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Government-issued currencies usually come with legal tender laws and citizens are required to pay taxes using the government money. Since taxes are not voluntar

Government-issued currencies usually come with legal tender laws and citizens are required to pay taxes using the government money. Since taxes are not voluntary, this creates built-in demand for the fiat money. The creators of alternative competitor-money are punished as well. The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first. A side note here about capital controls: Bitcoin allows money to be borderless, which is natural. Capital controls are an artificial construct of the state, often used to prop up the perpetually failing fiat money. The second issue is economic. When the money supply of your currency is not constrained (by gold, or otherwise), then it inevitably inflates, often unpredictably and uncontrollably. The death of a fiat money usually has disastrous effects on the people, especially on the poor. Unfortunately, fiat money has a short lifespan, on average. The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem. Bitcoin is such a system: all participation in Bitcoin has been voluntary. Early adopters took a big risk on a fledgling technology, and some have been rewarded with handsome returns. Early writing about cypherpunk money usually mentions anonymity, which Bitcoin does not have (yet). > Where is this experiment going in the long run? Isn't that the trillion-dollar question? :-)

Nursie 9y ago
>> Early adopters took a big risk on a fledgling technology I can't agree with that. Early adopters really didn't take a lot of risk, they ran a mining program for a while, or bought some BTC for a few cents to a few dollars.
- clarkmoody 9y ago
  In some countries, Bitcoin has been outlawed. Owning stuff the government doesn't like is certainly a risk. They also endured 90% drops in value from early peaks to troughs. Bitcoin could have gone to zero at any point if the system had failed. (It still could) Some invested time learning about new technology that could've gone nowhere.
  - Nursie 9y ago
    >> In some countries, Bitcoin has been outlawed. Very few. In more/most it's just taxable. >> They also endured 90% drops in value from early peaks to troughs. Bitcoin could have gone to zero at any point if the system had failed. (It still could) OK, sure, but again not a massive risk if your initial stake was tiny. And it was a stake rather than an investment - it's not really an investment as you're not investing in a productive endeavour. More like buying and holding an asset.
    - qsucvatz 9y ago
      In the end, either one does or does not own the property. They choose when to buy and when to sell. From your perspective, isn't it a massive risk not to sell at this all time high value? If they hold or sell, do they deserve whatever outcome?
      - Nursie 9y ago
        > From your perspective, isn't it a massive risk not to sell at this all time high value? Not really, if you didn't tie up significant proportions of your net worth in the initial buy. > If they hold or sell, do they deserve whatever outcome? Deserve is a worryingly moral word to apply there. My only dispute is that early adopters took a lot of risk. It's not like they sunk their life savings into opening a small business.
- googletazer 9y ago
  They could have been doing something else with their time. Instead they were mining, promoting, and trading this technology. By definition there is an opportunity cost to being an early adopter instead of going with the flow - so indeed they took a risk.
  - pessimizer 9y ago
    The question was whether it was a "big" risk. Every action, including the decision not to take a particular action, is a non-zero risk.
  - UncleMeat 9y ago
    Does that opportunity cost justify owning a meaningful percentage of all of the coins that will ever exist?
    - googletazer 9y ago
      What does "justify" mean here? Are you somehow saying its not fair that early adopters have a lot of coins?
      - scotty79 9y ago
        If at some point bitcoin will suck significant portion of saving of whole world then they will own huge share of all of that which seems a bit unfair.
        ric2b 9y ago
        So buy it from them. It's a completely voluntary system that requires no permission to participate, has been from the start. I assume 'fair' to you would mean taking it from them to re-distribute between everyone else?
        scotty79 9y ago
        > So buy it from them. You can't do that if they don't sell and they won't sell untill bitcoin stores large portion of world's wealth. > I assume 'fair' to you would mean taking it from them to re-distribute between everyone else? I have no idea why would you assume that. Especially if you could achieve same thing just by destroying their bitcoin. No need to re-distribute. Share is the thing that matters not the amount. On more serious note fair for me is more or less how actual brick and mortar econony distributes things. You make things other find useful, you get share of humanity's wealth in return. Holding things, bitcoin, gold, real estate, copyright strays for me from 'fair'. I see it as the less fair, the less you contibuted to humanity to acquire those things and the more claim on share of humanity's wealth you have by holding them.
frgtpsswrdlame 9y ago
