Bitcoin will become an excellent store of value. Here's Jim Willie, an analyst and long-time gold bug, talking about how hilariously cumbersome gold is to deal with:  |
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People have a very hard time imagining more than one change to the current system. They can imagine Bitcoin added to the current world, but they can't imagine a Bitcoin world. This is why the term "paradigm shift" exists. Humans don't engage more than one level of hypothetical without developing that skill specifically. To evaluate something as transformative as Bitcoin you have to imagine what the world would be like if many different things were to all change. In particular, you have to momentarily suspend disbelief and simply ask what would happen if Bitcoin took over. Because that's the scenario that matters, not "oh Amazon also accepts Bitcoin." |
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Peter Schiff still coming out very strongly against Bitcoin: https://www.youtube.com/watch?v=lMfoFlJhcck&list=UUIjuLiLHdFxYtFmWlbTGQRQNo valid arguments in the whole thing, but it does show his mindset pretty clearly. If you're still holding these bitcoins, DO NOT GO DOWN WITH THE SHIP. Go to my gold company, Schiff Gold... if you've got 30 or 40 bitcoins you can buy a few ounces of gold. At some point you may not be able to buy a pack of chewing gum with those bitcoins. |
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Zer0Sum, Certainly there are some lucky/stubborn investors, but I take seriously the points made throughout the entire discussion linked in the passage you quoted, not just the OP. In particular, it takes an extremely stubborn investor to continue living paycheck to paycheck (for example) while maintaining hundreds of thousands or millions of dollars in an asset that could go to zero at any time. To bring up such people only seems to reinforce the point: their existence is minimized thanks to Bitcoin's extreme volatility over the years. As far as real estate, I think there could be a lot more involved in the inertia of "holding" a house. Moving can be a huge deal both logistically and psychologically, and it seems there is a somewhat unique psychology to home ownership in the first place, as seen in the proverbial expression, "A man's home is his castle." A better example would probably be something like Google stock. |
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^ Agreed that Bitcoin is the way out. But again, this is another in a long train of technologies that have made everyone's lives better. It's just that now we're getting into the really huge ones. Bitcoin, prediction markets, decentralized everything...then in a short while the pace of new tech becomes impossible to comprehend, let alone predict.
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You're right. Those jobs eventually won't exist, because they'll be automated. Instead, other - easier, higher paying - jobs will exist as people desire greater and greater comfort in their lives and hence start wanting tiny, really easy things done.
Proofreading my comments here for readability takes a few extra seconds/minutes. Shall I hire someone to do it? How about hiring someone to adjust the feng shui of my sentence arrangement? Perhaps, as mentioned above, I'll simply pay someone a satoshi to get out of my way since I'm in a hurry. Maybe someone to follow me around at a distance with binoculars to periodically make sure there's nothing embarrassing stuck in my hair or on my face/clothes.
