12 ms·

Why Bitcoin is not a socialist’s ally

38 points by panarky 6y ago

deleted 6y ago
[deleted]
ogogmad 6y ago
> Under the gold and silver standards, the public money supply was fixed – and could not be easily manipulated by the state (either the government or the, then non-existent, Fed). But that did not stop private bankers from leveraging public money out of thin air to create huge quantities of private money with which to fund the Robber Barons, i.e. the Jeff Bezoses, of the era. But didn't the creation of private money happen because gold was so expensive to hold and transport? Assuming Layer 2 solutions like Lightning get off the ground, Bitcoin won't have this problem, right?
- sudosysgen 6y ago
  Not really. The gold/silver standard refers to the monetary system where paper cash is backed by precious metals, for which it can be exchanged any time. It does not refer to literally buying things with gold. So yes, Bitcoin has all the same issues as a gold-backed currency (a gold standard). Private forms of money were created in order to help alleviate the extreme inelasticity of gold-backed currencies, which the US abandoned in 1971. So Bitcoin would have all the issues of the dollar from 1944 to 1971.
  - Melting_Harps 6y ago
    > Private forms of money were created in order to help alleviate the extreme inelasticity of gold-backed currencies, which the US abandoned in 1971. So Bitcoin would have all the issues of the dollar from 1944 to 1971. Which is when it began it's World Reserve Status, and was the reason why Capital Markets functioned and helped rebuild the West, and Japan, as well as led to the highest increase in Social Mobility the World had ever seen at that point and led to the emergence of the World's sole Super Power. I'm an Anarchist and I want to do away with the notions of Nation-states entirely, but even I cannot help but take issue with your framing of what the US Treasury did by identifying those desirable qualities and attributes as 'issues.' The issues emerge when reckless abandon is applied to what was semi-sound monetary policy and you get the perversion of Modern Money and the corruption of Markets that lead to its continual inflationary based asset bubbles and crashes because of cheap/hot money. Monetary stability is what should be desired, and for that you need a system incapable of the whims from Human Corruption. Also, I disagree, if Bitcoin lives up to its potential it remains the only really Multi-planetary monetary system in existence. Nothing else even comes close, if you want to try this experiment just try sending money during non-business hours, on a weekend to a person not in your network. So, BTC is hardly constrained to your confines.
    - JumpCrisscross 6y ago
      > the whims from Human Corruption Aside: is there a term for this style of capitalisation? I see it in 19th century texts...does it have Latin roots?
      - Melting_Harps 6y ago
        Perhaps, I've always used it to Identity a certain trait or well known entity. I often read philosophy texts from that era that did the same, never really understanding or knowing its convention but using it none-the-less. For example, I would have capitalized 'century' in your response, as you did for Latin for the same reasons.
        JumpCrisscross 6y ago
        > philosophy texts from that era that did the same This makes sense. This isn't intended to be hurtful, but for a general audience, I'd suggest avoiding it. My first association was with Flat Earther and other nutter forums, where I think it's used as a misplaced appeal to authority, to look like Enlightenment-era texts.
- kerkeslager 6y ago
  Lightning has nothing to do with holding and transporting Bitcoin. Holding Bitcoin is literally free. Transporting Bitcoin can also be free, depending on what you mean by transporting.
  - deleted 6y ago
    [deleted]
  - VikingCoder 6y ago
    > Holding Bitcoin is literally free. Interesting claim. How do you secure it, back it up, and bequeath it to people on your passing? Don't those things cost time and actual money?
    - kyboren 6y ago
      > How do you secure it, back it up, and bequeath it to people on your passing? Keep the private key, mnemonic, seed phrase, etc. only in your brain and perhaps your will, potentially split into pieces that are kept in the physical control of independent trusted entities. > Don't those things cost time and actual money? Time: yes. Actual money: perhaps, but that is not fundamentally required. For example, oral traditions are a time-honored means of transferring information to heirs. Keep in mind we're talking about just 256 bits of information. You can scratch it on a rock and bury it in your back yard if you want.
      - VikingCoder 6y ago
        Grant Imahara just died of a brain aneurysm. You can't count on whispering a password on your deathbed. Do you think a carved rock is safe and secure? https://en.wikipedia.org/wiki/2011_Joplin_tornado https://en.wikipedia.org/wiki/2011_Joplin_tornado
