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Why Bitcoin is not a socialist’s ally (2020)

90 points by noch 5y ago

seoaeu 5y ago
Cryptocurrency governance basically boils down to one dollar one vote. That’s, um, not what you want if you are looking to empower the working class
- scottiebarnes 5y ago
  Bitcoin has no formal governance system, on chain or off chain. Could you be more specific? Unless you're talking about blocks/hashing power. But that's consensus, not governance of protocol.
  - epistasis 5y ago
    No formal governance does not mean no governance. It just means obscured governance with more hidden power structures. If people haven't read it, I highly recommend reading The Tyranny of Structurelessness, even if the political context of its writing is uninteresting to you, because the lessons are deep: https://en.m.wikipedia.org/wiki/The_Tyranny_of_Structurelessness https://en.m.wikipedia.org/wiki/The_Tyranny_of_Structureless... And if course, there's value in the critiques of it too. Libertarians can learn a lot from anarchists attempts at building social structures that don't have rulers.
    - tboyd47 5y ago
      Bitcoin does not have "structurelessness." It has a clear structure. A better word for what it has is "tensegrity."
  - shyish 5y ago
    I believe that he is referring more broadly to forms of governance in DAOs (though I believe they're all on turing complete chains). For example, OpenZeppelin provides some quickstart governance contracts[1] that are all coin-based voting systems. There are some simple ways around this, like to make voting power proportional to the square root of token ownership but obviously one address != one human voter. Vitalik wrote about some alternatives[2] on his blog, such as proof of humanity, proof or participation or staking based solutions primarily but most significant projects are still using coin-voting. [1]: https://docs.openzeppelin.com/contracts/4.x/governance https://docs.openzeppelin.com/contracts/4.x/governance [2]: https://vitalik.ca/general/2021/08/16/voting3.html https://vitalik.ca/general/2021/08/16/voting3.html
- ryanlol 5y ago
  In most cases mining and PoS-schemes can’t really be meaningfully called “governance”. The miners hold very limited decisionmaking power, in the case of Bitcoin they can’t do much more than censor transactions (and even that is hardly practical).
  - seoaeu 5y ago
    Who decided the block size? Who decided to adopt SegWit?
    - ryanlol 5y ago
      Not the miners. They’re only one of many parties with influence over Bitcoin development.
      - kayamon 5y ago
        Miners are the only people who decide the rules of Bitcoin. They vote with their mining power. (this is in the paper)
        wmf 5y ago
        Bitcoin isn't bound by the white paper.
    - mateuszf 5y ago
      > Who decided the block size? Who decided to adopt SegWit? Users running bitcoin nodes doing transactions validations, not miners creating transactions.
  - mclightning 5y ago
    Miners/Pools could go on strike. PoS schemes will require you to pool as well, meaning there will be centrally controlled staking pools. These pools will yield great power too.
    - 5y ago
- lowkey 5y ago
  Let's compare it with the baseline alternative, the fiat currency called the US dollar - Call it $1USD, no vote. With USD, the long-run target inflation rate as stated by the Federal Reserve is 2% per year. Seems small, some would argue - a small price to pay to avoid the dreaded risk of deflation. (Side note: why is deflation expected and approved of in computers and electronics but not healthcare or higher education?) What if I told you that the average worker who works for wages for 40 years, will lose 40% of the value of their lifetime earnings if inflation was 'only' 2% per year? What if I told you that the current inflation rate according to official sources is over twice the target inflation rate and all signs indicate it will remain elevated for years to come? What if I told you that the real problem with fiat currency is all the trust required? What if I told you that as a worker you now have an alternative to store a portion of your wages in a currency that is engineered using properties of digital scarcity, incredible security, and ingenious game theory to preserve, store, and even grow the purchasing power of your savings at a long-term rate of return that greatly exceed the rate of inflation or the performance of even the riskiest stocks. Why is it bad for workers to have another option for storing their savings, an option that doesn't leak value due to manipulation by centralized actors? No one is forced to use Bitcoin. Bitcoin is a choice. IMO Bitcoin is the better choice. YMMV.
  - virgilp 5y ago
    > Side note: why is deflation expected and approved of in computers and electronics but not healthcare or higher education? That's... not deflation? It's literally building wealth. Cheaper computers means more people can afford them/ people can afford more of them. This is a good thing! Cheaper healthcare (or higher ed) would also be a good thing. But for it to be a good thing, you would have to make it objectively easier for more people to access the same-or-better-quality healthcare or higher ed! If by "deflation" here you simply mean "there's the same overall quality and quantity of higher ed, but older people (who had time to hoard money) can access it a lot easier, to the detriment of young people"... that would clearly be a bad thing. Money is not like that, though. There's no economic advantage to be gained from people hoarding money - they're supposed to be a medium of exchange. If money increases value, you're not spending or investing them, which means less economic activity, hence less wealth for everyone. Money is just a vehicle, never an end-goal. Tl;dr: wealth is, largely speaking, "more and better stuff for everyone!". More and better computers, electronics, higher ed, healthcare. And money, too, I guess? Except that "more money" is typically associated with "inflation" - which shows you that money doesn't really count, it's just a vehicle.
roamerz 5y ago
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- Spooky23 5y ago
  Taxation was invented before money. Like all bitcoin nonsense, it’s hyperbole. The actual value of bitcoin is pretty tenuous, hanging by a “tether” that is mostly built on fraud and untrustworthy accounting.
  - roamerz 5y ago
