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Why I want Bitcoin to die in a fire

• tokenadult 13y ago
  Charlie Stross writes in the article kindly submitted here: "Bitcoin violates Gresham's law: Stolen electricity will drive out honest mining. (So the greatest benefits accrue to the most ruthless criminals.)" I try to follow most of the Bitcoin threads here on HN, but I've missed that argument before. It makes sense that mining-by-theft will eventually displace mining-by-buying-hardware, and that is indeed not a behavior to encourage by the incentives of Bitcoin. "Moreover, The Gini coefficient of the Bitcoin economy is ghastly, and getting worse, to an extent that makes a sub-Saharan African kleptocracy look like a socialist utopia" is an argument that tests people's commitment to neutral principles. If you don't like badly skewed differences in wealth, I suppose you wouldn't like badly skewed ownership of Bitcoin. Or do you like that anyway, as long as you have more Bitcoin than the other guy?
  • gst 13y ago
    Technology doesn't move backwards in time. Or in other words: As long as there isn't (from a technical point of view) a better thing than Bitcoin (for all of its current use cases) Bitcoin won't die.
    • tokenadult 13y ago
      Or in other words: As long as there isn't (from a technical point of view) a better thing than Bitcoin (for all of its current use cases) Bitcoin won't die. I've studied the history of technology formally as part of my undergraduate education, and there is no such general principle of how technologies are adopted in a society. Bitcoin could quite readily die. Whether it will or not remains to be seen, but people betting real money that Bitcoin will not die are best advised to diversify their investments.
    • stephencanon 13y ago
      Actual money is "a better thing than Bitcoin for all of its current uses" other than speculation (for which we have tulips) and crypto-anarchist fetishism (for which no better solution is available). Bitcoin may someday be better than existing currencies for some of the tasks we use them for, but it isn't yet.
      • sanxiyn 13y ago
        Personally I think http://www.reddit.com/r/Bitcoin/comments/1mavh9/trustless_bitcoin_bounty_for_sha1_sha256_etc/ http://www.reddit.com/r/Bitcoin/comments/1mavh9/trustless_bi... is pretty cool. I am not aware of other systems which can do that.
      • baddox 13y ago
        That's factually incorrect. For example, several months ago I was owed some money (around 500 USD) by a friend, and we decided to exchange the funds via Bitcoin, not for speculation or your delightfully pejorative "crypto-anarchist fetishism," but because it was by far the easiest and fastest way for us to do so. Cue your reply, justifying your original universal quantification by retroactively redefining it with new exceptions.
        • revdinosaur 13y ago
          I think the argument against your anecdote is that it was the best solution for you--no doubt a technologically literate person who has confidence in their mental model of what bitcoin is. For the general populace, it's a distant novelty still which reduces its general practicality greatly.
          • gst 13y ago
            It doesn't need to work for the "general populace". As long as it's useful to a small set of people it will be used by this small set of people.
            • revdinosaur 13y ago
    • smacktoward 13y ago
      Of course it does; or it can, at least. We invented SSTs but still plod about on sub-sonic airliners, for instance. The key isn't whether a particular technology is the latest and greatest, it's whether it's the latest and greatest that can economically be used.
  • AndrewDucker 13y ago
    "It makes sense that mining-by-theft will eventually displace mining-by-buying-hardware" I don't really understand why - if something is legal, and there are legal reasons to invest in it, then generally legal investment has been higher than illegal investment. Sure, some people will use malware to mine, but they won't be doing so with ASICs, so it won't bring in much money. So we're talking about people doing it with _actually_ stolen electricity, and you'd hope that the electricity companies were good at spotting that nowadays...
    • awjr 13y ago
      Well most illegally grown marijuana uses large amounts of stolen electricity (absolute control of temperature and lighting is a must to get the highest yield). I'm guessing it would not be profitable to grow it otherwise (or not as profitable). Similar issues will affect Bitcoin mining in the long run however I expect this to be more something that is achieved through mining bots and not through setting up server farms in houses with diverted electrical trunking. As to electricity companies finding out, the issue here is that the 'noise' from loss of electricity in the network masks a specific house consuming huge amounts of electricity. I'm guessing there must be some sort of profiling going on to determine if an occupied house is using too little electricity.
      • wrongc0ntinent 13y ago
        >> most illegally grown marijuana uses large amounts of stolen electricity Source? Reasoning?
        • walshemj 13y ago
          pretty much any report of a cannabis farm getting busted and ofgem (the Uk electricity regulator) estimated that a third of the stolen electricity is used for this purpose http://www.mirror.co.uk/news/weird-news/cannabis-farms-responsible-third-electricity-2022730 http://www.mirror.co.uk/news/weird-news/cannabis-farms-respo...
        • DanBC 13y ago
  • makomk 13y ago
    The part about stolen electricity is not actually true, though, at least the way it's justified there. The paper argues that botnets will drive out honest mining, but at this point they can't can't because custom-made hardware is so much faster at mining than general PCs. The current global hashrate is currently about 10 petahashes/sec and your average computer can manage around 10 megahashes/sec. Doing the maths, in order to achieve that through a botnet and drive out all honest mining you'd need a billion computers - that's roughly every PC in the world, running 24/7! (Computers with high-end AMD cards can do better - up to 1.2 gigahashes/sec on AMD's top-of-the-range card but they're also a lot rarer so shouldn't drive up the average much.)
    • cscheid 13y ago
      You don't need to drive out all honest mining. All you need is not to have to pay for any costs. The issue he's pointing out is that the rational, amoral actor will have to decide between a saturated market of ASICs with extremely long time to ROI, and a quick buck off of grandma's draining laptop battery.
      • nathas 13y ago
        The problem is that the difficult rate increases based on the hashing power put into the network, and the reward for mining is cut in half as more coins are mined until there are none left. http://www.bitcoindifficulty.com/ http://www.bitcoindifficulty.com/ You'd need a LOT of regular PCs to match even one simple asic. A butterfly lab's jalapeno does ~5 gigahash/sec. You'd have to infest 500 decent PCs to achieve that, and then wait about a month for about a tenth of a bitcoin. So to get 1 btc in a month, you'd need to infect 5k PCs without them noticing that "damn, my machine is really pegged" and "golly, this laptop is awfully hot and my battery dies really fast...". It has happened, but realistically you could just buy a miner and be done with it. https://krebsonsecurity.com/2013/07/botcoin-bitcoin-mining-by-botnet/ https://krebsonsecurity.com/2013/07/botcoin-bitcoin-mining-b... They were able to get ~240 machines, at a time when CPU mining was making them ~$350/day. Decent, but worth all the time to write the software and distribute it? Eh, probably not.
  • jessaustin 13y ago
    ...The Gini coefficient of the Bitcoin economy... Is this a thing? I mean, there are all sorts of fungible assets floating around the world, but I've never heard anyone talk about e.g. "the molybdenum economy" or "the Gini coefficient of the hard red winter wheat economy". Aren't economies usually located in actual places?
    • Jtsummers 13y ago
      If bitcoin becomes a currency and not a commodity, it will matter to a lot of people. Wheat and molybdenum are not currencies or used as currencies (certainly not at any large scale) so speaking of their "economies" is a nonsensical statement. > Aren't economies usually located in actual places? We have a global economy, and bitcoin advocates seem (or used to) interested in establishing BTC as a global currency with its own markets for buying and selling a variety of goods.
    • deleted 13y ago
      [deleted]
    • rahimnathwani 13y ago
      The reason it sounds strange to talk about 'the Gini coefficient of the Bitcoin economy' is that the Gini coefficient is usually used as a measure of income (or sometimes wealth) distribution among a _population_. As your comment suggests, those populations are usually defined by being located 'in actual places'. However, they could equally be defined by some demographic factor. You could look at the Gini coefficient of income for people with blue eyes. However, I don't see the sense in singling out just a single asset or asset class, and looking at its distribution among the whole human population of the earth UNLESS the total value of that asset is some large %%% of the total assets in the world.
    • metaphorm 13y ago
      Gini coefficient is applicable because bitcoin is a currency (or aspires to be one anyway). Sometimes commodities become money-ish, for a short time period, but they don't generally aspire to permanent status as currency.
