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Commerce generally works quite well, to the point that it works even when there is no legal compulsion to not cheat. Bad actors are ostracized while good actor

Commerce generally works quite well, to the point that it works even when there is no legal compulsion to not cheat. Bad actors are ostracized while good actors build followings, leading to reputation acting as an effective mechanism to find good actors to trade with, and incentivize people to become good actors. In any case, when people are free to choose between government-recognized currency and non-governmental digital currency, they will choose the one that best suits each circumstance, leading to greater overall utility.

simiones 6y ago
Yes, in a functioning economy. Here we are discussing what happens as an economy breaks down - as people stop being able to pay their debts, for various reasons.
- CryptoPunk 6y ago
  I thought you were talking about economies with poorly functioning states, like say Ethiopia or Kenya. In these places, markets work quite well, they are just limited in the range of products and services they offer. They have limited access to the most useful financial and payment systems, like PayPal, due to undeveloped banking systems, blacklisting by governments of advanced economies, and bans by their own govermments. Cryptocurrency offers a much more accessible alternative to global payment systems to the people living in these countries.
  - simiones 6y ago
    Usually, markets work quite well because they work face to face. Internet commerce on the other hand is usually extremely risky business if you don't have access to parties which can control that risk: strong, fair states that enforce complex laws in cases of disputes; 3rd parties that assume some of the risk, such as PayPal or eBay. Bitcoin solves none of these problems. Sure, it allows you to at least assume this risk, which your country otherwise doesn't, so it's not nothing. But it's at best a band-aid. It also doesn't protect you in any way from your employer not paying your salary on time, from being wrongfully terminated, from not being able to get a loan, from business partners not paying their debts because they can't sell their own products etc. These are usually the problems that a non-functioning state and non-functioning economy face.
    - CryptoPunk 6y ago
      >>Internet commerce on the other hand is usually extremely risky business if you don't have access to parties which can control that risk: strong, fair states that enforce complex laws in cases of disputes; 3rd parties that assume some of the risk, such as PayPal or eBay. Cryptocurrencies can be used in person too. With respect to eCommerce, EBay worked extremely well simply because of reviews. Not because of laws. And yes, people came to trust eBay, which was due to its faithful fulfilment of its obligations as a platform steward, not due to regulatory requirements imposed on it.

simiones 6y ago

Yes, in a functioning economy. Here we are discussing what happens as an economy breaks down - as people stop being able to pay their debts, for various reasons.

CryptoPunk 6y ago
I thought you were talking about economies with poorly functioning states, like say Ethiopia or Kenya. In these places, markets work quite well, they are just limited in the range of products and services they offer. They have limited access to the most useful financial and payment systems, like PayPal, due to undeveloped banking systems, blacklisting by governments of advanced economies, and bans by their own govermments. Cryptocurrency offers a much more accessible alternative to global payment systems to the people living in these countries.
- simiones 6y ago
  Usually, markets work quite well because they work face to face. Internet commerce on the other hand is usually extremely risky business if you don't have access to parties which can control that risk: strong, fair states that enforce complex laws in cases of disputes; 3rd parties that assume some of the risk, such as PayPal or eBay. Bitcoin solves none of these problems. Sure, it allows you to at least assume this risk, which your country otherwise doesn't, so it's not nothing. But it's at best a band-aid. It also doesn't protect you in any way from your employer not paying your salary on time, from being wrongfully terminated, from not being able to get a loan, from business partners not paying their debts because they can't sell their own products etc. These are usually the problems that a non-functioning state and non-functioning economy face.
  - CryptoPunk 6y ago
    >>Internet commerce on the other hand is usually extremely risky business if you don't have access to parties which can control that risk: strong, fair states that enforce complex laws in cases of disputes; 3rd parties that assume some of the risk, such as PayPal or eBay. Cryptocurrencies can be used in person too. With respect to eCommerce, EBay worked extremely well simply because of reviews. Not because of laws. And yes, people came to trust eBay, which was due to its faithful fulfilment of its obligations as a platform steward, not due to regulatory requirements imposed on it.