Well, maybe (s)he does. This philosophy is quite compatible with anything really - if you happen to think that your well-being is best served by a tyrannical despotic ruler, well, that'll work for you. If you think it's best served by complete lawless anarchy, well, that's what you think. The point is that, when you have sufficiently achieved your own well-being, you can afford to dedicate some of your productive capacity to the well-being of others; the question that arises is whether there exists a moral obligation to do so. Personally, I don't think there is any such a moral obligation, but I do think that it's a sign of greed when people take more cake than they can eat.

edit: the real problem with Elwar's statement is that it says nothing about what to do when two people's ideals conflict.

Please read the previous posts.  I said it's not a black and white situation.  It's not like $99 is fair, but $100 is unfair - there's no sudden line that you cross.  If something costs $10 to produce, then is $10,000,000 a fair price (suppose you own the only squieegligook mine, and people want squieegligooks)?  Answer my question - is it possible to be greedy when setting a price?

Is that your best argument as to why fraud is illegitimate?  Just "because"?  I'm hypothesising a truly free market, where there are absolutely no regulations.  Buyer beware, is the order of the day.

Great! Do we agree then, that if I can separate a fool and his money, it matters not how I do that?

Wouldn't it be great if all consumers were perfectly good at spotting and avoiding fraudsters? My question remains:
Personally I am of the opinion that profiteering is immoral, illegitimate, inefficient and unproductive, and nothing other than a fraudulent misrepresentation of the value of a product or service. It just seems to me that the pro-free-market position is untenable. Why is profiteering considered ok, yet fraud is not? Don't ignore the question by saying it's "orthogonal" like as though that means something.

You're equating "those who especially need milk" with "those with the resources to pay elevated prices".  If your corner store raises prices, it won't be the needy that can still buy milk, but the wealthy. These two groups will be almost mutually exclusive (i.e. the needy will probably be poor, and the wealthy will probably not be needy).

I agree with all you say and, while I would very much like to be the good philanthropist and put up the $50K you require, well firstly, I don't have it and secondly if I did, there are plenty of other things I'd do with it first.

How come you're afraid of being double-spent? Bitcoins don't permit double spending, unless you're doing something specifically to re-expose that risk, such as offering wealth on foot of zero-confirmation bitcoin receipts...? Exchange rate risk... yes, but then, when volatility goes down, you'll be able to (nearly) eliminate the fee for that risk, right?

Certainly one should have a buffer of capital to cover for unlikely events, but once you've put enough capital aside to do that, then the fees should come down, right?  i.e. you need $50K to cover for unlucky exchange rates.  So how long, at 0.5% fee, will it take you to put $50K aside?  A few months?  A couple of years?  So do that, then put a big banner on your site saying how you're now able to reduce fees by 0.5% due to the excellent risk management strategy devised by the managerial team.

Don't get me wrong - read my OP again. I'm all for a fair price and a fair profit. Seems to me, though, that the "Great Bitcoin Opportunity To Give Economic Power Back To The People" is being abused by some players (and, again, I mentioned some specific websites only as representative examples).


I mean price-fixing monopoly cartels. Like OPEC, right? (though maybe their monopoly is dwindling). A powerful monopoly needs no assistance. It can purchase its own violence without requiring the state to provide any.

You think it's silly, but that's how the natural world is. A lion would proudly take possession of a cheetah's kill. The ferrari owner is to blame as he stupidly left a very desirable and valuable piece of property undefended. Likewise the rich man, and the small farmer. The thief and bandit are not to blame because, given the society where this takes place, where violence and theft are to be expected, if they had not performed the acts of 'theft' and 'violence', someone else would have.

I'm talking about "true libertarianism" in which even the NAP is rescinded. You are truly free to do whatever you want. Rescinding laws until you're left with only the NAP is arbitrary. Give me a good logical argument why libertarians insist on maintaining a NAP, and yet insist on rescinding lots of other laws.  Or, alternatively, why libertarians insist on creating the NAP, yet refuse to create other laws.

