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Bitcoin, at this point in time (and for the last two years or so, though not really for the preceding eight) is digital gold. It's a version of gold that, with

Bitcoin, at this point in time (and for the last two years or so, though not really for the preceding eight) is digital gold. It's a version of gold that, with proper preparation, can be carried inside your head when you move from place to place, or transferred by voice or text message. Most people in the west have about the same use for gold[0] and bitcoin - speculation, gamble, "investment". However, people of Venezuela, Turkey, Libya, Iran and even Russia have a lot of use for gold (and bitcoin): A store of value they can take with them if they leave. And unlike gold, bitcoin can be made confiscation proof. The official currencies of these places have more volatility and less stability than BTC. [0] Gold does have ornamental and industrial use, but that's NOT why people buy it, and not why it is valued the way it is. The "investment" claims on gold outnumbers the industrial/ornamental claims by some 3 or 4 orders of magnitude.

bradleyjg 8y ago
Everything you say about bitcoin is equally true of a bank account in pounds in London. There’s zero reason in principle that it is any harder or easier for an oppressive government to prevent capital outflows to bitcoin than to British bank accounts. At very best there’s a temporary advantage in bitcoin’s favor as oppressive governments take time to understand and lock down the newer avenues for evading their controls.
- josu 8y ago
  While you are right, and this is a common practice among wealthy individuals, it's virtually impossible for most people in those countries to open bank accounts abroad.
- beagle3 8y ago
  I started with "at this point in time". At this point in time, it is easy for a person not suspected of crime (or otherwise being on the wrong side of the government) to move their british pounds from their London account to e.g. one in New York or Switzerland, convert them to USD or CHF either before or after the transfer, and generally hedge against government by betting on other things. At this point in time, the same is certainly not true for the people of Iran or Venezuela, where there are capital controls, and the only way to get a different currency is on the black market. Effectively, compared to the west, everyone there is "on the wrong side of the government". > There’s zero reason in principle that it is any harder or easier for an oppressive government to prevent capital outflows to bitcoin than to British bank accounts. In principle that's true, but that just makes bitcoin's raison d'etre more evident. At this point in time it does not seem to be needed, but it may become needed with less than a day's notice. This has happened to the people of Cyprus (a "western" European country). Even the US confiscated gold in the 1930's. History does not repeat, but it rhymes. Bitcoin is a hedge; it's far from perfect, it has a lot of drawbacks, but at this point in time , it is more useful than gold for people who might have to flee.
  - bradleyjg 8y ago
    You seemed to have missed the point. There’s nothing to stop an oppressive government from preventing its people from buying bitcoin the same as they prevent them from buying pounds and wiring them to British banks. The dark hints about how any government may become oppressive is a red herring. The issue isn’t that bitcoin isn’t needed because my government isn’t currently oppressive, it’s that bitcoin’s utility in the face of an oppressive government is wildly exaggerated. You are attributing magic powers to bitcoins that they do not have. Black markets are not invulnerable to government crackdowns because they are digital. On the contrary, digital networks are in many ways easier to control centrally than distributed underground physical networks.
    - acdha 8y ago