    • gwern 13y ago
  • jagermo 13y ago
    Thanks, done.
  • rayiner 13y ago
    I don't know why so many people are in love with the idea of deflationary nature of bitcoin. Consider one important asset in the world that shares the key feature with Bitcoin that there is a fixed amount of it: land. If you look out at the world, land possession is not just unequal, but also exhibits extremely low turnover. In Britain, 0.6% of the population owns 69% of all the inhabited land in the country, and they come mostly from the same families that owned the country in 1872 (the last time a major survey of land ownership was performed): http://www.independent.co.uk/voices/commentators/johann-hari/britains-land-is-still-owned-by-an-aristocratic-elite--but-it-doesnt-have-to-be-this-way-483131.html http://www.independent.co.uk/voices/commentators/johann-hari.... If you look at say Manhattan, you see the same phenomenon. All the land is owned by old people and established families. It's a place where kids have to be much more successful than their parents to be able to afford to buy property in the same place. Who can take a look at the deflationary nature of land, and think "gee, I'd like everything to be like this!"
    • sanskritabelt 13y ago
      """Who can take a look at the deflationary nature of land, and think "gee, I'd like everything to be like this!"""" People who think they're going to come out on the long end of the stick.
    • beat 13y ago
      Interesting point on deflation... the 2008 economic collapse was marked by a brief moment of deflation. Just little deflation nearly destroyed the world economy. A preference for deflationary models is one of the reasons I don't take libertarian economics seriously.
      • cbr 13y ago
        Just little deflation nearly destroyed the world economy I don't think you can interpret the causation as going that direction.
        • squozzer 13y ago
          In simpler English it wasn't the deflation that nearly destroyed the world economy, it was the near-destruction of the world economy that triggered the deflation.
  • Perceval 13y ago
    > Charlie Stross writes in the article kindly submitted here: "Bitcoin violates Gresham's law: Stolen electricity will drive out honest mining. (So the greatest benefits accrue to the most ruthless criminals.)" I try to follow most of the Bitcoin threads here on HN, but I've missed that argument before. You've missed this argument because it's an awful argument. It's a misunderstanding and misapplication of Gresham's law. It seems like the author simply wanted to use the phrase "bad X drives out good X" without bothering to understand what Gresham's law actually applies to. Even if the greatest benefits of mining accrue to botnet operators, that doesn't affect the incentives faced by other individuals or groups weighing whether or not to invest in mining rigs. The incentives are: are the fixed cost of hardware and variable costs of power and labor outweighed by the value of the bitcoins mined. Does not matter what other miners are doing. Because of the fixed supply of bitcoins and the increasing difficulty, botnets may have an advantage. However, because bitcoin is deflationary, the rising price of an increasingly supply-constrained asset might offset the diminishing returns. That's a risk investors are going to have to weigh. But that still isn't a case of Gresham's law.
• AndrewDucker 13y ago
  I wonder what Bitcoin reward halving will do when it next happens (2016). It should certainly make it much less worth investing in as much electricity, and should thus bring down the carbon footprint.
  • kahoon 13y ago
    When Charles Stross is talking about "carbon footprint" he ignores the not even comparable amount of resources that the current world wide banking infrastructure devours.
    • vkou 13y ago
      The banking infrastrucutre devours resources, and provides liquidity. What you should compare the carbon footprint of BTC with the carbon footprint of mints and treasuries.
    • VMG 13y ago
      I like to compare it to gold mining
      • deleted 13y ago
        [deleted]
  • Jtsummers 13y ago
    If the BTC reward drops too low the fees will start going up. As long as they're able to collect sufficient fees I wouldn't expect the number of miners to decrease.
  • maxerickson 13y ago
    It depends on whether mining activity has saturated the reward by then. (current hardware seems to still be returning more than 10x the electricity cost, based on squinting at http://minr.info/ http://minr.info/ Edit: And that is after the price drop.)
• mrfusion 13y ago
  I'd be curious to know if any of the altcoins have tried creating an inflationary currency? I guess you'd still need some kind of reward for early adaptors though?
  • kahoon 13y ago
    Peercoin is such an example with an inflation rate planned to be 1% per year.
    • gnaritas 13y ago
      Yea but it's long term deflationary as well, the destruction of fees alone will probably match the 1% inflation thus eliminating it and growth in popularity would push it negative.
    • dlsx 13y ago
      Dogecoin has the fastest rate of adoption, what are you guys doing sitting here holding your dicks? Don't miss the boat!
  • jessaustin 13y ago
    I don't see the point of the deflation "criticism". Bitcoins are effectively infinitely divisible, and if deflation raged long and hard enough to get to the limits of BTC precision, the protocol could simply be modified to add more precision.
    • Nursie 13y ago
      Sooooo very many times this has been addressed. Deflation is not bad because you can't divide currency any further. It's bad because it encourages the hoarding of cash, discourages lending, investment and spending, and it rewards effort yesterday more than effort today. The "but we can subdivide!" is not an answer.
      • jessaustin 13y ago
        Have you ever seen an actual economist say this? I have a feeling Stross got his economy degree from a cereal box. Bitcoin is not the first asset in history to appreciate. Why haven't the wild swings we've seen in gold, oil, pork bellies, etc. had the horrible results you predict? "Deflation" doesn't even relate to assets people aren't forced by law or other circumstances to use for regular commerce. For normal, non-currency assets like that, we say "appreciation" instead of "deflation". If 6 billion people decided to "hoard" BTC tomorrow, I guarantee there would be plenty of dollars/rubles/whatever available for investment, lending, and spending. Honestly the hoarding argument is dumber than the precision argument, so I tried to give Stross the benefit of the doubt.
• donquichotte 13y ago
  To me, the greatest revelation in this article was the Gini coefficient of bitcoin, which, according to the author, " makes a sub-Saharan African kleptocracy look like a socialist utopia". https://bitcointalk.org/index.php?topic=51011.0 https://bitcointalk.org/index.php?topic=51011.0 EDIT: Plot of the wealth distribution in bitcoin: http://postimg.org/image/hzjmgepa3/ http://postimg.org/image/hzjmgepa3/
  • gwern 13y ago
    This pseudo-Gini is meaningless, since addresses!=people. It is perfectly possible for the pseudo-Gini to increase even as the real Gini decreases: simply have Bitcoin further democratize and the new users keep their coins in convenient web wallets! Since web wallet services tend to consolidate their coins onto a very few addresses for their own convenience.
    • FatalLogic 13y ago
      >This pseudo-Gini is meaningless, since addresses!=people. It is meaningless but not really for that reason. The estimation of Gini Coefficient that Charlie Stross links was calculated by the Bitcoinica exchange from their client list. It's meaningless because it was calculated in 2011, when the number of Bitcoin owners and users was a tiny fraction of the current figure, and the network was less than 2 years old and practically unknown to the wider world. He first cites that out-of-date estimate, and then claims that it is getting worse, without providing evidence for that claim.
  • jrells 13y ago
    Comparing the Gini coefficient of wealth in a country to the Gini coefficient of bitcoin is comparing apples to nonsense. Addresses aren't people and bitcoin wealth is not wealth. I wouldn't guess that most bitcoin users store a significant amount of their wealth in bitcoins, so I wouldn't even expect significant correlation to wealth.
• andyhmltn 13y ago
  There are some really bad points in here. Like this: Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography). So are you saying I can't pay for drugs with cash?
  • ubercore 13y ago
    You can't as easily pay someone across the country in cash for drugs that they then ship to you.
  • philwelch 13y ago
    You can, but cash is cumbersome to manage and dealing in large quantities of it all the time immediately makes you a suspected drug dealer.
  • melindajb 13y ago
    and there's the whole traceability thing. if you can't trace the transactions you can't find bad actors. Consider the "follow the money" line in "All The President's Men" regarding the Watergate scandal. If Nixon had paid the burglars in bitcoin he'd probably still be in office.
