Bitcoin Forum

...continued from my previous post from heated/fun debate about Bitcoin with a friend who is well and good in the current economic system...

The point my friend is making (and quite convincingly if I do say so myself) is that the current system cannot be taken/viewed from an extremist's point of view and simply written off as "evil".  Our current system is here, and it is working.  The main fault with it, in his view, is that it can be used to create wars to eliminate unwanted and unfriendly (non)participants of the current system.  Once that takes place, you have only participating players left, making the current system... well... "The current system!" :)

In order for Bitcoin to succeed, it has to topple, beat, replace, compete with the current system which is really good for WARS!  And, my friend suggests, Bitcoin will not succeed because:

Bitcoin's are totally useless once you have a state of WAR!

What do you think? Where is he right/wrong?

Bitcoin is perhaps the most effective way to hire cyber-warriors. :)

Conventional war... probably not. Massive government spending is required to fund war and bitcoin couldn't facilitate that.

I think your friend is mentally retarded and you should get a new friend unless you just like working with 'challenged' kids.

I agree.  What exactly is his point!  Why is it useless?  Unless the internet/ networking ceases to exist!

The bitcoin monetary system is more resilient to war than the current system, for the following reason.

The fiat banking system is a system of liabilities. Liabilities require you to trust that the counterparty will make good on the liability. In times of war, trust between countries is replaced by hostility and mistrust.

Bitcoin is not based on liabilities. You dont have to trust anyone to store value in bitcoins. In times of war when countries do not trust each other, payment must be made in something that doesnt require trusting your enemy. That is one reason why international trade was settled in gold, for so long.

+1 and look at history, I would rather be in bitcoins then a countries currency during war.  Once a war kicks off the money goes in the old round filling cabinet.  Ask Saddam, Kadafi, Hitler (just to name a few experts) all of those folks went to war and their money turned to funny.  Now you look at Hitler and what did he do, he chased more stable funds to back his funds and he also stole obtained other items such as art, gold and transferable equity so he could keep the war machine going.  I don't have time to write a whole history about this (wait maybe I should, might make a nice coffee table book, anyways) but drop by your local library and have fun discovering our human history and how money and war have worked since the dawn of time. 

And remember kids, stay in school.

Deutschmark had rapid inflation during WW2. If some one had savings it would be whipped out.

would rather have bitcoin if I were you. not to mention I could flee the country I wouldn't have lots of cash on hand to be confiscated.

Now; post EMP and nuclear war is a whole other topic

I don't even know what you mean by "a state of WAR!".  A state of war, where?  There are states of war all over the place right now in lots of different senses.  And that's been the case from bitcoin's birth to now.  So, clearly you can't mean any such state of war(s) as already exist, because bitcoin hasn't been rendered useless by them.  So, what then?  Like, a world-wide, in everyone's backyard, guns going off all around, state of war?  I mean, seriously, WTF are you talking about.

The main fault with the current system is that it can be used to create wars?  What?  So let's imagine a system where only bitcoin is used.  Would that mean no wars?  Why couldn't a bitcoin only system "create" wars in whatever ways you imagine this one does?  I don't even see the skeleton of a coherent argument here.

If bitcoin were to ever be a core currency, why wouldn't governments use it like they used Gold for centuries? Issue your own notes backed by bitcoin, offer a redemption option to generate confidence, but print up to 10 times more in notes than you have in bitcoin reserve, and hope there's no run. That *does* work for a while, and can certainly work to finance wars. Eventually it fails, but memories are short...each generation of politicians seems to have to learn the same lessons for themselves via first-hand experience.

Well if we assume a Bitcoin using country under attack, they would actually have some "good" routes for funding a massive war machine:


1. Pay your "war tax/tribute" or get conscripted = hard money plus soldiers of low productivity to get rid off. (yes evil; that's war)

2. We are all here because we believe Bitcoin to be superior money to fiat, as in leading to a more efficient market/society. In a BTC
    country this would also mean more productivity and a more efficient war machine.

3. Agents/spies behind enemy lines can be funded on-demand with BTC despite everything going on which A keeps them funded doing
    their sabotage thing and B keeps them loyal as they are dependent on your nations money drip feed. (many Nazi agents sent to
    America defected very quickly and spent their large cash suitcases on their girlfriends before any missions got done)

4. Recruit enemy populations to do sabotage paying them in BTC. The opponent would have a hard time finding out who was cutting all
   their wires and harder time yet dealing with it during war.

