Just put a gun to people's face when they don't want fiat currency and then print all you want. Very practical solution.
USD is "legal tender" which is direct coercion (you must accept USD as payment for a debt).
Indirect coercion is multitudes of currency controls, capital controls, taxation, banking licenses etc. All the laws and regulations backed by well-oiled guns of SWAT teams that prevent people from easily trading and saving in whatever currency they want.
I see, so a coercive currency is just fiat currency (or just currency) with an appended modifier. This modifier itself is then qualified with 'indirect' because the regulations enabling the use of these currencies is backed by government force which, although rarely utilised in the context of the commercial transaction, is ever-present. In relation to this indirect coercion these economists are (directly? or indirectly?) forcing people to spend money through monetary policy.
Ok, my bad. The currency itself can hardly be called "coercive". Coercion is done by people to people. When I was talking about economic policies, I meant this recipe:
1. Establish a government-issued currency that it can print when it wants.
2. Make people use this currency by creating barriers to other currencies and forcing people to accept it as payment for debts.
3. Print money according to some made up theory on what's better for society and give this money to whoever needs it it more (according to a theory at hand).
This is the weird libertarian view of "coerciveness" where having to participate in a society with other people is a gross imposition but being fireable instantly at the whim of your employer is not coercive.
I'm aware of the strange views of Libertarians, but I'd never heard a currency itself marked as coercive! I agree: It's a strange view of coercion where getting fired and ending up on the street provided you're fired by a private employer is less a coercive act than having to pay a percentage of your income for social benefit, or, worse yet it seems, having to use a 'coercive currency'.
Protection from being fired comes with a cost. Less people are willing to open companies and easily hire people to do job if they are afraid that they wouldn't be able to fire inefficient workers. All "unemployment" is government creation due to either "free" stuff like unemployment benefits or to regulations that prohibit some employers from hiring you.
Are you suggesting that in a society without a government there would be no unemployment? (To clarify, unemployment is the opposite of employment. Unemployment is 'not working'.)
On your first point, it's not whether or not it comes with a cost that is the relevant question. The relevant question is: If it does come with a cost, does the cost justify the benefits and/or are we willing to pay the cost?
Unemployment will always be voluntary. I'm not employed on Sundays, Saturdays and during vacations absolutely voluntarily. I'm employed 16 hours in a row some days absolutely voluntarily. Unemployment is involuntary when there are people who are willing to pay for some work and people who are willing to earn that for that work, but they can't meet together because: 1) wage is below government-approved limit or 2) this type of job is forbidden, or 3) employer cannot fire the person when the job is done or 4) it's damn too expensive to even start filing all papers to hire someone.
So there's no room in this case where and individual would be unable to find work? Somehow, everyone will have a skill-set and the personal capability (even quadriplegic people?) at any given time to find work on demand and to change their work on demand as well.
What is your definition of voluntary, by the way? Is a person taking a job they don't want to do, but have to in order to feed themselves, a voluntary decision?
Say, I would like to be an astronaut. I'm thus unemployed because no one will voluntarily take me to an orbit just because I want that. Is it bad for society? Well, who knows? But I sure can find million other jobs to work at until we hit real resource limits and 100 trillion head count on this planet.
It's very good that you ask this question. There was always and always will be scarcity in the world. Everyone wants more than it's available right now. To avoid poverty we need ways to save, build capital and insure ourselves against rainy days. This won't eliminate poverty, but nor rape and murder will help removing it.
The only way to know how to rationally use resources is to do so without acts of violence. Then we can talk about how to make sure that most people have something useful to do and have enough money to feed themselves.
I think what oleganza is trying to say here is that while unemployment may indeed exist under any system, what we have to understand is that by creating laws and regulations to fight it, we really are doing it at someone else's expense.
For instance, if an automobile factory produces cars and people don't really need so many cars, then this factory fires workers. If it's impossible or difficult to fire them, then this means the cost goes on to consumers and prices of cars go up.
The reason unemployment exists is not because there's not enough jobs. There are plenty of job positions that can't be filled because there are no people willing and/or skillful enough to fill them. The reason unemployment exists in the wild (with no regulation) is because the market needs to readjust itself to produce something people want in the quantities people want. When government interferes into this process, it only delays this adjustment.
Right, and I guess what I'm saying is that it's fine to do so at someone else's expense. But that's the moral argument and it's a simple one, I don't see government force as illegitimate and therefore I'm fine with taxation, regardless of who is being taxed. If you believe it is illegitimate, that's ultimately your problem and you live in a reality where most people do not agree with you. That's fine, we can disagree and move on.
But the problem comes in when unsubstantiated statements come into this. I don't see any evidence presented at all that what you go on to say in your last paragraph is true.
"The reason unemployment exists is not because there's not enough jobs." I'm sorry, but my country's unemployment rate is 22%[1], and we have no welfare state worth mentioning. The minimum wage is under $1/h, and there are no restrictions on hiring nor on firing. We've had this same rate of unemployment for decades with constant economic liberalization. Now, I suppose under oleganza's view, we can still blame the very fact that government (anywhere) exists on this problem, but at a certain point you cannot blame the government anymore.
If people weren't afraid an IRS agent could come and take away their possessions and if they refused to cooperate a policeman could come and handcuff them, we would see whom most people would agree with. It's like saying "but my wife agrees with me that beating women is okay" all the while knowing you would beat her even more if she disagrees.
How about "But that's the moral argument and it's a simple one, I don't see government force as illegitimate and therefore I'm fine with taxation, regardless of who is being taxed"?
Basically, you are okay if people who disagree with your opinion can be beaten and their money confiscated. This does not say anything good of you as a fellow human being.