    I agree with that. My point was simply that if bitcoin were successful it could provide an untraceable haven that the government would have a difficult time in taxing.
- namdnay 5y ago
  > The main enabler of socialism in a non willing populace is the government forcibly extracting taxes from people who would otherwise not donate freely to that cause So.. taxes? What’s that got to do with socialism?
  - roamerz 5y ago
    Maybe my understanding of socialism is incorrect then. When I think of socialism the face of Bernie Sanders comes up. That equates to me of government subsidized everything. As anyone knows the government does not have anything it does not take from her citizens by force (taxes or printing money). Capitalism on the other hand, to me, puts the responsibility of life in the hands of the citizens directly. While not perfect by a long shot it was working well here. I think what has changed over the years is liberals slowly chipping away at capitalism and the two don’t mix well.
    - jeltz 5y ago
      Yes, it is incorrect. Taxes has very little to do with socialism. You can have socialism without taxes and most non socialist system rely on taxes to some extent.
cblconfederate 5y ago
To put this in context, Varoufakis' idea plan of how to solve the greek crisis after closing the banks was as follows: His team would break into the central bank to steal the tax id archives and issue a new "parallel" currency of IoUs that might be on blockchain, but would be completely controlled by him. So obviously the idea of currency not controlled by a central authority is not one he would accept.
- throwvirtever 5y ago
  But his point that Bitcoin is also essentially controlled by a central authority, i.e. the Bitcoin community, has merit. (Even if the control isn't formal, owning a large percentage of a finite "thing" still counts as control, if the "thing" is the unit of exchange for people's work, property, etc. A BTC economy would depend on what the large holders decide to do with their portion). With Bitcoin, the community that controls the money supply is not at all democratic; it is the early adopters with large holdings that carry all the weight. From the perspective of a non-early adopter, the Bitcoin world would be even worse then the central bank and government world. Banks can be regulated and governments can be thrown out. Bitcoin would create a tyranny of "hodlers" protected by intractable mathematics.
  - throwaway248329 5y ago
    > With Bitcoin, the community that controls the money supply is not at all democratic; it is the early adopters with large holdings that carry all the weight. The mechanism according to which Bitcoin upgrades has nothing to do with decisions of whales or democracy. Read about how soft/hard forks and UASF specifically works.
    - throwvirtever 5y ago
      I wasn't referring to upgrades, I was referring to control of the existing, finite supply of Bitcoin. In a Bitcoin-centered economy, a relatively small community of "whales" would have de-facto control of the supply, because the supply available for circulation would depend on what they decide to do with their holdings.
jprupp 5y ago
I'm Venezuelan. All I can say is: I know, and that's why I dedicated ten years of my life to help Bitcoin succeed, mostly in the form of Bitcoin Cash these days. I oppose socialism and understand how Bitcoin can help prevent elitists from gaining control over the economy.
- Synaesthesia 5y ago
  Bitcoin is totally elitist and mostly a vehicle for speculation.
  - throwvirtever 5y ago
    > Bitcoin is totally elitist and mostly a vehicle for speculation. I agree, but the parent poster does have a point. There are places where the economic situation has deteriorated to the point that using Bitcoin can solve some problems. Some things are worse than Bitcoin, but it's a rare phenomenon.
  - scottiebarnes 5y ago
    Look around, everything is a vehicle for speculation, from houses to baseball cards to oil. Of any network that exists over the internet, Bitcoin is the least elitist. Participation is permissionless; anyone can spin up a wallet, and it requires no identification. Transactions are borderless, code is open source. No one can prevent you from sending/receiving at a protocol level.
- chucktingle 5y ago
  [flagged]
ed25519FUUU 5y ago
If you think the uneven distribution of fiat currency is out of whack, wait until you learn about cryptocurrency!
- tromp 5y ago
  You're right that the best that a cryptocurrency distribution could hope for is to mimic fiat ownership. But Bitcoin distribution is so heavily tilted toward the initial years that it's much more uneven than fiat. And other cryptocurrencies are worse yet, especially those with huge premines (which include all coins lacking PoW), concentrating all the wealth on its creators.
tboyd47 5y ago
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savant_penguin 5y ago
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- jakelazaroff 5y ago
  > no one is forced to use aws or Amazon Sure they are. I’d probably have to stop using the Internet entirely to avoid using a service powered by AWS.
  - mmdoda 5y ago
    The point is you as a business don't have to use aws, there are alternatives out there. For consumers it is irrelevant because they aren't buying "aws" directly.
    - Synaesthesia 5y ago
      You don't have to live in your house, you are free to live outside. You don't have to have a job, you are free to starve. You don't have to live in your country, you are free to go. You see, freedom is not absolute, there are power relations involved.
      - savant_penguin 5y ago
        This is a false comparison Because freedom is not absolute it does not mean I'd want to give whatever freedom I have away Under socialism you do not get do pick jobs at will. And you better show everyone how happy you are at the job assigned to you. "You don't have to live in your country, you are free to go." Many have died for this freedom alone. And you don't have to go to North Korea to know this. Right in the heart of (now) western Europe people were shot dead for running away through the Berlin wall. How come people risk death to run away from the utopia? They must be counter-revolutionaries better murder whatever family they left behind
        grumpyprole 5y ago
