Bitcoin will NOT solve all problems but will make rich people richer!

[yucca]

and thus pave the road for political solutions

Political and solutions together? I dont really understand this concept. Is this like unicorns?

yeah but the special ones, you know the ones that pee strawberry juice and have long flowing rainbow manes.

[jubalix]

Bitcoin will not purchase happiness for the man who has no concept of what he wants; bitcoin will not give him a code of values, if he's evaded the knowledge of what to value, and it will not provide him with a purpose,

it certainly may bring happiness, and code of values come out of thermodynamics

Only the man who does not need it, is fit to inherit wealth – the man who would make his own fortune no matter where he started.

you start in a deep well that others dug before you were alive and you were born in the well. You have no climbing tools of any kind, or digging, the owners/people at the top of the well drop scraps of food down to you and sometimes water, but really don't care except that when they throw down documents for you to process/write (white collar) and things to assemble (blue collar) these jobs are done. These products are hoisted up in a bucket connected by razorwire so you will never be able to climb it and anyway its not strong. They only keep you alive when you make them profit, this may mean sometimes they drop medications down to you but these are mainly anti depressants so you can feel better about your true situation. They may offer 1/10000000 well people a lotto ticket out, but only do this by making you return more work or eat less for that lotto ticket, so it not really an out it was a regressive tax. But it gave you [false] hope

Can you not see It does not matter how smart, hard working, enthusiastic, kind, optimistic or lucky you are, you are structurally you are still and always will be in the well, with no way out ever.

So keep believing hard work and smarts will get you there, it wont.

[khal]

Bitcoin will certainly be the currency of future "internet states/country"

[thoughtfan]

* Governments will always find ways to milk you.
You think hey, no more inflation. They will come up with some kind of creative new tax so that you will en up paying even more.

If the volume of taxed money is the same, I'm not aware of any worse way to tax than via inflation directed to the credit market. Any other taxation scheme ever created is economically less destructive than inflation. Basically, even if they keep milking us just as much, the way they milk does make a significant difference. All these brutal economic cycles which destroy so much capital, for instance, would not occur if it weren't for inflation directed to credit.
Plus, another quite destructive taxation type is that which attacks savings and investments, since these are the fuel for future economic growth. Income taxes attack savings and investments. Some argue that a world in which cryptocurrencies are the norm would render income taxation unpractical: http://falkvinge.net/2011/05/19/the-information-policy-case-for-flat-tax-and-basic-income/

The way they 'milk' makes a massive difference.  I don't see this being a painless transition, especially to the mainly poor who believe they should pay their 'fair share' of taxes whilst the smarter and those who pay the smarter take more and more income and wealth out of reach of the taxman.  However I see governments being forced to totally rethink their income (and their expenditure) as inevitable eventually.

People propose flat tax or high VAT as alternatives but both are still taxes on the productive and both are among the taxes that become more difficult to impossible with the rise of anonymous currency.

Tax on land on the other hand does not.  Governments can, and should, give up on trying to keep tabs on how much people earn and how much wealth they own.  Tax on land is taxation without 'milking'!  Taxation as a rent on the increase in land value that is as a consequence of others' efforts (businesses, workers and 'public works' such as infrastructure) is not only not negative, it has a positive impact by ensuring land is used more effectively.

I happen to think Land Value Tax is part of a family of solutions that includes and goes hand in hand with Bitcoin.  But regardless of whether it is or not the eventual solution the fact that taxation via inflation will be impossible whilst taxation on wealth, on income and on sales will be very difficult will push the conversation towards better solutions.

[caveden]

People propose flat tax or high VAT as alternatives but both are still taxes on the productive and both are among the taxes that become more difficult to impossible with the rise of anonymous currency.

Unfortunately VAT on goods is almost impossible to avoid, in spite of having or not a way to spy on people's finances. Merchants have a strong incentive to declare it in order to reimburse the VAT they payed on input.

And even for VAT on services, some nasty techniques may considerably reduce evasion, like forcing merchants to allow customers to provide their fiscal number to be attached to the "fiscal receipt" (what's the correct English term?), and then reimburse these customers of a % of the VAT they payed. The government of the state of São Paulo is doing this right now. You may get back as much as 30% of all the VAT (there called ICMS) that you pay. As the default VAT percentage is 18%, it means by default you can get back ~5,4% of the price of everything you buy just by adding your fiscal number to the receipt. It's not a negligible amount, so most people do give their numbers. As a consequence, the state avoids a significant amount of tax evasion and also happens to gather an immense amount of financial data about its subjects. Total Big Brother, and would work quite well even in a cryptocurrency world.

