
Bitcoin Is for Drugs - robertelder
https://medium.com/@hudon/bitcoin-is-for-drugs-27dcc5923716
======
ve55
I've done a lot of work involving buying and selling virtual goods (not
cryptocurrencies, think of currency in an online game as an example).

A lot of communities in these areas love bitcoin, not becuase they want to
scam anyone, but precisely the opposite: becuase they are tired of being
scammed.

Do you know what you have to do when you use Paypal to buy digital goods from
many persons or companies? You have to send them your ID, a picture of you
next to your ID, often confirm a phone call or email, and then pay an extra
fee.

Because if they don't make customers do that, they will get scammed by
chargebacks no matter what, and lose all of their money. People are tired of
bullshit like Paypal, and that's why they prefer Bitcoin.

I agree with some points the author has, I don't think there's anyone that
thinks the valuation of recent ICOs on the Ethereum network are anywhere near
reasonable, but just because things are significantly overvalued doesn't mean
the entire technology is for scamming.

Just like there's reasons to not exclusively use Amazon/Google, there's
reasons to not exclusively use USD/Paypal/Banks/etc.

~~~
mamcx
The problem is that buy the bitcoin in some places, like Colombia, is hell.

I'm trying in like 6 different places and not chance to work.

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bradleyjg
There are a lot of people living near me that want to send money back to
relatives in the country where they were born on a regular basis. One of the
advantages that are often touted as a legitimate use of bitcoin is to lower
transaction costs.

In light of that claim, I wonder how difficult it would be for: one of my
neighbors in Queens, NY to take $1000 cash, turn it into bitcoin, send it to a
brother in Cebu City, Pachuca, or Dhaka; for the brother to turn those
bitcoins into Philippine or Mexican pesos or Bangladeshi takas; how long it
would take; and finally how much it would end up costing versus the mid-market
exchange rate between dollars and the other currency.

~~~
cgb223
I think the main issue that would have to be addressed is the "turn cash into
bitcoin" step.

While I havent personally done an in person bitcoin exchange, I'd imagine that
there aren't too many people doing it this way, and probably not in quantities
of $1000+. I would love to hear about the experiences of people who have done
this.

The other option would be to setup a bank account, which might be a bit of a
challenge if the person is not a citizen, or perhaps not even in the country
legally, and then there's the issue of the money now having a permanent
digital paper trail (not bad per-se, but probably something your typical
migrant worker sending money home might try to avoid (but seriously pay your
taxes))

~~~
nabaraz
I think "turn cash into bitcoin" is the easiest step.

\- Bitcoin ATM: You insert cash and get bitcoin on your wallet. There are over
1000 ATMs in US alone. [1]

\- People: There are lot of craigslist-like sites for P2P bitcoin exchange.
[2]

\- Gift card: Again there are lot of communities for exchanging gift card for
bitcoin. [3]

\- Bank account/Debit/Credit card: You can buy bitcoin from sites like
coinbase which are US-based and are actually FDIC insured. [4]

1\. [https://coinatmradar.com/](https://coinatmradar.com/)

2\. [https://localbitcoins.com/](https://localbitcoins.com/)

3\. [https://paxful.com/buy-bitcoin/amazon-gift-card](https://paxful.com/buy-
bitcoin/amazon-gift-card)

4\. [https://www.coinbase.com](https://www.coinbase.com)

~~~
willitpamp573
1 and 4 are not real solutions because they compromise your identity. 2 and 3
are correct.

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baddox
> The blockchain is for censorship resistance. That’s it. Use cases such as
> buying drugs, gambling, tax evasion, sharing secrets, capital flight and
> scamming people eclipse all other use cases.

> Investing in Bitcoin is investing in vice.

Unless the author is using an unfamiliar definition of "vice," I hardly see
how this follows. Several of the use cases listed are not what I would
consider immoral. Drugs and gambling can obviously lead to addiction, but I
don't consider them inherently immoral regardless of whether they are legal in
a given jurisdiction. Tax evasion is a little more of a grey area in this
context, because I'm not quite sure how you would use Bitcoin for tax evasion.
Sharing secrets is completely morally ambiguous; it depends entirely on what
the secret is. Does _anyone_ consider capital flight immoral? I've never heard
that idea. Lastly, yes, scamming people is fairly unambiguously immoral.

~~~
Avshalom
...

...

Really. Who reading this do you expect to believe you're unfamiliar with drugs
and gambling being called 'vice'?

~~~
baddox
Obviously they are both considered immoral by some people, and even a
significant portion of people in certain areas (probably in the USA). But
that's also true of many things that I wouldn't expect to be brought up in an
article that seems to be focused on technology and not any particular religion
or moral system, like cursing or homosexuality. I would make similar comments
if someone wrote an article about problems with a digital music store (e.g.
iTunes) that primarily focused on the fact that the store is inherently
immoral because it sells songs with explicit lyrics.

