2013-12-19 - Charles Stross - "Why I want Bitcoin to die in a fire"

[Collectrix]

Here is a detailed response to the environmental claims against Bitcoin, fiat collectively requires significantly more energy expenditures to maintain: http://www.ofnumbers.com/2013/12/18/charles-stross-takes-on-the-bitcoin-community/

Reference Link: http://www.antipope.org/charlie/blog-static/2013/12/why-i-want-bitcoin-to-die-in-a.html

Above-the-fold Excerpt:

Bitcoin just crashed 50% today, on news that the Chinese government has banned local exchanges from accepting deposits in Yuan. BtC was trading over $1000 yesterday; now it's down to $500 and still falling.

Good.

I want Bitcoin to die in a fire: this is a start, but it's not sufficient. Let me give you a round-up below the cut.

--------

My response to his rant:

How utterly depressing.

Your leading title - "Why I want Bitcoin to die in a fire" is so completely at odds with what I thought you were about, that I'm having a bit of cognitive dissonance parsing it.

It would be as if Isaac Asimov said "Robots - seriously, screw those buckets of junk, I just wrote about it for the checks."

You open with admitting the current financial system is crap, but apparently not crappy enough to replace, as Bitcoin isn't "IT".

In light of the massive fraud that we've seen globally, from the 2008 mortgage securitization fraud, LIBOR rigging scandal, HSBC Drug Money laundering and the continued Eurozone implosion courtesy of the Eurodollar and everyone hooking together the worst parts of their respective economies into a debt-chain of nightmare proportions, it seems that preserving the current system is one of the last things we should be considering.

And yet, when faced with the potential of complete freedom, the solution apparently is for Bitcoin to "die in a fire". Lightning has struck outside of our financial cave, and we're not rushing to the smouldering tree to nurture this spark, we're instead fleeing back into the damp cold depths, somehow reassuring ourselves that once you can feel the cave walls, you don't need light at all.

I find this particular view shockingly regressive. You, an author that I admire and have many times re-read your stories on taking technologies to the limit - "Accelerando" in particular comes to mind - and yet the very words out of your mouth regarding Bitcoin are riddled with fear and hostility.

Perhaps it was always part of your internal agenda, when I read this from "Accelerando":

"The last great transglobal trade empire, run from the arcologies of Hong Kong, has collapsed along with capitalism, rendered obsolete by a bunch of superior deterministic resource allocation algorithms collectively known as Economics 2.0."

I initially took this to mean that you recognized progress comes at a cost, but ultimately it is what enables us collectively to advance and improve our situation. Now, in light of your post about Bitcoin, I see this as fear of such an advance telegraphed four years before Bitcoin even existed.

As others will no doubt shine bright lights into the dark crevices of misunderstandings you have about Bitcoin, I'm just simply here to express my utter disbelief that someone as visionary as yourself can't see the benefits of a system that allows financial freedom.

You touch upon the fearful subjects of "Carbon Footprint" (Ignoring advances in lowered power consumption of the same.), "Bitcoin Malware" (Every ecosystem has predators and prey, surely), "Violates Gresham's Law" (Apparently we can steal electricity rather than pay? Funny how the utilities still operate then.) "Bitcoin's Lack of Regulation" (Like they've done such a stellar job with the regular system - please.)

And then, finally - "Bitcoin is designed for tax evasion" argument. Oh my. I suppose everyone is a crook and nobody would want to support their communities? Is this really the kind of thought process I'm supposed to believe you have? As for the "Gini Coefficient" you linked to, you do realize that distribution was on a singular exchange that ran with the money not long after, right? I'd say those funds have already been redistributed.

There's more, but honestly it all sounds like you're throwing your weight behind is the legacy financial system, warts and all, and somehow its better than having the ability to spend your money on what you want, or being able to shift your wealth around the globe without artificial barriers or constraints.

Perhaps I should ask about your stance on ebooks and Digital Rights Management, because it seems they're rather similar. Granted, "Accelerando" was released using a Creative Commons license, but what about the rest? Are you in favor of restrictive policies regarding data? Is every "regulation" in your view fair and just?