Yeah, but such a statement requires no actual evidence. I can tell you I'm okay with it, because that's a fact about myself. The fact that your view is incompatible just shows that I don't consider all opinions morally valid, some are wrong. Just as to you it might appear that I am not 'good', it might appear to me that you're not 'good' if you refuse to pay taxes. It's a coincidence that my view is backed-up by society, but such is life. A libertarian might say to a person born blind, deaf and dumb who is unable to work: 'tough luck', I can say to a libertarian born in a society that forces them to support those less fortunate with taxes: 'tough luck.' I personally see nothing immoral about this.
There's a larger implication, actually. You think it's moral to use force against people who disagree with you. It doesn't matter what the question is, the idea is that you are prepared to initiate the use of force, while libertarians are fundamentally opposed to that.
I just think it's important to take our fellow human beings not as objects to be taxed, but as individuals to be convinced. If you think helping some group of people is a good idea - convince me, don't just steal from me. If you steal, this doesn't make you a single bit more moral.
I don't see this 'larger implication'. Where is this objective moral scale I can look at? The one that'll tell me that I'm more moral than you, or you're more moral than me? I don't claim I'm more moral than you, I do claim we have differing morality. My morals tell me that it is okay to 'initiate force' in certain circumstances, the fact that your morals tell you the opposite has no bearings on me nor on any objective scale of morals you could point to. You've taken a principle and put it on some sort of pedestal which allows you to point to it and say: if you violate that, you're immoral. I can do the same with any given principle and neither of us comes out on top morally, nor will we ever. The unfortunate thing about your principle is that it is weak from a force perspective: in order for you to stay true to your morals, you cannot initiate force, in order for me to stay true to my morals, I can do so and I can enable the government to do so as well.
Very good. But you cannot claim the majority of people actually share your morals, because you also initiate force against them. If people weren't afraid of your force, my guess is most of them wouldn't be willing to pay taxes. It's like if you were a crusader occupying a muslim village and converting everyone living in it to christians by force. Does it make them christian? Technically yes. In reality, unlikely.
On a legal conception (my field), people don't pay taxes because they are forced to do so by force, people pay taxes for a wide variety of reasons: fear of consequences, habit, actual willingness to pay taxes, social cohesion, internalization of process. Paying taxes makes sense for businesses, and various other organisations on an economic level. Paying taxes in Australia (where I am), for example, gets you a wide variety of benefits that most people appreciate, and most of them don't feel forced to do so. Maybe at some baseline level they are 'forced' to do so, but it is done voluntarily. Just as you would say that a person taking a job because otherwise they will starve is a voluntary act, so can paying taxes be voluntary despite the background threat of prison.
Same with religion, maybe those initial people will not be Christians, but maybe their grandchildren will be if the occupation continues. The Ottomans, for example, converted people to Islam through tax incentives and education.
A test case for you:
In Canada (and Australia), for example, 89% of the land is in direct ownership by the Crown, the other 11% is rented by the Crown to individuals in the form of land tenure. Legally, the Queen is not allowed to permanently sell any land, as they are subject to the old rules of English family law, where descendants are to be entitled to inherit the land. The Queen, through the Government of Canada which represents her, is the owner of the entire country. Does she not have the right to charge whatever rent rates (taxes) she would like? And are not people paying these taxes voluntarily as long as they live on this rented land?
> people don't pay taxes because they are forced to do so by force, people pay taxes for a wide variety of reasons
Easy to test. Ask people if they would keep paying taxes if they weren't afraid of IRS (or equivalent). My experience: the answer is NO with most.
> A test case for you
The question is where this legitimacy of owning a land by the Queen comes from. The royal family simply declared certain territories their own, then used government forces (sponsored by taxation) to enforce this. So I'd argue it's the people who paid taxes who own the land, not the Queen. What you have, though, is a perverted situation in which people pay taxes to have their land taken away from them and then leased back. That's insane.
Is that the correct test, though? Ask the guy if he would take the job if he wasn't starving: He'll say 'No'. So in a system where he has no recourse to some safety net, he's not acting voluntarily in any case where the alternative is a type of negative consequence which he'd like to mitigate. I'd rather not be doing law, for example, I'd rather be reading on the beach, but the alternative could be living on social assistance (which is a definitely a thing to fear for me), still I wouldn't say that I'm involuntarily doing my job.
Maybe you should ask, instead: "Why do you pay taxes?" And allow the respondents to give you a wider set of reasons. Maybe some will say it is out of fear of the IRS, but some people might not say that, or say something different. It's still a 'test' of the matter, but it's a less leading test and it's the sort of test that follows from what I've said.
Sorry, the Queen test case was just for fun. Wanted to see what you'd say. Yeah, the Queen cannot legitimately own anything by that conception, since it is all ultimately tainted by a long historical process of beating out competitors on the British Isles.
No, I disagree that we should be asking "Why do you pay taxes?" because this is an open ended question which leaves a lot of room for speculation and asks for an opinion, not an action. Action is what matters. People might convince themselves it's actually a good idea to pay taxes if it's inevitable anyway. But if you ask them "Would you pay it?" then it's a question about an action - yes I would, or no I wouldn't. I don't see why would a person lie.
Yeah, asking why you do something is as much a question about an action as asking whether you'd do it. You're not asking "Would you pay it?" you're asking: "Would you pay it if condition x were false?" You're taking it out of reality, where condition x is true. I agree, you could ask: "Would you pay it?" but the response from the person to that question would be useless without the necessary conditional you've put in it. However, as soon as you put in the conditional about a state of affairs, the person is not analysing their action as it is, but is instead analsying their action according to a state of affairs that may exist. It's as much a mental trick as it is in a case where people convince themselves it's a good idea if it's inevitable.
