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Comment by sevensor | Hacker News Reader

It's interesting to see how this is playing out. Libertarians have long argued that government-issued fiat currency is a tool of state oppression. Now we have a real-world experiment demonstrating on a grand scale what happens when you create a currency by consensual fiat. I'd be interested to hear what libertarians think about this: Is Bitcoin truly the kind of currency libertarians have been advocating? Have I mischaracterized the libertarian position? What do you think about the concentration of Bitcoins in the hands of a small number of people? Where is this experiment going in the long run?

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Government-issued currencies usually come with legal tender laws and citizens are required to pay taxes using the government money. Since taxes are not voluntary, this creates built-in demand for the fiat money. The creators of alternative competitor-money are punished as well. The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first.

A side note here about capital controls: Bitcoin allows money to be borderless, which is natural. Capital controls are an artificial construct of the state, often used to prop up the perpetually failing fiat money.

The second issue is economic. When the money supply of your currency is not constrained (by gold, or otherwise), then it inevitably inflates, often unpredictably and uncontrollably. The death of a fiat money usually has disastrous effects on the people, especially on the poor. Unfortunately, fiat money has a short lifespan, on average.

The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem. Bitcoin is such a system: all participation in Bitcoin has been voluntary. Early adopters took a big risk on a fledgling technology, and some have been rewarded with handsome returns.

Early writing about cypherpunk money usually mentions anonymity, which Bitcoin does not have (yet).

> Where is this experiment going in the long run?

Isn't that the trillion-dollar question? :-)

>> Early adopters took a big risk on a fledgling technology

I can't agree with that. Early adopters really didn't take a lot of risk, they ran a mining program for a while, or bought some BTC for a few cents to a few dollars.

In some countries, Bitcoin has been outlawed. Owning stuff the government doesn't like is certainly a risk.

They also endured 90% drops in value from early peaks to troughs. Bitcoin could have gone to zero at any point if the system had failed. (It still could)

Some invested time learning about new technology that could've gone nowhere.

>> In some countries, Bitcoin has been outlawed.

Very few. In more/most it's just taxable.

>> They also endured 90% drops in value from early peaks to troughs. Bitcoin could have gone to zero at any point if the system had failed. (It still could)

OK, sure, but again not a massive risk if your initial stake was tiny.

And it was a stake rather than an investment - it's not really an investment as you're not investing in a productive endeavour. More like buying and holding an asset.

In the end, either one does or does not own the property. They choose when to buy and when to sell.

From your perspective, isn't it a massive risk not to sell at this all time high value?

If they hold or sell, do they deserve whatever outcome?

> From your perspective, isn't it a massive risk not to sell at this all time high value?

Not really, if you didn't tie up significant proportions of your net worth in the initial buy.

> If they hold or sell, do they deserve whatever outcome?

Deserve is a worryingly moral word to apply there.

My only dispute is that early adopters took a lot of risk. It's not like they sunk their life savings into opening a small business.

They could have been doing something else with their time. Instead they were mining, promoting, and trading this technology. By definition there is an opportunity cost to being an early adopter instead of going with the flow - so indeed they took a risk.

The question was whether it was a "big" risk. Every action, including the decision not to take a particular action, is a non-zero risk.

Does that opportunity cost justify owning a meaningful percentage of all of the coins that will ever exist?

What does "justify" mean here? Are you somehow saying its not fair that early adopters have a lot of coins?

If at some point bitcoin will suck significant portion of saving of whole world then they will own huge share of all of that which seems a bit unfair.

So buy it from them. It's a completely voluntary system that requires no permission to participate, has been from the start.

I assume 'fair' to you would mean taking it from them to re-distribute between everyone else?

> So buy it from them.

You can't do that if they don't sell and they won't sell untill bitcoin stores large portion of world's wealth.

> I assume 'fair' to you would mean taking it from them to re-distribute between everyone else?

I have no idea why would you assume that. Especially if you could achieve same thing just by destroying their bitcoin. No need to re-distribute. Share is the thing that matters not the amount.

On more serious note fair for me is more or less how actual brick and mortar econony distributes things. You make things other find useful, you get share of humanity's wealth in return.

Holding things, bitcoin, gold, real estate, copyright strays for me from 'fair'. I see it as the less fair, the less you contibuted to humanity to acquire those things and the more claim on share of humanity's wealth you have by holding them.

> You can't do that if they don't sell and they won't sell until bitcoin stores large portion of world's wealth.

They do sell though, billions of dollars worth, everyday on several exchanges.

> Especially if you could achieve same thing just by destroying their bitcoin.

So now we're responding with force to a completely voluntary system? Great. And by the way, that is still redistribution, all other assets would go up in value in response.

> On more serious note fair for me is more or less how actual brick and mortar econony distributes things. You make things other find useful, you get share of humanity's wealth in return.

> Holding things, bitcoin, gold, real estate, copyright strays for me from 'fair'. I see it as the less fair, the less you contibuted to humanity to acquire those things and the more claim on share of humanity's wealth you have by holding them.

I agree on copyright, because it's a far different beast with tons of problems, but the others are essentially stores of value that you can get in a voluntary exchange by doing things others find useful.

There is inherited wealth, yes, but I've never found a way that works that solves that birth inequality.

>Since taxes are not voluntary

>The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first.

Do you believe obeying property law is voluntary? I find it to be coercive.

Left-libertarians definitely find property law coercive.

Turns out if you're consistent in applying the NAP then homesteading becomes illegitimate as any exclusive claim on land which was previously free for anyone to make use of is an act of force against literally every other person in the area.

Yup, the homesteading principle is interesting and workable iff there is infinite land of the same sort of quality easily available to everyone.

IIRC the guy that came up with it agreed with that reading on it!

Instead of answering your question, I will leave this:

Very small children understand and recognize property, since it is a natural right. The toy in my hand is "mine," and when some other kid comes along and takes it, I get upset.

>Very small children understand and recognize property, since it is a natural right. The toy in my hand is "mine," and when some other kid comes along and takes it, I get upset.

When a very small child in a poor family looks at what is under a wealthy family's Christmas tree he's also going to be upset. Does that make a relatively equal distribution of Christmas presents a natural right?

I see no basis for decrying all coercion and mandating transactions be voluntary yet also overlooking the biggest contributor to coercion: property.

Upset/uncomfortable - maybe, but at who? The rich family? His own family? Himself? Society? All of those?

People on hackernews and in general tend to view "negative" feelings, envy, etc... as generically "bad". These feelings are evolutionary signals from your primal brain that something isn't going right. Its up to you to fix that, however you see fit.

Not all people feel the same way or get the same primal brain screams. Who decides who's right?

Whichever side has more hashing power. Err, I mean muscle+weapon power.

Yup, every armed robbery is a brain deciding that it can take stuff by force instead of making/creating/exchanging it.

>Upset/uncomfortable - maybe, but at who? The rich family? His own family? Himself? Society? All of those?

"Upset" wasn't my word choice, I was just re-using what clark said to show the emptiness in using childhood feelings to determine what is and isn't a natural right. I don't actually believe our society should be governed by the feelings of children.

> These feelings are evolutionary signals from your primal brain that something isn't going right. Its up to you to fix that, however you see fit.

So rape and pillaging it is then.

I mean those two have pretty clear risks as well. Morality might moderate people's primal feelings but they are even better moderated by understanding opportunity - costs of the actions. Nevertheless, there is nothing inherently "bad" about "negative" feelings. They just tell you something isn't going right and you have to fix it. How you do that - is up to you.

What is a "natural right?" How is one identified? How is it distinguishable from a right that is not a "natural right"?

It's begging the question by making the basics of your political philosophy axiomatic.

> The toy in my hand is "mine,"

Then the stronger kid comes along and takes the toy away, because he is stronger and now it's in his hand and he says "it's mine".

Would you find it coercive to forbid the stronger kid to act this way by means of a law (enforced maybe by the teacher) that forbids stronger kids to steal from smaller kids?

edit: oppressive -> coercive, sorry

Yeah, right, I’m guessing that You have limited access to children. Otherwise You World have known that they recognize everything as their property (unless the original owner is stronger than them)

>Very small children understand and recognize property, since it is a natural right.

they also tend to shit when and where they want (would you say that "it is a natural right" too?). The point of upbringing in civilized society is to put under control the "natural" instincts. And what you mentioned is an instinct, not a right. The notion of rights comes later as the rules that the people with developed "bladder control" agree upon in order to live together and cooperate.

Whoever said this can not possibly have children. Small babies couldn't care less about toys which move in and out of their hands, except perhaps for the serious matter of tasting them.

They soon learn to say the word that other people use when they want to keep stuff. The actual meaning of the word, and that some people's ownership seems to have legitimacy, doesn't dawn on them until later.

(Just to clarify in the age of the Internet: I think we should respect ownership. But the argument that we should do it because it's an innate concept with babies is a bad one, even if it was true.)

