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A market doesn’t work in countries without a strong government, since for a market to work, there needs to be faith that the other party isn’t going to break th

A market doesn’t work in countries without a strong government, since for a market to work, there needs to be faith that the other party isn’t going to break the rules of the market. If you’re trying to sell your goods and someone comes in with a gun, then you have to hope that either you have a gun or can call police. If you have to resort to using a gun, then that leads to huge costs and lots of dead people.

boogies 6y ago
> If you have to resort to using a gun, then that leads to huge costs and lots of dead people. Is that more true for you using a gun than it is for police using a gun?
- gbear605 6y ago
  If it’s you using a gun, you get Somalia. If it’s the police using a gun, you get the US. (If it’s the police using a baton, you get the UK). It works because the threat isn’t just physical harm but also social consequences. Even going back through history, there would be governmental consequences for not abiding by fair trade, whether that was the local lord throwing you in the stockades or the rest of your tribe ostracizing you.
- eek04_ 6y ago
  Yes. Police is regulated and has a lot of conventions (laws) and resources that enforce those conventions. Ultimately, it goes back to a fairly well-resourced court of law, which is willing to take a fairly high cost to make a decision, as a shared cost paid through taxes. With individuals making those decisions, the decisions will be made at much lower cost, and this will result in lower quality of decisions.
__MatrixMan__ 6y ago
I'm not gonna say that that doesn't happen, but it's surely not the only thing that happens in places without an authority. People want to exchange goods, and they're typically willing to be clever in order to make that happen. Already cryptocurrencies are implementing webs of trust to guard against this kind of thing (CirclesUBI). There are also things like MAD escrow (particl). And there's the old fashioned way, which is to get the community together and set up your own impromptu government. I'm not saying that markets function well without readily available trust. But to say that they cease to exist in those contexts is surely taking it too far.
leppr 6y ago
That's precisely the main innovation of Bitcoin. Without the aid of a central authority, people are able to decide on a set of rules that must be respected to play in the market. People can switch to different "markets" with different rules at will. The value of these markets is itself decided through a free market. Given a sufficient level of digitization, it's not hard to imagine how many kind of real world markets could be backed by Bitcoin-like systems.
- adrianN 6y ago
  Except for very narrow use cases I don't see how the rules you can enforce in a digital space like a blockchain network help when you don't have a stable meatspace system of law. A bitcoin transaction can be mathematically as bullet proof as you want, but that doesn't help make your meatspace assets any more bullet proof.
  - CryptoPunk 6y ago
    It doesn't take much law to make cryptocurrency secure for a person to hold: just protection from home invasion and torture. It can work quite well in otherwise highly dysfunctional societies. Other forms of property ownership are much more fragile, and require a much more sophisticated legal system.
    - fakedang 6y ago
      Will that be enough? AFAIK, every country's government (or some warlord) has a monopoly on violence and the law. If they wanted to, they could easily just draft a law mandating crypto to be stored in particular forms else can't be used/traded. Or they could simply invade your home on some bullshit pretext and seize all of your crypto. Both instances have happened before (and have been posted on HN too) and I've seen both of them in both autocracies and Western democracies. Imo, there's nothing better to secure your assets better than some form of monopoly on the law, or a monopoly on violence, or even better a combination of the two. This is also why billionaire classes simply consider crypto a wealth store asset and not a secure store of assets.

boogies 6y ago

> If you have to resort to using a gun, then that leads to huge costs and lots of dead people. Is that more true for you using a gun than it is for police using a gun?

gbear605 6y ago
If it’s you using a gun, you get Somalia. If it’s the police using a gun, you get the US. (If it’s the police using a baton, you get the UK). It works because the threat isn’t just physical harm but also social consequences. Even going back through history, there would be governmental consequences for not abiding by fair trade, whether that was the local lord throwing you in the stockades or the rest of your tribe ostracizing you.
eek04_ 6y ago
Yes. Police is regulated and has a lot of conventions (laws) and resources that enforce those conventions. Ultimately, it goes back to a fairly well-resourced court of law, which is willing to take a fairly high cost to make a decision, as a shared cost paid through taxes. With individuals making those decisions, the decisions will be made at much lower cost, and this will result in lower quality of decisions.

__MatrixMan__ 6y ago

I'm not gonna say that that doesn't happen, but it's surely not the only thing that happens in places without an authority. People want to exchange goods, and they're typically willing to be clever in order to make that happen. Already cryptocurrencies are implementing webs of trust to guard against this kind of thing (CirclesUBI). There are also things like MAD escrow (particl). And there's the old fashioned way, which is to get the community together and set up your own impromptu government. I'm not saying that markets function well without readily available trust. But to say that they cease to exist in those contexts is surely taking it too far.

leppr 6y ago

That's precisely the main innovation of Bitcoin. Without the aid of a central authority, people are able to decide on a set of rules that must be respected to play in the market. People can switch to different "markets" with different rules at will. The value of these markets is itself decided through a free market. Given a sufficient level of digitization, it's not hard to imagine how many kind of real world markets could be backed by Bitcoin-like systems.

adrianN 6y ago
Except for very narrow use cases I don't see how the rules you can enforce in a digital space like a blockchain network help when you don't have a stable meatspace system of law. A bitcoin transaction can be mathematically as bullet proof as you want, but that doesn't help make your meatspace assets any more bullet proof.
- CryptoPunk 6y ago
  It doesn't take much law to make cryptocurrency secure for a person to hold: just protection from home invasion and torture. It can work quite well in otherwise highly dysfunctional societies. Other forms of property ownership are much more fragile, and require a much more sophisticated legal system.
  - fakedang 6y ago
    Will that be enough? AFAIK, every country's government (or some warlord) has a monopoly on violence and the law. If they wanted to, they could easily just draft a law mandating crypto to be stored in particular forms else can't be used/traded. Or they could simply invade your home on some bullshit pretext and seize all of your crypto. Both instances have happened before (and have been posted on HN too) and I've seen both of them in both autocracies and Western democracies. Imo, there's nothing better to secure your assets better than some form of monopoly on the law, or a monopoly on violence, or even better a combination of the two. This is also why billionaire classes simply consider crypto a wealth store asset and not a secure store of assets.