>Since taxes are not voluntary >The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first. Do you believe obeying property law is voluntary? I find it to be coercive.
- bjl 9y ago
  Left-libertarians definitely find property law coercive.
  - ticviking 9y ago
    Turns out if you're consistent in applying the NAP then homesteading becomes illegitimate as any exclusive claim on land which was previously free for anyone to make use of is an act of force against literally every other person in the area.
    - Nursie 9y ago
      Yup, the homesteading principle is interesting and workable iff there is infinite land of the same sort of quality easily available to everyone. IIRC the guy that came up with it agreed with that reading on it!
- clarkmoody 9y ago
  Instead of answering your question, I will leave this: Very small children understand and recognize property, since it is a natural right. The toy in my hand is "mine," and when some other kid comes along and takes it, I get upset.
  - frgtpsswrdlame 9y ago
    >Very small children understand and recognize property, since it is a natural right. The toy in my hand is "mine," and when some other kid comes along and takes it, I get upset. When a very small child in a poor family looks at what is under a wealthy family's Christmas tree he's also going to be upset. Does that make a relatively equal distribution of Christmas presents a natural right? I see no basis for decrying all coercion and mandating transactions be voluntary yet also overlooking the biggest contributor to coercion: property.
fsloth 9y ago
"The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first." So basically everyone should be armed to their teeth? Because, if there is no state to impose control, a warlord will emerge who will. Or is there some other solution to the problem that humans have known tendencies toward violence and power hunger?
- clarkmoody 9y ago
  But Wouldn't Warlords Take Over?[1] [1] https://mises.org/library/wouldnt-warlords-take-over https://mises.org/library/wouldnt-warlords-take-over
  - dmoy 9y ago
    That article paints a very unfair portrayal of Somalia. Pre war Somalia was involved in the collapse of a communist government, not exactly a stable before and after comparison (which I would think the author would acknowledge given their own Apples and Oranges comparison?). If we go back before that things were pretty damn stable, white pearl and all. I guess maybe I'm just a bit put off because of the blurb towards the opening about "society A, which is filled with evil, ignorant savages who live under anarchy" (conveniently not naming any specific society, but hint hint, it reads a lot like the author implies either Somalia or Colombia). I thought we were past the whole racist Noble Savage thing.
  - xg15 9y ago
    The core argument of that essay seems to be "Well yes, but maybe the warlords would be better than the government we have today. We don't have proof they wouldn't be." ... which seems rather weak to me.
  - scotty79 9y ago
    > If, by hypothesis, the vast majority of people—although they have different conceptions of justice—can all agree that it is wrong to use violence to settle their honest disputes, then market forces would lead to peace among the private police agencies. This is pretty much even sillier hypothesis than "if people agree to work together towards common good, through the forces of cooperation, they would achieve prosperity greater than it's possible in any competitive capitalist system" and that one was tried and proven false. People agreeing that the violence is not the right way to resolve disputes? Author must somehow missed all of history right untill yesterday and have no friends or at least only friends without neighbours.
KirinDave 9y ago
> The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem. Buuuuut, they bought it with fiat currencies, in many cases USD. So... right there the entire idea breaks down. Still, maybe that's unfair. A valid criticism of this argument is that it's a variant of the the serf comic argument (or genetic fallacy) in which those embedded in a bad system may not question it because they benefit from it. The real problem from a libertarian perspective is that bitcoin (and really all PoW blockcahins) just encodes how a new State, a plutocratic one based around processing power and energy availability, is formed. This is in a very literal sense what bitcoin encodes, with the miners being the only folks with any real votes (in that if miners as a group refused to mine other currencies and actively discourage others from doing so, other currencies cannot scale and are locked out). Not that bitcoin is scaling all that well. Or eth for that matter. As we've seen from recent research, Bitcoin is slightly better than existing systems at discouraging monopolies (because even accidental misuse could crash the currency), but I seriously doubt a mining duopoly dictating most of the future of bitcoin is something that any libertarian actually calls a positive outcome, other than a snarky nod to damaging existing states. The long term evolution of the system is pivotal on some new, non-PoW scheme. PoS is the major contender right now. There might be other methods as derivations (e.g., PoW coupled with physical location, PoS with term limits, PoS with accreditation, etc). Non-PoW systems will also scale much more effectively than PoW systems, as well.
- lisper 9y ago