Private property has nothing to do with toys in your hand; so it's not related to this debate. Do children think owning a factory and making money off of workers working there is a natural right?

Not to directly answer your question, but to elaborate slightly, many political philosophers would draw a distinction between natural property (e.g. land, natural resources) and 'made' property. They would say that in the case of found property (land, natural resources), property rights are indeed artificial and coercive. But the value that has been added to those natural resources by the efforts of a person is theirs. This is, in part, the justification for the Land Value [1] tax. It's an interesting question where Bitcoin ownership may fall on that spectrum. I'm not sure, to be honest. But I think that might provide a framework for thinking about the issue.

[1] - https://en.wikipedia.org/wiki/Land_value_tax

I think you're mixing up the argument of whether property is just with whether property is coercive.

The arguments you've outlined are drawing a distinction between which kinds of property are thought to be just by certain schools of thought. However, this is entirely unrelated to the fact that all forms of property are coercive -- enforcing them ultimately requires (the threat of) violence.

Most people fail to make this distinction unless they properly think it through, though I personally find it most grating with the type of libertarian who argues with the "non-aggression principle" or variants thereof. I believe people make this mistake because it can be uncomfortable to admit to yourself that you're in favor of something that is coercive, even when the coercive thing is clearly a good thing overall. I'm sure there's a fancy name for this type of fallacy :)

Yep, you're totally right. My mistake. Good point.

While this position is technically correct, it is absurd. By this logic, enforcing freedom from slavery is coercive as well, because it requires threat of violence.

Exactly! Which exposes the flaw in basing your political ideology around the removal of coercion.

Hmmm I think it's important to emphasise that anarcho-capitalism necessarily relies on coercion, but it's probably a strawman when speaking about its philosophical defenders. Libertarians want to maximise the account of freedom they build up from the originating premise of self-ownership. They are perfectly willing to license the use of coercion to uphold that propertarian system of rights. What they have issue with is the existence of an overweening state that has de facto and de jure power over you no matter what. They want the means of coercion to be privatised; to be outsourced to local militias, private security firms, and the like.

Of course, like all ideologies, they don't think of this as a system of accumulated power that exploits destitute workers and relies on dystopian bands of warlords to beat anyone who protests into submission, but as something like 'a pure state of freedom'.

Indeed, it is - which proves the parent's point. This would be an example of something that's both just and coercive.

But this definition is unusual and doesn't bring any insight. It reminds me about psychological egoism, that says that there is no altruism, everything is egoism. Technically correct, but doesn't help to explain altruism-behavior.

No, I don't believe so. Take taxes, taxes are coercive because if you refuse to follow tax law then the government enacts violence against you right?

Now take property, property is coercive because if you refuse to follow property law then the government enacts violence against you.

It's one to one.

Difference being that the first is someone taking your property and the second is you taking property from someone else.

"The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first."

So basically everyone should be armed to their teeth? Because, if there is no state to impose control, a warlord will emerge who will. Or is there some other solution to the problem that humans have known tendencies toward violence and power hunger?

But Wouldn't Warlords Take Over?[1]

[1] https://mises.org/library/wouldnt-warlords-take-over

That article paints a very unfair portrayal of Somalia. Pre war Somalia was involved in the collapse of a communist government, not exactly a stable before and after comparison (which I would think the author would acknowledge given their own Apples and Oranges comparison?). If we go back before that things were pretty damn stable, white pearl and all.

I guess maybe I'm just a bit put off because of the blurb towards the opening about "society A, which is filled with evil, ignorant savages who live under anarchy" (conveniently not naming any specific society, but hint hint, it reads a lot like the author implies either Somalia or Colombia). I thought we were past the whole racist Noble Savage thing.

The core argument of that essay seems to be "Well yes, but maybe the warlords would be better than the government we have today. We don't have proof they wouldn't be."

... which seems rather weak to me.

> If, by hypothesis, the vast majority of people—although they have different conceptions of justice—can all agree that it is wrong to use violence to settle their honest disputes, then market forces would lead to peace among the private police agencies.

This is pretty much even sillier hypothesis than "if people agree to work together towards common good, through the forces of cooperation, they would achieve prosperity greater than it's possible in any competitive capitalist system" and that one was tried and proven false.

People agreeing that the violence is not the right way to resolve disputes? Author must somehow missed all of history right untill yesterday and have no friends or at least only friends without neighbours.

> The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem.

Buuuuut, they bought it with fiat currencies, in many cases USD. So... right there the entire idea breaks down. Still, maybe that's unfair. A valid criticism of this argument is that it's a variant of the the serf comic argument (or genetic fallacy) in which those embedded in a bad system may not question it because they benefit from it.

The real problem from a libertarian perspective is that bitcoin (and really all PoW blockcahins) just encodes how a new State, a plutocratic one based around processing power and energy availability, is formed. This is in a very literal sense what bitcoin encodes, with the miners being the only folks with any real votes (in that if miners as a group refused to mine other currencies and actively discourage others from doing so, other currencies cannot scale and are locked out).

Not that bitcoin is scaling all that well. Or eth for that matter.

As we've seen from recent research, Bitcoin is slightly better than existing systems at discouraging monopolies (because even accidental misuse could crash the currency), but I seriously doubt a mining duopoly dictating most of the future of bitcoin is something that any libertarian actually calls a positive outcome, other than a snarky nod to damaging existing states.

The long term evolution of the system is pivotal on some new, non-PoW scheme. PoS is the major contender right now. There might be other methods as derivations (e.g., PoW coupled with physical location, PoS with term limits, PoS with accreditation, etc). Non-PoW systems will also scale much more effectively than PoW systems, as well.

> they bought it with fiat currencies

No. Some people bought it with fiat currencies. Others mined for it. Still others exchanged goods and services for it.

And some were gifted it. I remember a handful of sites that would give you some BTC just for asking as a demonstration of the technology. It was worth roughly a cent or two at the time -- obviously much more now if held.

The number of people who mined for it without using fiat currencies to buy the hardware and energy is, I submit, such an astronomically small value I'd demand you prove to me it exists at all. They might exist, but I suspect their stories are singular.

> Still others exchanged goods and services for it.

I'm not sure what your point is here. It's not difficult to imagine existing state currencies influence these processes. I've also pointed out it's not a very good argument for either side of the libertarian fence.

But hey, let's focus on minutiae as opposed to the larger ethical and social questions surrounding bitcoin and derivatives. That seems like a rad use of time.

> using fiat currencies to buy the hardware and energy

The process had to be bootstrapped somehow. And given that the world's economy at the time bitcoin was invented ran on fiat currency, it's not surprising that fiat currency was used to help bootstrap the process.

> I'm not sure what your point is here.

My point is that your original claim:

> Buuuuut, they bought it with fiat currencies, in many cases USD. So... right there the entire idea breaks down.

is false. Just because the process was bootstrapped with fiat currency does not imply that "the entire idea breaks down."

Did you read a sentence that you disagreed with and then immediately refused to finish the paragraph?

> A valid criticism of this argument is that it's a variant of the the serf comic argument (or genetic fallacy) in which those embedded in a bad system may not question it because they benefit from it.

I'm just saying, the idea that there is in fact an equitable pre-distribution of agency and power to draw from is fallacious. It doesn't mean we shouldn't try and create better systems; just that we shouldn't pretend such a thing existed.

When you begin your argument with a claim that is factually incorrect there is no need to read further to know that the argument is invalid.

So. You didn't read it. Proudly.

And it IS factually correct in that there was state-maintained fiat currency at the genesis of nearly every story, we just both agree it doesn't matter that much.

Consider how uninteresting this exchange is, and how much of our collective time you've wasted by not reading the entire post. You've spent MUCH more time talking with me (and I with you) than if you had JUST READ THE POST.

> You didn't read it.

Whether I read it or not is irrelevant. The fact remains that you opened your argument with a demonstrably false claim.

> And it IS factually correct in that there was state-maintained fiat currency at the genesis of nearly every story

That may be, but that's not what you said, nor is it what I disputed.

> Consider how uninteresting this exchange is

I dunno, I think it's kind of fascinating the lengths some people will go to to avoid saying something as simple as, "You're right, I phrased that badly. What I meant to say was..."

Point is that the distribution of bitcoin wealth is wholly dependent on distribution of fiat currency wealth.

But that's false. You always need some capital to make an investment in anything, but anyone with the foresight to recognize bitcoin's potential back in 2010 could mine and/or buy coins essentially for nothing.

I'm sympathetic to the inflation argument, but it doesn't seem to match what actually happens. For example, Bitcoin inflated by about 20% in a 20-minute period yesterday. The theory doesn't seem to match the practice here.

What he means to say is that the currency goes up, prices go down.

So if a currency goes up in value, that's actually economic 'deflation', because the prices of goods go down.

