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This argument is really hard to understand for people whose revenue is derived from the current system. Many people here fail to understand what cryptocurrencies are about because they are entrenched in these systems and these new systems endangers their perceived stability.

The reality is that the world, companies, people and nation states do not care about that. The current divide is due to the "system" being non-inclusive (only some people are in) and given that the system carry on to exclude more people while giving more privileges to the incumbents, the crypto tension will continue to rise.

Cryptocurrencies are not challenging banks. They are challenging governments, but they are too slow and bureaucratic to understand that.

The people whose revenue is derived from the current system are far outnumbered by those who lose in the system.

Oh no we can't milk taxes of your (un)realized gains so it's bad for the planet. I like it when they load the other FUD which is: BTC is used by criminals (implying fiat isn't).

The interesting part is how the FUDers like Nouriel Roubini fire away all the negatives in the same sentence, making it sound like they have an agenda against BTC and not so much a well researched deep concern regarding one of the FUD points.

What of the social contract?

The dystopia I see in your words: government as an efficient service provider providing for and competing for the patronage of the ultra-wealthy holders of cryptocurrency: the monopoly on force is broken because wealth is forever exempt. Socialized, societal wealth of all forms - roads, healthcare, police, defense - discarded. The underclass of every nation left without recourse to the power of government to redistribute wealth, and a global oligarchy is ascendant.

Government's first calling should not be efficiency. That's a misapprehension of its purposes.

Yep. There's a reasonable argument to be made that the decline in the Western Roman Empire's ability to raise taxes led in part to feudalism and the decline of cities and the transformation of rural peasantry into serfs. Authoritarian landholders and aristocratic armies replaced an (admittedly oppressive but also moderately concerned with some social welfare) organized state.

The state is a double-edged sword for sure. But denying its ability to raise revenues seems like a great way to hasten dystopia.

A system that can't fund itself via taxation alone is broken and needs fixing. Money printing is a proxy for taxation but targeted at the poor, as the rich aren't affected (arguably, they do better as assets go up).

Taxation will not disappear in a crypto world, and that's how government would fund themselves. Societal wealth will continue in the form of roads, police, healthcare etc. Govt. will have to be resourceful about how it spends its tax earnings. The key difference is that Government can't go money printer brr whenever tax revenues aren't enough simply because they don't allocate resources efficiently. Tax rates in the US are high enough already. If they were increased more, people might leave. In a crypto world, there would be genuine pressure for the Government to lean up and cut back on unnecessary spending.

In a world where resources are constrained, you will not have SF county spending $61k per year per tent for the homeless. The state would die if they spent with such unconcern. https://www.sfchronicle.com/local/article/S-F-pays-61-000-a-...

SF County can't print money, only the federal government can. As far as I know California receives the least amount of federal tax benefits. They pay more then they recieve

Yes, I am aware of SF county being unable to print (only the central bank can). The point I am making is that this is an instance of wasteful expenditure that would be expensive in a world where nations lose control over currency and are operating on a tight budget that enforces skin in the game and discipline.

This is also an argument for a gold standard. What is a society to do when collective debt can help? For example: existential war, economic turmoil. Do you contend that governments should never spend on credit? I contend that printing money may sometimes be a good idea.

What society would undertake moonshots like DARPA... or going to the moon... if it could not invest with debt collateralized on a future generation's produce?

Spending on credit that you never pay is different. With a smart contract a government would have to release it's collateral. Now they can just keep the inflation up.

Ah, sure, the next generation pays, even as they generate even more debt themselves. I acknowledge it's a Ponzi scheme. But well managed, and expecting consistent growth in the productivity of our society over generations, the Ponzi scheme won't collapse.

> Increasing taxes will cause a mass exodus leaving the Governments in a bad shape. [..] Holders will just migrate to a [different] country

Yeah, when the US increases taxes on me, I'll just move to Korea. Oh, what's that, it takes a minimum of 5 years and learning the language to get a citizenship? And I still have to pay the IRS in USD in the meanwhile since they're still taxing me until I revoke my US citizenship (which I can't until I get a korean one in 5 years).

