What separates this from the other bitcoin movies? These are starting to blend all together. Also when is someone going to interview people from the community and just not all main people that we see all day everyday giving opinions.
Valid question, Gweedo. A couple of perspectives.
1. I used to publish a poker magazine called ALL IN from 2003-2006; during this period, there were all kinds of poker-related shows on channels from NBC, CBS, Travel, Fox Sports, ESPN, G4, to countless others. I can tell you that the proliferation of shows were a strong indication of the vibrancy of the underlying market. For bitcoin enthusiasts, the number of film and media projects focused on bitcoin should be a bullish signal. Yes, they blend together, but so what. I hope every film project is successful and fulfilling to its creators.
2. I'm not sold on bitcoin, especially not its larger claims. I'm 100%-intrigued by bitcoin as a phenomenon, but not sold with respect to its practicality or utility; I do root for all new things, though. As recently as April, I thought it was the "stupidest thing I had ever heard of." I was talking to a friend, whom I respect greatly, a top technology entrepreneur (who incidentally turned me onto the poker boom,) and I laughed at him when he was going on and on about the implications of bitcoin. I dismissed it for a couple of reasons:
---- a. I couldn't get my head around the arbitrariness of the initial value. The point at which it went from $0 USD to anything. What was that first person that paid some fraction of a government-issued currency speculating on?
---- b. The inflationary arguments that my friend made struck me as ironic. Japan has been in a deflationary trap for 20 years. Bond yields in the west, both US and Europe, were lower than low. Additionally, for all the talk about wild money printing, the problems in Europe among the PIGS (Portugal, Italy, Greece, and Spain) were not the result of hyper-inflation, but the opposite. The 4 European countries cannot get their hands on
enough euros. This is because as a part of the euro framework, the euro countries have ceded their sovereign right to print currency to a currency union that includes Germany and France. As a result the countries with the highest rates of unemployment in developed world, the deepest recessions, and the most insolvent balance sheets are countries without the ability to print money or depreciate their currency. This was happening at the same time that Shinzo Abe of Japan was restoring optimism in Japan by promising to bring back inflation, which the market sometimes doesn't believe he will be able to do.
---- c. There seems to be a lack of understanding of the inverse function that applies to inflation - not all are impacted equally by inflation. A person that owes creditors $100,000 in car, student, home, and credit card loans is not impacted the same way a person that has $100,000 in the bank. If you've loaned somebody $100,000 for 5 years at a fixed rate of interest and a person borrows $100,000 for 5 years at a fixed rate of interest, when some climate of hyper-inflation strikes, the person that borrowed $100,000 can pay the original loan back with vastly depreciated dollars. In a sense, net debtors are significant beneficiaries as old debts become smaller in relation to current wage levels. Young people have debt. As such, young people benefit from inflation as the largest asset a young person has is the future income stream from wages; wages generally keep up with inflation...as such, a young person's most valuable asset, future wages, is inflation-protected while the debt is being paid off with cheaper dollars. While for retirees with savings from past efforts, the savings can be decimated by inflation as they have loaned money out in fixed income instruments. People that loan money for fixed time periods have the most to lose in inflationary climates, not young people with negative balance sheets. Inflation hurts lenders, it helps debtors.
(At a sovereign level, Japan is again an example. For instance, due to 20 years of deflation, Japan has debt-to-GDP of 240%...by far the highest in the developed world due to the value of past debts not depreciating due to inflation.)
Then it struck me what was cool about bitcoin. 24 hours after the conversation...4 images/thoughts flashed in rapid succession: Elliot Spitzer, Julian Assange, Online Poker, and drugs. Now, for some reason, bitcoiners seem embarrassed by this. For me, this is the most important aspect of bitcoin: Bitcoin counters a government's ability to suppress speech, behavior, or personal habits through regulation of the financial system. With Spitzer, his crime was not just engaging the services of prostitutes, but a crime called structuring - a form of money laundering, where one attempts to evade cash reporting rules. Wikileaks, we saw how the US was able to get Paypal, Mastercard, Visa to stop payment processing and suppress speech in a real sense. Online poker, which was enjoyed by millions of Americans was shut down using the banking and payment system (and domain seizures.) And people doing drugs is none of my business provided there is no harm to others. The seller of drugs pays a far greater price than the consumer of drugs even though both are guilty of equivalent "crimes". So then I thought about it this way:
1. As a proxy for freedom, bitcoin is wonderful. There is a need for a cash equivalent online. I buy it. And I wholeheartedly believe why the liberty-minded adopters of bitcoin feel this movement is so important. I don't feel it with the same intensity, but I am glad there are people out there that are on the front lines.
2. Bitcoin as a protocol is a solid aspect as well. Once the fiat vs. math-based arguments are stripped away, (which I find the least significant attribute), there are virtues to an efficient p2p payment protocol. I think of the future value of bitcoins as similar to that of domain names. Dot-com domains used to be free back in 1993, then as the browser took off, the names started getting value, some were used for businesses, others were speculative, but the value of domains grew as dot-com became the commercial standard. Now, dot-net domains have no less intrinsic value than dot-com domains, but the latter is considerably more valuable because it took hold commercially among consumers. This is how I feel with bitcoin vs. other virtual currencies. Bitcoin is the dot-com of virtual currencies. And as domain names grew in value, if bitcoin adoption takes off as a protocol like dns did, then yes, each bitcoin will gain in value in a similar way.
(Sub-point: Dot-com domains are also limited in a sense....there are only so many pronounceable and memorable combinations possible...and the bulk of valuable dot-com domains have been registered already...this is similar to the limited supply characteristics of bitcoin. People that argue that the limited supply of bitcoins will constrain bitcoin from mass adoption should consider that the limits of dot-com domains did not constrain the growth of the commercial web.)
This brings me to the premise of our program: Liberty vs. Protocol.
The early adopters were all for liberty, decentralization, anonymity, state subversion, and an unregulated currency. The new entrants, far more commercially minded, such as VCs and VC-backed entrepreneurs are looking to take bitcoin mainstream as a protocol. The latter do not care one iota about any of the former considerations...even if making bitcoin as big as it can be means a fully-regulated currency that sheds anonymity and decentralization.
I think of it as the Libertarian Paradox. This is where the interests of Libertarians diverges from the interests of Capitalists.
The more mainstream the currency, the more valuable each bitcoin becomes, but going mainstream will likely mean total compliance. Can bitcoin stay punk?
This is the central story that our production, The Bitcoin Phenomenon on SQ1.tv, is looking to dive into.
Thoughts?
