Our response to Dmytri Kleiner's misunderstanding of money

[evoorhees]

Dmytri Kleiner wrote a piece about a week ago that was so misguided it couldn't go unchecked.

He original article: http://www.dmytri.info/bitcoin-and-public-money

Our response:
http://blog.bitinstant.com/blog/2012/11/9/response-to-dmytri-kleiner-on-the-origin-of-money.html

[Rudd-O]

Dmytri Kleiner wrote a piece about a week ago that was so misguided it couldn't go unchecked.

He original article: http://www.dmytri.info/bitcoin-and-public-money

Our response:
http://blog.bitinstant.com/blog/2012/11/9/response-to-dmytri-kleiner-on-the-origin-of-money.html

Erik: your article is chessmate for Dmytri's.  Well done.

[hazek]

Dmytri Kleiner wrote a piece about a week ago that was so misguided it couldn't go unchecked.

He original article: http://www.dmytri.info/bitcoin-and-public-money

Our response:
http://blog.bitinstant.com/blog/2012/11/9/response-to-dmytri-kleiner-on-the-origin-of-money.html

Well done man, you nailed it. I'm sick and tired of sophistry and I'm very happy someone is willing to step up, take the time and do the work of calling it out for what it is - garbage.

[Rudd-O]

Dmytri Kleiner wrote a piece about a week ago that was so misguided it couldn't go unchecked.

He original article: http://www.dmytri.info/bitcoin-and-public-money

Our response:
http://blog.bitinstant.com/blog/2012/11/9/response-to-dmytri-kleiner-on-the-origin-of-money.html

Well done man, you nailed it. I'm sick and tired of sophistry and I'm very happy someone is willing to step up, take the time and do the work of calling it out for what it is - garbage.

Agreed.

You know, it's hard to combat mythologies like these, because the inventors of these myths often aren't the ones doing the brunt of the effort of propagating them -- that would be the useful idiots like Dmytri who believe what they are told blindly.

Take ΅the origin of money is tribute" as an example.  This truth-bearing statement is very much obviously a lie (and also a myth because people like Dmitry believe in it without any valid evidence to support his belief).  At some point, when Dmitry was told this lie, he just believed this lie at face value and incorporated it into his belief system.  At no point in time did he bother to question or fact-check the lie against any number of facts already widely available.

The result of this pattern of ingestion of lies: when people like Dmitry talk about any subject, they explicitly (or, worse, implicitly) fill in lies as established premises in their arguments, therefore coloring and sabotaging every single possible thought they could experience about reality and share with others.  Furthermore, the very confidence with which they express their unsubstantiated and false premises as unquestionable truths acts as reinforcement.  Sort of how "which president is the 'good' one?" implicitly establishes the unsubstantiated premise that "having a president is good / mandatory / inevitable" without actually saying it.

The result of that link in the chain of lies: people who consume this kind of superstitious garbage read arguments like Dmitry's and bellyfeel "well, perhaps something in the argument might be questionable, but surely the initial premises must be correct", reinforcing the myths as time goes by.

This is convenient for the liars who make up these myths, because the useful idiots genuinely believe the lies and repeat them to one another, which makes them that much more convincing when they spread the lies, and that much more difficult to accuse them of corruption and venality.

All of this reminds me of how people remember they learned about their pet lies.  They remember the lies as truths that somehow must be true because everybody around them has heard of them and pretty much accepts them.  What they don't remember is that teachers (or other authority figures like priests) told them these lies when they were children, and threatened them with punishment if they refused to believe them.  Since their brains weren't fully developed, they can't remember the threats attached to the lies -- they only remember the lies as truths.  This is the tried-and-true process mechanism that all religions (including statism) have used to spread their poison, it's very effective, and it's still going on.

Our job is so much harder than theirs.  They get to use threats to "convince" children to believe in lies ("God/vernment loves you", "when God/vernment forces you to give them money that's charity", "when you don't obey or give money to God/vernment you are being a bad boy", "God/vernment is good when they smite people who refuse to pay and obey").  We're limited to using reason and evidence to try and extirpate these cancers rooted in adults carrying them decades ago.

[Rudd-O]

I'd already posted in the comment stream of the article.  I posted once more, and here's the text of my comment in case the Staazi doesn't publish it:

-------------------------

Dmytri,

You're right when you say that people doing business as "the State" can certainly threaten everyone else into paying up, whether they transact in Bitcoin or seashells.  Nobody contested that.

With one condition: for them to threaten anyone, first they need to be aware of some activity that (in their mind) justifies their threats, and Bitcoin (plus prudent behavior on the part of the activity's participants) makes that pretty much impossible for them.  No one can punish what they can't find.

And that's just great!  That's exactly what we want.  That is why Bitcoin doesn't need to replace fiat currency.  Bitcoin can be used to hide people's economic activities from this mafia.  Make no mistake, this is a deliberate design decision in Bitcoin. This decision will eventually de-fund and weaken this mafia you speak of.