        > Under socialism you do not get do pick jobs at will. And you better show everyone how happy you are at the job assigned to you. Socialism might mean you have more choice of work, because there is greater social mobility and access to education. Perhaps also you might work for a "cooperative" firm, where every employee is a part owner and gets to vote on issues and a take on the profits.
michaelsbradley 5y ago
The Decentralization Movement, in the Web3 sense (three Internet prongs: consensus, messaging, information persistence), is (or ought to be) ultimately a vehicle for fostering subsidiarity[+], working opposite to the efforts of socialism to subordinate the individual to the state, and opposite to the extremes of laissez-faire capitalism. [+] https://en.wikipedia.org/wiki/Subsidiarity_(Catholicism) https://en.wikipedia.org/wiki/Subsidiarity_(Catholicism)
steve76 5y ago
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c54 5y ago
> Massive bubbles denominated in Bitcoin will build up and they will burst just as they did in the 19th century under the Gold Standard. Does anyone know about bubbles under the gold standard? Seems interesting and is a piece of history I've never read about before.
- Synaesthesia 5y ago
  I was curious too and found some examples here https://en.wikipedia.org/wiki/Economic_bubble https://en.wikipedia.org/wiki/Economic_bubble - Panic of 1819 - Panic of 1837 - Railway bubble ~1840 - US farm bubble and crisis (1914–1918, crash 1919–1920) prices rapidly escalated during WWI and crash after war's end . - Roaring Twenties stock-market bubble (US) (1921–1929) - Florida speculative building bubble (US)(1922–1926)
  - c54 5y ago
    Were these actually related to the gold standard as such? Or were they just bubbles that occurred during that time. For instance the railway bubble seems to have nothing at all to do with being on the gold standard.
    - AnimalMuppet 5y ago
      The gold standard meant that QE style answers were not possible. It didn't cause the bubble or the crash, but it meant that there were stronger constraints on what the government could do in response.
- jeltz 5y ago
  The Great Depression? Many countries had to abandon the Gold Standard to get out of it. In my country we also had a real estate bubble in the late 19th century.
streamofdigits 5y ago
varufakis should reade graeber's Debt. the most glaring problem of bitcoin (and the whole crypto world) is that it has this naive "scarcity view" of currency whereas it is an in-your-face reality that a most important role of currency is to boostrap a credit system. cryptobros have an obsession with inflation and rates side of government regulation and they seem to be completely oblivious to the credit system side of regulation - the two-tier private/central bank etc. maybe because they actually have no clue how the current system works) so besides the inflation/deflation challenge I have yet to see any proposal how one could have stable decentralized unregulated credit markets and would be quite interested if people have serious relevant references.
- Synaesthesia 5y ago
  Varoufakis is a pretty sensible economist and understands perfectly what money's role in society is. If you read his book on confronting the EU he shows how eg Greece abandoning the Euro and moving to the Drachma wouldn't work out... It shows his understanding of macroeconomics.
  - streamofdigits 5y ago
    I am pretty sure he understands credit money but he needs to show his work :-) The point of my comment is that cryptobros are largely financially illiterate and when an economist undertakes the thankless task to discuss the possibility of a "cryptoeconomy" its important to make a list of all the missing parts
- nextstep 5y ago
  Yanis Varoufakis has read Debt, he talks about it often and he and Graeber spoke together many times. https://twitter.com/yanisvaroufakis/status/1301540694159486976?s=21 https://twitter.com/yanisvaroufakis/status/13015406941594869...
- sudosysgen 5y ago
  Varoufakis and Graeber actually gave a few talks together
osigurdson 5y ago
I have read in a few places (example below) that Bitcoin hash power is highly concentrated. Given that Bitcoin is controlled by hash power it would be good to know who those people are. https://nypost.com/2021/10/26/bitcoin-ownership-concentrated-in-a-few-hands-new-study/ https://nypost.com/2021/10/26/bitcoin-ownership-concentrated...
- wmf 5y ago
  Hashpower doesn't confer any control; you can see this in the case of Segwit2X.
- throwaway248329 5y ago
  Miners can't do anything outside of what is already allowed by the Bitcoin protocol. https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners
  - retrac 5y ago
    They could rewrite the protocol at-will if a cabal of miners holds a clear majority of the hash power. If that cabal would require hundreds of groups with no common cause on every continent, then no problem. If it's just a handful of individuals who could make that call, that's a potential problem. And we just don't know which end of that spectrum the current hash rate distribution actually looks like. Admittedly, there's no reason a private investor would want to tank their holdings like that I can think of. But, if significant hash rate is being held by state actors as some have suggested, economic warfare comes into the picture.
    - throwaway248329 5y ago
      No, that's literally not how it works. Read the article I linked. Even if the cabal of miners decided to make a change in the protocol and print themselves bunch of free coins, those mined blocks would get rejected by the full nodes, which compose the Bitcoin network and validate all the transactions.
  - 5y ago
pezzana 5y ago
Long story short: Varoufakis dislikes the inflexibility of Bitcoin's supply. Varoufakis wants currencies with flexible supplies safely under the control of technocrats like him. This should come as no surprise. What is surprising is that anyone would think differently. What Varoufakis doesn't get is that he has no control over the future direction of Bitcoin. It's in large part an escape hatch for those who are fed up with technocratic debasement of money. Neither Varoufakis nor anyone else will be able to prevent people from using Bitcoin. They'll try, but lose enormous credibility when they fail.
- drclau 5y ago
