Hacker News Reader

Comment by alexb_ | Hacker News Reader

This is a fantastic post - I'm 100% going to start using the term "Casino-Chip Society" whenever I talk about "cashless" society.

There is another reason that cashless society is awful that was not talked about in this article, but I think is just as important - a digital dollar means that you have a dollar where it is impossible to commit crime. While that sounds like a good thing (who wants crime?), it very much stops being a good thing as soon as you bump up with laws that go against your morals. Designing systems with the assumption that we will always have democratic and free government is a horrendous idea, allowing the government to have a complete record and log of every single transaction you ever make, as well as having the ability to stop you using digital money, makes it so easy for fascists.

View on HN

> a digital dollar means that you have a dollar where it is impossible to commit crime

Maybe. You'll probably just be able to convert it to some other form of value at a loss and then continue from there. Plenty of governments have envisioned the end of the "black market" only to be shown how utterly impossible that idea is.

That's the thing that wasn't explicit in the article; that each time you "switch layers" you often incur fees - if you're going down or back.

You can deposit cash at a bank and get it back, but that's almost an exception.

Once you get into layer 3 it is harder and harder to get back to layer 1 or 2 without losing "some value" - gift cards being the most obvious example.

> You can deposit cash at a bank and get it back, but that's almost an exception.

You get back the same cash but you almost certainly don't get back the same value due to inflation.

True, but that hits you if you just stuff 20s in your mattress (which is why inflation is the most effective flat tax we have).

>> You get back the same cash

No you don't, or at least, no I don't. My bank has fees for depositing cash (more than x times a month), fees for withdrawing cash (even at an atm) and fees for holding my cash (having an account.)

Trading in cash is _really_ expensive.

This is surprising. You should consider other banks.

Not that surprising. Depending on the country, all banks could be like that.

This is... not normal, at least in the US for all but the lowest quality checking accounts with very low balances and no linked accounts.

Which country do you live in if you don't mind me asking, and are you talking about personal or business accounts? In the UK there are "premium" personal bank accounts that will charge you a (low) monthly fee, but you usually get benefits from these such as free travel insurance, and the fee will often be waived if you deposit £x per month. Transfers to most countries are free, withdrawals and deposits are free and two of my accounts don't charge for currency conversions or foreign withdrawals. Traditional business accounts will sometimes charge withdrawal and deposit fees (especially on cash at the counter), and usually charge an (again low) monthly fee, but even in that sector you can find lots of accounts now that are essentially free. I'm curious whether this is different in other countries.

But if you had kept the cash for that same amount of time it would have lost the same amount of value to inflation. You don't lose any more value from switching between levels.

> a digital dollar means that you have a dollar where it is impossible to commit crime.

This is overly definitive. For example, in Poland, it's illegal to run a private online poker site and yet there's plenty of operators doing it. They offer digital money transfers via payment processors which specialize in skirting the law, such as Neteller, Payza etc. The Polish state doesn't care enough about its own laws regarding online gambling to clamp down on such practices and so people are happily commiting crimes using the "digital dollar".

The GP phrased that way too much like an allegory from under a rock and not enough like an internet comment.

(I think) He means that digital currencies remove plausible deniability.

The Polish government can both claim to crack down on gambling to its conservative supporters and at the same time avoid investing too many resources in pointless anti-vice enforcement. The second they have a digital ledger of all transactions in the country, they either have to get real with their conservative supporters who will vote them out or really go after all the people gambling whose bookies will drag them out from their beds.

Politics is a balancing act.

With better surveillance tech (no cash being an example of this) you can pave the way for future governments to exercise that power in bad ways even if the current one is lenient.

In Canada, casinos are used to wash money, https://www.cp24.com/news/mystery-shoppers-sent-to-ontario-c... The government makes too much from casinos, and doesn't care.