• gottasayit 13y ago
  TL:DR; Big government socialist type doesn't like financial decentralization and a monetary system that can't be strictly controlled. Wants it to die quickly because ultimately free people might decide that it's worth keeping and using. News at 11.
  • ubernostrum 13y ago
    tl;dr mixed-market capitalist says Bitcoin is problematic because it's a vapid libertarian talking point disguised as a currency. HN user replies with vapid libertarian talking points.
  • krapp 13y ago
    I seriously doubt Charles Stross is skeptical of bitcoin because he hates and fears freedom. That kind of hyperbole only serves to feed cynicism about bitcoin and its community, particularly given the assumption that the article wasn't even worth a glance for you, because obviously "not liking bitcoin" = "globalist shill."
    • Dirlewanger 13y ago
      If someone's not going to like Bitcoin, at least give better reasons than crappy strawman ones like, it's being used for illicit markets (what currency isn't?), it's uses a lot of electricity (what bank doesn't?), criminals outsource mining to botnets (along with other illicit activities like pushing spam which existed before Bitcoin mining, your point?)...and then downright puerile remarks like tickling a gold fetish? Jesus christ. If he's not a "globalist shill", he definitely has next to no societal context on Bitcoin and has gotten his information from CNN and the like who equally don't understand it.
      • ubernostrum 13y ago
        My traditional witty summary is to say that Bitcoin is the currency of people who've read John Locke but not Thomas Hobbes.
    • gottasayit 13y ago
• Brakenshire 13y ago
  In my opinion, the whole principle of bit-coin is like a manifesto for financial sovereignty - i.e. it says that money should be above government, and above democracy. Personally, I do actually want the government to be able to levy taxes to pay for public services, to be able to trace corrupt payments, to be able to seize the assets of fraudsters who have convicted under a fair judicial process, to be able to nudge the value of a currency to pursue wider macro-economic aims, and so on. Ultimately, living in a society means being subject to its laws. To accept Bitcoin at face value is to accept a future where every country operates by default with a financial system like Switzerland, and I don't believe that the vast majority of the population want that to happen.
  • Nursie 13y ago
    I really rather agree. I also don't really object to currency manipulation by central banks because they are a stabilising influence and (in theory) are there to stop the money supply from becoming a negative economic factor in times of recession etc. I quite like the article, and I've made many of those arguments myself. I don't know that bitcoin will fail. It may be that there are enough people to keep it going indefinitely, people who buy in to the politics, who don't care about the politics, or don't know about the details. But I'd not be sad to see it go. Crypto-currency is really cool. Next time I'd quite like one that isn't inherently deflationary and doesn't require burning millions of dollars worth of electricity to keep the system safe from attack. There has to be a more elegant way. But then I don't give a crap about decentralisation so there are multiple good schemes IMHO.
    • DennisP 13y ago
      Peercoin, for one, has a 1% annual growth rate forever, and is designed to be more energy-efficient over the long term because it relies partly on "proof-of-stake" instead of just proof of work. There are a couple other proof-of-stake currencies too, and some unimplemented ideas like proof-of-burn. Another interesting currency is Freicoin, which uses proof-of-work but has demurrage.
      • 13y ago
• diydsp 13y ago
  I, too, am suffering Bitcoin-headline-fatigue, to the point where I was glad to see machined QR bitcoins b/c I could finally tell people to kindly shove them where the sun don't shine. HOWEVER, just b/c I'm exhausted, I don't think Stross' points are valid or limited to Bitcoin in the least. He might want BC to die in a fire, but BC isn't doing anything special that cash/gold isn't/can't be doing. Here is an overview of his points: > 1. Mining BtC has a carbon footprint from hell > 2. Bitcoin mining software is now being distributed as malware > 3. Stolen electricity will drive out honest mining. (So the greatest benefits accrue to the most ruthless criminals.) > 4. Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography). >5. It's also inherently damaging to the fabric of civil society.
• dcc1 13y ago
  Urm Charlie could always issue "Charlie Dollars" backed by bitcoin, nothing stopping him creating his own inflationary currency. Just like nothing stopped governments issuing currencies backed by gold (and later removing the link moving to complete fiat) All in all the author exhibits all the signs of someone who doesn't understand bitcoin in his troll attention seeking article. Bitcoin is not perfect but its a damn interesting new technology/platform that the world has not seen before. He was probably busy in the 90s slamming this new emerging technology/platform called the web
  • nicholassmith 13y ago
    You do know who Charles Stross is, right? Influential sci-fi author, early web user, old school programmer? You may not agree with him, but it's not trolling, he raises many valid points and he's not the first to do it.
    • dcc1 13y ago
      His main point is along the lines of "OMG <insert_bad_actors> can/may use <technologyXYZ>" Bitcooin like any tool from the invention of fire to tools like a hammer to "the web" can be used for good or bad, you think someone who writes sci-fi and programs would understand this.
      • nicholassmith 13y ago
        His point is he's sick of the inherent drum-beating that BitCoin is the salve to the financial issues present in the gold backed/regulated traditional economy because it's just as broken, if not potentially more so.
        • dcc1 13y ago
          There is a lot of pumping by those who want "bitcoin to go to the moon" for their own financial gain. That still does not make bitcoin technology inherently evil. The distributed ledger and proof of work pioneered by Bitcoin does have incredible potential to change the way people transfer "value" between themselves. The problem is a subset of bitcoin users who want to get rich quick, that does not make this technology evil or worthy of death. Cash can also be used by all sorts of criminals for all sorts of shit, if anything its much easier to use for nefarious purposes than bitcoin. It was anonymity provided by TOR that gave rise to silk road, pseudo-anonymity provided by bitcoin was just a bonus.
• M4v3R 13y ago
  I was pretty sure that after this current "crash" (3rd already in Bitcoin history, depending on how you count them) articles like that ("Bitcoin is doomed", "I want Bitcoin to fail") will surface. And here it is. Nothing new to see here folks. Same ol' arguments, which were discussed hundreds of times already.
• brainburn 13y ago
  |new bitcoins are created by carrying out mathematical operations which become progressively harder as the bitcoin space is explored No, no, NO! Statements like this immediately lessen the writer's credibility.
  • nkuttler 13y ago
    They do, but you should explain why in your comments to debunk this nonsense.
  • tzs 13y ago
    What exactly is wrong with that statement?
    • brainburn 13y ago
      The calculations get more or less likely to produce a correct result, depending on how many calculations are done per second. In the end, on average, 1 correct result is found every 10 minutes.
• Tycho 13y ago
  I find the figures about bitcoins carbon footprint to be somewhat dubious. Anyone verify the calculations? Interestingly, with Bitcoin you could do the mining with carbon neutral energy, since the electricity can be consumed where it's generated and the output is just data to be transmitted.
  • Nursie 13y ago
    I'm not sure about his figures, but the idea of a crypto-currency that needs petaflops of continuous processing power to keep itself safe from attack does seem ass-backwards in the extreme.
    • Tycho 13y ago
      Seems like more of a red-herring to me.
      • Nursie 13y ago
        Not really. IF you don't care about trying to wrest currency away from central control (and I really don't care about that at all) then you can come up with some really nice, cryptographically secure systems that don't involve heaps of processing power, have instant verification, support offline transactions etc. etc. It's only the political aspect (we must have decentralisation and a fixed supply of coins!) that mean Bitcoin has to operate that way, an thrash away at petaflop speeds, burning electricity as fast as it can, to try and keep security.
        • Tycho 13y ago
          Well now you've qualified the statement. Decentralization is the main point of Bitcoin.
          • Nursie 13y ago
            Decentralisation is indeed one of the main points of bitcoin. It's not a necessary feature of all crypto-currencies and it's not a feature that I care about. I have no idea if it's possible to design a decentralised crypto-currency without all this pointless thrashing, it may well be, but the currency designs I know of from the crypto-establishment (rather than the cipherpunk/crypto-anarchist community) tend to be far more featureful and elegant, and their security is based on mathematical constructs rather than brute force. They just don't cater to internet-libertarian talking points.