Am I to conclude that all of those flights of fancy that you've eloquently penned over the years really spring from the restricted and fearful psyche of someone who prefers flawed "protection" instead of actual freedom?

Please say it isn't so.

I'm not here to change your mind, because it seems you're quite firmly set on the issue, I'm just here to express my complete and utter shock that a visionary would rather hide in the back of his cave, feeling the walls for comfort, in the utter darkness.

[TraderTimm]

Here is a detailed response to the environmental claims against Bitcoin, fiat collectively requires significantly more energy expenditures to maintain: http://www.ofnumbers.com/2013/12/18/charles-stross-takes-on-the-bitcoin-community/

Thanks for the link, its a good read - and confirms what I already knew empirically. Which also further depresses me that Stross can miss something so painfully obvious. Perhaps he'll be in the "Laggard" part of the adoption curve, when all of his peers start selling books in Bitcoin. One can only hope he'll see reason.

[jjtech]

Dear Tradertimm,

As a dreamer and an advocate of progress myself, i commend you on the great rebuttal!

i wonder, did he ever respond to you ?

He metioned "hitting the pub" after a few of the comment replies, then later he said he'd be "wielding the ban hammer". I suppose he's either too busy drinking, or ban-hammering. I haven't seen my post appear, so he is either backlogged, drunk, deleted it, or all of the above.

I don't see your response under his post. Was it removed?

[Carlton Banks]

and the "if this goes on" linear extrapolations imply that BtC will badly damage stable governance, not to mention redistributive taxation systems and social security/pension nets if its value continues to soar (as it seems designed to do due to its deflationary properties).

This article is just the whining of yet another kleptomaniac who hates the idea of people being able to hold on to their own money.

Bitcoin is the ultimate freedom test. It tells you who is giving lip service and who genuinely believes in it.

^^^  This!!!  There are a lot of folks who like to give voice to their support of liberty, but who at their core are merely interested in imposing their own concept of "liberty"--one that usually puts them in charge.

It's how leftists think.

Strange, I always thought that libertarianism was as left as you can be right without actally crossing the left-right line. Except the extreme-right libertarians, of course. Oh, and I forgot the socio-anarchists, too. They're as right as you can be left without being right of the left. Confusing isn't it!

[Cryddit]

Bear in mind that science fiction authors often write about adversarial propositions -- you can't write a good story without conflict to drive the plot.  As a writer you don't need to believe that either side is "right" -- you need to understand the conflicts and make the characters passionate about their causes and show how it drives their interactions. 

Later on, people will think that whichever side of the conflict the writer put the protagonist on is the side he personally believes in, and for some shallow predictable polemist writers that's true.  But that isn't how it works in general, or David Brin could never have written 'Glory Season'. During the story, the only character who remotely shares the values of the reading audience, or for that matter the author, gets killed.  He wasn't the protagonist.  In fact the protagonist was too late to save him.  And his death resulted in (and from) merely the evolution, not the resolution, of a conflict between two opposing sides both of which most of us would consider dystopian.

I believe in cryptocurrency as a concept and I'm invested in it, but I'm concerned about some of Bitcoin's economics and don't believe that Bitcoin can possibly represent the ultimate evolution of cryptocurrency.  In the long run cryptocurrency requires some refinement and evolution before it will be better than what it attempts to replace.

The simple fixed money supply, if it were the main or only form of money, would lead to fairly dire instabilities.  In the very long run, if Bitcoin were the *only* money supply, then we'd have  economic collapse because with a fixed money supply an investor could always do as well, on average, just sitting on his money as investing it in something productive.  Good thing then that it will never be the *only* money supply. 

For every complex problem (like regulation of the money supply by nation states and distrust of those who do it), there is a solution that is simple, easy, and wrong (like doing and allowing no regulation of the money supply at all).  I fear that Bitcoin's current approach is one of many wrong answers, that it will take actual long-term use to observe exactly how and why it is wrong, and that cryptocurrencies will need to experiment for a long time in order to find better answers.