The problem is that in my dystopia, you might be willing and able to pay for such services, but if so you'd be part of the new aristocracy, the lucky few. The vast majority of people would not be able to spend money on such frivolous expenses, and therefore there would be few oppurtunities to earn money that way. How does that sound when applied to things like working a cash register? There will always be plenty of work, though its content will change, until that extreme far future time when AIs do absolutely everything anyone could possibly want. Lack of economic demand doesn't equate to lack of human need. Demand is a function of price - in economic terms you can only contribute to demand for a good to the extent that you have the means to purchase it. Yes and the greatest trend in the history of technology is that of more and more people gaining the means to purchase more and more amenities to satisfy their less and less urgent needs. People had these worries going all the way back to the Industrial Revolution. |
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For the last 200 years it is a correct assessment, but if you are old enough, comparing 2014 with 1999 in almost every aspect (except, bitcoin  ): living conditions, income and work load in US for a majority of the population are much worse in 2014, no question about it. Creeping unrecognized inflation; long term unemployment; higher premium, but worse medical plans-we have it all. Because of high unemployment, people have difficulty changing jobs and/or moving, etc., etc. I am trying the Piketty book-it seems that he got something right there regarding the cause of this situation, but I am not sure what solutions (if any) are possible. That's certainly not the fault of technology. It's the Fed and other government bloat. |
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The trend is so blindingly obvious that it scarcely warrants mention: unskilled labor gets easier and easier ( hard/dangerous/dirty labor gets paid more), and the wages received buy a dramatically greater standard of living. When we add in technological innovations that further save on the labor that is otherwise necessary for basic living - such as washing dishes, bailing water from a well (to say nothing of digging and maintaining the well) - the argument becomes several times more striking. How does this apply to real estate? In the US a lot of people living in crack addled trailer parks who have iPhones and Netflix, but they still have drug addicts for neighbors. We need to broaden what is included in our "quality of life" stats to capture this; it's presently invisible. What do you think living 200 years ago was like for people of similar skill level, family circumstances, and motivation? Or perhaps I shouldn't say living: the vast majority of them would probably not be living at all. |
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Just like most people in first-world countries (third-world countries are third-world because they're much farther from the "problem" of technological unemployment) can get by now working a low-wage part-time job if they don't mind having no electricity or running water, in the future you'll be able to get by on a low-wage part-time job if you don't mind living exactly as you are now.
What makes you think those low wage part time jobs will still exist? It's highly likely that they'll increasingly be automated out of existence. You're right. Those jobs eventually won't exist, because they'll be automated. Instead, other - easier, higher paying - jobs will exist as people desire greater and greater comfort in their lives and hence start wanting tiny, really easy things done. Proofreading my comments here for readability takes a few extra seconds/minutes. Shall I hire someone to do it? How about hiring someone to adjust the feng shui of my sentence arrangement? Perhaps, as mentioned above, I'll simply pay someone a satoshi to get out of my way since I'm in a hurry. Maybe someone to follow me around at a distance with binoculars to periodically make sure there's nothing embarrassing stuck in my hair or on my face/clothes. In a world where having just a bit a skill allows you live like a wealthy person does today because everything is insanely cheap, I might want to pay for all sorts of things. There will still be relatively rich and relatively poor, of course, and it will naturally usually be the richer paying the poorer to do such things, which is how the relatively poor will be able to get the tiny amount of money they need to live in what is today considered great comfort. Yes, the world you describe is certainly one possible outcome, but I don't believe it's in any way assured. It's assured by basic economic logic. If nothing needs doing, it's because, well, nothing needs doing. No one wants for anything. If you have a solar-powered house that does everything automatically, including growing food and preparing it and serving it, you'll have no housework (no jobs) at all to do, but is this a bad situation? (Perhaps you'll pay for someone to chew it for you so you can continue your dinnertime chat uninterrupted?) The economy where truly nothing needs doing is like that solar-powered Inspector Gadget house. And transitory phases on the way to that ideal just involve things like 2-minute workweeks to pay for the ultra-cheap goods and (almost all automated) services we need to enjoy our present standard of living. I fear the result will be business as usual, and a market economy which excludes an increasingly large proportion of society from meaningful participation in society. Followed by a bloody revolution. The market isn't excluding anyone from participating in society; government barriers are. In a free market, anyone who can provide any service that anyone values at $4 per hour (or $3, or $2, or $1) can get a wage just slightly below that. Some people simply cannot provide services that are valued any higher than $1 per hour, but that is nothing novel or unique to high technology; imagine the lot of such a person 200 or 2000 years ago. They would be reliant on charity, or living in whatever is considered relative squalor at that point in history. At least in a free market society they'd be able to make a tiny amount of money working, in addition to whatever charity (or if you like, welfare) they receive, instead of nothing...and in the future when things are fantastically cheap they may be earning enough to live better than any of us are now. This is a gigantic boon, especially for the poor and unskilled. Far from being a cause for concern, it is rather the solution to those very types of concerns. |
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Or put another way. The market economy (or indeed all economies, as we understand the term) are all about managing scarce resources.
