Bitcoin ‘Ought to Be Outlawed,’ Nobel Prize Winner Stiglitz Says (2017) | Hacker News Reader

Bitcoin ‘Ought to Be Outlawed,’ Nobel Prize Winner Stiglitz Says (2017)

bloomberg.com

28 pointsQub3d17 comments

A repost of an article discussed on HN at the time[0], but I believe to be relevant to the latest discussions on the crypto boom and, especially, NFTs.

I find it very interesting that the HN discussion at the time had one comment mention, "I don't really see how 'it doesn't serve any socially useful function' yields the statement 'it should be outlawed.'" This argument is true in and of itself, but now with the huge environmental concerns and vehicle for scams and theft built upon crypto, I don't think its an argument to be made here any longer.

[0]: https://news.ycombinator.com/item?id=15812247

Bitcoin is a direct assault on the authority of central banks to control money supply and set interest rates.

The time is long overdue for citizens to start playing a more direct role in these two important functions of monetary policy.

Bitcoin also provides a convenient method for holders of this currency to lower the taxes that they are forced to pay in order to fund all of the waste and corruption not only within the federal reserve banking system, which is a revolving door that connects to Wall Street, but in other government agencies as well.

Stiglitz, who has spent most of his career living on a form of UBI courtesy of the parents who are desperate for their kids to attend Ivy League schools, is not very credible as a result on the topic of who exactly US monetary policy is intended to benefit: Wall Street fat cats sporting Ivy League degrees (enabled by their heavily lobbied allies in government like Chuck Schumer) or the Main Street average joe?

>Until such time as central banks cease to exist, bitcoin will also continue to provide a convenient method for holders of this currency to avoid paying taxes to fund all of the waste and corruption not only in the federal reserve banking system, but in other government agencies as well.

As long as humans are selfish and ignorant, so will the governments. Technology is going to do bugger all to defund wasteful enterprises, let alone a pyramid scheme.

Anti-gov peeps benefit from government COVID aid, the vaccine, public schools, etc, etc. and don't want to pay taxes...the bitcoin argument is a double standard for the rich.

Compare this with the corruption of 3rd world countries: tell this to all the migrant children at the border dying to get a chance. Americans have no idea how easy they have it, complaining and wanting more...

It surprises me how little the intention and philosophy of Bitcoin's creators and early adopters is discussed. For the most part, they were anarchists and libertarians with the explicit intent of destabilizing the state by offering a stateless alternative to one of the state's primary functions. Often this comes with specific economic beliefs that reject fractional reserve banking. It was a political manifesto in the form of software.

While some of the wilder takes on it would prove a little too optimistic -- the scaling problem, in particular, seems intractable -- in many ways it was still a success. You can carry $10 million across an international border in a brain wallet, and if you do it just right, there's no way for a government or similar actor to even know. It's very hard to estimate something like this, but I've seen estimates in the $20 to $150 billion range for 2019 or 2020 for the volume of Bitcoin moved for the international drug trade. This is Bitcoin working exactly as intended, of course.

I'm a Bitcoin early adopter and anarchist and it wasn't about destabilizing the state. It was (and remains to be, for many of the OGs) about making a space for peaceful people which was outside of the manipulation of large institutions, both corporate and governmental.

In other words it's not about forcing a new system on everyone, it's about creating a new system which people can opt into if they didn't like the old one. And there are many reasons not to like the corruption and coercion of central banks, financial institutions, and the surveillance state.

> It was (and remains to be, for many of the OGs) about making a space for peaceful people which was outside of the manipulation of large institutions, both corporate and governmental.

I agree with this explanation, and would add that I think the simple point is that people should be able to save their hard-earned money and accumulate value in a way that's divorced from technocrats manipulating the economy.

Precious metals have served this purpose for a while, but obviously a virtual system dispenses with the huge inconveniences of storing heavy physical objects. You've got gold that can be transported at the speed of information.

The institutional system we have now has essentially decided that saving money is wrong, that deferring consumption is pernicious.

Of course, this is a boon for "consumer capitalism", which last I checked is reviled.

There's not much discussion because not much is happening. Ross made a political statement and is now serving life. A few more bros have gotten redpilled into believing in goldbug Austrian economics (without living it). A decent amount of money is probably escaping from China but the people doing it want to keep their heads down for obvious reasons. I guess any actual challenge to the state is likely to be invisible until it becomes overwhelming.

Weaponized attack on fractional reserve banking. Is and always has been. I still support it.

“Fractional reserve banking. Since bitcoin hasn't lived up to its original vision, it caused a periodical shift in narrative and splintering of its early core developers and adherents. Currently its 21 million coins cap is the last remaining “perk”* assuming the code won't be altered. This artificial scarcity might make for an attractive appreciating asset, like postage stamps—because “one man's trash is another man's treasure”—but it does not stop fractional reserve banking. Just as governments went off the gold standard, they can get off the envisioned bitcoin standard. And just as banks lend out money that doesn't exist, exchanges can lend out bitcoin that don't exist, which already happens (24). As predicted by one of its earliest pioneers:

“I see Bitcoin as ultimately becoming a reserve currency for banks, playing much the same role as gold did in the early days of banking. Banks could issue digital cash with greater anonymity and lighter weight, more efficient transactions.” —Hal Finney (25)

While his prescience is eerily accurate and impressive, it lacks imagination. The irony is that this envisioned system breeds the same environment that led to the 2008 financial crisis, which instigated the development of bitcoin. My point here is not that fractional reserve banking is fundamentally bad. I don't think it is. My point is that if fractional reserve banking is good then bitcoin is redundant. Whereas if fractional reserve banking is bad then bitcoin is redundant as well because it does not prevent it. Once more, prosperity boils down to good policy and governance.” —https://www.cynicusrex.com/file/cryptocultscience.html

I’m not disagreeing. The use case still exists.

If another invention comes along that incentivizes the reduction of fraud through a distributed ledger AND has value, well, I’ll jump on that train too.

Edit: you know, I spent the time to read your citations, but I’m not sure why you devote this much time to comments on the internet. Once you have a track record of making strategic, correct, positive choices for your family; over the course of decades... I don’t listen to commentary. I make choices with money, not words on the internet. Words on HN have zero time value

Then don't reply.

nice

I think they meant "Nobel Memorial Prize Winner".

Yes -- big difference.

Isn't Bitcoin almost impossible to outlaw by design?

It would be a difficult law to enforce, but that's different from if the law is written. Many laws inherently have a hard time being enforced.

Reply on news.ycombinator.com