Now - I don't agree with any of the commenters arguments at all, but the terms 'inflationary' and 'deflationary' are used in that context.

There are some that argue the inflation and deflation are not a function of the price of goods - rather - simply the amount of money in circulation and that's it. I think this is the Austrian position.

I'm not sure what you're trying to correct here. Are you thinking I used "inflation" to describe an increase in Bitcoin's price? I wasn't: Bitcoin's price spiked overall yesterday, but there was also a point where the price dropped by 20% in 20 minutes, and that's what I'm referring to.

> The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem. Bitcoin is such a system: all participation in Bitcoin has been voluntary. Early adopters took a big risk on a fledgling technology, and some have been rewarded with handsome returns.

I could never really make sense of that position. Voluntarily by whom? Why would you ever voluntarily agree to a high-inequality society where you are at the lower end?

I don't think bitcoin is a valid example because it's something that (right now) you can choose to ignore completely without any negative consequences for you. Therefore, high inequality is not necessarily a problem.

The moment bitcoin would become the single dominating currency, the situation would be completely different.

>Why would you ever voluntarily agree to a high-inequality society where you are at the lower end?

In terms of political philosophy, most libertarians come at it through a rights based framework (see: Bastiat, Locke) and believe rights to be non-arbitrary. You seem to be suggesting a more self-interested framework which I'm not going to argue for/against.

In terms of reality, libertarians skew wealthy and less social. Like most groups they are more likely to rationalize a system that is congruent on the surface with their place in society.

> In terms of reality, libertarians skew wealthy and less social. Like most groups they are more likely to rationalize a system that is congruent on the surface with their place in society.

Well yes, I too can think up the philosophy of xg15ism in which people like me are well off at the cost of everyone else - and then demand that society implement it, pretty please.

I just don't see how that would bring us forward in any way.

> he libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem.

I'd like to remind the world there are such things as consequentialist Libertarians who view the value of their policy preferences based on their outcomes rather than the NAP.

Do you have any good reading material on consequentialist libertarians? I only ever run into deontological ones.

Honestly not really, the blog "bleeding heart libertarians" tends to focus on the consequentialist arguments more, but most of the contributors seem to be deontological in outlook.

Most of the consequentialists wind up becoming pretty standard neo-liberals as they are willing to consider government intervention when needed.

"Since taxes are not voluntary, this creates built-in demand for the fiat money."

Not really.

The real underlying demand for a currency comes from the advantage that everyone gets by using the same currency in a common market.

The 'required for tax' purposes is a side-show.

Does anyone with any financial background appreciate that most businesses in the US want to use a single currency for their US transactions, and definitely not a 'grab bag' various currencies?

Nobody wants that. Nobody.

Also, the requirement to 'pay taxes' in a common currency is not coercive.

As long as there is liquidity in currency, then you can exchange whatever asset you want for USD and pay your taxes then.

Libertarians are still free to use whatever they want in their business dealings. Of course, we all use USD because it's pragmatic and useful.

"Capital controls are an artificial construct of the state"

Western nations do not really have 'capital controls' other than for the purposes of taxation and fraud. And sure, you could say 'taxation' is an 'construct of the state' but it's certainly not 'arbitrary'.

"When the money supply of your currency is not constrained (by gold, or otherwise), then it inevitably inflates, often unpredictably and uncontrollably."

Totally false. Inflation is a target by most central banks. They can make it positive or negative, generally, and target specifically 2% for certain reasons. You can argue against the 2% if you want, but not that managed currencies are inherently 'one thing or another'. They are whatever they are designed to do.

By having a 'perfectly hard currency' - you forgo the risk of having some crazy person doing monetary policy - but worse - you lose the possibility for having monetary policy altogether. How could you possibly not mention this as the most obvious drawback to a strict currency (i.e. no monetary policy)?

Monetary policy is a very powerful instrument for helping the economy along. Without it, it would be impossible to ensure enough liquidity as the market expands. Also, the economy would not be resilient to 'shock' events.

The reason zero economies on planet earth used a fixed-currency regime is because it does not work.

"The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily"

This position is false, as capitalism itself is game of gaining leverage towards monopoly. Without some degree of redistributive taxation, 90% of the US economy would be in the hands of a small group of people. (And P.S. I'm no communist)

"Bitcoin is such a system: all participation in Bitcoin has been voluntary. "

Again, false.

Bitcoin is not a currency. If anything, BTC has proven how ridiculously bad this 'crypto-currency' idea has been as a currency. By it's very own 'relatively strict' status, it has increased it's value ('deflationary' in your terminology) - and has become useless as a currency.

-----> If we were using Bitcoin as a currency, the economy would be tanking due to a deflationary death-spiral <-----

EDIT: by 'death spiral' I'm referring to a common economic idea. As prices of goods go down, investors tend to hoard cash rather than invest it, as holding currency might be a better investment strategy than spending. Without investment, other parts of the economy slow, furthering the impetus to holding cash. The 'mass deflation' we've seen in BTC is equally as destructive as 'mass inflation' we would see from some really poorly managed gong-show currency.

Put another way: yes, you might like it if your 'new tennis shoes' were 1/2 price next week, and 1/2 that price the week after - hey - cheap tennis shoes! But think about it: has the economy just magically been 100% more productive each week? No. Of course not. So - what's happening is a monetary game that will soon hit your paycheque (i.e. your boss can pay you 1/2 your salary each week because that's your real market value). But worse - because of this drop in prices, your boss will be less likely to expand because his cost of capital equations show him it's smarter to hold the cash.

But it's all moot: Bitcoin is not a currency. It could be used as a currency, but it's not. It's just a purely speculative thing that's going on. People trading numbers for money 'because'. There's no rhyme or reason. There is no 'big government vs. small government' ideology here. There is no 'libertarian' behind BTC currency. It's just a meme with money that's interesting to watch.

> The real underlying demand for a currency comes from the advantage that everyone gets by using the same currency in a common market.

> The 'required for tax' purposes is a side-show.

Why can't it be both? :)

> Totally false. Inflation is a target by most central banks. They can make it positive or negative, generally, and target specifically 2% for certain reasons.

This is a bit questionable. There are good reasons why a slight positive rate of inflation is a good thing, and while you could try to target a negative rate, it would almost certainly be very harmful to the economy.

Basically, people and even many companies have fewer contracts or prices for selling things than for buying things. So when relative prices need to adjust, this adjustment happens more smoothly and faster when prices don't have to decrease in nominal terms (because e.g. an employee whose compensation should go down in real terms will fight very hard against a nominal decrease in their income, but will fight less hard against a broad nominal increase in their outlays).

So you should generally aim to have only very few (if any) items in your basket of goods whose prices are decreasing.

(Economists call this the zero lower bound and focus on salaries, but I'd expect the effect to apply to other prices as well.)

I meant to say that a managed currency does not imply inflation, as the commenter was saying.

I'm saying a managed currency can be whatever you want it to be. I agree targeting deflation would be bad.

Hint: deflation is kind of bad, and we have massive deflation with BTC :)

> Monetary policy is a very powerful instrument for helping the economy along. Without it, it would be impossible to ensure enough liquidity as the market expands. Also, the economy would not be resilient to 'shock' events.

Many countries expressly forbid themselves to use monetary policy to manipulate their economy. Their monetary policy has singular goal: to keep inflation low and stable.

So maybe it's not such a graet tool although tempting.

I'm not a moral realist so I think that libertarian philosophy is nothing but the most venal elements of capitalism congealed in thought, but I should add that the classical formulation of libertarianism is internally incoherent. You omit that for any transaction to be legitimate it must not only be voluntary but must also consist of the exchange of things legitimately acquired in the past, i.e. voluntarily acquired. This chain of voluntary exchange is what is supposed to grant one a title to that thing. But of course, in reality, that does not exist in the least. The distribution of things over history is primarily a function of brute coercion and happenstance. Nozick knew as much, and his suggestion is as pitiful as his scruples: we need to 'reset' society according to the Rawlsian difference principle and then begin our libertarian accounting.

In any case, I can't take seriously anyone who thinks that humans aren't interested in freedom because they want to be free to do things, i.e. I want to be free to see my family not only in that I don't want someone to stop me from doing so, but I also want the means to be able to do so. The one is more or less pointless without the other. And that obviously requires more than negative liberty. Or that, in another vein, that capitalist enterprises are not vehicles of accumulated power that sustain themselves by exploiting workers, ordered along hierarchical top-down principles. One only need step into sociological reality to see as much.

So about bitcoin...

