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Those two are the exact same goal. Just wrapped in different ideologies and highlighting different aspects of the tradeoff. But they're saying the same thing.

Those two are the exact same goal. Just wrapped in different ideologies and highlighting different aspects of the tradeoff. But they're saying the same thing. The only thing that makes money laundering what it is is governments deciding what are good ways to make money.

seibelj 8y ago
Gold is not controlled by a government, but it's a poor currency given its physical characteristics, although it has been used as a common currency in the past. Cryptocurrencies are similarly not government controlled, but have better characteristics to make them usable as common currencies. The desire to use cryptocurrencies as currency is not by nature linked to crime, or tax avoidance, etc. just as owning gold does not make you a tax cheat. I own cryptocurrencies and I paid taxes on my trades, just as I paid taxes on my other capital gains.
- blotter_paper 8y ago
  >Gold is not controlled by a government, but it's a poor currency given its physical characteristics, although it has been used as a common currency in the past. It still is used as a currency, particularly in Islamic parts of the world. https://en.wikipedia.org/wiki/Modern_gold_dinar https://en.wikipedia.org/wiki/Modern_gold_dinar
kragen 8y ago
When people say that an advantage of Bitcoin is that it is a currency not controlled by a government, they do not mean that governments prevent them from spending their dollars, or that governments are aware of what their dollars are spent on. If that was what they meant, you would be right to say, "Those two are the exact same goal." But that isn't what they mean, and so you are mistaken. What people actually mean when they say "not controlled by a government" is that the dollar has lost 98.3% of its value since its peak in 1792–1833. It fell 6.3% in 1834, but stayed at that value (with occasional deviations downwards) until 1932. From 1932 to 1970, it lost 47% of its value, mostly in 1933. In 1971, it became a fiat currency, and fiat currencies are famously prone to inflation; since 1970, the dollar has lost 96.6% of its remaining value. I'm measuring the dollar against gold here, not just because gold was what defined its value from 1792 to 1970 (and part of 1971), but because gold was the standard of value for international commerce from sometime around 100 BCE until 1971. You could reasonably use a different good as the standard of value, and you'll probably get marginally different results, although a few goods (passenger pigeons, 32-bit multiplications, warships) will give you significantly different results. Gold is relatively convenient for this because of the wide availability and verifiability of its price. Gold's short-term volatility makes it useless for very short-term comparisons, though, by which I mean anything less than 10 years. When Bitcoin people say they want a "currency not controlled by a government", they mean that they don't want 97% of their savings to evaporate in a mere 50 years because the government decided that printing money was a good way to meet its payroll and pay its bonds. As fiat currencies go, dollars are actually doing pretty well. Here in Argentina, our peso has lost about 25% of its value each year for the last several years, but this year, it's accelerated; it's lost 50% of its value since April. (It's worth 5¢ today, down from 10¢ in April.) And of course everyone remembers Zimbabwe's hundred-trillion-dollar bills. Now, you could argue that 5% inflation per year doesn't really impair a currency's use as a measure of value or a medium of exchange, only as a store of value. And you might be right. But there are a bunch of people out there who would love to have a secure store of value that they can also spend, which is why the dollar price of gold more than tripled in 2005–2012. (It's recovered a bit since then.) I am not going to take a position here on whether providing a potentially safer store of value than dollars is a good thing or a bad thing. It's a thing some people want, and you might not want them to have it. That's okay. I'm just pointing out that they want it, and it's not the same thing as money laundering. (Historical gold price data from http://onlygold.com/m/Prices/Prices200Years.asp. http://onlygold.com/m/Prices/Prices200Years.asp.)
- vinceguidry 8y ago
  Are the needs of the people looking for a spendable store of value more important than society's need to enforce what a currency should be used for?
  - kragen 8y ago
    Presumably you are hoping someone else will respond to your question, because, as I said in the comment above, I am not taking any position on such questions.
- badge 8y ago
  Bitcoin's inflation rate is higher than the USD though? Bitcoin inflation rate per annum: 3.87% USD Current inflation rate for the United States is 2.7%. Early in Bitcoin history, by design Bitcoin went though a period of hyperinflation where Satoshi and a few users acquired most of the coins in circulation. Aprox 4.11% of Bitcoin users (addresses) control 96.53% of all bitcoins in circulation. Also there's a chance that something will make Bitcoin obsolete in the near future - immediately destroying the trade value of Bitcoin, either a new cryptocurrency, a quantum computer or cryptographic breakthrough that would allow theft of BTC private keys or more predictably a bug like what recently happened in the main Bitcoin core wallet client software which allowed a user to inflate the supply of Bitcoins past 21 million and mint more BTC for free. So if you were truly concerned about long term stability - gold or tangible functional assets would be much safer than software based pet rocks. https://www.livebitcoinnews.com/cve-2018-17144-the-aftermath-of-a-catastrophic-bitcoin-bug/ https://www.livebitcoinnews.com/cve-2018-17144-the-aftermath... The obvious worst part of this bug was the inflation exploit. An attack could create new bitcoins at will, exceeding the 21 million hard cap limit that is currently in place. This would absolutely destroy confidence in not only Bitcoin, but every cryptocurrency. In addition, a miner could crash every single node they are connected to by producing a block with an invalid transaction in it. Miners are will go out of their way to connect to as many other mining nodes as possible, so they receive notifications of blocks faster. Imagine you’re a miner, hashing away at block #1000. Another miner, Jim, finds block #1001 and starts propagating it around the network. However, you’re not connected to Jim, so it takes an extra few seconds for you to receive the block. During those few seconds, the network has moved on and you’re wasting hashpower and in turn money. You need to receive the new block before you get started on the next one. All the miners are highly connected, so if one is producing client-crashing blocks, many of the larger miners would be hit. Quite a concerning catastrophe that has no guarantee of being avoided in the future, as any programer knows how many bugs can hide or be exploited in any code base.

