Bitcoin's Dystopian Future

[Sword Smith]

A government is a company like any other company. Its business model might be challenged by crypto currencies just like Western Union's business model will be challenged but it will have to adapt.

If a government is a company, what is its core service? Security!

In an anarcho capitalistic world (no govenments), there would still exist a demand for security as you point out. This demand will be filled by some entity and the best way to provide security is to control a geographical area, like in a gate community - and what, if any, are the fundamental differences between a gated community and a government? None! We are already living in a world of "privately" owned security companies competing with each other. We just happen to call these kind of companies "governments". We are living in an anarcho capitalistic world already. We who call ourselves libertarians are just not too happy with the quality and price that these companies provide.

Governments will not die since there is a huge demand for their service - security. Governments will adapt and figure out new ways to get a revenue either through property taxes or through head taxes but many people will be hurt in this process as you correctly point out.

[conspirosphere.tk]

As Bitcoin grows large enough to represent a real threat governments might make noise about regulating it or shutting it down, but the entire time politicians are spewing hot air insiders throughout the bureaucracy are going to be quietly stashing whatever money they can get control over in Bitcoins. All the scare stories that pop up between then and now are designed solely for the purpose of scaring early adopters into letting go of their bitcoins so those who don't have them yet can buy in cheaply.

Fore ever and ever. Same shit, and same asshholes.

[unk]

this is cute and imaginative, but it is better as fiction than as social science or prediction. if the professional economists can't predict anything two years ahead, why do you think you can?

1. even if bitcoin were untaxable, which it's not, why would the government be unable to find some other source of funds? it could tax land (owners or renters), for example. at the very worst, tax fraud through bitcoin could slightly undermine progressive income taxation, but it's unlikely to do even that because there would still be real-world employers with physical presences that are easy targets of tax enforcement. most salary-based tax is voluntarily reported by individuals, except for that portion declared by institutional employers. your view is a bit ahistorical, too: the income tax isn't even very old.

2. you seem to be assuming that the value of an individual bitcoin will reach $1 million. (that is probably what would be necessary for satoshi to be a 'trillionaire'.) why would anyone without bitcoins throw so much money into bitcoins, however? they might be useful, and they might be enough to attract both speculation and real use, but a century before your fanciful claims would materialise, those with present wealth would find it far easier to set up an alternative cryptocurrency.

2a. bitcoin would not actually be a robust way to store the amount of wealth that would be necessary for your story to materialise. it could still probably be disrupted by $5 million's worth of asic chips. it presently stores, also, nowhere near as much as the widely reported 'market capitalisation' figure.

3. why do you think bitcoin enables your nightmare scenarios, like kidnapping children in the suburban united states to sell them to paedophiles? if there were already drive to do this and people thought they could get away with it, i'm sure suitcases of cash or wire transfers to borderline-lawless jurisdictions would make for suitable, less trackable payments.

[Rassah]

This OP makes me think that Bitcoin will be a MAJOR push towards something like seasteading, or a private island nation, simply because those who became bitcoin-wealthy will likely want to come together to support each other; strengths in numbers and safety in sticking together kinda thing. In the end, we may just end up with a super-wealthy micronation that likely works as a non-binding corporation/conglomerate of wealthy owners, residing within the safety of their own privately militarized, protected gated community/island/ship, with its tentacles in every business in the rest of the world.

The nice thing about markets and economics is that people will always need "stuff," and as long as people need "stuff" and other people are willing to make "stuff" for money, there will always be work and "stuff" being made, regardless of who holds all the wealth.

[uMMcQxCWELNzkt]

I feel Bitcoins are a new step in human history, or at least, the currency will at least plant the idea for future generations to accomplish. At this point there is no going back. I have to disagree with your negative perspective on Bitcoin's future, electricity for example has made is possible to share your thoughts across the globe, as it has enabled aircraft to drop bombs across the globe. All tech will have both positive and negative consequences and as a species I hope for the day where we can take a step back and say enough is enough, I don't want to participate in this slave driven system, I can think for myself.

