14 ms·

Bitcoin, The Economic Singularity: From Holland with Love

43 points by generalseven 13y ago

jdmitch 13y ago
When researchers and policymakers begin to have even an inkling of Bitcoin’s deeper significance – more than “anonymous digicash created by evil hackers to buy contraband from drug dealers” – there’s a better chance that banks and governments of the world will start to get serious about cleaning up the global mess they’ve created. Can bitcoin's unregulatable nature really provide an example for how establishment financial systems should be better regulated? Bitcoin can be an alternative, it seems, but not a "city on a hill" to fiat currencies, and their financial systems.
- betterunix 13y ago
  What makes you think Bitcoin is unregulatable?
  - deleted 13y ago
    [deleted]
  - oleganza 13y ago
    1. Politicians can't change the rules of the protocol. 2. Politicians can't print more bitcoin as they like. Only according to the protocol and in competition with others. 3. It's virtually impossible to censor Bitcoin transactions (unless you shut down the whole internet in the country).
    - betterunix 13y ago
      1. So what? Politicians also cannot change the laws of physics that govern paper money transactions, yet paper money is regulated. 2. That is not an issue of regulation. 3. The same applies to paper money, and again, paper money is regulated.
      - oleganza 13y ago
        I was just listing aspects of Bitcoin that are "unregulatable". Regulation = laws = rules = instructions to cops when to apply rubber hose. 1. Cash transactions require meeting in person. This makes people more vulnerable to meeting with rubber hose. 2. The value of your paper cash is diluted when owners of rubber hose print more of it. Bitcoin reduces these threats by more than 90%.
    - userulluipeste 13y ago
      I am sorry to break it to you, but: 1. Politicians make the rules, and the rules can dictate the seizure of the places that offer the government-free version of Bitcoin. (Well, for now the governments may not agree to cooperate on this, but the scenario has realistic prospects.) In this way the governments gets access to Bitcoin's evolution. After this, they can in time change it in wherever way they want and make it at some point incompatible with government-free versions. Mind you, that the bulk of the Bitcoin users will update their version from the most seemingly trusting source, which may be government's. 2. Don't underestimate people in this overly-motivating subject. And the motivated people can become very ingenious. 3. I am not sure if there can be a reason for censorship (a powerful actor can act in other ways against the undesired Bitcoin users), but what it is possible is to learn to filter out Bitcoin activity in particular or everything unknown in general. What is this binary stream? Encryption? Want privacy? Here's the government-provided solution that assures you (government-surveyed) privacy! ;)
- TomGullen 13y ago
  How do you think Bitcoin's unregulatable nature differs from the unregulatable nature of physical cash?
  - oleganza 13y ago
    1. Your cash can be devalued by printing more cash: http://en.wikipedia.org/wiki/Quantitative_easing http://en.wikipedia.org/wiki/Quantitative_easing 2. If you move or store cash, it can be confiscated by the police: http://www.pbs.org/newshour/bb/nation/july-dec13/assets_08-19.html http://www.pbs.org/newshour/bb/nation/july-dec13/assets_08-1... Bitcoin is impossible to "print" more than scheduled and it's much easier to transport and store safely than cash or gold.
    - i_am_dead 13y ago
      1) What about gold then? 2) The Silk Road bitcoins were confiscated by police just fine. In fact Bitcoin is in some ways easier to trace and therefore confiscate. If the cops can trace a transaction to you they just apply some rubber hose cryptography.
      - hcho 13y ago
        >1) What about gold then? It is more easily dividable than gold.
      - oleganza 13y ago
