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While I haven't completely read through this entire essay I do have a small observation: I find it fascinating how much distrust for Government and banking sys

While I haven't completely read through this entire essay I do have a small observation: I find it fascinating how much distrust for Government and banking systems fuels your passion for Bitcoin. So long as capitalism exists in its current state currency will just be an instrument of capitalism's will. Whether that be Bitcoin, USD or Disney Dollars. Capitalism is what inspires transaction fees, denying health insurance requests, taking away someones house, poverty, planned obsolescence, etc. I feel your fire is being pointed at the wrong direction. That maybe your beef is with capitalism and not whether we use semi-anonymous block chains or pieces of green paper.

guylhem 14y ago
I have a beef, but with inefficiency due to wilful stupidity. You could be right- there was even a well written essay I read about how governments could try and turn bitcoin into an oppressive financial system, due to the ease it provides to track every transaction. Maybe I'll have a beef with capitalism if, after the implementation of a system which trims down what I perceive to be a self-made problem (inflation fuelling governments destructive policies), I still notice persisting issues. I can't say for now. The experiment is just beginning :-) I hope I do not have any blinding faith in any political system. It just seems to me that capitalism is what works best, and could work better with a libertarian approach. Just like Thomas Sowel says - I don't have faith, but proofs. (Still, this doesn't mean there can't be better proofs or better things we just don't know yet.) So I would not say I hate the banking system, no more than I hate horse buggies : it just seems to me that cars are more efficient. I would hate it if horse buggies were mandatory and cars forbidden, because it would be a loss of efficiency for society. The current banking system performs an important role, in an efficient way, but it will hopefully made obsolete and replaced by something more efficient. It is likely that governments and capitalism will still be involved, but between governments and capitalism, I know what I fear the most. It's not the self interested capitalists who acts following their best interests, doing things as you said, like taking away someones houses, but the governments who takes a "moral superiority" position, use their power to benefit some well connected ones, pretend to act in the common good and violating both the letter and the spirit of the law - all the while doing the very same things. At least the capitalist doing these things is honest in the reasons why they are done. And the "good ones", Ayn Rand style capitalist, do worry about the letter and the spirit of the laws and of a contract. She said that beautifully : "I am not primarily an advocate of capitalism, but of egoism; and I am not primarily an advocate of egoism, but of reason. If one recognizes the supremacy of reason and applies it consistently, all the rest follows."
- pjzedalis 14y ago
  What you call inefficiency others call profit. The more times money moves around the more money others stand to gain. The economy as a whole does well when moving between parties at a consistent rate. Eliminating the inefficient transaction doesn't just hurt profit. It hurts the very core of how our economic models currently work. That being said Bitcoin is currently no threat to that system. It's hard to imagine it ever being honestly.
  - guylhem 14y ago
    I'm not sure I understand your point. It seems inconsistent with walrasian pure and perfect competition, where profits tend to zero and the optimal outcomes are achieved. Eliminating the inefficiencies, ie profit in pure and perfect competition, is the way the system works - non null profits attract new businesses. That's basic economics, with very special edge cases (ex - natural monopolices) I'm not sure exactly why or how economy as a whole would do better with more inefficiencies at each point, and money moving more as you suggest. Are you referring to the equation of the velocity of money (MV=PQ) ? It says nothing about how desirable the outcome is (ex: broken window fallacy)
    - parasubvert 14y ago
      Pure and perfect competition has never existed in the real world, however - it's a theoretical modeling tool to remove complexities when describing interactions. The real world has to deal with asymmetric information and product differentiation. In other words, price is not the only signal driving supply and demand. It also has to deal with the dynamic disequilibrium that is caused by entrepreneurship and innovation, which "creatively destroys" previous markets in favor of new ones. It is this process that is the source of all profit and economic growth, at least according to Schumpeter.
    - pjzedalis 14y ago
      Banks don't really want to be more efficient and charge less fees. Banks are essential to any system (capitalism) that requires a currency. Nobody would want to be a bank if they could not charge fees. No bank would offer loans or any kind of securities without some backing and protections. Since Bitcoin is finite, semi-anonymous and not backed by a central bank or government banks will never have those protections. So instruments that are essential to our economy like car loans, mortgages, etc. will not be possible. Does anybody really want that?

