Bitcoin will *not* attack/fight/etc central banking and fiat currency

[Peter R]

Bitcoin will simply mind its own business, as we work towards building a better way to store wealth and exchange payments with each other.  If central banking or fiat currency becomes less relevant during this process, then this is just technological evolution at work.  

I wrote this post in response to Paul Krugman's latest "Bitcoin is Evil" piece (http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/?smid=tw-NytimesKrugman&seid=auto&_r=1&).  In Dr. Krugman's post, bitcoin is referred to as "a weapon intended to damage central banking and money issuing banks."

This is not true.  Bitcoin is an experimental system that attempts to solve the double-spend problem in a trustless manner.  As SheHadManHands notes, it is a practical implementation of a system that may suffer from "the 60 year problem in computer science, known as the Two Generals' Problem. It enables a decentralized network to achieve consensus on a ledger of assets, without requiring any trust between parties."


I propose we take the high road as we move forward with bitcoin.  Here's what I mean:  If you say bitcoin is a weapon designed to damage central banking, you sound angry and hostile.  If you say that bitcoin is a ground-breaking peer-to-peer electronic cash system, and politely discuss that its widespread adoption may make existing financial systems less relevant and motivate governments to re-think antiquated tax laws, you sound intelligent and open-minded.  

[Bono]

No one is expecting it to topple governments or replace the almighty dollar.

You know how when you're travelling, you can use a VISA anywhere in the world?

Same difference, just better.

[TradeAnalyst]

This is only one paper but FENCEN could ban BTC because it could be a danger for the supremacy of the dollar .

First China then some other countries and if FENCEN does it what will happen to the BTC in term of valuation ?

Honestly the BTC bubble wasnt good at all for this experience + until BTC is under high speculation BTC has no interest for E-com .

Just an opinion ....

"It doesn’t matter much to the idea of cryptocurrencies whether Bitcoin or its many emulators boom, zoom and crash, there will be cryptocurrencies from here on and they will flourish."

[DeathAndTaxes]

It would change your analysis to be that Bitcoin is a practical implementation of a system that may suffer from the Two Generals Problem.  Bitcoin exactly "solve" the problem.  The problem is considered to be unsolvable.  A solution would imply the system could never be compromised.  A 51% attack is a limitation of the Bitcoin implementation and thus the problem isn't solved.  What Bitcoin (or technically the consensus in ordering of valid transactions forced by miners using a proof of work) does is reduce the uncertainty on the permanence of a transaction by adding confirmations .... unless an attacker has >50% of the computing power.  However that doesn't mean the problem is solved only that the cost of an attack has been raised.

It is very likely that only computer science nerds would really care about the distinction but a false claim simply provides an easily defeated strawman.

[Peter R]

It would change your analysis to be that Bitcoin is a practical implementation of a system that may suffer from the Two Generals Problem.

Thanks D&T.  The original post has been updated to incorporate your suggestion. 

[freet0pian]

Bitcoin will simply mind its own business, as we work towards building a better way to store wealth and exchange payments with each other.  If central banking or fiat currency becomes less relevant during this process, then this is just technological evolution at work.  

I wrote this post in response to Paul Krugman's latest "Bitcoin is Evil" piece (http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/?smid=tw-NytimesKrugman&seid=auto&_r=1&).  In Dr. Krugman's post, bitcoin is referred to as "a weapon intended to damage central banking and money issuing banks."

This is not true.  Bitcoin is an experimental system that attempts to solve the double-spend problem in a trustless manner.  As SheHadManHands notes, it is a practical implementation of a system that may suffer from "the 60 year problem in computer science, known as the Two Generals' Problem. It enables a decentralized network to achieve consensus on a ledger of assets, without requiring any trust between parties."


I propose we take the high road as we move forward with bitcoin.  Here's what I mean:  If you say bitcoin is a weapon designed to damage central banking, you sound angry and hostile.  If you say that bitcoin is a ground-breaking peer-to-peer electronic cash system, and politely discuss that its widespread adoption may make existing financial systems less relevant and motivate governments to re-think antiquated tax laws, you sound intelligent and open-minded.  

I think you're taking the opposite of the high road by saying it wasn't meant to damage central banking, etc. That's just pure BS.