That goes back to what I said before, which you ignored, if you were to ask me: "Would you still work if you were a millionaire?" I might say: "No." That's true, but it's not true for any useful purpose, because I'm not a millionaire. If you ask me: "Why do you work?" I might say: "Because I like making money." In fact, the latter case is a more truthful statement than the previous case, because I don't actually know what Millionaire-Me might do whereas I do know what Non-millionaire Me would do (work). In any event, the previous question doesn't tell you whether or not I consider the fact I work voluntary, in fact, it doesn't tell you very much anything at all. I personally do consider the fact I work voluntary, but you'd have to ask the latter question to find that fact out. If you just had the previous question and left it, you might as well assume I believe that I work involuntarily.
In the end, you ARE asking for an opinion, the way you propose is a less honest way to do so considering what the inquiry at hand is. Remember, I said that people might have multiple reasons why they pay taxes. This is a sociological fact. Even one person might have multiple reasons why they pay taxes.
If you asked me your question:
"Would you pay taxes if you weren't forced to?" I'd say: "Yes." That's all you get.
My question:
"Why do you pay taxes?" "Fear of jail if I don't, because they pay for roads, social services, because I believe they are a legitimate exercise of function of government."
I'm not lying, no reason to, I pay taxes for multiple reasons and so do most people, and these preferences themselves may be ordered, maybe on my scale of preferences the fear of jail is in-fact less than the fear of potentially unmaintained roads if I have a nice car, for example.
Actually, an idea: Presumably we can synthesise the inquiry, ask "Why" and then ask "Would you still do it", or do it in reverse order. Then, ask people what their preference scales are, etc, etc. You'll find out more information about the reasons people pay taxes, you'll also find that what I said before is true: people pay taxes for multiple reasons.
As for why unemployment exists in the US... Please factor in illegal employment created by government criminalizing drugs and other things (prostitution or gambling, for instance). Factor in minimum wage, which allows some people to earn more at the expense of those who are not employed at all. Factor in military men coming back from wars not being able to find jobs, because government used them and threw away. Factor in people who are not able to start certain businesses because it's expensive to obtain licences. So it's not just restrictions on firing people. It's so much more.
The market is a system constantly re-evaluating itself to reach equilibrium. It's a very weak view of the market which takes away from it the ability to take into account government 'interference'. Indeed, most governments don't interfere too often, prostitution and gambling have been illegal for decades in the US (legal where I live, however). I don't need to factor these things in, because the market has already factored them in. What government interference implies is a sort of Old-Testament God, who constantly interferes with its subjects. Governments try their best to interfere very little, they make sure inflation stays low-ish, they don't suddenly change economic policy except in crises. Government "interference" (the better word you might use is 'existence', since this is what I think you mean) is an ever-present fact of the market and the market has always taken it into account.
I just pointed out a number of sources of unemployment originating from government interference and you just replied with "but government interference always existed, therefore it cannot be a reason for unemployment". That's not an argument.
Did I say that? I didn't realize I made such a categorical statement! I thought I said that the market already takes the government into account, not that the government cannot be a reason for unemployment. The government certainly could be a reason for unemployment, but that doesn't mean it is always the reason for unemployment, nor does it mean that proper regulation necessarily leads to lowered employment.
Talking about cost. We can only evaluate things when we are free from coercion to run experiments and measure the results independently. If there is a huge federal government monopoly on economic policy, there's no way we can find out if it's efficient or good enough. The only way to find out - remove the government coercion and then see how each family decides on their own: on which money to use, where to invest, what medicine to take etc.
I didn't say we have to evaluate the cost in any sort of vacuum of political power, the tools are here and the tools are perfectly capable of taking into account government. In fact, the tools necessitate a governmental economic policy at this point. Government measurements often are independent measurements insofar as they are measurements done by an entity that has more neutral stake in the economic function of a nation than any constituent citizen, company or body corporate. Who is the neutral arbiter in a society without government? Added: Who else can require corporations/individuals to release correct/non-fraudulent financial data, and who else can hold them to account if they don't do so?
In an experiment you not only measure, you also conduct an experiment. And in an economy every decision affects everyone to varying degree. Especially government's because only violent actors can reach those who would otherwise not be reachable. E.g. when I sell you my service, it does not greatly affect anyone except you. But when I start doing my service for you as a government agency, I suddenly affect everyone because I have to tax everyone and do that I have to create ten more agencies including IRS, police, SWAT etc.
Bitcoin seems to be a very good way of creating a new "club" of a small number of bitcoin-wealthy at the expense of everyone else. Being resistant to legal action is not an advantage, it will create an environment rife with fraud and security risks.
Bitcoin owners become wealthy not by stealing, but because government is stealing from people via money printing and capital controls and regulations. Then, "wealthy bitcoiners" gladly share part of their investment and teach everyone about Bitcoin for free.
Gold and USD is even easier to steal because it's damn too expensive or impossible to protect them. You never actually own USD, by the way, it's always in some banker's balance sheet. See also: http://en.wikipedia.org/wiki/Executive_Order_6102
Protecting Bitcoin by splitting the password via 7-of-12 SSSS and sending the keys to 12 of your friends around the globe costs almost zero. The amount of security does not depend on how much you are willing to spend on it. It only depends on your paranoia. Most of the people are safe enough with cheap offline computer. Fugitives can use more complex schemes.
There must be some reason why people would prefer the currency of one club over another. Maybe it's because in "the Bitcoin club" no one tells you what you can do with your money, no one devalues your money at will and no one steals from you and says it's "legitimate taxation" because you allegedly signed some social contract you've never actually seen.
In fairness, the concepts of money and ownership could also be argued to the products of a social contract, and that the inability to beat someone over the head and take their stuff is an abridgment of freedom.
Of course not. But codes of behavior clearly exist. Even without invoking laws, people in a civilized society will patiently stand in line rather than attempt to fight for first place.
Money is similar: it does not exist, except in our imaginations. We invented the idea, along with ideas like "fairness", "justice" and "ownership". They are not perfect inventions, and they are illusory and ephemeral, but they nonetheless shape human behavior.