Tax on land on the other hand does not. 

Land tax creates price distortions. Why land should be rendered less useful to hold, relative to other goods? Interfering with market prices is never a good thing.
(of course that every tax does such interference, but a general flat VAT affects all consumption equally, so the distortion effects are less bad)

[justusranvier]

However I see governments being forced to totally rethink their income (and their expenditure) as inevitable eventually.

Governments are evil, violent mafias. When people stop believing it's virtuous to point guns at their neighbors to get what they want governments will be extinct.

[thoughtfan]

However I see governments being forced to totally rethink their income (and their expenditure) as inevitable eventually.

Governments are evil, violent mafias. When people stop believing it's virtuous to point guns at their neighbors to get what they want governments will be extinct.

Well, either they will cease to be evil violent mafias or they will cease to exist.  Time alone will tell.

[johnyj]

So far, it is still an experiment, both technically and politically

Centralization is the natural end of any profit driven system, so how to limit the centralization tendency is the core question

At the begining, when resource is aboundant, bitcoin is quite distributed, this might be the best time, but that period is almost coming to an end, mining operations will be more and more specialized and centralized to several large pool, bandwidth and storage limitation will put most of people out of the mining, and satoshi dice like automated trading bots will abuse most of the transaction capacity...

[justusranvier]

Well, either they will cease to be evil violent mafias or they will cease to exist.

Same thing. Without the coercion they aren't governments any more. We have other words for organizations which do the same job without the violence, like "charity", "insurance companies", "business", etc.

[thoughtfan]

Tax on land on the other hand does not. 

Land tax creates price distortions. Why land should be rendered less useful to hold, relative to other goods? Interfering with market prices is never a good thing.
(of course that every tax does such interference, but a general flat VAT affects all consumption equally, so the distortion effects are less bad)

I don't believe it does 'distort' the market when it comes to land.  I agree with the principle of not interfering with markets relating to capital and labour because yes, it does distort prices making it an uneven and unjust playing field.  But the reason people mostly apply the same to land is because neo-cons and ancaps tend to bundle capital with land and call them both capital.  But classic economics differentiates between land, capital and labour, recognising land to be a special case.

At the risk of derailing this thread (I could go on about LVT till the cows come home - as I have over in the politics subforum) it is the fact of landowners reaping the benefits of the increase in value of their land as a consequence of the combined efforts of others that distorts and creates injustices.  LVT or other forms of GeoLibertarianism or Georgism look at means of minimising or eradicating those distortions.

As for VAT I can see what you're saying about sales tax being a much easier one to monitor and enforce than income or wealth taxes.  However it is still a tax on the productive and is still prone to a certain extent to avoidance whereas land tax simply isn't.  I own the land, I have title to it there is no argument.  It can not be hidden.  My land is valued the same as that of my neighbours and that's how their and my 'location levy' (a term I prefer) is determined.

You ask why should [holding] land be rendered less useful than other goods?  Because it is!  Well actually it is worse than 'less useful'; it is harmful.  Comparison with Bitcoin makes the essential difference easiest to see.  In common, hoarding Bitcoin and hoarding land both mean less is available for everyone else.  But regardless of how little Bitcoin is left it is just as useful for newcomers to use for trade, for international transfer or for hoarding.  It doesn't matter how much you scale it essentially it still works.  You try getting the same crop out of, or building the same house on a plot that is 0.00001 the size of what an 'early adopter' bought for the same price!

[thoughtfan]

Well, either they will cease to be evil violent mafias or they will cease to exist.

Same thing. Without the coercion they aren't governments any more. We have other words for organizations which do the same job without the violence, like "charity", "insurance companies", "business", etc.

I'm still not convinced by the idea of competing law enforcement agencies etc. that I've seen anarchists argue for.  I would prefer police, armed forces and justice system to remain under one agency.  I would call that a government regardless of whether they are 'evil violent mafias' or not.  I understand purist anarchists say unless you're allowed to raise your own army you are 'oppressed' and the regime preventing you are therefore oppressive and evil.  I'm not saying they're wrong.  I just don't agree.

[justusranvier]

I just don't agree.