• nkuttler 13y ago
  Sigh. > For starters, BTC is inherently deflationary. For starters, tell us why this is inherently bad. This statement also assumes that the BTC economy will grow forever. > Bitcoin is designed to be verifiable [...] but pretty much untraceable What would be bad about this if it were true? Paper bills work just fine, even though they are pretty much untraceable. By the way, this opinion is pretty much wrong, bitcoin is very far from being untraceable (IPs, exchanging BTC, etc.) > Libertarians love it because it pushes the same buttons as their gold fetish Ok, article is clearly emotional. How did this end up on the front page? > Mining BTC has a carbon footprint from hell https://en.bitcoin.it/wiki/FAQ#Is_it_not_a_waste_of_energy.3F https://en.bitcoin.it/wiki/FAQ#Is_it_not_a_waste_of_energy.3... > Bitcoin mining software is now being distributed as malware Surprise. Thieves steal valuable things. This wouldn't happen without BTC, right? > Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography). FINCEN would like a word with you. Also, how does it hurt the USD that it is used for assassination, drugs and child pornography? It's ok that people hate bitcoin though, some people just let their emotions take control.
  • peterevans 13y ago
    You need someone to explain to you why deflation is a bad thing? Well, since you asked: http://lmgtfy.com/?q=why+is+deflation+bad%3F http://lmgtfy.com/?q=why+is+deflation+bad%3F
    • nkuttler 13y ago
      Let me prove without a doubt that you are wrong: http://lmgtfy.com/?q=why+is+delfation+good http://lmgtfy.com/?q=why+is+delfation+good
      • peterevans 13y ago
        You probably could have helped your cause further had you not spelled the word "delfation." Have you actually proved me wrong? I'll leave that as an exercise for the reader.
• exelius 13y ago
  I agree with all of his points; I've been making them myself for the past few months. Bitcoin is bad specifically because it is unregulated. Regulation of financial markets exists for a reason: the optimal strategy of individuals and institutions in unregulated financial markets is to lie, cheat and steal to accumulate as much wealth as possible. Credit economies rely on a foundation of trust; and while it may seem hard to trust our financial system, you CAN trust that when you put your money in a bank, it will be there when you go to get it out (thanks, FDIC!) As much as we may not like credit, it provides market efficiency on an extraordinary scale.
  • sergiosgc 13y ago
    The problem is that today's supposedly heavily regulated markets just aren't. Markets are regulated for the little guy, but not for the Goldman Sachs of this world. The '08 financial crisis as clearly shown that most regulatory hurdles established in the late XX century have been lifted, and that for big sharks financial markets are an all you can eat buffet. Worse, we learned nothing. Everything is as it was. It is a matter of time before the same events unfold in an even sadder rerun.
    • SideburnsOfDoom 13y ago
      > The problem is that today's supposedly heavily regulated markets just aren't Yes, and Mr Stross is pointing out that Bitcoin may be different, but that doesn't make it better. In fact he lays out good reasons to believe that it is worse.
    • tonyhb 13y ago
      I agree with you, and this only highlights that bitcoin needs some level of regulation before it can be used commonly. If bitcoin is going to become commonplace, it needs a lot of support, more infrastructure, and some regulation.
  • icebraining 13y ago
    while it may seem hard to trust our financial system, you CAN trust that when you put your money in a bank, it will be there when you go to get it out Unless your money is in Cyprus. In any case, in Bitcoins you may not be able to trust banks, but on the other hand, you don't need to (as much), since you can store huge sums anywhere, even your own head. Hell, print out a private key and store the paper in a safe of a regular bank, if you want to.
• girvo 13y ago
  I find people who have a negative opinion on BTC funny. I honestly just do not care about it, it is an interesting experiment, and one that I'm not going to trust my money to. More power to ya if you're going to. If it crashes, alright. If it doesn't, then sweet. Seriously, I'll never understand articles like these... Oh, and his point about BTC "creating" drug markets -- are you for real? Seriously? People have been buying and selling drugs on the internet since... well, I'd wager since it's inception, but at least for the past decade. BTC may make it easier, or "safer", but those markets have existed for a very long time, you just needed to know where to look...
  • qq66 13y ago
    Bitcoin halves the latency and error rate of drug transactions over the Internet. Instead of mailing cash to someone and waiting for them to mail you drugs back, the cash transfer is instantaneous. For in-person transactions, Bitcoin doesn't seem to have a large advantage over the traditional briefcase full of cash.
  • SideburnsOfDoom 13y ago
    > Oh, and his point about BTC "creating" drug markets -- are you for real? Seriously? ... but those markets have existed for a very long time You're splitting hairs between "creating" and "massively expanding". How seriously would you take a statement like "Amazon.com is unimportant, they didn't create a market to buy books and stuff. They may make it easier, or safer, but those markets have existed for a very long time"
    • girvo 13y ago
      Depends. Before Operation WebTryp, the online market for grey-market research chemicals was, well, huge. Things are still huge, and that entire market has nothing to do with Bitcoin. There's more to online drugs than the SilkRoad (and indeed, there was more stuff going on in the dark-web prior to BTC as well, but yes, not at the same volumes). And more to the point: who cares -- the real-world market absolutely dwarfs (by at least an order of magnitude, maybe two) the "online drug trade", so his fear-mongering there seems short-sighted to me. There are plenty of legit issues with Bitcoin (some of which the OP even brought up), this one is just playing to people's fear of drugs. In my opinion, anyway :)
• exit 13y ago
  this reads like a movie/music executive complaining about about the open internet or maybe bemoaning the discovery of nuclear physics it's also strange for me to read since stross is one of my favorit authors/thinkers
  • alex-g 13y ago
    But scepticism about libertarian technofetishism has been a bit of a theme in his writing for... a while now. The Vile Offspring in Accelerando are a scarcely-veiled example.
    • craigyk 13y ago
      yes, and the skepticism is almost certainly deserved. it drives me insane how naive most libertarians are about how things would actually play out if they got their way. it's sad but true that there probably isn't a clean, self-consistent ideology/system that will work in a messy world. but if I had to pick one, it would be socialism because the only freedom I can imagine being better than having complete control over my money (Ayn Rand) is not even having to worry about it (Star Trek).
  • SideburnsOfDoom 13y ago
    > his reads like a movie/music executive complaining about about the open internet But it's also different; unlike movie execs, Stross knows a fair amount about the open internet, and something about financial systems.
• neals 13y ago
  Yes, popular one liners make for great headlines. Die in a fire! That doesn't sound juvinile at all. These harsh words for something that you don't even HAVE to use or even be a part of. There's a group of people with an idea, lots of people with great intentions, building a technology that you don't have to pay for. This is called Open source software, you want all of that to die in a fire?
• nathas 13y ago
  This guy doesn't seem to get what bitcoin is or it's purpose. As far as I'm concerned, bitcoin will just be another alternative currency forever. It will likely never replace fiat, and that's fine. It's awesome for international trade, fast transfer, low-fee, and a safe way to store your money (if you're okay with the value of btc fluctuating wildly; if it ever settles then it will be "safe"). I disagree with all of his points. His carbon footprint/malware/Gresham's law points can all be countered with "incentive to mine leaves as the reward goes down, difficulty goes up, and total remaining coins decreases" which means less people will mine. For hideous markets and tax evasion, yeah, you can do both of those with fiat too. It's not a concept exclusive to bitcoins.
  • ubernostrum 13y ago
    It will likely never replace fiat Bitcoin is a fiat currency, in several senses of the term. A Bitcoin has no intrinsic value, it is unbacked and its value is not defined in reference to any other asset or quantity. (though arguably it is not a currency at all)
    • nathas 13y ago
      It is not a fiat currency. https://en.wikipedia.org/wiki/Fiat_money https://en.wikipedia.org/wiki/Fiat_money It is not backed by any government, it is not legal tender, and it is not state issued. It has no intrinsic value, you're right about that part.
      • ubernostrum 13y ago
        Fiat currency does not have to be issued by a government, and does not have to be legal tender. And Bitcoin certainly meets one of the "various" definitions given in the Wikipedia article. There are plenty of other definitions of the term it meets -- at root, a fiat currency is simply a currency whose value exists because someone said so, rather than because it's tied to something else. And... well, Bitcoin has value because people say it does, not because it's tied to something else.