  > they bought it with fiat currencies No. Some people bought it with fiat currencies. Others mined for it. Still others exchanged goods and services for it.
  - ballenf 9y ago
    And some were gifted it. I remember a handful of sites that would give you some BTC just for asking as a demonstration of the technology. It was worth roughly a cent or two at the time -- obviously much more now if held.
  - 9y ago
mikeash 9y ago
I'm sympathetic to the inflation argument, but it doesn't seem to match what actually happens. For example, Bitcoin inflated by about 20% in a 20-minute period yesterday. The theory doesn't seem to match the practice here.
- alexasmyths 9y ago
  What he means to say is that the currency goes up, prices go down. So if a currency goes up in value, that's actually economic 'deflation', because the prices of goods go down. Now - I don't agree with any of the commenters arguments at all, but the terms 'inflationary' and 'deflationary' are used in that context. There are some that argue the inflation and deflation are not a function of the price of goods - rather - simply the amount of money in circulation and that's it. I think this is the Austrian position.
  - mikeash 9y ago
    I'm not sure what you're trying to correct here. Are you thinking I used "inflation" to describe an increase in Bitcoin's price? I wasn't: Bitcoin's price spiked overall yesterday, but there was also a point where the price dropped by 20% in 20 minutes, and that's what I'm referring to.
alexasmyths 9y ago
"Since taxes are not voluntary, this creates built-in demand for the fiat money." Not really. The real underlying demand for a currency comes from the advantage that everyone gets by using the same currency in a common market. The 'required for tax' purposes is a side-show. Does anyone with any financial background appreciate that most businesses in the US want to use a single currency for their US transactions, and definitely not a 'grab bag' various currencies? Nobody wants that. Nobody. Also, the requirement to 'pay taxes' in a common currency is not coercive. As long as there is liquidity in currency, then you can exchange whatever asset you want for USD and pay your taxes then. Libertarians are still free to use whatever they want in their business dealings. Of course, we all use USD because it's pragmatic and useful. "Capital controls are an artificial construct of the state" Western nations do not really have 'capital controls' other than for the purposes of taxation and fraud. And sure, you could say 'taxation' is an 'construct of the state' but it's certainly not 'arbitrary'. "When the money supply of your currency is not constrained (by gold, or otherwise), then it inevitably inflates, often unpredictably and uncontrollably." Totally false. Inflation is a target by most central banks. They can make it positive or negative, generally, and target specifically 2% for certain reasons. You can argue against the 2% if you want, but not that managed currencies are inherently 'one thing or another'. They are whatever they are designed to do. By having a 'perfectly hard currency' - you forgo the risk of having some crazy person doing monetary policy - but worse - you lose the possibility for having monetary policy altogether. How could you possibly not mention this as the most obvious drawback to a strict currency (i.e. no monetary policy)? Monetary policy is a very powerful instrument for helping the economy along. Without it, it would be impossible to ensure enough liquidity as the market expands. Also, the economy would not be resilient to 'shock' events. The reason zero economies on planet earth used a fixed-currency regime is because it does not work. "The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily" This position is false, as capitalism itself is game of gaining leverage towards monopoly. Without some degree of redistributive taxation, 90% of the US economy would be in the hands of a small group of people. (And P.S. I'm no communist) "Bitcoin is such a system: all participation in Bitcoin has been voluntary. " Again, false. Bitcoin is not a currency. If anything, BTC has proven how ridiculously bad this 'crypto-currency' idea has been as a currency. By it's very own 'relatively strict' status, it has increased it's value ('deflationary' in your terminology) - and has become useless as a currency. -----> If we were using Bitcoin as a currency, the economy would be tanking due to a deflationary death-spiral <----- EDIT: by 'death spiral' I'm referring to a common economic idea. As prices of goods go down, investors tend to hoard cash rather than invest it, as holding currency might be a better investment strategy than spending. Without investment, other parts of the economy slow, furthering the impetus to holding cash. The 'mass deflation' we've seen in BTC is equally as destructive as 'mass inflation' we would see from some really poorly managed gong-show currency. Put another way: yes, you might like it if your 'new tennis shoes' were 1/2 price next week, and 1/2 that price the week after - hey - cheap tennis shoes! But think about it: has the economy just magically been 100% more productive each week? No. Of course not. So - what's happening is a monetary game that will soon hit your paycheque (i.e. your boss can pay you 1/2 your salary each week because that's your real market value). But worse - because of this drop in prices, your boss will be less likely to expand because his cost of capital equations show him it's smarter to hold the cash. But it's all moot: Bitcoin is not a currency. It could be used as a currency, but it's not. It's just a purely speculative thing that's going on. People trading numbers for money 'because'. There's no rhyme or reason. There is no 'big government vs. small government' ideology here. There is no 'libertarian' behind BTC currency. It's just a meme with money that's interesting to watch.