        shard 6y ago
        Not sure what your reference to the tornado was trying to point out. I could not find any references on the page to the tornado abrading away carved rock.
- roenxi 6y ago
  If the non-leverage path involves X dollars. The leverage path >X dollars. Unless someone is fairly explicitly trying to stop them then banks (and other businesses) will start inventing private methods of exchange, popularising them and then playing leverage games. There are extremely powerful interest groups that want money to be creatable on demand (and not subtle ones; the public loves credit). If a sound money system is in use (Gold, Bitcoin, etc) then it may hold for a long while but sooner or later be re-defined out of the system and replaced with something that can be created. The process has nothing to do with the other underlying technical realities of the sound money, the problem being solved is the soundness of the money itself.
- einpoklum 6y ago
  > But didn't the creation of private money happen because gold was so expensive to hold and transport? No. 1. There was creation of state and of private money, or money-of-sorts, in societies where money wasn't based on gold. 2. If transport and holding was the issue, private money could have been limited to the amount of available gold. No, that's really not the reason.
heidegger 6y ago
all socialists snicker at the mention of bitcoin. it is a punchline, a jab at "Libertarians" and their silly faith in technological solutions to social problems
- H8crilA 6y ago
  Yeah, if only more people knew some history: https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
  - sudosysgen 6y ago
    This is a correlation without causation. The root cause of both fiat currency and the worker being ripped off, is globalization. Fiat currency did not cause the disconnect between productivity and wages, the same way that the disconnect between productivity and wages did not cause fiat currency. They were both caused by the shift to a complex global economy.
    - H8crilA 6y ago
      And you're sure of this root cause analysis because ... ? Also, if that's the root cause then surely you can point me to some correlation between "globalisation" and some measurable ills of the world? After all - causation does mean correlation.
    - chrisco255 6y ago
      Why not both? Why the debate here when clearly globalization and currency debasement has an impact on society. I'll go ahead and add technology to the list. Did the information age cause a disconnect between productivity and wages? Perhaps tech + globalization ensured that we have sort of a two tiered system in the west, where information workers have largely benefitted and seen their wages and quality of life go up...but there have not been corresponding booms in the manufacturing sector to support these developments because that labor has been outsourced to developing countries?
yalogin 6y ago
For me Bitcoin further exacerbates the already terrible distribution of wealth in our world. BTC is purely a play for the "rich" folks. I say "rich" because it needs not just tech access and disposable money barriers but also has the additional tech knowledge barrier to it.
- ColanR 6y ago
  That is a problem which crypto proponents are actively trying to overcome.
  - Dahoon 6y ago
    As long as it requires work by CPUs or GPUs it is for rich people.
    - colecut 6y ago
      Gold requires actual physical mining equipment and labor. You could make the argument that gold is also for rich people, but no one seems to have a problem with it.
      - wmf 6y ago
        Many people object to gold being used as money. Now that gold is mostly for jewelry and investment people can afford to not care about it.
  - sudosysgen 6y ago
    Yes, and that is exactly what the essay is about. Crypto proponents will only be able to overcome that issue, under capitalism, if they solve the issue of a fixed money supply. It is not sufficient to solve the computing issue if it leads to massive inequality and concentration of wealth, as well as other problems.
  - einpoklum 6y ago
    But the problem is not technical in nature - it is social. The question of who decides, and how is the decision made, to issue more currency and distribute it, or to obviate existing currency - this is a political(-economic) question.
joosters 6y ago
Normally, a big problem in crypto-currency blog posts is that an ill-informed author blathers on about supposed technical features of blockchains. But this article is remarkable in that it doesn't mention any feature or property of bitcoin at all! You could replace the word 'bitcoin' in the page with any other currency, monetary system or whatever means of accounting that you like (using shells for currency, perhaps?), and nothing would change. The article is amazingly content-free, and its arguments & propositions could be re-applied to whatever you like/dislike!
- sudosysgen 6y ago