• weavejester 13y ago
  Usually I agree with Charlie Stross, but I think he's building his case on a few false assumptions. To mine bitcoin and make a reasonable profit, you really need dedicated mining hardware. This means that stolen electricity is not really an issue, as even very large botnets wouldn't be able to keep up with a few $1000 of custom hardware. Similarly, while Bitcoin's future carbon footprint is something to be concerned about, I think it's too early to draw a line of exponential growth and conclude the world is doomed. There are a large number of potential bottlenecks when it comes to computing hardware. I'd also question how useful Bitcoin is for avoiding taxes, when the exchange rate is so volatile. There are far safer ways to avoid paying taxes, many of them legal. In my view, the most interesting part of Bitcoin is not its value, or its potential anonymity, but that it's an open protocol for distributing wealth, in the same way that TCP/IP is an open protocol for distributing data. There has already been some interesting experiments around micro-payments with Bitcoin that would never have gotten off the ground without it.
• tomrod 13y ago
  I think his correct points highlight why BtC is good, not bad. Untraceability is incorrect though. His points expressing worry over stable governance as being totally desirable is interesting. Why is the current system in play necessarily a good thing? Deflation seems like a problem until one recognizes alternative currencies provide the same options and will grow over time. Hence the deflation isn't a problem unless one only accepts BtC.
• carsongross 13y ago
  BTC is inherently deflationary. The idea that deflation is necessarily harmful to an economy is a fallacy. See the Fed itself: http://www.minneapolisfed.org/research/sr/sr331.pdf http://www.minneapolisfed.org/research/sr/sr331.pdf "Our main finding is that the only episode in which we find evidence of a link between deflation and depression is the Great Depression (1929—34). We find virtually no evidence of such a link in any other period." From the post: The current banking industry and late-period capitalism may suck, but replacing it with Bitcoin would be like swapping out a hangnail for gas gangrene. Not proven. A bitcoin economy would be worse than unlimited bailouts and money printing? Not even close to proven, or, at this point, particularly plausible.
  • walshemj 13y ago
    Tell that to property owners in Japan :-)
    • Perceval 13y ago
      Property owners in general should not suffer from deflation more than anyone else who has purchased any asset. People who have gone into debt in order to purchase an asset during deflation, however, will face problems: http://fraser.stlouisfed.org/docs/meltzer/fisdeb33.pdf http://fraser.stlouisfed.org/docs/meltzer/fisdeb33.pdf
      • walshemj 13y ago
        Percival pretty much all property owners use leveraged debt aka a mortgage unless you happen to be a trust fund kid - it also has a bad knock on effect on the banks who lent the money.
  • Brakenshire 13y ago
    > The idea that deflation is necessarily harmful to an economy is a fallacy. Well, it is undeniable that this is subject to very heated debate. Some people are monetarist, some people are not, and central bank policies shift from country to country and from generation to generation. For instance, Spain and the UK had very similar debt and deficit figures at the outset of the recession, but Spain does not control the value of its currency. The Euro is controlled by the European Central Bank, and is run primarily by German central bankers, who are strongly opposed to inflation as a lever of policy. The UK controls its own currency, and has deliberately pursued an inflationary monetary policy, and even more so with the newly appointed head of the Bank of England, Mark Carney. It is a very common opinion, in the US and the UK as well as in parts of Europe, that this is a key reason why the UK economy is doing ok, with 7.5% unemployment, while the Spanish economy remains in freefall, with 25% unemployment. Certainly, one academic study plucked off the internet, written before the current financial crisis, is unlikely to settle the issue for all time. Bitcoin effectively allows individuals to bypass this debate, and put their money where they think is appropriate. But, of course, the individual who is saving money always wants to avoid inflation, so will put their money where it will maintain its value. Whether this is positive, or indeed sustainable for the rest of the economy, is, as I say, a matter for debate.
• phaed 13y ago
  I lost all respect for this guy.
• clavalle 13y ago
  Bitcoin in traceable. Much more traceable than something like cash or gold. It can be taxed. In fact, it lends itself very well to taxation since each transaction is indelibly recorded. Just because no one's implemented taxation doesn't mean it can't be done. If it can be taxed it can be regulated. It does cut out the banks. That is a strength. The serpentine bank transfer system that skims transaction fees on a huge number of transactions can be avoided. This has some obvious benefits (as most things that reduce transactional friction do -- I mean, most of us on HN are probably in the friction reducing business in one form or another). Government does not have to issue it. The jury is still out on whether this is a net positive or not. I think it is a worthy experiment since government control of the money supply seems like more of an accident of history than anything. It /could/ be a fundamental strut in the framework of effective government but I think that might be overselling it. Bitcoin gives us a vehicle to test that theory. In short, Charles Stross is confusing the way things are with the way things must be and that is a mistake. Most of these problems, if they are truly problems, are solvable. And, at the very least, their impact will not be catastrophic so it is worth the risk to see where this experiment leads.
  • sharpneli 13y ago
    > Bitcoin in traceable. Much more traceable than something like cash or gold. This is something that is often forgotten in these discussions. Everything is public with bitcoins. The only open issue is binding the transactions to an ip and via that to a person. And considering how widely the internet is monitored these days that should not pose a problem. After that analyzing connections between wallets is a similar problem as analyzing friendships in a massive social network. Transactions form a graph from wallet to wallet. If massive drug rings would use Bitcoin instead of cash it would actually be easier to track them down than it is right now. In addition bitcoin is trivially forkable. It has only as much value as people want to give it. It is in essence as imaginary as any fiat currency is.
    • runako 13y ago
      >> binding the transactions to an ip and via that to a person Naive question: since IP's don't map 1:1 to people (proxies, the tendency of people to use lots of devices in lots of places), how does this work in practice? Does it really work in practice?
• shadowmint 13y ago
  That little 'flag' link is for articles that get posted that you think are poor content, badly written, ill informed or troll bait... right?
  • tptacek 13y ago
    No. The 'flag' link is for stories that are inappropriate for the site. What you describe is a "downvote" button. Using flags to downvote is abusive. My understanding is, the mods catch people using the flag button to downvote, the mods make your flag stop counting.
    • Crito 13y ago
      > "My understanding is, the mods catch people using the flag button to downvote, the mods make your flag stop counting" The "flag" link disappears entirely, it doesn't just stick around but become a noop.
      • tptacek 13y ago
        How sure are you about that? Obviously the flag link goes away for some people.
        • Crito 13y ago
          Maybe they do both, but I am certain that the flag link disappears for some people after abuse. I'm not sure what the advantage of doing both would be (though I assume hellbanned users normally still see a flag link that does nothing).
          • SamReidHughes 13y ago
            I've inferred from some info I've heard that some known abusers keep abusing the flag feature -- it seems like it would be disabled for them, or disabled for submissions matching certain keywords.
• belorn 13y ago
  So the article claims that more assassination, drugs and child pornography is being sold now than before? Is there any facts supporting such claim? Sold assassination, drugs and child pornography should exist as crime statistics, proving or disproving the claim.
  • gwern 13y ago
    Sanjuro's 'Assassination Market' thus far doesn't have any correlated deaths, and it's an open question whether it's real rather than a scam. (How could you ever tell?)
