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I find you utterly un-compelling. And I say that as someone who has literally spent hundreds of bitcoin at one of the ONLY points in bitcoin's history when it

I find you utterly un-compelling. And I say that as someone who has literally spent hundreds of bitcoin at one of the ONLY points in bitcoin's history when it was primarily used as a genuine medium of exchange (silk road). Simple example - show me a method of handling reconciliation of fraud/contract dispute for bitcoin that doesn't fall back on the legal systems of those government systems you're so happy to rail against. (hint - there is NONE). You know what those governments absolutely won't do? Incur costs upon themselves to mediate exchanges in a foreign currency. They will either ban it (china) or add back all those things you seem to think bitcoin will solve (funds freezing, required intermediaries, identity & reporting, sanctions) that make those costs predictable and acceptable (us).

mardifoufs 5y ago
What do you mean only point in it's history? I agree that bitcoin is mostly good for drugs but it's still being used for that as we speak. Some markets are starting to only take Monero, sure, but you can still get around with just BTC. Silk road wasn't the last dn market or even the best, not even close.
- horsawlarway 5y ago
  The primary use is now speculation - full stop.
  - ephbit 5y ago
    The distinction between store of value and speculation is rather fuzzy IMO. Is putting money into gold for savings (because an actual savings bank account currently not only loses money in real but even in nominal terms) speculation as well?
    - invaliduser 5y ago
      Speculation: "investment in stocks, property, etc. in the hope of gain but with the risk of loss." Buying bitcoins seems to match the definition. You can buy gold as an inflationary hedge, but I don't think people would do that with bitcoin.
    - frankbreetz 5y ago
      How does a bank account lose money in nominal terms? You get paid interest
      - kragen 5y ago
        It depends on where you live. In some countries it's common for monthly fees to exceed the interest you get paid. My corporate bank account ended up in the hands of a colleciton agency that way!
      - calumetregion 5y ago
        Have you heard of negative interest rates? This is so real that it is real. Also real: the wild "insanity" that is the picture painted by the writer of this Harper's piece is also exactly the same "insanity" that is present in, well, everything that involves the US dollar. Money is so tenuous worldwide at this stage that entire central bank policy is designed so that you won't want to keep it anyway. You must spend! We really are jacked directly into the machine. It's pretty wild if you compare it to just a blip ago, historically.
kragen 5y ago
I bet you wish you hadn't spent those hundreds of bitcoin, don't you? As I said in the last post I linked, Bitcoin handles a few billion dollars a year in cross-border remittances, largely to family members in Venezuela; this suggests that it's keeping several million people alive. I hear there are still darknet markets around, too. So there are current uses as a genuine medium of exchange that are very significant. Do they amount to its primary use? I don't know. I suspect Bitcoin's primary use right now is speculation, and I wish that would settle down, because I'd really appreciate it if the money I get paid in would retain roughly the same value for weeks at a time. But perhaps the primary use of US$100 bills is cocaine trafficking; if so, what does it matter to people who are using them for other things? If the primary use of oxygen were feeding pathogenic bacteria, would you stop using oxygen? I don't think it's a problem that Bitcoin doesn't contain its own fraud or contract dispute resolution mechanisms. Neither do gold, silver, copper, or greenbacks, and they work pretty well as currencies. Last time I had a dispute about a Bitcoin transaction, I resolved it by negotiating with the person I was disputing with to find a mutually agreeable settlement, which took about an hour; failing that, theoretically I could have resorted to talking to their friends, the Mafia, or, yes, the police, but probably I would have just swallowed my losses and not done business with them again. (In theory I could also have resorted to individual violence, too, which is probably the most common dispute resolution mechanism after simple negotiation.) You may or may not be aware of this, but commerce is enormously older than states are, perhaps by a factor of ten, and a great deal of it has been conducted throughout history outside the aegis of any shared authority to whom disputes could plausibly be referred. It's true that a good dispute resolution mechanism reduces the risks of commerce, but commerce is often still worthwhile without it. Ask anybody who's worked under the table, been an illegal immigrant, rented a room illegally, or bought drugs on the street. I'm not railing against government systems in this thread. They have their good points and their bad points. Fundamentally, though, I think history has proven out Lord Acton's maxim that power corrupts, and absolute power corrupts absolutely; and, because I have seen the devastation corrupt governments can wreak, I do not think that governments should have absolute power. I especially do not think the US government should have absolute power over Russians, or that the Chinese government should have absolute power over Americans; the history of such arrangements is replete with avoidable famines and intentional genocides.
StanislavPetrov 5y ago
>Simple example - show me a method of handling reconciliation of fraud/contract dispute for bitcoin that doesn't fall back on the legal systems of those government systems you're so happy to rail against. There are some people who would much rather trust the government with total control over their money, and there are some people who would much rather take responsibility for their money even if that means the government isn't there to swoop in and save them if they are foolish enough to be swindled or entrust money to someone who defrauds them. In a free society, people would be able to choose whether to incur the risks associated with the government or the risks associated with total control over their own finances. It is very telling that adherents for government control seek to eliminate this choice at the point of a gun.
dataangel 5y ago
The fraud/contract mechanism that I remember seeing proposed years ago was always escrow (which BTC at least supports) and a third party arbiter.
- horsawlarway 5y ago
  Yes - this is exactly what the silk road did. A buyer would place enough coins into escrow with the silk road to prove he had the funds available to make the purchase, the seller would ship the goods, after receiving the goods, the buyer would unlock the coins from escrow and they would be given to the seller. The problem here, is that this effectively makes the silk road (drumroll...) a traditional bank. With the monetary controls and downsides that the folks trying to speculate on bitcoin claim they don't want. (The can freeze funds, reverse transactions, run away with your coins, etc) Further, since traditional mining is out of reach for most folks - there's no real way to avoid having to buy through an intermediary. So when you hear folks saying "Not your wallet, not your coins" ask them how they managed to get their coins in the first place, and how they avoided ever trusting an intermediary with their coins during that process (unless they literally mined them themselves, not as a pool, they're bullshitting you - they trusted an intermediary, and fraud was absolutely a possibility) I think my real point here (admittedly long winded) is that a large reason the modern banking system functions the way it does is that they've essentially been asked to handle fraud and dispute reconciliation in a world where you're not allowed to resort to rote physical violence yourself. Unfortunately, to do that they require all sorts of monetary controls (The same controls coin enthusiasts claim to hate). But those same enthusiasts don't actually have a functional solution for handling reconciliation in instances where a dispute actually occurs, outside of falling back on the legal system of a government. Some of them seem to have a mental fantasy of hiring assassins or threatening folks with either hacking or some other "dire" threat, but it's mostly bullshit - when fraud happens they run squealing to the government or they eat the loss. These folks are like a strange variation of the "prepper" crowd - they wish the world worked like it did thousands of years ago where blunt force solved problems.
  - dataangel 5y ago
    Thinking escrow services make them a central bank means you're misunderstanding a lot of things. "Central banks" control currency printing, which silk road never did. The entire point of BTC is that being algorithmically controlled. I suspect you just mean traditional banks where people have their checking and savings accounts. But you're still mistaken. Having an arbiter for the money involved in one transaction does not mean you can have all of your funds frozen. At worst you can have a bad arbiter that awards the money from one transaction unfairly. They also absolutely can not "reverse transactions" if you are paying with a transfer on chain. I think you're mixing up "escrow" where a website requires you send them your BTC and they transfer your BTC to someone else for you by moving numbers in a SQL table with actual on chain transactions. With on chain escrow the arbiter can never get the funds, only forward them or send them back.