[marcus_of_augustus]

Bear in mind that science fiction authors often write about adversarial propositions -- you can't write a good story without conflict to drive the plot.  As a writer you don't need to believe that either side is "right" -- you need to understand the conflicts and make the characters passionate about their causes and show how it drives their interactions. 

Later on, people will think that whichever side of the conflict the writer put the protagonist on is the side he personally believes in, and for some shallow predictable polemist writers that's true.  But that isn't how it works in general, or David Brin could never have written 'Glory Season'. During the story, the only character who remotely shares the values of the reading audience, or for that matter the author, gets killed.  He wasn't the protagonist.  In fact the protagonist was too late to save him.  And his death resulted in (and from) merely the evolution, not the resolution, of a conflict between two opposing sides both of which most of us would consider dystopian.

I believe in cryptocurrency as a concept and I'm invested in it, but I'm concerned about some of Bitcoin's economics and don't believe that Bitcoin can possibly represent the ultimate evolution of cryptocurrency.  In the long run cryptocurrency requires some refinement and evolution before it will be better than what it attempts to replace.

The simple fixed money supply, if it were the main or only form of money, would lead to fairly dire instabilities.  In the very long run, if Bitcoin were the *only* money supply, then we'd have  economic collapse because with a fixed money supply an investor could always do as well, on average, just sitting on his money as investing it in something productive.  Good thing then that it will never be the *only* money supply. 

For every complex problem (like regulation of the money supply by nation states and distrust of those who do it), there is a solution that is simple, easy, and wrong (like doing and allowing no regulation of the money supply at all).  I fear that Bitcoin's current approach is one of many wrong answers, that it will take actual long-term use to observe exactly how and why it is wrong, and that cryptocurrencies will need to experiment for a long time in order to find better answers.

So much wrong in here it is not worth correcting anymore ....

[Cryddit]

So much wrong in here it is not worth correcting anymore ....

That's all right.  I don't have enough information yet to make corrections myself; I'd no expectation that anyone else would. 

[TraderTimm]

That's all right.  I don't have enough information yet to make corrections myself; I'd no expectation that anyone else would.  

So science fiction writers have a free license to "kick the hornets nest" because they can? How completely idiotic.

As for how Bitcoin is the "wrong answer", I'd love to see your defense of how the existing system is the "right" one. And if you believe this, why the fuck are you here?

[Bitcoinpro]

reading the story and some of the comments below its a bit off a joke really  

[theecoinomist]

ain't even mad

[Bitcoinpro]

Bitcoin don't give a shit.

its hard not to swear when dealing with some of these dystopiates isn't it  

[Cryddit]

So science fiction writers have a free license to "kick the hornets nest" because they can? How completely idiotic.

All writers actually.  Their business, when they are good, is to get us to think about things.  Whether that's fiction writers 'kicking the hornet's nest' and making us question our own beliefs and biases, or journalists daring to tell the truth no one else dares name and making us question our institutions and leaders.

As for how Bitcoin is the "wrong answer", I'd love to see your defense of how the existing system is the "right" one. And if you believe this, why the fuck are you here?

In many places around the world, like pretty much all war zones, Cyprus, Greece, Italy, most of sub-saharan Africa, and much of Latin America, Bitcoin is definitely a better system than what currently exists, because the people doing monetary policy there either are desperate, have no idea what they're doing, are corrupt, or are under too much pressure from people who are desperate, have no idea what they're doing, or are corrupt.   A 'dead' hand with mindlessly simple algorithms is better than management by actively incompetent or malicious people.  

In many other places around the world, where actual competent and reasonably honest people are doing monetary policy, Bitcoin is not remotely a better solution in terms of monetary policy.  It *is* however, a better solution as a financial network.  Nothing as good exists for cross-border money flows, including into and out of all those nations where barriers exist to honest business because the officials in those countries doing monetary policy are incompetent or corrupt.  

I'm invested in Bitcoin because it solves a multi-trillion dollar problem; how to send money quickly, cheaply, easily, and securely around the world and break down barriers to trade.  It may or may not be better monetary policy depending on where you live, it's a risky and volatile investment, and its equilibrium price when it's valued according to its utility will most likely be found through a huge cycle of bubbles and at least one 99% crash driven by currency speculation.  But I honestly believe that its value according to utility is higher than the current price, and that's why I'm invested.  

