What is Bitcoin's deeper significance? I don't know much, but here are some sketches.
1) Bitcoin has the potential to destroy the tools of monetary policy.
2) Bitcoin has the potential to hide taxable income from governments.
3) Governments with dwindling tax bases may react by printing traditional currency, hastening the flight to Bitcoin in a vicious cycle.
4) Traditional currencies may collapse as people rush to convert them into Bitcoin.
5) Unable to tax coercively, traditional governments may collapse.
What might replace them? Toll roads and kickstarter philanthropy in Randian democracies?
(Is this in the ballpark for Bitcoin's potential impact or not?)
If we're talking about deep significance, I also think Bitcoin could be a tool to help support world peace (hear me out!)
My understanding of one facet of the UN is that by promoting trade between UN nations it makes war between these nations more costly and difficult thus reducing the chance that war would break out.
If correct a globally accepted and popular currency which can be freely transferred across borders between citizens of every nation could help depopularise outbreak of war between nations.
You can criticise this view in many ways, but I think it's undeniable in principal that open trade between nations would serve as a barrier for initiation of war and conflict. And raising barriers against this behaviour is only a good thing.
In the WW2, USA was safest place in the reasonably-developed world. If you were wealthy and had the ability to move your assets from one country to another, USA was a safe bet for you. Obviously, the movement of wealth was also convenient for the host country's government. Nowadays USA may not appear as the only good place to be, but if you understood the underlying idea of the above reasoning, you may also understand that at any moment a conflict/war can induce a differentiating factor for perception of safety. If the environment becomes risky with a war to be unleashed, you won't risk keeping your wealth in a system whose very existence is endangered, you'll move to a greener pasture. A greener pasture, preferably in a powerful country, with no risk of having a war carried out on its territory and therefore with a minimal exposure to any conflict.
Those greener pastures usually are in the very countries that seek war in the first place. The war itself is a profitable business in many ways.
Bitcoin makes no difference against this. Actually in the regard to world conflicts, Bitcoin carries an insulating effect. It makes you more mobile and more willing to get yourself to a safe and peaceful place to live (and spend your Bitcoins there).
I don't understand why people think Bitcoin necessarily leads to governments collapsing. Bitcoin can be regulated in many ways:
1. If you buy a house you must show evidence that you earned the money. You can't earn all your Bitcoins Breaking-Bad (or Silk-Road) style and expect that the government will think your new-found fortune is ok. Thanks to the blockchain you kind of can't lie too much, unlike, say, cash.
2. If the government wants to ban certain activities it can do so easily. Suppose that the government wants to keep its citizens from gambling or from using mixer services, it could declare that it won't recognize Bitcoins that passed through those services as legal tender. Good luck paying property taxes with your tainted bitcoins.
... and so on. Things are not that different. In fact the blockchain may mean that the government has more, and not less, access to information: for example governments generally can't access information from other countries except in rare occasions. With Bitcoins that information is accessible by default.
Now what the government can't do with Bitcoin is play games with the money supply. People in places such as Argentina could perhaps tell us why that would be a good thing.
Except that finite money supply in a growing economy with positive interest rates is both deflationary and a driver of increasing inequality.
Sensible active monetary policy and "lender of last resort" activities are vital to functioning modern economies. That's why they had to be enacted in Europe during the financial crisis despite not being properly provided for by the existing Euro framework.
The inflationary economy already created huge inequality. Do you think all Fed's printed dollars are equally distributed to the poor? In reality, they all go to banks that loan them to the poor. Increasing prices on energy and food + mortgage and other credits prevent poor people from saving money and becoming economically independent.
Bitcoin holders, on the other hand, have to sell bitcoin below tomorrow's price to eat something today. It is reversed trend: the more people want bitcoins, the more "equally" they will become distributed. Everyone who holds and doesn't spend bitcoins does not participate in the economy and thus doesn't earn his wealth yet. But to earn it he has to part with part of his stash, thus leaving less for himself in the future.
( I am rather trying the argument, rather than actually believing it myself.)
There are not only BTCs, but also forks and other crypto currencies. So if BTCs hording becomes a problem the incentive to adopt one of the alternatives will rise. Diminishing the value of BTC relative to some other currency and therefore suppressing ( at least to some extend) hording.
Hoarding (saving) will never become a problem because the value of currency is derived from all savers willing to hold it. Why would I store money in an altcoin if Bitcoin has bigger number of savers and I project that it will only increase (and thus increasing my own wealth)?
"Tainted Bitcoins" can be trivially laundered and mixed in with normal Bitcoins. This will only become easier in the future, and conceivably make it into the protocol itself with something like ZeroCoin.
It's funny but there is a lot of similar discussion on the other side of the fence, too: "Now that the FBI has a hold of DPR's Bitcoins, how do we blacklist these tainted Bitcoins so that we don't fall for honeypots/undercover agents?"
You can't, unless you want to fork the blockchain and start a new genesis block sans the Bitcoins you don't like, but that would be disasterous and no one would agree to it. It would defeat the whole premise of Bitcoin—why are your Bitcoins more special than my Bitcoins?
