But needless to say both of them have soured on a lot of their previously strongly held ideas regarding how they expected people act given a free market and the benefits of unrestrained capitalism.
I'm curious, can you expand a bit on the specific behavior that they have observed to be outside of their expectations?
Was it primarily thefts, scams, market fluctuations, illicit trade? Or is it the constant calls for regulation?
Well, with the one who doesn't know what to think any more, I think his change of heart has been primarily driven by emotion and seeing all the thefts, scams, and failures of bitcoin thus far. He hasn't told me anything about getting scammed or losing money, but I suspect he might have been burned at some point. He also really hates Mt.Gox and the fact that they are the center of the bitcoin universe at this point, and he thinks it's ridiculous that there hasn't been anyone to out compete them yet. I personally think that's a result of real world regulations restraining the market, and that if that barrier to entry was not there Mt.Gox would either be out of business, a non-factor, or completely overhauled and improved to compete.
The other one has definitely given it a lot more thought, and I can't exactly recreate all his arguments but some of the points that I remember are something like:
- The cost of defending your financial interests in a free market against other rational actors(self interested and unrestrained, i.e. will take any perceived advantage) outweighs the benefits gained. One example I remember him giving was a theoretical exchange closing once the amount of deposit exceeds the projected amount to be gained from transaction fees over some time period and just taking everyones money because that is the rational option.
(I personally think these problems can be solved and we are in the process of solving these issues now with bitcoin and some of the ideas like Open Transactions, coloured coins ect.)
- He believes that people underestimate tendency of the market to over-react to problems and self regulate after the fact in an ad-hoc and inefficient manner. Sort of correcting obvious problems after it's too late and doing it poorly.
(I kind of see the point here, it's pretty vague I think though)
- Some other random stuff how political ideologies in general are all flawed when you try to stick with one solution to every problem and that people should be more dynamic and less focused on pigeon holing themselves into certain systems.
There's more but I'm not sure if I can remember exactly. I should ask him again and check and if there is anything interesting I'm missing.
I think bitcoin just caused him to be more critical of his own political assumptions. I guess that's a good thing, but we have a long way to go and I think bitcoin and the culture around it is going to be improving a lot in the near future. As in all these problems that bitcoin is having are just going to make it that much stronger in the long run as people adapt and the market corrects itself. It's going to be interesting to see how it unfolds.
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