> it very much stops being a good thing as soon as you bump up with laws that go against your morals

A pretty explicit part of the fascist ideology per se is that laws are merely morals that are written down and enforced. The idea is that people adopt their moral code from the central government who defines how people "should" perceive the world in order to make citizens obedient to the dogma of the state. Willing fascists do everything they can to dissolve any notion of personal choice in the matter, for themselves and for others, and by their very constitution cannot conceive of morals existing outside of a system of authority.

Wait, so does that mean the "War on Drugs" wasn't making me more free??? The US Government would never do anything fascist so obviously you're wrong.

All laws make you less free. Laws exist to restrict freedoms in order to create a better society - what a better society means is the part where political differences come up. Most people can agree on laws existing to prevent harm unto others, but then what does that mean? Answers depend on your values and goals, and are fundamentally what politics are.

The point is though, all laws make someone "less free", because the purpose of law is to prohibit.

> The point is though, all laws make someone "less free", because the purpose of law is to prohibit.

I think you're wrong. Not all laws prohibit. For example, take a law that establishes public libraries. It doesn't prohibit anybody from anything.

Nah, all government is bad. Socialism is when the government spends money, freedom is when I get paid $5 an hour and eat trans fats

When exactly did I say that all government is bad? I personally think it's great the government restricts the right of people to commit murder.

Why?

The market would take care of it. Instead of police, just hire security.

This is one of the problems with polarization. The legitimate points of one side get grouped in with all the other ridiculous crap.

Every law, every program has a cost. Many times this costs are worth it. And there are plenty of times where they aren't, or have unintended side-effects.

Pointing out these costs and forcing society to recognize them as explicit decisions and tradeoffs is one of the key benefits of the Right, even if you disagree on where they fall on the balance of net-benefits in the final analysis.

TANSTAAFL

> Pointing out these costs and forcing society to recognize them as explicit decisions and tradeoffs is one of the key benefits of the Right

I don't think either side is better or worse at this. It's more like, point out the costs of the other side's policies while glossing over the costs of your own.

Abortion is a great example. I never hear a pro-life argument that starts out "abortion should be illegal but it will create all these unwanted babies and here's what I propose we do about that and what it will cost. We'll vote on outlawing abortion but it will be tied to tax increases to pay for programs to ensure these children have proper nutrition and education."

The idea that the right cares about babies right up until the moment you're born is common enough that George Carlin was joking about it in the 70s.

Don't forget the classic play (used on both sides) of denying there is a problem instead of stating that the cure is worse than the disease.

It’s more than that. People who extract resources tend to be reactionaries who hate taxes more than anything.

They are against schools, against libraries, against whatever, as taxes reduce their return on assets.

It’s all shorted and eventually backfires.

"freedom is when I get paid $5 an hour and eat trans fats"

Whose producer is only happy to collude with the regulatory agencies to get those trans fats declared as safe.

The "revolving door phenomenon" is a worldwide problem. Big business captures the government much of the time.

These days, they might even get their opponents' opinions classified as misinformation.

The law establishing public libraries doesn‘t just say "let there be public libraries". It designates a source for funding, making it a reason that taxpayers are less free. It forces publishers to sell/give books to the libraries.

If it could just exist without restricting someone‘s freedom in the wider sense, we wouldn‘t need a law.

Right. Privately funded libraries didn't need any laws.

It's even worse for authors. They pay taxes to support institutions that exist to lend out the author's books for free.

Lol. Libraries are huge buyers of books and drive demand.

Publishing wouldn’t exist without libraries. Something like 90% of book retail space has vaporized, and the ruthless consolidation makes the top 50 authors utterly dominate sales.

> Privately funded libraries didn't need any laws.

Not sure if this was meant to be a troll, but obviously private libraries depend on someone enforcing private ownership in general. Public libraries have some very specific legal carveouts (e.g. around protecting patron privacy) but otherwise are treated the same as private libraries, only publicly funded.

What about a law that says you are entitled to a lawyer when arrested? Or a law that says if you overpay on your taxes, the government has to make you whole?