"You're not allowed to take what's mine" is every bit a product of an illusory code of behavior as taxation, laws, etc. It does not exist in nature intrinsically. If you honor other people's ownership and expect them to honor yours, you are participating in following these unwritten rules.
And why do you suppose people decide to stand in line without anyone actually forcing them to do so? It must be because they know that if a couple of them decide to break the line and go ahead of everyone else, then everyone else would do the same, this would create chaos and no one's gonna get anywhere.
With so called social contract everything falls apart rather fast when you remove force from the picture. How many people, do you think, would keep paying taxes if they knew no IRS agent is ever going to show up on their doorstep?
You see, you confuse what's really a universal behavior and codes with something that's imposed upon us by a threat of force. No one forces people to use Bitcoin or Gold. But people are forced to use USD. No one us forced to donate to charities, but people are forced to pay taxes. Every time you look at something that you think is a product of society, please ask yourself: would this thing exist if no central force, like government, was applied? For instance, would property exist if no government was enforcing it? Some would say no, but of course it's not true, since territorial behavior is present even in animals.
> And why do you suppose people decide to stand in line without anyone actually forcing them to do so? It must be...
This doesn't follow intrinsically. The threat of violence is absolutely present in line-standing scenarios (imagine starving people in a bread-line; the biggest reason not to cheat is that fellow line-standers would kick your ass).
> But people are forced to use USD.
Sort of, in the same sense that one is "forced" to engage in voluntary labor in order to survive. If one were to go live in the woods, they could hunt and forage without ever touching a greenback. However, to nearly everybody, the benefits of USD (and labor) outweigh the costs, or at least they act that way.
Obviously, many of our existing social structures are backed by centralized violence, both at the nation-state and community levels. But my point is that this is just as true of gold or BitCoin as it is of USD and taxes. While common decency will prevent most people from taking your stuff, at the end of the day, the threat of violence is what keeps someone from stealing your gold, or beating you with a wrench until you give up your BTC encryption key. There is no reality in which there is not an incentive to use violence, even if only to stop other violence.
Clearly, "social contract" is a broken metaphor: none of us signed a goddamn thing simply from being born. It bothers me as well that I effectively have no say in the matter, and that I am tacitly complicit in the various injustices of the state. I would vastly prefer opt-in distributed nation-tribes, such as Neal Stephenson's "phyles".
But at the same time, there is a strong possibility that if governments were to evaporate tomorrow, we would revert first to "nature red in tooth and claw", eventually giving way to networks of feudalistic allegiances, in both cases, backed by extreme violence. Should we invent new post-national social structures (perhaps with actual social contracts that people choose voluntarily)? Of course, the sooner the better! But in the meantime, we all get 30% (or whatever) stolen in order to not have to worry about 100% getting stolen. It sucks, but it could be a lot, lot worse.
Being resistant to legal action is an advantage in many parts of the world with repressive government.
There are more advantages when you look outside the narrow view of utility in modern western society. Now anyone in the world can explore entrepreneurship and all they need is a computer. Computers are becoming more and more accessible (Raspery Pi's, $100 laptops etc).
Now people in poverty stricken countries can establish their own businesses and trade on a world wide scale. No bank accounts needed. Ability to accept micro payments without abhorent fees.
> Bitcoin seems to be a very good way of creating a new "club" of a small number of bitcoin-wealthy at the expense of everyone else
Currently we live in a society where wealth disparity has reached sickening levels.
Bitcoin will significantly reward those who take the risk from an early stage if it does take off. The difference being that Bitcoin is not a fundamentally rigged system.
> The difference being that Bitcoin is not a fundamentally rigged system.
A fundamentally rigged system is any system which doesn't reward merit. That's BitCoin - it doesn't reward merit. Those who got in first, benefit if they convince everyone else to use it.
And what is merit? Does Satoshi who created it have merit? Or do those who started mining it back then because they recognized the true potential have merit? Or those who bought it at $2 and then a $10 and then at $100 have merit, because they understand why Bitcoin is important and what it can do to the world? It's not like those who got in are random people. They had some knowledge and experience that allowed them to understand Bitcoin, while everyone else was running around screaming "ponzi scheme"
Not necessarily. The fractional reserve system is rigged in the sense that to use it you must borrow at interest where the interest can not be paid back resulting in assets transferred to the creators of the currency. Bitcoin does not have this property. In my opinion the system of Bitcoin isn't rewarding certain people over others, that is a property of the market.
In a country (Peru) where formal legal systems functioned extremely badly, there was a huge extralegal economy: houses, businesses, transport, etc all of which didn't officially exist and had no legal protection. Providing a route into the legitimate system provided a huge economic benefit for a lot of people and reduced Maoist terrorism.
Bad legal system < Lawlessness / Extralegality < Good legal system.
The article is interesting in that it quotes Dutch Finance Minister Jeroen Dijsselbloem saying:
"Bitcoin is not electronic money… At present its eventual impact on the real economy seems negligible…Bitcoin is not a financial product as defined by law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply."
Then the article goes on to say:
>ingredients are in place to make Amsterdam a city with a lot of Bitcoin in its future.
And the article then lists a lot of the benefits of having Bitcoin as an unregulated 'local currency', aka a commodity. This is a dangerous place for Bitcoin. If it grows too much, it will be recognized as a currency and regulated. If it grows only slightly, then it will not see any real use outside of the small group that already uses it. In the latter case, people like the author of the article stand to benefit a fair amount. In the former case, people like the author of the article stand be driven out of business, or have their business model impaired, by regulation.
If the point of the article was to convey that this is a golden age for Bitcoin in Holland, then it has achieved its purpose. If the point of the article was to make it seem that significant adoption of Bitcoin in Holland lay ahead, or that it would be a good thing, then it has not done so. In fact, that would be an entirely different article that would have to include more factual and historical analysis than this article even bats an eye at.
