Government can shut down the cryptocurrency experiment any time it wants. Government money creation worked because the government insists you pay taxes in their money and they have people with guns. Crypto exists as long as governments wants it to and no longer.
There is a great deal of triumphalism in the crypto-world, because it has made a bunch of people rich. People who get rich virtually always think it is because they are great people. They feel empowered and so on. (And, according to the research, generally become selfish jerks with a reduced empathic response.)
The simple power relationship is this: Any government can put the hurt on crypto and largely shut it down in their country simply by criminalizing it and having their taxation folks watch the entrances and exits.
Crypto can be badly hurt by three governments: China, the EU, and the US, in exactly the same way. Crypto is arguably in violation of a host of security laws as it stands, and could be made more illegal any time a regulator or government chooses to.
People with guns beat people with cryptography. Code is not law, and the people who thought it was were fools. Law is what people with something approaching a monopoly on violence in an area say it is, and nothing else.
Peer-to-peer financial networks are a good idea: Cutting out banks for exchanging money is a good idea. (Bitcoin is a bad way to do both, but that’s not this article. Other coins do a better job.)
But it must be allowed by those people who control organized violence, and if they choose not to, all your technical wizardry will not save your networks, even if some crippled, black web version remains.
Nor is money creation quite what you think it is. Money exists mostly because powerful people want to be able to coerce the non-powerful through either taxation or debt-farming. Other benefits are incidental, if appreciated.
That doesn’t mean that crypto can’t, in theory, grab money creation from banks (though co-optation is far more likely). It means that, like banks, whether crypto can do so rests on whether they can cut a deal with, and prove their usefulness to, state-sanctioned, organized violence.
This is all it is ever about.
The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.
Ten Bears
Just ones and zeros. Yes/no, true/false, it’s either there, or it isn’t.
Stirling Newberry
The idea is that blockchain will do better than management.
Fred
I, too, consider Bitcoin a bit of a scam, a pyramid scheme. That said, your postulate, Ian,that governments can control what crosses their borders has never been close to true. It’s never been true with drugs, such as marijuana. It won’t be Trump if Trump decides to raise tariffs on imports; the affected countries will simply drop ship through a different route.
ClosingBoss
Excellent article obviously there is some one out there just as smart as me or willing to share some intel. The crypto experiment is enhancing and reinforcing existing fiat currencies to remove economic fiat collapse from equation. Creating the perception of wealth by adjoining the digital experiment. Well done on article good job.
ClosingBoss
The argument that the crypto currency market is a 200 trillion dollar market implies that local fiat currencies will be traded for crypto currencies in buy sell orders. Creating an economy in the digital arena not only enhances existing fiat currencies it stabilizes the us dollar as world reserve currency. The assumption that government controls crypto currency is so true because they control the internet and can cancel any algorithm based application or confiscate or reverse it. The crypto currency market is created by design and thankfully the white hats behind the scenes are creating a solution to conflict with any negative agenda which can destabilize any local fiat currency in any country.
Rich
The author and the respondents already know the US dollar has been a fiat currency for decades just like cryptocurrencies have been fiat since their inception. This fact was lost most recently on the esteemed Jamie Dimon CEO JPMorgan Chase as evidenced by his public comments on the subject; Chase a bank the policies and procedures of which are protected by the exclusive right to violence exercised by the US Gov’t. However, even Jamie recognized society is being forced by him and others into a cashless system, perhaps not as fast as India, as bank CEOs like Dimon eliminate ATMs and reduce the number of human tellers and bank branches. VISA also is actively incentivizing vendors and businesses to coerce consumers into abandoning cash altogether by making those vendors refuse cash transactions. And the people who suffer the most are the poor and impoverished who neither qualify for electronic credit nor possess the capital to “purchase” cryptocurrencies. This phenomenon reminds me this “evolution” in finance is not so far removed from “script”system employed in company coal mining towns of West Virgina and western Pennsylvania. In short, “script” was issued as payment substitute for cash wages because the foodstuffs and consumables purchased in the “company stores” and the rent paid for the company housing could only be purchased with the company “script”. While the men, fathers and teenage sons, labored in the mines during the day when the company stores were open for business, the women, mothers and teenage daughters, were tasked with visiting the company store to purchase food and household items. This fiat system made these women and their daughters available to company officials and security guards for rape, sexual assault and abuse whether or not sufficient script was available for the purchases. Esau script. We’re already there again in many communities.