  It isn't an ill-informed author, Yanis Varoufakis is a very respected and competent economist. Of course! You could replace Bitcoin with any other fixed supply currency. This is literally the point of the article! He is arguing that Bitcoin cannot work for the common man, because it has all the issues of fixed-supply currencies that lead to fiat currency. Transitioning to Bitcoin would be akin to restoring the Bretton Woods system, and would be disastrous for everyone. He is indeed addressing a feature and property of Bitcoin. That feature is fixed supply. That is what matters to an economist, because it has huge impacts. Varoufakis, in this essay, doesn't talk about the tech, because not only has he already done so, but because it is irrelevant to the analysis that he, as an economist, makes about the consequences of a switch to Bitcoin.
  - joosters 6y ago
    A 'fixed supply' is not key to his points. Point 1 is, more specifically, that you would not be able to get agreement to adjust properties of the currency (remember, bitcoin is only 'fixed' in that there's a number in the code: with enough support, all the numbers can be changed). But he goes on to say that the problem is that the rich & powerful won't have incentives to adjust the money supply, something that could be argued about any money that already exists right now. Point 2 is just: there will be inequality, the rich stay rich, the poor stay poor. Yes, true, unless you do some huge form of wealth redistribution, you won't change this. But note that this again is not related to the new currency. Jeff Bezos will still remain rich no matter what features your new currency has, because he already is rich. So, I don't see how these points are related to bitcoin or in fact any currency.
AcerbicZero 6y ago
Sooooo the issue with bitcoin+socialism would be the lack of easily centralized controls by which the party/state can manipulate the currency and that people are incapable of doing altruistic good, therefore the party/state must have those controls? Authoritarians are gross.
- Qworg 6y ago
  I think you'll find that people (broadly) are capable of altruism, but persons (narrowly) act in their own self interest and take advantage of the altruistic.
- pessimizer 6y ago
  This is an person arguing with socialists about why bitcoin is not good for socialism, not a person trying to convince libertarians to not be libertarians. Try to argue with it on its own terms, not whatever your personal issues are.
- sudosysgen 6y ago
  Absolutely not. Varoufakis isn't even an authoritarian, he's more the Bernie Sanders type but more open about his worldview. The issue is that Bitcoin is a currency that has both a fixed supply, and is naturally controlled by the very richest people. This leads to a series of incentives and effects of monetary policy that creates conditions where the average person loses out, big time.
- einpoklum 6y ago
  > The lack of easily centralized controls No, BitCoin has basically _no_ control of the currency. The algorithm is what it is, and the initial "players" who have the most BitCoin are who they are.
nknealk 6y ago
Bitcoin presumes (1) everyone owns a computer (or a smartphone/similar) and (2) everyone has network connectivity all the time. Without these two things, one cannot transact. There are huge swaths of the world where this isn't true. Short of making computing devices and internet connectivity human rights, these assumptions compound existing inequalities.
- drexlspivey 6y ago
  Performing an online transaction requires a credit card or a bank account which is a far stricter requirement than a smartphone which you can get for 20 bucks
  - ianmobbs 6y ago
    There are also huge swathes of the world where nobody has credit cards or bank accounts. This isn't an argument for Bitcoin as much as it is for physical currency
- wmf 6y ago
  You could always issue "paper" bills that are denominated/backed by BTC. Such currency wouldn't have all the benefits of Bitcoin but it wouldn't be worse (from a coiner's perspective) than existing paper money that people are using today.
  - ianmobbs 6y ago
    Who is the one backing those paper bills? This brings back centralized banking, which is what most folks in favor of replacing fiat currency with Bitcoin are working away from
    - wmf 6y ago
      Yes, there would be a centralized entity printing and custodying the BTC behind the bills, but all paper money today is also controlled by centralized entities. So in this scenario, digital BTC would be "real Bitcoin" and paper BTC would be "Bitcoin light".
DennisP 6y ago
A lot of this presumes a scenario in which Bitcoin replaces fiat and become the world's sole currency. It's hard to imagine why that would happen. What we seem to actually be getting is multiple cryptocurrencies, in addition to fiat. Under these conditions, if the world falls into depression, where money is too scarce, then an easy solution is to launch new currencies. On blockchains that support smart contracts, this would be easy to do. If Hayek was on the right track with his advocacy of competing currencies, this could be a more stable system than we have now. Easy deployment of local currencies could also help support local businesses over large monopolies.