Today there are far more people who would be very interested in risking investing in Bitcoin and accepting Bitcoin for their service, than there are people who have heard of it. Every attack on any Bitcoin business brings in more people and their capital from around the world than the wealth it destroys. If Netherlands one day starts hurting Bitcoin business on big scale, it will create a resonance that will increase Bitcoin awareness and utility 10x the same year.
Also, the first country that will allow Bitcoin flourish will attract such an enormous amount of capital, it will make news everywhere and it won't be that easy to shut down business anymore.
> it will be recognized as a currency and regulated.
I'm still wondering how any government would plan to "regulate" it. In the same way a lot of contractors want to pay by cash so they can go under the table on their annual income for tax purposes, if you don't publish a link between your bitcoin address and yourself then it would be impossible for a government to oversee your bitcoin activity until you somehow tied a transaction back to your real identity.
The world black market is estimated to be 2 trillion dollars (http://en.wikipedia.org/wiki/Black_market). It will only be bigger, but governments will still be able to tax land, real estate and big companies.
However, without inflation, QE and ad-hoc confiscations, no government will be able to have "budget deficit". That is, no government would be able to "borrow" money from nothing to build stuff for "free" for their electorate.
Since no politician will be able to do "free" stuff without raising taxes, no one would elect any government at all. This all brutal nonsense will simply fall out.
108 comments
[ 3.4 ms ] story [ 87.6 ms ] threadCan bitcoin's unregulatable nature really provide an example for how establishment financial systems should be better regulated? Bitcoin can be an alternative, it seems, but not a "city on a hill" to fiat currencies, and their financial systems.
2. Politicians can't print more bitcoin as they like. Only according to the protocol and in competition with others.
3. It's virtually impossible to censor Bitcoin transactions (unless you shut down the whole internet in the country).
2. That is not an issue of regulation.
3. The same applies to paper money, and again, paper money is regulated.
Regulation = laws = rules = instructions to cops when to apply rubber hose.
1. Cash transactions require meeting in person. This makes people more vulnerable to meeting with rubber hose.
2. The value of your paper cash is diluted when owners of rubber hose print more of it.
Bitcoin reduces these threats by more than 90%.
1. Politicians make the rules, and the rules can dictate the seizure of the places that offer the government-free version of Bitcoin. (Well, for now the governments may not agree to cooperate on this, but the scenario has realistic prospects.) In this way the governments gets access to Bitcoin's evolution. After this, they can in time change it in wherever way they want and make it at some point incompatible with government-free versions. Mind you, that the bulk of the Bitcoin users will update their version from the most seemingly trusting source, which may be government's.
2. Don't underestimate people in this overly-motivating subject. And the motivated people can become very ingenious.
3. I am not sure if there can be a reason for censorship (a powerful actor can act in other ways against the undesired Bitcoin users), but what it is possible is to learn to filter out Bitcoin activity in particular or everything unknown in general. What is this binary stream? Encryption? Want privacy? Here's the government-provided solution that assures you (government-surveyed) privacy! ;)
2. If you move or store cash, it can be confiscated by the police: http://www.pbs.org/newshour/bb/nation/july-dec13/assets_08-1...
Bitcoin is impossible to "print" more than scheduled and it's much easier to transport and store safely than cash or gold.
2) The Silk Road bitcoins were confiscated by police just fine. In fact Bitcoin is in some ways easier to trace and therefore confiscate. If the cops can trace a transaction to you they just apply some rubber hose cryptography.
It is more easily dividable than gold.
Rubber hose is more expensive than QE. You can steal one person's stash, but cannot steal from millions at once (well, you can, but it'll be too obvious and very expensive). Just watch zebras crossing the river infested with crocodiles. The fiat currency is when all zebras find themselves in the slaughterhouse.
1) Bitcoin has the potential to destroy the tools of monetary policy. 2) Bitcoin has the potential to hide taxable income from governments. 3) Governments with dwindling tax bases may react by printing traditional currency, hastening the flight to Bitcoin in a vicious cycle. 4) Traditional currencies may collapse as people rush to convert them into Bitcoin. 5) Unable to tax coercively, traditional governments may collapse.
What might replace them? Toll roads and kickstarter philanthropy in Randian democracies?
(Is this in the ballpark for Bitcoin's potential impact or not?)
My understanding of one facet of the UN is that by promoting trade between UN nations it makes war between these nations more costly and difficult thus reducing the chance that war would break out.
If correct a globally accepted and popular currency which can be freely transferred across borders between citizens of every nation could help depopularise outbreak of war between nations.
You can criticise this view in many ways, but I think it's undeniable in principal that open trade between nations would serve as a barrier for initiation of war and conflict. And raising barriers against this behaviour is only a good thing.
Bitcoin makes no difference against this. Actually in the regard to world conflicts, Bitcoin carries an insulating effect. It makes you more mobile and more willing to get yourself to a safe and peaceful place to live (and spend your Bitcoins there).
Without government people would have to find ways to voluntarily pay for things they like to have. E.g. roads, insurance etc. Some roads will be paid, some roads will be sponsored by merchants that do business on the streets, some roads will be owned by big malls etc. The market is different from the state not in that it does something differently, but that there are millions of ways to satisfy demand instead of just one.
Read more on possibilities in "Practical Anarchy": http://freedomainradio.com/FreeBooks.aspx
1. If you buy a house you must show evidence that you earned the money. You can't earn all your Bitcoins Breaking-Bad (or Silk-Road) style and expect that the government will think your new-found fortune is ok. Thanks to the blockchain you kind of can't lie too much, unlike, say, cash.
2. If the government wants to ban certain activities it can do so easily. Suppose that the government wants to keep its citizens from gambling or from using mixer services, it could declare that it won't recognize Bitcoins that passed through those services as legal tender. Good luck paying property taxes with your tainted bitcoins.