guylhem 14y ago

I have a beef, but with inefficiency due to wilful stupidity. You could be right- there was even a well written essay I read about how governments could try and turn bitcoin into an oppressive financial system, due to the ease it provides to track every transaction. Maybe I'll have a beef with capitalism if, after the implementation of a system which trims down what I perceive to be a self-made problem (inflation fuelling governments destructive policies), I still notice persisting issues. I can't say for now. The experiment is just beginning :-) I hope I do not have any blinding faith in any political system. It just seems to me that capitalism is what works best, and could work better with a libertarian approach. Just like Thomas Sowel says - I don't have faith, but proofs. (Still, this doesn't mean there can't be better proofs or better things we just don't know yet.) So I would not say I hate the banking system, no more than I hate horse buggies : it just seems to me that cars are more efficient. I would hate it if horse buggies were mandatory and cars forbidden, because it would be a loss of efficiency for society. The current banking system performs an important role, in an efficient way, but it will hopefully made obsolete and replaced by something more efficient. It is likely that governments and capitalism will still be involved, but between governments and capitalism, I know what I fear the most. It's not the self interested capitalists who acts following their best interests, doing things as you said, like taking away someones houses, but the governments who takes a "moral superiority" position, use their power to benefit some well connected ones, pretend to act in the common good and violating both the letter and the spirit of the law - all the while doing the very same things. At least the capitalist doing these things is honest in the reasons why they are done. And the "good ones", Ayn Rand style capitalist, do worry about the letter and the spirit of the laws and of a contract. She said that beautifully : "I am not primarily an advocate of capitalism, but of egoism; and I am not primarily an advocate of egoism, but of reason. If one recognizes the supremacy of reason and applies it consistently, all the rest follows."

pjzedalis 14y ago
What you call inefficiency others call profit. The more times money moves around the more money others stand to gain. The economy as a whole does well when moving between parties at a consistent rate. Eliminating the inefficient transaction doesn't just hurt profit. It hurts the very core of how our economic models currently work. That being said Bitcoin is currently no threat to that system. It's hard to imagine it ever being honestly.
- guylhem 14y ago
  I'm not sure I understand your point. It seems inconsistent with walrasian pure and perfect competition, where profits tend to zero and the optimal outcomes are achieved. Eliminating the inefficiencies, ie profit in pure and perfect competition, is the way the system works - non null profits attract new businesses. That's basic economics, with very special edge cases (ex - natural monopolices) I'm not sure exactly why or how economy as a whole would do better with more inefficiencies at each point, and money moving more as you suggest. Are you referring to the equation of the velocity of money (MV=PQ) ? It says nothing about how desirable the outcome is (ex: broken window fallacy)
  - parasubvert 14y ago
    Pure and perfect competition has never existed in the real world, however - it's a theoretical modeling tool to remove complexities when describing interactions. The real world has to deal with asymmetric information and product differentiation. In other words, price is not the only signal driving supply and demand. It also has to deal with the dynamic disequilibrium that is caused by entrepreneurship and innovation, which "creatively destroys" previous markets in favor of new ones. It is this process that is the source of all profit and economic growth, at least according to Schumpeter.
  - pjzedalis 14y ago
    Banks don't really want to be more efficient and charge less fees. Banks are essential to any system (capitalism) that requires a currency. Nobody would want to be a bank if they could not charge fees. No bank would offer loans or any kind of securities without some backing and protections. Since Bitcoin is finite, semi-anonymous and not backed by a central bank or government banks will never have those protections. So instruments that are essential to our economy like car loans, mortgages, etc. will not be possible. Does anybody really want that?