Just read the man himself: http://p2pfoundation.ning.com/forum/topics/bitcoin-open-source

"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible."

[Honeypot]

Crypto will be incorporated into the power structure of the world one way or another.

To the pseudo- revolutionaries who make that wannabe fuck che look competent, good night and sleep tight

[black_swan]

Peter R, I wouldn't worry that much.  Certain people write this kind of stuff and take strong positions just to attract other blinds and to be able to say "I wrote this on the <insert date in the past". As mush as I think bitcoin is truely a disruptive technology, it won't kill or challenge any FIAT in this word. Instead it will make much easier to be used in certain cases, be it currency or commodity

[justusranvier]

I propose we take the high road as we move forward with bitcoin.  Here's what I mean:  If you say bitcoin is a weapon designed to damage central banking, you sound angry and hostile.  If you say that bitcoin is a ground-breaking peer-to-peer electronic cash system, and politely discuss that its widespread adoption may make existing financial systems less relevant and motivate governments to re-think antiquated tax laws, you sound intelligent and open-minded.

That's incredibly naive.

Central banking and the people who control it are at war with the rest of humanity, or at best see everybody else as subjects to be ruled over or livestock to be harvested.

The clash between Bitcoin and central banking will be violent, not because Bitcoin is violent, but because they are ready, willing, and able to bring violence against anything that threatens their monopoly.

Why do you think Krugman said "The US Dollar is backed by men with guns"? That wasn't simply a quip - it's as clear and honest a warning as you're going to get from them.

You're not talking about fundamentally honest people who will gracefully step aside when something better comes along - these are ruthless mafiasos who don't care who they have to crush to maintain their position.

The only problem is they don't have the skills to combat a technological phenomena like Bitcoin themselves, so the determining factor will be how many programmers defect and sell out compared to the number that won't. It's a human resources game now.

[Peter R]

I think you're taking the opposite of the high road by saying it wasn't meant to damage central banking, etc. That's just pure BS.

It is not BS.  That would be like saying the automobile was intended as a weapon to damage the horse-and-buggy industry.  That sounds angry and scared.  

The automobile was intended as a better way for people to get from point A to point B.  The fact that it put buggy-whip manufacturers out of business was just the natural evolution of transportation technology.  

The automobile did not *attack* the horse and carriage. It simply did its own thing and people adopted it because they thought it was better.  

[beetcoin]

No one is expecting it to topple governments or replace the almighty dollar.

You know how when you're travelling, you can use a VISA anywhere in the world?

Same difference, just better.

a lot of people are.. and they are probably deluded.

[black_swan]

No one is expecting it to topple governments or replace the almighty dollar.

You know how when you're travelling, you can use a VISA anywhere in the world?

Same difference, just better.

a lot of people are.. and they are probably deluded.

A lot of people are or maybe they say that to convince others? :-)

Peter R, men have always been scared of changes, this is no difference.
I guess education is the key?

[Peter R]

I propose we take the high road as we move forward with bitcoin.  Here's what I mean:  If you say bitcoin is a weapon designed to damage central banking, you sound angry and hostile.  If you say that bitcoin is a ground-breaking peer-to-peer electronic cash system, and politely discuss that its widespread adoption may make existing financial systems less relevant and motivate governments to re-think antiquated tax laws, you sound intelligent and open-minded.

That's incredibly naive.

Central banking and the people who control it are at war with the rest of humanity, or at best see everybody else as subjects to be ruled over or livestock to be harvested.

The clash between Bitcoin and central banking will be violent, not because Bitcoin is violent, but because they are ready, willing, and able to bring violence against anything that threatens their monopoly.

Why do you think Krugman said "The US Dollar is backed by men with guns"? That wasn't simply a quip - it's as clear and honest a warning as you're going to get from them.

You're not talking about fundamentally honest people who will gracefully step aside when something better comes along - these are ruthless mafiasos who don't care who they have to crush to maintain their position.

The only problem is they don't have the skills to combat a technological phenomena like Bitcoin themselves, so the determining factor will be how many programmers defect and sell out compared to the number that won't. It's a human resources game now.

I think you may be mis-interpretting my post if you call it naïve.  I agree with most of what you just wrote.  But you proved my point when you said "not because Bitcoin is violent."