... and so on. Things are not that different. In fact the blockchain may mean that the government has more, and not less, access to information: for example governments generally can't access information from other countries except in rare occasions. With Bitcoins that information is accessible by default.
Now what the government can't do with Bitcoin is play games with the money supply. People in places such as Argentina could perhaps tell us why that would be a good thing.
Sensible active monetary policy and "lender of last resort" activities are vital to functioning modern economies. That's why they had to be enacted in Europe during the financial crisis despite not being properly provided for by the existing Euro framework.
Bitcoin holders, on the other hand, have to sell bitcoin below tomorrow's price to eat something today. It is reversed trend: the more people want bitcoins, the more "equally" they will become distributed. Everyone who holds and doesn't spend bitcoins does not participate in the economy and thus doesn't earn his wealth yet. But to earn it he has to part with part of his stash, thus leaving less for himself in the future.
There are not only BTCs, but also forks and other crypto currencies. So if BTCs hording becomes a problem the incentive to adopt one of the alternatives will rise. Diminishing the value of BTC relative to some other currency and therefore suppressing ( at least to some extend) hording.
People want one money - the most marketable most liquid commodity to store their cash in. http://blog.oleganza.com/post/54121516413/the-universe-wants...
Given the current size of the market, a government budget of a few billion dollars can easily whipsaw the bitcoin supply.
Of course, it will destabilize prices for some period of time, but only at great expense to itself and making millions of people aware of Bitcoin and thus accelerating its long-term growth.
Part of the reason I said 'a few billion' is that several governments can afford to spend that, no problem. If they think they are facing an existential threat (as you seem to believe), it is basically a certainty that they will try it.
It's funny but there is a lot of similar discussion on the other side of the fence, too: "Now that the FBI has a hold of DPR's Bitcoins, how do we blacklist these tainted Bitcoins so that we don't fall for honeypots/undercover agents?"
You can't, unless you want to fork the blockchain and start a new genesis block sans the Bitcoins you don't like, but that would be disasterous and no one would agree to it. It would defeat the whole premise of Bitcoin—why are your Bitcoins more special than my Bitcoins?
Truth is, tax collection works largely on the honour system, cooperation from employers, and through audits/investigation. Bitcoin is no different. The only real benefit the blockchain could give is to help automate some of the consensual tax collection further.
But anyway, the government accepting any bitcoins for tax payments should probably be considered a win for the ecosystem.
How do you figure?
> Your parent comment is using a definition where coins that pass through a mixer with tainted coins themselves become tainted. [...]
1. The aggressive party would have to stop accepting any coins that come from Zerocoin altogether.
2. Mr. Taint can go about his day sending Satoshi's to random addresses in the blockchain, effectively tainting every address he can find.
3. It would require collaboration from every single Bitcoin service, otherwise a single non-collaborating service would end up mixing tainted coins with non-tainted coins over time and the whole population would become tainted.
The US government can ostensibly stop accepting Zerocoins. In that event, so would any party that wanted to trade with them. There wouldn't be any need for a new blockchain, possessors of clean coins would simply have to decide how much extra value that part of ecosystem provided.
That last sentence mixes up with your point 3, tainting all the coins would be a collaboration between owners of clean coins and service providers, there is at least room for owners of clean coins to be careful with them.
Bitcoins aren't actual "things", they're just values that get debited from an account and credited in another, so you can't have tainted bitcoins.
You could have tainted addresses, by checking if there's a path between a certain address and the blacklisted ones, but then anyone could taint anyone else's address by just sending them a Satoshi.
The significance of bitcoin is that it's an unrestricted option for anyone at any time. Just because you won't accept your paychecks in bitcoin doesn't mean you won't want to use them from time to time, if only for the freedom to bypass the astonishingly ubiquitous banking institution. I'm not even talking about anything illegal (though illegal doesn't always mean wrong), I'm talking about the minefield of wealth draining fees and bullshit (frozen accounts, chargebacks, spending limits, really slow transfer times) that bitcoin lets you avoid when you want to.
> This past June Dutch Finance Minister Jeroen Dijsselbloem gave a Bitcoin-friendly report to Parliament. He said: «Bitcoin is not electronic money… At present its eventual I'mpact on the real economy seems negligible…Bitcoin is not a financial product as defined by law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply.»
This is the same Dijsselbloem who said that deposit confiscation on Cyprus is not a template for similar confiscations in the rest of EU: http://www.bloomberg.com/news/2013-03-19/cypriot-bank-accoun...
This is the same Dijsselbloem who said that Cyprus is a template for "haircuts" on deposits in the EU: http://www.businessinsider.com/dijsselbloem-cyprus-deal-is-a...
When time comes, all these guys will change their minds 180º without blinking. Fortunately, it will be too late.
Never gonna happen. Bitcoin is the cleaning we need. There's absolutely no incentive for governments or banks (which are in bed with governments) to make things better for those, who are not in the club.
I don't think Bitcoin's gonna wipe out the very idea of government, but it certainly has a potential to give rise to free economic zones, where no government can have its way. And their success can, in turn, convince even more people that they don't really need anyone to govern them.
Indirect coercion is multitudes of currency controls, capital controls, taxation, banking licenses etc. All the laws and regulations backed by well-oiled guns of SWAT teams that prevent people from easily trading and saving in whatever currency they want.
Starting with Keynes and finishing with Krugman, Bernanke and Appelbaum who suggest forcing people to spend more by printing more money and increasing inflation. http://www.nytimes.com/2013/10/27/business/economy/in-fed-an...
Is that about right in standard parlance?
1. Establish a government-issued currency that it can print when it wants.
2. Make people use this currency by creating barriers to other currencies and forcing people to accept it as payment for debts.
3. Print money according to some made up theory on what's better for society and give this money to whoever needs it it more (according to a theory at hand).