• cs702 13y ago
  The author's complains are a sober reminder that society is not yet ready, and has not yet evolved all the infrastructure it will need to cope with rising global Bitcoin adoption.[1] Regardless, if the number of people using Bitcoin continues to grow, our institutions and infrastructure will have to evolve to address the problems mentioned by the author. Among other things, society will need more secure (truly malware-resistant) personal computing systems, more secure (from snooping) communications systems, substantially better authentication mechanisms, more secure energy generation and transmission equipment and facilities, more secure financial institutions, and more technologically-savvy regulatory and policing institutions. Those are all really good things. -- [1] Compare, for example, how society works with paper cash and gold bars versus Bitcoin: * Paper cash or gold in substantial amounts is always stored in private or bank safes, or in high-security underground vaults that most people have only seen in movies. In contrast, Bitcoin private keys are often stored in general-purpose personal computers running a wide variety of applications, managed by people who don't know how to secure a computer. * Transporting any substantial amount of paper cash or gold is often done via armored trucks operated by highly-trained security personnel. In contrast, Bitcoin private keys are transported via all sorts of highly insecure methods by people who don't know better. * No sane person holding a substantial amount of cash or gold at home would ever let complete strangers come and go into their house as they please, while giving them keys to all doors, cabinets, drawers, and safes. In contrast, people regularly give complete access to their computers to complete strangers by willingly or unwillingly installing software created by such strangers. * Our regulatory and policing institutions know how to identify, prosecute, and even prevent illegal gold and cash transactions, successfully keeping them to a tiny percentage of overall economic activity in most advanced economies. In contrast, those same institutions do not yet know how to cope with the use of Bitcoin for illegal activities. -- Edits: moved comparison of Bitcoin to gold and cash to footnote; also, made minor changes to several sentences so they more accurately reflect what I intended to write in the first place.
  • williamcotton 13y ago
    That's like, your opinion, man. But for real dude, ever heard of democracy? What if I don't agree with you and your bullshit ideas?
• clamprecht 13y ago
  I read the post and wondered if it was prepared, and he waited until the next "crash" to post it. After all, that's the best time to post anti-bitcoin posts.
  • SideburnsOfDoom 13y ago
    Probably not, IMHO. The author has experience at writing, no reason why he can't turn out something polished-looking quickly. Especially as he has been thinking along these lines for a while. Gestating ideas is "preparing" to write even if the finished pieces is not "pre-prepared".
• baddox 13y ago
  > Like all currency systems, Bitcoin comes with an implicit political agenda attached. Decisions we take about how to manage money, taxation, and the economy have consequences: by its consequences you may judge a finance system. The consequences of Bitcoin he lists are arguably bad, sure, but they don't touch the consequences of nation states that centrally control their financial and monetary systems.
  • Nursie 13y ago
    I know right! Financial stability, stable systems of investment and lending, managed inflation and currency supply. Some damn terrible consequences there!
    • baddox 13y ago
      "Financial stability" in the sense that the government has the final control on literally everything, from your money to your property to your labor. "Stable systems of investment and lending" in the sense that large members of the finance industry operate with impunity (see the big bank bailouts). "Managed inflation and currency supply" doesn't really mean much without talking about how well they are managed. And then you have the real bad consequences: runaway military spending and mass killing of people from other nations, runaway prison populations for victimless crimes, massive market interference that stifles innovation and efficiency, public schools which create the next generation of unquestioning patriots, etc.
• scythe 13y ago
  >a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions. It's kind of silly when people twist words like this. Do you support the existence of the United States government? So you support Guantánamo Bay, Abu Ghraib, and Contras killing nuns in Nicaragua? That's the basic form of this argument. It would of course be fair to call Bitcoin crypto-anarchism, or anarcho-capitalism, or crypto-anarcho-capitalism, if you're a huge fan of hyphens. To tar all libertarians (it's never capitalized, unless you mean the party) with this brush is disingenuous; it's a way of arguing against the reasonable sorts (e.g. Milton Friedman and Gary Johnson) and the next complaint "but most libertarians I see are [...]" is equally bad: you choose to look at the crazy types, similar to how Hacker News posts way more about the NSA and DEA than about the NHTSA and the CDC. How can we possibly have a reasonable discourse if we devolve so quickly to calling each other anarchists and fascists and accusing everyone you don't like of supporting child pornography? Signed, "moderate" libertarian.
• mindcrime 13y ago
  It's disappointing to see that cstross feels the way he does about certain things. He's one of my favourite authors, and I just hope that knowing how far apart we are on some issues doesn't diminish my ability to appreciate his fiction. At least it's nothing like Orson Scott Card, where my disagreements with some of his opinions mean that I basically have no longer have any interest in reading his works at all. So, Charles Stross hates Bitcoin because he things a market for drugs is "hideous". sigh. I think that a market for drugs is, while not necessarily desirable, inevitable, and that free individuals should be able to choose what they do or don't put into their own bodies. Assassination and child pornography are Bad Things to be sure, but Bitcoin doesn't cause either and both are going to exist with or without Bitcoin. I don't get arguing against a mechanism that supports basic free market exchanges, just because a few bad actors can use it to do bad things. You can't engineer your way to a perfect world, given human nature. Tax evasion? Good. Taxation is theft. If I need to employ technological solutions to protect my money from the government, then so be it.
  • djur 13y ago
    With such incisive and reasoned slogans as "taxation is theft", how can it be that libertarians are so widely considered a target of derision and loathing? Taxes are your just dues for living in a society. Tax evasion is theft from the commonwealth.
    • mindcrime 13y ago
      With such incisive and reasoned slogans as "Tax evasion is theft from the commonwealth," how can it be that statists are so widely considered a target of derision and loathing?
      • jljljl 13y ago
        He actually provides a reason for why Tax evasion is theft: Since taxes are the dues for living in a society which provides public goods such as roads, infrastructure, education, etc., refusing to pay taxes is stealing the usage of those goods without paying your dues. I can see that in his argument, but I don't see an explanation for why taxes are theft in your argument. Unless somehow you completely avoid usage of public goods (which no, you don't).
• kitsune_ 13y ago
  Surely there must be a kind of duality between inflation and deflation in context of the total money supply and the individual unit of money that is deeper than commonly taught? Couldn't a a fixed-money-supply economy and a flexible-money-supply economy be unified in a single mathematical and theoretical framework? This must surely be possible, but in that regard "unit of exchange / money" would have probably discarded in favor of another thing?
  • asgard1024 13y ago
    Try Steve Keen and his work. He modeled both fixed money and flexible money supply in his dynamical models of finance. You can even download a computer program "Minsky" and try the models yourself. Edit: He is also a proponent of "endogenous theory of money", which basically says that money can be easily created within the system through debt. In essence, "fiat money" is a fundamental property of monetary systems, and not something imposed by governments.
• _greim_ 13y ago
  I love his meta-criticism of Libertarian and Leninist (and presumably other) ideologies: > [It] makes prescriptions about how to run human society that can only work if we replace real messy human beings with frictionless spherical humanoids of uniform density... I need to read more of his books.
  • craigyk 13y ago
    He is pretty exemplary as an author. He marries really interesting ideas and their consequences with a healthy amount of humor.
  • webXL 13y ago
    Too bad he doesn't explain why libertarianism only works if we are all uniform and frictionless. Perhaps because it's nonsense and libertarianism actually doesn't require that. It's also too bad emotional rants like this carry such weight. Is the status quo really that great?
• melindajb 13y ago
  One only has to to look at the fate of the Linden Dollar (Second Life) to see what will eventually happen to Bitcoin.
• MattyRad 13y ago
  One of the things I happen to like about Bitcoin is that it will only be as successful as its adoption rate. I think of this as a literal interpretation of voting with you wallet. So if Bitcoin, against considerable odds, is successful (a small possibility, to be sure), Charles Stoss here will be outvoted, and there is nothing he or the government can do to stop it. And in that respect, Bitcoin is its own insurance policy.
• baddox 13y ago
  > To editorialize briefly, BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions. Which is fine if you're a Libertarian, but I tend to take the stance that Libertarianism is like Leninism: a fascinating, internally consistent political theory with some good underlying points that, regrettably, makes prescriptions about how to run human society that can only work if we replace real messy human beings with frictionless spherical humanoids of uniform density (because it relies on simplifying assumptions about human behaviour which are unfortunately wrong). Is Stross speaking specifically of a libertarian political party, like the U.S. Libertarian Party? His capitalization of the word would seem to indicate that, or that Stross is woefully ignorant of even the most basic fundamentals of the extremely broad category of political philosophy called "libertarianism." I tend to think it's the latter, based on his ludicrous summary of his perception of libertarianism. I am curious what assumptions about human behavior he thinks are at the heart of libertarianism.
  • steveklabnik 13y ago
    Everyone forgets that 'libertarian' originally meant 'anarchist,' generally 'big L' Libertarianism refers to the party, while 'little l' libertarianism refers to consequentialist or propertarian libertarianism.
