Hacker News Reader

Comment by beepbopboopp | Hacker News Reader

Id take it a step further. The immorality of cryptocurrency isn't complicated and defines why it never has become more.

Fiat money exists within a social contract - governments that issue currency must also maintain the infrastructure that makes society work. They're accountable for everything from roads to retirement plans.

When cryptocurrency advocates push to separate money from government, they're not just pursuing financial innovation. They're deliberately undermining the mechanism that funds our shared existence. They want the benefits of living in society without contributing to its maintenance.

This isn't freedom - it's freeloading. Cryptocurrency, at its philosophical core, enables wealth hoarding while disconnecting the hoarders from any responsibility to the communities that made their wealth possible in the first place.

View on HN

>Fiat money exists within a social contract - governments that issue currency must also maintain the infrastructure that makes society work.

Imagine saying this to someone who lost their home in the LA wildfires despite paying high taxes all their life to live there. Some social contract.

Should I say it before after they get their government subsidized insurance money?

Government subsidized?

>After saying it would run out of funds by March, California’s last-resort fire insurance provider will impose a special charge of $1 billion on insurance companies — which will in turn pass the costs along to homeowners — the first such move in more than three decades.

https://calmatters.org/economy/2025/02/homeowners-insurance-...

I'm a little confused... You're citing the existence of the government subsidy as a way to question its existence?

The state (and city of LA):

1. Created dangerous conditions through inadequate fire management.

2. Prevented the private market from adequately communicating the risk through price increases. As a result, 7/12 of insurers stopped or restricted selling new policies.

3. Created a moral hazard by selling it's own policies to homeowners who were dropped by the private market.

4. Failed to respond to the fires.

5. Failed to cover claims through its insurance program.

6. Is trying to bail itself out by extracting $1 billion tax from the rest of the state.

Yet we're supposed to be thankful for this?

You could say the people whose homes burned are grateful they are being bailed out at everyone else's expense. But I bet they would be much happier if their homes had never burned down in the first place - a debacle that was entirely avoidable.

The question wasn't "should you be thankful?", the question was "has fire insurance been heavily subsidized by the state?". The answer to that question, which is implicit in multiple of the bullet points in your comment, is: Yes, fire insurance has been heavily subsidized by the state.

Separately, as convenient as it is to blame the state for the fire happening in the first place, the truth is just that wildfires are more common now, and are going to continue being more common, because of climate change. That's a bummer, but it isn't the fault of the state of California alone.

>Yes, fire insurance has been heavily subsidized by the state.

No, it wasn't subsidized by the state. The state has actually made fire insurance more expensive for everyone - including the people who lost their homes.

>Separately, as convenient as it is to blame the state for the fire happening in the first place, the truth is just that wildfires are more common now, and are going to continue being more common, because of climate change.

What's actually convenient is blaming a series of predictable policy failures on "climate change" - something that cannot be held accountable - rather than the politicians who can be.

In your earlier comment you said:

> 3. Created a moral hazard by selling it's own policies to homeowners who were dropped by the private market.

My friend, that's the subsidy. Those are public policies with subsidized premiums.

It also isn't clear what "predictable policy failures" you think caused the fire and allowed it to spread.

The problem is that fire risk is way up in a lot of places, including LA. Insurers know this, so all else equal, their premiums would also be way up. However, the premiums are now too high for most people to afford. So policy makers can either just let people be priced out of areas with high fire risk, or they can subsidize insuring those areas. Neither option is a good one.

Maybe if we put you in charge of all the governments in these areas, we would find that you do actually have the magical solution to square this circle, but I'm very skeptical. I think you're just doing the normal thing - which is your right as a citizen of a democratic system of government! - of complaining about whichever policy was chosen of the universally bad options available.

That's not a subsidy unless your definition of a subsidy is anytime the government gives anyone anything. It would be a subsidy if the state provided the private market with financial incentives to reduce premiums. That is not what they are doing. Instead, they are offering a product that the market doesn't want to provide, and bailing themselves out by increasing premiums when their genius move goes up in smoke.

>So policy makers can either just let people be priced out of areas with high fire risk, or they can subsidize insuring those areas. Neither option is a good one.

No actually option #1 is exactly what the state should have done. You want to live in a dangerous place? That's your choice, but you should be prepared to pay the price for it. When the state offers these policies, they are encouraging people to live in harm's way. If those who died had been priced out of these areas, they might still be alive today - just living somewhere else.

I'm sorry man, but subsidized insurance is a subsidy! What are we even doing here?

To your second point. Sure, it's easy to say that as an ideological rando on the internet. In the real world, policymakers are going to try to figure out better solutions than "nobody can live in the western United States because the fire risk is too high everywhere".