Of course, people would still have the right to defend themselves; foolish is the bandit who attacks the rich martial arts expert travelling dark lonely streets without bodyguards and foolish is the thief who steals a ferrari with the remotely activated defense systems, and so on.

Insofar as a monopoly can occur in a free market, then so can profiteering.  I can't wait for the alternative lower-cost bitcoin services to spring up.  Given that first-movers have the advantage, and second and third-movers will probably just maintain the status quo, well, I'm not so hopeful.  Let me ask you a question.  Do you suppose there are any price-fixing cartels in bitcoin-dom yet?

I feel exactly the same way.  I admire bitcoin very much, and the opportunities for an equitable society are plain for all to see; pity it's being usurped by the money-makers.

To all those that say "do it yourself", well, if I could, I would. I would cover costs and take no profits, but I would ask for donations.

Are you saying that it's not possible to be greedy?  Is there never a point at which an asking price is unfair?

How about this.  I could agree with you and say profiteering is legitimate.  I could then go further and say that profiteering through fraud and deception is also legitimate.  Well, why not?  If I can convince someone to part with their money, could I not then put that money to better use in the market?  Give me a really good reason why dishonesty shouldn't be allowed and yet profiteering should.  No appeal to morals, please, nor to "the greater good" or "market efficiency" etc, please, as these are statements about a theoretical markets.  After all, if it's a free market, my dishonesty will soon be discovered and my customers will go elsewhere. What's the problem? In fact, by dishonestly trading, I'd even be helping the economy - think about it, my defrauded customers will become much more careful and discriminating in their future purchases and the economy as a whole will be more resilient and less susceptible to fraudsters..... Can you *logically* refute that and *still* claim that profiteering is natural, moral, legitimate, efficient, and productive?

I've realized that there is an analogy to the Non Agression Pact of Libertarianism, and have started a thread apropos: https://bitcointalk.org/index.php?topic=88184.0

Decades, if not centuries, of standard economic theory says demand is a decreasing function of price. Are you saying all that is wrong now? If your product is good value, the shouldn't the free market (eventually) select it even if it's much cheaper than the competition? Wouldn't your customers spread the word about what a great guy with a great product you are?

So I started a discussion about what I perceive as profiteering in another thread, and realized that there is a comparison with libertarianism and the Non Agression Pact.  I define profiteering as selling at the maximum price you think your customers will pay; as a genuine free market would fully endorse. One forum user, evoorhees, states:


So I wondered, why stop at profiteering? Why should fraud, deception or trickery somehow not be permitted?  Please read that thread for more info there.  Here I just want to discuss the analogy with NAP which, hopefully, is fairly obvious as follows.

Libertarians want there to be a minimum of laws, in fact, as I understand, there should be only one: do no violence unto others (where violence is understood to include such things as theft or damage, which implicitly defines such a thing as private property).

Well, why no agression? Life is violent by nature - just ask any lion or gazelle; each and every one of us should be obliged to take adequate steps to defend ourselves and those who do not... well... too bad, they were warned. The thief cannot be blamed if that ferrari happened to be there, with the keys in the ignition; the bandit cannot be blamed if the rich man was travelling dark lonely streets without bodyguards; the large-scale farmer cannot be blamed if his small-scale neighbor left his farm unguarded while he was ill.  And so on.

A society could have lots of laws, or a few laws, or none. What's so special about having just one law, the NAP? Like I say, life is violent, so people should all be prepared for violence. You can't defend the NAP by appealing to civilisation or that mankind has subjugated its violent nature, because then you're implicitly justifying any other laws that civilisation chooses to enact, or any other behaviors that mankind chooses to subjugate.

Indeed, a violent person should be praised for helping the society learn how to defend itself and become even more resilient to external agression.  A bit like hackers getting paid to show banks where their weaknesses are.

If you want people to be as free as possible, then stopping at "no agression" seems a bit arbitrary.  It's certainly not written in the stars or the rocks.  What gives?

Yeah, maybe, but any player with control over a large percentage of bitcoins could play havoc with the market.  Who would use bitcoins if an iphone costs 10BTC one week, and 100BTC the next?

edit: nonetheless, I'm not so worried about this attack.  As LordFrog says, it'd be an expensive way to attack bitcoin.

