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

[justusranvier]

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.

How about we change "intended" to "can be used as"?

Also "better" is an extremely subjective term.

If you're a primary dealer, then USD is obviously better money for you because you get to be the first spender of new issuances.

For everybody else, it's terrible.

Whether or not you call Bitcoin a weapon, the effect it will have on the livelihoods of people who get their wealth from monetary rent-seeking is going to look a lot like violent devastation from their point of view.

[Peter R]

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.

How about we change "intended" to "can be used as"?

Yes!  Now the statement is true.  Bitcoin (or gold) can be used as a weapon against central banking, just like US dollars can be used for drug trade.  Bitcoin can also be used as a better way to fund relief efforts in foreign countries after natural disasters, or as a way for the world's unbanked to more fully participate in the modern economy.  Bitcoin can do lots of things; that is why it is such a powerful idea.  

I hope readers see my point:  If Paul Krugman had said "bitcoin is a new technology that can be used as a weapon to harm central banks" it would not have had the same connotations as: bitcoin "was designed as a weapon intended to damage central banking".  He chose words that associated bitcoin, and thus also the people that support bitcoin, with certain motives, political leanings, and ideology.  

[justusranvier]

He chose words that associated bitcoin, and thus also the people that support bitcoin, with certain motives, political leanings, and ideology.

It is highly likely that Satoshi (whomever he, she, or they was) did match those motives and political leanings, however this is not presently falsifiable since we can't ask Satoshi and expect to get a response.

[ProfMac]

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."

On Dec 27 FinCEN issued an opinion on bitcoin miners.  It was not hostile.

[KonstantinosM]

Let's face it, the banks have absolutely fucked this world over. Where I come from (Greece) the banks literally added all of this odious debt and drove a whole country to its knees. Now such foreign investors are just buying off people's livelihoods. This is no joke.

We should oppose such arbitrary power. The banks as we speak foreclose people's homes, and bankrupt whole cities. It doesn't matter whether we call bitcoin the bank destroyer or just a new P2P decentralized electronic currency. The fact remains that a lot of middle-men are going to lose a lot of money.

Choosing to enter bitcoin you gain the right to do transactions that are harder to trace and are completely independent from the current system. Let's not pretend that this is not disruptive but let's not pretend that somehow it is unfair for people to freely trade with one another.

From credit cards to ridiculous bank fees, to goverment bailouts the banks have proven to be the weakest link of our modern economy. The dollar is also being controlled and overprinted. I can almost guarantee you that a dollar come year 2020 is going to be worth at least a fifth less than a dollar today.

How insidious does it sound that the federal reserve is not even a part of the treasury? The money of the people should be regulated at the very least by the people's government.

[Peter R]

Let's not pretend that this is not disruptive but let's not pretend that somehow it is unfair for people to freely trade with one another.

Well said.  Indeed, bitcoin is disruptive.  Bitcoin allows people to freely trade with each other and this is fair and right. 

[BitcoinBarrel]

Hey it's a free market right? Let the best product win and let the people decide.

[freet0pian]

I admit Peter that you can't be 100 percent sure of Satoshi's motives. And you're free to market Bitcoin how you like, and for the western markets it could be better to market it just as a technology.

But you're seriously deluding yourself if you think Satoshi didn't want Bitcoin to ultimately destroy dishonest money when his statements lean that way. And just as justus pointed out, that if successful, Bitcoin will act like a weapon against the banksters' ill gotten gains.

So how does it differ from a weapon if it can destroy a good amount of their wealth? Is it the intent only? Does the intent make any difference to the outcome?

[s1lverbox]

My view is that BTC just showed system which is to perfect for banks to accept it.
They know BTC is just start for this race, but one day fiat and central bank will become useless.
You can buy now normal items from silver,gold, phones to cars and homes for BTC.

Small fees, no taxation and no problem someone will look in to your pockets(bank account) and have tools to block you from using funds will make BTc and other crypto really big player on financial markets.

Subways accepting BTC, bitgild and others. sky is the limit this days.