Do you, either in person or via a proxy, have the right to threaten other people with violence for disagreeing with you?

I fully support your right to fund any organization you want to fund with your own money, and to refrain from funding any organization you disagree with. Will you grant me the same consideration?

[thoughtfan]

So far, it is still an experiment, both technically and politically

Centralization is the natural end of any profit driven system, so how to limit the centralization tendency is the core question

At the begining, when resource is aboundant, bitcoin is quite distributed, this might be the best time, but that period is almost coming to an end, mining operations will be more and more specialized and centralized to several large pool, bandwidth and storage limitation will put most of people out of the mining, and satoshi dice like automated trading bots will abuse most of the transaction capacity...

I think centralisation is certainly part of the cycle, part of the picture but in the examples I'm thinking of if centralisation becomes excessive it get's lazy then competition springs up and shakes things up again

I think those who believe centralisation as an inevitable consequence of profit will tend to filter out signs that what is happening doesn't conform to that picture.

Let's look at mining first:

If ASIC mining gear generally keeps the same price per hash regardless of the scale of purchase (which is essentially where it is at at the moment) there is no economies of scale that will drive out the hobby ASIC miner.  And if the growth of the bitcoin user network is growing exponentially the proportion of those deciding to mine needs to decrease by even more for the distribution of mining to decrease - and I just don't see it.

As for the pools I think we're all aware of the dangers of some pools having too much power and it is simple enough to use another means, not least p2p, to mitigate those problems. I will not comment on the transaction capacity issue with SD and dice because I don't understand the technical issues nor proposed solutions well enough to form an informed judgement.

[yucca]

Lexically government does not imply coercion (although I fully empathise with those that think otherwise).

In theory one could build a governing system that is P2P and fair (of course people unable to own a node would not have a voice).

But the problem would arise of peers grouping together "offgrid", talking etc., forming subroups that work on coerceing other peers into voting a certain way, larger groups could control the media etc. So in effect the government system escapes its mathematically perfect existence in the network and spills out into individual minds and we are back to square one; a pyramid heirachy emerges and eventually dominates, again enforcing laws chosen by those higher up.

Bitcoin itself has no defenses against this behaviour either. Business intrinsic to BTC is mining and transaction processing (and loans), in time mining/transacting will be carried out by a diminishing number of mega-nodes (eventually 1) as that configuration is the optimal solution both energy and hardware wise. This optimal solution is inevitable in a competitive market, and so the chance for corruption increases over time.

When you consider the above; the concept of a Borglike hive mind kind of makes sense (unless you're near the top of the existing pyramid). Should a hive mind arise in humans I think it would be favoured by evolution and we would be exploring the galaxy sooner. Also I dont think a borg mind has to be grey and unfeeling as portrayed on startrek, maybe it would be wonderful?

[thoughtfan]

I just don't agree.

Do you, either in person or via a proxy, have the right to threaten other people with violence for disagreeing with you?

I like having this asked me because it is not one I can answer as cleanly and as certainly as I would like to so it makes me think!  I think if we had a clean slate, say a bundle of us found ourselves on a previously uninhabited piece of land, I would not feel I had the right to be part of the establishing an organisation that would prevent others from doing anything other than abusing others.  And if we ended up with more than one competing organisation doing crime prevention/justice I really don't know - but I can see problems.

But I'm guessing neither of us are in that position!  I guess we both live in lands that are currently governed.  Now if we stripped these governments' powers back to the extent that we both agree and strip their funding back to the extent we both agree I know we still have not gone as far as you want but we still have one government.  In this situation if a bundle of people (or one very rich person) decided they wanted to fund an army or a police force and do justice their way and for the sake of argument, at the risk of offending muslims out there, they decided the law they considered to be just was sharia law, would I trust them to respect the rights of suspects or to treat believers and non-believers with equal respect?  Mmm.  I think I would prefer to support the government in saying, "No you can't have your army" which of course means being prepared to prevent the army from being formed by force.  So I don't know if I would go as far as saying I have a 'right via proxy to threaten' but I think I would nevertheless take that step in the given circumstance.

I fully support your right to fund any organization you want to fund with your own money, and to refrain from funding any organization you disagree with. Will you grant me the same consideration?