No one has yet figured out how to organise society when the main task is to manage plentiful resources. Scarcity never completely goes away (unless you get to heaven or something and want for absolutely nothing). The idea with technological unemployment is that everything is so plentiful that it is so incredibly cheap as to be obtainable with a tiny amount of going out of your way. To take it to an extreme scenario, you might get enough money from simply stepping aside to allow someone to pass you on the sidewalk (a few satoshis are transferred automatically by apps on your two phones, or however it's done in the future) to pay for your living expenses for an entire month if you lived at the level of comfort you live now. It's probably more helpful to think of it as a move from full-time to part-time to minimal time to ultra-minimal time employment. Bottom line: you'll simply need to work far less, and the work will be far easier, to enjoy the same standard of living you do now. |
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As to technological unemployment, it is indeed a good thing. Nay, a fantastic thing. A world without a demand for anyone to work except those who are highly technically skilled would clearly be a world of plenty.
With our market economy as it stands, the world you describe would be a world of plenty for the technologists only. The masses, whose labour would no longer be needed, would have no money with which to buy these plentiful goods. Keep track of the timeframes. The economy as it stands is not yet one without any demand for non-technical work. Do you think people 200 years ago could feed a family (not to mention having a TV, smartphone, Internet, running water, electricity, etc.) by working a cash register? By standing outside holding a sign? By pouring drinks in a bar? The trend is so blindingly obvious that it scarcely warrants mention: unskilled labor gets easier and easier ( hard/dangerous/dirty labor gets paid more), and the wages received buy a dramatically greater standard of living. When we add in technological innovations that further save on the labor that is otherwise necessary for basic living - such as washing dishes, bailing water from a well (to say nothing of digging and maintaining the well) - the argument becomes several times more striking. To paraphrase Tom Woods, a few hundred years ago kings still had to crap in a bucket and throw it out the window. What is considered living below the poverty line now, in the USA for instance, is a life that in many ways would make the royalty of past generations envious. Just like most people in first-world countries (third-world countries are third-world because they're much farther from the "problem" of technological unemployment) can get by now working a low-wage part-time job if they don't mind having no electricity or running water, in the future you'll be able to get by on a low-wage part-time job if you don't mind living exactly as you are now. In the event that technology ever advances so incredibly far that you only need to work a few minutes a week, or basically not at all (say you get enough just by allowing your habits to be benignly monitored for science or whatever), in order to get enough money to pay for everything you want, that will clearly be a very nice situation. Again, keep track of the time. This is an extreme future scenario, but it is the (glorious, wonderful) endpoint of the trend that is causing such needless concern. |
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Unemployment, insofar as it is involuntary, is mostly the result of minimum wage laws. With Bitcoin it becomes pretty hard to enforce those laws. If a high school student who is unable to find work wants to sell her anime drawings that take her four hours to make for only $10 ($2.50 per hour) and get paid in bitcoins via Tor, who can stop her?
That's baloney... Unemployment is much more complicated an issue than merely the level of minimum wage laws. There are a variety of infrastructure issues and societal concerns about the distribution of wealth. If companies and the rich decide how profits are distributed, then they are going to maintain high unemployment in order to exploit workers and there is NO incentive to invest in the infrastructure if there is NOT a decent system of government to protect various assets and making those kinds of infrastructure investments. A very complex issue indeed, and bitcoin is NOT going to solve all of these kinds of political problems, even though bitcoin can contribute towards resolving some monetary corruption problems.. and to potentially provide a deflationary investment vehicle for the masses. yeah, the issue is split almost 50/50 at research institutions/universities about whether raising minimum wage is good or bad. there is no consensus, so what you believe is just what you believe. What does consensus have to do with anything? http://en.wikipedia.org/wiki/Argumentum_ad_populumThis is basic economic logic: you institute price caps you get lack of sellers (shortages), you institute price floors (in this case minimum wage) you get lack of buyers (in this case employers). Note that welfare isn't relevant - there's a reason I said "insofar as it is involuntary"; welfare results in some people voluntarily going on the dole, remaining unemployed. -- As to technological unemployment, it is