Sorry. Libertarian philosophy is my bete noire. But the point is evident enough: I highly doubt libertarians can offer a credible macro-economic justification for the creation of a decentralised currency sustained by the whims of the market alone, and that they rely on the force of a prior moral theory. If the moral theory is void, so is the justification. I'm not sure how you would go about justifying bitcoin on its own terms. Its outside of effective social control, consumes masses of electricity, relies on centralised economies of scales in mining, and doesn't have any use-function apart from being a store of value. I imagine that blockchain technologies will have lots of useful applications down the road, but bitcoin is a primitive piece of technology that probably has a net negative effect on the world.

> being a store of value

You yourself have hit on the justification for Bitcoin's use.

Bitcoin relies on other people to buy in and hodl in order to fulfill its value storing properties. If people stopped buying more (at higher prices since it's a fixed supply) then the value would plummet, and that would be a terrible value store if your value plummets while being stored in it.

does libertarianism have any tenets other than "human interactions should be voluntary"?

I'm no libertarian, but wouldn't the fact that you can buy bitcoins with traditional fiat currency throw a wrench in this being a valid experiment?

Since anyone that received an "unfair advantage" with government-issued fiat can turn around and use it to get an unfair advantage in bitcoin as well?

So in order for libertarian society to work as desired we first have to... evenly distribute the wealth? I don't think we'll find any libertarians taking that position.

Does even (or rather, less uneven) distribution of wealth imply involuntary coercion? I don't think it has to.

The person who coined the term libertarian (Joseph Dejacques) argued that all property rights were restrictions on freedom, and for even distribution of not just wealth but income, on the basis of an ideal where maximizing liberty was the most important goal.

But right-wing libertarianism prioritize property rights over liberty.

You assert there are conditions under which the oligarchs would relinquish some portion of their holdings voluntarily?

If the holdings were devalued on the market, does that qualify as involuntary relinquishment?

Maybe? What did you have in mind?

The person who coined the term "libertarian" did take that position. In fact he went much further, and probably would be quite offended at what right wing libertarians espouse in the name of libertarianism given that it's hard to find anyone more opposed to property rights and accumulation of wealth.

Here is Joseph Dejacques using "libertarian" for the first time in a letter to Proudhon (incidentally also an early feminist work; the letter was a rebuke to Proudhons male chauvinism):

> Flogger of woman and absolute serf of man, Proudhon Magnan, you use your words for a lash. Like a slave-driver you seem delighted to disrobe your beautiful victims (on paper) and flagellate them with invectives. Moderate anarchist, liberal, but not libertarian, you want free exchange of cotton and candles and you seek to protect man against woman in the exchange of affectional human passion. You cry against the great barons of capital, and you would rebuild a proud barony of man on vassal-woman. Logician with misfit eyeglasses, you are unable to read the lessons of the present or the past; you can discern nothing that is elevated or at a distance or in the perspective of the future.

(EDIT: Worth noting above is that he sets "moderate anarchist" up as less radical than "libertarian")

And this is another paragraph from the same letter, denouncing not just property rights (one of things he admired in Proudhon's was his "property is theft" slogan) but denouncing restrictions on consumption:

> Do I need, for example, one sun for myself, one river for myself, one forest for my own, or all the houses in all the streets for my own? Have I the right to become the proprietor of them to the exclusion of others, especially when I do not need them? If I have not that right, is it any more just for me to wish, as under the system of contracts, to measure to each one—according to his accidental ability to produce—just what proportion he should receive of all things; how much of the sun’s rays he is entitled to, how many cubic feet of air and of water shall he allotted to him, or the extent of his promenades in the forests; what number or the parts of the houses he may occupy, what streets he may walk in and what streets he must keep out of?

While you probably won't agree with much he says - as a libertarian socialist even I disagree with much of what he says (he's very much what Marx would have written off as one of the utopian socialists, or a hippie a century early), the letter is well worth a read both because it has historical importance in being the start of libertarianism (right wing libertarianism was first born about a century later), but also because it is incredibly beautifully written even if one disagrees with it:

https://theanarchistlibrary.org/library/joseph-dejacque-on-t...

Yes. Just the same as generational wealth in the real world. The problem with meritocracy is that ocracy implies some power over the system and in a true meritocratic system the first generation would corrupt it to help their kids. Meritocracy is an oxymoron because the difference between equality of opportunity and equality of outcome is a gradient, not a line.

Doesn't the Law of Large Numbers imply that equality of opportunity and equality of outcome are one and the same thing?

Or to put it another way, how do you measure "equality of opportunity" if not by "equality of outcome"? If your theory of "equality of opportunity" differs from the measured "equality of outcome", doesn't that automatically mean you've omitted some characteristic of the real world from your theory?

A lottery has equality of opportunity, but not equality of outcome.

Many aspects of our societies have lottery-like qualities.

That's why I mentioned the law of large numbers. But I see your argument - you're arguing that the variance in the probability distribution representing "opportunity" is so great that the measured outcome could be anything.

But this seems like "too convenient" an explanation to me, it could be used to justify literally any system. For any system, one could assert that actually the opportunity is equal, but the variance is so great that the measured outcome "accidentally" arose out of the totally-equal-honest "opportunity" probability distribution.

I'm not prepared to accept such weak justifications of any supposed equal-opportunity system, I'd prefer to have a system where the outcome provided me with some verifiable indicator that the original opportunities were actually equal, in a similar sort of way where one can have verifiable proofs in cryptographic protocols.

Even if you create a popular/useful coin based on a *cratic system (e.g. iron workers get X number of coins) and try to evenly distribute the coins, they will cluster over time to people to game the system. Perhaps some game detection could penalize those folks and rebalance the distribution.

> Perhaps some game detection could penalize those folks and rebalance the distribution.

That is indeed a large part of the point of the social/welfare state.

I have a very difficult time separating "true" libertarians with members of libertarian parties. Like people don't readily give up how pragmatic they are. On one end, there seem to be people who really yearn for pure individual freedom with no government at all. I'm pretty sure that was tried for the first 50,000 years of humanity and the results are well documented. (spoiler, for populations larger than ~100 people, your chance of ending up a king's subject is >99%) The other end doesn't seem to mean anything concrete, other than a distaste for OSHA or environmental laws.

Anyway, I think most Libertarians would be cool with a handful of ultra-wealthy, because they really think they can conquer the market someday and be one of them.

I consider myself a pragmatic libertarian, which off the top of my head basically means that:

1. I believe very strongly in the sovereignty of the individual.

2. I prefer more open and incentive-driven markets.

3. I’m skeptical of governments, particularly large and powerful ones, because they’re inefficient, rely on coercion, and are too tempting as prizes to be captured for power, prestige, and wealth.

However, these are all on a spectrum and I’m open to trying other points along that spectrum if they work better than our current system. I also recognize that the optimal system may be too distant from where we are today to even move towards it directly.

So for healthcare for example, our system is dreadful, but I’m not sure that pure free markets would be better. But I’d strongly prefer a public option (and maybe even single payer), or a well-designed hybrid system like Singapore or Switzerland has to fully nationalized healthcare like UK.

Similarly, I’m open to trying basic income, a land value or VAT instead of income tax, and other alternative systems. I’m particularly in favor of systems that are more stable and resistant to changing from the whims of the current government.

I personally don’t understand how anyone who thinks the government is awesome can continue to believe that when they watch episode after episode of unchecked police brutality, or constant encroachments on civil liberties, or the entire Trump administration.

The UK doesn't have fully nationalized healthcare.

* GP surgeries (doctors offices) are private businesses, and may provide NHS services or private services.

* The NHS contracts out for a growing number of services, ranging from operating whole departments (e.g. Virgin operates the out-of-hours walk in centre for non-emergency care next door to the A&E/ER at my local hospital) to cleaning.

* The NHS rents out facilities to private providers, and individual NHS trusts may derive income from carrying out private work (though the proportion of this income is limited, and the revenue goes back into their budgets). This is in addition to NHS staff often renting NHS facilities to carry out private surgeries outside their normal rotation.

* Dentists are mostly private and generally dentists that do NHS work also do private work, and often mix and match with the same patient (e.g. the NHS does not reimburse more expensive types of fillings, so your dentist may recommend e.g. things like porcelain veneers on visible teeth and stick to NHS options for less visible work).

* Pharmacies are mostly private - the NHS mostly operates pharmacies only in hospitals etc. but they too can be privately operated.

* 10% of the population have private health insurance. This is mostly "top up" insurance offering additional services or faster turnaround for non-essential surgeries etc. than the NHS.

* Many types of healthcare services are mostly private. E.g. while you can get some types of cosmetic surgery on the NHS

As it stands, the NHS is the most cost-effective hybrid or private system in any developed country. Too cost-effective some would say; to the point where it comes at the cost of making things more miserable for patients. But that's what you get when we pay far less than any other countries at a comparable income level.

OK, you're sort of shining a spotlight on my ignorance here, but a few thoughts:

1. Maybe "fully nationalized" isn't technically true, but my understanding was that the UK was widely regarded to have a nationalized healthcare system. Not really interested in whether that's technically true at the margins unless there's some major policy impact.