It seems like we're just arguing semantics at this point. And no, we don't have to evacuate the entire west because of fire risk, we just have to change incentives so fewer people move to the very hazardous parts.

It's not semantics! This is the refuge of everyone who says something is what it's not (or isn't what it is). "Well sure, yeah, I guess if you use words to mean the things that those words mean, then you have a point!"

You can just say that the public subsidy for insurance distorted the market in problematic ways. I totally agree with that. I don't understand why you got attached to saying that it isn't a subsidy.

But no, it's not as simple as "change the incentives so fewer people move to the very hazardous parts". This already is, and is only going to become more so, an existential problem for insurers, throughout very large swaths of the west.

The recent LA fires weren't in any particularly hazardous place. The hazard levels are higher than people can bear in more places than policymakers can bear to let private insurance markets sort it out. It's a real and giant problem. Just trying to hand wave it away with "foolish policymakers just didn't do the obvious thing" is convenient, but unhelpful.

If you really to keep arguing this...

California's FAIR plan is not a subsidy because it is not trying to lower the price of a good or service. It is rather a safety net program for those who cannot access private insurance (another policy failure caused by price controls). It's really as simple as that and I don't see why you're having so much trouble understanding it.

>This already is, and is only going to become more so, an existential problem for insurers, throughout very large swaths of the west.

Other western states are doing fine, probably because they do more controlled burns, so seasonal fires don't become conflagrations. That, as well as an insurance market where the state doesn't suppress price signals makes fires a non-issue for 99% of people. Also, since more and more people are living in urban areas I would expect fewer fatalities in the future, not more.

I'm not "having so much trouble understanding it", it's just that publicly subsidized insurance is ... subsidized. It's not a complicated or "semantic" question. You've created this other definition of what "subsidy" is, which just isn't what it is. If the government subsidizes something, it's a subsidy.

I don't get why you're so attached to doing contortions to deny that. It kind of seems like you think subsidies are good things, but that this subsidized insurance is bad, so thus it can't be a subsidy. But it's easy to square this circle: sometimes subsidies are good but often they aren't.

To your last paragraph, I think you just aren't aware how much other states are also struggling with this problem. You seem to live in California, so it's understandable to be most aware of what's going on in your own state.

I think that taxes can and should be funded through the single tax on property proposed by Henry George as opposed to sales or income tax. Widespread adoption of private cryptocurrency may be sufficient to enable adoption of the single tax system.

Georgism is orthogonal to cryptocurrency.

Like how is cryptocurrency even related to consolidating all taxes into one on the unimproved value of land, this seems like such a nonsequitur.

Cryptocurrency makes direct cash-like payments possible over the internet more easily. It makes collection of sales and income tax more difficult to collect.

More easy? Crypto is significantly more complicated than modern banking/credit cards. The second part is true though.

Is the 2nd part true though? In the US sales taxes are mostly applied at the state level where the governments don't have particularly privileged access to the banking system and is enforced by being able to physically go to the merchant in question.

Bitcoin would probably make that easier for the government as you could now track merchants sales volumes directly on the blockchain.

For the federal government being able to deputize the banks to flag suspicious transactions certainly helps find tax avoidance, we've had an income tax way longer then we've had credit cards.

more easy? requiring ever increasing computational requirements to move money?

we figured out bank transfers decades ago, and there is no exponentially increasing challenges with a wire transfer.

Banks and centralized payment systems are natural monopolies, so they jack up their fees as much as possible and become weak points for regulation.

A bank transfer costs me 15$ bucks, more than 10x the cost of a bitcoin transaction right now. That's incredible when you consider that the bitcoin is millions of times less computationally efficient than a bank transfer, but not so incredible when you consider that banks need to cover the cost of air conditioned boxes full of bean counters.

Want to set up a bitcoin account and accept bitcoin? Boom, done. You can set up a script to automate it. It's a an API. You can accept bitcoin with a public key, you can authenticate ownership of that key with signatures, and there is no risk of anyone using that public key to pull money out of your account.

Want to set up a bank account and accept bank transfers? Well you are gonna need to go in person, and don't forget your drivers license, your passport, proof of residence, and your mother's maiden name because that's your only form of identification and when this security model inevitably fails it's called "identity theft" and it's your fault. Oops, they're only open during business hours and weekdays, better luck tomorrow! Not to mention that you might get your funds frozen if you sneeze too hard.

I guess a bank is easier if you're over the age of 40 and can't learn new things

> They're deliberately undermining the mechanism that funds our shared existence. They want the benefits of living in society without contributing to its maintenance.

