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by azakai 4559 days ago
I don't see where the issue of whether it is economically a good idea is brought up?

The article focuses on the history of money, specifically how governments have increasingly monopolized it. And the conclusion is summarized here:

> Anyone who thinks that Bitcoin will triumph has to believe that it will succeed where earlier generations of private currencies failed -- that Bitcoin will, improbably, manage to overthrow more than century’s worth of accumulated state power, jealously guarded and ruthlessly enforced.

In other words, the argument here is that governments will kill bitcoin (if it becomes big enough).

The basis for the argument is that, while bitcoin is new and unique and in no way similar to those old types of money that existed in the past, it is still money, and it is still being used by people within the reach of national governments. And the argument is that those national governments will keep their monopolies on currency by fighting bitcoin.

That leaves open the question of whether they will succeed. Certainly governments have not succeeded at killing another bit* thing, bittorrent.

However, the story is not quite a parallel, as bitcoin will be used in different ways, and likely require far more of a connection to "normal" monetary markets - people will want to exchange bitcoin for standard currency. Governments might be capable of fighting that very effectively, even though they have proven mostly powerless against bittorrent.

2 comments

Not necessarily kill, but co-opt or take over entirely. Or even beat it into the ground competitively with a similar digital currency that they control and can promote more vigorously.
I think there's maybe a distinction to be drawn between transactions between individuals, which could be made in virtual doughnuts if both parties agreed, and a currency used in trade.

As far as I can see, btc is now two things - a protocol which could be used as technical implementation for any number of things, and also implementation of a currency which isn't backed by any concrete asset or entity (other than end users). For the currency, the main value and insurance against risk seems to be in the brand (i.e. what makes a bitcoin worth more than a foocoin).

But it's trivial for a government to kill commercial use of btc as an alternate currency within their jurisdiction. It's not legal tender and therefore can be banned for use in transactions by registered companies - that can be easily enforced by tax authorities and police. It's also quite justifiable on the basis of collecting taxes, protecting the economy generally, and protecting citizens from being caught with paper that isn't backed by law or national banks. Black markets are by definition illegal - the only question is to what extent they are tolerated and that is largely a question of their size and impact on the formal economy.