Hugh
Money has value if the people in a society find it useful enough to say it does. Violence is not required. Taxation is not required. Weimar hyperinflation undercuts the whole MMT equation of currency value with taxation. The German economy was not at full capacity or employment so inflation should not have occurred. At the same time, taxation and the government’s monopoly on violence were irrelevant to its progress.
I see rather two arguments here. A currency has value as long as people say it does and have the economy and resources to control their own fate. That’s the ultimate arbiter. As the greenback experiment during the American Civil War showed though within this limit, it was on the spending not taxation side that fiat money could be made and enforced. As witnessed by Section 4 of the 14th Amendment: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
The questions I have about crypto-currencies are do they do anything socially useful and at what expense. So far I see their social benefits as minimal and their costs as astronomical.
Rich
https://dissidentvoice.org/2017/12/runaway-train-towards-full-digitization-of-money-and-labor/
V. Arnold
Crypto-currencie’s potential is huge; but given the violent nature of capitalism; it will never be allowed in an uncontrolled manner.
At this time I’ve seen no evidence crypto is anything but a Ponzi scheme.
Orwell said it best: The future is a boot smashing a human face forever.
V. Arnold
…currency’s…
realitychecker
@ V, Arnold
You seem to have violence on your mind a lot these days, sometimes completely without reason.
How do you feel about the violence inherent in the child and other open sex trade exploitations in the sex tourism capital of the world, where you have chosen to spend your life?
Any thoughts about the prostitute who just died falling from a hotel balcony where she was having ‘unusual’ sex with a sex tourist? She was a cute young girl of pleasant disposition, it was reported.
Did you know her?
Hvd
Ian,
Can you please do something about RC’s constant indulgence in ad hominems which distract from and subvert almost every thread. I don’t think he should be banned – he has a viewpoint that is worth hearing but the attacks like the one above, unrelated to the discussion at hand tend to shut down any real discussion.
Thank you for consistently raising issues that encourage thoughtful discussions.
Ed
I have read, though don’t know if it’s true, that one of the elements driving the bitcoin bubble is Russian oligarchs using it to evade the sanctions being placed on them by multiple Western governments (including the US, though Trump is failing to enforce it). If it’s true, then there will be at least one Government that endorses it, and then some Governments with incentive to squash it.
The Stephen Miller Band
Great post. I agree.
In the same sentiment, a Hacker, wittingly or unwittingly, is by definition a Government Employee. Which Government is the only question.
When it comes to Hacking & Hackers, Mr. Robot is more a fiction than the audience is led to believe. Otherwise, by now, the world would have been brought to its knees.
The Resistance cannot happen online in the Virtual World. The Virtual World is Containment on Steroids.
The Stephen Miller Band
My comment necessarily assumes Bitcoin is the currency of Hackers. It’s a safe assumption.
The Stephen Miller Band
Digital gold: Why Hackers Love Bitcoin
So, if I’m a criminal, I’m going to create a Moty Cristal if one doesn’t exist so he can negotiate on my/our behalf and yet pretend he’s doing it on the “client’s” behalf.
realitychecker
@ hvd
It would be a resounding wonderfulness if you could occasionally pipe up with similar requests regarding the well-known group here who take obvious delight in ganging up and slandering me with the most heinous and untrue accusations and labels. As V. Arnold did just yesterday, and has innumerable times in the past.
Thank you so much for your one-sided concern. 🙂
P.S. You might sometime care to invest a bit of energy to note who strikes the first blow in these exchanges. HINT: It is NEVER me. I never bite first, but I always bite back. That is as it should be. If you don’t want the horns, don’t try to fuck the bull.
Ivory Bill Woodpecker
HVD, just think of this as an amusing place to go cyber-slumming, and lurk and smirk at the antics of the adherents of both ends of the Horseshoe.
http://rationalwiki.org/wiki/Horseshoe_theory
No need to bother the slumlord. 😈
Ten Bears
I find it all rather fascinating. Literally a virtual cesspool. A one stop shop for NAZI propaganda.
I was pretty upset with myself for rising to the bait a couple of weeks ago, but to my observation all the talk of violence around here is coming from those least likely to know anything about it.
When the bowel vacation makes contact with the oscillating unit, we’ll find out.