indeed a good thing. Nay, a fantastic thing. A world without a demand for anyone to work except those who are highly technically skilled would clearly be a world of plenty. Just think about it: no one needs anything non-technical done; that means no non-technical need is going unfulfilled: no one is hungry, because if there were any shortage of food there would be demand for farmers. No one is unclothed, because if there were any shortage of clothes there would be demand for weavers, etc. And if you'll say that any shortage of clothing will just be met by more machines, YES, that's the whole point and it's great! It means, again, there is no shortage of clothing. Clothing is not in demand. But still more miraculously, no people (or very few people) are required to devote their labor to achieve this state of affairs. It's the whole reason you buy a dishwasher, for example, freeing you up to do something you think is more fun or valuable than washing dishes by hand. You're not working anymore because you don't need to do the work. You're either doing some other work that needed doing, or - if there is no other work at all that needs doing - you're living in a paradise, since all your needs that could be met by any kind of human labor are already met. You don't even need a shoulder massage, because if you did you could hire someone to do that and that would be a non-technical job created, contradicting the initial assumption. This would be paradise, a situation where you don't need to work at all and you can still experience a higher standard of living than you do now. On the way there, we'll have intermediate situations where you can work only part time with no reduction in life quality, then only 5 hours a week, then a few minutes a week will do it. Finally most people won't work at all unless they want to enjoy an even higher standard of living or if they just want to occupy themselves with something for the fun or psychic reward of it. There is absolutely nothing to be afraid of about this scenario. And keep in mind at no time is the unemployment involuntary in such a future. It's people working less because they care little to better their already quite nice situation by toiling for hours a day; instead they will work only a few hours a week, or eventually not at all - all the while enjoying an increasing standard of living. |
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It's pretty simple if you think about an example:
You have a silver dollar and a paper dollar. You want to buy an ice cream cone priced at $1. The government forces the merchant to accept both (legal tender laws). Which do you spend? Paper, since you'd rather have the silver.
Now suppose there are no legal tender laws. Which does the merchant demand? Silver, since the merchant would rather have the silver. Paper goes to dust since no one wants it. (Some may say the government will still allow you to pay your taxes in paper money so it'd retain a bit of its old value, but that would destroy the government since all its tax revenue would be unspendable since no one wants paper.)
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Unemployment, insofar as it is involuntary, is mostly the result of minimum wage laws. With Bitcoin it becomes pretty hard to enforce those laws. If a high school student who is unable to find work wants to sell her anime drawings that take her four hours to make for only $10 ($2.50 per hour) and get paid in bitcoins via Tor, who can stop her?
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Time to rekindle this discussion...if Ethereum every materializes.
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I'm starting to see now how Bitcoin, in a parallel universe, would have been adopted a lot more quickly if it was called "Bitledger" and just referred to as a ledger from the start. Who knows... but the ledger paradigm really makes it all very clear in my opinion.
I'm guessing it was due to the past attempts at "e-cash" that had already framed the endeavor. Satoshi achieved the goal via a ledger system, but didn't call it "BitLedger" presumably because Bitcoin sounded more enticing given he was up against a bunch of people who couldn't see the point. Much of the early days were spent just convincing people it had any value at all, and admittedly the name BitLedger doesn't exactly scream "money" at a visceral level. However, several years of history with a liquid market demonstrating that the units are at all times very much redeemable for goods, services, and fiat money should have long since dispelled such concerns - assuming they were ever really stopping anyone anyway. In my own case, if I had run across "BitLedger" I would have at least had to think a bit before initially dismissing it. It's a whole new idea. I'm inclined to think I'd reach the obvious conclusion: being essentially a community norm, it's going to be as valuable as the community that adopts it, and it's a chicken-and-egg thing. Which is true. |
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Zangelbert, I don't know if you have read Cursed money! from F. Bastiat but in case you didn't you may appreciate it (it's a quick read).
I think he was the first author to conceptualize accurately what is money. He didn't employ the terms ledger and memory, but he clearly understand the fact that money is a social debt and works as a memory.