So I pay income tax, property tax, road tax, sales tax and even my savings I have to put in the hands of the govt which has been unreliable, corrupt and mostly serves the interests of the few over the interests of the many regardless of which political party has been elected.

Indeed. Was Beepboop arguing that inflation is the mechanism that funds our shared existence?

Why do you think cryptocurrency at its philosophical core enables wealth hoarding? If I don’t pay my property taxes, I lose my house, regardless of how much cryptocurrency I own.

Why can’t we have a separation of money and state where the state receives its due through taxes and is unable to inflate the money supply?

I'm having trouble making sense of anything in this comment.

I think he's just advocating for the idea that money (and monetary policy) should be separated from taxation, like the gold standard. Or maybe an imaginary silver standard, where the citizens hold the precious metal directly (and pay taxes in it) instead of just having the currency backed by precious metal.

Just because the government and banking institutions can't easily censor and restrict the money supply, doesn't mean they can't collect taxes on it. In a word where crypto is the dominant form of money they can just throw you in jail if you don't pay taxes.

If you need to pay X amount of taxes, maybe the government should explicitly collect X amount of taxes transparently instead of collecting Y amount of taxes, selling a bunch of debt that needs to be financed at a later date, inflating the currency, etc. Because the more transparency in a democracy, the fewer ways for politicians to hijack taxation.

Cryptocurrency doesn't enables wealth hoarding at its philosophical core, as demonstrated by some that have a pure linear emission, like 1 coin per second forever, with no benefit whatsoever for their creators.

The US government has not been unreliable. It has been very much the opposite of that, for a very very long time. That's why it has the best credit that any entity has ever had.

Sometimes I feel like a lot of you want to break things just so that you can then say "See! I told you it was broken!". I have very little patience for this.

By having "the best credit" you mean literally it can borrow money at low rates?

What does that have to do with the fact that most citizens are struggling financially and fewer people than ever are able to buy property?

Being able to borrow at low rates is only one outcome of being a very reliable government (to this point).

People struggling financially and being unable to buy property are policy choices that have nothing to do with reliability.

To illustrate: If we had never created the Social Security program, a lot more elderly people would be impoverished, but that wouldn't be unreliable, it would just be a different policy choice. But now that we do have the Social Security program, if people start being unable to get their payments, then that would be unreliable.

The distinction is: Are we keeping up our end of the bargains we've made? Historically, we have done so to an extremely high degree, which is why our credit is very good. And not just in financial terms. The current administration seems hell bent on ruining that long history of reliability, and that's very bad. But it's just not true that the US government has been unreliable historically.

They too are undermining our existence they just do it in a different way. I'm not sure which kind of parasite is more offending to the people doing all of the work.

To stick with the topic, the author argues for voting "openness may be too much, as we can see how each and every person votes, and thus can influence them" How is this different from putting a gun to your head and having you transfer your crypto currency to my account?

I find the topic really boring and unproductive. We have a few dozen kinds of robber barons and no amount of superficial conversation is going to change anything.

Everyone agrees really, everyone wants more for themselves or for the things they consider important.

The thing I'm curious about is what it should actually cost to run a country. Can we even simplify the topic to a point where the different configurations are few enough for mere mortals to understand?

I don't see how I'm to judge your road tax without understanding that. You can do roads on many different scales. 200 years ago the people living in a street had to organize the pavement of it. The road to the next city was financed on a city level.

Libertarians are like house cats, they’re convinced of their fierce independence while dependent on a system they don’t appreciate or understand.

It's true, am a cat.

But tax is coercion. Make it voluntary, and people won't pay it. Despite this, a lot of people are fine with it because it gets them roads and state pensions and healthcare or whatever. Some people want it to be increased, thereby volunteering to pay more and volunteering others to do the same. Everything is based on force, and the social contract is a kind of Stockholm syndrome.

> social contract is a kind of Stockholm syndrome

One could always retreat to wildlands of Siberia and live their own happy life away from roads and reddit. One would not survive for long without the same society, which produced the survival knowledge, but one could at least try.

> Everything is based on force

How do you reconcile "what's stopping me from hitting you with 5 euro wrench" without the fantasyland non-aggression principle? Without that "social contract" and with absolute personal liberty, any rights/liberties/freedoms exist solely to the extent one themselves can enforce them against the mighty five euro wrench.

Outside cats, at least, are independent. It's evidenced by the existence of so many stray cats. They have leverage that other pets don't.

They don't need to understand the whole household. They only need to understand if they are being mistreated, in which case they can choose to leave and hunt vermon until the end of their (very few) days.

So I think it is better to be a housecat than a lapdog at least.

Reply on news.ycombinator.com