Willy
We had a variation of the blockchain concept where I worked. Everybody had instant visibility of who was working on what and who had the greatest impact on the bottom line. You’d think a system like that would result in minimal yet fair management.
But our insecure management easily subverted that system, because they had the power to do so. They used a variety of corrupt ‘power techniques’ to disable or remove top employees who they believed were a threat to their own incompetent selves. Everybody knew what was going on but nobody publicly complained because in that place the power one held was everything.
realitychecker
@ Ten Bears
We can all have differing views about whether and when violence is OK, I guess, but the view that it is NEVER justified, or doesn’t really exist and happen no matter what we think about it, is just childish wishing.
E.g. I can’t ever condone the violence you have spoken of where you brag about unleashing 17 hunting dogs on an innocent bear before you execute it from a safe distance. You think that’s good and justified, but I don’t.
We should still be able to discuss the issues, though.
Webstir
Ian, you state:
1. “Law is what people with something approaching a monopoly on violence in an area say it is, and nothing else.” And then,
2. “Money exists mostly because powerful people want to be able to coerce the non-powerful through either taxation or debt-farming.”
This seems redundant. Money is law. In any form it takes, money is a promise that is backed by state sanctioned violence. Therefore, I think you entire submission could be boiled down to this:
Law is what people with something approaching a monopoly on violence in an area say it is, and nothing else. Money is law. Therefore, money — including crypto — is what people with something approaching a monopoly on violence in an area say it is.
The poor could of course exert this “monopoly on violence” in order to redefine the conventional definitions of law and money. Indeed, they have in the past. It’s called a general strike.
Ten Bears
You’re a fucking liar. I’ve never shared my bear-hunting experiences here, and I don’t use dogs.
You are a fucking liar. Want to step outside?
realitychecker
@ Ten Bears
I’m a liar????
I’m on my way out to see the Three Billboards movie, but when I get back I’m going to dig that EXACT quote out and shove it in your drunken face.
That’s a promise.
And when will you learn that there’s nothing more ridiculous than threatening violence to an Internet antagonist? C’mon Beers, eat my liver, I’m waitin’ for ya near the ticket window lol.
subgenius
France just put in for Bitcoin controls…
Also, this:
http://weis2017.econinfosec.org/wp-content/uploads/sites/3/2017/05/WEIS_2017_paper_21.pdf
Peter
Bitcoin is moving from being a coal based currency to a hydro power enterprise. The Chinese are shutting down their bitcoin miners because of the huge electric drain estimated at 24 Terrawatt hours total and because of the instability the currncy produces. Quebec Hydro is actively recruiting these mining operations offering cheap power and natural cooling for the server farms in the frozen north.
Libertarians may have begun this experiment but the commies have seen the potential to use this currency system in their Marxist NWO. It could potentially be used to destroy national currencies subduing independent nations with one world currency to compliment one world government.
realitychecker
@ Ten Bears
Back from a very good movie, and GUESS WHAT I FOUND:
“realitychecker permalink
August 27, 2017
“If you were to talk to me thus on the street, I would rip your balls and feed them to you.”
Yet another Internet tough guy lol. Would you have your seventen dogs to back you up?”
This comment was responding to your offer to rip someone’s balls off. So, obviously, the quote I’m searching for was prior to that. And no refutation from you on the rest of that comment thread.
But at least now I know the quote I promised you, the one THAT YOU CALLED ME A LIAR ABOUT just above, pre-dates August.
I’m happy to go back further and find it, unless you prefer to offer a very gracious and humble apology right now. 🙂
@ Che Pasa
As I scrolled through last summer’s comments, I also came across ANOTHER time you slandered me with a fabricated quote, and I challenged you to provide the actual quote, and you never did.
JUST LIKE YOU ARE DOING AGAIN RIGHT NOW!!!!
Where is that fucking quote, Che ?????
Some of you people here are really beneath contempt. You love to take cheap shots, with no regard for the truth. I’m happy to shove it in your faces. 🙂
Peter
@RC
I see why you don’t have time to discuss other topics, Mud-wrestling with morons is tiring and time consuming.
realitychecker
@ Peter
LOL You got that right.
realitychecker
@ Ten Bears
OH SHIT, TEN BEERS, HOW VERY FUCKING EMBARRASSING FOR YOU!!!!!!
