[mjburgess]

Hmm.. the government effectively owns the network, the land, and the police force. The idea that the government cannot stop a monetary transaction is woefully naive; the only reason they haven't in the case of BTC is that it isnt money. If it came anywhere close to rivalling a state-backed currency, you'd be undermining the monetary and financial ability of a democratically elected government to exercise its economic policies. You'd be thrown in prison.

Aside from the obvious ease with which a government can undermine the network, it's participants, and so on -- there is also the lack of incentive for anyone not ideologically committed to interpreting a blockchain as currency, to do so.

A database, of any type, is just a set of numbers. The meaning of those numbers is a social and institutional practice. Contracts enforcing that meaning is a legal and political one.

This article displays the same extraordinary naivety of tech libertarians that I'd assumed had now past. Money is a social institution. Social institutions will not be replaced by anyone's preferred system of rules.

This is a common flaw in all utopian thinking, that necessarily and forever, all people will have more incentive to listen to them and follow their rules, than to ignore them or kill them. There is no evidence for the former, and daily mountains of evidence of the latter.

The final incentive to accept the dollar is the threat to your life, and all people you'd conspire with, to undermine it. This is the only known solution to forming stable contracts and society-wide reliable institutions.

[XorNot]

You're thinking too far ahead: governments define the currency that can be used to extinguish debts, particularly to the state (taxes).

You can't pay your taxes in Bitcoin: you can only use Bitcoin to buy enough local currency to pay your taxes from someone else who has some. Which they get from the state.

While the endpoint of this is jail and the monopoly on violence of government, it's also just regular economic reality: you can't buy something if you don't have anything the seller will accept. And the government doesn't accept Bitcoin.

[mjburgess]

Well I'm thinking as far ahead as the article author. You're right that there are many issues long before all this, but they would hand-wave those away.

What you can't handwave way is: in your utopia, why does everyone have more of an incentive to buy-into your system than to ignore it or destroy it?

This is the fundamental question of all national social institutions. A distributed database is so far away from answering the problem that it comes across, at best, as childlike.

No utopian projects can answer this question, and utopians in my experience, hate it: the communitists as much as the libertairian objectivists. They are all committed to a theory of sin in which we live in a fallen world because people do not behave the right way, and if we just programmed to them to behave that way, all our problems would be solved. Neither care to note how radically different their opponents programs are.

Ironically, of course, the utopian is the problem that they are trying to solve: a person with a Mission to divest from The Existing Social Order, and found a new one. The very existence of people with this mindset demonstrates that some people will prefer to destroy an order than to participate in it -- if they could. They are each trying to forment The Final Civil War.

Thankfully many, but not all, countries today have got out of this doom-loop.

[floundy]

Somewhere in the rabbit hole of delusion that is "buying in" to crypto is the idea that:

1. "Bitcoin is inevitable" and governments will be forced to buy it as "digital gold" to prevent a collapse of the world financial system.

2. Governments are already sneakily stockpiling BTC as insurance against a collapse of the world financial system.

[lgrapenthin]

There is a multitude of governments involved in Bitcoin with different incentives and strategies. If you claim "The government can do X to Bitcoin" you should explain which government(s) and how exactly that would work. When was the FED a "democratically elected government", by the way?

[mjburgess]

Any nation's legislature, if threatened with loss of control of the nation's money, would immediately make it illegal to use any tender not sanctioned by that state. A vast amount of the state's historical policing was aimed largely at preventing alternative currencies from forming (consider, e.g., Isaac Newton's role at the Royal Mint).

They will put you in jail; withdraw your business licence and suspend your limited liability; deny your bankruptcy claims; tax you into oblivion; and so on. The state has every incentive to destroy a private currency, or a private army, or a private police force.

The only reasons states have take some interest in bitcoin and the like is that they aren't currencies. If there was any viable way of making ordinary daily economic transactions in BTC, it wouldnt exist. Inside the crypto system, "coins" are mere tokens with basically no ability to be traded for any goods or services. To buy anything you need to exist the system into an actual currency. So long as that latter step is required, BTC/etc. isnt a political project in the sense of this article.

"Money" isn't much more than a veil over the good-and-services of a society, an approximate quantitative measure of their marginal value. Governments require control over the money supply to manage this activity (eg., in pandemics) so they can, eg., prevent a widespread economic depression by temporarily exploiting inefficiencies the gap between the notional-and-actual value of money, giving people lots of it. Woe betide anyone who sells cars in BTC when there's a war on; you'll be in prision as a traitor.

[ric2b]

One merely needs to look at US history to see that this is incorrect, before the Federal Reserve existed there were several competing bank "currencies" backed by gold that were commonly used instead of gold because they were easier to exchange, but with the knowledge that they could be traded for gold if needed.

[Finneyfamily]

> The state has every incentive to destroy a private currency, or a private army, or a private police force.

I don't see how currency is similar to an army or police force, could you elaborate?

[mjburgess]

The supply of money is one of the main means a government has to conduct economic policy. Consider what would have happened during the financial crash if governments hadnt been able to inject massive amounts of it into the economy.

Libertarians assume that if there's no democratic control over the currency, somehow, Reality, will make everything turn out ok. Well we tried that for a very long time, and it was a disaster. Every crisis is much worse if you cannot control the money supply.

In any case, no modern state would ever give this up. Its vital for their being able to deliver policies that people want, and to managing times of crisis.

[Finneyfamily]

It's also vital to undermine the savings of the population, which has been the case in most countries (perhaps less noticeable when there is a working financial system, but in many other countries people don't have access to invest in the market, or don't trust the institutions).

[lgrapenthin]

Cars were sold/bought for BTC and ETH when the war came to central Ukraine, nobody went to prison for that. Many people there do transactions daily via TRON chain nowadays.

[mjburgess]

I was thinking more of a major car company, rather than a few individuals making transactions. Two people can trade on any basis; you can trade a car for baseball card if you like. Nevertheless, the only story I can find in this case is one long-time crypto enthusiast selling a car with BTC, which happens everywhere from time to time.

My point was that during any major event in which the state requires control over the money supply, people making any meaningful difference to that control, won't be free to do so. In order to conduct a modern war, all states need to place large parts of their economies on a war-footing and requisition industries for defence (eg., iirc, 40% of the UA economy is now on defence).

Since BTC isnt a currency, trading with it has little impact on any state; it might as well be old bottles of wine. If it were to ever gain this status, and companies during a war were meaningfully offering their services in it, that would severly interfere with a state's ability to operate.

This just won't happen. It's absurd even to imagine it. If the libertarian problem with the state is how it uses its overwhelming legal, political, social etc. power to mismanage and economy and force people into capital controls etc... it's the dumbest thing in the world to suppose that by having people install a database, you've somehow undermined the state's ability to act.