2. "Cost-effective" is an interesting term, because it assumes we agree on what "effective" means. I want choice, innovation, better health outcomes, more convenience, shorter wait times, etc., and I'm willing to pay some premium (but not 4x or something) for them. For these reasons, I don't want want the NHS system here (nor do I think it'd work here), despite it being better for some values of "cost-effectiveness".

3. If by "cost-effectiveness", you just mean per-capita spending on healthcare, are you sure the NHS is the most cost-effective of any developed country? Doesn't seem to be the case here: https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... -- maybe you're using some more complicated measure of spending per health outcomes?

> 1. Maybe "fully nationalized" isn't technically true, but my understanding was that the UK was widely regarded to have a nationalized healthcare system. Not really interested in whether that's technically true at the margins unless there's some major policy impact.

Which countries do you consider not to have a nationalized healthcare system, then we can make a comparison?

Note that even in the US, the government covers roughly half of all healthcare expenditure. The UK government covers about 79%.

> 2. "Cost-effective" is an interesting term, because it assumes we agree on what "effective" means. I want choice, innovation, better health outcomes, more convenience, shorter wait times, etc., and I'm willing to pay some premium (but not 4x or something) for them. For these reasons, I don't want want the NHS system here (nor do I think it'd work here), despite it being better for some values of "cost-effectiveness".

Even if you for some reason believe you don't get this with the NHS (meanwhile most people here considers the US system to be terrifying), you have all of that by combining the NHS with private top-up insurance. The average cost of combining NHS and private insurance in the UK is far lower than the average cost of healthcare in the US.

So you can get the benefits that socializing services have in ensuring universal coverage and ensuring nobody drives up overall costs by waiting until things get more expensive to treat, with the ability to pay for whatever extra services you want.

Fewer people go without coverage, and you get cheaper coverage and more choice since you can still pick and choose from private providers but also get a public option if you prefer that.

In fact, because of the ability of the NHS to rent out resources, even privately paying for operations etc. tends to be so much cheaper even at top end London specialists that if you're in the US and need elective care it is worth checking the cost of flying to London, having it done, and staying in a nice hotel while recovering. For a lot of conditions that'll be cheaper.

Personally I find it telling that it is almost impossible to find people holding your positions in places where people have experienced these socialized systems unless they have the money to pay far more for care that is out of reach of most people.

For 3., note that you're referring to PPP adjusted numbers. The UK costs have also increased more the last few years than I realized. Even so, while the PPP adjusted data does not have the UK stand out as much as it used to, the gap between the UK and e.g. the US still illustrates the most important point.

By "nationalized", I mean where the state owns and employs a significant portion of the healthcare resources and personnel, as opposed to just paying for it.

Really? Then I think you've misunderstood my positions and you might want to try another read through my original comment. Unless you think that every other developed country in the world is clamoring for the exact NHS system? Because my point is that I'd prefer single payer or a robust public option to nationalized systems, not that I want the current US system.

note that you're referring to PPP adjusted numbers

Yes, because that's what makes sense. Why wouldn't you use PPP-adjusted numbers?

the gap between the UK and e.g. the US still illustrates the most important point

As I suspected, you're just defending the UK system as being superior to the US system. On this we agree, but it's irrelevant to my broader point.

Side note: why are Europeans so freaking defensive about their systems of governance? I swear that you can't have a reasonable discussion online about healthcare, taxes, employment law, etc, etc. without a mob of people from Europe jumping in to assure everyone that their system is the best and the US system for everything is horrible and we all unknowingly live in a terrifying dystopia.

We get it, you love the way you do things. I tend to agree on a number of issues, but I'm so tired of the condescending chatter about it. It just comes off as really insecure.

I've lived in Europe, I'd do it again, I LOVE Europe, but I don't think you've got it all figured out, or that your systems will always work everywhere.

What are you trying so hard to prove?

> By "nationalized", I mean where the state owns and employs a significant portion of the healthcare resources and personnel, as opposed to just paying for it.

In that case the NHS is a lot less nationalized than you might think: a huge proportion of NHS services are provided by private firms under NHS contracts.

> Really? Then I think you've misunderstood my positions and you might want to try another read through my original comment. Unless you think that every other developed country in the world is clamoring for the exact NHS system? Because my point is that I'd prefer single payer or a robust public option to nationalized systems, not that I want the current US system.

The vast majority of developed countries have systems very similar to the UK, with a mix of public and private service provisions. The exact mix of public and private varies, but then again even in the US about half all healthcare expenditure is through the government.

> As I suspected, you're just defending the UK system as being superior to the US system. On this we agree, but it's irrelevant to my broader point.

That wasn't anything to "suspect" - it was there in plain sight. But that was also just as an example. Pretty much every developed country have socialized healthcare that is both cheaper and providing proper care for a large proportion of the population than the US system.

> Side note: why are Europeans so freaking defensive about their systems of governance?

Because the prospect of "US conditions" is terrifying, to the point that "US conditions" is actually a term used in politics in some European countries used to scare voters with the thought of what happens if you let the right wing run rampant over public services.

>I swear that you can't have a reasonable discussion online about healthcare, taxes, employment law, etc, etc. without a mob of people from Europe jumping in to assure everyone that their system is the best and the US system for everything is horrible and we all unknowingly live in a terrifying dystopia.

Equally, you can't have such a discussion without a bunch of Americans trying to push the kind of deregulation that led to the festering mess that is the US healthcare system.

> What are you trying so hard to prove?

It's not that we're trying so hard to prove anything. It's that we find it offensive that you let people die on the streets to avoid applying known working solutions out of fear they're too left wing.

You don't need to pick the UK solution. Any solution from any of the wealthier developed countries is superior to the US system. And they span the range from almost totally socialized (Norway) to mostly private healthcare with a mix of private and public insurance (Germany, France for example).

What they all have in common is that they provide universal coverage and a regulatory system that put people first. Most of them are cheaper than the US. Most of them are

Sounds like garden variety ignorance.

Can be applied to your posts as well.

I liked the way conversation started, but this is pointless.

It would be awesome if people with my values (my tribe) were in charge. Similar to the view that communism is a great political system; all those failures you point to are not true communism.

>> I personally don’t understand how anyone who thinks the government is awesome

This is where I think some libertarians wander off from what those largely in favour of state actually think.

I think a lot of people would agree there's a lot wrong with government, but most would also rather have one. They just want one that's run better.

Your libertarianism seems quite pragmatic and I personally sympathise with the ideas behind libertarianism - lack of coercion, lack of people making arbitrary moral decisions (like drug laws) and imposing them on society.

However I also like public services, welfare safety nets (BI is indeed interesting) and various other things that only come with state-level cooperation.

I think a lot of people would agree there's a lot wrong with government, but most would also rather have one.

I would argue that most libertarians aren't anarchists, but it's a popular strawman tactic from those arguing against it (particularly on the left). It's almost a cliche: "You know where is a libertarian paradise with no government? Somalia! Hurr durr!"

I think we all agree that government has problems. Libertarians just think that the problems of government are inherent and fundamental, so the solution is usually in less government (but not no government), while "liberals" (huge spectrum here, I know) seem to think that the answer is more government.

And we all agree that we need better government, but libertarians think that public accountability works better the closer the citizenry is to the decisions being made, and liberals seem to favor more centralized decision-making, I guess for efficiency? I'm not entirely clear on why :)

I don't much care for that, but like I said, I do like a welfare safety net, public health service and other public services.

I'm not saying it's all libertarians, but I have interacted with quite a number on the net, over the years, who would scrap those things entirely. I, personally, think inefficient government is a price worth paying for such things, but that we must seek to do better.

The more / less government is false dichotomy. That's why leftists make jokes about you, even smart-sounding libertarians like you always make these stupid black / white statements.

Universal healthcare being one example (at least our system seems simpler than your deductible / premium / medicare / medicaid / etc. chaos), UBI being another.

More / less is a spectrum, so by definition it can’t be a dichotomy :)

Also, don’t know what “our system” or “your chaos” refers to, but if it’s the setup for another screed about how universal healthcare is superior to the current US system, save the wear and tear on your keyboard. I’ve heard it many times and I agree.

You are right, not a dichotomy. But main point stands - it is useless metric.

You strongly prefer a public option, or single payer.

You are open to trying basic income.

Do you think we should have laws and regulations to protect the environment?

If so, then I think you have graduated from Libertarian to Liberal. Ha ha! I did the same thing after I realized that a true free market libertarian ideal is easily abused by corporations and the wealthy, and the common man has no chance.

Classical liberal, yes.

> I believe very strongly in the sovereignty of the individual.

You should be very interested then where your sovereignty comes from. At the moment it comes from having above yourself an entity so powerful that you and others around you (that are 10 times, 100, 1000 times as powerful as you) are equally insignificant and uninteresting as long as you pay your dues and don't make a fuss, ie don't try to overtake one another in violent way (even in some non-violent ways that in the past proved bothersome for the overlord so they were forbidden).