Of course, again, some of your conclusions about how Bitcoin can't replace fiat currency are true (even if the premises you use to arrive at them are completely wrong).  Public money may or may not continue to exist, but there will inevitably come a time when nobody will use it, because a better alternative -- Bitcoin -- has arrived.  It happened in the Roman Republic, it happened in Zimbabwe, and it will happen here too.

Isn't that just fantastic?

[evoorhees]

Very well said Rudd-O

[BitcoinCoffee.com]

To demand any type of medium-of-exchange already assumes the definition/concept 'money'.

[enquirer]

What a pile of nonsense, typical european waffle. Tributes can be paid in many ways besides money - in goats, in military service, in free labor (as in Dmitry's motherland) etc

[fivemileshigh]

Erik, I sometimes think you're lending entirely too much credence to ass-clowns like him by bothering to reply to his baloney. Or to put it another way, would a modern-day neuro-surgeon sit down to have a serious medical discussion with a shaman from 2000 years ago?

 

[Rudd-O]

Thank you very much, guys.  I welcome your appreciation.

[matonis]

Of course Dmytri is not on this forum, but he is defending himself in an educational tweet-a-thon;
https://twitter.com/dmytri and here https://twitter.com/jonmatonis/status/267255183443120128

[Roger_Murdock]

"Thousands of bitcoins for cryptosecurity, but not one damn satoshi for tribute!"

[TheButterZone]

Derrive=derive.

[ryann]

And after all that, Dmytri is still correct. If you think bitcoin is going to replace govt currencies then you are so far out to left field you dont need to reply. This place is just like Apple forums. Fanboys. You do raise some good points though.

[Roger_Murdock]

And after all that, Dmytri is still correct. If you think bitcoin is going to replace govt currencies then you are so far out to left field you dont need to reply. This place is just like Apple forums. Fanboys. You do raise some good points though.

Typically an assertion like that is followed by an argument.  WHY do you think Bitcoin can't replace government currencies?

[Rudd-O]

And after all that, Dmytri is still correct. If you think bitcoin is going to replace govt currencies then you are so far out to left field you dont need to reply. This place is just like Apple forums. Fanboys. You do raise some good points though.

Typically an assertion like that is followed by an argument.  WHY do you think Bitcoin can't replace government currencies?

'?
More to the point, does Bitcoin even need to replace government currencies?  Who cares, right?  Bitcoin is sound money, superior to government currencies, so it'll replace the currency used in the market, or most of it, or only a significant chunk of it.  This will be the first case of good money displacing bad money :-)

[scribe]

Best discussion on Bitcoin and money in forever - this is getting to the heart not of whether Bitcoin is good or bad, but of how we value the boundary between private and public goods in the next, networked century. I applaud Dmytri for bringing up the issue, and for highlighting the challenges that both Bitcoin *and* the state face.

My own opinion is that the Bitcoin crowd has a long way to go, and that Dmytri is "right". To be on the fence about it, I want Bitcoin to succeed in order to improve the effectiveness of both individuals *and* common action. Both can do better, and indeed *have* to if we're going to face up to an ever-changing, fucked up world.

Right now, Bitcoin is still "at risk" IMHO. It has promise. But it's also naive. It is an experiment that could go either way. But the challenge is not to rebel against existing hierarchies, nor to replace them.

The challenge is to re-build them. Better.

Rebuild reputation models. Rebuild tax models. Rebuild payment models. Rebuild banks and insurance models. Rebuild user interfaces. Rebuild local currencies.

Redefine "fiat".

[justusranvier]

My own opinion is that the Bitcoin crowd has a long way to go, and that Dmytri is "right". To be on the fence about it, I want Bitcoin to succeed in order to improve the effectiveness of both individuals *and* common action. Both can do better, and indeed *have* to if we're going to face up to an ever-changing, fucked up world.

The world is fucked up because of coercion, not because the coercion isn't efficient enough.

There is no such thing as a better tax model that will result in improved common action, because pointing guns at people and ordering them around is the exact opposite of common action.

When taxation becomes impossible, and the institutions which subsist on it collapse, then the opportunity for common action will start.

[goodbc]

Government will (in the end) tax your house, your land, your car etc. and will demand BTC. You cannot hide physical property too much and they will tax it. For bitcoins!   

[justusranvier]

Government will (in the end) tax your house, your land, your car etc. and will demand BTC. You cannot hide physical property too much and they will tax it. For bitcoins!   

It won't work.

There's a form of EROEI that applies to taxation. Governments have a exponentially-increasing need for taxation to bribe the dependent classes, pay public sector pensions, and to make legislators rich by diverting money to their cronies in the "private" sector.

Eventually the need for taxation will exceed the available productivity and the state will collapse just like it did in Rome, Weimar Germany, the USSR, and many others. That point comes much faster when the enforcement cost rises. If the government has to spend $0.01 per dollar of revenue in enforcement costs the game can go on a lot longer than if it has to pay $0.10 per dollar of revenue.

If taxes must be attached to tangible property and collected directly from individual taxpayers the "return on investment" from the perspective of the government drops catastrophically.