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Comment by dfxm12 | Hacker News Reader

Bitcoin, in that sense, is anti democratic. It’s based on mistrust rather than trust, it refuses to take any responsibility onto itself – indeed, it doesn’t even have a self to take responsibility onto. It’s nihilistic.

This is an interesting bit of rhetoric, but I don't follow the logic here. The author contends that banks are built on trust and Bitcoins are built on mistrust.

Don't the pages of legislation and regulation prove that we don't trust banks? What about what's happened in Cyprus recently?

Also, isn't the p2p model of Bitcoin the very crux of trust?

I agree Bitcoin has been volatile, but it isn't based on mistrust.

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I don't understand what "anti-democratic" means in this context, so I won't comment on that part. But I think the author is alleging that bitcoin is based on mistrust sort of in the same way that stuffing currency in your mattress is based on mistrust. If that interpretation is correct, he does have a point. One of the features of bitcoin is that it retains the benefits of keeping physical currency while also providing the benefits of digital transactions. But this seems to be uber-democratic, not anti-democratic, so I may be way off base here.

I approach this with absolutely know special authority on the subject but it I were to offer an opinion on why Bitcoin is anti-democratic I would say that it is because fiat currencies are democratic. When a currency is supported by a government that government has some degree of control over that currency and that government, if it is democratic, can act on the currency based on the will of the people. (Obviously we could get into a big debate about oligarchs undermining democracy, etc, but let's skip that for now.)

If a currency like Bitcoin is adopted by too large a population of a given country and becomes a de facto currency it wrestles the fiat currency out of its position and eliminates any democratic control over currencies.

I understand that there are many, many hard-money libertarian types around here who see this and cry, "yes! freedom!" but my understanding of the scholarship on this sort of thing is that fiat currencies are very important for economic adjustments due to shocks. The Euro is showing us what a hard-money environment looks like as a natural experiment for Spain and Greece and it is not going well.

If I am an asset-holder I am a big fan of ensuring that devaluation can't take my riches away but if I am a technocrat trying to build a functioning economy for the long term that can deal will all sort of unexpected events and treat people without assets fairly I want a fiat currency. To me this is where the nihilism comes in, or at least Bitcoin represents an "I got mine Jack" view of the economy. That being said, now it is here and if it gain acceptance the world is going to need to deal with it. (A currency with a permanently tight supply sounds like a machine for creating constant recessions to me, but I'm no expert.)

I dunno...

A democratic government is a government that rules through the will of the people rather than by the might of an institution.

A democratic currency, then, would be a currency which derives its value from the willingness of the populace to accept it as tender rather than from governmental fiat.

Democratic legitimacy comes from the democratically elected government, regulating the economy is accepted by pretty much all democracies as one of the powers of a government. I am not sure if that is what you mean by "the might of an institution."

I think a democratic currency should be the one selected by the democratic government in most cases. Otherwise, if you accept my premise above that a currency like Bitcoin is good for asset-holders, they could use their influence in the economy to force non-asset-holders to use Bitcoin. That would be the opposite of democratic since it would be more wealth = more votes.

For me that's probably the worst part of the article. It's definitely rhetoric, and on brief inspection sounds quite impressive but says nothing aside from the authors wish to inject words like "mistrust", "anti-democratic" and "nihilistic" into the sentence with precisely zero logical support structure. If Bitcoin has no "self" how can it take responsibility onto itself, and how can it be nihilistic? Even when attempted to be engaged with on its own terms the sentence is devoid of insight, and just represents a cynical attempt to adjust the tone to support previous opinions.

I would have to argue that I trust an anonymous computer network and my own ability to keep a wallet file safe over any bank in the world.

At least a blockchain isn't actively out to scam me out of money.

The blockchain is simply a tool. A bank ledger is not actively trying to scam you out of your money either. It is the people involved that do so. There has been plenty of shady dealings around Bitcoin already.

Yeah but you have to trust that Bitcoin's protocol actually enforces the security properties you want. Newsflash: it does not.

> The author contends that banks are built on trust and Bitcoins are built on mistrust.

Sounds very much like the author is attempting to engage in doublespeak...

When someone steals physical dollars from a bank branch, none of the bank accounts are generally affected. This is the 'trust'

What is the difference between someone stealing physical dollars from a bank and the bank inventing new dollars through the practice of fractional reserve banking, other than one practice is legal and the other is not?

1) someone stealing physical dollars from a bank

A human being of machine transports paper and/or coins from one location to another.

2)the bank inventing new dollars through the practice of fractional reserve banking

No paper or coins are moved from one location to the other.

If you think fractional reserve banking in morally equal to stealing people's possessions then you know less about the banking system than you think you do. Fractional reserve banking is a practice that is something like 400 years old so if you want to trash it you have to think long and hard about how useful it must be to the economies of the world to have lasted this long.

Not that I would necessarily agree to it, but I imagine the argument would be that the legislation and regulation is our expectations in writing. We trust the banks to up hold those expectations. When that trust is broken, they are punished.

Or another way to put it might be trust versus faith.

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