        More than 90% of gold value is speculative. This all will move to Bitcoin as it's superior by all measures. Storing and transporting gold is just way too expensive. The universe wants one money: http://blog.oleganza.com/post/54121516413/the-universe-wants-one-money http://blog.oleganza.com/post/54121516413/the-universe-wants... Rubber hose is more expensive than QE. You can steal one person's stash, but cannot steal from millions at once (well, you can, but it'll be too obvious and very expensive). Just watch zebras crossing the river infested with crocodiles. The fiat currency is when all zebras find themselves in the slaughterhouse.
innino 13y ago
What is Bitcoin's deeper significance? I don't know much, but here are some sketches. 1) Bitcoin has the potential to destroy the tools of monetary policy. 2) Bitcoin has the potential to hide taxable income from governments. 3) Governments with dwindling tax bases may react by printing traditional currency, hastening the flight to Bitcoin in a vicious cycle. 4) Traditional currencies may collapse as people rush to convert them into Bitcoin. 5) Unable to tax coercively, traditional governments may collapse. What might replace them? Toll roads and kickstarter philanthropy in Randian democracies? (Is this in the ballpark for Bitcoin's potential impact or not?)
- TomGullen 13y ago
  If we're talking about deep significance, I also think Bitcoin could be a tool to help support world peace (hear me out!) My understanding of one facet of the UN is that by promoting trade between UN nations it makes war between these nations more costly and difficult thus reducing the chance that war would break out. If correct a globally accepted and popular currency which can be freely transferred across borders between citizens of every nation could help depopularise outbreak of war between nations. You can criticise this view in many ways, but I think it's undeniable in principal that open trade between nations would serve as a barrier for initiation of war and conflict. And raising barriers against this behaviour is only a good thing.
  - userulluipeste 13y ago
    In the WW2, USA was safest place in the reasonably-developed world. If you were wealthy and had the ability to move your assets from one country to another, USA was a safe bet for you. Obviously, the movement of wealth was also convenient for the host country's government. Nowadays USA may not appear as the only good place to be, but if you understood the underlying idea of the above reasoning, you may also understand that at any moment a conflict/war can induce a differentiating factor for perception of safety. If the environment becomes risky with a war to be unleashed, you won't risk keeping your wealth in a system whose very existence is endangered, you'll move to a greener pasture. A greener pasture, preferably in a powerful country, with no risk of having a war carried out on its territory and therefore with a minimal exposure to any conflict. Those greener pastures usually are in the very countries that seek war in the first place. The war itself is a profitable business in many ways. Bitcoin makes no difference against this. Actually in the regard to world conflicts, Bitcoin carries an insulating effect. It makes you more mobile and more willing to get yourself to a safe and peaceful place to live (and spend your Bitcoins there).
oleganza 13y ago
Quote from article: > This past June Dutch Finance Minister Jeroen Dijsselbloem gave a Bitcoin-friendly report to Parliament. He said: «Bitcoin is not electronic money… At present its eventual I'mpact on the real economy seems negligible…Bitcoin is not a financial product as defined by law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply.» This is the same Dijsselbloem who said that deposit confiscation on Cyprus is not a template for similar confiscations in the rest of EU: http://www.bloomberg.com/news/2013-03-19/cypriot-bank-account-levy-unique-eurogroup-s-dijsselbloem-says.html http://www.bloomberg.com/news/2013-03-19/cypriot-bank-accoun... This is the same Dijsselbloem who said that Cyprus is a template for "haircuts" on deposits in the EU: http://www.businessinsider.com/dijsselbloem-cyprus-deal-is-a-template-2013-3 http://www.businessinsider.com/dijsselbloem-cyprus-deal-is-a... When time comes, all these guys will change their minds 180º without blinking. Fortunately, it will be too late.
