

How Bitcoin Can Bring Down The United States Of America - mazsa
http://falkvinge.net/2013/06/04/how-bitcoin-can-bring-down-the-united-states-of-america/

======
venomsnake
I usually respect Falkvinge but this is pure uncut bullshit.

First the status of US as a superpower is much better guaranteed from the
couple of thousand nukes and a couple dozen of carriers etc ... even in the
case of total economic collapse the military might alone will be enough to
allow the US to have strong word in the world affairs.

The fact the US have no trouble selling its debt at negative real interest
rates means not that US is borrowing too much but that it is not borrowing
nearly enough concerning the people that want to be US creditors.

Us is also one of the main centers of IT research, development and production.
Just forbidding Intel and AMD to sell chips to some country can harm it a lot.

Krugman calculated that the benefit of USD being a world reserve currency is
roughly 300 billion USD per year - not a pocket change but hardly a game
breaking amount.

~~~
contingencies
Err, not uncut bullshit. 4 billion dollars increased debt per day was the
figure I read last week.

(Edit: <http://www.brillig.com/debt_clock/> claims 2.7 billion dollars
increase per day. Anyway, it's huge. It's not bullshit. Treasury source @
[http://www.treasurydirect.gov/govt/reports/pd/pd_debtposactr...](http://www.treasurydirect.gov/govt/reports/pd/pd_debtposactrpt_0413.pdf))

~~~
venomsnake
And the universe is losing stars on the rate of 30 supernovas per second.
Should we create a action group for star preservation?

A big number means nothing until putted in context.

4 billion per day gives a trillion and a half per year. Also known as half the
us health spending for the same year. Or 10% US GDP.

While this may be troubling in other situations - in the current situation due
to inflation the us will surely pay less than the amount borrowed in real
terms. So this works to reduce the debt if measured in "goods and services"
metric. And if US gets in deflation spiral the debt will be the least of the
worries. While the interest on the debt is lower than the Fed target inflation
rate there is nothing to worry about.

~~~
contingencies
Reuters: [http://www.reuters.com/article/2011/06/08/us-usa-debt-
bondho...](http://www.reuters.com/article/2011/06/08/us-usa-debt-bondholders-
idUSTRE75718320110608) _"It has dire implications for the economy at a time
when the macro data is softening," said Ben Westmore, a commodities economist
at National Australia Bank_

CNBC: <http://www.cnbc.com/id/100388142> _"The minute we default, there would
be a complete collapse in the bond market," said Peter Schiff, chief executive
officer of Euro Pacific Capital and a critic of U.S. government spending
habits. That would leave the U.S. struggling to refinance more than $4.6
trillion that come due within two years, including $3 trillion of Treasurys
due to mature in 2013._

The Atlantic:
[http://www.theatlantic.com/business/archive/2013/01/h/267205...](http://www.theatlantic.com/business/archive/2013/01/h/267205/)
_This story has three possible endings. Either Congress lifts the debt
ceiling, and we all live happily ever after, at least until the upcoming
battle over the continuing resolutions; or Congress doesn't, and we only get a
massive dose of austerity; or Congress doesn't, we get a massive dose of
austerity, and then we default, with interest rates shooting up and the
financial system melting down. This shouldn't be a difficult choose-your-own-
fiscal-adventure._

Forbes: [http://www.forbes.com/sites/igorgreenwald/2013/01/09/why-
the...](http://www.forbes.com/sites/igorgreenwald/2013/01/09/why-the-debt-
default-is-coming/) _Welcome to the permanent crisis. It’s the only way our
increasingly dysfunctional government can get things done._

------
asperous
>"The United States is kept alive as a nation by the fact that if anybody
wants to purchase goods from another nation, like China, they first have to
buy US Dollars from the USA, then exchange those USD for the goods they want
in China. That, and the fact that this results in all countries buying tons of
USD to put in their currency reserves."

First of all, this isn't true. You can use the Forex market to exchange your
currency however you wish. It's true that a lot of people save USD because
there's a lot of trust in the USA (held by the fact we have the highest gdp in
the world), which boost its value, even if that currency was replaced with
people saving bitcoins instead, the usd would still have a lot of value. The
value of the United States currency is in the trust that the country will
survive.

While I wish we didn't have the national debt, it's just a fact of life for
most countries. We owe most of our debt to ourselves actually, and as a
percentage of gdp, the US debt is about #35 out of all the countries in the
world [https://www.cia.gov/library/publications/the-world-
factbook/...](https://www.cia.gov/library/publications/the-world-
factbook/rankorder/2186rank.html) .

------
_delirium
I'm not sure I could come up with a better parody title summing up how a
certain segment of the tech community prefers fairly delusional writing about
politics and economics to doing real research than:

"How Bitcoin Can Bring Down The United States Of America"

------
grovulent
Look - some people don't want to bring down anything. They just want a more
efficient, cheaper means of exchange and a more reliable store of wealth.

Besides that - when it comes to effects of such a currency on geo-politics...
<cue spooky music>... NOBODY KNOWS... Really. No one has the absolute foggiest
idea about what would happen if bitcoin main streamed. I wish people would
stop thinking that they do.

------
bayesianhorse
I'm fed up with the arrogant techie-revolutionist interpretations of
bitcoin...