Bitcoin isn't intended as a weapon to attack/fight anything.  Bitcoin is a way to opt-out of the current monetary system and support something that (at least I feel) is superior.  Sure, maybe vested interests within the current monetary system will fight bitcoin, but that doesn't mean that "bitcoin is intended as a weapon to damage central banks."  If central banks chose to fight bitcoin, it would just reveal their insecurity.  

What I'm saying is that if Paul Krugman says that bitcoin is intended as a weapon to damage central banks, then he looks angry and afraid (and a bit tinfoil hattish too).  If Paul Krugman says that the US Dollar is backed by men with guns (and that that's a good thing), then he looks like he supports violent oppression.

So, again, if we say that bitcoin is a ground-breaking peer-to-peer electronic cash system, and politely discuss that its widespread voluntary adoption may make existing financial systems less relevant and motivate governments to re-think antiquated tax laws, we sound open-minded and non-violent.

[freet0pian]

I think you're taking the opposite of the high road by saying it wasn't meant to damage central banking, etc. That's just pure BS.

It is not BS.  That would be like saying the automobile was intended as a weapon to damage the horse-and-buggy industry.  That sounds angry and scared.  

The automobile was intended as a better way for people to get from point A to point B.  The fact that it put buggy-whip manufacturers out of business was just the natural evolution of transportation technology.  

The automobile did not *attack* the horse and carriage. It simply did its own thing and people adopted it because they thought it was better.  

Your point would be only true if Satoshi wanted just to create another payment method. But he didn't. Just address his quote or you're just being ignorant and/or naive of his mindset.

[justusranvier]

I think you may be mis-interpretting my post if you call it naïve.  I agree with most of what you just wrote.  But you proved my point when you said "not because Bitcoin is violent."

Bitcoin isn't intended as a weapon to attack/fight anything.  Bitcoin is a way to opt-out of the current monetary system and support something that (at least I feel) is superior.  Sure, maybe vested interested within the current monetary system will fight bitcoin, but that doesn't mean that "bitcoin is intended as a weapon to damage central banks."  If central banks chose to fight bitcoin, it would just reveal their insecurity.  

What I'm saying is that if Paul Krugman says that bitcoin is intended as a weapon to damage central banks, then he looks like angry and afraid (and a bit tinfoil hatish too).  If Paul Krugman says that the US Dollar is backed by men with guns (and that that's a good thing), then he looks like he supports violent oppression.

So, again, if we say that bitcoin is a ground-breaking peer-to-peer electronic cash system, and politely discuss that its widespread voluntary adoption may make existing financial systems less relevant and motivate governments to re-think antiquated tax laws, we sound open-minded and non-violent.

I'd call it a defensive weapon, but that might be quibbling.

With regards to the marketing aspect, I agree that not characterizing Bitcoin as revolutionary technology helps avoid disturbing the delicate sensibilities of relatively wealthy and comfortable first world users.

You can probably already tell how much value I place on their sensibilities.

There's a reason Andreas Antonopolus doesn't do North American Bitcoin conferences any more - there are six billion people in the world who are acutely aware of the downsides of government currencies because it affects their day to day survival. Those people don't care if you describe Bitcoin as a technology designed to destroy the banking system because that's exactly what they want.

Remember the Arab Spring started because a bunch of Egyptians were literally starving because inflation meant they couldn't afford to buy food any more. How many Americans know that the US government has used various methods to convince foreign central banks to peg to the USD, much less what the implications of that are in terms of allowing us to export our monetary inflation to the people least able to defend themselves?

Whatever that number is, I guarantee that more Egyptians than Americans know. For many, these issues are literally a matter of life and death. There's a whole world (literally) of people out there who will be more than happy to adopt a technology marketed as intended to destroy the global banking system.

[Peter R]

I think you may be mis-interpretting my post if you call it naïve.  I agree with most of what you just wrote.  But you proved my point when you said "not because Bitcoin is violent."

Bitcoin isn't intended as a weapon to attack/fight anything.  Bitcoin is a way to opt-out of the current monetary system and support something that (at least I feel) is superior.  Sure, maybe vested interested within the current monetary system will fight bitcoin, but that doesn't mean that "bitcoin is intended as a weapon to damage central banks."  If central banks chose to fight bitcoin, it would just reveal their insecurity.  

