Blockchains will lead us to plutocracy | Hacker News Reader

Blockchains will lead us to plutocracy

medium.com

14 pointsdionyziz8 comments

this article is so full of grandiose claims even in the first paragraph that it's hard to comment on. Blockchain tech isn't going to replace nation states or even financial systems because trustless systems do not scale. There is no economic incentive to replace smooth running low-cost transactions with expensive blockchain transactions. The appeal of blockchain is purely ideological.

That aside I am at least thankful that someone points out the very obvious political failings of decentralised systems, they tend to be pretty tyrannical, and of course full of power disparities and 'law of the jungle' logic.

The much more mundane prediction is that blockchain tech, if it has any utility, is leveraged by government to for example circumvent sanctions and whatnot, and you get something like the Pedro, which as far as I'm aware hasn't replaced the very armed Venezulean government. You'll get a "socialism with Chinese characteristics" situation, where everything has weird crypto-jargon but functions like a normal system.

there is a Twitter account called "The Center For Decentralization" that used to post about this issue, but seems to have gone inactive for a long time. Too bad because the name of the account, with four words, sums up the core paradox of blockchainism better than anything I've seen since.

Or perhaps blockchains will lead us nowhere, because they're unaffordable to run?

https://www.theverge.com/2019/7/4/20682109/bitcoin-energy-co...

Proof-of-Work, which is what makes Bitcoin an energy hog, is only one way to do it.

This author points to the role of often complex monetary policies which can be part of a multi-layered strategy to address the affordability of maintaining the platform. Projects such as Factom, Steemit, Lykke and several others have demonstrated that this is definitely not a binary consideration. There are definitely blockchains that are not sustainable in their design, but there are definitely instances where this is not the case.

This author does a great job of explaining the nuanced monetary policies that blockchain ecosystems require in order be resilient in delivering value to their stakeholders. As blockchain platforms can act as voluntary p2p value exchanges, is it really correct to consider it a tax?

Capturing enough value to stay in business is one of multiple functions treasuries can provide within these ecosystems. Another function of treasuries is to support additional monetary policy, like maintaining a deep order book and supporting some liquidity cushion to prevent manipulation of the price. When these features are explicitly known by people who choose to use the platforms, is it still a tax?

"Both of these means are a form of linear taxation, the first on the store-of-value function of money, the other on the medium-of-exchange function of money (as far as I know, the third function of money is impossible to tax)."

Not so, taxing the "unit of account" is achieved simply by issuing more tokens, causing a devaluation, aka inflation. In fact it seems to me the easiest way.

Maybe. But not blockchains, which require purchases of tokens, and hide the fact that they are nothing but speculation schemes.

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