- vkou 6y ago
  "Money is too scarce" is not ever going to be a problem. If the monenatry supply, as a multiple of the economy is experiencing contraction, central banks can always print more. Bitcoin, in this sense, is once again solving a problem that nobody has.
  - DennisP 6y ago
    Bitcoin is not trying to solve that problem. The article is claiming that Bitcoin would have that problem, if it were to take over the world from fiat. My claim is that this is false, because there can be more than one cryptocurrency.
- udue73uru 6y ago
  I think it's much more likely that the desirable properties of crypto-currencies will be baked into government issued psudo-coins that retain the desirable parts of bitcoin while discarding the inconvenient parts. The only people who hate on fiat money are people who don't understand why backed currencies suck or why it would be bad if every country used the same currency. What doesn't suck though is money that essentially tracks itself and baking that self-tracking feature into an existing fiat currency via some kind of pseudo-coin would make regulatory enforcement wildly easier without the downsides of a backed currency.
kerkeslager 6y ago
Of course Bitcoin is not a socialist's ally in the long run. It's fundamentally a way to get government out of money, which is exactly the opposite of socialism. Bitcoin is an anarcho-capitalist tool. The article rightly notes that the ability to print money is relevant here, but I think they could have expressed it in simpler terms. In short: printing money is always a redistribution of wealth. If you print a million dollars and give it to a group, you've effectively taken money away from everyone else and redistributed it to that group. The pot of wealth in the country hasn't changed size, the recipients of the newly-minted money just have more of the pot. In a socialist ideal, this is a key tool because it's one of the main ways of redistributing wealth from the rich to the poor. You print money and give it to the poor. This isn't creating value, obviously, it's just decreasing the value of the money held by the rich, and giving that value to the poor. A decentralized value store can't do that. However, some socialists would argue that the ability to print money in modern western powers is primarily used to redistribute wealth from the poor to the rich, not the other way around. Due to this, a socialist might say it's better to use a decentralized value store now than to use a centralized value store that is used to redistribute wealth in the wrong direction. If you're a socialist, the question on your mind with regards to bitcoin should be: Is the power to print money being used to redistribute wealth from the poor to the rich? And if so, is the short term benefit of avoiding this harm worth the longer-term harm of moving value out of stores where wealth can be redistributed from the rich to the poor? These are much more complicated questions: the first might be answerable with data, but the second question involves a lot of future variables which may simply be impossible to predict.
- einpoklum 6y ago
  > Bitcoin is an anarcho-capitalist tool. s/tool/ponzi scheme/... or in other words - I am entirely unconvinced that bitcoin has a positive short-term effect. Most of what happens with BitCoin is people buying it in exchange for fiat currency, a bunch of speculation, and mining (if that's not mostly over). I don't see it empowering workers' movements.
  - Melting_Harps 6y ago
    Then your view(s) is solely fixed on those who benefit from this exclusionary Monetary System, go ask people who don't have access to bank accounts or are undocumented how horribly they are treated and marginalized then come back and see what is and isn't a ponzi scheme. See how many people are unfairly targeted by the State(s) with policies like Operation Chokepoint in the US, though similar laws exists in other places as well, while at the same those very same Governments bail out Banks and Corporations found guilty in money laundering for Drug Cartels or other illicit crimes and while telling the People they're not doing enough to keep up with the ever-increasing costs of living due to these policies and inflated asset bubbles. Go look up what System D is, and see what worker movements it could help benefit, because just from that statement alone you show just horribly informed you are and how narrow and ignorant your view of the World really is.
m12k 6y ago
Not mentioned here, but bitcoin is also a much better tool for tax evasion than banks are, with all their mandatory reporting to the tax authorities. That also makes it less of an ally for a socialist, since it helps the wealthy starve the state of tax revenue, further increasing inequality.