  > It's in large part an escape hatch for those who are fed up with technocratic debasement of money Those fed up with technocratic debasement of money, and organized crime. I just read here [0] that Bulgaria is the second largest owner of Bitcoin, after Satoshi Nakamoto, due to "a crackdown on organized crime by the Bulgarian law enforcement in May 2017 resulted in the seizure of a stash of 213,519 Bitcoins". Same article claims FBI is number 4 owner, after "they brought down Silk Road, the infamous dark web drug bazaar, and seized 144,000 Bitcoin owned by the site’s operator Ross Ulbricht, better known as, “Dread Pirate Roberts”, in 2013. I do not know how correct this information is, though, so take it with a grain of salt. In any case, it makes one wonder how much more cryptocurrencies are owned by organized crime. [0]: https://usethebitcoin.com/top-10-richest-bitcoin-owners/ https://usethebitcoin.com/top-10-richest-bitcoin-owners/
  - throwawayForMe2 5y ago
    The FBI coins were auctioned off, Tim Draper took the first batch of 30,000 https://www.reuters.com/article/us-usa-bitcoin-idUSKBN0F719920140702 https://www.reuters.com/article/us-usa-bitcoin-idUSKBN0F7199...
  - drexlspivey 5y ago
    Microstrategy and the Winklevoss twins have bigger stashes than that
  - malermeister 5y ago
dathinab 5y ago
Wait, isn't it obvious that cryptocurrencies like bitcoin are: fully unchecked capitalism Socialism is (at least in theory) about regulating the market in a way which puts social aspects in the foreground to maximize benefits for the society as a whole even if it's at the cost a a few. This requires regulation. Cryptocurrencies like bitcoin are all about avoiding regulation. Also in cryptocurrencies in the end the wealthy have all the power, because they can use the wealth to dominate the mining and with this can control which changes are accepted by a blog-chain and which are not (this is a bit more obvious for PoS chains, but applies to PoW chains too). Socialism is also about every natural person in society (theoretically) having the same power, which is in direct conflict with how modern crypto currencies work. So IMHO crypto currencies are an aspect of hyper capitalism pretending to be something else.
- anyonecancode 5y ago
  > So IMHO crypto currencies are an aspect of hyper capitalism pretending to be something else. Yes, exactly! The "problem" cryptocurrency solves is people with wealth having too many restrictions on that wealth. I think blockchain technology is super interesting, and insofar as cryptocurrencies are an implementation of that technology they're interesting, but I'm very much not in agreement that they're solving any real problem that needs solving, and in fact the concept of cryptocurrency as money actually exacerbates an already bad situation. If one is worried about a small number of economic elite having undue influence over society, crypto is part of the problem, not the solution.
  - landemva 5y ago
    A couple real problems solved: . censorship resistance . government theft/seizure There are more, though these two have helped me.
    - dathinab 5y ago
      The problem is that the same tools which helps with "censorship resistance" also prevent certain forms of well intended "moderation"* similar "government seizure" isn't necessary theft at all as it might e.g. "seizure" of stolen money (e.g. through hacking) or "seizure" of money earned through serve crimes (murder, human traffican, etc.). *like e.g. removing videos of a rape used to blackmail a innocent person. I don't believe that you can magically/blindely solve problems of society with technical solutions.
expensive_news 5y ago
Are the long term goals of crypto-enthusiasts for crypto to completely replace fiat currency? I can’t imagine a world without fiat currency, for the simple reason that governments operate in a deficit. A world without fiat currency would imply that all government workers are paid with crypto, all roads are funded with crypto, the military is funded with crypto, etc. And since this currency is limited and deflationary, this would imply that the only people who can fund these governments are the crypto whales. This sounds like a dystopian nightmare. Further, it seems obvious to me that many of the decisions made by the Ethereum community are only intended to benefit wealth hoarders and early investors (PoS and the deflationary aspect). Their decisions don’t seem to have the larger global community in mind, at least in an authentic way. They seem to see it, simply, as a store of value.
- bitxbitxbitcoin 5y ago
  Depends who you ask. I agree that it is unlikely that cryptocurrency replaces fiat currency entirely. What is more likely is a return to fiat money backed by an asset. A Bitcoin standard as opposed to the (relatively) recently abandoned gold standard. Fiat currency as the world is experiencing it now is just as grand and uncharted of an experiment as Bitcoin.
- throwaway248329 5y ago
  It doesn't mean that governments are going to be funded by crypto whales, it just means that government spending will be kept on check and limited by the amount of money they can tax from people. Politicians not being able to fund wars using a money printer is a good thing, not bad.
  - lottin 5y ago
    > it just means that government spending will be kept on check and limited by the amount of money they can tax from people Governments can borrow money with or without fiat currency, so I don't know where you got the idea that a crypto-currency would stop governments from borrowing.
bob332 5y ago
Bitcoin is absolute nonsense and loved by morosn
stjohnswarts 5y ago
In a way bitcoin is a socialist's dream since it allows tracking of all transactions and tracing of all assets so taxation and surveillance can be nearly perfect.
sleepysysadmin 5y ago
Oh wow this is the Syriza minister of finance. >In other words, I shall argue that Bitcoin is not fit for purpose under capitalism, or as a vehicle toward transcending capitalism, but something like Bitcoin will characterise monetary systems in a future world free of private banks and share markets. Wow the open letter he is responding to is a socialist who believes bitcoin is a good idea for socialism? Bitcoin is literally the antithesis to socialism. It seems clear to me in this article that Yanis knows this. Greece didn't get control over the euro. They couldn't print lots of money to generate significant inflation to hide their debt. Socialist governments basically dont function without heavy inflation making their people poor. Something that has never happened in history is a fiscally conservative balanced budget socialist government with fully controlled inflation.