Truth is, tax collection works largely on the honour system, cooperation from employers, and through audits/investigation. Bitcoin is no different. The only real benefit the blockchain could give is to help automate some of the consensual tax collection further.
You are insisting on your own definition of tainted here. Your parent comment is using a definition where coins that pass through a mixer with tainted coins themselves become tainted. An aggressive party might do much the same thing with a service like Zerocoin (that is, once it watched a tainted coin go it, it would assume that only tainted coins can come out).
But anyway, the government accepting any bitcoins for tax payments should probably be considered a win for the ecosystem.
> You are insisting on your own definition of tainted here.
How do you figure?
> Your parent comment is using a definition where coins that pass through a mixer with tainted coins themselves become tainted. [...]
1. The aggressive party would have to stop accepting any coins that come from Zerocoin altogether.
2. Mr. Taint can go about his day sending Satoshi's to random addresses in the blockchain, effectively tainting every address he can find.
3. It would require collaboration from every single Bitcoin service, otherwise a single non-collaborating service would end up mixing tainted coins with non-tainted coins over time and the whole population would become tainted.
Because under a stronger definition of tainted, they cannot be trivially mixed, they pass on the contagion.
The US government can ostensibly stop accepting Zerocoins. In that event, so would any party that wanted to trade with them. There wouldn't be any need for a new blockchain, possessors of clean coins would simply have to decide how much extra value that part of ecosystem provided.
That last sentence mixes up with your point 3, tainting all the coins would be a collaboration between owners of clean coins and service providers, there is at least room for owners of clean coins to be careful with them.
2. If the government wants to ban certain activities it can do so easily. Suppose that the government wants to keep its citizens from gambling or from using mixer services, it could declare that it won't recognize Bitcoins that passed through those services as legal tender. Good luck paying property taxes with your tainted bitcoins.
Bitcoins aren't actual "things", they're just values that get debited from an account and credited in another, so you can't have tainted bitcoins.
You could have tainted addresses, by checking if there's a path between a certain address and the blacklisted ones,
but then anyone could taint anyone else's address by just sending them a Satoshi.
That would be very expensive for government. First, it will basically give away a lot of money and invite 100 times more people and capital in the bitcoin economy. Then, after selling its stash it will affect the price much less (because it will also have been driven up by many additional speculators) and simply earn back much less USD than they have spent.
Of course, it will destabilize prices for some period of time, but only at great expense to itself and making millions of people aware of Bitcoin and thus accelerating its long-term growth.
You are saying you don't think government manipulation would have negative (long term) impacts. That's a separate thing from the government not being able to play games with the currency.
Part of the reason I said 'a few billion' is that several governments can afford to spend that, no problem. If they think they are facing an existential threat (as you seem to believe), it is basically a certainty that they will try it.
As a speculator the government is no better than any other speculator. It will compete on par (more cash is simply more risk). And big players trading bitcoin is a good reason for many more players to jump in this market. The governments are unique in their ability to apply guns. When guns are not used, it's no different from big investment firms playing on markets.
If things continue going as they were for the last years: government printing money and people trying to move savings anywhere but in the currencies, then yes, all printed currencies will become worthless and if people run to Bitcoin, it will be impossible to have "budget deficits" and very hard to tax many people.
Without government people would have to find ways to voluntarily pay for things they like to have. E.g. roads, insurance etc. Some roads will be paid, some roads will be sponsored by merchants that do business on the streets, some roads will be owned by big malls etc. The market is different from the state not in that it does something differently, but that there are millions of ways to satisfy demand instead of just one.
Bitcoin is not a threat to centralized currencies, there is room in the financial world for both. A government controlled currency has some clear advantages, relative stability being one of them. I wouldn't accept paychecks in bitcoin for the same reason I wouldn't accept paychecks in gold bullion, although both have a demonstrable value, government issued currency provides a stable way for the average person to store wealth at scale. Although everyone sneers at the federal reserve, their financial engineering plays a real role in perpetuating western affluence (though it clearly has serious problems; a topic for another day).
The significance of bitcoin is that it's an unrestricted option for anyone at any time. Just because you won't accept your paychecks in bitcoin doesn't mean you won't want to use them from time to time, if only for the freedom to bypass the astonishingly ubiquitous banking institution. I'm not even talking about anything illegal (though illegal doesn't always mean wrong), I'm talking about the minefield of wealth draining fees and bullshit (frozen accounts, chargebacks, spending limits, really slow transfer times) that bitcoin lets you avoid when you want to.
None of those is remotely in the realm of possibility, except maybe #2 and the difference in scale (at least in the US) between total tax receipts and the float of BC is so vast that it limits it to a very small percentage of the total. All bitcoin currently in circulation amount to 0.1% of one year of US tax revenue ($2.5T v $250M).
Two and a half years ago 1 BTC was 200 times less valuable - around $1. Give it two more years and it will be 10% of US tax revenue. Than everything will be possible.