xg15 9y ago
> The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem. Bitcoin is such a system: all participation in Bitcoin has been voluntary. Early adopters took a big risk on a fledgling technology, and some have been rewarded with handsome returns. I could never really make sense of that position. Voluntarily by whom? Why would you ever voluntarily agree to a high-inequality society where you are at the lower end? I don't think bitcoin is a valid example because it's something that (right now) you can choose to ignore completely without any negative consequences for you. Therefore, high inequality is not necessarily a problem. The moment bitcoin would become the single dominating currency, the situation would be completely different.
- sf_rob 9y ago
  >Why would you ever voluntarily agree to a high-inequality society where you are at the lower end? In terms of political philosophy, most libertarians come at it through a rights based framework (see: Bastiat, Locke) and believe rights to be non-arbitrary. You seem to be suggesting a more self-interested framework which I'm not going to argue for/against. In terms of reality, libertarians skew wealthy and less social. Like most groups they are more likely to rationalize a system that is congruent on the surface with their place in society.
  - xg15 9y ago
    > In terms of reality, libertarians skew wealthy and less social. Like most groups they are more likely to rationalize a system that is congruent on the surface with their place in society. Well yes, I too can think up the philosophy of xg15ism in which people like me are well off at the cost of everyone else - and then demand that society implement it, pretty please. I just don't see how that would bring us forward in any way.
ticviking 9y ago
> he libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem. I'd like to remind the world there are such things as consequentialist Libertarians who view the value of their policy preferences based on their outcomes rather than the NAP.
- frgtpsswrdlame 9y ago
  Do you have any good reading material on consequentialist libertarians? I only ever run into deontological ones.
  - ticviking 9y ago
    Honestly not really, the blog "bleeding heart libertarians" tends to focus on the consequentialist arguments more, but most of the contributors seem to be deontological in outlook. Most of the consequentialists wind up becoming pretty standard neo-liberals as they are willing to consider government intervention when needed.
Emma_Goldman 9y ago
I'm not a moral realist so I think that libertarian philosophy is nothing but the most venal elements of capitalism congealed in thought, but I should add that the classical formulation of libertarianism is internally incoherent. You omit that for any transaction to be legitimate it must not only be voluntary but must also consist of the exchange of things legitimately acquired in the past, i.e. voluntarily acquired. This chain of voluntary exchange is what is supposed to grant one a title to that thing. But of course, in reality, that does not exist in the least. The distribution of things over history is primarily a function of brute coercion and happenstance. Nozick knew as much, and his suggestion is as pitiful as his scruples: we need to 'reset' society according to the Rawlsian difference principle and then begin our libertarian accounting. In any case, I can't take seriously anyone who thinks that humans aren't interested in freedom because they want to be free to do things, i.e. I want to be free to see my family not only in that I don't want someone to stop me from doing so, but I also want the means to be able to do so. The one is more or less pointless without the other. And that obviously requires more than negative liberty. Or that, in another vein, that capitalist enterprises are not vehicles of accumulated power that sustain themselves by exploiting workers, ordered along hierarchical top-down principles. One only need step into sociological reality to see as much.
- isoskeles 9y ago
  So about bitcoin...
  - Emma_Goldman 9y ago
    Sorry. Libertarian philosophy is my bete noire. But the point is evident enough: I highly doubt libertarians can offer a credible macro-economic justification for the creation of a decentralised currency sustained by the whims of the market alone, and that they rely on the force of a prior moral theory. If the moral theory is void, so is the justification. I'm not sure how you would go about justifying bitcoin on its own terms. Its outside of effective social control, consumes masses of electricity, relies on centralised economies of scales in mining, and doesn't have any use-function apart from being a store of value. I imagine that blockchain technologies will have lots of useful applications down the road, but bitcoin is a primitive piece of technology that probably has a net negative effect on the world.
jrjf940 9y ago
does libertarianism have any tenets other than "human interactions should be voluntary"?