38 points by panarky 6y ago

deleted 6y ago

[deleted]

> Under the gold and silver standards, the public money supply was fixed – and could not be easily manipulated by the state (either the government or the, then non-existent, Fed). But that did not stop private bankers from leveraging public money out of thin air to create huge quantities of private money with which to fund the Robber Barons, i.e. the Jeff Bezoses, of the era. But didn't the creation of private money happen because gold was so expensive to hold and transport? Assuming Layer 2 solutions like Lightning get off the ground, Bitcoin won't have this problem, right?

sudosysgen 6y ago
Not really. The gold/silver standard refers to the monetary system where paper cash is backed by precious metals, for which it can be exchanged any time. It does not refer to literally buying things with gold. So yes, Bitcoin has all the same issues as a gold-backed currency (a gold standard). Private forms of money were created in order to help alleviate the extreme inelasticity of gold-backed currencies, which the US abandoned in 1971. So Bitcoin would have all the issues of the dollar from 1944 to 1971.
- Melting_Harps 6y ago
  > Private forms of money were created in order to help alleviate the extreme inelasticity of gold-backed currencies, which the US abandoned in 1971. So Bitcoin would have all the issues of the dollar from 1944 to 1971. Which is when it began it's World Reserve Status, and was the reason why Capital Markets functioned and helped rebuild the West, and Japan, as well as led to the highest increase in Social Mobility the World had ever seen at that point and led to the emergence of the World's sole Super Power. I'm an Anarchist and I want to do away with the notions of Nation-states entirely, but even I cannot help but take issue with your framing of what the US Treasury did by identifying those desirable qualities and attributes as 'issues.' The issues emerge when reckless abandon is applied to what was semi-sound monetary policy and you get the perversion of Modern Money and the corruption of Markets that lead to its continual inflationary based asset bubbles and crashes because of cheap/hot money. Monetary stability is what should be desired, and for that you need a system incapable of the whims from Human Corruption. Also, I disagree, if Bitcoin lives up to its potential it remains the only really Multi-planetary monetary system in existence. Nothing else even comes close, if you want to try this experiment just try sending money during non-business hours, on a weekend to a person not in your network. So, BTC is hardly constrained to your confines.
  - JumpCrisscross 6y ago
    > the whims from Human Corruption Aside: is there a term for this style of capitalisation? I see it in 19th century texts...does it have Latin roots?
    - Melting_Harps 6y ago
      Perhaps, I've always used it to Identity a certain trait or well known entity. I often read philosophy texts from that era that did the same, never really understanding or knowing its convention but using it none-the-less. For example, I would have capitalized 'century' in your response, as you did for Latin for the same reasons.
      - JumpCrisscross 6y ago
        > philosophy texts from that era that did the same This makes sense. This isn't intended to be hurtful, but for a general audience, I'd suggest avoiding it. My first association was with Flat Earther and other nutter forums, where I think it's used as a misplaced appeal to authority, to look like Enlightenment-era texts.
kerkeslager 6y ago
Lightning has nothing to do with holding and transporting Bitcoin. Holding Bitcoin is literally free. Transporting Bitcoin can also be free, depending on what you mean by transporting.
- deleted 6y ago
  [deleted]
- VikingCoder 6y ago
  > Holding Bitcoin is literally free. Interesting claim. How do you secure it, back it up, and bequeath it to people on your passing? Don't those things cost time and actual money?
  - kyboren 6y ago
    > How do you secure it, back it up, and bequeath it to people on your passing? Keep the private key, mnemonic, seed phrase, etc. only in your brain and perhaps your will, potentially split into pieces that are kept in the physical control of independent trusted entities. > Don't those things cost time and actual money? Time: yes. Actual money: perhaps, but that is not fundamentally required. For example, oral traditions are a time-honored means of transferring information to heirs. Keep in mind we're talking about just 256 bits of information. You can scratch it on a rock and bury it in your back yard if you want.
    - VikingCoder 6y ago
      Grant Imahara just died of a brain aneurysm. You can't count on whispering a password on your deathbed. Do you think a carved rock is safe and secure? https://en.wikipedia.org/wiki/2011_Joplin_tornado https://en.wikipedia.org/wiki/2011_Joplin_tornado
      - shard 6y ago
        Not sure what your reference to the tornado was trying to point out. I could not find any references on the page to the tornado abrading away carved rock.
roenxi 6y ago
If the non-leverage path involves X dollars. The leverage path >X dollars. Unless someone is fairly explicitly trying to stop them then banks (and other businesses) will start inventing private methods of exchange, popularising them and then playing leverage games. There are extremely powerful interest groups that want money to be creatable on demand (and not subtle ones; the public loves credit). If a sound money system is in use (Gold, Bitcoin, etc) then it may hold for a long while but sooner or later be re-defined out of the system and replaced with something that can be created. The process has nothing to do with the other underlying technical realities of the sound money, the problem being solved is the soundness of the money itself.
einpoklum 6y ago
> But didn't the creation of private money happen because gold was so expensive to hold and transport? No. 1. There was creation of state and of private money, or money-of-sorts, in societies where money wasn't based on gold. 2. If transport and holding was the issue, private money could have been limited to the amount of available gold. No, that's really not the reason.