[KonstantinosM]

My view is that BTC just showed system which is to perfect for banks to accept it.
They know BTC is just start for this race, but one day fiat and central bank will become useless.
You can buy now normal items from silver,gold, phones to cars and homes for BTC.

Small fees, no taxation and no problem someone will look in to your pockets(bank account) and have tools to block you from using funds will make BTc and other crypto really big player on financial markets.

Subways accepting BTC, bitgild and others. sky is the limit this days.

I agree with everything except the no taxation part. The most fair tax is a value added tax. If a sovereign nation creates a cryptocurrency and "code" in it the VAT and only return it in cases where it does not apply, this suddenly makes every transaction in a network 100% taxable by the government. (unless people just traded private keys). This technology could be used to make an excellent currency on behalf of a nation.


A value added tax is the fairest of all taxation methods. Rich and poor alike pay the exact same tax. A tax like this in conjunction with universal basic income can create utopias. This technology could make this happen.

[s1lverbox]

My view is that BTC just showed system which is to perfect for banks to accept it.
They know BTC is just start for this race, but one day fiat and central bank will become useless.
You can buy now normal items from silver,gold, phones to cars and homes for BTC.

Small fees, no taxation and no problem someone will look in to your pockets(bank account) and have tools to block you from using funds will make BTc and other crypto really big player on financial markets.

Subways accepting BTC, bitgild and others. sky is the limit this days.

I agree with everything except the no taxation part. The most fair tax is a value added tax. If a sovereign nation creates a cryptocurrency and "code" in it the VAT and only return it in cases where it does not apply, this suddenly makes every transaction in a network 100% taxable by the government. (unless people just traded private keys). This technology could be used to make an excellent currency on behalf of a nation.


A value added tax is the fairest of all taxation methods. Rich and poor alike pay the exact same tax. A tax like this in conjunction with universal basic income can create utopias. This technology could make this happen.

At this moment there is no tax and thats why i mention that.

[smoothrunnings]

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.  

Do you understand what happens when your money is put into a bank, what happens to your savings? It's in part loaned out but most importantly it's used to pay the GDP (sp?) the bad credit/loans which the banks are still receiving bailouts for. So bitcoin is a threat to the banking system, if you take 75% of your money out and put it into bitcoin which the banks have not access to or control over what do you think will start to happen?

You really need to think this stuff through you know! This is why the banks and governments are fighting bitcoin because it's hurting them, but at the same time they got all of us into this mess that they themselves should of stopped or been forced to stop sooner.

[lolstate]

> 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

Whether Satoshi sat down to create an explicity weaponised technology is up for debate. You can’t deny, though, that Bitcoin is an implicitly weaponised system - its successful uptake will damage central banking, possibly fatally. The Krugmans of the world recognise this, imo. Recently, there was a video interview with Kruggers on Bloomberg or CNBC when he actually sounded as though he was in despair when forced to acknowledge that Bitcoin had not yet died. I think he said something about ‘we’ (refering to him and his cronies) not understanding why ‘it’ (refering to bitcoin) was still around when his theories don’t allow for it.

I read his latest NYT piece as a lame attempt at one of the first shots across our bow. They are starting to adopt the ‘then they fight you’ mode.   

[luqash3]

Peter R everyone has his own opinion. Well in my opinion bitcoin popularity and usage shall escalate as time passes by while fiat currency popularity shall diminish as time passes by. So just wait and watch fiat currency replaced with new revolution currency bitcoin soon.

[Dabs]

If you become a tyrant, expect your country to have a resistance movement or rebels. Happens in every dictatorship in the entire world.

[Peter R]

I am surprised by the comments I'm receiving.  One thing that surprises me is that some people have actually framed me as a supporter of central banking and fiat currency, as well as someone who does not appreciate the power of bitcoin.  If you look at my post history (or even read through this thread), you'll see I'm a strong supporter of bitcoin.  I agree that it is a disruptive technology that if widely adopted would make central banking and fiat currency less relevant.  