Not to mention I left behind my family and friends, many of whom can't emigrate due to not qualifying for a work visa or other category.

My point here is that the free market does not apply to governments as you imply it might. Consumers can vote with their wallet for things like different brands of food and other commodity goods, but people can't change citizenships easily. People can't vote on their favorite country easily due to massive social effects and how limited immigration is.

There are far more people who live in a country where they think their government is worse than another one, and yet don't move, than there are people who do change countries for such a reason.

Agreed, it isn't easy. But things are changing. Balaji Srinivasan argues that's the future. Naval Ravikant says that innovation has been found in geographic centers like the Arabic world (middle ages) -> Rome (Renaissance) -> England (1800s) -> SF Bay area (since the 60s), but the next center will be geographically distributed but on gathered on the cloud through digital nomadism. See The Sovereign Individual as a book that predicts this.

There's a business here that helps managing citizenship: https://nomadcapitalist.com/

I don't know what the future holds. We shall see :)

You could argue that conventional warfare was the traditional mechanism by which governments competed against one another to "consume" failed states and re-allocate resources to governments that were better capable of putting them to use.

In modern times, the global financial markets seem to be somewhat playing that same role since nuclear wars isn't a palatable option, with only a few "outcast" nations not participating in that system (Iran,Russia,NK,Myanmar,etc...).

Taxation systems, being the mechanism by which governments are able to build power bases, themselves compete against one another as individuals and companies avoid taxation by moving resources to low/no tax states within that same system.

This human system is a constantly evolving chaotic system that's changing more rapidly than most of us perceive, and crypto is just one aspect of that.

In other words: You disagree with what your government is doing. Instead of convincing your fellow citizens that it needs to do less, you take matters into your own hands like a wannabe dictator.

I wish I had the power you accuse me of wielding. I hope and wish that in a few decades from now, we will look back in bewilderment how we allowed nation states to have control over currencies to fund centralized operations at our expense.

BTC doesn't concentrate power, it tilts the balance in favor of a just system where value isn't plundered at a whim.

You don't have it (on your own) but you try.

> BTC doesn't concentrate power, it tilts the balance in favor of a just system where value isn't plundered at a whim.

No, the value is "plundered" by a democratically elected government. You don't like it? Vote against it. Or work to fix your system of government if it's too broken for that. But don't try to make the policies you don't like impossible.

And yes, unlike BTC operates on the basis of one-person-one-vote, or somehow prevents concentration of wealth, it does not prevent concentration of power.

What part of your belief system is violated if the nation state lost power over currencies? Democracy will still prevail in the alternative I am suggesting, it will just be defanged from a certain viewpoint.

I suggest reading the history of money. The current system is an aberration. Historically, with gold as the currency/gold standard, nation states couldn't inflate money away.

If democracy is defanged, it hasn't prevailed.

> I suggest reading the history of money. The current system is an aberration. Historically, with gold as the currency/gold standard, nation states couldn't inflate money away.

I'm not a reactionary and I don't think you are either. So how is this an argument? We got rid of the gold standard for good reasons.

the poor have debt, inflation is good for them. (in fact the federal reserve target rate of inflation is good for everyone in a utilitarian sense (whereas deflation is horrible))

Inflation is good for the poor is a lie. The poor can no longer afford a house, can't pay for college, can't pay for healthcare because inflation has taken this away from them.

Inflation is good for the rich. I would much rather be rich and hold assets that go up with inflation, and invest on leverage because inflation makes it easy to pay back my loan. The rich hold most of their wealth in assets, the poor hardly have any assets that go up with inflation and are left behind with whatever cash they have which loses value continuously.

Taxation is a method that can theoretically target the rich more than the poor. Inflation steals from everybody equally in theory, but from the poor more than the rich in practice.