snitko 13y ago
> there’s a better chance that banks and governments of the world will start to get serious about cleaning up the global mess they’ve created Never gonna happen. Bitcoin is the cleaning we need. There's absolutely no incentive for governments or banks (which are in bed with governments) to make things better for those, who are not in the club. I don't think Bitcoin's gonna wipe out the very idea of government, but it certainly has a potential to give rise to free economic zones, where no government can have its way. And their success can, in turn, convince even more people that they don't really need anyone to govern them.
- oleganza 13y ago
  But who will build the roads? We need someone to force people to do stuff in public's interest.
  - snitko 13y ago
    Where we're going we don't need roads http://www.youtube.com/watch?v=flge_rw6RG0 http://www.youtube.com/watch?v=flge_rw6RG0
    - oleganza 13y ago
      That's the best answer.
  - mattstreet 13y ago
    Require real money for things related to those services? Such as buying gasoline?
    - oleganza 13y ago
      Some economists suggest a better measure: establish a coercive currency and print it as they like to pay for public goods. Just put a gun to people's face when they don't want fiat currency and then print all you want. Very practical solution.
JonSkeptic 13y ago
The article is interesting in that it quotes Dutch Finance Minister Jeroen Dijsselbloem saying: "Bitcoin is not electronic money… At present its eventual impact on the real economy seems negligible…Bitcoin is not a financial product as defined by law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply." Then the article goes on to say: >ingredients are in place to make Amsterdam a city with a lot of Bitcoin in its future. And the article then lists a lot of the benefits of having Bitcoin as an unregulated 'local currency', aka a commodity. This is a dangerous place for Bitcoin. If it grows too much, it will be recognized as a currency and regulated. If it grows only slightly, then it will not see any real use outside of the small group that already uses it. In the latter case, people like the author of the article stand to benefit a fair amount. In the former case, people like the author of the article stand be driven out of business, or have their business model impaired, by regulation. If the point of the article was to convey that this is a golden age for Bitcoin in Holland, then it has achieved its purpose. If the point of the article was to make it seem that significant adoption of Bitcoin in Holland lay ahead, or that it would be a good thing, then it has not done so. In fact, that would be an entirely different article that would have to include more factual and historical analysis than this article even bats an eye at.
- oleganza 13y ago
  Today there are far more people who would be very interested in risking investing in Bitcoin and accepting Bitcoin for their service, than there are people who have heard of it. Every attack on any Bitcoin business brings in more people and their capital from around the world than the wealth it destroys. If Netherlands one day starts hurting Bitcoin business on big scale, it will create a resonance that will increase Bitcoin awareness and utility 10x the same year. Also, the first country that will allow Bitcoin flourish will attract such an enormous amount of capital, it will make news everywhere and it won't be that easy to shut down business anymore.
- wwwtyro 13y ago
  > If it grows too much, it will be recognized as a currency and regulated. Honest, non-rhetorical question: How? (In the sense of both the goals of the regulation and the means of enforcement.)
jqueryin 13y ago
Here's a mirror as it appears as though the site went down due to HN traffic: http://webcache.googleusercontent.com/search?q=cache:http://bitcoinmagazine.com/7725/the-economic-singularity-from-holland-with-love/ http://webcache.googleusercontent.com/search?q=cache:http://...