------
TACIXAT
I have a lot of problems with how cryptocurrencies are dressed up to look like
investments. Everyone talks about the market cap as if it were a company with
some underlying value and some public value. I feel that is very misleading.
As well, with the charts and trading platforms, less educated adopters are
treating it like a company that produces value.

It is a digital collectible. There are a finite number of them produced (in
Bitcoin's case, at least). The price is high due to speculative demand. People
hoard them and lose them, and the price will continue to rise until it
collapses. It is extremely deflationary and has no monetary controls in place
to stabilize it.

Government backed currencies have value because of taxes. Everyone must pay
taxes in the designated currency and failure to do so is punished by a
monopoly on force (the government can make your life miserable for not
paying).

There is no necessitating force, like taxes, for cryptocurrencies. The main
use case and driving forces in their adoption are illicit (ransomware, dark
markets, etc). There are no capital controls either. No one will elect to pay
their employees in Bitcoin due to its extremely deflationary nature. No
employer will elect to pay someone in a currency without capital controls. For
example, if I agreed to pay someone 1 BTC per week for their work, and one
week it is worth $1k USD and the next it is $3k USD, I would be getting
seriously screwed. Also, since it is unstable, prices will always be pegged to
the fiat currency (eg. 5 USD in BTC at the current market price), since
charging a fixed amount in Bitcoin would cause people to be unwilling to pay
it or the company to take a loss on the sale.

I don't know if the illicit markets are enough to sustain demand for
cryptocurrencies in the same way that taxes do for normal currencies. I
personally view them as a modern day ponzi scheme driven by speculative
demand. That is not to say that you can't make money off of them, but don't be
surprised if they go the same way as Beanie Babies. Just don't ever expect a
major entity to adopt a currency that unknown actors have large control over.

------
throwaway2016a
> The blockchain is for censorship resistance.

The blockchain is for having an immutable[1] log of transactions that does not
require trust in the peer that you are making a transaction with.

Off the top of my head...

\- Bank transactions

\- Security audit logs

\- Securities (stocks)

\- Corporate governance

\- Actual government

\- Legitimate business transactions where you don't want to have to worry
about charge backs or bounced checks

The article also falls into the trap of thinking Bitcoin and Blockchain are
anonymous. They are not. Some blockchains try to be more anonymous. Bitcoin is
not one of them.

[1] Yes, I know the blockchain can be forked which in theory makes
transactions mutable. However, the barrier to take advantage of that is
prohibitively high and highly visible (i.e. is hard to do in secret).

~~~
tedsanders
Blockchain does not reduce the need for trust, in my opinion. If I order pizza
from you and pay with Bitcoin, I still have to trust that you'll deliver the
pizza. There is no way around the need for trust (though of course there are
mechanisms such as laws, police, and judges that help reinforce trust in our
society).

The only trust that blockchain provides is trust that a counterparty won't go
back and change the ledger showing that a pizza was ordered. This solves the
double spending problem, but it doesn't solve all the other kinds of fraud.

~~~
throwaway2016a
Agreed. I should have been more specific. It reduces the need to trust the
person initiating the transaction. That person still needs to trust the entity
that is supposed to provide value in exchange for that transaction.

Unless the blockchain supports contracts and you have a well coded contract.

------
revicon
I buy BBQ from Smokey J's
([https://www.smokeyjbbq.com](https://www.smokeyjbbq.com)) in Berkeley, CA
with bitcoin. They have an android tablet under the counter for taking
transactions, it's great!

Never bought drugs with them before, according to the artice maybe I should
try...

~~~
throwaway2016a
There is a place in Montreal that takes Bitcoin for Poutine. Unfortunately I
didn't have any on me lats time I was there.

~~~
jMyles
There for PyCon by chance? The bitcoin poutine place (one of several places
that accepted bitcoin on that street, I noticed) was like 4 blocks from the
convention center. That was a fun PyCon.

~~~
throwaway2016a
No. Unfortunately I don't make it to conferences as often as I'd like. I just
live in New Hamsphire and it only takes me 4 and a half hours to drive to
Montreal. It makes a good weekend getaway if I don't want to hop a plane :)

------
joewrong
replace "Bitcoin" with "Cash"

~~~
akhilcacharya
Cash doesn't randomly increase several times in value and require significant
fees and time for confirmation.

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Chris2048
No, it's not "for" vice. It's just there's more reason to use bc for those
things, so those are "early adopters".

There is nothing stopping you use it for anything else.

~~~
lern_too_spel
Except for the many better payment options for legal transactions.

~~~
Chris2048
like Paypal?

aka freeze anytime at our discretion.