Ahhhhhh, thank you.

So, Proudhon, and others, argue that the service fees are, in part, due to transferring wealth in and out of bitcoin-dom (e.g. €1 SEPA transfer etc).  If that were the case, then (and I choose MtGox only as a representative example) MtGox would have smaller fees for changing a USD MtGox balance into a BTC MtGox balance - no external bank transactions necessary.  But the fee is 1.2%.  Is 1.2% of some 50,000 bitcoins per day a reasonalbe amount?  Or, again only a representative example, look at TorWallet.  It exists only in bitcoin-dom with no external bank involvement.  Nobody has refuted my estimate for server and admin costs which would be much smaller than the actual fee.

Therefore, Proudhon and others, I reject the claim that bitcoin service fees are related to moving money in and out of the bitcoin economy.  If that were so, then, not only would TorWallet have lower fees (or I've grossly underestimated their costs), but also asdf's hypothesis will come to pass, but I'm not so hopeful:


You're oversimplifying.  It's not a black-and-white situation.  If my food and shelter costs were $1000 per month, then it's not like charging $1500 or $2000 is grossly unreasonable.  But suppose I were one of the usual cronies milking the system for what it's worth - a doctor, a lawyer, a politicial, a banker, etc.  And I ask for $10000 per day (think about bankers with $5M yearly bonuses, on top of their salary), is that still reasonable?  Is it reasonable to insist on being paid an enormous amount just because people are willing to pay?  Does it never become "greed"?

I've had a similar argument on this forum about the cost of digital goods, e.g. an mp3. My argument was similar to Portnoy's - should I pay $1 for an mp3 because I consider it worth that much to me, or should I pay $0.001 because if 1,000,000 people buy it, then the author will have been abundantly well paid?  Why is it that big-name musicians earn tens of millions of dollars per year, while less known musicians, often of a much superior quality, barely scrape a living?  I am fully aware that this is the free market, but, bearing in mind the root causes of the current economic mess, can't any of you capitalists stop for a moment to thiink: is it fair?  Really - try to think if greed is truly the best way for humanity to shine.  Think about whether rewarding people with fabulous wealth is the best way to attract the best people for a job (be that politician, or banker, etc), or if it's the best way to attract the greediest people.

Then why does an e-book, or an mp3 on itunes, have a price which is comparable to the physical book or CD on high-street?  I agree, in an ideal world prices would come down, but I'm just a born sceptic.

So the most popular response is: if you don't like it, do it yourself. Maybe it's just me, but that response just that seems so... childish. [sarcasm]Oh yeah, and unpredictable[/sarcasm]. Reminds me of "It MY ball, so if you don't play the way I say, I'm taking my ball back." What, do I have to learn how to do everything? Ever heard of specialisation of labour? I've already chosen my career and it wasn't software dev. Does that mean I have to be a slave to the software devs, or is there not some better method? Is the bitcoin revolution really going to just make *everyone* selfish, as is seems so far, or can we not hope for better?

Many people in this forum complain of government protection of the banking monopoly allowing the banks to charge outrageous fees with impunity.  Well look here - all hail the free market - where the fees are just as high.

It was.

I disagree.  An exchange which holds peoples' (e.g.) USD and BTC balances does not pay any external service (e.g. a bank) when two people trade with one another.  They just move numbers around within their own database.  Of course, this has to be done in a clever way so as not do annoy your users and that requires paying good devs and admins.

I realise that.

Not a dev. :-(

Indeed.  When the price of mixing services comes down (alot), then, I suppose, yes, I will start mixing my coins.  Right now, like I say, this "free market" seems to consist of greedy suppliers and, in any case, is too expensive for me.

How about this: I'll open a bank and I'll lend out depositors' monies at interest. I'll charge depositors a fee to keep their money safe.  I'll charge depositors every time they conduct an operation in the bank - I'll charge fees for them to put their money IN the bank, and I'll charge them fees to take their money out.  With ATM bank machines, I can reduce my costs-per-operation to almost zero, but WTF, I'll charge depositors the same amount anyway 'cos, really, all the banks do that anyway and I wanna be part of the BigBankersClub. Now THAT would be fees for using cash.

