Bitcoin's Dystopian Future

[freequant]

One much more likely outcome is that US government will pass a bill to have full and unrestricted access to ISP traffic, outlaw peer-to-peer technology and cryptography in all forms, and crack down on anyone they catch using cryptography and / or peer-to-peer technology. The use of cryptography was regulated a decade ago, there is no reason this cannot come back if the government sees fit to it. Ah, and yeah, of course all the other governments will follow suit like nice little lap dogs.

[Ekaros]

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.

I feel like this is the scenario we are moving towards anyway.

And the 80% wont be good. I think feudalism might rise again... And bitcoin or any other cryptocurrency won't stop this in anyway...

It's really depends on separation of those parts of populations...

[phelix]

Thanks for your post, it is always important to think about worst case scenarios to be able to prevent them.

Governments would have to buy Bitcoin / cryptocoins (with fiat or gold). They could even back fiat money by cryptocoins. Lack of taxes may bring serious problems, though:

People could be linked to an address by their dns in a government controlled public database. Whenever you pay VAT will be deducted automatically. If you send to or receive from unregistered addresses the police will visit you and ask questions.

Note that this would even be easier with centralized money. It could happen though, that a cryptocurrency forces governments into doing it.

[wachtwoord]

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.

Made me think of:
YOUR FAVORITE MARTIAN - TAKE OVER THE WORLD: https://www.youtube.com/watch?v=rtWDQHNhuBs

[Adrian-x]

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.

Made me think of:

"The Story of Your Enslavement" https://www.youtube.com/watch?v=Xbp6umQT58A&feature=youtube_gdata_player

[wachtwoord]

Thank you. That gave me goosebumps.

[thoughtfan]

... it could tax land (owners or renters)...

This ^

Except that land taxation always taxes owners not renters.

There is a carrot to land taxes I'm on a mission to point out to people (see my blog link) but I also think Bitcoin and anything that makes it easier for more income, purchases and wealth more difficult for governments to keep up with also acts as a stick towards a means of public revenue that's been staring them in the face for a century and more!

[unk]

... it could tax land (owners or renters)...

This ^

Except that land taxation always taxes owners not renters.

except where it doesn't, like in the uk. i wish more people here would learn more about the actual world before coming up with grand political or economic theories (or at least before trying to correct me).

[Hawker]

If Bitcoin were to replace fiat currency, government would move from taxing incomes to taxing resources.  Think water rates, road tolls, etc.  The state system would tick along just fine.

[thoughtfan]

i wish more people here would learn more about the actual world before coming up with grand political or economic theories...

As do I sire, as do I

But I don't either believe one should be obliged to know the ins and outs of every tax jurisdiction prior to being free to post 'grand political or economic theories'.

... it could tax land (owners or renters)...

This ^

Except that land taxation always taxes owners not renters.

except where it doesn't, like in the uk.

I understand that both business and residential rates in the UK are paid by occupiers not landowners.  What I would question is your classifying the uk system as 'land tax'.   I know Scotland and Wales have variations on the system but as far as I understand it neither domestic nor business rates are based on land values but on rateable values for business premises and on 'Council Tax Banding' for residential.  The latter, based on 1991 values fails dismally to reflect the increased polarity between land value in prosperous and impoverished regions.  Business tax at least is more current but still includes the value of the building itself.  Neither tax is payable on vacant building land.  In my eyes it would take some stretch to classify either as 'land tax'.

Although not impossible (which I suppose my wording incorrectly implied) I can not see any organisation putting a land tax system in place without at least having enough of an understanding (and, as you suggest, doing enough research) to know it can only work if it is the land owner that pays.  What's more, because rental values are determined by demand and are independent of the cost of supply then these charges can not be passed on to the tenant so not even indirectly does the tenant pay.*

As it happens I wrote a blog about Land Tax this morning.

No hard feelings.  I wrote as I did for clarification rather than as criticism/correction.