~~~
venomsnake
Well it is pretty simple for bitcoin to bring down the US.

1\. Create a country somewhere or invade/buy one.

2\. Achieve international recognition.

3\. Create economy order or two of magnitude bigger than the US

4\. Adopt BTC as national currency.

5\. Now everyone that wants to trade with you must buy BTC.

6\. Trade sanctions against the US.

And in 20-30 years after the sanctions it may even have result.

~~~
LordIllidan
I think you may want to break down step 3 into some substeps.

~~~
venomsnake
These are implementation details. Real architecture astronauts think only of
the big picture.

------
sidcool
I read the article and it's nothing less than sensationalist, right from the
title. It did have bits and pieces of useful information, but overall a dud.

------
dcc1
Its bullshit like this that gives bitcoin a bad name, now the spinsters will
use this article to spin bitcoin in a negative light, well done :(

~~~
sebcat
Definition of spinster: <http://en.wikipedia.org/wiki/Spinster>

------
jam-python
It's hard to see that Bitcoin itself could be the undoing, but there is
potential now for disruption that hasn't existed prior. While I also feel the
article is a ... umm a bit overboard. The root point is that it feels like it
could be possible to shake the banking system a bit. That assumes that the
banking system isn't manipulating Bitcoin for it's gain as well.

------
shousper
Wow.. Is not one person even willing to entertain the idea?

"Shut him up! I've got a lot invested in this ride, shut him up! Look at my
furrows of worry, look at my big bank account, and my family. This has to be
real." - Bill Hicks.

------
contingencies
I work within the Bitcoin area but not on Bitcoin exclusively, and I have
lived in many countries. I own zero Bitcoins. My take is that decentralized
currencies and settlement systems (an important distinction, mind you; Bitcoin
tries to be both) _do_ have a strong potential to alter the status quo,
particularly with vast numbers of European and US citizens in unemployment or
various levels of relative poverty, and with the Chinese government's
exceptional stance against capital flight. The combination of these elements
is extremely potent and is not going away any time soon.

Monopolists (credit cards, USD, SWIFT, etc.) have had it too good for too
long; all empires fall, nothing lasts forever.

We have alternatives now: they're affordable, they're increasingly
approachable, and they're potentially more transparent (and therefore legally
compatible and corruption resistant) than the legacy systems. We even have a
foothold in politics.

Anyone who thinks change isn't coming is probably not versed in economics, a
staunch conservative, or (sub)consciously expecting greater plays toward
totalitarianism and technocracy from our surveillance states.

The coming change will be a massive one for humanity and its ultimate result
will be a different relationship not only between individuals and their
governments, but amongst the people of the world without regard for
government.

We have seen the separation of church and state. Witness: _the separation of
finance and state_.

Nationalism, Einstein's _infantile disease; the measles of mankind_ may
finally be put to rest, without the need to accept the hidously risky
alternative of global governance.

Let us celebrate the creativity and differences in the world, not criticize
those who seek to create opportunities for change in the best way possible:
non-violently and from the ground up, through individual citizen
participation.

------
oleganza
Bitcoin will not bring down anyone. People will jump on Bitcoin when
governments completely destroy value of their paper and confidence in
themselves. If tomorrow you start seeing prices going up 10% _daily_ and
people getting rid of worthless paper notes, where would you go? First, you'll
try to buy some physical goods: food, gold, car, houses etc. But then which
money would you use in the remains of the economy? As everyone already has
smartphones and if telecom industry does not collapse completely, it would be
super easy to install Bitcoin wallets and go on buying and selling stuff in
BTC.

Hopefully, if people jump on BTC earlier than later (and we have more useful
services, apps and hardware keeping and transacting in BTC) the total collapse
will never actually happen. We will just more or less smoothly transition the
whole economy on BTC at the expense of all USD-holders (unfortunately). It
will be painful, but at least industries will not stop working for months, but
will continue going on. Only remaining cash will become worthless during the
race to get rid of it.

However, if governments magically stop printing money, default and regain some
confidence, then they may probably avoid total run from USD/EUR/etc. Maybe.
But right now the speed of money printing and amount of debt is so huge, I
don't see any way out of it other than complete USD replacement (more or less
peacefully) or brutal tyrannical controls to keep people using gov paper until
some bloody revolution happens when economy get completely paralyzed and
people starve.

------
ebbv
I used to follow Falkvinge on Twitter but nonsense like this is why I stopped.

It's one thing to be in favor of personal liberty (which I am) and in sensible
economic practices.

It's another to say that this toy that has yet to move beyond a small
percentage of even techie libertarians is going to bring down the biggest
country in the history of the world.

It's just idiotic.