43 points by generalseven 13y ago

When researchers and policymakers begin to have even an inkling of Bitcoin’s deeper significance – more than “anonymous digicash created by evil hackers to buy contraband from drug dealers” – there’s a better chance that banks and governments of the world will start to get serious about cleaning up the global mess they’ve created. Can bitcoin's unregulatable nature really provide an example for how establishment financial systems should be better regulated? Bitcoin can be an alternative, it seems, but not a "city on a hill" to fiat currencies, and their financial systems.

betterunix 13y ago
What makes you think Bitcoin is unregulatable?
- deleted 13y ago
  [deleted]
- oleganza 13y ago
  1. Politicians can't change the rules of the protocol. 2. Politicians can't print more bitcoin as they like. Only according to the protocol and in competition with others. 3. It's virtually impossible to censor Bitcoin transactions (unless you shut down the whole internet in the country).
  - betterunix 13y ago
    1. So what? Politicians also cannot change the laws of physics that govern paper money transactions, yet paper money is regulated. 2. That is not an issue of regulation. 3. The same applies to paper money, and again, paper money is regulated.
    - oleganza 13y ago
      I was just listing aspects of Bitcoin that are "unregulatable". Regulation = laws = rules = instructions to cops when to apply rubber hose. 1. Cash transactions require meeting in person. This makes people more vulnerable to meeting with rubber hose. 2. The value of your paper cash is diluted when owners of rubber hose print more of it. Bitcoin reduces these threats by more than 90%.
  - userulluipeste 13y ago
    I am sorry to break it to you, but: 1. Politicians make the rules, and the rules can dictate the seizure of the places that offer the government-free version of Bitcoin. (Well, for now the governments may not agree to cooperate on this, but the scenario has realistic prospects.) In this way the governments gets access to Bitcoin's evolution. After this, they can in time change it in wherever way they want and make it at some point incompatible with government-free versions. Mind you, that the bulk of the Bitcoin users will update their version from the most seemingly trusting source, which may be government's. 2. Don't underestimate people in this overly-motivating subject. And the motivated people can become very ingenious. 3. I am not sure if there can be a reason for censorship (a powerful actor can act in other ways against the undesired Bitcoin users), but what it is possible is to learn to filter out Bitcoin activity in particular or everything unknown in general. What is this binary stream? Encryption? Want privacy? Here's the government-provided solution that assures you (government-surveyed) privacy! ;)
TomGullen 13y ago
How do you think Bitcoin's unregulatable nature differs from the unregulatable nature of physical cash?
- oleganza 13y ago
  1. Your cash can be devalued by printing more cash: http://en.wikipedia.org/wiki/Quantitative_easing http://en.wikipedia.org/wiki/Quantitative_easing 2. If you move or store cash, it can be confiscated by the police: http://www.pbs.org/newshour/bb/nation/july-dec13/assets_08-19.html http://www.pbs.org/newshour/bb/nation/july-dec13/assets_08-1... Bitcoin is impossible to "print" more than scheduled and it's much easier to transport and store safely than cash or gold.
  - i_am_dead 13y ago
    1) What about gold then? 2) The Silk Road bitcoins were confiscated by police just fine. In fact Bitcoin is in some ways easier to trace and therefore confiscate. If the cops can trace a transaction to you they just apply some rubber hose cryptography.
    - hcho 13y ago
      >1) What about gold then? It is more easily dividable than gold.
    - oleganza 13y ago
      More than 90% of gold value is speculative. This all will move to Bitcoin as it's superior by all measures. Storing and transporting gold is just way too expensive. The universe wants one money: http://blog.oleganza.com/post/54121516413/the-universe-wants-one-money http://blog.oleganza.com/post/54121516413/the-universe-wants... Rubber hose is more expensive than QE. You can steal one person's stash, but cannot steal from millions at once (well, you can, but it'll be too obvious and very expensive). Just watch zebras crossing the river infested with crocodiles. The fiat currency is when all zebras find themselves in the slaughterhouse.

innino 13y ago

What is Bitcoin's deeper significance? I don't know much, but here are some sketches. 1) Bitcoin has the potential to destroy the tools of monetary policy. 2) Bitcoin has the potential to hide taxable income from governments. 3) Governments with dwindling tax bases may react by printing traditional currency, hastening the flight to Bitcoin in a vicious cycle. 4) Traditional currencies may collapse as people rush to convert them into Bitcoin. 5) Unable to tax coercively, traditional governments may collapse. What might replace them? Toll roads and kickstarter philanthropy in Randian democracies? (Is this in the ballpark for Bitcoin's potential impact or not?)

TomGullen 13y ago
If we're talking about deep significance, I also think Bitcoin could be a tool to help support world peace (hear me out!) My understanding of one facet of the UN is that by promoting trade between UN nations it makes war between these nations more costly and difficult thus reducing the chance that war would break out. If correct a globally accepted and popular currency which can be freely transferred across borders between citizens of every nation could help depopularise outbreak of war between nations. You can criticise this view in many ways, but I think it's undeniable in principal that open trade between nations would serve as a barrier for initiation of war and conflict. And raising barriers against this behaviour is only a good thing.
- userulluipeste 13y ago
  In the WW2, USA was safest place in the reasonably-developed world. If you were wealthy and had the ability to move your assets from one country to another, USA was a safe bet for you. Obviously, the movement of wealth was also convenient for the host country's government. Nowadays USA may not appear as the only good place to be, but if you understood the underlying idea of the above reasoning, you may also understand that at any moment a conflict/war can induce a differentiating factor for perception of safety. If the environment becomes risky with a war to be unleashed, you won't risk keeping your wealth in a system whose very existence is endangered, you'll move to a greener pasture. A greener pasture, preferably in a powerful country, with no risk of having a war carried out on its territory and therefore with a minimal exposure to any conflict. Those greener pastures usually are in the very countries that seek war in the first place. The war itself is a profitable business in many ways. Bitcoin makes no difference against this. Actually in the regard to world conflicts, Bitcoin carries an insulating effect. It makes you more mobile and more willing to get yourself to a safe and peaceful place to live (and spend your Bitcoins there).