heidegger 6y ago

all socialists snicker at the mention of bitcoin. it is a punchline, a jab at "Libertarians" and their silly faith in technological solutions to social problems

H8crilA 6y ago
Yeah, if only more people knew some history: https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
- sudosysgen 6y ago
  This is a correlation without causation. The root cause of both fiat currency and the worker being ripped off, is globalization. Fiat currency did not cause the disconnect between productivity and wages, the same way that the disconnect between productivity and wages did not cause fiat currency. They were both caused by the shift to a complex global economy.
  - H8crilA 6y ago
    And you're sure of this root cause analysis because ... ? Also, if that's the root cause then surely you can point me to some correlation between "globalisation" and some measurable ills of the world? After all - causation does mean correlation.
  - chrisco255 6y ago
    Why not both? Why the debate here when clearly globalization and currency debasement has an impact on society. I'll go ahead and add technology to the list. Did the information age cause a disconnect between productivity and wages? Perhaps tech + globalization ensured that we have sort of a two tiered system in the west, where information workers have largely benefitted and seen their wages and quality of life go up...but there have not been corresponding booms in the manufacturing sector to support these developments because that labor has been outsourced to developing countries?

yalogin 6y ago

For me Bitcoin further exacerbates the already terrible distribution of wealth in our world. BTC is purely a play for the "rich" folks. I say "rich" because it needs not just tech access and disposable money barriers but also has the additional tech knowledge barrier to it.

ColanR 6y ago
That is a problem which crypto proponents are actively trying to overcome.
- Dahoon 6y ago
  As long as it requires work by CPUs or GPUs it is for rich people.
  - colecut 6y ago
    Gold requires actual physical mining equipment and labor. You could make the argument that gold is also for rich people, but no one seems to have a problem with it.
    - wmf 6y ago
      Many people object to gold being used as money. Now that gold is mostly for jewelry and investment people can afford to not care about it.
- sudosysgen 6y ago
  Yes, and that is exactly what the essay is about. Crypto proponents will only be able to overcome that issue, under capitalism, if they solve the issue of a fixed money supply. It is not sufficient to solve the computing issue if it leads to massive inequality and concentration of wealth, as well as other problems.
- einpoklum 6y ago
  But the problem is not technical in nature - it is social. The question of who decides, and how is the decision made, to issue more currency and distribute it, or to obviate existing currency - this is a political(-economic) question.

joosters 6y ago

Normally, a big problem in crypto-currency blog posts is that an ill-informed author blathers on about supposed technical features of blockchains. But this article is remarkable in that it doesn't mention any feature or property of bitcoin at all! You could replace the word 'bitcoin' in the page with any other currency, monetary system or whatever means of accounting that you like (using shells for currency, perhaps?), and nothing would change. The article is amazingly content-free, and its arguments & propositions could be re-applied to whatever you like/dislike!