There's the 'arrested' part and the 'taxes' part. There are limitations on the power we give the government to arrest people and to collect taxes. But the limitations are only there because of the freedom we loose in exchange for criminals being arrested and public services paid for.

If there was a law that said everyone must only wear blue clothes on Wednesdays, that's taken away your freedom to choose what to wear. If there's an exception to that law that says socks can be either green or blue, that's not the law granting a new freedom to wear green socks, it's a law not taking away a freedom that existed before the blue clothing law.

All laws make you less free, but societies without laws also make you less free.

Freedom is a slippery concept.

This is not true at all. We have many laws which restrict the government. Many amendments do this. Or the Respect for Marriage Act as a recent example, which restricts what the government can prohibit and provides for marriage rights for people who might not otherwise have them.

> All laws make you less free

I offer the 13th amendment (US) as a counterexample.

I mean, that does restrict private tyranny…

What else are laws - even in a democracy - if not "merely morals that are written down and enforced"?

I think the difference is that the totality of morality is supposed to come from the state in Fascism.

A well functioning society necessarily ought not legally forbid things that I consider immoral, which allows for personal autonomy with regards to ethics.

I think that would be better stated as in totalitarianism, the totality of morality is supposed to come from the state. Fascism is only one form of totalitarianism.

The issue is in the word "merely".

Of course the goal of law writ large is to engender "good" conditions in a society by restricting "bad" elements and encouraging "good" ones. In this sense the law has a moral quality.

Roughly speaking, "law" is morality as practiced by a state. The difference is in the acknowledgment or ignorance of the laws' congruence with the moralities of the citizens' opinions and preferences those laws are meant to represent. One could say the entire goal of democracy is the messy process of aligning the state's morality with the collective morality of its citizens. Fascism is then comparable to defining a single normative moral position and imposing it on the entire populace unilaterally.

In short, the question is: whose morals?

Laws and morals are both normative claims about the actions of individuals, but while morals are concerned with individual actions, laws must be concerned about societal-level ramifications of not just the actions, but also the enforcement of law. For example, most people would agree that adultry is bad and immoral. But as a society we've decided that its immorality isn't sufficient to overcome the ills of being punishable by the state, and thus it ought not to be illegal. Stealing to feed your starving family is moral, but we don't want to support theft in general so its illegal.

In a free society, one must recognize that legality ought loosely follow morality, with the ideal being that illegal actions are the strict subset of immoral actions which cause greater ill than the enforcement of their illegality. In the absence of an oracle into objective good and evil, a society must err on the side of not making things illegal which could potentially either be not worse than the ill of their enforcement, or not be immoral at all.

The all-to-common trap is to confuse the direction of influence: morality should influence legality, never the other way around. Allowing legality to influence one's perception of morality is simply surrendering your autonomy to those who greatest influence the law, and is a sure-fire path to authoritarianism.

This should be read at every US Federal and State legislature session, every day.

Ignoring this allows the term “culture wars” to define our politics - which is precisely the end of a “melting pot” society

This is an absolutely fantastic post.

Many laws are just mechanisms for coordination and organization of society. In the U.S. it's illegal to drive on the left side, and in the UK, It's illegal to drive on the right. Which side you drive on isn’t a matter of morality. However, knowing that everyone else is going to drive on the right (or left) keeps traffic flowing and reduces accidents.

The history of civil rights progress is characterized by marginally deviant behavior(for the time) slowly becoming more accepted and mainstream. Take LGBT rights or marijuana for example. If you disallow even the slightest level of deviance than you potentially neuter the ability of money to participate in that process.

So let's say I have lots of level 2 money.

I go to various banks and trade in the level 2 for level 1.

I take my billions of level 1,and stick it in a warehouse. Maybe one day I even set it on fire.

What does this mean? Does the fed recognizes the loss, and just print more? Have I in effect just shrunk the economy? My level 2 money is still in the system, its just the paper has vanished.