Before I was banned from Abovetopsecret I should say that this list does not phase me in the least lol. Microchips are not necessary for control either, believe me school, supermarkets, tv, music, news, chemicals in food etc all do a fine job.  

[virtualmaster]

 
I must say that reading some articles on bitcointalk is more amusing for me than watching a comical serial.
For outsiders probably even more.
I think at the moment they look on us more like on some mad people:
http://www.time.com/time/magazine/article/0,9171,2140782,00.html

[nevafuse]

We are living in an anarcho capitalistic world already. We who call ourselves libertarians are just not too happy with the quality and price that these companies provide.

Governments will not die since there is a huge demand for their service - security. Governments will adapt and figure out new ways to get a revenue either through property taxes or through head taxes but many people will be hurt in this process as you correctly point out.

I kinda agree with this mentality, but there is more involved than disagreeing with quality & price.  As technology advances, old ways of doing things become obsolete.  In our case, decentralized money makes government issued money obsolete.  Now we can save money (not pay taxes), without losing the advantage of a stable, nonconterfeitable currency.

Your argument is a little different because you mention government's main service is security over money.  I'm not sure I agree with that though.

[unk]

I must say that reading some articles on bitcointalk is more amusing for me than watching a comical serial.
For outsiders probably even more.
I think at the moment they look on us more like on some mad people:
http://www.time.com/time/magazine/article/0,9171,2140782,00.html

my favorite recent bizarre post that captures much of the ethos of this forum was:

[Google CEO Eric] Schmidt is the guy who wants to make personal ownership of drones illegal.

Authoritarian from the word go.

Google + Bitcoin is not a good fit.

[leemar]

Like many of the respondents here I have a greater faith in human nature to provide a compassionate response to what may be coming.  However if the European experiment we have just seen unfold tells us anything, you cannot have a single monetary system without a single government.  I see that transition as being a monumental challenge, and will require visionary leaders to take leaps of counter-intuitive faith.

[uMMcQxCWELNzkt]

Thanks, OP!

For the most part I agree. A word you were probably looking for (or trying to avoid in order to stick to plain English) is seigniorage, which I've mentioned a few times before. Just like the issuers of governmental cash make profit from money supply inflation, the 'issuers' (early adopters) of bitcoins profit immensely from Bitcoin's growth. We steal other people's slices of the "global value pie".

However, I have confidence that most people can adapt, so I'll put an alternative spin on your points:

Re: The Bleak Future of Fiat Currencies
I think it's only as bleak as governments are untrustworthy and unstable. I guess we'll have to wait and see how they'll cope, and how people will adapt their governments.

Re: Wealth Disparities
You seem to assume people will continue to rally behind Bitcoin's brand-name chain, and that the spin-offs will continue to be small-time wannabes. Maybe, but I hope that Ripple (or something similar) takes off, enabling easier exchange between various esoteric "coin ideas". I doubt they made it Open Source just so everyone would religiously rally behind the real Bitcoin. The way I see it, the free knowledge is supposed to help redress the unfairness of seigniorage. Everyone is welcome to create their own crypto flight miles, crypto discount coupons, crypto shares,... whatever their imagination comes up with.

Re: Law enforcement
I suspect many law enforcement agencies are well aware (or at least have some awareness) of the economics of crime. The harder they fight against drugs or child porn etc., the more scarce and therefore more lucrative it becomes. But how would society react if politicians said "actually, we shouldn't take child pornography off the Internet. If we just leave it there and ignore it, it'll be freely available for all the sickos and the makers of new stuff will go out of business." Maybe there would be an uproar and it would be the end of that person's political career. Maybe not. Drug reform is probably a safer bet because it's less contentious. It will take time.

Re: What should we do?
Never stop learning.

Government don't just want to stop criminals(non-government) from illegal lucrative activity, the government themselves profit from such activities. Drugs are a great example, as long as they can control it, they can profit from scarcity and the handling of supply. Then you have prisons, war and all that good stuff that the government loves to collect your money for. Government only care about reform when they have no financial stake in said reform, if they have nothing to gain from you then you can rest assured that they only care if they can instead divert you while pick pocketing you elsewhere. 