sudosysgen 6y ago
It isn't an ill-informed author, Yanis Varoufakis is a very respected and competent economist. Of course! You could replace Bitcoin with any other fixed supply currency. This is literally the point of the article! He is arguing that Bitcoin cannot work for the common man, because it has all the issues of fixed-supply currencies that lead to fiat currency. Transitioning to Bitcoin would be akin to restoring the Bretton Woods system, and would be disastrous for everyone. He is indeed addressing a feature and property of Bitcoin. That feature is fixed supply. That is what matters to an economist, because it has huge impacts. Varoufakis, in this essay, doesn't talk about the tech, because not only has he already done so, but because it is irrelevant to the analysis that he, as an economist, makes about the consequences of a switch to Bitcoin.
- joosters 6y ago
  A 'fixed supply' is not key to his points. Point 1 is, more specifically, that you would not be able to get agreement to adjust properties of the currency (remember, bitcoin is only 'fixed' in that there's a number in the code: with enough support, all the numbers can be changed). But he goes on to say that the problem is that the rich & powerful won't have incentives to adjust the money supply, something that could be argued about any money that already exists right now. Point 2 is just: there will be inequality, the rich stay rich, the poor stay poor. Yes, true, unless you do some huge form of wealth redistribution, you won't change this. But note that this again is not related to the new currency. Jeff Bezos will still remain rich no matter what features your new currency has, because he already is rich. So, I don't see how these points are related to bitcoin or in fact any currency.

AcerbicZero 6y ago

Sooooo the issue with bitcoin+socialism would be the lack of easily centralized controls by which the party/state can manipulate the currency and that people are incapable of doing altruistic good, therefore the party/state must have those controls? Authoritarians are gross.

Qworg 6y ago
I think you'll find that people (broadly) are capable of altruism, but persons (narrowly) act in their own self interest and take advantage of the altruistic.
pessimizer 6y ago
This is an person arguing with socialists about why bitcoin is not good for socialism, not a person trying to convince libertarians to not be libertarians. Try to argue with it on its own terms, not whatever your personal issues are.
sudosysgen 6y ago
Absolutely not. Varoufakis isn't even an authoritarian, he's more the Bernie Sanders type but more open about his worldview. The issue is that Bitcoin is a currency that has both a fixed supply, and is naturally controlled by the very richest people. This leads to a series of incentives and effects of monetary policy that creates conditions where the average person loses out, big time.
einpoklum 6y ago
> The lack of easily centralized controls No, BitCoin has basically _no_ control of the currency. The algorithm is what it is, and the initial "players" who have the most BitCoin are who they are.

nknealk 6y ago

Bitcoin presumes (1) everyone owns a computer (or a smartphone/similar) and (2) everyone has network connectivity all the time. Without these two things, one cannot transact. There are huge swaths of the world where this isn't true. Short of making computing devices and internet connectivity human rights, these assumptions compound existing inequalities.

drexlspivey 6y ago
Performing an online transaction requires a credit card or a bank account which is a far stricter requirement than a smartphone which you can get for 20 bucks
- ianmobbs 6y ago
  There are also huge swathes of the world where nobody has credit cards or bank accounts. This isn't an argument for Bitcoin as much as it is for physical currency
wmf 6y ago
You could always issue "paper" bills that are denominated/backed by BTC. Such currency wouldn't have all the benefits of Bitcoin but it wouldn't be worse (from a coiner's perspective) than existing paper money that people are using today.
- ianmobbs 6y ago
  Who is the one backing those paper bills? This brings back centralized banking, which is what most folks in favor of replacing fiat currency with Bitcoin are working away from
  - wmf 6y ago
    Yes, there would be a centralized entity printing and custodying the BTC behind the bills, but all paper money today is also controlled by centralized entities. So in this scenario, digital BTC would be "real Bitcoin" and paper BTC would be "Bitcoin light".

