Bitcoin and the poor

Friday, 02 November, Year 4 d.Tr. | Author: Mircea Popescu

David Perry is a tech guy with a Bitcoin blog. Quoting from his most recent,

No doubt whatever system does take the current system's place, Bitcoin or not, will eventually need a patch, then another and so on. To that end I suggest that it is not only our duty to replace the current system, whether the bankers like it or not, but that we must also take care to never become the bankers. Bitcoin is decentralized, removing the single point of failure these banks are trying to defend. Bitcoin is small, simple and agile, removing the tremendously large attack footprint the banks have to contend with. Bitcoin is the community and the community is Bitcoin - we're small still and we have the opportunity to determine, to an extent, our own growth patterns. Let's make sure that the community always understands what we're doing here today and recognizes when it's time to repeat history. It's a day I hope is long in the future, but one we must still plan for. We are growing the roots of the monetary revolution, let's make sure they run healthy and deep.

The five hundred or so words preceding the quote are mostly naive ultrasummarisation of vast, poorly understood subject matter - the sort of pointless prose that inevitably composes highschool essays. Sure, the teachers mark it with A's and B's because that's the most one can reasonably expect of teens : dull, uninformed and uninteresting summary-of-summary-of-summary. As long as it's not jarringly incorrect it gets its A.

The same thing happens on the Internet, incidentally, because that's the most one could expect of twenty-somethings and to a large degree thirty-somethings too. So normally you shake your hand in that characteristic hand gesture and carry on, most of the time. Except... in this quote there's plenty of jarringly incorrect.

For one, the notion that "we must also take care to never become the bankers" is poppycock. To stick with the realm of the easily digestible : the old web presses of the New York Times may be replaced with the new digital methods of Trilema or Coding In My Sleep or whatever else. The job of the editor, however, doesn't go away : letters form words still and words need to be curated still. That's the editor, whether his hands are stained with ink and his lungs full of lead dust or merely his wrists ache with CTS and his eyes are pink from the monitor glare, the editor's the editor. And so is the columnist, whether he's an employee or an independent, writing for the newspaper or for his own blog, contrary to what Gregory Ferenstein would like to believe the columnist is never going away any more than people stop using words and move on to using numbers to communicate to one another.i

So, bankers we will be. In this system or that system, old, new, square or round, as long as it's to do with money we're going to be bankers. Sure, not all of us, nobody has to be a banker if he doesn't want to. Sure, we don't have to use the same methods, constructs, processes or concepts, nor are we likely to. But bankers will be forevermore, or to be precise for as long as money exists.

Which, incidentally, takes us to a practical point : all sorts of half-baked ideologues, pretty much all of the culturally-marginal scum that froths on the edges of society, all the "activists" and "anarchists" and "communists" and heck-else they call their own inability to cope, inability to achieve and inability to thrive in the world see Bitcoin as a sort of gift from above, made by their daddy directly to them.

Well... Bitcoin is absolutely nothing of the sort. Bitcoin doesn't make it easier for anti-capitalists, it makes it harder. Bitcoin doesn't make it easier for anti-corporatists, it makes it harder. Bitcoin especially does not make it easier for socialists, for those people that despise hierarchy and pretend equality : it makes it impossible. Plain impossible.

Bitcoin is the most conservative thing since at least queen Victoria, if not outright Jesus. Bitcoin makes so-called "progressive" tax schemes unworkable. Bitcoin makes any sort of public welfare untenable. Bitcoin makes anyone's pretense of equality with anyone else risible. Bitcoin isn't here to "make communes work", but quite the contrary : it will render communes both inoperable and uninteresting to pretty much everyone. Once it's done tearing away the crap these very people have tacked on to government, once we're back to something a lot more akin to what the slave states had before the Civil War (and that's exactly were we're headed, and that's exactly what that conflict was : a dispute between Big Government and individuals - unfortunately BG won) we'll obviously be in a much better position to grok all this. Retrovision is always 20/20, after all.

Getting back, "bitcoin is decentralized, removing the single point of failure these banks are trying to defend" is also poppycock. What exact single point of failure are the banks trying to defend ? How exactly is Bitcoin "small, simple and agile" given the friggin blockchain is Gigabytes already at a time nobody's practically using it yet ? What simplicity is this, when starting to use it requires fifty or one hundred hours of research ? How does that compare to banks shipping teens credit cards in the mail, sight unseen ? What on Trompi's green good Earth is a "tremendously large attack footprint" ?