Nursie 9y ago

>> Early adopters took a big risk on a fledgling technology I can't agree with that. Early adopters really didn't take a lot of risk, they ran a mining program for a while, or bought some BTC for a few cents to a few dollars.

clarkmoody 9y ago
In some countries, Bitcoin has been outlawed. Owning stuff the government doesn't like is certainly a risk. They also endured 90% drops in value from early peaks to troughs. Bitcoin could have gone to zero at any point if the system had failed. (It still could) Some invested time learning about new technology that could've gone nowhere.
- Nursie 9y ago
  >> In some countries, Bitcoin has been outlawed. Very few. In more/most it's just taxable. >> They also endured 90% drops in value from early peaks to troughs. Bitcoin could have gone to zero at any point if the system had failed. (It still could) OK, sure, but again not a massive risk if your initial stake was tiny. And it was a stake rather than an investment - it's not really an investment as you're not investing in a productive endeavour. More like buying and holding an asset.
  - qsucvatz 9y ago
    In the end, either one does or does not own the property. They choose when to buy and when to sell. From your perspective, isn't it a massive risk not to sell at this all time high value? If they hold or sell, do they deserve whatever outcome?
    - Nursie 9y ago
      > From your perspective, isn't it a massive risk not to sell at this all time high value? Not really, if you didn't tie up significant proportions of your net worth in the initial buy. > If they hold or sell, do they deserve whatever outcome? Deserve is a worryingly moral word to apply there. My only dispute is that early adopters took a lot of risk. It's not like they sunk their life savings into opening a small business.
googletazer 9y ago
They could have been doing something else with their time. Instead they were mining, promoting, and trading this technology. By definition there is an opportunity cost to being an early adopter instead of going with the flow - so indeed they took a risk.
- pessimizer 9y ago
  The question was whether it was a "big" risk. Every action, including the decision not to take a particular action, is a non-zero risk.
- UncleMeat 9y ago
  Does that opportunity cost justify owning a meaningful percentage of all of the coins that will ever exist?
  - googletazer 9y ago
    What does "justify" mean here? Are you somehow saying its not fair that early adopters have a lot of coins?
    - scotty79 9y ago
      If at some point bitcoin will suck significant portion of saving of whole world then they will own huge share of all of that which seems a bit unfair.
      - ric2b 9y ago
        So buy it from them. It's a completely voluntary system that requires no permission to participate, has been from the start. I assume 'fair' to you would mean taking it from them to re-distribute between everyone else?
        scotty79 9y ago
        > So buy it from them. You can't do that if they don't sell and they won't sell untill bitcoin stores large portion of world's wealth. > I assume 'fair' to you would mean taking it from them to re-distribute between everyone else? I have no idea why would you assume that. Especially if you could achieve same thing just by destroying their bitcoin. No need to re-distribute. Share is the thing that matters not the amount. On more serious note fair for me is more or less how actual brick and mortar econony distributes things. You make things other find useful, you get share of humanity's wealth in return. Holding things, bitcoin, gold, real estate, copyright strays for me from 'fair'. I see it as the less fair, the less you contibuted to humanity to acquire those things and the more claim on share of humanity's wealth you have by holding them.

frgtpsswrdlame 9y ago

>Since taxes are not voluntary >The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first. Do you believe obeying property law is voluntary? I find it to be coercive.