90 points by noch 5y ago

Cryptocurrency governance basically boils down to one dollar one vote. That’s, um, not what you want if you are looking to empower the working class

scottiebarnes 5y ago
Bitcoin has no formal governance system, on chain or off chain. Could you be more specific? Unless you're talking about blocks/hashing power. But that's consensus, not governance of protocol.
- epistasis 5y ago
  No formal governance does not mean no governance. It just means obscured governance with more hidden power structures. If people haven't read it, I highly recommend reading The Tyranny of Structurelessness, even if the political context of its writing is uninteresting to you, because the lessons are deep: https://en.m.wikipedia.org/wiki/The_Tyranny_of_Structurelessness https://en.m.wikipedia.org/wiki/The_Tyranny_of_Structureless... And if course, there's value in the critiques of it too. Libertarians can learn a lot from anarchists attempts at building social structures that don't have rulers.
  - tboyd47 5y ago
    Bitcoin does not have "structurelessness." It has a clear structure. A better word for what it has is "tensegrity."
- shyish 5y ago
  I believe that he is referring more broadly to forms of governance in DAOs (though I believe they're all on turing complete chains). For example, OpenZeppelin provides some quickstart governance contracts[1] that are all coin-based voting systems. There are some simple ways around this, like to make voting power proportional to the square root of token ownership but obviously one address != one human voter. Vitalik wrote about some alternatives[2] on his blog, such as proof of humanity, proof or participation or staking based solutions primarily but most significant projects are still using coin-voting. [1]: https://docs.openzeppelin.com/contracts/4.x/governance https://docs.openzeppelin.com/contracts/4.x/governance [2]: https://vitalik.ca/general/2021/08/16/voting3.html https://vitalik.ca/general/2021/08/16/voting3.html
ryanlol 5y ago
In most cases mining and PoS-schemes can’t really be meaningfully called “governance”. The miners hold very limited decisionmaking power, in the case of Bitcoin they can’t do much more than censor transactions (and even that is hardly practical).
- seoaeu 5y ago
  Who decided the block size? Who decided to adopt SegWit?
  - ryanlol 5y ago
    Not the miners. They’re only one of many parties with influence over Bitcoin development.
    - kayamon 5y ago
      Miners are the only people who decide the rules of Bitcoin. They vote with their mining power. (this is in the paper)
      - wmf 5y ago
        Bitcoin isn't bound by the white paper.
  - mateuszf 5y ago
    > Who decided the block size? Who decided to adopt SegWit? Users running bitcoin nodes doing transactions validations, not miners creating transactions.
- mclightning 5y ago
  Miners/Pools could go on strike. PoS schemes will require you to pool as well, meaning there will be centrally controlled staking pools. These pools will yield great power too.
  - 5y ago
lowkey 5y ago
Let's compare it with the baseline alternative, the fiat currency called the US dollar - Call it $1USD, no vote. With USD, the long-run target inflation rate as stated by the Federal Reserve is 2% per year. Seems small, some would argue - a small price to pay to avoid the dreaded risk of deflation. (Side note: why is deflation expected and approved of in computers and electronics but not healthcare or higher education?) What if I told you that the average worker who works for wages for 40 years, will lose 40% of the value of their lifetime earnings if inflation was 'only' 2% per year? What if I told you that the current inflation rate according to official sources is over twice the target inflation rate and all signs indicate it will remain elevated for years to come? What if I told you that the real problem with fiat currency is all the trust required? What if I told you that as a worker you now have an alternative to store a portion of your wages in a currency that is engineered using properties of digital scarcity, incredible security, and ingenious game theory to preserve, store, and even grow the purchasing power of your savings at a long-term rate of return that greatly exceed the rate of inflation or the performance of even the riskiest stocks. Why is it bad for workers to have another option for storing their savings, an option that doesn't leak value due to manipulation by centralized actors? No one is forced to use Bitcoin. Bitcoin is a choice. IMO Bitcoin is the better choice. YMMV.
- virgilp 5y ago
  > Side note: why is deflation expected and approved of in computers and electronics but not healthcare or higher education? That's... not deflation? It's literally building wealth. Cheaper computers means more people can afford them/ people can afford more of them. This is a good thing! Cheaper healthcare (or higher ed) would also be a good thing. But for it to be a good thing, you would have to make it objectively easier for more people to access the same-or-better-quality healthcare or higher ed! If by "deflation" here you simply mean "there's the same overall quality and quantity of higher ed, but older people (who had time to hoard money) can access it a lot easier, to the detriment of young people"... that would clearly be a bad thing. Money is not like that, though. There's no economic advantage to be gained from people hoarding money - they're supposed to be a medium of exchange. If money increases value, you're not spending or investing them, which means less economic activity, hence less wealth for everyone. Money is just a vehicle, never an end-goal. Tl;dr: wealth is, largely speaking, "more and better stuff for everyone!". More and better computers, electronics, higher ed, healthcare. And money, too, I guess? Except that "more money" is typically associated with "inflation" - which shows you that money doesn't really count, it's just a vehicle.

roamerz 5y ago

[flagged]