* The tenant would likely eventually end up paying more but only because another consequence of Land Value Tax is that other forms of taxation are reduced/abolished meaning more money is available meaning the competition for the same rental units is increased resulting in landlords being able to raise rent.

[gollum]

The OP believes that criminality will increase if anonymity can be guaranteed in communications and transactions but we already have criminality and trafficking today. The society won't change a lot because of some more anonymity.

Anonymity is a tool. You can use it for good or bad. I believe the consciousness and morality of humanity is evolving, therefore increased anonymity is not a threat to the society.

Some people thinks that the rulers (Governments, Bankers and Big Corporations) will buy into bitcoin, they probably won't.
The rulers will watch how the bitcoin experiment unfolds, learn from it and create their own cryptocurrency. Their primary goal will of course be control, so they design their cryptocurrency in a way that gives them 100% control over who, where and when was involved in each transaction, each wallet must be connected to a person or company. Cash-fiat will be totally abandoned since it is anonymous. Gold, Silver coins might emerge as an easy alternative for anonymous transactions offline.

[Crypto Canary]

All the world’s wealth has essentially been stolen, but by whom? By you, dear reader.

We’ll be very lucky if we aren’t all rounded up and summarily executed. Thankfully, you’ll be able to use some of that money to purchase protection, but I’m not at all convinced that it will be enough. A wrathful government backed by an enraged population is a fearful enemy. Satoshi foresaw this long ago, and I doubt he/she/it/they will ever voluntarily come into the light.

Nah, everyone else will just mine Bytecoin, Trytecoin, Crumbcoin, or Hexcoin or whatever name they come up with next.   Bitcoin's current value is based mostly on the fact that most people don't know how it works. Once the other iterations of bitcoins start getting attention, the value will probably even out between them.

[phelix]

All the world’s wealth has essentially been stolen, but by whom? By you, dear reader.

We’ll be very lucky if we aren’t all rounded up and summarily executed. Thankfully, you’ll be able to use some of that money to purchase protection, but I’m not at all convinced that it will be enough. A wrathful government backed by an enraged population is a fearful enemy. Satoshi foresaw this long ago, and I doubt he/she/it/they will ever voluntarily come into the light.

Nah, everyone else will just mine Bytecoin, Trytecoin, Crumbcoin, or Hexcoin or whatever name they come up with next.   Bitcoin's current value is based mostly on the fact that most people don't know how it works. Once the other iterations of bitcoins start getting attention, the value will probably even out between them.

Ever heard about the network effect?

[wachtwoord]

All the world’s wealth has essentially been stolen, but by whom? By you, dear reader.

We’ll be very lucky if we aren’t all rounded up and summarily executed. Thankfully, you’ll be able to use some of that money to purchase protection, but I’m not at all convinced that it will be enough. A wrathful government backed by an enraged population is a fearful enemy. Satoshi foresaw this long ago, and I doubt he/she/it/they will ever voluntarily come into the light.

Nah, everyone else will just mine Bytecoin, Trytecoin, Crumbcoin, or Hexcoin or whatever name they come up with next.   Bitcoin's current value is based mostly on the fact that most people don't know how it works. Once the other iterations of bitcoins start getting attention, the value will probably even out between them.

Ever heard about the network effect?

He obviously hasn't 

[BTCLuke]

It is obvious to me that the OP has missed a major piece of the puzzle.

It's not just cryptocurrency that is making all of these changes... It is decentralization itself that is... And those changes will be far, far larger than monetary.

Decentralization is nothing less than the removal of power from those who have it and scattering it around to all that want it.

Gnutella was technically the first decentralized program. (That I know of.) They may have fizzled, but today we have Bittorrent, Mega, and TOR, among others, to share information through. Together these make IP laws start to seem kinda silly.

Bitcoin is a bigger jump, because it represents half the economy; any product or service that someone wants to sell, worldwide, we can now buy in a decentralized way. But it's just the buying half...

3D Printing using DEFCAD search and the resulting industry built around downloadable products will represent an even larger jump... They are the other half of the economy, and everything one could sell will eventually be manufactured and sold this way. (Destroying pretty much all existing industry worldwide.)