On your first point, it's not whether or not it comes with a cost that is the relevant question. The relevant question is: If it does come with a cost, does the cost justify the benefits and/or are we willing to pay the cost?
What is your definition of voluntary, by the way? Is a person taking a job they don't want to do, but have to in order to feed themselves, a voluntary decision?
The only way to know how to rationally use resources is to do so without acts of violence. Then we can talk about how to make sure that most people have something useful to do and have enough money to feed themselves.
For instance, if an automobile factory produces cars and people don't really need so many cars, then this factory fires workers. If it's impossible or difficult to fire them, then this means the cost goes on to consumers and prices of cars go up.
The reason unemployment exists is not because there's not enough jobs. There are plenty of job positions that can't be filled because there are no people willing and/or skillful enough to fill them. The reason unemployment exists in the wild (with no regulation) is because the market needs to readjust itself to produce something people want in the quantities people want. When government interferes into this process, it only delays this adjustment.
But the problem comes in when unsubstantiated statements come into this. I don't see any evidence presented at all that what you go on to say in your last paragraph is true.
"The reason unemployment exists is not because there's not enough jobs." I'm sorry, but my country's unemployment rate is 22%[1], and we have no welfare state worth mentioning. The minimum wage is under $1/h, and there are no restrictions on hiring nor on firing. We've had this same rate of unemployment for decades with constant economic liberalization. Now, I suppose under oleganza's view, we can still blame the very fact that government (anywhere) exists on this problem, but at a certain point you cannot blame the government anymore.
[1]http://webrzs.stat.gov.rs/WebSite/Public/ReportResultView.as...
How about "But that's the moral argument and it's a simple one, I don't see government force as illegitimate and therefore I'm fine with taxation, regardless of who is being taxed"?
Basically, you are okay if people who disagree with your opinion can be beaten and their money confiscated. This does not say anything good of you as a fellow human being.
I just think it's important to take our fellow human beings not as objects to be taxed, but as individuals to be convinced. If you think helping some group of people is a good idea - convince me, don't just steal from me. If you steal, this doesn't make you a single bit more moral.
Same with religion, maybe those initial people will not be Christians, but maybe their grandchildren will be if the occupation continues. The Ottomans, for example, converted people to Islam through tax incentives and education.
A test case for you:
In Canada (and Australia), for example, 89% of the land is in direct ownership by the Crown, the other 11% is rented by the Crown to individuals in the form of land tenure. Legally, the Queen is not allowed to permanently sell any land, as they are subject to the old rules of English family law, where descendants are to be entitled to inherit the land. The Queen, through the Government of Canada which represents her, is the owner of the entire country. Does she not have the right to charge whatever rent rates (taxes) she would like? And are not people paying these taxes voluntarily as long as they live on this rented land?
Easy to test. Ask people if they would keep paying taxes if they weren't afraid of IRS (or equivalent). My experience: the answer is NO with most.
> A test case for you
The question is where this legitimacy of owning a land by the Queen comes from. The royal family simply declared certain territories their own, then used government forces (sponsored by taxation) to enforce this. So I'd argue it's the people who paid taxes who own the land, not the Queen. What you have, though, is a perverted situation in which people pay taxes to have their land taken away from them and then leased back. That's insane.
Maybe you should ask, instead: "Why do you pay taxes?" And allow the respondents to give you a wider set of reasons. Maybe some will say it is out of fear of the IRS, but some people might not say that, or say something different. It's still a 'test' of the matter, but it's a less leading test and it's the sort of test that follows from what I've said.
Sorry, the Queen test case was just for fun. Wanted to see what you'd say. Yeah, the Queen cannot legitimately own anything by that conception, since it is all ultimately tainted by a long historical process of beating out competitors on the British Isles.
That goes back to what I said before, which you ignored, if you were to ask me: "Would you still work if you were a millionaire?" I might say: "No." That's true, but it's not true for any useful purpose, because I'm not a millionaire. If you ask me: "Why do you work?" I might say: "Because I like making money." In fact, the latter case is a more truthful statement than the previous case, because I don't actually know what Millionaire-Me might do whereas I do know what Non-millionaire Me would do (work). In any event, the previous question doesn't tell you whether or not I consider the fact I work voluntary, in fact, it doesn't tell you very much anything at all. I personally do consider the fact I work voluntary, but you'd have to ask the latter question to find that fact out. If you just had the previous question and left it, you might as well assume I believe that I work involuntarily.
In the end, you ARE asking for an opinion, the way you propose is a less honest way to do so considering what the inquiry at hand is. Remember, I said that people might have multiple reasons why they pay taxes. This is a sociological fact. Even one person might have multiple reasons why they pay taxes.
If you asked me your question:
"Would you pay taxes if you weren't forced to?" I'd say: "Yes." That's all you get.
My question:
"Why do you pay taxes?" "Fear of jail if I don't, because they pay for roads, social services, because I believe they are a legitimate exercise of function of government."
I'm not lying, no reason to, I pay taxes for multiple reasons and so do most people, and these preferences themselves may be ordered, maybe on my scale of preferences the fear of jail is in-fact less than the fear of potentially unmaintained roads if I have a nice car, for example.
Actually, an idea: Presumably we can synthesise the inquiry, ask "Why" and then ask "Would you still do it", or do it in reverse order. Then, ask people what their preference scales are, etc, etc. You'll find out more information about the reasons people pay taxes, you'll also find that what I said before is true: people pay taxes for multiple reasons.
People will figure this out. And if they don't, who is to come with a gun and tell them how to live?
In many cases it's not even needed. Who needs to know how much do you earn? Only those who confiscate from you.
Protecting Bitcoin by splitting the password via 7-of-12 SSSS and sending the keys to 12 of your friends around the globe costs almost zero. The amount of security does not depend on how much you are willing to spend on it. It only depends on your paranoia. Most of the people are safe enough with cheap offline computer. Fugitives can use more complex schemes.