      That area of magical thinking just amazes me: look at the Chinese Great Firewall or Erdogan’s Turkey to see how this would actually work. People get arrested for visiting websites or having the wrong app on their phone and there’s no reason to believe that capacity wouldn’t be used the same way. This especially bad for Bitcoin since unlike cash they’d get your full history and quickly deanonymize everyone you know.
      - beagle3 8y ago
        This area of magical thinking just amazes me: Look at the recent two years! The big run up in bitcoin value has happened because people were moving money out of China despite capital controls put in place. Is it still as easy? Probably not, I'm not up to date. Could people who have done that get in trouble for that in the future (thanks to bitcoins long memory)? possibly, if their opsec wasn't top notch and even if it was top-notch but they were unlucky enough to use a mixer that cooperates with the chinese government. And Erdogan's turkey is also a great example; While the "coup" was happening, it was possible, even easy, to move money out of the country using bitcoin (not so fiat money). Quite a few people left the country afterwards, and many were arrested regardless of phone app. I don't know how many of them took their wealth with them in bitcoin, but they had much easier time doing that than any other way. at the time
tigershark 8y ago
No, no and no. Sweden and Denmark are taxing bitcoin capital gains so I don’t see a single reason why a malicious government cannot confiscate them. The beautiful story of “digital gold” is just a story. To me it seems more like a digital crap honestly and I can’t wait for the day when it finally disappears. Sadly it will be in any case too late given the massive amount of energy and co2 thrown away..
- sobani 8y ago
  The Netherlands is taxing (my) Bitcoin holdings as well. The way they do that, is by depending on my honesty. The reason I'm honest is because I don't want any troubles when I'm going to buy my lambo (no, not serious). Afaik Bitcoin is handled the same as cash: they don't really check how much you have, but they will come down hard when you start spending more than you should be able to.
- beagle3 8y ago
  > so I don’t see a single reason why a malicious government cannot confiscate them. Technically, how can they confiscate them? They cannot. They can tax them 100% or 150%, true. And they can imprison or kill their taxpayers if they with. true. But if I managed to cross the border from (hypothetically) malicious Sweden to (hypothetically) benevolent Liberia, with the private key in my head, what can they do about it? They can, and money governments in the past have, deny me passage with anything of value but my clothes - it is often the case that anything of value gets taken at the border (hell, it is likely the US will take anything above $10,000 on your person unless you are very well equipped legally). But there is no technical way for them to do that with bitcoin, and for that matter to even know that you carry the private key of a $1B wallet in your head, unless they have researched it before hand -- which, at last for now, is hard to do for the entire population. > To me it seems more like a digital crap honestly and I can’t wait for the day when it finally disappears. Art pieces that go for >$1M feels like analog organic crap. But the value is determined by the market, not but our feeling. > Sadly it will be in any case too late given the massive amount of energy and co2 thrown away.. I agree bitcoin is likely wasting significant energy and co2, but ... Have your ever seen a rough estimate of the costs (in resources / energy / co2) that our existing monetary system imposes? It is certainly not free, and e.g. in a lot of places more than 1% of real-estate / energy is consumed by financial entities, many of which have usefulness to society arguably comparable to bitcoin. I have looked for a study as such and has not found one. (sidenote: some estimates are that 1% of global energy use goes towards clothes drying. probably provides even less value to society than bitcoin)