The world is full of military technology that just invites anyone with a goal to put the finger on the trigger. So far best invention to control this state of affairs is to have the most dangerous weaponary in hands of just few actors preferably with non-overlapping geographical zones of interest.

What you are noticing is that one person's just cause is another person's business model. For many people the call to "have freedom and keep the government out your life" sounds wonderful, even if they either don't know exactly what that means, or if it means 1000 different things to 1000 people. It just sounds good. But it also allows some other people in the process to make more money. e.g. if you make money by digging something out the ground and selling it, you don't want to be told you can't dig any more and you don't want to be told you have to fill the hole in when you're done and put all the plants and wildlife back how it was. So you get a symbiotic relationship emerging between these two groups of folks : the money-makers spend their time and effort pushing "freedom", for purely personal gain, while the freedom-lovers eat it up, improving their self-esteem and feeling good about themselves even though they have very little actual freedom, and a big dirty hole in the ground next to their town.

> Anyway, I think most Libertarians would be cool with a handful of ultra-wealthy, because they really think they can conquer the market someday and be one of them.

The existence of ultra-wealthy people isn't inherently bad.

The question is about the alternative. If everyone's quality of life improves (including relative to the ultra-wealthy), I'd rather that happen than reduce everyone's quality of life out of a sense of "fairness."

Claiming most libertarians act against their own interests because they think they can become ultra-wealthy is straw-manning the view.

That's a good point, but I don't concede that improving fairness makes the quality of life worse for the 0.001%. Their wealth far exceeds their ability to consume it. With a small shift, you can drastically reduce suffering without effecting their life in any perceptible way.

Liberterians such as myself, would like to see a more prosperous world. With the technology we have available today, we're 1000s of times more productive than we were millions of years ago, and yet, 99% of society is still stuck working 40-60 hours a week and barely earning enough money to get by. There are many reasons why this is the case: taxes are only 1 reason. But, most of these reasons ultimately have something to do with government. Housing and Healthcare is no-where near as cost effective as it could be, if we were allowed to zone it properly and innovate on it.

Ultimately, Libertarians stand for the freedom of people. Currently, when a government takes and uses 1/3 of every dollar earned, the society is not free. Note: that ratio would be a lot higher in expensive areas like the bay area, etc.

1/3 doesn't sound like much oppression, but when you add in the multiplicative effect on the spending side, it becomes more onerous because everything is more expensive. The day care has to charge 50% more, etc.

It's about Maslow's hierarchy of needs. Most people, 99% are still working on their bottom tier. It would be morally, ethically, and economically wrong to stop their progress, by taking 1/3 of their productive efforts.

As the above posts mentioned, we do differentiate between natural resources and earned resources. Natural resources like Land should be taxed because you didn't create it from your own labor. On Earnings However, if you make your bed in the morning, you should be able to keep that labor - no one should be allowed to come over and use 33% of your bed.

"Currently, when a government takes and uses 1/3 of every dollar earned, the society is not free."

See, this is just nonsense. You follow this to its logical conclusion and the only free people have no government. You're free to reject it all. There's plenty of places where you can just say "fuck it" and nobody will come bother you. Go ahead. Nobody does, though, because they quite like the security of living in a city, where no matter what the emergency help is just a phone call away, and one can watch live video from the surface of Mars on a smartphone.

I don't understand the dilemma. Nobody is forcing you to use bitcoin and it's still an incredibly small market in the grand scheme of things. The libertarian position is (generally) that government mandated fiat currency is a tool of state oppression. No such force exists when it comes to bitcoin, and if people are unhappy with the concentration of bitcoin in the hands of a small number of people, they are free to use any other currency.

What's the difference between a government manipulating a currency and a cabal of wealthy individuals manipulating a currency? Or is your problem mainly that businesses have to accept dollars?

It isn't illegal to circumvent the cabal by agreeing to use a different currency. The sole goal of currency is a common medium of exchange. If that common medium is being manipulated then the market will perceive that as damage and route around it.

>If that common medium is being manipulated then the market will perceive that as damage and route around it.

Isn't that basically the problem with bitcoin though? We can't perceive if it's being manipulated or not.

E: Actually that brings up another issue for me. Wouldn't that just be a run on the currency? So the last people to get out of manipu-coins are the ones stuck holding the bag?

The currency is still just a medium of exchange. If the value crashes and some are left "holding the bag" as you say, then those left holding currency could still exchange with one another.

No system promises that its actors will behave morally. What we're talking about is whether or not you fundamentally believe that government can and should exert force on the market. Those of us who believe they should not don't see a perfect and moral market on the other side, we just would prefer to exchange problems of force and authority with problems of interpersonal relationships.

>No system promises that its actors will behave morally.

Of course not, but government allows us to reach outside the system (in some cases) and set the rules for the system. Those rules can be used to help encourage more moral behavior and discourage less moral behavior.

>Those of us who believe they should not don't see a perfect and moral market on the other side

Okay but you can see how this language:

>If that common medium is being manipulated then the market will perceive that as damage and route around it.

does begin to imply a "perfect" market right? If something is manipulated then we just route around it. That phrasing seems to hide that the real cost in "routing around" a currency is that a lot of people lose all their money.

>we just would prefer to exchange problems of force and authority with problems of interpersonal relationships.

This wording seems to put force/authority and interpersonal relationships on opposite sides of the spectrum but that's obviously not true. Interpersonal relationships are one of the primary methods of using force and authority.

Perhaps a more accurate representation of your views is that you would like force and authority to be only transmitted person to person?

Anyone who has a miner can generate bitcoin. Only the FED can create new USD.

Sure, but what's the importance of that fact?

that it's the first distributed open currency much like BitTorrent is a distributed open fileshare.

Are we still on the libertarian thing? I guess I don't understand why the fact that BTC creation is distributed is important.

I think the former method of creating currency is fairer and more transparent.

Well it's obviously not necessarily more transparent. I know that the Fed is creating money, I can find out how much it's creating and I can listen to government officials explain why we should create more/less money or why we should make money in this instance but not that one, etc. I can even vote for people whose dollar creation opinions line up with mine.

In BTC I don't know who's creating it, what they believe about it and I have no way to affect their creation of it. Seems like the democratic governing system is more fair and transparent so where did I go wrong?

If you disagree with money printing, your vote will not matter. In bitcoin, the inflation schedule can be checked very easily. It doesn't matter who is creating it as long as the supply is stable and predictable.

>If you disagree with money printing, your vote will not matter.

It would matter more than my (non-existent) vote in bitcoin would.

>It doesn't matter who is creating it as long as the supply is stable and predictable.

So to be clear, your problem isn't that the fed is centralized and btc is decentralized it's that btc is regular and the fed can be irregular?

> It would matter more than my (non-existent) vote in bitcoin would.

You don't have to use it though.

> So to be clear, your problem isn't that the fed is centralized and btc is decentralized it's that btc is regular and the fed can be irregular?

Both aspects are problematic. It's not only the FED that is centralized, the banking system itself is. Bitcoin is Peer-to-peer without trusted third parties.

In Bitcoin, the number of outstanding currency units can be checked very easily.

What I care about as a consumer is being able to predict the value of my currency at future times. Bitcoin doesn't allow me to do this at all.

nothing does

> I can find out how much it's creating

No, you can trust them to tell you how much they're creating. Important distinction.

> I can even vote for people whose dollar creation opinions line up with mine.

The people who run the FED aren't elected, so no, you can't.

> In BTC I don't know who's creating it, what they believe about it and I have no way to affect their creation of it.

It doesn't matter, the issuance is controlled by the protocol and you can know how much Bitcoin will be created on 2105/06/25 by making a few simple calculations.

So if you don't agree with it you can bail out right now and never participate in it, no one forces you to.

Is this how 250 kWh of energy usage per BTC transaction is supposed to be considered ethical?

It is more ethical than financing wars through deficit spending.

A on-chain bitcoin transaction allows an arbitrary number of off-chain transactions.

How many times are people going to try whataboutism on HN? Everyone can recognize it by now.

The existence of war does not absolve you. If your standard of morality is "everything that's better than war is okay", you have approximately no morality.

The whataboutism started with uninformed statements about bitcoin energy usage. My rebuttal is about the costs of the alternatives.

Call it whatever you want. The days of proof-of-work are numbered, I can guarantee you that.

https://download.wpsoftware.net/bitcoin/pos.pdf

This isn't really true. New USD is created anytime someone gets a loan. The Fed impacts that money creation only indirectly by setting rates (not considering QE -- even with QE, the point remains: new money is created when a loan is made by a fractional-reserve institution)

Edit to further elucidate: It isn't exactly the loan that creates money, but what happens with the money after the loan. It will almost certainly land in a bank account somewhere, adding to that bank's reserves, which allows them to lend 90% of the loan's value again. (assuming a 10% capital reserve requirement)

This is simply false.

