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Cryptocurrency is, in a sense, a bottom-up tool against top-down state control of a finance system. This is not strictly a good or a bad thing; just a thing. I
by derefr 3y ago
Cryptocurrency is, in a sense, a bottom-up tool against top-down state control of a finance system. This is not strictly a good or a bad thing; just a thing.
If the people of a country have a "common law" underlying their bottom-up interactions, that already works on its own as a basis for a productive and growing economy — but a totalitarian state has imposed top-down laws that interfere with that productive economy — then crypto will help "route around" that totalitarian state, and thereby help the economy.
If the people of a country include a large criminal element that would forcefully put themselves in the position of rentier middleman, extracting all margin from interactions in the economy for themselves and so starving the country of growth capital — and the state has imposed top-down laws that interfere with that rent-extraction, in an attempt to get the economy going in the right direction — then crypto will help "route around" that well-meaning state, and thereby reinforce the criminal capture of the economy.
- timeagain 3y ago> If the people of a country include a large criminal element that would forcefully put themselves in the position of rentier middleman, extracting all margin from interactions in the economy for themselves and so starving the country of growth capital Isn’t this the business plan of every failed/fraudulent crypto exchange?
- eniotna 3y agoKeyword here is "forcefully", when you use an exchange, you willingly do so.
- derefr 3y agoI mean "forcefully" literally. You voluntarily enter into a relationship with Uber, AirBnB, etc; and other companies can enter the same market. You don't voluntarily enter into a relationship with the guy who comes into your shop demanding protection money. Nor with the gang who corners the market for e.g. bananas, by "negotiating" with both the producers and the large commercial buyers at gunpoint.
- klntsky 3y ago> then crypto will help "route around" that well-meaning state, and thereby reinforce the criminal capture of the economy. How is it possible that these rent-extracting middlemen (whatever it means, mafia?) can _not_ be in control of the state long term? If they capture the profits that power the state in the end, wouldn't it be correct to describe it as a state-in-another-state, state-in-transition or just two-competing-states situation? Crypto seemingly helps with both mafia and the govt for an ordinary user, cause they both have similar powers when it comes to control of crypto txs (almost zero).
- derefr 3y ago> Crypto seemingly helps with both mafia and the govt Crypto never helps the state (in isolaton†); insofar as part of a state's responsibilities include issuing and controlling a fiat currency, setting import/export controls for that currency, etc., then the existence of crypto only serves to interfere with state control. Crypto helps a criminal gang insofar as it helps it evade state control over e.g. moving large amounts of wealth into/out of the country. Consider for a moment: when Pablo Escobar was selling billions of dollars of drugs, it was just as much of a logistical challenge to move the money while avoiding state interception, as it was to move the drugs. Crypto completely obviates that logistical challenge. > How is it possible that these rent-extracting middlemen (whatever it means, mafia?) can _not_ be in control of the state long term? Because the country as a whole is small, and other nations do not recognize the legitimacy of the criminal-gang-as-state and will continually help the citizens of the country to take down the criminal gangs whenever they rise close to that level of power. Also because the gangs just don't have popular support. Ruling by fear can work if your economy is based on resource extraction and that resource extraction can be mostly automated; but it doesn't work at all if your economy relies on productive bottom-up trade interactions between citizens. The gang only had something to exploit insofar as there was still a slightly-productive economy for it to parasitize; if it manages to capture the entire economy, then at that exact point, that economy is dead, and there is nothing more to extract. (But really, you don't need a theory behind it, you can just see that it doesn't happen in practice. Venezuela never became a true kleptocracy; Haiti still isn't a kleptocracy; etc.) --- † Western countries have adopted a policy of not doing much to interfere with the growth of crypto. This is realpolitik. Crypto most interferes with states that try to most-heavily manipulate their financial system. Right now, those states it most interferes with, are states that Western countries want to economically hobble, lest they end up at war with them. The US, for example, is very happy to see Chinese capital flight to US investments, enabled via crypto despite China's best efforts.
- acdha 3y ago> a totalitarian state has imposed top-down laws that interfere with that productive economy — then crypto will help "route around" that totalitarian state, and thereby help the economy. I don’t think this fits the technology: blockchains are perfect for totalitarian states since they prevent anyone from hiding from the tax collectors and police. The only way it helps is if the government is too weak to enforce its laws, at which point that’s probably the least of your concerns.
- klntsky 3y ago> prevent anyone from hiding from the tax collectors and police Only if you use chains with traceable transactions.
- v-erne 3y agoI did not know this is possible - can You give an example of blockchain with this property?
- acdha 3y agoYou also have to only buy things available purely on that system from people you are certain don’t collaborate with the government. If all of those assumptions aren’t true, your activity can be tracked with increasing precision and the authorities will see local transactions which you can’t explain otherwise and demand explanations. The schemes Zcash and Monero use have never been tested at scale with a sophisticated adversary. The statistical methods used are probably fine for keeping your friends from knowing what you buy but it’s less clear that a government which can observe network traffic and receive KYC data from compliant merchants or compromised devices won’t be able to rule out some of the decoys over time, and since it’s a blockchain you’re gambling that this will hold true forever.
- J_Shelby_J 3y agoThose of us fortunate to live within a, mostly, good economic system don’t need cryptocurrency. I don’t have a problem saying that. But I also have the imagination to wonder if it will always be the case. And the empathy to understand that not every human is as fortunate as myself. People making broad statements about a technology seem to do so only from their current perspective. “Crypto is useless” for example, really means: “crypto is useless to me.”
- troupo 3y agoI've lived in both a bad economy and a good economy. Having your money in USD is always a safer bet in bad economies. > “Crypto is useless” for example, really means: “crypto is useless to me.” No. It means "crypto is useless for every single use case it's advertised as a solution for except illegal money transfers, and even then the number of caveats is as long as the equator"
- landemva 3y agoNobody can steal my crypto, I don't need a physical vault for gold coins, and I can buy stuff around the world in minutes. Am in North America.
- reducesuffering 3y agoYou sure? Bitcoin Core dev lost all his 200 BTC crypto via hack... Hope you understand bitcoin security better than him. https://cointelegraph.com/news/bitcoin-core-developer-claims-to-have-lost-200-btc-in-hack https://cointelegraph.com/news/bitcoin-core-developer-claims...
- landemva 3y agoReally like how the whataboutism adds useful thoughts. That guy claimed his cloud VM was compromised. Few would consider that to be a secure way to keep a secret, and it could be a boating accident story. Boating accidents do happen.