Which is sad is that Austrians who otherwise love him dismiss his sole essay on money because it doesn't fit their views of money as a commodity.
Thanks for that. It was a great essay and suspiciously absent of mention in the Austrian circles I frequent. This passage seems most relevant: This is the time, then, to analyse the true function of cash, independently of mines and importations. You have a crown. What does it imply in your hands? It is, as it were, the witness and proof that you have, at some time or other, performed some labour, which, instead of profiting by it, you have bestowed upon society in the person of your client. This crown testifies that you have performed a service for society, and, moreover, it shows the value of it. It bears witness, besides, that you have not yet obtained from society a real equivalent service, to which you have a right. To place you in a condition to exercise this right, at the time and in the manner you please, society, by means of your client, has given you an acknowledgment, a title, a privilege from the republic, a counter, a crown in fact, which only differs from executive titles by bearing its value in itself; and if you are able to read with your mind’s eye the inscriptions stamped upon it you will distinctly decipher these words: – “Pay the bearer a service equivalent to what he has rendered to society, the value received being shown, proved, and measured by that which is represented by me.” Now, you give up your crown to me. Either my title to it is gratuitous, or it is a claim. If you give it me as payment for a service, the following is the result: – your account with society for real satisfactions is regulated, balanced, and closed. You had rendered it a service for a crown, you now restore the crown for a service; as far as you are concerned, you are clear. As for me, I am just in the position in which you were just now. It is I who am now in advance to society for the service which I have just rendered it in your person. I am become its creditor for the value of the labour which I have performed for you, and which I might devote to myself. It is into my hands, then, that the title of this credit – the proof of this social debt – ought to pass. You cannot say that I am any richer; if I am entitled to receive, it is because I have given. Still less can you say that society is a crown richer, because one of its members has a crown more, and another has one less. For if you let me have this crown gratis, it is certain that I shall be so much the richer, but you will be so much the poorer for it; and the social fortune, taken in a mass, will have undergone no change, because as I have already said, this fortune consists in real services, in effective satisfactions, in useful things. You were a creditor to society, you made me a substitute to your rights, and it signifies little to society, which owes a service, whether it pays the debt to you or to me. This is discharged as soon as the bearer of the claim is paid. It reminds me of reddit user Capt_Roger_Murdock's excellent succinct explanation of Bitcoin: The reason it's so hard for most people to understand Bitcoin is that most people don't really understand money. Money isn't wealth. It's an accounting system used to facilitate the exchange of wealth. (The paradox of money is that while everyone wants it, no one actually wants it - they want the stuff they can buy with it!) Many people are put off by the fact that bitcoins are "just data." But that's what ALL money is, information! More precisely, money is a means for credibly conveying information about value given but not yet received (or at least not yet received in a form in which it can directly satisfy a person's wants or needs).
To put it yet another way, money is a ledger. With fiat currencies like the dollar, that ledger is centralized. And that gives the central authority responsible for maintaining that ledger tremendous power, power that history has proven will inevitably be abused. With Bitcoin, the ledger is decentralized. And that means that no one individual or entity has the power to arbitrarily create new units (thereby causing inflation), freeze (or seize) your account, or block a particular payment from being processed. We've had decentralized money before. After all, no one can simply print new gold into existence. And the "ledger" of gold is distributed because the physical gold itself (the "accounting entries" in the metaphor) is distributed. But with gold, that decentralization comes at a heavy price (literally). The physical nature of gold makes it hugely inefficient from a transactional perspective.
Enter Bitcoin.
It is the first currency in the world that is BOTH decentralized AND digital. It is more reliably scarce than gold, more transactionally efficient than "modern" digital banking, and enables greater financial privacy than cash. It could certainly still fail for one reason or another, but if it doesn't, it has the potential to be very, VERY disruptive. |
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I have the feeling that you are overthinking this....
Just allow PubKeyHash tx only, and use bitcoin signed messages for claiming. And announce with some time so interested parties can momentarily send funds to a PubKeyHash if they have it in some other form.
Can you elaborate on this? |
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