Spooky23 5y ago
Taxation was invented before money. Like all bitcoin nonsense, it’s hyperbole. The actual value of bitcoin is pretty tenuous, hanging by a “tether” that is mostly built on fraud and untrustworthy accounting.
- roamerz 5y ago
  I agree with that. My point was simply that if bitcoin were successful it could provide an untraceable haven that the government would have a difficult time in taxing.
namdnay 5y ago
> The main enabler of socialism in a non willing populace is the government forcibly extracting taxes from people who would otherwise not donate freely to that cause So.. taxes? What’s that got to do with socialism?
- roamerz 5y ago
  Maybe my understanding of socialism is incorrect then. When I think of socialism the face of Bernie Sanders comes up. That equates to me of government subsidized everything. As anyone knows the government does not have anything it does not take from her citizens by force (taxes or printing money). Capitalism on the other hand, to me, puts the responsibility of life in the hands of the citizens directly. While not perfect by a long shot it was working well here. I think what has changed over the years is liberals slowly chipping away at capitalism and the two don’t mix well.
  - jeltz 5y ago
    Yes, it is incorrect. Taxes has very little to do with socialism. You can have socialism without taxes and most non socialist system rely on taxes to some extent.

cblconfederate 5y ago

To put this in context, Varoufakis' idea plan of how to solve the greek crisis after closing the banks was as follows: His team would break into the central bank to steal the tax id archives and issue a new "parallel" currency of IoUs that might be on blockchain, but would be completely controlled by him. So obviously the idea of currency not controlled by a central authority is not one he would accept.

throwvirtever 5y ago
But his point that Bitcoin is also essentially controlled by a central authority, i.e. the Bitcoin community, has merit. (Even if the control isn't formal, owning a large percentage of a finite "thing" still counts as control, if the "thing" is the unit of exchange for people's work, property, etc. A BTC economy would depend on what the large holders decide to do with their portion). With Bitcoin, the community that controls the money supply is not at all democratic; it is the early adopters with large holdings that carry all the weight. From the perspective of a non-early adopter, the Bitcoin world would be even worse then the central bank and government world. Banks can be regulated and governments can be thrown out. Bitcoin would create a tyranny of "hodlers" protected by intractable mathematics.
- throwaway248329 5y ago
  > With Bitcoin, the community that controls the money supply is not at all democratic; it is the early adopters with large holdings that carry all the weight. The mechanism according to which Bitcoin upgrades has nothing to do with decisions of whales or democracy. Read about how soft/hard forks and UASF specifically works.
  - throwvirtever 5y ago
    I wasn't referring to upgrades, I was referring to control of the existing, finite supply of Bitcoin. In a Bitcoin-centered economy, a relatively small community of "whales" would have de-facto control of the supply, because the supply available for circulation would depend on what they decide to do with their holdings.

jprupp 5y ago

I'm Venezuelan. All I can say is: I know, and that's why I dedicated ten years of my life to help Bitcoin succeed, mostly in the form of Bitcoin Cash these days. I oppose socialism and understand how Bitcoin can help prevent elitists from gaining control over the economy.

Synaesthesia 5y ago
Bitcoin is totally elitist and mostly a vehicle for speculation.
- throwvirtever 5y ago
  > Bitcoin is totally elitist and mostly a vehicle for speculation. I agree, but the parent poster does have a point. There are places where the economic situation has deteriorated to the point that using Bitcoin can solve some problems. Some things are worse than Bitcoin, but it's a rare phenomenon.
- scottiebarnes 5y ago
  Look around, everything is a vehicle for speculation, from houses to baseball cards to oil. Of any network that exists over the internet, Bitcoin is the least elitist. Participation is permissionless; anyone can spin up a wallet, and it requires no identification. Transactions are borderless, code is open source. No one can prevent you from sending/receiving at a protocol level.
chucktingle 5y ago
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ed25519FUUU 5y ago

If you think the uneven distribution of fiat currency is out of whack, wait until you learn about cryptocurrency!

tromp 5y ago
You're right that the best that a cryptocurrency distribution could hope for is to mimic fiat ownership. But Bitcoin distribution is so heavily tilted toward the initial years that it's much more uneven than fiat. And other cryptocurrencies are worse yet, especially those with huge premines (which include all coins lacking PoW), concentrating all the wealth on its creators.

tboyd47 5y ago

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savant_penguin 5y ago

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jakelazaroff 5y ago
> no one is forced to use aws or Amazon Sure they are. I’d probably have to stop using the Internet entirely to avoid using a service powered by AWS.
- mmdoda 5y ago
  The point is you as a business don't have to use aws, there are alternatives out there. For consumers it is irrelevant because they aren't buying "aws" directly.
  - Synaesthesia 5y ago
    You don't have to live in your house, you are free to live outside. You don't have to have a job, you are free to starve. You don't have to live in your country, you are free to go. You see, freedom is not absolute, there are power relations involved.
    - savant_penguin 5y ago
      This is a false comparison Because freedom is not absolute it does not mean I'd want to give whatever freedom I have away Under socialism you do not get do pick jobs at will. And you better show everyone how happy you are at the job assigned to you. "You don't have to live in your country, you are free to go." Many have died for this freedom alone. And you don't have to go to North Korea to know this. Right in the heart of (now) western Europe people were shot dead for running away through the Berlin wall. How come people risk death to run away from the utopia? They must be counter-revolutionaries better murder whatever family they left behind
      - grumpyprole 5y ago
        > Under socialism you do not get do pick jobs at will. And you better show everyone how happy you are at the job assigned to you. Socialism might mean you have more choice of work, because there is greater social mobility and access to education. Perhaps also you might work for a "cooperative" firm, where every employee is a part owner and gets to vote on issues and a take on the profits.

michaelsbradley 5y ago

The Decentralization Movement, in the Web3 sense (three Internet prongs: consensus, messaging, information persistence), is (or ought to be) ultimately a vehicle for fostering subsidiarity[+], working opposite to the efforts of socialism to subordinate the individual to the state, and opposite to the extremes of laissez-faire capitalism. [+] https://en.wikipedia.org/wiki/Subsidiarity_(Catholicism) https://en.wikipedia.org/wiki/Subsidiarity_(Catholicism)

steve76 5y ago

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c54 5y ago

> Massive bubbles denominated in Bitcoin will build up and they will burst just as they did in the 19th century under the Gold Standard. Does anyone know about bubbles under the gold standard? Seems interesting and is a piece of history I've never read about before.