• dlsx 13y ago
  bitcoin, its ogre you loose. The people have spoken, and DOGE coin is the people coin. wOOF
  • jessaustin 13y ago
    You know some days I actually wonder why hellbanning exists. Not today.
• onaga 13y ago
  Bitcoin is being killed off by DOGECOIN
• luvdoge 13y ago
  try dogecoin and love again DDjPtTjwFigCzPxAW4LDLR8eM8sJufXCnq
• lesye 13y ago
  >almost 2014 >Not investing in Dogecoin It almost looks like you guys don't want to have a trip to the moon.
• installgen2 13y ago
  bitcoins are gonna die soon invest in dogecoin, huge bubble coming soon - stop speculating and start fucking buying it's assured cash DAVZ3yVjXfWcBZeqCd1mkkWiFk7EP3nn16
• wowsuchmoney 13y ago
  Why are you still buying worthless bitcoins? Doge is the future of money. http://dogecoin.com http://dogecoin.com such coin many profit up 50% today
  • FatalLogic 13y ago
    Please stop doing this. It won't be tolerated here, and it will become difficult to post anything about dogecoin in future if you keep spamming it. This place is far stricter than Reddit.
• legohead 13y ago
  bitcoin didn't crash 50%, not even close. it was only 700-740ish yesterday. and it's already back up past 600. I've been watching it every day. it has been on a slow decline for a while, with some drastic dips here and there, but it recovers. still too early to call any kind of crash.
• dlsx 13y ago
  Blah blah blah doge is up 600% !!! I just got a girl to show me her boobs for 10K doge. You guys I'm not joking, hot girls are using doge!!!!!!!!!!!! What the fuck is going on ? Ahhhhhh!
  • wowsuchmoney 13y ago
    doge is love, doge is life.
• georgemcbay 13y ago
  I also want Bitcoin to die. For me it isn't about the politics of banking, it is about the fact that the whole system is designed in a way so as to waste maximum amounts of energy on doing nothing of real intrinsic value (which he touches on re: carbon footprint).
  • rainforest 13y ago
    The same could be said about diamond mining, or production of goods that serve only decorative purposes. Video games do the same thing, wasting vast computing resources on pretty pictures to titillate humans who could be working. Is HN's carbon footprint justifiable? Does it produce intrinsic value?
• sliverstorm 13y ago
  ... This means the the cost of generating new Bitcoins rises over time, so that the value of Bitcoins rise relative to the available goods and services in the market False. I mean, it could go that way, but if you have a large established market to anchor the value of BTC, the mining difficulty will adjust to match (instead of the value of BTC adjusting to match). If it is not profitable to mine BTC, people will stop mining and the difficulty will drop; the cost of mining will adjust to the value of BTC.
• stcredzero 13y ago
  Which is fine if you're a Libertarian, but I tend to take the stance that Libertarianism is like Leninism: a fascinating, internally consistent political theory with some good underlying points that, regrettably, makes prescriptions about how to run human society that can only work if we replace real messy human beings with frictionless spherical humanoids of uniform density Brilliant prose! Pragmatism always has and always will rule.
• epscylonb 13y ago
  Libertarians are annoying, anyone who thinks technology will solve complex social problems will be dissapointed by bitcoin eventually. The deflationary nature of bitcoin is it's hardest aspect to defend because there really hasn't been anything like it in history before. A finite asset that is easy to transfer over long distances without central interferance really is unprecedented. I think you have bought in to the bitcoin fantasy that it will be the only currency in use. I don't think that will ever happen for a variety of reasons. If gold and fiat can coexist why not bitcoin too?. Loaning bitcoins seems to be a crazy proposition, so I suspect inflationary currencies will stick around just for that reason. Not to mention bitcoin by itself is fairly terrible for in person transactions, if you add a service on top what is the difference for the customer between that and a credit card company?. Fiat is useful and solves problems that bitcoin doesn't. Regarding mining, I have my own concerns, bitcoin proponents love to describe mining as “securing the network” and equate it with vaults and security guards used in banks. This comparison is at least partly flawed, mining prevents double spends and nothing else. It's certainly true that a centralized ledger could prevent double spends for tiny fraction of the cost of mining, but globally who can be trusted by all parties to adminster it?. The comparison isn't one sided however, it is much cheaper to securely store (and move) bitcoins than gold for example. Energy use is tricky, preserving the environment should be a top a priority, but should we aspire to use less energy?. One question I have often asked but never got a good answer to, how much of the worlds energy needs to be devoted to mining to prevent a 51% attack?. If it is north of 30% of the worlds energy output then right now that would seem a huge waste. But if we had access to cheaper, cleaner renewable energy, would it still be a problem?. Malware?, it's just a symptom of larger problem, computer security is terrible. No one is really sure who to plame, users, applications, operating systems and hardware makers all come into the firing line. If bitcoin pushes forward computer security surely that can only be a good thing?. I'm unconvinced about whether greshams law applies to mining due to the performance disparity between ASICs and CPU/GPUs, but surely if computer security improves this problem diminishes?.
• csense 13y ago
  According to this article, > Bitcoin is pretty much designed for tax evasion. This assumes that the government needs to know how much money you have / make in order to tax you. There is an alternative -- to instead tax physical property (in particular real estate) and/or physical goods moving across borders. This alternative has been used for most of human history; the income tax is a fairly recent thing. (In the US, it is theoretically a "temporary" measure to pay for World War I.)
• rfugger 13y ago
  Most of those arguments apply to the internet itself. The author sounds like a conservative in the 90's upon hearing about the web.
• chmike 13y ago
  I don't think money, or specifically dollars are any better than bitcoins. Beside I would like to point out that it's not the currency in it self the problem, but what we do out of it. Depth grow of dollars is a huge speculation buble which will blast soon or later. Get ready for it. Criticizing the carbon footprint of bitcoin is a joke compared to the carbon footprint of depth dollars. Regarding the future of bitcoin, my feeling is that it has the value of tracability which is very attractive for the police states we are evolving to. So I expect states might continue to tolerate it as long as it doesn't accelerated the dollar buble blast and present a threat. Another current problem of bitcoin is that it's value is so much rising by speculation that it prevents it to start being used as a commercial currency. Illegal business activity is indeed a problem, but its tracability leaves a track. I wouldn't assume that it's free play for all illegal business. Assume hunt dogs are silently following the tracks.
• mpg33 13y ago
  The good thing about bitcoin is that it will succeed or fail based on market principles.
• cenhyperion 13y ago
  > calculating ever-larger prime numbers, they get further apart iirc that's not completely true. It may be in practice for bitcoin as a currency, but I remember reading that there's a limit to the distance between two primes, no matter how large they become.
  • vbuterin 13y ago
    Actually, false. There are no primes between n! + 1 and n! + n + 1 for all n, so arbitrarily large gaps between consecutive primes do exist.
• codex 13y ago
  The core argument that Bitcoin is deflationary is irrelevant to the fitness of Bitcoin, at least for online transactions. To me, the chief value of Bitcoin is that it enables super cheap micro (and macro) transactions online. Goodbye silly debit and credit card interchange fees! Used in this way, dollars are held in Bitcoin form for only the tiniest of moments before being converted back into dollars. Long term fluctuations in exchange rates don't matter. I look forward to using micro payments for content online. Ad supported content and the inevitable vending of my personal data is distasteful to me.
  • maaku 13y ago
    You do know that the minimum recommended fee is $0.10? (or was, a few days ago..) Bitcoin is not designed for micro-transactions.
• justzisguyuknow 13y ago
  Why do people keep saying it crashed 50% since yetserday? That number is just plain wrong. It was NOT trading over $1000 yesterday, that was over a week ago.
• thekaleb 13y ago
  Most of his complaints are FUD. He didn't even bring up legitimate concerns like how big of space you would need to have the entirety of the block chain in the future.