5. Bitcoin does not easily fund wasteful governments, this means that a BTC country might well be unlikely to be the instigator of
   war - hence our hypothetical country would not be the aggressor and thus have more international sympathy.

6. During occupation the government could go underground, while still ruling the country's BTC economy and citizens would be
    harder to exploit without causing a rebellion.
    During WWII France this could have meant a continued and highly organized resistance against the Nazis that really only controlled
    Paris early on. With BTC control of the parliament (or whatever) in Paris would have had little significance.

7. Technologies that work well in peace usually also work well during war-time. Examples: Wheels=speed, phones/radio=comm., mass
    production technology, medicine=better/living soldiers, sensor equipment, satellites, high strength construction/armor materials and
    infrastructure. There is no reason to believe Bitcoin should be different.

8. With the opponent printing lots of fiat to fund their wars, their currency would be tanking while the Bitcoin country would be getting
    "free money" from the resulting BTC deflation.


It is a fallacy that smaller things cannot beat larger things. Large things generally take a lot of energy to even operate. If they are more efficient per unit, then that is fine, but that can hardly be said for our current EU/US status quo.

Or in short: Come at me bro!

We are perpetually at war so this doesn't even make a little sense.

I think the current system makes financing war a very easy, just print the fucking money. Then use that money to take over a country and its oil, only to make more money! Now since you cant simply print bitcoin, financing wars would be harder, the only way would be to convince the people its a good idea and ask them for the their money / lives to fight for this war. As a result their would be no BS wars, because no one will pay good money to get people to kill themselves just so some corporation can come in and start pumping. Yes your right bitcoin is totally useless when it comes to war, because the oil companies would have to finance their own wars.

If bitcoin were to ever be a core currency,
no one would accept anything other then bitcoin.

I think you're right here.

Although the oil companies have the world by it's balls quite nicely...I don't think they'd have a problem finding a new way to exploit economic systems for the purpose of control/power.

While they may not have the bitcoins, they have the stuff which makes bitcoins worth having.

False. Govs would still require tax payment in their own currency, there'd still be legal tender laws, etc. Bitcoin as the backing/reserve-currency absolutely makes the situation better than now, but as I noted, govs still printed too much money when gold backed everything...

If it weren't for bankers financing wars, the history of the world would be far different. If governments and banks have little control over the currency, then yes I believe that war would be much more difficult. While war does temporarily promote some industries and can temporarily relieve recession-like symptoms, the greater toll is a big fat negative. But it has to get to the point where people only want a nation's currency to pay its taxes and nothing more and have to be willing to be civilly disobedient in the case of military drafts. But bitcoin won't fix most of this because of the fact that bankers will eventually accrue a large portion of the wealth or bitcoin will just fail because it's silly to loan money in a deflationary economy unless...

What's to stop the bitcoin elite from financing a large state's war? The profit incentive would be tremendous. It's what the goldsmiths and lenders did several hundred years ago for british and american wars. It was possible then, it will be possible again.

It would hardly surprise me if the majority of coins were already held by those looking to gain from it in 100 years, even if just in case a situation like this were to arise.

"I care not what puppet is placed on
the throne of England to rule the Empire, ...
The man that controls Britain's money
supply controls the British Empire.
And I control the money supply."
- Baron Nathan Mayer Rothschild

Then again, even if they didn't, they have the skill and experience to quickly turn things their way.

You'd call it a war if you were preemptively invaded.

In order for the elite to wage war the economy must first produce to enable war consumption. Without the production they cannot wage war.

The sounder a currency the more the elite would bleed savings until their resources are exhausted and they can no longer fund the mercenaries. The Golden Age of the soundest gold standard (there were multiple gold standards) was also the time of the least war because the State was more tightly constrained from being able to prey on the production of producers.

There is a huge difference in the economics of violence in the Information Age in contrast to the Industrial Age. The cost of protection and return on investment from extortion has changed dramatically in favor of both the producers and holders of capital. Both producers and holders of capital are in large part no longer held hostage by geography and consequently no longer need institutions capable of projecting tremendous amounts of violence to protect their assets.

And one of the reasons the elite did not bleed wealth was because of the fractional reserve lending system which allowed them to not bleed but consolidate wealth, particularly during times of war. Bitcoin being both the blood (gold) and the veins (storage & value transfer mechanism) constricts the predatory and agressive class far tighter than gold or anything else ever could.

What evidence are you using to support these claims?  This (http://www.amazon.com/The-Better-Angels-Our-Nature/dp/0670022950) well researched book suggest that we're currently living in the most peaceful time in earth's history in terms of violence generally and war violence in particular.  There's tons of data in that book that would seem to contradict your claim.

