Comment by AndrewKemendo | Hacker News Reader

Comment by AndrewKemendo | Hacker News Reader

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As I mentioned in the Twitter thread, my chief criticism of cryptocurrency since the beginning is it's naivete of the history and politics of money.

The discussions about economics applied here focus too much on microeconomic rather than macroeconomic arguments. So they end up missing the point entirely which is this:

Money isn't a neutral instrument and it's not something that can be decoupled from societal/political concepts and structures.

You can evaluate it as though it is neutral, but it has not ever been and will never be a neutral instrument because of the historical tendency for resources to pool and therefore become power centers, among other things.

Therefore if you view cryptocurrency as having the primary intention to de-couple commerce from coercive power structures [1], then you'll see immediately the historical problem. Namely, history doesn't favor distributed power, especially not when it can easily be co-opted by the powerful systems in which they rely.

In the best case scenario for crypto-utopians, millions of people transact and do commerce on a decentralized currency. In that case, whatever sovereign is most impacted, will then either outlaw commerce by crypto by force or require parity with the sovereign currency and control of the crypto currency through tax payments. This has happened multiple times over the centuries with alt-currencies and they are killed off by the most powerful (see: Most powerful economy/military) organization.

Politically, there is nothing different about Bitcoin than there was with the confederate states dollar for example.

[1] From the original whitepaper: "What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party." https://bitcoin.org/bitcoin.pdf

> history doesn't favor distributed power

In that case, why do we have ~200 nations instead of a single world government? Clearly, sovereignty matters to groups of people.

"Sovereignty of money does not matter to LARGE groups of people" - might be a more defensible argument.

>In that case, why do we have ~200 nations instead of a single world government?

The correct starting question is "why do we have 200 nations, instead of millions of individuals and families living autonomously?" and the answer is: human beings are basically tribal people, and military conquest.

And then the answer to your question about why 200 is that military conquest never got any farther before the atom bomb eliminated direct warfare between major nations.

Why don't we have a single registrar for all TLDs? Why don't we have GitHub as the single repository for ALL software in the world?

My point is that sovereignty, innovation etc. are valuables which centralization can't deliver. "Monopolies will maximize profits and therefore, under-supply the product" is Economics 101. So, yes, economics of scale and network effects do encourage centralization but there are counter-balancing forces.

What we need is protocols that allow a sliding scale as opposed to non-interoperable silos. DNS, TCP/IP, Git delivered exactly that. While GitHub has the scale and network effects, plenty of people are happily using GitLab, BitBucket etc.

Right... but that doesn't address the point that nations in modern day are still decentralized.

~200 nations instead of a single world government

The long run trend is very obviously toward a single government. Consider that until the Sumerians established cities less than 7000 years ago, humanity was just thousands small traveling groups of nomads with no defined borders.

Sovereignty gets a lot of lip service, but in practice most people don't really want it. It's a lot of work.

> The long run trend is very obviously toward a single government

Is it? I believe there are far more countries now than 30 years ago.

We seem to have some more powerful international organisations now than a century ago, but earlier than that we had world spanning empires, and Europe was less than 10 countries before WW1.

I want to believe that we're heading towards a star trek like unified post scarcity planet, but I'm unsure we're not just seeing a local trend.

It's misleading actually because unincorporated territories or completely unmanaged or ungoverned groups could be counted in a "sultinate" and it would effectively mean nothing.

Much how King Arthur, Lord of the Britains was not known to the members of the anarcho-syndicalist commune.

>The long run trend is very obviously toward a single government.

Hmm, I think you will have to justify that statement, rather than simply claim it is a very obvious fact. Generally, there were fewer governments in the past as compared to the modern day.

That depends very much on how you define government. If you are a band of hunter gatherers does the "Chief" or "Shaman" that your band looks up to for leadership count as your goverment? If the answer is yes then there were way more governments in the past than there are in modern day.

If the answer is no then your point stands. However I tend to think that the answer is in fact yes and the trend does indeed seem to be toward centralized world government given a long enough time period.

Technology can automate and organize a lot of it better than a human government, and with no crazy ideological agendas.

That's the fallacy of technocrats. The Soviets used to think that with their centrally planned economy. You should probably see Adam Curtis' Hypernormalisation documentary. It's an eye opener.