bjl 9y ago
Left-libertarians definitely find property law coercive.
- ticviking 9y ago
  Turns out if you're consistent in applying the NAP then homesteading becomes illegitimate as any exclusive claim on land which was previously free for anyone to make use of is an act of force against literally every other person in the area.
  - Nursie 9y ago
    Yup, the homesteading principle is interesting and workable iff there is infinite land of the same sort of quality easily available to everyone. IIRC the guy that came up with it agreed with that reading on it!
clarkmoody 9y ago
Instead of answering your question, I will leave this: Very small children understand and recognize property, since it is a natural right. The toy in my hand is "mine," and when some other kid comes along and takes it, I get upset.
- frgtpsswrdlame 9y ago
  >Very small children understand and recognize property, since it is a natural right. The toy in my hand is "mine," and when some other kid comes along and takes it, I get upset. When a very small child in a poor family looks at what is under a wealthy family's Christmas tree he's also going to be upset. Does that make a relatively equal distribution of Christmas presents a natural right? I see no basis for decrying all coercion and mandating transactions be voluntary yet also overlooking the biggest contributor to coercion: property.

fsloth 9y ago

"The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first." So basically everyone should be armed to their teeth? Because, if there is no state to impose control, a warlord will emerge who will. Or is there some other solution to the problem that humans have known tendencies toward violence and power hunger?

clarkmoody 9y ago
But Wouldn't Warlords Take Over?[1] [1] https://mises.org/library/wouldnt-warlords-take-over https://mises.org/library/wouldnt-warlords-take-over
- dmoy 9y ago
  That article paints a very unfair portrayal of Somalia. Pre war Somalia was involved in the collapse of a communist government, not exactly a stable before and after comparison (which I would think the author would acknowledge given their own Apples and Oranges comparison?). If we go back before that things were pretty damn stable, white pearl and all. I guess maybe I'm just a bit put off because of the blurb towards the opening about "society A, which is filled with evil, ignorant savages who live under anarchy" (conveniently not naming any specific society, but hint hint, it reads a lot like the author implies either Somalia or Colombia). I thought we were past the whole racist Noble Savage thing.
- xg15 9y ago
  The core argument of that essay seems to be "Well yes, but maybe the warlords would be better than the government we have today. We don't have proof they wouldn't be." ... which seems rather weak to me.
- scotty79 9y ago
  > If, by hypothesis, the vast majority of people—although they have different conceptions of justice—can all agree that it is wrong to use violence to settle their honest disputes, then market forces would lead to peace among the private police agencies. This is pretty much even sillier hypothesis than "if people agree to work together towards common good, through the forces of cooperation, they would achieve prosperity greater than it's possible in any competitive capitalist system" and that one was tried and proven false. People agreeing that the violence is not the right way to resolve disputes? Author must somehow missed all of history right untill yesterday and have no friends or at least only friends without neighbours.

KirinDave 9y ago

> The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem. Buuuuut, they bought it with fiat currencies, in many cases USD. So... right there the entire idea breaks down. Still, maybe that's unfair. A valid criticism of this argument is that it's a variant of the the serf comic argument (or genetic fallacy) in which those embedded in a bad system may not question it because they benefit from it. The real problem from a libertarian perspective is that bitcoin (and really all PoW blockcahins) just encodes how a new State, a plutocratic one based around processing power and energy availability, is formed. This is in a very literal sense what bitcoin encodes, with the miners being the only folks with any real votes (in that if miners as a group refused to mine other currencies and actively discourage others from doing so, other currencies cannot scale and are locked out). Not that bitcoin is scaling all that well. Or eth for that matter. As we've seen from recent research, Bitcoin is slightly better than existing systems at discouraging monopolies (because even accidental misuse could crash the currency), but I seriously doubt a mining duopoly dictating most of the future of bitcoin is something that any libertarian actually calls a positive outcome, other than a snarky nod to damaging existing states. The long term evolution of the system is pivotal on some new, non-PoW scheme. PoS is the major contender right now. There might be other methods as derivations (e.g., PoW coupled with physical location, PoS with term limits, PoS with accreditation, etc). Non-PoW systems will also scale much more effectively than PoW systems, as well.

lisper 9y ago
> they bought it with fiat currencies No. Some people bought it with fiat currencies. Others mined for it. Still others exchanged goods and services for it.
- ballenf 9y ago
  And some were gifted it. I remember a handful of sites that would give you some BTC just for asking as a demonstration of the technology. It was worth roughly a cent or two at the time -- obviously much more now if held.
- 9y ago

mikeash 9y ago

I'm sympathetic to the inflation argument, but it doesn't seem to match what actually happens. For example, Bitcoin inflated by about 20% in a 20-minute period yesterday. The theory doesn't seem to match the practice here.