But that's not all! What else can we decentralize?

Well, if the government does it today, why can't we decentralize that too?

Security? But of course. Why use the .govs police when you can have free-market security services bought and sold in a decentralized environment?

Law? No problem. There are already websites like judge.me that offer non-nationalized law... Making those into a decentralized solution would be childsplay.

Whenever you think it can't be decentralized, trust me, it can. Even roads can be built privately, and decentralized marketplaces can expedite them. Fire services? Same as security. It can all be done without any government once the interest to do so is there.

So I submit that bitcoin's influence on our future is one of many 'decentralizers.' -And not the largest one by far.

One much more likely outcome is that US government will pass a bill to have full and unrestricted access to ISP traffic, outlaw peer-to-peer technology and cryptography in all forms, and crack down on anyone they catch using cryptography and / or peer-to-peer technology.

So I guess you haven't heard yet that you don't have to use their internet?

We'll all be our own ISPs in a few short years. Wireless Mesh networking is real tech and they've even had it in the One-Laptop-Per-Child computers for several years now.

The range of wifi has been the largest stumbling block, however we are only 1 wifi standard away from having complete and total wireless freedom without any centralized points in it that governments can control.

[gollum]

It is obvious to me that the OP has missed a major piece of the puzzle.

It's not just cryptocurrency that is making all of these changes... It is decentralization itself that is... And those changes will be far, far larger than monetary.

Decentralization is nothing less than the removal of power from those who have it and scattering it around to all that want it.

Decentralized governments is actually not a new concept, between 10th to 15th century Italian cities was independent states.
http://en.wikipedia.org/wiki/Italian_city-states

With the help of technology and p2p currencies it is easier and more efficient to run small states today than 1000 years ago. When our current governments fail, smaller states will be formed which means smaller gap between the leaders and the people. When people have a stronger connection to their government they will also be more loyal to each other and the government which decreases the chance of the worst case scenarios.

Switzerland is a good example of a functioning small country with decentralized democracy already:
http://en.wikipedia.org/wiki/Direct_democracy#Switzerland

[cryptoanarchist]

I think OP fails to realize that the money with decentralized currencies is going to flow to the most creative/productive and those types of people are the ones who can "create" jobs.

There will be LESS unemployment - not more. Government jobs will be eradicated, but replaced by even more free market jobs. In fact, for every regulatory agency that shuts down there will be whole new industries that spring up as a direct result.

I think the problem will be that those who have gotten their money through our current system of looting and mooching will suddenly find themselves at the bottom of the income brackets instead of the top. ( A municipal judge, having no actual productive skills, may have to work at McDonald's someday.)

To those people I say -"too bad"

[nazgulnarsil]

Bitcoin allows capital flight to a degree never before seen in history.  This will enable people to vote with their feet much much more easily than ever before.  People will choose to live in places where security against physical and economic violence is best.  This should result in higher quality governance as places with poor governance experience massive capital flight, leaving them poor and ineffective.  This boon is worth minor negatives.  We must get away from the status quo in which optimizing for conquering others is a more effective strategy than optimizing for standard of living.

[dacoinminster]

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


I'm sorry, just couldn't resist.

I know I shouldn't laugh at that, but I did.

Other than that, I'm kind of surprised at the high quality of thought and discussion going on here. Thanks everybody who chimed in. Some of you actually made me feel a tiny bit better

[lunarboy]

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

I know I shouldn't laugh at that, but I did.

Other than that, I'm kind of surprised at the high quality of thought and discussion going on here. Thanks everybody who chimed in. Some of you actually made me feel a tiny bit better

You must have some faith in the good of humanity or why bother even trying? Faced with a choice of two similar financial investments promising similar returns, surely more than 51% of us will choose the one most morally and environmentally beneficial to the planet and their fellow humans?

Keep steering the world in the direction you believe is the right one, and we will all be the better for it.

 I know I am.