Synaesthesia 5y ago
I was curious too and found some examples here https://en.wikipedia.org/wiki/Economic_bubble https://en.wikipedia.org/wiki/Economic_bubble - Panic of 1819 - Panic of 1837 - Railway bubble ~1840 - US farm bubble and crisis (1914–1918, crash 1919–1920) prices rapidly escalated during WWI and crash after war's end . - Roaring Twenties stock-market bubble (US) (1921–1929) - Florida speculative building bubble (US)(1922–1926)
- c54 5y ago
  Were these actually related to the gold standard as such? Or were they just bubbles that occurred during that time. For instance the railway bubble seems to have nothing at all to do with being on the gold standard.
  - AnimalMuppet 5y ago
    The gold standard meant that QE style answers were not possible. It didn't cause the bubble or the crash, but it meant that there were stronger constraints on what the government could do in response.
jeltz 5y ago
The Great Depression? Many countries had to abandon the Gold Standard to get out of it. In my country we also had a real estate bubble in the late 19th century.

streamofdigits 5y ago

varufakis should reade graeber's Debt. the most glaring problem of bitcoin (and the whole crypto world) is that it has this naive "scarcity view" of currency whereas it is an in-your-face reality that a most important role of currency is to boostrap a credit system. cryptobros have an obsession with inflation and rates side of government regulation and they seem to be completely oblivious to the credit system side of regulation - the two-tier private/central bank etc. maybe because they actually have no clue how the current system works) so besides the inflation/deflation challenge I have yet to see any proposal how one could have stable decentralized unregulated credit markets and would be quite interested if people have serious relevant references.

Synaesthesia 5y ago
Varoufakis is a pretty sensible economist and understands perfectly what money's role in society is. If you read his book on confronting the EU he shows how eg Greece abandoning the Euro and moving to the Drachma wouldn't work out... It shows his understanding of macroeconomics.
- streamofdigits 5y ago
  I am pretty sure he understands credit money but he needs to show his work :-) The point of my comment is that cryptobros are largely financially illiterate and when an economist undertakes the thankless task to discuss the possibility of a "cryptoeconomy" its important to make a list of all the missing parts
nextstep 5y ago
Yanis Varoufakis has read Debt, he talks about it often and he and Graeber spoke together many times. https://twitter.com/yanisvaroufakis/status/1301540694159486976?s=21 https://twitter.com/yanisvaroufakis/status/13015406941594869...
sudosysgen 5y ago
Varoufakis and Graeber actually gave a few talks together

osigurdson 5y ago

I have read in a few places (example below) that Bitcoin hash power is highly concentrated. Given that Bitcoin is controlled by hash power it would be good to know who those people are. https://nypost.com/2021/10/26/bitcoin-ownership-concentrated-in-a-few-hands-new-study/ https://nypost.com/2021/10/26/bitcoin-ownership-concentrated...

wmf 5y ago
Hashpower doesn't confer any control; you can see this in the case of Segwit2X.
throwaway248329 5y ago
Miners can't do anything outside of what is already allowed by the Bitcoin protocol. https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners
- retrac 5y ago
  They could rewrite the protocol at-will if a cabal of miners holds a clear majority of the hash power. If that cabal would require hundreds of groups with no common cause on every continent, then no problem. If it's just a handful of individuals who could make that call, that's a potential problem. And we just don't know which end of that spectrum the current hash rate distribution actually looks like. Admittedly, there's no reason a private investor would want to tank their holdings like that I can think of. But, if significant hash rate is being held by state actors as some have suggested, economic warfare comes into the picture.
  - throwaway248329 5y ago
    No, that's literally not how it works. Read the article I linked. Even if the cabal of miners decided to make a change in the protocol and print themselves bunch of free coins, those mined blocks would get rejected by the full nodes, which compose the Bitcoin network and validate all the transactions.
- 5y ago

pezzana 5y ago

Long story short: Varoufakis dislikes the inflexibility of Bitcoin's supply. Varoufakis wants currencies with flexible supplies safely under the control of technocrats like him. This should come as no surprise. What is surprising is that anyone would think differently. What Varoufakis doesn't get is that he has no control over the future direction of Bitcoin. It's in large part an escape hatch for those who are fed up with technocratic debasement of money. Neither Varoufakis nor anyone else will be able to prevent people from using Bitcoin. They'll try, but lose enormous credibility when they fail.