There's a few people looking at Bitcoin as a survivalists currency, well a small hedge in disaster scenarios along with more normal stuff. Of course it depends on the scenario.

 How useful is a Bitcoin to an Iranian really? Now bear in mind how Gaddafi got on and he had a ton of Gold and Oil, both considered currencies. The difference with Bitcoin is just that the tech to track it is difference. Gold and Oil are just tracked in different ways... I'm not sure which is better or worse for different situations. Offline transactions are however, only offline...

If cash goes out the window in states of war what replaces it?

I read a story of a guy entrenched in a city in Czechoslovakia for a year. He recounted that gold was used but it was worth much much less than all the goldbugs might expect. Lighters and cigarettes were worth much much more. Gold simply wasn't really currency as the situation was so desperate. The key thing you need for gold and Bitcoin to work are some international trade. If you're completely cut off like you get in war (i.e. Iran now), then you can't get the other side of the transaction so that's the key.

@ChupacabraHunter: does your friend spend time in war zones?  I suspect no. Does he use Bitcoin? I suspect no. Sounds to me like he's a typical modern pundit, a loud-talking know-it-all. I wouldn't be surprised if this is exactly how he made his money - by talking with authority about things he knows shit about. So 21st century...

Yep, gold is useful for inflation hedge, not useful if you are trapped in warzone, in a warzone food and any useful products are more valuable than gold.

BTC doesn't have to "topple, beat, replace", etc. It just needs to compete. The freemarket suggests competition is good because it brings about innovation spurred by economic reward. Why should there be a private corporation controlling the currency of the US? (Isn't that a.... monopoly???) Why shouldn't currencies compete?

@ChupacabraHunter: 25 replies, and no word from you. That's not nice. I was hoping for a discussion, or at least an update.

Currencies should compete in a free market just like everything else should compete. Even if there is a limit on total number of BTC, it can still be used to finance and buy things just as easily as anything else. Heck, Iran accepted gold for oil once the sanctions set in. Who says they couldn't use BTC for that?

Yes, you are right... I finally (after about 30  minutes of trying got my internet connection going!)  I am on the road... kinda "Simon Black"-like :)

Most times I check things on a small device, but responding from there is a pain.  I have GREAT discussions with people all over the world, and wish to get those ideas here to have them go "deeper" with you guys, the "hero" members et al. but I guess this is just not working since I don't have constant, reliable internet connection. I wish there was a cool Android App for messaging and discussing things on this forum... any suggestions?

anyhow, I am responding as best I can, it is just too sporadic, I am really on the move now, but soon I will settled somewhere!

Thanks for the great input and call for a nice discussion, that is also what I want.

Your friend isn't putting forward any rational arguments. The better question I would ask myself if I were you is, what drives me to continue engaging with an irrational person? Curiosity toward yourself if pretty important.

I don't even think it will have to come to war.
Bitcoin is fully dependent on the current system and cannot function without it.

Right about the first few: No wars.  No bitcoins.  Very modern.
Wrong about: Pundit. Loud-talking. Know-it-all.

Actually, the whole point of my post is to have the community here help me have a nice intelligent conversation with someone who's intelligence I value, and who lives in the normal "economy" with his family etc.

He sees the current system for what it is, and he sees it from the inside as he is a very skilled mathematician and statistician.  He uses these skills to work and make money for a huge company, and he is taking the time to talk to me and to help me understand why he thinks Bitcoin is not a good idea. 

He is open to discussion.  He is listening at the moment.  I am trying to see if I can "convert" him, or if he can convince me that I am infact wrong.

Some people's posts here miss the point. I am only trying to see how a patient, and open discussion can lead to informing someone who is VERY INTIMATELY connected to the current system and how he can be converted to see the light of Bitcoin as we all do!

One idea at a time.

That's all. 

Thanks for you help, and input.

I think it could facilitate it as some other's have mentioned that gold has been used for that in the past... the question is:

Would Bitcoin be a better (winning) facilitator when compared to Fiat or Gold for that matter (?)

I do love a challenge! :)

No. Sorry, not so easy to dismiss, he is not mentally retarded, quite to opposite.

I think his point is that it is "useless" in comparison with the current DOMINANT system which is exactly that: DOMINANT!

The current system is creating, financing, keeping a state of war the world over. 

btw. I am still waiting for more clarification on my friend's view, but it does seem to make some sense that bitcoin would have to (in theory anyway) be able to finance an army of "defenders" if push came to shove and the bitcoin system came face-to-face with the current financial, warmongering system.