bradleyjg 8y ago

Everything you say about bitcoin is equally true of a bank account in pounds in London. There’s zero reason in principle that it is any harder or easier for an oppressive government to prevent capital outflows to bitcoin than to British bank accounts. At very best there’s a temporary advantage in bitcoin’s favor as oppressive governments take time to understand and lock down the newer avenues for evading their controls.

josu 8y ago
While you are right, and this is a common practice among wealthy individuals, it's virtually impossible for most people in those countries to open bank accounts abroad.
beagle3 8y ago
I started with "at this point in time". At this point in time, it is easy for a person not suspected of crime (or otherwise being on the wrong side of the government) to move their british pounds from their London account to e.g. one in New York or Switzerland, convert them to USD or CHF either before or after the transfer, and generally hedge against government by betting on other things. At this point in time, the same is certainly not true for the people of Iran or Venezuela, where there are capital controls, and the only way to get a different currency is on the black market. Effectively, compared to the west, everyone there is "on the wrong side of the government". > There’s zero reason in principle that it is any harder or easier for an oppressive government to prevent capital outflows to bitcoin than to British bank accounts. In principle that's true, but that just makes bitcoin's raison d'etre more evident. At this point in time it does not seem to be needed, but it may become needed with less than a day's notice. This has happened to the people of Cyprus (a "western" European country). Even the US confiscated gold in the 1930's. History does not repeat, but it rhymes. Bitcoin is a hedge; it's far from perfect, it has a lot of drawbacks, but at this point in time , it is more useful than gold for people who might have to flee.
- bradleyjg 8y ago
  You seemed to have missed the point. There’s nothing to stop an oppressive government from preventing its people from buying bitcoin the same as they prevent them from buying pounds and wiring them to British banks. The dark hints about how any government may become oppressive is a red herring. The issue isn’t that bitcoin isn’t needed because my government isn’t currently oppressive, it’s that bitcoin’s utility in the face of an oppressive government is wildly exaggerated. You are attributing magic powers to bitcoins that they do not have. Black markets are not invulnerable to government crackdowns because they are digital. On the contrary, digital networks are in many ways easier to control centrally than distributed underground physical networks.
  - acdha 8y ago
    That area of magical thinking just amazes me: look at the Chinese Great Firewall or Erdogan’s Turkey to see how this would actually work. People get arrested for visiting websites or having the wrong app on their phone and there’s no reason to believe that capacity wouldn’t be used the same way. This especially bad for Bitcoin since unlike cash they’d get your full history and quickly deanonymize everyone you know.
    - beagle3 8y ago
      This area of magical thinking just amazes me: Look at the recent two years! The big run up in bitcoin value has happened because people were moving money out of China despite capital controls put in place. Is it still as easy? Probably not, I'm not up to date. Could people who have done that get in trouble for that in the future (thanks to bitcoins long memory)? possibly, if their opsec wasn't top notch and even if it was top-notch but they were unlucky enough to use a mixer that cooperates with the chinese government. And Erdogan's turkey is also a great example; While the "coup" was happening, it was possible, even easy, to move money out of the country using bitcoin (not so fiat money). Quite a few people left the country afterwards, and many were arrested regardless of phone app. I don't know how many of them took their wealth with them in bitcoin, but they had much easier time doing that than any other way. at the time

tigershark 8y ago

No, no and no. Sweden and Denmark are taxing bitcoin capital gains so I don’t see a single reason why a malicious government cannot confiscate them. The beautiful story of “digital gold” is just a story. To me it seems more like a digital crap honestly and I can’t wait for the day when it finally disappears. Sadly it will be in any case too late given the massive amount of energy and co2 thrown away..

sobani 8y ago
The Netherlands is taxing (my) Bitcoin holdings as well. The way they do that, is by depending on my honesty. The reason I'm honest is because I don't want any troubles when I'm going to buy my lambo (no, not serious). Afaik Bitcoin is handled the same as cash: they don't really check how much you have, but they will come down hard when you start spending more than you should be able to.
beagle3 8y ago
> so I don’t see a single reason why a malicious government cannot confiscate them. Technically, how can they confiscate them? They cannot. They can tax them 100% or 150%, true. And they can imprison or kill their taxpayers if they with. true. But if I managed to cross the border from (hypothetically) malicious Sweden to (hypothetically) benevolent Liberia, with the private key in my head, what can they do about it? They can, and money governments in the past have, deny me passage with anything of value but my clothes - it is often the case that anything of value gets taken at the border (hell, it is likely the US will take anything above $10,000 on your person unless you are very well equipped legally). But there is no technical way for them to do that with bitcoin, and for that matter to even know that you carry the private key of a $1B wallet in your head, unless they have researched it before hand -- which, at last for now, is hard to do for the entire population. > To me it seems more like a digital crap honestly and I can’t wait for the day when it finally disappears. Art pieces that go for >$1M feels like analog organic crap. But the value is determined by the market, not but our feeling. > Sadly it will be in any case too late given the massive amount of energy and co2 thrown away.. I agree bitcoin is likely wasting significant energy and co2, but ... Have your ever seen a rough estimate of the costs (in resources / energy / co2) that our existing monetary system imposes? It is certainly not free, and e.g. in a lot of places more than 1% of real-estate / energy is consumed by financial entities, many of which have usefulness to society arguably comparable to bitcoin. I have looked for a study as such and has not found one. (sidenote: some estimates are that 1% of global energy use goes towards clothes drying. probably provides even less value to society than bitcoin)