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TTPrograms
It seems like it requires a particularly narrow world view to equate
censorship resistance with vice.

~~~
hudon
I agree and I didn't mean to equate them. Many people make the mistake and say
requests for privacy means you have something to hide. The fact that digital
tools that offer censorship resistance, be it Tor, Tails or Bitcoin have
applications for BOTH activists and criminals (just like cash or weapons or
bridges or ...) could be an article in itself and requires more diligence than
an article that is basically saying "blockchains are shit for anything that
doesn't need censorship resistance".

------
verbatim
I'm not sure if it's ironic, or fitting, that the end of the article is a
piece of artwork credited only as "Please let me know if you know the source
of this image."

~~~
ihuman
Its art for the "Satoshi Creator of Blockchain" card in the game Spells of
Genesis, a mobile game based on "blockchain technology."

[http://68.media.tumblr.com/1b1c73a1c7febea81b3d3163aff2aff4/...](http://68.media.tumblr.com/1b1c73a1c7febea81b3d3163aff2aff4/tumblr_inline_obbta5fOv91t44dvb_400.jpg)

------
Paul-ish
I don't find his scarcity counter argument compelling. All the things he
offers as scarce aren't really scarce, as they could easily be recreated in a
way such that the duplicates are indistinguishable from the original. Bitcoins
can't, to current knowledge, be counterfeit.

He would have been better of saying that he could create his own fork of
bitcoin with the same supply, but that wouldn't make it valuable.

------
uiri
It is a shame that this was flagged on the basis of the title. It is an
interesting article with a thesis other than that implied by the clickbait
title.

------
wamsachel
D.A.R.E

Drug Acquisitions Require Encryption

------
czz
when you have a scarce resource with the consensus of many people, digital or
physical, it works.

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rb808
I still can't think of any reason for me to use BTC.

A couple of friends have bought bitcoin because they think it will go up in
value. Maybe it will maybe it wont. I certainly dont want to own BTC when it
could fall to zero.

~~~
willitpamp573
BTC is only useful when it's the closest thing to USD that you're able to use
for your business.

Users of bitcoin exit their position to USD as quickly as they possibly can.

------
Dove
This argument is exactly analogous to the argument that privacy is for people
with something to hide.

There's a very good response to that argument, and it applies here as well. It
runs thus: sometimes society is wrong. Every advancement in our thinking
starts out as a rebellion -- such as the civil rights movement in the 60's.
Many of the participants did have something to hide from significant chunks of
society, yet what they were doing was ultimately judged to be right.

Usually the things society judges to be wrong are wrong -- but sometimes they
aren't. I want society to be able to oppose movements when they become large
and vocal, and I want society to be able to ban dangerous ideas from public
spaces -- but at the same time, I want individuals to be able to study and
nurture any ideas they like in privacy, no matter how harmful or radical,
because I want the good-but-countercultural ones to grow until they are ready
to face society's judgement.

Privacy is often used to pursue vice . . . but that is an acceptable price to
me, to guarantee individual freedom of inquiry.

So it is with cryptocurrencies. And for that matter, cash.

Sometimes our laws are wrong, and it is the black market which provides the
demonstration and motivation to change them. Prohibition is an obvious
example. Uber and Airbnb are controversial, but modern examples. Sex toys are
an easily overlooked example. Marijauna legalization comes to mind, too; the
laws are changing for that particular drug (and not for, say, Psilocybin)
precisely because the scale of the black market has resulted in a lot of
people having experience with it and giving us both personal experience and
scientific data. If anonymous cash transactions were not possible, that
probably wouldn't have happened.

The individual ability to buy _anything_ , much like the individual ability to
read _anything_ , is both an important personal freedom and an engine for
social progress specifically in the areas where society's mores are wrong.
Sure, people almost always use this freedom to do things society doesn't
approve of (either in the sense of the whole country or in the more restricted
sense of their local community). Sure, those are usually things that are
actually wrong. But squashing them isn't worth losing the powerful corrective
force for society as a whole that arises from those few cases in which the
miscreants are _right_.

I do want governments to be able to make laws, to be able to regulate
commerce, to declare that certain things can't be bought and sold. But I don't
want them to have such an efficient method of enforcement that small scale
rebellion isn't possible. A certain persistent, low-level, ongoing engagement
in vice is the price of moral experimentation, and I think it's worth it.

~~~
hudon
Thank you for the insightful comment. My article was meant to challenge my
blockchain-loving friends and focus on "blockchains are only good at
censorship resistance", but I unfortunately made it sound like that was
equivalent to vice.

I think your post is an eloquent explanation of the nuanced topic and merits
discussion on its own

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mrtron
VCRs are for porn.

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unixhero
Fuck off; to the article.