From Ian’s August 8, 2017 post, Book Review: Confucius and the Chinese Way:
” Ten Bears permalink
August 9, 2017
Japanese eat shark fin soup, slicing a shark’s dorsal off before dumping it back into the ocean, alive, to sink to the bottom of the ocean, alive. Anglo-Europeans eat goose vomit. India Indians eat brains culled from live monkeys. I have eaten the heart of a bear I had just shot, after seventeen dogs ran it three miles up the side of a mountain.
Not butchering rabbits, my friend. No one group of people – there is only one race: the human race – holds the corner on cruelty to our cousins.”
Let me repeat your words, you fucking liar: “I have eaten the heart of a bear I had just shot, after seventeen dogs ran it three miles up the side of a mountain.”
YET, just above, you called ME a LIAR, for saying you have said that. You say you never did or said any such thing. You threatened me for saying it.
Credibility is all we have online, and when we destroy someone’s credibility, we have effectively killed him online.
You tried to destroy my credibility by pronouncing me a liar, but I have just destroyed yours instead. Either you were lying then, or you were lying today. Either way, you are a liar.
You should have just apologized when I offered you the opportunity hours ago.
You still owe me an apology–are you man enough, are you ethical enough, to give it now?
Don’t make me come there and “rip your balls off,” as you love to say lol.
Do the right thing now, and we can just move on. I don’t have any real problem with you, except that I don’t like your hunting methods and I will destroy anybody who impugns my integrity and good faith the way you just tried to do.
Otherwise, I will just keep torturing you with this, the same way Che Pasa will get tortured for his repeated lies about me (Which reminds me,where’s that fucking lying quote you tried to hang on me, Che Pasa?)
Too many here have deliberately chosen dishonesty as a regular practice in lieu of honest argumentation. If there is ever any reason to ban ANYONE, as many cowards here have urged Ian to do to me, it should be for LYING, not for making unpopular (to snowflakes and Dem slaves) arguments that are made in good faith. I hope Ian takes note. I really do. People like that are not an asset to this fabulous blog.
Cheers, Beers. 🙂
realitychecker
@ Pasta and Beers
Where are you disgustingly dishonest cowards now? Hiding under your beds?
Come out, come out, whatever you are lol.
Maybe you were banned because Ian realizes that a true market place of ideas has no rightful space for deliberately dishonest, unrepentant liars?
Ivory Bill Woodpecker
This site, which I once respected, now reminds me of quarrelsome brats on a playground, with a negligent principal.
How long, I wonder, before it finally sinks to the level of, oh, The Crawdad Hole?
realitychecker
@ Ivory Bill
Are you here this morning to support the right of obvious brazen cowardly liars to do their thing without pushback?
If so, look to your own loss of ‘respect’ from anyone who gives a damn about the truth.
Thanks for your (cough) contribution to the discussion. 🙂
Ivory Bill Woodpecker
Aaaaaand the loudest brat of them all is heard from.
I’ve slummed enough to amuse myself for a while, and to confirm that the Horseshoe Theory still describes most of the denizens of this cyber-slum well.
I leave you to your simian phallic competitions.
realitychecker
Good riddance. Go back to arranging your doilies.
You only come out when the Dem slaves are losing.
Willy
It’s just play wrestling. Like puppies practicing for the real thing. When the real thing comes, we’ll all storm the castles with our pitchforks and torches, all rolling together in our hoverounds.
realitychecker
@ Willy
This could be an important learning moment for you. Don’t waste it on more silly sarcasm.
You have clearly presented a case where someone attempts character assassination, and is shown to be an unworthy liar. The whole case is laid out right in front of you, NO EFFORT REQUIRED.
Take a stand, for once in your life.
Do you favor the liar, or the one who pushed back against the lie?
Does the fucking truth matter to ANYONE around here anymore?
Serious query.
realitychecker
Here’s a concrete demonstration, from the recent “Violent People” thread, of how honest, ethical people act when they have made a mistake, for all you morons who just don’t know how to have rational and respectful discussions:
” Tom W Harris permalink
January 13, 2018
Pssssttt…rc, we’re on the same side (on this particular issue). I was characterizing the Ku Kluxers on this thread, not you. Sorry that I was unclear about that.”
“realitychecker permalink
January 14, 2018
@ Tom W. Harris
Tom, please accept my most sincere and abject apology for misreading you. I really mean that.
. . .