Your comment would be more useful if you attempted to address my misunderstandings, as you perceive them.

You and I go to the bank and get two loans backed by the same reserve. We party and spend those new dollars which in part didn't exist before. Then we work to repay the bank and make the debt and credit columns agree in the books. Btw, the money of salaries we get could be borrowed too.

Another shot at it with a thought experiment. Everybody goes to the bank and borrows 10k every month. The bank never asks them back for the first five years. Result? Inflation, possibly hyperinflation. Same as if they would be printing money (and they'll won't get anything back when the five years are past.)

This is known as the money multiplier effect.

It's perhaps better put like this:

You store a dollar in the bank. The bank makes a loan to a business to buy cars. The car company stores that dollar in another bank. The bank makes a loan with that dollar to a farmer to buy sheep from another farmer. That farmer who sold the sheep puts that dollar in the bank.

That one dollar was used in three different transactions, thus creating more US Dollars than were actually printed.

And on and on it goes.

Edited to add:

That's why runs on banks are so dangerous, because the bank never has the full amount of money in it's safe. It's using that money to make loans.

Government currency is mandated, bitcoin isn't. If bitcoin is manipulated, people can choose not to use it. If government currency is manipulated, people have no other (legal) choice but to continue using it. This makes the two distinct to a libertarian.

Some libertarians may be more pragmatic than others. For example, some may argue that so long as a government issued fiat currency is in use (as it is today), manipulations by the government should be held to a minimum. This may be the cause of the confusion.

>If bitcoin is manipulated, people can choose not to use it. If government currency is manipulated, people have no other (legal) choice but to continue using it.

Isn't this going to create a run on the currency? So say tomorrow some news comes out proving these btc whales are responsible for 80% of the order book and are manipulating the market, isn't it the slowest people to react who are stuck holding the bag?

Furthermore, isn't the problem with btc that we don't know if it's being manipulated or not? Manipulation or not at least I know what's going on with the dollar.

I'm not a spokesperson for bitcoin and I'm neither qualified to nor interested in discussing its market risks or potentials. I don't believe these have any bearing on whether bitcoin is fundamentally distinct from government mandated fiat currency from a libertarian standpoint.

I Am Not a Libertarian but a few thoughts come to mind. Bitcoin is just about as close to the libertarian ideal as you can practically get in this world. The two main flaws that I can see is that it's not as anonymous as it could be, and many governments have already imposed a number of burdensome regulations which prevent people from using bitcoin as they see fit. More anonymity would get around those regulations to some extent (not saying that I agree with doing that, it's just the pedestrian reality).

WRT most of the wealth being held by a small number of people, I think it's inevitable that power structures like this arise in human societies. If you leave things unchecked, some people will acquire way more wealth than others. Doing away with regulations will likely only make that worse, not better. I'm more of a socialist, so I would prefer that we somehow limit the amount of wealth that a single individual can hold, because it gives them a tremendously unfair amount of control over the destiny of humanity as a whole.

So if someone would acquire more wealth than this "limit" you think it's okay to steal it from them? How is theft morally acceptable?

I am a libertarian. I can tell you, for a law abiding citizen, bitcoin is no better than a dollar. You still have to pay taxes on it, report it to the IRS and it's still subject to whatever regulations the government wants to put on it, for example 10k/20k reporting requirements, etc. If the gov wants your money, they will find you, one way or another.

It'll be interesting to see what happens when a few people own 90% of the bitcoin and everyone else just sort of shrugs and starts using a new cryptocurrency, instead.

This is what I don't understand. In the hypothetical case where we switch to using bitcoin won't early adopters be the only people with money? What about the 99.9(9?)% of the population who don't own any bitcoins?

How are you thinking the switch would occur? It's not like the "old" currencies will suddenly lose their value, you'll be able to exchange them for a long time.

Plus, most people don't own that much currency anyway; they either get a paycheck (which can start coming in BTC) or an asset like a house, which is valuable in any currency.

USD has already declined in value 3x over the past 6 weeks, compared to BTC

Everything has declined in value over the past 6 weeks compared to BTC.

The value of the dollar has declined a few hundred percent vs the price of nvidia stock in the past year, too. I'm not really sure that sort of comparison makes sense.

When I said "only people with money" I meant "meaningful amount of money" but I can see what you're saying. I'm not sure what I'm struggling with about the concept...time for me to do some more reading / thinking.

Welcome to serfdom.

Committed ideological Bitcoin supporters commonly believe in a network effect race condition spiral they call 'hyperbitcoinization' which models a world where a sort of event horizon in market adoption had been crossed, and everyone on Earth is forced to use bitcoin either directly or indirectly.

In this techno-feudalist scenario, being one of the Bitcoin 1% or even 10% means the world is at your feet, and if you've maintained good opsec, nobody may even know how much of their lives are your property.

Reminds me of this satire post from reddit (4yrs old). https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_time...

It correctly predicted BTC at $10k in 2017. So much for satire!

It also incorrectly predicted it from 2013-2017.

>and if you've maintained good opsec

Don't exchanges verify identity? Wouldn't you be committing fraud by maintaining good opsec?

Point being is that someone may eventually leak an exchange database with those details. Then the word's out. Kind of like Equifax.

If you subscribe to the Bitcoin in-universe dogma that views committing fraud and extortion as something that central banks and governments do, not what free market actors entering into voluntary contractual agreements with one another (which are regulated by math and logic spelled out in open source code) do, then maintaining good opsec is not just good business but a moral imperative.

Lets say you never maintain much in the exchange, and always tumble coins before moving them in/out.

It would certainly be possible to prove identity when transferring BTC in/out of an exchange, but make it exceedingly hard to prove that they ultimately make it to/from wallets you control.

But of course possible does not mean it is likely.

Wouldn't the same scenario play out with any other cryptocurrency? Early adopters will sit on the bulk of it.

Also since a large number of coins are lost the 40% number understates the size of the whales. Estimates are that 20% of coins are simply lost for good.

This is interesting but my understanding of blockchain is limited so: Aren't all transactions 'encoded' in the blockchain? If so why can't the coins be found? If not, what does the blockchain "record"?

Very small transaction outputs can't be used in practice because they're less than the required transaction fee.

If the private keys corresponding to the coins are lost then the coins are, for all intents and purposes, lost. They can't be sold, moved around, etc.

The coins are there but since the private key for the wallet that is assigned ownership of them is lost they're effectively gone.

They could in theory be 'reclaimed' with a majority of mining power but it's hard to tell if coins are lost or their owners are just idle.

Up to 25% lost for good according to this source: https://letstalkbitcoin.com/blog/post/rise-of-the-zombie-bit... & https://seekingalpha.com/article/4082979-many-bitcoins-lost-...

Also many wallets are simply unspendable due to transaction costs.

Considering the difficulty involved in even buying bitcoin I'd have to say no. If you want to make a sizeable investment you need to hand over large amounts of personal data to an exchange. I'm talking the works; routing number, passport, proof of residency etc. I should be able to simply walk to a BTC ATM put cash in and add it to a wallet on my phone (perhaps you can in some places?). Additionally, exchanges like Coinbase are required to report any transaction over 20,000USD to the IRS. Fiat cash is much less of a PITA.

Or just pay more to move your money into a country that doesn't care about such things, then buy it truly anonymously.

Or mine it if you have access to cheap electricity and can afford the equipment to be near the top in hashing speed.

In either case, you can see how Bitcoin wealth is biased to people with lots of fiat to begin with. I question if there could be any new currency that would not suffer the same inequality.

Bitcoin isn't a fiat currency. It has intrinsic value in the same way that gold does, because it's fungible, divisible, transportable, impossible to counterfeit, etc. So in that sense, I think the answer to your question is yes: Bitcoin is the kind of currency libertarians have been advocating for.

However, I think it's a bit early in the life of cryptocurrencies to make any evaluation about how the experiment is going. To understand why libertarians obsess over currency, I recommend one look at some history[1] instead, and see that fiat currencies have long been associated with war, oppression, and corruption.

To answer your last question, I don't think cryptocurrencies will actually be used unless there is a need for them. If inflation in the U.S. becomes extreme, for example, people will naturally flood to cryptocurrencies as a better store of value and/or way of transporting value. There have already been examples of that happening in countries with currency problems, such as in 2015 when many Argentinians began experimenting with Bitcoin[2].

But for the foreseeable future, most people will probably not notice any big problems using their local currency, and so they will continue to do so.

I personally don't think Bitcoin will last. Instead, another cryptocurrency will take over. Probably many will take turns over the years.

[1] https://en.wikipedia.org/wiki/A_History_of_Money_and_Banking...