All this regurgitation of soundbytes previously swallowed whole has to cease. There's no "attack footprint", and in fact the average person holding bitcoins has a significantly larger attackable cross-section than the average bank (in no small part because the average bank does not go around seedy bars and dens inhabited by dubious whores-that-are-really-artistical-snowflakes with the safe in its pocket and keys in the other pocket, for instance). In fact, total Bitcoin "hacks" this year count in the 1-10% of the total monetary mass range. The day the banking system manages to be hacked for 0.1% of the M3 give me a call. You can make it collect, I'll pay.

But the most offensive part of it all is the "Bitcoin is the worker's union and the worker's union is Bitcoin" cut-and-paste straight from Nadezhda Krupskaya or some crap. No, it is not. Bitcoin is no "community", bitcoin is simply math. It could care less about any community, nor hmm, how did the quote go...

The Bitcoin Miner writes; and, having writ, Moves on: nor all your Piety nor Wit Shall lure it back to cancel half a Line, Nor all your Tears wash out a Word of it.

That's what Bitcoin is. Fate. Send one single transaction out and then hold all the vigils, glassloots activism, protests or whatever else to have it returned. See how well that works, why don't you ?

Bitcoin is fate. It operates completely outside of any human agency, even if it was (possibly) some people that created it. For all you know about who Nakamoto was... Bitcoin might as well have created itself.

The way fate works is quite simple : do the right thing and you're part of it. Do the wrong thing(s) and you're in the dark, huddling corners, wondering what went wrong and why does "the mainstream" oppress you so. And that "right thing" scarcely ever has anything to do with what "the community" thinks, wants or imagines.

It is, after all, math.

———
  1. And no, the happenstance that all sentences could be held in strings and as such have a numeric value isn't a counter-argument in this discussion : the only way real words and real phrases become strings and numeric values is through the work of the editor. And the columnist. []
Category: Bitcoin
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31 Responses

  1. David Perry`s avatar
    1
    David Perry 
    Friday, 2 November 2012

    To be fair, when I wrote that we must take care not to become the bankers, I wasn't speaking politically. If you read the article in context, you'll see I'm making a technical reference to the fact that our current system is comprised more of patches than actual stuff any more and that while Bitcoin is fresh new and simple, it could some day become that too.

    Just as the founders of the U.S. gave us the tools to someday overthrow a regime just like the regime they overthrew in the form of the constitution, we must ensure that we are watchful and replace systems as they need replacing, not after they've been in decline for decades.

  2. Mircea Popescu`s avatar
    2
    Mircea Popescu 
    Friday, 2 November 2012

    To be fair, the point about patches upon patches to the point there's doubtfully any structure left is quite sound.

  3. David Perry`s avatar
    3
    David Perry 
    Friday, 2 November 2012

    Also, if you've read something political into that article you've mis-read it entirely. There were no politics there, only tech. When I say that the current system is broken, I don't mean because of political corruption or fraud, I mean because it's physically broken, so many things layered on top of each other that it's amazing it works at all. When I say it needs replaced I mean it in the same sense that an engineer says a bridge isn't safe and needs to be re-built. No politics, just tech.

  4. Mircea Popescu`s avatar
    4
    Mircea Popescu 
    Friday, 2 November 2012

    Well in that sense I'm not at all sure you're right. From a technical point of view banking is second possibly only to space exploration in terms of soundness. The issues you list (and the problems there are) tend mostly on the political side. The reason money has recently become unworkable has little to do with BITS and loads to do with the politically-appointed chairman of the fed, for instance.

  5. "Bitcoin doesn’t make it easier for anti-corporatists, it makes it harder."

    How so?

    "Bitcoin is the most conservative thing since at least queen Victoria, if not outright Jesus. Bitcoin makes so-called “progressive” tax schemes unworkable."

    Where I live (and virtually everywhere, as far as I know), “progressive” tax schemes are the conservative thing.

  6. Mircea Popescu`s avatar
    6
    Mircea Popescu 
    Friday, 2 November 2012

    How so?

    Let's take something easy : mining. A proper ASIC run costs a hundred millions. Who has the hundred millions ?

    Look at it more generally : a corporation is a vehicle for natural persons to separate their natural existence from some venture. The pseudonymous identity that Bitcoin uses meets just fine the definition of a corporation. In other words, pretty much the only way to even interact with Bitcoin is through a corporation.