AI will declare an independent government, all human will join that government eventually. We will be batteries in exchange of great life styles. No matter how hard we try, we can optimize the resources better than machines.

“The world under heaven, after a long period of division, tends to unite; after a long period of union, tends to divide. This has been so since antiquity.” - Luo Guanzhong, Romance of the Three Kingdoms

our world isn't under heaven though, increasingly a lot of bureaucracy can be automated away - it just ISN'T because a fair deal of automation means taking away control from politicians. add to that the technical illiteracy in general in the political sphere and there is no push for automation apart from authoritarian governments like china

all we need is an event that demonstrates the need for a world government - for eg a massive asteroid headed at earth or a planetary scale food drought to see these systems implemented.

the world is stagnating

We don't need a world gov't. We already have the UN, G8, G20. A world gov't means insufficient representation, inability to change.

What's the difference between a single government and a decentralized government? Under a single government there would necessarily be many subgovernments competing over resources, just as we have now under global capitalism.

Yes, 200, but China, India, US, EU (ok, bit of a stretch there), Brazil and Indonesia is about half of the world's population.

The EU will be less of a stretch after the U.K. Brexits out of membership in the next nuclear superpower, in order to complete their transition to an offshore banking haven in the City. Or am I reading the situation wrong?

> why do we have ~200 nations instead of a single world government

Deltas in space and time plus the fact face to face conversations give you a better idea of the sender's mental state. Comms over the Internet are untrustworthy, if you don't have prior experience with the sender.

Also, language, which is related to deltas in time and space.

> why do we have ~200 nations instead of a single world government?

It's easier for powerful central organizations to influence smaller countries which are divided against each other, while believing that they are relatively independent.

Also: latency of information transfer and the speed of light, which lead to local variance and central filtering of changes which are allowed to diffuse elsewhere.

In that case, why do we have ~200 nations instead of a single world government? Clearly, sovereignty matters to groups of people.

Italy alone used to be a dozen+ independent city states. Divided the world 200 ways seems like a lot unless you look at how much it's been divided historically. And in comparison, that's extremely centralized.

The history of political organization is driven by the history of military technology. Historically, the earth has flip-flopped from centralized to decentralized power several times, eg. Rome (legion) => feudalism (mounted knight) => Mongol Empire (mounted archers) => Rennaissance city states (crossbow, musket) => nation state (industrialization) => global superpower (atom bomb, ballistic missile). Basically whenever the dominant military technology is expensive to produce or benefits from large highly-organized armies, the trend is toward centralization, while whenever it is cheap to produce and gives the advantage to independent guerilla fighters, the trend is toward decentralization. There's some evidence (break up of Soviet Union, Eastern Europe, Islamic terrorism) that we're headed toward a new era of decentralization, driven by microchips, the Internet, drones, and cheap encrypted communication.

I agree with your main point, but not the last sentence. The complexity and expense of state of the art military technology is beyond the means of smaller nation-states, let alone rebel groups, and that trend has been accelerating since WWII.

Stealth, space supremacy, global surveillance, carrier groups, strike wings, nuclear arsenals, reaper drones and all the other crazy battlefield robot tech in service or development can cut to pieces any obsolete nation state military, let alone some rebels armed with cheap 3d-printed guns.

"Stealth, space supremacy, global surveillance, carrier groups, strike wings, nuclear arsenals, reaper drones and all the other crazy battlefield robot tech in service or development can cut to pieces any obsolete nation state military, let alone some rebels armed with cheap 3d-printed guns. "

So why isn't the US (which has all this tech) winning in Afghanistan over some rebels with AK 47s? Likewise Vietnam after literally a decade of fighting.

Weapons superiority is one factor in winning wars. Likewise, to address the gp's point, the history of political organization is partly driven by military technology.

There are definitely other factors at play, but have no illusions about it: if the United States didn't mind killing and maiming a large number of innocent civilians, it could just knock down entire cities and wipe out entire populations if it wanted to. The main reason that those conflicts are tough is because the US tries to make a show that they care about human rights instead of just shelling the crap out of insurgents.

And the current struggles of the American military only result in hundreds or maybe thousands of American deaths, which historically, would be a mere rounding error. Afghanistan, Iraq, Syria, et. al. are a mess, but they don't come to a significant human cost to America.

