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One possible reason is that by the time they realize it's a threat, it will be too late.

by dntrkv 6y ago

ben_w 6y ago
Given what governments worldwide have done with currencies in the past, I think you’re underestimating their capacity and how much they care about the functioning of their currency. If you’ll excuse my admittedly also-naïve wargaming of their responses: “Dear ISPs, this is the government. That stuff you do to block piracy and illegal porn? Do that for bitcoin.” “Dear Banks, this is the government. Purchase of bitcoin is now a federal offence. Tell us if anyone tries to exchange them for money.” “Dear The Power Company, this is a government order. Turn off power to these properties who are engaged in illegal Bitcoin mining.” “Dear everyone, this is the government. Your taxes can only be paid in dollars, not in bitcoin.” (Not that I would say such things will never happen, only that I expect America to become irrelevant on the world stage before it happens; and even in the most extreme USSR-mimicking scenario that is not something I expect before 2041).
- dntrkv 6y ago
  As I mentioned in my reply above, I think the way it can work is if it grows exponentially, and the US government doesn't respond in time at which point not using crypto will put the US at a disadvantage. Crypto has the unique ability to spread across borders with ease, no other currency has had this ability. So I think it's a pretty unique scenario in that case. Another scenario is if it grows slowly amongst the countries that have unstable currencies. Slowly it takes over the USD as the world currency. At a certain point, the US would have to allow it to participate in that economy.
  - ben_w 6y ago
    Nations with bad currencies and mismanaged economies sometimes switch to the USD. Such nations collectively switching to a different currency like the Euro or the Yuan is way more plausible than switching to Bitcoin; and not only do none of the USA, the Eurozone, nor China have economic policies compatible with giving up direct control of inflation, the usefulness of a shared single currency isn’t enough to outweigh the political costs for the UK to use the Euro (famously), or South Korea to use the Yuan, or Canada to use USD. Money in the scale of governments isn’t like money on the scale of individuals. For governments, money isn’t even like it is for the richest individuals, different as it is between the rich and normal people.
    - yazaddaruvala 6y ago
      I don't follow. Why would a country's citizens choose to use a different country's currency rather than a denationalized currency? i.e. couple their monetary policy to the world market, rather than to a single country's market. Given they just experienced one countries economy create poor monetary policy, why trust a single entity rather than diversify by trusting the group decision of many decentralized entities? And why wouldn't a government whose citizens do not trust the government's currency, not incentivize its citizens to use a denationalized currency instead of funding potential threats? e.g. The Venezuelan government would way rather its citizens use BTC over USD or Colombian currency, in order to ensure inflation/deflation is globally decided by neutral parties, rather than decided by a single foreign entity with potentially malicious intent.
      - ben_w 6y ago
        Aaa… this will take too long to do justice to the topic, but politically speaking, the Euro is supernational and the UK collectively hates it, that sort of attitude is part of the problem. “Loss of sovereignty” is how they felt about it, how many discussed it. > The Venezuelan government would way rather its citizens use BTC over USD or Colombian currency, in order to ensure inflation/deflation is globally decided by neutral parties Why would those parties have Venezuelan interests in mind rather than their own? One of the arguments against the Eurozone (I’m not qualified to judge it on quality, but it is given as an argument) is that Northern Europe “should” have different inflation to Southern Europe to help boost the local economies. Can’t do that with a single currency, they say, and that would apply more the wider that zone spreads. A single global economy — fiat, digital, or metallurgical — would never be able to resolve it.
        yazaddaruvala 6y ago
        > “Loss of sovereignty” is how they felt about it, how many discussed it. Yup! I agree, there will be many holdout countries. However, even the UK uses the USD as the world's reserve currency. > Why would those parties have Venezuelan interests in mind rather than their own? Venezuela was fucked because a handful of people are performing bad monetary policy. While the interests of each mining operation would be their own interests, in aggregate, the interests of all BTC mining is a globally averaged monetary policy. Unaffected by corruption, or stupidity (whichever you think is a more apt description of Venezuela's current monetary problem).
almost_usual 6y ago
Too late to what? Forcefully distribute it as it sees fit or else put you in prison or harm your family? If you keep using it in secret it will never be mainstream. Physical force is the strongest currency on Earth. Arguing it’s not is arguing millions of people die for entertainment rather than shifts of power. If Bitcoin is the revolutionary future millions will die on that hill to make it so.
- dntrkv 6y ago
  If they haven't done it by now, then they don't currently see it as a threat. Now let's say in a few years, that inflection point happens where crypto sees an exponential rate of adoption. Every other country begins to use it, some ban it, many others adopt it. At that point, if not using crypto will put the US at a disadvantage, they have no other choice but to adopt it as well. A semi-related example is the way many companies "disrupt" the markets e.g. Uber/Airbnb wasn't a threat to many cities, until it was. At which point, the demand for Uber/Airbnb outweighed the government's ability to do anything about it. It's not the best example since some cities have done things about it and Uber/Airbnb, being a company, is easier to target. With crypto, its decentralized nature makes it much more difficult to control and attempting to ban it will raise issues around free speech. That's not to say countries won't try and succeed in getting it banned, though in the case of the US, I don't think it's as cut and dry.
  - almost_usual 6y ago
    Militarized countries do not forfeit power without conflict and loss of life. It’s quite possible what all world governments have in common.
    - dntrkv 6y ago
      But what if it's not a conscious forfeit of power. The power is taken out from underneath them and by the time they realize it, they have no recourse. Other than threatening all countries that use the currency, which I don't see happening.