[TraderTimm]

I don't see your response under his post. Was it removed?

I checked recently, and it isn't there. No proof that it even made it, so I'm not sure what the problem was. Highly likely it was in the moderation queue and got deleted/binned from there.

[TraderTimm]

So science fiction writers have a free license to "kick the hornets nest" because they can? How completely idiotic.

All writers actually.  Their business, when they are good, is to get us to think about things.  Whether that's fiction writers 'kicking the hornet's nest' and making us question our own beliefs and biases, or journalists daring to tell the truth no one else dares name and making us question our institutions and leaders.

As for how Bitcoin is the "wrong answer", I'd love to see your defense of how the existing system is the "right" one. And if you believe this, why the fuck are you here?

In many places around the world, like pretty much all war zones, Cyprus, Greece, Italy, most of sub-saharan Africa, and much of Latin America, Bitcoin is definitely a better system than what currently exists, because the people doing monetary policy there either are desperate, have no idea what they're doing, are corrupt, or are under too much pressure from people who are desperate, have no idea what they're doing, or are corrupt.   A 'dead' hand with mindlessly simple algorithms is better than management by actively incompetent or malicious people.  

In many other places around the world, where actual competent and reasonably honest people are doing monetary policy, Bitcoin is not remotely a better solution in terms of monetary policy.  It *is* however, a better solution as a financial network.  Nothing as good exists for cross-border money flows, including into and out of all those nations where barriers exist to honest business because the officials in those countries doing monetary policy are incompetent or corrupt.  

I'm invested in Bitcoin because it solves a multi-trillion dollar problem; how to send money quickly, cheaply, easily, and securely around the world and break down barriers to trade.  It may or may not be better monetary policy depending on where you live, it's a risky and volatile investment, and its equilibrium price when it's valued according to its utility will most likely be found through a huge cycle of bubbles and at least one 99% crash driven by currency speculation.  But I honestly believe that its value according to utility is higher than the current price, and that's why I'm invested.  

"They make us think" - ah yes, the defense for the people who are "just asking questions", seemingly oblivious as to the implications of their actions. He knew exactly what he was doing. Its clear from the title, the content, and the subsequent cherry-picked comments that he allowed to remain on his blog. If he's going to have his own censor-happy kingdom, fine - but to throw baseless accusations against Bitcoin is ridiculous.

I could make a claim against you, that you have no defense of - because I just "Say so", and it wouldn't help anyone involved. It wouldn't make them "think" or "hear the truth" about a damn thing. Its mudslinging, plain and simple. Stross sure wasn't advocating a patient and rational debate.

Stross came out of the gate fists slinging his slop, behaving like a reckless bully. That is a far cry from your portrayal of someone trying to ignite debate about important internal issues regarding Bitcoin.

[mistress_magpie]

Charles Stross is an excellent hack writer but sounds like a pissy little whinging baby in this article.

[Collectrix]

Regarding Stross' allegations, here is a very detailed rebuttal with numbers regarding environmental impact and carbon use: http://www.ofnumbers.com/2013/12/18/charles-stross-takes-on-the-bitcoin-community/

[TheButterZone]

Regarding Stross' allegations, here is a very detailed rebuttal with numbers regarding environmental impact and carbon use: http://www.ofnumbers.com/2013/12/18/charles-stross-takes-on-the-bitcoin-community/

Cool, just a few typos.

[Kyt Dotson]

I love Stross's work, but I didn't hold back much when I wrote up my article about what he and Krugman (by quoting him) got totally wrong. Just because a technology has the hallmarks of something that could supplant a current system isn't a reason to want it to die.

What's really odd about this reaction from Stross is that some of his work involves cultures that exist based on highly divergent and individualized technology use.

[Got Bitcoin?]

Every and anyone who does/do not benefit, or are somehow threatened from their position or dependancy on any medium that is directly threatened by the success of BTC want Bitcoin to "die in a fire". Fortunately, there are more pros than cons, to anyone remotely intelligent and objective.

Long Live Bitcoin!


~Got Bitcoin?