mardifoufs 5y ago

What do you mean only point in it's history? I agree that bitcoin is mostly good for drugs but it's still being used for that as we speak. Some markets are starting to only take Monero, sure, but you can still get around with just BTC. Silk road wasn't the last dn market or even the best, not even close.

horsawlarway 5y ago
The primary use is now speculation - full stop.
- ephbit 5y ago
  The distinction between store of value and speculation is rather fuzzy IMO. Is putting money into gold for savings (because an actual savings bank account currently not only loses money in real but even in nominal terms) speculation as well?
  - invaliduser 5y ago
    Speculation: "investment in stocks, property, etc. in the hope of gain but with the risk of loss." Buying bitcoins seems to match the definition. You can buy gold as an inflationary hedge, but I don't think people would do that with bitcoin.
  - frankbreetz 5y ago
    How does a bank account lose money in nominal terms? You get paid interest
    - kragen 5y ago
      It depends on where you live. In some countries it's common for monthly fees to exceed the interest you get paid. My corporate bank account ended up in the hands of a colleciton agency that way!
    - calumetregion 5y ago
      Have you heard of negative interest rates? This is so real that it is real. Also real: the wild "insanity" that is the picture painted by the writer of this Harper's piece is also exactly the same "insanity" that is present in, well, everything that involves the US dollar. Money is so tenuous worldwide at this stage that entire central bank policy is designed so that you won't want to keep it anyway. You must spend! We really are jacked directly into the machine. It's pretty wild if you compare it to just a blip ago, historically.