Really, guys, what's the point of a revolutionary new currency if nothing really changes? We'll just get a different cartel of geek bankers? I was hoping for better.

[rant warning]

Well, everywhere you see bitcoin promoted or advertised, they'll give you the selling points - rapid transactions (hours instead of days), pseudonymous, secure, inflation-proof, and, not least, near-zero transaction fees.

This last, the near-zero fees, might be true of the protocol, but it is absolutely not true for all the services that have sprung up.  There are, to my knowledge, very few services that offer less than 0.5% fee, most would be around 2-3% - roughly a credit card transaction fee.

What got me started on this was TorWallet's announcement of a mixing service https://bitcointalk.org/index.php?topic=87387.0.  Now, that seems like a wonderful service, but it charges 3% for mixing your coins, while a similar competing service, BitcoinFog, charges 2%.  Let's think about that.  BitcoinFog says he gets "thousands of bitcoins per day" moving through his service (see above thread, msg 17).  2% of thousands is, let's say, 50 bitcoins per day or about $300 per day, or $9000 per month.  Now that is way more than anything you might need to run the server.  A low-cost server might be $10 per month, a high-end might be, what, $50 per month?  So, assuming a high-end server (BTC 0.2 per day) handling 3000 bitcoins per day and an admin costing BTC 4 per day on average, a reasonable fee might be 0.2/3000 ~ 0.005% for server costs, 4/3000 ~ 0.1% for admin.

Now you might well say, STFU, go do your own.  Well, I would.  But let me tell you another story.  Where I live, the govt built a nice new bridge over the river.  It cost a lot of money, so there was a toll to go over it.  Now, 30 years or so later, the bridge has gathered enough tolls to be fully paid off many many times over, but the toll keeps getting more and more expensive.  I realise that there are maintenance costs, but they'd be far less than the tolls.

Same with bitcoin services - the devs have to be paid for the initial investment.  But if that were all, then you'd expect the fee for a service to reduce over time, and to reduce as more people use the service.  That hasn't happened with any bitcoin service that I'm aware of yet, leading me to think that service ops just want to milk the pundits as much as possible.

So - is it possible to use bitcoins with "near-zero" fees?  I don't think so.

[/rant]

I've tried to discuss this before, see below, and subsequent replies and rebuttals to that thread.  I've never been completely satisfied that there is a defense against this attack.  In short, you'd end up with an 'official' blockchain, where gov't salaries would be paid, and tax would have to be paid in that chain.  And a black market chain, obviously illegal - the 'blackchain' 

Yes, indeed.  What is the acronym for a Local Exchange Trading System which is *not* based on credit/debt but rather on value-by-scarcity of some commodity?  How about BitcoinBackedLocalEconomicTradingSystem,PaymentNetworkandCurrency.  BBLETS,PNaC. 

This is something I've always thought bitcoin could do.  I've always imagined a world where local, or even national, currencies are backed by bitcoins.  e.g. Your government can prove it has 100,000 bitcoins, and so issues $1 trillion (or whatever) at a fixed exchange rate which citizens use on a daily basis.  When you need to buy a house, you save up your $s, exchange for BTCs and buy the house.  International trade imbalances would be paid off with BTCs.  (aside: I realise that I've made an exchange rate of $1 million per btc, but bear in mind I'm just using the "$" as a symbol to indicate unit-of-currency, not as an indication of the existing US$. We could use, e.g. B$)

This could even work with LETS.  A wealthy bitcoin entrepreneur could set up a bank and issue a BTC-backed LETS currency which the local community would use.  Neighboring localities would have their own currency backed by whoever owns bitcoins there, and the exchange rate would fluctuate according to how hard the people worked, and how much produce they manage to export to the surrounding localities in order to bring more BTCs into their own locality.

Less-than-honest BTC owners might try to surreptitiously issue more currency, but inflation would always catch up with them.