[2] https://www.nytimes.com/2015/05/03/magazine/how-bitcoin-is-d...

There's something that must be mentioned here: there are multiple visions for what bitcoin should be. Probably with much oversimplification, but as unbiased as I can be:

One side wants bitcoin to be a decentralized store of value, untraceable, unseizable, a safe heaven for your wealth that's completely permissionless to use.

The other side wants bitcoin to be a currency for the day-to-day life that is cheap to use, a global currency to escape the (possibly shitty) fiat issued by your state and the banking system. Basically money for "the other 6 billion people" or "the unbanked" or whoever else that needs it.

The two visions don't contradict each other, however they have different priorities, and they make different technological compromises when faced with a problem (decentralized scaling).

This doesn't take away anything from your question, but one has to consider this divide when looking for answers.

Multiple competing privately issued currencies is also a trope of libertarianism; people refer a lot to Hayek's The Denationalization of Money.

I've written about why I think this is a disingenuous comparison: https://paulbutler.org/archives/stop-dragging-hayek-into-bit...

I don't claim that Bitcoin is a winner according to the criteria set out by Hayek, in fact it's obviously problematic as a unit of account as you explain.

The various decentralized stablecoin projects (disclaimer: I'm involved with one of them, MakerDAO) attempt to create competitive currency as laid out by Hayek, using collateralization and continual supply/demand tweaks to encourage a stable market price.

From that perspective, Bitcoin is indeed more like a trailblazer and a collectible precious metal, and not a serious contender for actual currency status. Still, it seems to have an important role in the ecosystem of denationalized currency.

If they are good stewards of the money and invest it well then they will keep it and we all gain from their investments. If not they lose it and someone, hopefully more responsible will have it. In the long run the right people (those who can make profitable investments) will have control over capital.

Can you clarify what is your definition of "right people" in this specific case?

How do you know being a good steward of that money doesn't mean just hoarding it and doing nothing?

Bitcoin encourages hoarding while it's going up. Who knows where this runaway phenomenon will lead.

At least the dollars and euros exchanged for it don't go anywhere. Bitcoin has fast become a store of value and redistribution of the world's wealth to early adopters, as any new fixed money supply would be.

One thing I never see discussed is if Bitcoin were to truly become mainstream, it would require "the mainstream" to purchase all of their Bitcoin from existing holders. In essence, all of the people who got in early get to decide who does and does not get to participate in this hypothetical Bitcoin-based future.

Setting aside all the other issues with Bitcoin (scaling, energy use, volatility) it seems like this would be a major issue if Bitcoin was ever on the precipice to being considered "mainstream". People would most likely strongly object to having to go purchase bitcoin from a bunch of people who bought in early in order to continue functioning in their lives. It is one of the big, largely undiscussed, reasons I believe that Bitcoin will never truly catch on.

It seems like every currency is going to have a power-law distribution of holders, whether it's Bitcoin or USD. I don't see how that undercuts the libertarian desire for currencies without central control.

No central control assuming you ignore the mining pools.

I would say that wealth concentrating in a small number of hands is not a surprising outcome, nor is it a dynamic anyone with libertarian leanings can really be uncomfortable with. I'll admit I'm unpleasantly surprised by how quickly it happened.

I would say that cryptocurrency has one advantage over traditional systems of money in that it governs with the consent of the governed - if the richest 4% of the cryptocurrency world become too aggressive and stifle innovation to protect their status, cryptocurrency's nature makes it very easy for the other 96% to take their ball and play elsewhere. There have been several 'hard fork' moments already (Bitcoin Cash, Ethereum Classic, etc) and what the majority of people went with was mostly determined by who inspired their confidence. I don't think Greenspan or Yellen could have gotten the majority of miners to switch to their system, that takes the confidence of the majority.

So to answer your last question - I would expect the experiment to lead to a more brutal and cutthroat competition than we are used to, but I also expect the rules to be more fairly enforced, and the incentives of the rich and the rest to self-correct if they begin to diverge.

I can't speak for other libertarians, but for me, finding that tradeoff worth it is what it means to be a libertarian. How clear-eyed I am about the costs I couldn't guess.

> "What do you think about the concentration of Bitcoins in the hands of a small number of people?"

It should be emphasized that bitcoins don't have a fixed value (bitcoin can't force an exchange rate), and that anyone can created a competing currency (bitcoin can't force people to accept bitcoin). So although bitcoins may be concentrated, that doesn't necessarily mean that wealth is being concentrated. A lot of (non-libertarians particularly) mistakenly conflate currency with wealth.

I understand your point, but i'm not sure it applies to bitcoin anymore... it has become a trading currency, a weird sort of stock, it's not a buying currency, so I don't think your argument fully applies. At the most it applies as a storage of wealth, but not as a purchasing power, because it's completely impractical to buy actual stuff with due to transaction cost.

I don't think that Bitcoin is inherently favored by Libertarians. Ultimately, you pay the same amount of taxes on bitcoin as any other capital gain, so it's irrelevant.

I'm a bit of a lower-case-l libertarian and will chime in.

I don't see Bitcoin as ideal. I think its greatest weakness is that it's insanely deflationary, even worse than gold. But then again I'm not among those libertarians who dismiss the whole of Keynes or modern finance. I don't agree with Keynes on everything but he made some tremendously important observations. The big one is the velocity of money and the idea that money is a verb, not a noun. If you get this then you get 90% of the good parts of Keynes.

The other issue with Bitcoin is proof of work. It's wasteful as hell (PoW also stands for proof of waste) and also inherently biases the system toward oligopoly. Proof of work is subject to industrial economies of scale, leading inevitably to consolidation.

Proof of stake isn't perfect either. It's plutocratic, but then again so is proof of work since hardware costs money. It's a marginal improvement but not ideal. I don't think the ideal proof function has been discovered. It would be something that allowed anyone to "mine" with an acceptable but not excessive amount of overhead and that didn't contain strong systematic biases toward oligopoly.

The ideal currency would be one that could actually do the beneficial things central banks do but without the central bank. While Bitcoin is not going to do that, I don't see that as impossible. Bitcoin is really the first viable MVP of something I've heard best described as "software defined money." Software can be programmed to do a lot of things, so maybe software defined money could be programmed to do what central banks do but without a central authority.

In other words: if we can represent an ideal central bank mathematically then we can encode it into software. Imagine a currency that automatically "dropped money from helicopters" when monetary velocity fell, etc. Figuring out how to make this not game-able of course is hard as hell but it's probably solvable.

My problem with central banking is political and ethical. The moral hazard is simply enormous. IMHO the Federal Reserve is a fourth branch of government and one with only minimal democratic oversight. Placing fiat currency printing directly in the hands of government is dangerous though, so you're kind of damned either way.

The 2008 financial crash is a very good test case. In 2008 and the ensuing bailout years it became absolutely obvious to me that the degree to which you were saved from the crash was proportional to things like what school you went to (Ivy League, with a hierarchy there topped by Harvard and Yale) and how closely connected you were politically to the Fed and the center of the New York and Washington political power elites.

(Side note: those who have never lived on the East Coast probably don't understand the school hierarchy. What school you went to determines your social caste forever. It's a major reason I now live on the West Sieeeed.)

This always happens -- always -- when humans are in charge of stuff. It doesn't even require a conscious conspiracy or even a conscious sense of bias. It emerges from stuff like Dunbar's number and how humans weight things in decision making. If you are human you are racist, classist, sexist, and everything-else-ist. To claim otherwise is to be a liar or to not know thyself. Meat brains are not rational and suck at statistics.

The second deeper problem with central banks is that the system of interest rate setting and money lending is inherently feudal. Central banks set a base rate but you or I cannot borrow at this rate. We have to borrow from a bank at a higher rate. The interest I pay contains a plain vanilla handout to banks in proportion to their social distance from the Fed.

I understand some of the technical rationale for this but it's deeply and systematically unjust. A major side effect of this system is that every time there's a recession things like QE end up being wealth transfers to the top and in proportion to social connectedness to the Fed's governing elite. So every time the economy contracts the oligarchy is strengthened. It's easy to see the incentives this creates and they're perverse in the extreme. Top economic elites now have an incentive to mismanage the economy.

So the bottom line is that I like the innovation Bitcoin represents but I see it as only an alpha proof of concept.

Bitcoin as it is today is a bubble and is probably going to fail. It seems to be undergoing a deflationary collapse right now. Even if it survives this it is technically unable to scale to the size required for global monetary use.

Ethereum is a little better but still not ideal, and some of the people involved seem wonky. Most ICOs seem like straight up scams, which is not encouraging. Of course fiat money systems are riddled with pink sheet pump and dumps and Ponzi schemes and other scams so I guess that's just a thing. "All mature ecosystems contain parasites."

The core invention of software defined money and distributed byzantine consensus is an absolutely revolutionary innovation and is going to change the world.

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