seibelj 8y ago

Gold is not controlled by a government, but it's a poor currency given its physical characteristics, although it has been used as a common currency in the past. Cryptocurrencies are similarly not government controlled, but have better characteristics to make them usable as common currencies. The desire to use cryptocurrencies as currency is not by nature linked to crime, or tax avoidance, etc. just as owning gold does not make you a tax cheat. I own cryptocurrencies and I paid taxes on my trades, just as I paid taxes on my other capital gains.

blotter_paper 8y ago
>Gold is not controlled by a government, but it's a poor currency given its physical characteristics, although it has been used as a common currency in the past. It still is used as a currency, particularly in Islamic parts of the world. https://en.wikipedia.org/wiki/Modern_gold_dinar https://en.wikipedia.org/wiki/Modern_gold_dinar

kragen 8y ago

When people say that an advantage of Bitcoin is that it is a currency not controlled by a government, they do not mean that governments prevent them from spending their dollars, or that governments are aware of what their dollars are spent on. If that was what they meant, you would be right to say, "Those two are the exact same goal." But that isn't what they mean, and so you are mistaken. What people actually mean when they say "not controlled by a government" is that the dollar has lost 98.3% of its value since its peak in 1792–1833. It fell 6.3% in 1834, but stayed at that value (with occasional deviations downwards) until 1932. From 1932 to 1970, it lost 47% of its value, mostly in 1933. In 1971, it became a fiat currency, and fiat currencies are famously prone to inflation; since 1970, the dollar has lost 96.6% of its remaining value. I'm measuring the dollar against gold here, not just because gold was what defined its value from 1792 to 1970 (and part of 1971), but because gold was the standard of value for international commerce from sometime around 100 BCE until 1971. You could reasonably use a different good as the standard of value, and you'll probably get marginally different results, although a few goods (passenger pigeons, 32-bit multiplications, warships) will give you significantly different results. Gold is relatively convenient for this because of the wide availability and verifiability of its price. Gold's short-term volatility makes it useless for very short-term comparisons, though, by which I mean anything less than 10 years. When Bitcoin people say they want a "currency not controlled by a government", they mean that they don't want 97% of their savings to evaporate in a mere 50 years because the government decided that printing money was a good way to meet its payroll and pay its bonds. As fiat currencies go, dollars are actually doing pretty well. Here in Argentina, our peso has lost about 25% of its value each year for the last several years, but this year, it's accelerated; it's lost 50% of its value since April. (It's worth 5¢ today, down from 10¢ in April.) And of course everyone remembers Zimbabwe's hundred-trillion-dollar bills. Now, you could argue that 5% inflation per year doesn't really impair a currency's use as a measure of value or a medium of exchange, only as a store of value. And you might be right. But there are a bunch of people out there who would love to have a secure store of value that they can also spend, which is why the dollar price of gold more than tripled in 2005–2012. (It's recovered a bit since then.) I am not going to take a position here on whether providing a potentially safer store of value than dollars is a good thing or a bad thing. It's a thing some people want, and you might not want them to have it. That's okay. I'm just pointing out that they want it, and it's not the same thing as money laundering. (Historical gold price data from http://onlygold.com/m/Prices/Prices200Years.asp. http://onlygold.com/m/Prices/Prices200Years.asp.)

vinceguidry 8y ago
Are the needs of the people looking for a spendable store of value more important than society's need to enforce what a currency should be used for?
- kragen 8y ago
  Presumably you are hoping someone else will respond to your question, because, as I said in the comment above, I am not taking any position on such questions.
badge 8y ago
Bitcoin's inflation rate is higher than the USD though? Bitcoin inflation rate per annum: 3.87% USD Current inflation rate for the United States is 2.7%. Early in Bitcoin history, by design Bitcoin went though a period of hyperinflation where Satoshi and a few users acquired most of the coins in circulation. Aprox 4.11% of Bitcoin users (addresses) control 96.53% of all bitcoins in circulation. Also there's a chance that something will make Bitcoin obsolete in the near future - immediately destroying the trade value of Bitcoin, either a new cryptocurrency, a quantum computer or cryptographic breakthrough that would allow theft of BTC private keys or more predictably a bug like what recently happened in the main Bitcoin core wallet client software which allowed a user to inflate the supply of Bitcoins past 21 million and mint more BTC for free. So if you were truly concerned about long term stability - gold or tangible functional assets would be much safer than software based pet rocks. https://www.livebitcoinnews.com/cve-2018-17144-the-aftermath-of-a-catastrophic-bitcoin-bug/ https://www.livebitcoinnews.com/cve-2018-17144-the-aftermath... The obvious worst part of this bug was the inflation exploit. An attack could create new bitcoins at will, exceeding the 21 million hard cap limit that is currently in place. This would absolutely destroy confidence in not only Bitcoin, but every cryptocurrency. In addition, a miner could crash every single node they are connected to by producing a block with an invalid transaction in it. Miners are will go out of their way to connect to as many other mining nodes as possible, so they receive notifications of blocks faster. Imagine you’re a miner, hashing away at block #1000. Another miner, Jim, finds block #1001 and starts propagating it around the network. However, you’re not connected to Jim, so it takes an extra few seconds for you to receive the block. During those few seconds, the network has moved on and you’re wasting hashpower and in turn money. You need to receive the new block before you get started on the next one. All the miners are highly connected, so if one is producing client-crashing blocks, many of the larger miners would be hit. Quite a concerning catastrophe that has no guarantee of being avoided in the future, as any programer knows how many bugs can hide or be exploited in any code base.