alexasmyths 9y ago
What he means to say is that the currency goes up, prices go down. So if a currency goes up in value, that's actually economic 'deflation', because the prices of goods go down. Now - I don't agree with any of the commenters arguments at all, but the terms 'inflationary' and 'deflationary' are used in that context. There are some that argue the inflation and deflation are not a function of the price of goods - rather - simply the amount of money in circulation and that's it. I think this is the Austrian position.
- mikeash 9y ago
  I'm not sure what you're trying to correct here. Are you thinking I used "inflation" to describe an increase in Bitcoin's price? I wasn't: Bitcoin's price spiked overall yesterday, but there was also a point where the price dropped by 20% in 20 minutes, and that's what I'm referring to.

alexasmyths 9y ago

"Since taxes are not voluntary, this creates built-in demand for the fiat money." Not really. The real underlying demand for a currency comes from the advantage that everyone gets by using the same currency in a common market. The 'required for tax' purposes is a side-show. Does anyone with any financial background appreciate that most businesses in the US want to use a single currency for their US transactions, and definitely not a 'grab bag' various currencies? Nobody wants that. Nobody. Also, the requirement to 'pay taxes' in a common currency is not coercive. As long as there is liquidity in currency, then you can exchange whatever asset you want for USD and pay your taxes then. Libertarians are still free to use whatever they want in their business dealings. Of course, we all use USD because it's pragmatic and useful. "Capital controls are an artificial construct of the state" Western nations do not really have 'capital controls' other than for the purposes of taxation and fraud. And sure, you could say 'taxation' is an 'construct of the state' but it's certainly not 'arbitrary'. "When the money supply of your currency is not constrained (by gold, or otherwise), then it inevitably inflates, often unpredictably and uncontrollably." Totally false. Inflation is a target by most central banks. They can make it positive or negative, generally, and target specifically 2% for certain reasons. You can argue against the 2% if you want, but not that managed currencies are inherently 'one thing or another'. They are whatever they are designed to do. By having a 'perfectly hard currency' - you forgo the risk of having some crazy person doing monetary policy - but worse - you lose the possibility for having monetary policy altogether. How could you possibly not mention this as the most obvious drawback to a strict currency (i.e. no monetary policy)? Monetary policy is a very powerful instrument for helping the economy along. Without it, it would be impossible to ensure enough liquidity as the market expands. Also, the economy would not be resilient to 'shock' events. The reason zero economies on planet earth used a fixed-currency regime is because it does not work. "The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily" This position is false, as capitalism itself is game of gaining leverage towards monopoly. Without some degree of redistributive taxation, 90% of the US economy would be in the hands of a small group of people. (And P.S. I'm no communist) "Bitcoin is such a system: all participation in Bitcoin has been voluntary. " Again, false. Bitcoin is not a currency. If anything, BTC has proven how ridiculously bad this 'crypto-currency' idea has been as a currency. By it's very own 'relatively strict' status, it has increased it's value ('deflationary' in your terminology) - and has become useless as a currency. -----> If we were using Bitcoin as a currency, the economy would be tanking due to a deflationary death-spiral <----- EDIT: by 'death spiral' I'm referring to a common economic idea. As prices of goods go down, investors tend to hoard cash rather than invest it, as holding currency might be a better investment strategy than spending. Without investment, other parts of the economy slow, furthering the impetus to holding cash. The 'mass deflation' we've seen in BTC is equally as destructive as 'mass inflation' we would see from some really poorly managed gong-show currency. Put another way: yes, you might like it if your 'new tennis shoes' were 1/2 price next week, and 1/2 that price the week after - hey - cheap tennis shoes! But think about it: has the economy just magically been 100% more productive each week? No. Of course not. So - what's happening is a monetary game that will soon hit your paycheque (i.e. your boss can pay you 1/2 your salary each week because that's your real market value). But worse - because of this drop in prices, your boss will be less likely to expand because his cost of capital equations show him it's smarter to hold the cash. But it's all moot: Bitcoin is not a currency. It could be used as a currency, but it's not. It's just a purely speculative thing that's going on. People trading numbers for money 'because'. There's no rhyme or reason. There is no 'big government vs. small government' ideology here. There is no 'libertarian' behind BTC currency. It's just a meme with money that's interesting to watch.