I will give you the same consideration if you want to live, trade, rent and conduct your free life without owning land.  What's more, regardless of your wealth or lack thereof, regardless of your not electing to contribute to the public purse the police, the courts and the armed forces will protect you irrespective of who you are.  However if you decide to own land you do so under the understanding that whilst any increase in value that arises out of improvements you make is yours, any increase that happens as a consequence of others' efforts will not by right be yours and you will therefore be obliged to pay rent on it.

Please note I am not saying I have 'THE ANSWER' but i think I have AN answer that is a world away and is more just by orders of magnitude than what exists today.  I suspect by the time we got to having stripped away the powers and funding to the extent that we both would agree the differences in the connotations and likely outcomes of the remaining options would become clearer and I doubt very much we would come to blows over it!

[caveden]

I don't believe it does 'distort' the market when it comes to land. 

It's not a matter of belief, it's a fact. Market prices are those determined by voluntary transactions. Taxes are coercive, not voluntary. Any alteration taxes provoke on prices is a distortion of the actual market prices. And taxing only a particular kind of good (land), provokes an unbalanced distortion.

I agree with the principle of not interfering with markets relating to capital and labour because yes, it does distort prices making it an uneven and unjust playing field.  But the reason people mostly apply the same to land is because neo-cons and ancaps tend to bundle capital with land and call them both capital.  But classic economics differentiates between land, capital and labour, recognising land to be a special case.

Land can certainly be capital if used as such, capital == means of production. The land of a farmer, for ex., is part of his means of production. So it's his capital.
But whether it's capital or not is not my point, my point is that by taxing land only you'll create a burden on only this kind of good.

At the risk of derailing this thread (I could go on about LVT till the cows come home - as I have over in the politics subforum) it is the fact of landowners reaping the benefits of the increase in value of their land as a consequence of the combined efforts of others that distorts and creates injustices.  LVT or other forms of GeoLibertarianism or Georgism look at means of minimising or eradicating those distortions.

There are many problems with Georgism. Both on the ethical and on the practical/economical level. I'm aware that both Hoppe and Rothbard have written about it, you should perhaps search their essays.

As for VAT I can see what you're saying about sales tax being a much easier one to monitor and enforce than income or wealth taxes.  However it is still a tax on the productive

It's a tax on consumption. That's the last link in the economic growth chain. Attacking that link will not break the chain thus will not seriously reduce future economic growth. It will reduce the amount of growth that people can profit from (consume), but the growth speed won't be be seriously reduced, at least not if we compare with taxes which affect savings and investments.

You ask why should [holding] land be rendered less useful than other goods?  Because it is! 

The usefulness of something to society is not to be determined by you nor anybody else. You don't get to say that land is more or less useful than other goods. That's something to be decided by people's actions and their subjective evaluations.

But you can certainly anticipate that it will be artificially rendered relatively less useful than other goods if you apply a tax on it.

[yucca]

Well, either they will cease to be evil violent mafias or they will cease to exist.

Same thing. Without the coercion they aren't governments any more. We have other words for organizations which do the same job without the violence, like "charity", "insurance companies", "business", etc.

I'm still not convinced by the idea of competing law enforcement agencies etc. that I've seen anarchists argue for.  I would prefer police, armed forces and justice system to remain under one agency.  I would call that a government regardless of whether they are 'evil violent mafias' or not.  I understand purist anarchists say unless you're allowed to raise your own army you are 'oppressed' and the regime preventing you are therefore oppressive and evil.  I'm not saying they're wrong.  I just don't agree.

Interesting discussion

I sometimes think that anarchy is like disrupting a bottle of soapy water, the bigger bubbles would be burst and we would have more foam, yes it would be fairer initially, wealth and decision making would be more evenly distributed. But alas over time one dominant bubble would again form, and then what... I guess shake again and repeat. But what if a chemical were introduced to the water to prevent bubbles? A technological singularity might be what it takes? And then we can evolve to the next fractal level, becoming an individual collective as we enter the cosmos in fantastic ships. Now I'll leave you two to it...

[justusranvier]

However if you decide to own land you do so under the understanding that whilst any increase in value that arises out of improvements you make is yours, any increase that happens as a consequence of others' efforts will not by right be yours and you will therefore be obliged to pay rent on it.

So you do believe in using force to get what you want from people who disagree with you.

[thoughtfan]

I don't believe it does 'distort' the market when it comes to land.  