The other thing the surprises me is how quickly people are willing to ascribe motives and ideologies to Satoshi Nakamoto.  Satoshi Nakamoto was a brilliant mathematician and computer scientist who gave the world a potentially game-changing system that allows us to more effectively store wealth and exchange value with each other.  He is apolitical and has no human vices.  

The individual or group of individuals that created the alias "Satoshi Nakamoto" could have been anyone!  It could have been an angry computer-scientist with extreme anarchist leanings, it could have been a small group at the NSA working without the approval or knowledge of their superiors, it could have been some random professor who did it just for the lulz.  I don't think we will ever know, and nor do I think it matters.  

This is why Satoshi had to disappear.  What matters is what bitcoin is, not what you think the motives and ideology of its creators are.  

[TheButterZone]

https://en.bitcoin.it/wiki/Genesis_block

http://libbitcoin.dyne.org/doc/blockchain.html#message-from-satoshi-bitcoin-s-creator

// The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

[Peter R]

https://en.bitcoin.it/wiki/Genesis_block

http://libbitcoin.dyne.org/doc/blockchain.html#message-from-satoshi-bitcoin-s-creator

// The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

This is a fact.  I think it is a fitting quote for the genesis block.  It reminds us of the flaws of central banking and fiat currency. 

[justusranvier]

Whether Satoshi sat down to create an explicity weaponised technology is up for debate.

Sure, there's a bit of room for ambiguity, but not much:

While the security technology is very far from trivial, the "why" was by far the biggest stumbling block -- nearly everybody who heard the general idea thought it was a very bad idea. Myself, Wei Dai, and Hal Finney were the only people I know of who liked the idea (or in Dai's case his related idea) enough to pursue it to any significant extent until Nakamoto (assuming Nakamoto is not really Finney or Dai). Only Finney (RPOW) and Nakamoto were motivated enough to actually implement such a scheme.

The "why" requires coming to an accurate understanding of the nature of two difficult and almost always misunderstood topics, namely trust and the nature of money. The overlap between cryptographic experts and libertarians who might sympathize with such a "gold bug" idea is already rather small, since most cryptographic experts earn their living in academia and share its political biases. Even among this uncommon intersection as stated very few people thought it was a good idea. Even gold bugs didn't care for it because we already have real gold rather than mere bits and we can pay online simply by issuing digital certificates based on real gold stored in real vaults, a la the formerly popular e-gold. On top of the plethora of these misguided reactions and criticisms, there remain many open questions and arguable points about these kinds of technologies and currencies, many of which can only be settled by actually fielding them and seeing how they work in practice, both in economic and security terms.

Here are some more specific reasons why the ideas behind Bitcoin were very far from obvious:

(1) only a few people had read of the bit gold ideas, which although I came up with them in 1998 (at the same time and on the same private mailing list where Dai was coming up with b-money -- it's a long story) were mostly not described in public until 2005, although various pieces of it I described earlier, for example the crucial Byzantine-replicated chain-of-signed-transactions part of it which I generalized into what I call secure property titles.

(2) Hardly anybody actually understands money. Money just doesn't work like that, I was told fervently and often. Gold couldn't work as money until it was already shiny or useful for electronics or something else besides money, they told me. (Do insurance services also have to start out useful for something else, maybe as power plants?) This common argument coming ironically from libertarians who misinterpreted Menger's account of the origin of money as being the only way it could arise (rather than an account of how it could arise) and, in the same way misapplying Mises' regression theorem. Even though I had rebutted these arguments in my study of the origins of money, which I humbly suggest should be should be required reading for anybody debating the economics of Bitcoin.

[lolstate]

Sure, there's a bit of room for ambiguity, but not much

I agree, although where there is the potential for a little wiggle room, we should acknowledge it and encourage people to explore the possibility.

My take has always been Bitcoin was ambitious beyond belief. It attempts to bootstrap a technology, protocol, currency and monetary revolution in one. It's actually incredibly impressive that in 5 years it appears to be coming close to realising this goal. If it only achieved 1/4 of its aim, it will be an outstanding success.