kragen 5y ago

I bet you wish you hadn't spent those hundreds of bitcoin, don't you? As I said in the last post I linked, Bitcoin handles a few billion dollars a year in cross-border remittances, largely to family members in Venezuela; this suggests that it's keeping several million people alive. I hear there are still darknet markets around, too. So there are current uses as a genuine medium of exchange that are very significant. Do they amount to its primary use? I don't know. I suspect Bitcoin's primary use right now is speculation, and I wish that would settle down, because I'd really appreciate it if the money I get paid in would retain roughly the same value for weeks at a time. But perhaps the primary use of US$100 bills is cocaine trafficking; if so, what does it matter to people who are using them for other things? If the primary use of oxygen were feeding pathogenic bacteria, would you stop using oxygen? I don't think it's a problem that Bitcoin doesn't contain its own fraud or contract dispute resolution mechanisms. Neither do gold, silver, copper, or greenbacks, and they work pretty well as currencies. Last time I had a dispute about a Bitcoin transaction, I resolved it by negotiating with the person I was disputing with to find a mutually agreeable settlement, which took about an hour; failing that, theoretically I could have resorted to talking to their friends, the Mafia, or, yes, the police, but probably I would have just swallowed my losses and not done business with them again. (In theory I could also have resorted to individual violence, too, which is probably the most common dispute resolution mechanism after simple negotiation.) You may or may not be aware of this, but commerce is enormously older than states are, perhaps by a factor of ten, and a great deal of it has been conducted throughout history outside the aegis of any shared authority to whom disputes could plausibly be referred. It's true that a good dispute resolution mechanism reduces the risks of commerce, but commerce is often still worthwhile without it. Ask anybody who's worked under the table, been an illegal immigrant, rented a room illegally, or bought drugs on the street. I'm not railing against government systems in this thread. They have their good points and their bad points. Fundamentally, though, I think history has proven out Lord Acton's maxim that power corrupts, and absolute power corrupts absolutely; and, because I have seen the devastation corrupt governments can wreak, I do not think that governments should have absolute power. I especially do not think the US government should have absolute power over Russians, or that the Chinese government should have absolute power over Americans; the history of such arrangements is replete with avoidable famines and intentional genocides.

StanislavPetrov 5y ago

>Simple example - show me a method of handling reconciliation of fraud/contract dispute for bitcoin that doesn't fall back on the legal systems of those government systems you're so happy to rail against. There are some people who would much rather trust the government with total control over their money, and there are some people who would much rather take responsibility for their money even if that means the government isn't there to swoop in and save them if they are foolish enough to be swindled or entrust money to someone who defrauds them. In a free society, people would be able to choose whether to incur the risks associated with the government or the risks associated with total control over their own finances. It is very telling that adherents for government control seek to eliminate this choice at the point of a gun.

dataangel 5y ago

The fraud/contract mechanism that I remember seeing proposed years ago was always escrow (which BTC at least supports) and a third party arbiter.

horsawlarway 5y ago
Yes - this is exactly what the silk road did. A buyer would place enough coins into escrow with the silk road to prove he had the funds available to make the purchase, the seller would ship the goods, after receiving the goods, the buyer would unlock the coins from escrow and they would be given to the seller. The problem here, is that this effectively makes the silk road (drumroll...) a traditional bank. With the monetary controls and downsides that the folks trying to speculate on bitcoin claim they don't want. (The can freeze funds, reverse transactions, run away with your coins, etc) Further, since traditional mining is out of reach for most folks - there's no real way to avoid having to buy through an intermediary. So when you hear folks saying "Not your wallet, not your coins" ask them how they managed to get their coins in the first place, and how they avoided ever trusting an intermediary with their coins during that process (unless they literally mined them themselves, not as a pool, they're bullshitting you - they trusted an intermediary, and fraud was absolutely a possibility) I think my real point here (admittedly long winded) is that a large reason the modern banking system functions the way it does is that they've essentially been asked to handle fraud and dispute reconciliation in a world where you're not allowed to resort to rote physical violence yourself. Unfortunately, to do that they require all sorts of monetary controls (The same controls coin enthusiasts claim to hate). But those same enthusiasts don't actually have a functional solution for handling reconciliation in instances where a dispute actually occurs, outside of falling back on the legal system of a government. Some of them seem to have a mental fantasy of hiring assassins or threatening folks with either hacking or some other "dire" threat, but it's mostly bullshit - when fraud happens they run squealing to the government or they eat the loss. These folks are like a strange variation of the "prepper" crowd - they wish the world worked like it did thousands of years ago where blunt force solved problems.
- dataangel 5y ago
  Thinking escrow services make them a central bank means you're misunderstanding a lot of things. "Central banks" control currency printing, which silk road never did. The entire point of BTC is that being algorithmically controlled. I suspect you just mean traditional banks where people have their checking and savings accounts. But you're still mistaken. Having an arbiter for the money involved in one transaction does not mean you can have all of your funds frozen. At worst you can have a bad arbiter that awards the money from one transaction unfairly. They also absolutely can not "reverse transactions" if you are paying with a transfer on chain. I think you're mixing up "escrow" where a website requires you send them your BTC and they transfer your BTC to someone else for you by moving numbers in a SQL table with actual on chain transactions. With on chain escrow the arbiter can never get the funds, only forward them or send them back.