    In practical terms : you won't even be able to identify who has the money. What's an anti-corporatist to do, once picketing Davos is impossible ? Internet petitions ?

    Where I live (and virtually everywhere, as far as I know), “progressive” tax schemes are the conservative thing.

    That just shows the relative small radius of your bubble. Regressive tax was the rule for most of human history, and it makes perfect sense from a natural perspective : those with more money are both more valuable and more able to fight the tax man.

    But just out of my curiosity, if where you live and virtually everywhere you know of progressive is conservative, what's liberal ?

  7. "Let’s take something easy : mining. A proper ASIC run costs a hundred millions. Who has the hundred millions ?"

    Anyone will be able to mine with ASICs; ASIC mining is as cheap as it is easy.

    "In other words, pretty much the only way to even interact with Bitcoin is through a corporation."

    Would you mind explaining this?

    "Regressive tax was the rule for most of human history, and it makes perfect sense from a natural perspective : those with more money are both more valuable and more able to fight the tax man."

    Fight the tax man? No, they join him (in its supposed fight against concentrated capital). The mantra of progressive tax schemes has nothing to do with reality, but most people believe it does - that's why I say that it is a conservative thing.

    "But just out of my curiosity, if where you live and virtually everywhere you know of progressive is conservative, what’s liberal ?"

    Liberal and conservative are two faces of the same statist coin. There's no such thing as a good tax scheme; some schemes are less destructive than others, that's all.

  8. Mircea Popescu`s avatar
    8
    Mircea Popescu 
    Friday, 2 November 2012

    Anyone will be able to mine with ASICs; ASIC mining is as cheap as it is easy.

    If anyone were able to mine with ASICs then you'd have to explain why you're not doing it. Before the general public can mine with ASICs these have to be made. In order for them to be made there's some costs and requirements. These costs and requirements can be met by few individuals and most corporations.

    So far the advantage Bitcoin gives corporations is so great that a two three four five corporations were able to receive payment for products they have not yet delivered, nor indeed even built. This should really be sufficient illustration. Sure, corporations are slow and dumb, and so haven't caught up yet, but in general Bitcoin is a corporate wet dream, even if it may seem an individualist wet dream.

    Would you mind explaining this?

    You can't hold your bitcoins other than in an address somewhere. This address is not you, but a limited representation of you according to some criteria. That happens to be what a corporation is.

    Let's take a simple model :
    I. You own a cow outright. You can sell this cow by giving it to another.
    II. You own a corporation which corporation owns a cow. You can, at your own leisure, either put on the corporation CEO hat and sell the cow to another ; or put on the shareholder hat and sell the corporation (with the cow) to another.

    Bitcoin is like II, not like I (you can either transfer the Bitcoins or transfer the wallet) with the aditional limitation that the cow can never be held outright.

    Fight the tax man? No, they join him

    This is mostly irrelevant from our pov.

    Liberal and conservative are two faces of the same statist coin. There’s no such thing as a good tax scheme; some schemes are less destructive than others, that’s all.

    This is fine, but nevertheless, if where you live progressive taxation is conservative, then what alternatives that are un- or non-conservative do you know of ?

  9. "Bitcoin especially does not make it easier for socialists, for those people that despise hierarchy and pretend equality : it makes it impossible. Plain impossible."

    You mean that socialists are people that despise hierarchy?

  10. Mircea Popescu`s avatar
    10
    Mircea Popescu 
    Friday, 2 November 2012

    Yes.

  11. "So far the advantage Bitcoin gives corporations is so great that five corporations were able to receive payment for products they have not yet delivered, nor indeed even built."

    You are talking about Bitcoin mining hardware manufacturing today, not about Bitcoin.

    "Bitcoin is like II, not like I (you can either transfer the Bitcoins or transfer the wallet) with the aditional limitation that the cow can never be held outright."

    Bitcoin can be I if you prefer so. Why not?

    "if where you live progressive taxation is conservative, what alternatives that are un- or non-conservative do you know of ?"

    Bitcoin.

  12. You mean that socialists are people that despise hierarchy?

    "Yes."

    Without hierarchy there's no socialism.

  13. Mircea Popescu`s avatar
    13
    Mircea Popescu 
    Friday, 2 November 2012

    This has Atlas written all over it. Are you Atlas ?