DennisP 6y ago

A lot of this presumes a scenario in which Bitcoin replaces fiat and become the world's sole currency. It's hard to imagine why that would happen. What we seem to actually be getting is multiple cryptocurrencies, in addition to fiat. Under these conditions, if the world falls into depression, where money is too scarce, then an easy solution is to launch new currencies. On blockchains that support smart contracts, this would be easy to do. If Hayek was on the right track with his advocacy of competing currencies, this could be a more stable system than we have now. Easy deployment of local currencies could also help support local businesses over large monopolies.

vkou 6y ago
"Money is too scarce" is not ever going to be a problem. If the monenatry supply, as a multiple of the economy is experiencing contraction, central banks can always print more. Bitcoin, in this sense, is once again solving a problem that nobody has.
- DennisP 6y ago
  Bitcoin is not trying to solve that problem. The article is claiming that Bitcoin would have that problem, if it were to take over the world from fiat. My claim is that this is false, because there can be more than one cryptocurrency.
udue73uru 6y ago
I think it's much more likely that the desirable properties of crypto-currencies will be baked into government issued psudo-coins that retain the desirable parts of bitcoin while discarding the inconvenient parts. The only people who hate on fiat money are people who don't understand why backed currencies suck or why it would be bad if every country used the same currency. What doesn't suck though is money that essentially tracks itself and baking that self-tracking feature into an existing fiat currency via some kind of pseudo-coin would make regulatory enforcement wildly easier without the downsides of a backed currency.

kerkeslager 6y ago

Of course Bitcoin is not a socialist's ally in the long run. It's fundamentally a way to get government out of money, which is exactly the opposite of socialism. Bitcoin is an anarcho-capitalist tool. The article rightly notes that the ability to print money is relevant here, but I think they could have expressed it in simpler terms. In short: printing money is always a redistribution of wealth. If you print a million dollars and give it to a group, you've effectively taken money away from everyone else and redistributed it to that group. The pot of wealth in the country hasn't changed size, the recipients of the newly-minted money just have more of the pot. In a socialist ideal, this is a key tool because it's one of the main ways of redistributing wealth from the rich to the poor. You print money and give it to the poor. This isn't creating value, obviously, it's just decreasing the value of the money held by the rich, and giving that value to the poor. A decentralized value store can't do that. However, some socialists would argue that the ability to print money in modern western powers is primarily used to redistribute wealth from the poor to the rich, not the other way around. Due to this, a socialist might say it's better to use a decentralized value store now than to use a centralized value store that is used to redistribute wealth in the wrong direction. If you're a socialist, the question on your mind with regards to bitcoin should be: Is the power to print money being used to redistribute wealth from the poor to the rich? And if so, is the short term benefit of avoiding this harm worth the longer-term harm of moving value out of stores where wealth can be redistributed from the rich to the poor? These are much more complicated questions: the first might be answerable with data, but the second question involves a lot of future variables which may simply be impossible to predict.

einpoklum 6y ago
> Bitcoin is an anarcho-capitalist tool. s/tool/ponzi scheme/... or in other words - I am entirely unconvinced that bitcoin has a positive short-term effect. Most of what happens with BitCoin is people buying it in exchange for fiat currency, a bunch of speculation, and mining (if that's not mostly over). I don't see it empowering workers' movements.
- Melting_Harps 6y ago
  Then your view(s) is solely fixed on those who benefit from this exclusionary Monetary System, go ask people who don't have access to bank accounts or are undocumented how horribly they are treated and marginalized then come back and see what is and isn't a ponzi scheme. See how many people are unfairly targeted by the State(s) with policies like Operation Chokepoint in the US, though similar laws exists in other places as well, while at the same those very same Governments bail out Banks and Corporations found guilty in money laundering for Drug Cartels or other illicit crimes and while telling the People they're not doing enough to keep up with the ever-increasing costs of living due to these policies and inflated asset bubbles. Go look up what System D is, and see what worker movements it could help benefit, because just from that statement alone you show just horribly informed you are and how narrow and ignorant your view of the World really is.

m12k 6y ago

Not mentioned here, but bitcoin is also a much better tool for tax evasion than banks are, with all their mandatory reporting to the tax authorities. That also makes it less of an ally for a socialist, since it helps the wealthy starve the state of tax revenue, further increasing inequality.