[BitcoinAshley]

Grandma’s retirement has been sabotaged by the rise of a new kind of money that she can’t even begin to understand. All she knows is that she did everything right, and now she has nothing.

I disagree. Hyperinflation will happen with or without bitcoin. It has happened in many countries to date, before bitcoin was even a whisper in Satoshi's brain. The way the central banks are managing currencies, fiat is going to die a very violent death whether or not Bitcoin exists.

It just so happens that bitcoin provides a viable alternative, as well as silver and gold and hey - good old barter. This spring I'll be trading turnips for bales of hay to feed my rabbits. Grandma will be fine, I promise.

I agree that we should put our bitcoin brains to work thinking of ways to use Bitcoin to ease peoples' troubles when fiat does collapse. But I disagree that bitcoin is necessary for a fiat collapse to occur. Ben Bernanke & Co are doing well enough on their own

[deadweasel]

Grandma’s retirement has been sabotaged by the rise of a new kind of money that she can’t even begin to understand. All she knows is that she did everything right, and now she has nothing.

I disagree. Hyperinflation will happen with or without bitcoin. It has happened in many countries to date, before bitcoin was even a whisper in Satoshi's brain. The way the central banks are managing currencies, fiat is going to die a very violent death whether or not Bitcoin exists.

It just so happens that bitcoin provides a viable alternative, as well as silver and gold and hey - good old barter. This spring I'll be trading turnips for bales of hay to feed my rabbits. Grandma will be fine, I promise.

I agree that we should put our bitcoin brains to work thinking of ways to use Bitcoin to ease peoples' troubles when fiat does collapse. But I disagree that bitcoin is necessary for a fiat collapse to occur. Ben Bernanke & Co are doing well enough on their own

+1

Amen BitcoinAshley.

[Daily Anarchist]

I enjoyed reading this, and while there is some truth to what is written, I think the author is missing the forest through the trees.

Every. Single. One. of his fears are happening RIGHT NOW... ALL THE TIME... EVERYWHERE... at the hands of GOVERNMENTS.

There is going to be a total power shift from the criminal organization known as THE STATE, and all who cling to its coattails, to the producers of value and those who engage in voluntary commerce and interactions between and among individuals.

[BTC Books]

my favorite recent bizarre post that captures much of the ethos of this forum was:

[Google CEO Eric] Schmidt is the guy who wants to make personal ownership of drones illegal.

Authoritarian from the word go.

Google + Bitcoin is not a good fit.

Why is that bizarre?  (The quote was mine - although in a different context and on a different thread)

[marcus_of_augustus]

Have some faith man! Regardless of the woeful state of monetary affairs, the world you are talking about is made of people interacting with other people. Adversity has a way of flushing out the chumps and bringing the best out in people. Regardless of the worst possible scenario you can imagine (you seem pretty good at these) the numbers on our screens or in our brains is not going to cause us to mistreat each other for no good reason, even cows do not behave like this ... those numbers can all dissolve and in the end it is one human animal interacting with another human animal. If everybody were cruel, unfeeling, starving, cold beasts then the future you portray is possible ... the fact is we are higher beings and for the most part well-fed and comfortable.

Also take issue with several parts;

Grandma has done everything right,

No, whatever else she may have done but on the whole Grandmas have endlessly voted for a bunch of misguided, uneducated, shallow, lying. cheating leaders offering to fix all her problems for her. This is her biggest error more than all the others. Democracy was a gift not to be squandered on selfish unthinking goals.

then this

a new idea to suck all the wealth out of the world like a financial black hole!

... was that supposed great wealth ever there to begin with? Numbers in a database are not wealth, they are representations of wealth (that were inflated beyond all rational calculations). All the real assets and productive capabilities of the globe are not going to disappear because of a geek experiment ... but they may one day come to become valued against such a tool. The run to hard assets of alternative currencies was set in motion long before bitcoin came on the scene, all it will do is merely accelerate the demise of the rotten, failed fiat monetary structures.