I’ll be more careful about you from now on. 🙂”
Is that so fucking hard? That’s all it takes to keep from appearing to be a deliberate, worthless asshole. Like Che Pasa and Ten Bears look right now.
Take a fucking lesson.
realitychecker
Bueller? Bueller?
realitychecker
These are the folks who arrogantly insist they will magically re-make the world into a perfect one.
What a crock.
Willy
Take a stand, for once in your life.
Basic truths are easy. Complex truths are hard. When complex truths involve religion and politics, and there’s no moderator around, it’s gonna be like bunches of puppies running around loose in a busy china shop.
I’ve tried taking a stand. I’ve talked up the Represent.us organization around here numerous times. It’s the best non-partisan non-profit anti-corruption organization that I’m aware of, which should be right up our alley. Everyone I’d think. Even if they aren’t into revolution and bombs yet, other noisier spinoff orgs may be inspired from such humble beginnings. Nobody else has said word boo about them as long as I’ve been here.
I have a sticker on my hoveround that says “Move bitch, get out the way!” Sadly it only intimidates other hoveround jockeys.
karenjj2
As a practical matter, I wonder if any of the on line poker players (aka bitcoin miners) will be able to exchange their digital “millions” for a tank of gas or a case of water when the power goes out during a hurricane. In my own experience with a grocery store that had a problem with a credit card machine, they simply put a sign in the window: “cash only until machine comes back on line.”
I think too many people have fallen into the digital imitation of the world and are in for a rude shock when the screen goes dark.
realitychecker
@ WillY
WTF are you talking about?
I’m talking about the fact that the commentariat here has zero to say about whether they think liars and character assassins are something they support, or something they oppose, and that appears to be more than anyone can handle.
These candy-asses are gong to save the world?
There has never been a group of more dysfunctional people in the history of the world than the modern left.
Pretending to be the best of humanity.
realitychecker
Gee, Ten Bears and Che Pasta have both disappeared at the same time.
Was it something I said?
Or is it just that overwhelming shame has finally kicked in?
Folks who can’t apologize for their obvious mistakes are the scum of the earth.
Peter
@RC
I doubt you’ll get much shame displayed by these or many other personas I see around the web today. They are relentless postmodern practitioners of nihilism which is the celebration of this type of behavior.
realitychecker
@ Peter
You know, you and I have some fundamental differences in our perceptions of corporate behavior and maybe also environmental issues. probably some others, but I have never had any reason to doubt your intelligence or your honest good faith in what write.
It has been a very painful and completely disheartening experience to have it force-fed to me that the folks on the left who I have always sympathized with and supported just may not be worth caring about.
But, I’m pretty much there now.
That’s my reality check for the day.
realitychecker
Edit: what you write
Peter
@RC
It’s taken me many years to stop sympathizing with these left/liberals who choose to behave the way they do. All of the groupthink issues such as anti-capitalism, environmentalism and especially CAGW alarmism that I accepted as supportable causes needed to be reevaluated in the light of what agendas the activists were promoting.
I thought that even with the errors and arrogance from some of the snowflakes there was a rational and honest core of people with good ideas for a better future. I was fooling myself and as people here show regularly the nihilists are ready and willing to see a third of the earth’s population killed off to protect their interests.
The more people reject their ideas and leaders the more openly they display their desire for chaos and fear to drive people into the arms of their Stalinist NWO.
realitychecker
@ Peter
“I thought that even with the errors and arrogance from some of the snowflakes there was a rational and honest core of people with good ideas for a better future.”
I always thought the same, until recently, but I cannot respect people who are OK living with blatant and obvious contradictions on so many important issues.
If you can do that, you are either an oblivious fool, or willingly dishonest as to at least one part of your belief system. So I point out the obvious absurdities.
I can’t respect people who get offended by that, instead of accepting the moral duty to revise their own thinking.
And the fact that nobody chimes in here with an opinion about the liars Ten Beers and Che Pasta evidences to me that lack of moral character has become too widespread for a decent person to tolerate.
Willy
In the wingnut world excess only happens to the other team. One’s own chosen system cannot fail. It cannot even be failed. There is no difference between anti-capitalism and anti-crony-capitalism…
…or anti-communism and anti-crony-communism, if their gate swings that way.
The only way to inject integrity is to clearly explain before punishing, lest the puppy disrespect the hand that’s shoving its nose into its shit.