xg15 9y ago

> The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem. Bitcoin is such a system: all participation in Bitcoin has been voluntary. Early adopters took a big risk on a fledgling technology, and some have been rewarded with handsome returns. I could never really make sense of that position. Voluntarily by whom? Why would you ever voluntarily agree to a high-inequality society where you are at the lower end? I don't think bitcoin is a valid example because it's something that (right now) you can choose to ignore completely without any negative consequences for you. Therefore, high inequality is not necessarily a problem. The moment bitcoin would become the single dominating currency, the situation would be completely different.

sf_rob 9y ago
>Why would you ever voluntarily agree to a high-inequality society where you are at the lower end? In terms of political philosophy, most libertarians come at it through a rights based framework (see: Bastiat, Locke) and believe rights to be non-arbitrary. You seem to be suggesting a more self-interested framework which I'm not going to argue for/against. In terms of reality, libertarians skew wealthy and less social. Like most groups they are more likely to rationalize a system that is congruent on the surface with their place in society.
- xg15 9y ago
  > In terms of reality, libertarians skew wealthy and less social. Like most groups they are more likely to rationalize a system that is congruent on the surface with their place in society. Well yes, I too can think up the philosophy of xg15ism in which people like me are well off at the cost of everyone else - and then demand that society implement it, pretty please. I just don't see how that would bring us forward in any way.

ticviking 9y ago

> he libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem. I'd like to remind the world there are such things as consequentialist Libertarians who view the value of their policy preferences based on their outcomes rather than the NAP.

frgtpsswrdlame 9y ago
Do you have any good reading material on consequentialist libertarians? I only ever run into deontological ones.
- ticviking 9y ago
  Honestly not really, the blog "bleeding heart libertarians" tends to focus on the consequentialist arguments more, but most of the contributors seem to be deontological in outlook. Most of the consequentialists wind up becoming pretty standard neo-liberals as they are willing to consider government intervention when needed.

Emma_Goldman 9y ago

I'm not a moral realist so I think that libertarian philosophy is nothing but the most venal elements of capitalism congealed in thought, but I should add that the classical formulation of libertarianism is internally incoherent. You omit that for any transaction to be legitimate it must not only be voluntary but must also consist of the exchange of things legitimately acquired in the past, i.e. voluntarily acquired. This chain of voluntary exchange is what is supposed to grant one a title to that thing. But of course, in reality, that does not exist in the least. The distribution of things over history is primarily a function of brute coercion and happenstance. Nozick knew as much, and his suggestion is as pitiful as his scruples: we need to 'reset' society according to the Rawlsian difference principle and then begin our libertarian accounting. In any case, I can't take seriously anyone who thinks that humans aren't interested in freedom because they want to be free to do things, i.e. I want to be free to see my family not only in that I don't want someone to stop me from doing so, but I also want the means to be able to do so. The one is more or less pointless without the other. And that obviously requires more than negative liberty. Or that, in another vein, that capitalist enterprises are not vehicles of accumulated power that sustain themselves by exploiting workers, ordered along hierarchical top-down principles. One only need step into sociological reality to see as much.

isoskeles 9y ago
So about bitcoin...
- Emma_Goldman 9y ago
  Sorry. Libertarian philosophy is my bete noire. But the point is evident enough: I highly doubt libertarians can offer a credible macro-economic justification for the creation of a decentralised currency sustained by the whims of the market alone, and that they rely on the force of a prior moral theory. If the moral theory is void, so is the justification. I'm not sure how you would go about justifying bitcoin on its own terms. Its outside of effective social control, consumes masses of electricity, relies on centralised economies of scales in mining, and doesn't have any use-function apart from being a store of value. I imagine that blockchain technologies will have lots of useful applications down the road, but bitcoin is a primitive piece of technology that probably has a net negative effect on the world.

jrjf940 9y ago

does libertarianism have any tenets other than "human interactions should be voluntary"?