• etherael 13y ago
  Wow, this is perhaps the single most ignorant article I have ever read about bitcoin, ever. There goes my respect for Charles Stross. Not a single point is actually true. 1) Compare the carbon footprint of bitcoin mining to the carbon footprint of all the industries it displaces. 2) and 3) are actually the same item, and both wrong because ASIC miners are absolutely dominating in the mining stakes now and for the foreseeable future, hacked bitcoin miners are ridiculously minor by comparison with almost zero returns. 4) There are already markets in drugs, assassination and child pornography. The currency most frequently used in crime is the USD. Quick, someone stop the printing presses and we'll bring crime to a screeching halt overnight. 5) If Bitcoin actually does manage to destroy the state, and that's a very big if, that is by far the absolute best thing that could ever happen in the entire world without a doubt. And it would imply it happened without bloodshed and because people chose it as a simply superior option, which if the negative scaremongering aspects of the disintegration of the state actually started to manifest, would not happen by definition. So even if you don't take it for granted the state is a shambling monstrosity that deserves a quick and merciful death, the very fact that Bitcoin ever gets to the necessary fraction of the global markets to kill it implies that people accept that and don't worry about it.
• guiomie 13y ago
  As if the current financial system doesn't have a carbon footprint ...
• csomar 13y ago
  Mining BtC has a carbon footprint from hell (as they get more computationally expensive to generate, electricity consumption soars). This essay has some questionable numbers, but the underlying principle is sound. I didn't do the math (not even back of the envelope) but my sense tells me it'll be less footprint than the current mega banks. Bitcoin mining software is now being distributed as malware because using someone else's computer to mine BitCoins is easier than buying a farm of your own mining hardware. Piracy, Theft and Crimes are not a new thing. They have been for a very long time. Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography). We don't have that now? I guess regulation is better with Bitcoin because cash has much more privacy than BTC. It's also inherently damaging to the fabric of civil society. You think our wonderful investment bankers aren't paying their fair share of taxes? It's like there is no off-shore tax havens right now, and everyone is paying his share of taxes. Maybe we should give the tax system another look and a good reform? Sorry, but I couldn't find any substance in this article. Just the usual hatred. Here is my actual view on Bitcoin: http://omarabid.com/why-cryptographic-currencies-matter/ http://omarabid.com/why-cryptographic-currencies-matter/
  • nhaehnle 13y ago
    I didn't do the math (not even back of the envelope) but my sense tells me it'll be less footprint than the current mega banks. True, but Bitcoin also does less than those banks. It's not really an apples-to-apples comparison.
• bobbygoodlatte 13y ago
  While I don't think Bitcoin is a "weapon intended to damage central banking", I'm not sure why the author has such an affinity towards central banks. He claims Bitcoin might destroy social safety nets — but how are central banks protecting those institutions? The cash that quantitative easing produces goes right into the hands of banks / investors. Rich people get richer when QE inflates the stock market to new highs. Working class people get poorer, and will feel the subsequent crash harder. If anything, Bitcoin is better for working class people. It means the money they earn retains value, regardless of whether they invest it in the market.
• Houshalter 13y ago
  The incentive to create malware, also a significant problem with advertising and online banking/transactions. Anyways I think the things the author dislikes about bitcoin is precisely what makes it so good. It's great that it can subvert government control on a small scale. It isn't going to stop taxation or anything because there is no way large corporations and rich individuals can hide that much in bitcoin transactions without getting caught. But for individuals who just want to buy something something minor it works perfectly. Besides it really isn't any different than cash in terms of anonymity. It just can be done online. And it isn't going to die anytime soon. Even if the price drops a lot, it can still be used to make transactions. The bitcoin protocol will keep on working 20 years from now, regardless what happens to the price. The speculators might suffer, maybe it will make less news. Maybe mainstream adoption will suffer, so everyday people looking to use it to make transactions easily online won't be able to. But the people that are using it to do illegal things that the author fears so much will still be there and aren't going away.
• lhgaghl 13y ago
  And here I was, having a decent day, and now I'm extremely angry. Why I want the author to die in a fire: > Mining BtC has a carbon footprint from hell This is an insanely dubious ungrounded argument. How do you know fiat doesn't have a high carbon footprint too? The linked article doesn't even mention whether this is the case. > Bitcoin's utter lack of regulation permits really hideous markets to WHAT the fuck? Who the fuck actually believes this? You fucking sheep. > Bitcoin mining software is now being distributed as malware Non-argument, fuck off. This is like saying someone can kill you and take your money, or even more obvious and ironic, install malware on your computer and steal money from your fiat bank account, which happens all the time anyway.
• lurkinggrue 13y ago
  Don't look at me, I hedged my savings into a collection of Beanie Babies and Tulips.
• KVFinn 13y ago
  While bitcoin supporters tend to hate the idea of inflation, there are others coins that have inflation built in to encourage spending -- a kind of progressive version of bitcoin. Here's a random example of a coin designed around a specific economic philosophy: >Unlike Bitcoin, Freicoin has a demurrage fee that ensures its circulation and bearers of the currency pay this fee automatically. This demurrage fee was proposed by Silvio Gesell to eliminate the privileged position held by money compared with capital goods, which is the underlying cause of the boom/bust business cycle and the entrenchment of the financial elite, and has been tested several times with positive results. http://freico.in/ http://freico.in/ (no idea if that has merit but it was the one that stuck in my head because it was so clearly articulated on their homepage)
• ypcx 13y ago
  I like how the author implicitly assumes that Bitcoin is a replacement for the current financial system. I wish it was so, but not just for Bitcoin, but the best set of the crypto-currencies, as determined by competition/user adoption.
• krupan 13y ago
  I'm coming across a lot of anti-bitcoin articles today. It alls seems very similar to the anti-linux FUD from 15 years ago.
• colanderman 13y ago
  Deflation and Inflation are two very different things; in particular, deflation is not the opposite of inflation What am I missing? The very first sentences from the articles he linked: In economics, deflation is a decrease in the general price level of goods and services. In economics, inflation is a persistent increase in the general price level of goods and services in an economy over a period of time. How are those not opposites?
  • SideburnsOfDoom 13y ago
    > What am I missing? ... How are those not opposites? Yes, but "We have deflation" is not the opposite of "we have inflation". It means that the consequences - the effects that they have on societies that experience them - are not simple opposites.
• dpweb 13y ago
  I'm no fan of all th hype, but each link in authors link farm is idiotic. Blaming bitcoin for child pornography? What these arm chair economics experts miss is that inflation and deflation are meaningless in things other than the currency you are getting paid your wages in. If the purchasing power of the dollar really fell apart, you get riots in the streets people can't feed their families. Bitcoin crashes it just another #1 article on hn to scroll through.
• rumcajz 13y ago
  Interestingly, in the long run inflation may be problem with Bitcoin rather than deflation. In 30-100 years (the numbers vary according to the source) the world population will start to shrink. From that point on there will be ever more money available per living person. Which, of course, mean inflation. Central banks can counter it by burning money. It's not clear who would do such beneficial activity with Bitcoins.
• Morphling 13y ago
  I get a feeling there is some alternative motive behind the article. The arguments are some what valid: Mining uses electricity so it leaves a "carbon footprint", but printing money and mining gold also leaves a footprint. Unaware "zombies" are used for mining, which means criminals get them more reliably, but I don't think this is BtC's fault. People should be aware what they download to avoid infections. I haven't heard of the stolen electricity thing, but in hind sight it's obvious, if you aren't paying for electricity you are minimizing your costs, but I'm not sure how wild spread this is, but again I don't think it's about BtC or BtC's fault. Lack of regulations does NOT permit assassination, sales of illegal drugs or spreading of child porn anymore than our current currencies, because this shit has been happening for way longer than BtC has been a thing.
• cLeEOGPw 13y ago
  I think we had plenty of these rants about torrents and how they damage music/film/game industry. I am expecting actually many more of these articles about bitcoin vs banks in future.
• warrenmiller 13y ago
  You can mine on solar energy https://bitcointalk.org/index.php?topic=376437.0 https://bitcointalk.org/index.php?topic=376437.0
• Zuider 13y ago
  His main complaint seems to be that bitcoin suits child rapists, and even worse, libertarians.