The United States and its voting populace doesn't really care about whether or not developing countries are wartorn, and quality of life is decimated—America and other states have completely destroyed the backbone of several societies in the Middle East and caused the deaths and relocation of hundreds of thousands of innocents, but you don't feel the pain of that when you live states-side. So the country has little incentive to quickly resolve these conflicts besides the bad PR; ongoing conflicts mostly buy time for protracted, proxy diplomacy with other major powers to lay claim to natural resources, and aren't viewed as conflict with a tangible human cost.

In both those conflict it was mostly not the US being at war with Vietnam or Afghanistan but with them supporting one political faction within the country against another which is a much messier business.

> Italy alone used to be a dozen+ independent city states. Divided the world 200 ways seems like a lot unless you look at how much it's been divided historically. And in comparison, that's extremely centralized.

What's interesting is to consider that while the world is very centralized in the sense you described, "day-to-day" operations are even more decentralized than ever. That is, (very generally speaking) order is established and maintained, and people go about their lives without huge, burdensome micro-management from "above" in the important aspects of their daily life.

It probably turns out that the most consequential decision-making affecting the modern person's daily life is happening very locally in the social & spatial/temporal sense. So, in that way, authority is effectively decentralized.

Italy used to be a dozen city states... And before that, Italy, France, Greece, Egypt, Turkey, Israel, Lebanon, a bunch of Baltic nations, England, and a bunch of others were all one state.

The number of states waxes and wanes throughout history, there's not a clear trend.

We already have 3 superpowers today with potentially 2 more developing. The others don't matter at scale.

It's more likely that the cities will become the dominant form of a citizen's home sovereignty rather than a nation, with only a few national boundaries around the world. People are inherently tribal and human behavior isn't changing anytime soon but countries are quickly becoming stretched too thin to keep up with all the varied and changing populations and their needs.

> why do we have ~200 nations instead of a single world government?

Coase won a Nobel Prize for this. Simply, the trade-off between bureaucratic inefficiency and economies of scale.

Only because current level of information technology is not able to support word government (in practice, not in theory). We can see the process of further unification looking at EU, which seems to a be current maximum level of unification.

Further EU unification is already falling apart, because they're trying to do it by dictate rather than voluntarily. And then there are language and cultural barriers.

A subtlety bears mentioning: History favors both centralized and distributed power, at different times, in different places, in quasi-cyclical fashion. Examples of history thwarting centralization include the collapses of: the Roman Empire, the USA in the 1860s, the 3rd Reich, Yugoslavia, the whole Warsaw Pact, and the USSR. Some of these were later "re-centralized" and some weren't. When things get too decentralized, centralization kicks in. When things get too centralized, decentralization kicks in. It's a balance.

I read the fourth turning some years ago and it repeats effectively the same argument. Previously the histories from Polybius.

From my study of it, it's closer to a ratchet. So while dissolution might happen at the highest organizational level, the hierarchies trend toward growing over successive cycles.

Also, the number of sovereign nations is just one measure of centralization of power. Economic structures are now more centralized than ever (with, in many cases, a handful multinational megacorps controlling most of each sector).

> Politically, there is nothing different about Bitcoin than there was with the confederate states dollar for example.

The big political difference is that Bitcoin transcends borders and national governments.

While the United States could have outlawed the Confederate dollar, the United States cannot outlaw Bitcoin because it can be sustained by miners globally.

Interestingly, the United States didn't have to outlaw the Confederate dollar, or the Texas dollar, because both of them were destroyed by their creators through over-printing.

A great book about all this if you want to dig in more is "Debt: the first 5000 years".

>> whatever sovereign is most impacted, will then either outlaw commerce by crypto by force or require parity with the sovereign currency and control of the crypto currency through tax payments

That's not possible. Even if all the governments of the developed world coordinated to ban cryptocurrencies or impose taxes on them, this will be an opportunity for developing countries to use cryptocurrencies as a competitive advantage to catch up financially.

Uh, how?

I suppose you could hitch your wagon to the Marshall Islands economy and see how that goes.

Very curious about how you foresee "developing countries to use cryptocurrencies as a competitive advantage to catch up financially" working if the cryptocurrencies are unusable in larger economies.

Why the downvotes? "traditional" cryptocurrencies are more useful in absence of a stable and reliable banking system and political system.

As smartphones spread across developing countries, hypothetical non-minable cryptocurrencies that works well on intermittent or local networking might become relevant.

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