oleganza 13y ago

Quote from article: > This past June Dutch Finance Minister Jeroen Dijsselbloem gave a Bitcoin-friendly report to Parliament. He said: «Bitcoin is not electronic money… At present its eventual I'mpact on the real economy seems negligible…Bitcoin is not a financial product as defined by law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply.» This is the same Dijsselbloem who said that deposit confiscation on Cyprus is not a template for similar confiscations in the rest of EU: http://www.bloomberg.com/news/2013-03-19/cypriot-bank-account-levy-unique-eurogroup-s-dijsselbloem-says.html http://www.bloomberg.com/news/2013-03-19/cypriot-bank-accoun... This is the same Dijsselbloem who said that Cyprus is a template for "haircuts" on deposits in the EU: http://www.businessinsider.com/dijsselbloem-cyprus-deal-is-a-template-2013-3 http://www.businessinsider.com/dijsselbloem-cyprus-deal-is-a... When time comes, all these guys will change their minds 180º without blinking. Fortunately, it will be too late.

snitko 13y ago

> there’s a better chance that banks and governments of the world will start to get serious about cleaning up the global mess they’ve created Never gonna happen. Bitcoin is the cleaning we need. There's absolutely no incentive for governments or banks (which are in bed with governments) to make things better for those, who are not in the club. I don't think Bitcoin's gonna wipe out the very idea of government, but it certainly has a potential to give rise to free economic zones, where no government can have its way. And their success can, in turn, convince even more people that they don't really need anyone to govern them.

oleganza 13y ago
But who will build the roads? We need someone to force people to do stuff in public's interest.
- snitko 13y ago
  Where we're going we don't need roads http://www.youtube.com/watch?v=flge_rw6RG0 http://www.youtube.com/watch?v=flge_rw6RG0
  - oleganza 13y ago
    That's the best answer.
- mattstreet 13y ago
  Require real money for things related to those services? Such as buying gasoline?
  - oleganza 13y ago
    Some economists suggest a better measure: establish a coercive currency and print it as they like to pay for public goods. Just put a gun to people's face when they don't want fiat currency and then print all you want. Very practical solution.

JonSkeptic 13y ago

The article is interesting in that it quotes Dutch Finance Minister Jeroen Dijsselbloem saying: "Bitcoin is not electronic money… At present its eventual impact on the real economy seems negligible…Bitcoin is not a financial product as defined by law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply." Then the article goes on to say: >ingredients are in place to make Amsterdam a city with a lot of Bitcoin in its future. And the article then lists a lot of the benefits of having Bitcoin as an unregulated 'local currency', aka a commodity. This is a dangerous place for Bitcoin. If it grows too much, it will be recognized as a currency and regulated. If it grows only slightly, then it will not see any real use outside of the small group that already uses it. In the latter case, people like the author of the article stand to benefit a fair amount. In the former case, people like the author of the article stand be driven out of business, or have their business model impaired, by regulation. If the point of the article was to convey that this is a golden age for Bitcoin in Holland, then it has achieved its purpose. If the point of the article was to make it seem that significant adoption of Bitcoin in Holland lay ahead, or that it would be a good thing, then it has not done so. In fact, that would be an entirely different article that would have to include more factual and historical analysis than this article even bats an eye at.

oleganza 13y ago
Today there are far more people who would be very interested in risking investing in Bitcoin and accepting Bitcoin for their service, than there are people who have heard of it. Every attack on any Bitcoin business brings in more people and their capital from around the world than the wealth it destroys. If Netherlands one day starts hurting Bitcoin business on big scale, it will create a resonance that will increase Bitcoin awareness and utility 10x the same year. Also, the first country that will allow Bitcoin flourish will attract such an enormous amount of capital, it will make news everywhere and it won't be that easy to shut down business anymore.
wwwtyro 13y ago
> If it grows too much, it will be recognized as a currency and regulated. Honest, non-rhetorical question: How? (In the sense of both the goals of the regulation and the means of enforcement.)

jqueryin 13y ago

Here's a mirror as it appears as though the site went down due to HN traffic: http://webcache.googleusercontent.com/search?q=cache:http://bitcoinmagazine.com/7725/the-economic-singularity-from-holland-with-love/ http://webcache.googleusercontent.com/search?q=cache:http://...