In a way, this would also partly solve the scaling problems with bitcoin (or have they all been resolved?).  If everyone all over the world were to pay for their small transactions with bitcoins, the blockchain would grow by... how much?... 1 TB per day?  And if everyone had, say, 10 non-empty addresses, then you'd need a balance-block of... maybe 5 or 10TB. (these are just guesstimates).  So, like Mageant says, paper currency for day-to-day transactions.

We should organise a reward for any libertarian on the forum (with many pro-libertarian posts) who is willing to travel to Somalia, provably live like a peasant in the city for 12 months, documenting their lives as they go with photos etc, then come back and tell us if it was great or not.  I'd offer $100 for that.

Secondly, the article talks about, for example, how great telecomms is in Somalia - 9 networks offering services from texting to mobile internet.  I wonder how easy it would be for a new small operator to break into that market - would the existing operators welcome the new competition?  Or would the new operator find his telecomms masts sabotaged?  Or high pricing for rental space on existing masts?  Or maybe his staff threatened?  No law = mafia-esque regulation of the market.  Now don't go telling me the current (western) situation is not much better (e.g. oil, telecomms, agri, industries lobbying to legally protect their market share).  I know.

You don't even need to look at Iraq or Afghanistan.  Yesterday (http://www.itn.co.uk/home/45735/School+bombed+in+Italy) a school in Italy was bombed a day before an anti-mafia rally.  The school was named after the wife of a murdered anti-mafia judge, murdered twenty years to the day beforehand.  In the bombing, one child was killed and several injured.  That's the alternative to "government by consent," what many here like to call the "tyranny of the majority" - it's "government without consent," and "tyranny of the minority."  Which do you prefer?

This is exactly what I'm asking about.  The Greek govt (and by proxy, the Greek people) implicitly trusted the EU not to flood Greece with worthless euros.  I guess they were also hoping that all of europe wouldn't suddenly go to Greece and spend their euros there.  There are no such guarantees with bitcoins.  If some Greek community decides to adopt bitcoin instead of creating their own local currency, then ALL of bitcoindom could start buying there (e.g. online shops etc), and the area will be flooded with bitcoins, making it hard for regular traders to find equilibrium prices.

So, my opinion, is that the switch to euro involved a trusted central bank authority.

cbeasts solution is similar to what I suggested above, except he wants to continue using the electronic nature of bitcoins, whereas I suggested using 'the athenian bitcoin bank' which issues paper currency backed by its bitcoin reserves.  Both systems assume that traders will honour the local bitcoin pseudo-currency, and either refuse or impede transactions with 'foreign' bitcoins. (this is what would give the 'green' bitcoins greater value - in the geographical zone of interest, more traders are willing to accept them, therefore their value increases).

So... to get back to the topic.  What do ye think then, better to use actual bitcoins, or better to institute a bank which issues as much currency as it has bitcoins in reserve.  Again, this is just to initially regulate the quantity of money in the economy.  It's clear that all merchants in a locality would probably have to cooperate in order for the local economy to be successful, so maybe the semi-centralised solution above, the bank, could be discarded in favour of a self-controlling system whereby each merchant promises to limit their bitcoin intake, or to manipulate prices of goods where necessary.


There are two interesting things here.  People are, and should be, responsible for the debts of their elected government.  BUT, not for the debts of private banks which is actually how it has worked out in many countries.  The elected officials either jumped on the bandwagon and are milking the system, or else they thought the economy was too systematically dependent on the banking sector to let it collapse.  Second, I'm really curious to see how things pan out in Europe where, if I understand correctly, the new EU tax treaty will allow the European Commission to dictate the budget of any member nation that can't get it's own budget under control.  Now, suppose you're... let's say Spanish.  Right now your economy is fairly messed up, but suppose the Spanish government messes it up even more so the Eurocrats step in and dictate tax rates, healthcare budget, education budget, the works.  And suppose the Eurocrats mess it up even more.  Now who pays?  The Spaniards pay for the mistakes of non-elected European officials?  The EU is, I think, by and large a positive thing, but this really has the potential to be a disaster.  Sorry - this bit is off topic.  If you want we can start a separate topic to discuss this.