One possible reason is that by the time they realize it's a threat, it will be too late.

by dntrkv 6y ago

One possible reason is that by the time they realize it's a threat, it will be too late.

Given what governments worldwide have done with currencies in the past, I think you’re underestimating their capacity and how much they care about the functioning of their currency. If you’ll excuse my admittedly also-naïve wargaming of their responses: “Dear ISPs, this is the government. That stuff you do to block piracy and illegal porn? Do that for bitcoin.” “Dear Banks, this is the government. Purchase of bitcoin is now a federal offence. Tell us if anyone tries to exchange them for money.” “Dear The Power Company, this is a government order. Turn off power to these properties who are engaged in illegal Bitcoin mining.” “Dear everyone, this is the government. Your taxes can only be paid in dollars, not in bitcoin.” (Not that I would say such things will never happen, only that I expect America to become irrelevant on the world stage before it happens; and even in the most extreme USSR-mimicking scenario that is not something I expect before 2041).

dntrkv 6y ago
As I mentioned in my reply above, I think the way it can work is if it grows exponentially, and the US government doesn't respond in time at which point not using crypto will put the US at a disadvantage. Crypto has the unique ability to spread across borders with ease, no other currency has had this ability. So I think it's a pretty unique scenario in that case. Another scenario is if it grows slowly amongst the countries that have unstable currencies. Slowly it takes over the USD as the world currency. At a certain point, the US would have to allow it to participate in that economy.
- ben_w 6y ago
  Nations with bad currencies and mismanaged economies sometimes switch to the USD. Such nations collectively switching to a different currency like the Euro or the Yuan is way more plausible than switching to Bitcoin; and not only do none of the USA, the Eurozone, nor China have economic policies compatible with giving up direct control of inflation, the usefulness of a shared single currency isn’t enough to outweigh the political costs for the UK to use the Euro (famously), or South Korea to use the Yuan, or Canada to use USD. Money in the scale of governments isn’t like money on the scale of individuals. For governments, money isn’t even like it is for the richest individuals, different as it is between the rich and normal people.
  - yazaddaruvala 6y ago
    I don't follow. Why would a country's citizens choose to use a different country's currency rather than a denationalized currency? i.e. couple their monetary policy to the world market, rather than to a single country's market. Given they just experienced one countries economy create poor monetary policy, why trust a single entity rather than diversify by trusting the group decision of many decentralized entities? And why wouldn't a government whose citizens do not trust the government's currency, not incentivize its citizens to use a denationalized currency instead of funding potential threats? e.g. The Venezuelan government would way rather its citizens use BTC over USD or Colombian currency, in order to ensure inflation/deflation is globally decided by neutral parties, rather than decided by a single foreign entity with potentially malicious intent.
    - ben_w 6y ago
      Aaa… this will take too long to do justice to the topic, but politically speaking, the Euro is supernational and the UK collectively hates it, that sort of attitude is part of the problem. “Loss of sovereignty” is how they felt about it, how many discussed it. > The Venezuelan government would way rather its citizens use BTC over USD or Colombian currency, in order to ensure inflation/deflation is globally decided by neutral parties Why would those parties have Venezuelan interests in mind rather than their own? One of the arguments against the Eurozone (I’m not qualified to judge it on quality, but it is given as an argument) is that Northern Europe “should” have different inflation to Southern Europe to help boost the local economies. Can’t do that with a single currency, they say, and that would apply more the wider that zone spreads. A single global economy — fiat, digital, or metallurgical — would never be able to resolve it.
      - yazaddaruvala 6y ago
        > “Loss of sovereignty” is how they felt about it, how many discussed it. Yup! I agree, there will be many holdout countries. However, even the UK uses the USD as the world's reserve currency. > Why would those parties have Venezuelan interests in mind rather than their own? Venezuela was fucked because a handful of people are performing bad monetary policy. While the interests of each mining operation would be their own interests, in aggregate, the interests of all BTC mining is a globally averaged monetary policy. Unaffected by corruption, or stupidity (whichever you think is a more apt description of Venezuela's current monetary problem).

almost_usual 6y ago

Too late to what? Forcefully distribute it as it sees fit or else put you in prison or harm your family? If you keep using it in secret it will never be mainstream. Physical force is the strongest currency on Earth. Arguing it’s not is arguing millions of people die for entertainment rather than shifts of power. If Bitcoin is the revolutionary future millions will die on that hill to make it so.

dntrkv 6y ago
If they haven't done it by now, then they don't currently see it as a threat. Now let's say in a few years, that inflection point happens where crypto sees an exponential rate of adoption. Every other country begins to use it, some ban it, many others adopt it. At that point, if not using crypto will put the US at a disadvantage, they have no other choice but to adopt it as well. A semi-related example is the way many companies "disrupt" the markets e.g. Uber/Airbnb wasn't a threat to many cities, until it was. At which point, the demand for Uber/Airbnb outweighed the government's ability to do anything about it. It's not the best example since some cities have done things about it and Uber/Airbnb, being a company, is easier to target. With crypto, its decentralized nature makes it much more difficult to control and attempting to ban it will raise issues around free speech. That's not to say countries won't try and succeed in getting it banned, though in the case of the US, I don't think it's as cut and dry.
- almost_usual 6y ago
  Militarized countries do not forfeit power without conflict and loss of life. It’s quite possible what all world governments have in common.
  - dntrkv 6y ago
    But what if it's not a conscious forfeit of power. The power is taken out from underneath them and by the time they realize it, they have no recourse. Other than threatening all countries that use the currency, which I don't see happening.