Will bitcoin bring the worst Schumpeterian crisis of the century?

[grondilu]

Even for a huge fan of bitcoin like me, sometimes bitcoin seems so disruptive that it scares the shit out of me.

This is going to bring tears and sorrow, as many people's job will suddenly become pointless.  A whole economic sector, mainly related to banking industry, is about to collapse.  Educated people are going to need to start again from scratch.  They will have learnt tons of stupid regulations and intellectual structures for nothing.  Pure freaking waste.  They will definitely not be happy about that.

It is certainly going to be painful for a lot of people, and many people will claim that bitcoin is a bad thing because it brings chaos.

http://en.wikipedia.org/wiki/Creative_destruction

[Bit_Happy]

Bitcoin brings chaos or the system was going to collapse anyway?

[grondilu]

Bitcoin brings chaos or the system was going to collapse anyway?

I don't think that the system was about to collapse anyway.  It would have survived, after a big devaluation, a world wide depression, possibly a few wars.  But in the end banks would still profit from it all.

Cryptocurrencies are necessary to destroy the banking system for good.

[unk]

things will be fine. society is not fragile. there won't be massive upheaval.

[pickaxe]

Bitcoin brings chaos or the system was going to collapse anyway?

The fiat currencies have caused huge environmental destruction, consolidation of power, and now this recession has made cash very difficult to work with. It's only natural for other systems for trade to emerge during the failure of the existing ones. Not that bitcoin would solve those problems, but more options for trade would help.

[xf2_org]

Banks won't go away.  Bankers will start using bitcoins...

[Kluge]

People will finally stop using banks as soon as they stop using AOL as an ISP "to access their email." 

[Vladimir]

Banks won't go away.  Bankers will start using bitcoins...

"If you cannot win them, join them" - this often was applied by many people to banksters. Now it seems banksters will have to apply this to bitcoin. Ohhh irony...

[Timo Y]

I don't think it's going to be any more dramatic than the financial crisis of 2008 in terms of sudden job losses. It's a gradual process that will take a decade or two. People are not going to give up on traditional banking overnight.  The banking industry will adapt and continue to provide jobs.  People are still going to need loans.  Bitcoins need to be secured just like fial money.

[nazgulnarsil]

I would say that certain types of current banking and financial institutions will do very very well and certain kinds very very poorly under a bitcoin based business model.

How to differentiate?  The difference is between businesses that create or destroy wealth.

[benjamindees]

Bitcoin isn't the cause of the coming Schumpeterian crisis.  Something else is.  But it will be well-positioned to pick up the pieces.

[nickwit]

H'ok

This is the shit coming down the hall:

1) climate change

2) mass-extinction / ecosystemic destabilisation

3) peak-oil


This stuff is definitely going to happen - in fact it's already happening now. We will be lucky to societally survive any of these - and they're all happening at the same time.

4) In addition to that, we also have encroaching fascism/freedomism world-wide, which is happening as the web threatens every hierarchy. This is no small thing. We've been through this before, and it was incredibly messy.

5) In addition to that, we have uber-weirdness in the shape of a gen-tech revolution, which is also going to happen at the same time. It's hard to understate the potential impact of this. It'll change what it means to be human.


The creeping fascism/corporatism we're seeing today is going to crash the global economy. It's already in the process of this... NO lessons were learned from the last crash. The banks are bigger and more conglomerated, still gambling, still with the same toxic debt on the books, and still addicted to the ferocious, blind short-termism driven by fucking astronomical bonuses... which have gone up.

...

Now into this is thrown bitcoins - and I'm guessing the main impact of bitcoins is that it teaches people that they CAN use alternative currencies... and the main purpose of alternative currencies is for people to do business when there isn't a viable alternative (see:  http://bit.ly/13dJy )


So my guess is that bitcoins will not bring a crisis - because the crisis that are already starting will totally eclipse them (in fact bitcoins is contained in 4). What bitcoins might do though is teach us how to temper some of these crisis.



 

[Anonymous]

If the oil runs out why do we need to worry about the climate changing?

[AllYourBase]

Even for a huge fan of bitcoin like me, sometimes bitcoin seems so disruptive that it scares the shit out of me.

This is going to bring tears and sorrow, as many people's job will suddenly become pointless.  A whole economic sector, mainly related to banking industry, is about to collapse.  Educated people are going to need to start again from scratch.  They will have learnt tons of stupid regulations and intellectual structures for nothing.  Pure freaking waste.  They will definitely not be happy about that.

It is certainly going to be painful for a lot of people, and many people will claim that bitcoin is a bad thing because it brings chaos.

http://en.wikipedia.org/wiki/Creative_destruction

Sure that's a fair point.  Also think about government employees, and companies with fat government contracts.  With good money, we'll see businesses become more lean and competitive, which is good.  I highly doubt this will happen overnight though; I anticipate it will take years.  I'm not too concerned. 

[barbarousrelic]

First, Bitcoin eliminates the need for banks to provide safekeeping of money or to act as a transaction clearinghouse, but it doesn't eliminate the need for loans. So banks will become less important but not completely irrelevant.

Second, when people switch out of unnecessary jobs, they are hopefully finding more useful jobs, which is in general a good thing for all of society.

[mewantsbitcoins]

Even for a huge fan of bitcoin like me, sometimes bitcoin seems so disruptive that it scares the shit out of me.

This is going to bring tears and sorrow, as many people's job will suddenly become pointless.  A whole economic sector, mainly related to banking industry, is about to collapse.  Educated people are going to need to start again from scratch.  They will have learnt tons of stupid regulations and intellectual structures for nothing.  Pure freaking waste.  They will definitely not be happy about that.

It is certainly going to be painful for a lot of people, and many people will claim that bitcoin is a bad thing because it brings chaos.

http://en.wikipedia.org/wiki/Creative_destruction

I think you have a good point there, but personally I am not worried about educated and willing to learn - they will adapt. The people I am worried are the masses of unskilled workers who were bred by this system to keep the growth increasing.

It's going to be bloody

[grondilu]

First, Bitcoin eliminates the need for banks to provide safekeeping of money or to act as a transaction clearinghouse, but it doesn't eliminate the need for loans. So banks will become less important but not completely irrelevant.

You don't need banks to borrow money.  Just search "auction bond" in the marketplace forum.

Second, when people switch out of unnecessary jobs, they are hopefully finding more useful jobs, which is in general a good thing for all of society.

True.  But I suspect some people will have difficulties to understand that once they get sacked.

[barbarousrelic]

You don't need banks to borrow money.  Just search "auction bond" in the marketplace forum.

Banks aren't required to borrow with current money systems and they won't be required in a Bitcoin-dominated world. But they will exist because they will be useful for people who want to lend money at interest without having to be directly involved with:

a)deciding who is worthy of a loan
b)collecting on bad loans

A lot of people would rather pay someone else to handle these aspects of loan-making. And the banks perform that job for a fee.

[Steve]

Banks won't go away.  Bankers will start using bitcoins...

I think this is a very plausible scenario indeed.  Gold has really always been at the foundation of the international banking system even though currencies were allowed to float against gold long ago.  It's not hard to imagine bitcoin taking at least part of that role in the future.

[grondilu]

Banks will not be needed anymore.  They will disappear.   Everything will be software-oriented.

There is no alternative in a world where money is digital.