The only thing that governments would need to do to stay in business is to tax things that can't be hidden, like land and real estate. I'm hoping they go with a single land value tax.
Then, governments cannot longer be "socialistic" by promising something for nothing. To do new awesome "government service" they'd have to raise taxes and then the lie will become obvious. Since no one really wants governments if they don't get free stuff, governments will quickly lose any moral support and will be viewed as plain thugs.
Yeah, sovereign debt will become a thing of the past and that's a good thing. Not sure how this is related to socialism though, at least in the strict sense of the word. It's more about short term thinking than anything else.
So you are saying you have evidence that without government you necessarily end up with pirates running around with guns? Remember that Somalia is in this state due to utter failure of government in the first place.
Right - the government stopped working, and people realized they don't need it. Mysteriously, this has lead to decades of chaos, despair and starvation rather then an economic boom.
That's what I always think when I read about these sorts of problems in Japan and Korea. There's a tremendous amount of pressure generated by the overwhelming influence of the big companies, and the shame felt by those who aren't given validation in this system must be acute (or at least it sounds like that for Korea, I don't know as much about Japan.)
Anyway the most common reaction may be to accept the judgement that you feel has been passed on you - that you are worthless - but at some point someone has to come along who refuses to accept that, and realises that the whole system is founded on narrow-minded bullshit. Then that person can build a challenger to the chaebol - one fueled by fresh thinking and real inspiration.
I mean look at LG and Samsung. Where's the passion and love in their products? Raw technical competence and business acumen might lead to limited success, but these companies seem completely soulless. At the end of the day, the world will never love a Samsung like they do an Apple. No matter how big they get, they'll never be able to make it to the next stage, where they actually inspire people and have devoted, passionate fans. So the space for alternative approaches within Korean culture seems (from an outside perspective) huge, even if the first steps are going to be very hard.
That is one type of policy. But if all female applicants are not "fit" for the school, you get all male and zero female.
So the other kind of fair policy (which is kind of like affirmative action) is to ensure X number of a particular group of applicants must be accepted.
Let me tell you how that turns out ... first hand (from a real experience).
An entity in Australia called DSTO started thrusting women into management positions back in the early 90s - so they could say they had 50% (or as close to 50%) of women in management roles. I had the misfortune of working with a few of the bad ones.
The ones that were capable (ie. competent) were great to work with, but there were some that were REALLY, REALLY bad. People laughed (or cringed) when the bad ones did their job - and it was obvious they were inept. It was so bad that I would consider these few women to be the worst I have -ever- seen (in 20+ years of a working career).
After a period of time, these women cracked and left because they could not cope with the situation. If anything, I blame the management for putting the wrong people in these roles and emphasising their inability. If anything, it may have backfired and created a perception that women just can't do the job (which is far from the truth). I remember them being away frequently on training, so there was no apparent lack of support that I could see.
Unfortunately, that's what you get when you play numbers games. You should NEVER, EVER promote anyone because of their race, religion, colour or gender... Nor should you discriminate against someone for those reasons.
That's what you get when you play numbers games poorly.
A better way to do it is to maintain the same admission standards for everybody, but actively seek out more applications from women. It'll indirectly raise the number of women who get admitted, without distorting things in the way that you describe.
>A better way to do it is to maintain the same admission standards for everybody, but actively seek out more applications from women. It'll indirectly raise the number of women who get admitted, without distorting things in the way that you describe.
Not necessarily and it could certainly lead to distortion due to simple error in evaluation.
If you encourage applicants from an underserved pool, do you believe the average quality of these new applicants from the pool will be equivalent to the average quality prior to the new programs?
It is hard to believe that the incompetent women managers were the only one left on the market - maybe they just did not try hard enough to find the good managers?
I like what Apple is doing, but I hope Microsoft can build a viable competitor ecosystem. I do think Apple is good at beautiful, approachable products, but I think they make so many sacrifices in terms of power and usability to achieve it that we need a strong alternative from Microsoft.
The iPad Air looks amazing for example, but compared to the OS-level features offered by tablet Windows 8.1, I think it's lacking.
The author's been reviewing OS X like this since 10.0. Probably involved with Apple's OSes since even further back. It's clearly become something dearer to him than a child.
Looks lovely. I would be really interested to own one of these if I had the money to buy surplus devices at the moment. Trying to see how using it solely vs an iPad would be interesting, 8.1 is clearly a more capable mobile OS but I wonder whether the iPad's superior app store would clinch it regardless. Versus an Android tablet would also be interesting.
1) Bitcoin has the potential to destroy the tools of monetary policy. 2) Bitcoin has the potential to hide taxable income from governments. 3) Governments with dwindling tax bases may react by printing traditional currency, hastening the flight to Bitcoin in a vicious cycle. 4) Traditional currencies may collapse as people rush to convert them into Bitcoin. 5) Unable to tax coercively, traditional governments may collapse.
What might replace them? Toll roads and kickstarter philanthropy in Randian democracies?
(Is this in the ballpark for Bitcoin's potential impact or not?)