What I'm saying is that if Paul Krugman says that bitcoin is intended as a weapon to damage central banks, then he looks like angry and afraid (and a bit tinfoil hatish too).  If Paul Krugman says that the US Dollar is backed by men with guns (and that that's a good thing), then he looks like he supports violent oppression.

So, again, if we say that bitcoin is a ground-breaking peer-to-peer electronic cash system, and politely discuss that its widespread voluntary adoption may make existing financial systems less relevant and motivate governments to re-think antiquated tax laws, we sound open-minded and non-violent.

I'd call it a defensive weapon, but that might be quibbling.

With regards to the marketing aspect, I agree that not characterizing Bitcoin as revolutionary technology helps avoid disturbing the delicate sensibilities of relatively wealthy and comfortable first world users.

Thanks Justus.  I think we're on the same page now. 

[justusranvier]

I think we're on the same page now.

I'm not sure about that.

The people you want to placate are the people I'm more than happy to jettison the instant pleasing them threatens the long term viability of Bitcoin or undermines its potential to help the people who need it most.

[BittBurger]

Bitcoin isn't intended as a weapon to attack/fight anything.  Bitcoin is a way to opt-out of the current monetary system and support something that (at least I feel) is superior.

Six in one, half a dozen the other ...

I get your point.  Major paradigm shifts are more successful when they creep up on powerful industries.

A mentality of war will only make us look stupid, and make them act stupid in response.

But between you and me ... it was intended as a "disruptive" technology.   That is the term used for it by many of the original Bitcoiners.

And they continue to use it.  Its disruptive.  Big time.

[Peter R]

I think you're taking the opposite of the high road by saying it wasn't meant to damage central banking, etc. That's just pure BS.

It is not BS.  That would be like saying the automobile was intended as a weapon to damage the horse-and-buggy industry.  That sounds angry and scared.  

The automobile was intended as a better way for people to get from point A to point B.  The fact that it put buggy-whip manufacturers out of business was just the natural evolution of transportation technology.  

The automobile did not *attack* the horse and carriage. It simply did its own thing and people adopted it because they thought it was better.  

Your point would be only true if Satoshi wanted just to create another payment method. But he didn't. Just address his quote or you're just being ignorant and/or naive of his mindset.

OK, here's the quote from Satoshi:

"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible."

Here's my fictional quote from the automobile visionaries:

"The root problem with the horse and buggy is all the poop that is left on the streets of New York.  If the owners of the buggy manufacturing companies used some of their profits to help with clean-up, this problem could be reduced; but history has shown that they keep it all to themselves.  People are tired of the smell and the mess on their shoes when stumbling home from the pub.  And besides, with advances in the the field of internal combustion, it is now possible to create personal horseless carriages that eliminate the poop problem, no longer require their owners to take care of an animal, and in general offer a faster and more efficient way to get from Point A to Point B."


My interpretation of the Satoshi quote is that it is simply a collection of facts.  Where is he proposing to *attack* anything?  He is simply pointing out the shortfalls of conventional currency!  So, then, just like Henry Ford, he goes and builds something that eliminates these shortfalls, giving the people something that he believes they want.  If the people chose to adopt it, sure it might put the "horse-and-buggy" industry out of business, but that was never his intent.  His intent was to solve the problems he had identified.  
    

[Peter R]

I think we're on the same page now.

I'm not sure about that.

The people you want to placate are the people I'm more than happy to jettison the instant pleasing them threatens the long term viability of Bitcoin or undermines its potential to help the people who need it most.

To me, bitcoin is just better money.  I want to describe it as honestly as I can, and if people agree and they adopt bitcoin, then I am pleased regardless of their ideology, income, or political leanings.  

My point again was if you say bitcoin is intended as a weapon to damage central banks like Paul Krugman did, then you are using loaded words to appeal to people's ideology and preconceived belief system.  Sure this may be good marketing in Egypt and bad marketing to the US upper class, but in both cases it's equally disingenuous.  

If you say that bitcon is better money because A, B, and C, then I think you are being more genuine.  


Do you guys think I'm out to lunch?