You wont have to wait long. War is coming from the North  8)

https://www.youtube.com/watch?v=nWHLE3DBs38

First of all, glad to see this discussion going. Next, I stand corrected on calling your friend a loud know-it-all pundit. I say this because from your posts I judge that I can trust your judgement. Finally, this community (myself included) usually doesn't take criticism well, even when well founded.

Now, with all this in mind - your friend's main point is valid for as long as "warriors" (or dogs and idiots, depending on your perspective) are willing to accept their own debt as a payment. The current system quite successfully relies on the inability of most people to see that far - it is really a neurological issue, and political aspects only build upon it. The war profiteering of the few at the expense of an infinite, exponentially growing debt of the public is still not recognized as a problem by the public.

On the other hand, Bitcoin does not necessarily endanger the current system. In fact, it is much more likely that it will co-exist as an alternative store-of-value and a system for international transfers. Most people would still happily and short-sightedly accept debt-backed fiat payments. Perhaps even the "elite" cannot think that far as to recognize Bitcoin as an actual danger? To help the inevitable but slow adoption of Bitcoin, perhaps we should slow down with all the "revolutionary" anti-government yelling, and simply focus on using Bitcoin and pointing out its practical advantages where they exist? I certainly think so, and I dislike btc businesses that are vocal about their political views. Offer the service, explain the technology, and let people decide for themselves about the implications.

Does your friend think the current elite would actually recognize Bitcoin as something that endangers them?

Once you have a state of war there'll be a shitload of people not supportive of a war who will flock towards Bitcoin because it offers an unprecedented alternative.

It'll be hard to convince people of the necessity for war when they see a new form of economy blossoming right in front of them that offers them extraordinary progress without the risk of physical violence.

I think bitcoin could be useful in preventing war.  Hard commodity money such as gold and silver can be seen by the enemy as booty to be looted.  Bitcoin cannot be looted.

CW

Maybe it can't. Your friend doesn't need to change, he can go extinct.

As for the Bitcoin is useless during a state of war premise I'd say there was a time around 10-15 years ago when I'd maybe agree with that but today I just can see major economies allowing the destruction of something like 15-20% of their GDP by gangs of people known as governments through nationalizing all ISPs in the area they rule through violence and cutting off all the other areas so I don't think I'd accept the premise that Bitcoin automatically becomes useless in the state war. For example the land area knows as the US is at war right now in several countries and yet Bitcoin is perfectly useful to almost everyone.

Wait what? Your friend believes we need war? What push?! Please, your friend is fear mongering. I don't need no stinking war.

Trade promotes interdependence a byproduct is peace and prosperity.
Fighting on the other hand consumes wealth, destroys prosperity and suffering is the byproduct.
Read The Autobiography of Benjamin Franklin, to find out how to create an army for defense without a central bank.

The economy is a result not a means. You don't need war to make it happy unless you are insane. *edit* if you still want a war to help teh economy make sure you are fighting on the front line.

The United States has been at war for the entire duration of the bitcoin block chain.  Bitcoin is of limited utility but certainly not useless.  I use bitcoin to earn dollars.

what are you going to do with 3 tons of gold if you need to get the hell out of dodge?
I can bet you my bitcoins are much safer than your gold.

Where the hell are you going to get $100.000.000 worth of gold?

All bitcoin needs to succeed is 15 to 18 percent adoption. (http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html)

I've been away a bit... sorry (I did ask for a 'patient' discussion ;) )

I don't think  that your view of having my friend "go extinct" is a good idea.  He is EXACTLY the kind of INFLUENTIAL person who can help to SEVERELY DISRUPT the current system NOW! If that was what we wanted to do... I DO! :)

That is why I went into this discussion.

Thanks for the rest of your comment, it is well appreciated! :)

Sorry, but this guy is profoundly confusing things.
The wright brothers didnt have 17% market penetration when they made their discovery.
His observations are very very narrow-minded because there are lots of examples of companies that succeeded even when they didnt follow his nonsense.
Picking out some of the 'winners' and generalizing it to everyone is just bullshit at a very basic level.

No. the Deutsche Mark only came into existence after WWII.

What you say is true though for the Reichsmark, which was in use before and during the war. All paper and book money was rendered worthless. But the Reichsmark was also issued as gold and silver coinage for the paranoid part of the people who would not trust papers and books. These coins still today have the same buying power as back then even though their emitting entities have ceased to exist long ago.