It's not a matter of belief, it's a fact. Market prices are those determined by voluntary transactions. Taxes are coercive, not voluntary. Any alteration taxes provoke on prices is a distortion of the actual market prices. And taxing only a particular kind of good (land), provokes an unbalanced distortion.

Thank you for pulling me up on this.  As I wrote it it didn't feel quite right.  You are correct in that if we consider market prices as determined by voluntary transactions to be the determinant of price then anything else does by definition 'distort' it.

And of course the terminology you use to say 'coercion provokes an unbalanced distortion' makes that look like a terrible thing - as it is I believe when applied to productive and consumptive activities.  Although I can see the 'end-of-chain' argument making VAT in a way maybe the one that affects productive activities least it is still hindering the beneficial cycle of commerce.

Taxing land simply doesn't.  To the contrary.

I agree with the principle of not interfering with markets relating to capital and labour because yes, it does distort prices making it an uneven and unjust playing field.  But the reason people mostly apply the same to land is because neo-cons and ancaps tend to bundle capital with land and call them both capital.  But classic economics differentiates between land, capital and labour, recognising land to be a special case.

Land can certainly be capital if used as such, capital == means of production. The land of a farmer, for ex., is part of his means of production. So it's his capital...

Ah, OK I had forgotten ancaps tend to go one further than the neo-cons and mush all the various elements that make up the means of production and call it all capital!  Of course then you can take rules that normally apply to capital and apply them also to what others might call land or labour.  Classic economics finds it useful to recognise essential differences between the elements that make up the means of production.  Smith talks in terms of ' labour, land, and capital' and the Wikipedia 'Factors of production' also refer to the three as being distinct.

If we don't mush up the terms into one we can say the land of the farmer is, along with his capital and his labour, his means of production.  The three certainly have many attributes in common but one of the beauties of not mushing them together is that it also gives us the freedom to see what is different about each.

...by taxing land only you'll create a burden on only this kind of good.

But it is only by bundling land under capital that you can then further classify it as a 'good' which it isn't if we're recognising the fundamental differences that caused it to be considered separate from capital in the first place.  Labour isn't a 'good' neither is land - only things in the Capital classification are 'goods'.

The usefulness of something to society is not to be determined by you nor anybody else. You don't get to say that land is more or less useful than other goods. That's something to be decided by people's actions and their subjective evaluations.

My subjective evaluation is not that 'land is more useful than other goods' but that it is not a 'good' and that its distinct attributes means it can be treated differently to 'goods'.

People's actions and their subjective evaluations will determine how much someone is prepared to pay for a property.  If there is a tax to be paid this will eradicate any increase in future value arising from its location so the amount someone is prepared to pay will be less - there will no longer be a virtually guaranteed appreciation in value due to demand in that location.  Call it a distortion if you like but it means the considerations in evaluating the property are now limited to its productive capacity and/or desirable features.  From my perspective it has taken out the 'distortion' in price caused by speculation.

Land is of limited supply.  The degree by which its value increases (other than by direct improvement by the owner) is determined by demand which is determined by its location - and the difference in price between various locations is a consequence of all economic activity and amenities in those locations.  Everybody who makes a positive contribution to commerce and amenities in one location has contributed to the increase in value of the land.  If it so happened that the proportion of contribution matched the proportion of the land owned then it would be easy and fair.  But it isn't.  Landowners in the absence of a land tax reap the benefit of the work of others - and by looking at it through the eyes of current economic paradigms actually believe they have 'earned' the increase in value.  In the meantime the next generation and newcomers have less and less of a chance of finding somewhere to live they can afford - whether to rent or to buy - because as illustrated by my Bitcoin comparison earlier, hoarding land with virtually no risk of it going down in value (providing others keep up the good work) keeps swathes of land under-utilised.

[thoughtfan]

However if you decide to own land you do so under the understanding that whilst any increase in value that arises out of improvements you make is yours, any increase that happens as a consequence of others' efforts will not by right be yours and you will therefore be obliged to pay rent on it.

So you do believe in using force to get what you want from people who disagree with you.

If that's how you insist on seeing it nothing I can say will change your mind.  You didn't even put it as a question but as a statement.  I happen to think as I said earlier that we have a lot more in common than we disagree on.  If you will stand beside me for most of this 'fight' towards shared values I believe the odds are we'll be able to work out the differences when most of the goals have been attained.  But you're also free to see me as a gun-touting scoundrel who would help myself to anything that is yours if that's your preference