drclau 5y ago
> It's in large part an escape hatch for those who are fed up with technocratic debasement of money Those fed up with technocratic debasement of money, and organized crime. I just read here [0] that Bulgaria is the second largest owner of Bitcoin, after Satoshi Nakamoto, due to "a crackdown on organized crime by the Bulgarian law enforcement in May 2017 resulted in the seizure of a stash of 213,519 Bitcoins". Same article claims FBI is number 4 owner, after "they brought down Silk Road, the infamous dark web drug bazaar, and seized 144,000 Bitcoin owned by the site’s operator Ross Ulbricht, better known as, “Dread Pirate Roberts”, in 2013. I do not know how correct this information is, though, so take it with a grain of salt. In any case, it makes one wonder how much more cryptocurrencies are owned by organized crime. [0]: https://usethebitcoin.com/top-10-richest-bitcoin-owners/ https://usethebitcoin.com/top-10-richest-bitcoin-owners/
- throwawayForMe2 5y ago
  The FBI coins were auctioned off, Tim Draper took the first batch of 30,000 https://www.reuters.com/article/us-usa-bitcoin-idUSKBN0F719920140702 https://www.reuters.com/article/us-usa-bitcoin-idUSKBN0F7199...
- drexlspivey 5y ago
  Microstrategy and the Winklevoss twins have bigger stashes than that
- malermeister 5y ago

dathinab 5y ago

Wait, isn't it obvious that cryptocurrencies like bitcoin are: fully unchecked capitalism Socialism is (at least in theory) about regulating the market in a way which puts social aspects in the foreground to maximize benefits for the society as a whole even if it's at the cost a a few. This requires regulation. Cryptocurrencies like bitcoin are all about avoiding regulation. Also in cryptocurrencies in the end the wealthy have all the power, because they can use the wealth to dominate the mining and with this can control which changes are accepted by a blog-chain and which are not (this is a bit more obvious for PoS chains, but applies to PoW chains too). Socialism is also about every natural person in society (theoretically) having the same power, which is in direct conflict with how modern crypto currencies work. So IMHO crypto currencies are an aspect of hyper capitalism pretending to be something else.

anyonecancode 5y ago
> So IMHO crypto currencies are an aspect of hyper capitalism pretending to be something else. Yes, exactly! The "problem" cryptocurrency solves is people with wealth having too many restrictions on that wealth. I think blockchain technology is super interesting, and insofar as cryptocurrencies are an implementation of that technology they're interesting, but I'm very much not in agreement that they're solving any real problem that needs solving, and in fact the concept of cryptocurrency as money actually exacerbates an already bad situation. If one is worried about a small number of economic elite having undue influence over society, crypto is part of the problem, not the solution.
- landemva 5y ago
  A couple real problems solved: . censorship resistance . government theft/seizure There are more, though these two have helped me.
  - dathinab 5y ago
    The problem is that the same tools which helps with "censorship resistance" also prevent certain forms of well intended "moderation"* similar "government seizure" isn't necessary theft at all as it might e.g. "seizure" of stolen money (e.g. through hacking) or "seizure" of money earned through serve crimes (murder, human traffican, etc.). *like e.g. removing videos of a rape used to blackmail a innocent person. I don't believe that you can magically/blindely solve problems of society with technical solutions.

expensive_news 5y ago

Are the long term goals of crypto-enthusiasts for crypto to completely replace fiat currency? I can’t imagine a world without fiat currency, for the simple reason that governments operate in a deficit. A world without fiat currency would imply that all government workers are paid with crypto, all roads are funded with crypto, the military is funded with crypto, etc. And since this currency is limited and deflationary, this would imply that the only people who can fund these governments are the crypto whales. This sounds like a dystopian nightmare. Further, it seems obvious to me that many of the decisions made by the Ethereum community are only intended to benefit wealth hoarders and early investors (PoS and the deflationary aspect). Their decisions don’t seem to have the larger global community in mind, at least in an authentic way. They seem to see it, simply, as a store of value.

bitxbitxbitcoin 5y ago
Depends who you ask. I agree that it is unlikely that cryptocurrency replaces fiat currency entirely. What is more likely is a return to fiat money backed by an asset. A Bitcoin standard as opposed to the (relatively) recently abandoned gold standard. Fiat currency as the world is experiencing it now is just as grand and uncharted of an experiment as Bitcoin.
throwaway248329 5y ago
It doesn't mean that governments are going to be funded by crypto whales, it just means that government spending will be kept on check and limited by the amount of money they can tax from people. Politicians not being able to fund wars using a money printer is a good thing, not bad.
- lottin 5y ago
  > it just means that government spending will be kept on check and limited by the amount of money they can tax from people Governments can borrow money with or without fiat currency, so I don't know where you got the idea that a crypto-currency would stop governments from borrowing.

bob332 5y ago

Bitcoin is absolute nonsense and loved by morosn

stjohnswarts 5y ago

In a way bitcoin is a socialist's dream since it allows tracking of all transactions and tracing of all assets so taxation and surveillance can be nearly perfect.

sleepysysadmin 5y ago

Oh wow this is the Syriza minister of finance. >In other words, I shall argue that Bitcoin is not fit for purpose under capitalism, or as a vehicle toward transcending capitalism, but something like Bitcoin will characterise monetary systems in a future world free of private banks and share markets. Wow the open letter he is responding to is a socialist who believes bitcoin is a good idea for socialism? Bitcoin is literally the antithesis to socialism. It seems clear to me in this article that Yanis knows this. Greece didn't get control over the euro. They couldn't print lots of money to generate significant inflation to hide their debt. Socialist governments basically dont function without heavy inflation making their people poor. Something that has never happened in history is a fiscally conservative balanced budget socialist government with fully controlled inflation.