By extension, say every person loses one $10 bill every year, in an unrecoverable (by anyone) way. Presumably that's factored into the money supply?

Is changing the paper (as in the UK this year) a way of "cleaning the balance sheet" - effectively preventing some truly monster hoard from suddenly appearing?

So many questions...

What I'm wondering is .. when you own stocks of companies it is like having one type of currency, one per company or fund. (right?). Now when the stock-market goes down I lose money. And so do most people who own stocks. Where does that lost money go?

Everybody lost a lot in the most recent downturn and (most) nobody gained. We simply have less "value" now. Where did that value go? How could it have just vanished?

For the value of a stock to go down people have to sell it. What the people who have not sold lost, the people who have sold gained. Overall the money supply has not changed, money has just moved from holders to sellers

So that's level 3 value right? It's not money (level 1) or even chips (level 2).

So I'd say it's inaccurate to say you lost money. More accurate to say you lost value.

When the shares were issued (out of thin air) they had speculative value - they are promises for future dividends (presumably level 2) based on future profits.

The stock market acts as a level 2/level 3 swap place, and hence let's you calculate the "current level 2 price" of your level 3 paper.

So yes, the value simply got lost. But balance that with the way it simply got created in the first place.

And bear in mind that _all_ shares go to 0 in the long run. Ultimately the future arrives and that future value speculation is fully realised.

Company A issues 100 stocks and sells each one for $100. Company A has a $10,000 market cap.

Investor X sells a share of Company A to Investor Y for $110. Company A now has a market cap $11,000 because each of their 100 shares are now valued at $110.

Investor Y sells the share of Company A, but can only find a buyer (Investor Z) willing to pay $90. Company A now has a market cap of $9,000 because each of their 100 shares are valued at $90.

Very nice, concise, and de-jargoned explanation of how value is “created” and “destroyed” in stock ownership.

Also, here is a relevant Gordon Gekko quote from "Wall Street":

"Money itself isn’t lost or made, it’s simply transferred –- from one perception to another."[1]

[1]: https://amontalenti.com/2011/12/16/wall-street-the-movie-25-...

Stock isn't currency. It's an ownership claim on the assets and future profits of the company. If a stock price goes down it means people in aggregate have judged the assets and future profits to not be worth as much as they used to be. No value was lost, the stock still represents the same ownership claim. People just in aggregate changed their prediction for the future of the company.

> Everybody lost a lot in the most recent downturn and (most) nobody gained...Where did that value go? How could it have just vanished?

Didn't the other side of the transaction make the money that you lost?

> My level 2 money is still in the system,

No it is not, when you exchanged it for level 1 you removed it from level 2.

> Does the fed recognizes the loss

When your level 1 money went up in flames, it just meant a profit for the fed.

Yes. If the (overall) nominal money flows decrease but (overall) real economy size stays the same – to the extent that it’s going to change prices for no “real” reason – people and central banks are likely to notice and may react.

Central banks are tasked with stabilizing price levels. (Why? Predictability helps people make decisions and plans, and get rewarded for them. Caveat: price changes that originate in changes to real economy convey valuable information about real scarcities and surpluses. This one, kinda, doesn’t.) Prices are closely related to the ways money circulates in the economy – so CBs keep a close eye on these stats. (Why? In short, it’s a big factor in the simple monetary formula, MV=PQ, that is: overall amount of money * money velocity = price level * quantity of real consumption.) The fact you froze or burned a lot may influence how that looks, in turn possibly influencing CB decisions to put the finger on this or that scale.

Of course, the CB doesn’t know what you did exactly, it’s playing an aggregate game. Right now it would appreciate that you counteracted inflation – made everything a bit cheaper by not spending or loaning your billions for others to spend.

> Designing systems with the assumption that we will always have democratic and free government is a horrendous idea

I wonder if that's why germans are so against anything that is privacy invading while swedish people are quite happy to have their home address publicly known.

Reply on news.ycombinator.com