[gollum]

You forgot about this competitors to bitcoin in your dystopian scenario:

1) Alt-coins
2) Gold and silver
3) USD alt-coin, EUR-altcoin and so on... If they cant beat bitcoin, they simply have to embrace bitcoin and create their own alt-coin. Crypto currencies are even better than cash for the government, every little transaction can be traced. Nothing is hidden from taxation.

[Operatr]

Bitcoin definitely has the potential to rock the boat in a big way as the vaccuum of trust people have in their banks and governments continues to grow, and as Cyprus already cased, Bitcoin is the exit door on a failing economy, that is only months or years from a complete collapse. Bitcoin is so readily and easily deployable compared to the current nightmare hose beast of a system that it could in theory provide a backstop against a failed economic system. Bitcoin will continue to spread and over-write the bad financial sectors, with whatever positive wealth there is shifts to BTC and other coins, and leaving the mountain of debt to rot in the 7th circle of hell with the FEDs printing press.

I have researched a lot on the New World Order, I have to say I think it is one of those things hard to accept if you are a decent human being that such a terrible evil could possibly exist. But look at our lives. The rich and powerful used their gilded tower to buy more wealth and more power to rob us of our common wealth and power. I exist in one of those in a smaller college town, there is nothing I can do here to get past around $10 an hour when everything keeps getting more expensive. I went to school and got a degree like they told us to, at least thankfully I went into IT instead of some other dying profession. This is the life I was given, and it feels like the end.

Bitcoin isn't just a currency to me, which is why I happily give my life to it to ensure it succeeds. A chance to start a real business from the future at the very start, is an amazing opportunity where really no others exist. My choices othewise are fix people's computers for a pittance, or do something else for a pittance, and that is all I have to look forward to until I died, until I found Bitcoin.

Bitcoin doesn't just have users, it also has believers like me, broken down and attacked at every angle into a maw of near-poverty, ready for a chance to take the power back that was stolen from us. I don't see my developing business as a hardware maker, I see it as a heavy arms manufacturer in the coming currency wars.

I am finished fixing the problem with the problem, doing my best work for a tiny scrap of fiat money into a machine that ultimately screws me, I hope the day comes I never have to see a Dollar bill in my real life wallet ever again.  Bitcoin is my living protest against a destructive, terrible system that only breeds misery and corruption worldwide.

Find me anyone that feels that way toward a fiat currency right now, and I'll print out this post and literally eat it.

I don't know about anyone else, but it is boom or bust for me. At least it beats sitting around hoping the world's nightmare governmental system pulls it's head out of its collective ass, when you secretly know it isn't profitable for the powers in charge to allow you to have a living wage and a home.

There is a line in the sand between the world fiscal gestapo and the tech geeks. Remember when BitTorrent was taken down a few ye...oh right, that is still there too. Bitcoin isn't going anywhere.

[TheKoziTwo]

A glimpse into the dystopian future after the rise of bitcoin:


I'm sorry, just couldn't resist.

[gollum]

In my dystopian future where automation and robots has replaced most human workforce the society will fork into two chains:

The lucky 20% - Those who owns the resources, and those who are needed to run the corporations and the government. The government has created its own crypto currency that Wall Street banks mines and the block reward is determined by Federal Reserve.

The struggling 80% - Those who are not needed by the system got to survive somehow, the government might give them food stamps and some benefits to prevent riots, but riots occur now and then. They have no other choice than to use bartering, local currencies, handwritten IOUs and bitcoin since they do not have any employment.

[Birdy]

If this is ever going to happen, I don't wanna be a rich-ass jerk.
I would try to use the gained influence to make the world a better place, not one far worse.
After all, we would be the ones with the new wealth, so we would be the ones that could change things.

on a side note: let's hope Satoshi is one of those idealistic good types, he could change the whole earth with the wealth he would gain.