Money is similar: it does not exist, except in our imaginations. We invented the idea, along with ideas like "fairness", "justice" and "ownership". They are not perfect inventions, and they are illusory and ephemeral, but they nonetheless shape human behavior.
"You're not allowed to take what's mine" is every bit a product of an illusory code of behavior as taxation, laws, etc. It does not exist in nature intrinsically. If you honor other people's ownership and expect them to honor yours, you are participating in following these unwritten rules.
With so called social contract everything falls apart rather fast when you remove force from the picture. How many people, do you think, would keep paying taxes if they knew no IRS agent is ever going to show up on their doorstep?
You see, you confuse what's really a universal behavior and codes with something that's imposed upon us by a threat of force. No one forces people to use Bitcoin or Gold. But people are forced to use USD. No one us forced to donate to charities, but people are forced to pay taxes. Every time you look at something that you think is a product of society, please ask yourself: would this thing exist if no central force, like government, was applied? For instance, would property exist if no government was enforcing it? Some would say no, but of course it's not true, since territorial behavior is present even in animals.
This doesn't follow intrinsically. The threat of violence is absolutely present in line-standing scenarios (imagine starving people in a bread-line; the biggest reason not to cheat is that fellow line-standers would kick your ass).
> But people are forced to use USD.
Sort of, in the same sense that one is "forced" to engage in voluntary labor in order to survive. If one were to go live in the woods, they could hunt and forage without ever touching a greenback. However, to nearly everybody, the benefits of USD (and labor) outweigh the costs, or at least they act that way.
Obviously, many of our existing social structures are backed by centralized violence, both at the nation-state and community levels. But my point is that this is just as true of gold or BitCoin as it is of USD and taxes. While common decency will prevent most people from taking your stuff, at the end of the day, the threat of violence is what keeps someone from stealing your gold, or beating you with a wrench until you give up your BTC encryption key. There is no reality in which there is not an incentive to use violence, even if only to stop other violence.
Clearly, "social contract" is a broken metaphor: none of us signed a goddamn thing simply from being born. It bothers me as well that I effectively have no say in the matter, and that I am tacitly complicit in the various injustices of the state. I would vastly prefer opt-in distributed nation-tribes, such as Neal Stephenson's "phyles".
But at the same time, there is a strong possibility that if governments were to evaporate tomorrow, we would revert first to "nature red in tooth and claw", eventually giving way to networks of feudalistic allegiances, in both cases, backed by extreme violence. Should we invent new post-national social structures (perhaps with actual social contracts that people choose voluntarily)? Of course, the sooner the better! But in the meantime, we all get 30% (or whatever) stolen in order to not have to worry about 100% getting stolen. It sucks, but it could be a lot, lot worse.
Civilization is a non-trivial problem.
There are more advantages when you look outside the narrow view of utility in modern western society. Now anyone in the world can explore entrepreneurship and all they need is a computer. Computers are becoming more and more accessible (Raspery Pi's, $100 laptops etc).
Now people in poverty stricken countries can establish their own businesses and trade on a world wide scale. No bank accounts needed. Ability to accept micro payments without abhorent fees.
> Bitcoin seems to be a very good way of creating a new "club" of a small number of bitcoin-wealthy at the expense of everyone else
Currently we live in a society where wealth disparity has reached sickening levels.
Bitcoin will significantly reward those who take the risk from an early stage if it does take off. The difference being that Bitcoin is not a fundamentally rigged system.
A fundamentally rigged system is any system which doesn't reward merit. That's BitCoin - it doesn't reward merit. Those who got in first, benefit if they convince everyone else to use it.
But those they convince do not benefit the same.
In a country (Peru) where formal legal systems functioned extremely badly, there was a huge extralegal economy: houses, businesses, transport, etc all of which didn't officially exist and had no legal protection. Providing a route into the legitimate system provided a huge economic benefit for a lot of people and reduced Maoist terrorism.
Bad legal system < Lawlessness / Extralegality < Good legal system.
"Bitcoin is not electronic money… At present its eventual impact on the real economy seems negligible…Bitcoin is not a financial product as defined by law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply."
Then the article goes on to say:
>ingredients are in place to make Amsterdam a city with a lot of Bitcoin in its future.
And the article then lists a lot of the benefits of having Bitcoin as an unregulated 'local currency', aka a commodity. This is a dangerous place for Bitcoin. If it grows too much, it will be recognized as a currency and regulated. If it grows only slightly, then it will not see any real use outside of the small group that already uses it. In the latter case, people like the author of the article stand to benefit a fair amount. In the former case, people like the author of the article stand be driven out of business, or have their business model impaired, by regulation.
If the point of the article was to convey that this is a golden age for Bitcoin in Holland, then it has achieved its purpose. If the point of the article was to make it seem that significant adoption of Bitcoin in Holland lay ahead, or that it would be a good thing, then it has not done so. In fact, that would be an entirely different article that would have to include more factual and historical analysis than this article even bats an eye at.
Also, the first country that will allow Bitcoin flourish will attract such an enormous amount of capital, it will make news everywhere and it won't be that easy to shut down business anymore.
Honest, non-rhetorical question: How? (In the sense of both the goals of the regulation and the means of enforcement.)
I'm still wondering how any government would plan to "regulate" it. In the same way a lot of contractors want to pay by cash so they can go under the table on their annual income for tax purposes, if you don't publish a link between your bitcoin address and yourself then it would be impossible for a government to oversee your bitcoin activity until you somehow tied a transaction back to your real identity.
However, without inflation, QE and ad-hoc confiscations, no government will be able to have "budget deficit". That is, no government would be able to "borrow" money from nothing to build stuff for "free" for their electorate.
Since no politician will be able to do "free" stuff without raising taxes, no one would elect any government at all. This all brutal nonsense will simply fall out.
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