  14. I see... no arguments.

    "the sort of pointless prose that inevitably composes highschool essays".

  15. Chawdipper`s avatar
    15
    Chawdipper 
    Saturday, 3 November 2012

    Bitcoin: Re-enslaving niggers since 2009.

  16. Mircea Popescu`s avatar
    16
    Mircea Popescu 
    Saturday, 3 November 2012

  17. Dmitry Medvedev`s avatar
    17
    Dmitry Medvedev 
    Saturday, 23 August 2014

    I don't see how bitcoin, or math more generally, could possibly make taxes impossible. As Politburo chief, I'll order the replacement of income and wealth taxes - which I always found unwieldy anyway - with consumption taxes. When I see a strawberry store, I'll have a comrade posted at the door taking 10% of the strawberries from people coming out of the store, and give them to the strawberry-less. Easy peasy. Decline onto any observable object or service. This is robust to whatever monetary system is used, or lack thereof.

    Pure online stuff that's easy to hide gets to be done tax-free, but if it has no real world interface, it doesn't have externalities, so fair enough. Same for hoarders who don't spend: no impact, no tax, all good.

  18. Mircea Popescu`s avatar
    18
    Mircea Popescu 
    Saturday, 23 August 2014

    Strawberries aren't worth anything. That doesn't say they're worth very little. It says they aren't worth anything.

    It's an information age, don't you know, and information ain't strawberries.

    Back before it was an information age, it was many different ages, and strawberries weren't worth anything back then, either, nor the cherry on a girl nor the berry on the straw. But back then it was "strawberries as opposed to a fine wrought sword" or "strawberries and fine wrought swords as opposed to stocks and bonds". By now, it's "anything material as opposed to knowledge". And you can't take 10% of what's in a person's head, it doesn't work that way.

    Moreover, ask yourself this : why would that guard work for you rather than for me ? What exactly is your UVP here ? That "it's on TV ?"

    It isn't on TV. It used to be.

  19. There is a tax that can be implemented if Bitcoin were to replace currency. A land tax. Governments would be unable to trace electronic commerce effectively but the one thing that has and will always have only a physical reality and from which all wealth derives is land.

    This idea has been suggested before but was never really an option due to so much low hanging fruit for government. But now the reality of a new economy makes it feasible.

  20. Mircea Popescu`s avatar
    20
    Mircea Popescu 
    Sunday, 19 July 2015

    I need very little land to operate businesses that are much more effectual than any government. So does everyone else.

    Sure, it can tax the land. The idea "was proposed" ie implemented for most of human history. The resultant government is something not unlike Charles Ist's government, which is to say before Cromwell hanged him.

    Cromwell did not have any single item of my arsenal today, nor do I use - let alone need - much of anything he and his camp would have produced. How long do you think your Charles' for this world ?

    Land taxing government was everyone's prison bitch cca 1700. That was four centuries ago.

  21. "back to something a lot more akin to what the slave states had before the Civil War (and that's exactly were we're headed, and that's exactly what that conflict was : a dispute between Big Government and individuals"

    Revision at its finest. Tell that to the slaves, to whom their masters were worse than anything you might today call "Big Government." No individuals were empowered in that system; a few were made into private emperors, given power of life and death over other humans, and the rest, who were not slaves, were no better than serfs.

  22. Mircea Popescu`s avatar
    22
    Mircea Popescu 
    Tuesday, 13 October 2015

    I do not speak any languages the slaves would understand.

    This is their shortcoming.

  23. For the sake of argument, how do you know it is their fault?

  24. Mircea Popescu`s avatar
    24
    Mircea Popescu 
    Tuesday, 13 October 2015

    Because it is invariant. I do not speak, today, any languages Reddit would understand, pretense as to their supposed use of English notwithstanding. Then Reddit agrees that "XT consensus" and I say Gavin has got to go. And lo and behold, no consensus and Gavin goes.

    How exactly is this different from the imaginary situation he anachronistically reconstructs out of the historical reality of 1800s ? Yes, yes, "empowered" and "private emperors", because his bias that if I have a business I didn't make it, Obama gave it to me must be preserved. Leave his narcissism aside, and you have the nude reality of the matter : slaves are slaves because they are slaves, not because you made them slaves. For which reason he can't make slaves be free, all he can do is pretend to have done it and ruin his life in pursuit of this empty, impossible fantasy.

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