
Bitcoin, The Economic Singularity: From Holland with Love - generalseven
http://bitcoinmagazine.com/7725/the-economic-singularity-from-holland-with-love/
======
snitko
_> there’s a better chance that banks and governments of the world will start
to get serious about cleaning up the global mess they’ve created_

Never gonna happen. Bitcoin is _the_ cleaning we need. There's absolutely no
incentive for governments or banks (which are in bed with governments) to make
things better for those, who are not in the club.

I don't think Bitcoin's gonna wipe out the very idea of government, but it
certainly has a potential to give rise to free economic zones, where no
government can have its way. And their success can, in turn, convince even
more people that they don't really need anyone to _govern_ them.

~~~
pjc50
Bitcoin seems to be a very good way of creating a new "club" of a small number
of bitcoin-wealthy at the expense of everyone else. Being resistant to legal
action is _not_ an advantage, it will create an environment rife with fraud
and security risks.

~~~
TomGullen
Being resistant to legal action _is_ an advantage in many parts of the world
with repressive government.

There are more advantages when you look outside the narrow view of utility in
modern western society. Now anyone in the world can explore entrepreneurship
and all they need is a computer. Computers are becoming more and more
accessible (Raspery Pi's, $100 laptops etc).

Now people in poverty stricken countries can establish their own businesses
and trade on a world wide scale. No bank accounts needed. Ability to accept
micro payments without abhorent fees.

> Bitcoin seems to be a very good way of creating a new "club" of a small
> number of bitcoin-wealthy at the expense of everyone else

Currently we live in a society where wealth disparity has reached sickening
levels.

Bitcoin will significantly reward those who take the risk from an early stage
if it does take off. The difference being that Bitcoin is not a fundamentally
rigged system.

~~~
XorNot
> The difference being that Bitcoin is not a fundamentally rigged system.

A fundamentally rigged system is any system which doesn't reward merit. That's
BitCoin - it doesn't reward merit. Those who got in first, benefit if they
convince everyone else to use it.

But those they convince do not benefit the same.

~~~
snitko
And what is merit? Does Satoshi who created it have merit? Or do those who
started mining it back then because they recognized the true potential have
merit? Or those who bought it at $2 and then a $10 and then at $100 have
merit, because they understand why Bitcoin is important and what it can do to
the world? It's not like those who got in are random people. They had some
knowledge and experience that allowed them to understand Bitcoin, while
everyone else was running around screaming "ponzi scheme"

------
innino
What is Bitcoin's deeper significance? I don't know much, but here are some
sketches.

1) Bitcoin has the potential to destroy the tools of monetary policy. 2)
Bitcoin has the potential to hide taxable income from governments. 3)
Governments with dwindling tax bases may react by printing traditional
currency, hastening the flight to Bitcoin in a vicious cycle. 4) Traditional
currencies may collapse as people rush to convert them into Bitcoin. 5) Unable
to tax coercively, traditional governments may collapse.

What might replace them? Toll roads and kickstarter philanthropy in Randian
democracies?

(Is this in the ballpark for Bitcoin's potential impact or not?)

~~~
zorked
I don't understand why people think Bitcoin necessarily leads to governments
collapsing. Bitcoin can be regulated in many ways:

1\. If you buy a house you must show evidence that you earned the money. You
can't earn all your Bitcoins Breaking-Bad (or Silk-Road) style and expect that
the government will think your new-found fortune is ok. Thanks to the
blockchain you kind of can't lie too much, unlike, say, cash.

2\. If the government wants to ban certain activities it can do so easily.
Suppose that the government wants to keep its citizens from gambling or from
using mixer services, it could declare that it won't recognize Bitcoins that
passed through those services as legal tender. Good luck paying property taxes
with your tainted bitcoins.

... and so on. Things are not that different. In fact the blockchain may mean
that the government has more, and not less, access to information: for example
governments generally can't access information from other countries except in
rare occasions. With Bitcoins that information is accessible by default.

Now what the government can't do with Bitcoin is play games with the money
supply. People in places such as Argentina could perhaps tell us why that
would be a good thing.

~~~
pjc50
Except that finite money supply in a growing economy with positive interest
rates is both deflationary and a driver of increasing inequality.

Sensible active monetary policy and "lender of last resort" activities are
vital to functioning modern economies. That's why they had to be enacted in
Europe during the financial crisis despite not being properly provided for by
the existing Euro framework.

~~~
yk
( I am rather trying the argument, rather than actually believing it myself.)

There are not only BTCs, but also forks and other crypto currencies. So if
BTCs hording becomes a problem the incentive to adopt one of the alternatives
will rise. Diminishing the value of BTC relative to some other currency and
therefore suppressing ( at least to some extend) hording.

~~~
oleganza
Hoarding (saving) will never become a problem because the value of currency is
derived from all savers willing to hold it. Why would I store money in an
altcoin if Bitcoin has bigger number of savers and I project that it will only
increase (and thus increasing my own wealth)?

People want one money - the most marketable most liquid commodity to store
their cash in. [http://blog.oleganza.com/post/54121516413/the-universe-
wants...](http://blog.oleganza.com/post/54121516413/the-universe-wants-one-
money)

~~~
grinnbearit
Mencius Moldbug expands on this concept [http://unqualified-
reservations.blogspot.in/2011/04/on-monet...](http://unqualified-
reservations.blogspot.in/2011/04/on-monetary-restandardization.html)

------
JonSkeptic
The article is interesting in that it quotes Dutch Finance Minister Jeroen
Dijsselbloem saying:

"Bitcoin is not electronic money… At present its eventual impact on the real
economy seems negligible…Bitcoin is not a financial product as defined by law.
(Mediation in) the purchase or sale of Bitcoins is not a financial service
either, so the Financial Supervision Act does not apply."

Then the article goes on to say:

>ingredients are in place to make Amsterdam a city with a lot of Bitcoin in
its future.

And the article then lists a lot of the benefits of having Bitcoin as an
unregulated 'local currency', aka a commodity. This is a dangerous place for
Bitcoin. If it grows too much, it will be recognized as a currency and
regulated. If it grows only slightly, then it will not see any real use
outside of the small group that already uses it. In the latter case, people
like the author of the article stand to benefit a fair amount. In the former
case, people like the author of the article stand be driven out of business,
or have their business model impaired, by regulation.

If the point of the article was to convey that this is a golden age for
Bitcoin in Holland, then it has achieved its purpose. If the point of the
article was to make it seem that significant adoption of Bitcoin in Holland
lay ahead, or that it would be a good thing, then it has not done so. In fact,
that would be an entirely different article that would have to include more
factual and historical analysis than this article even bats an eye at.

~~~
wwwtyro
> If it grows too much, it will be recognized as a currency and regulated.

Honest, non-rhetorical question: How? (In the sense of both the goals of the
regulation and the means of enforcement.)

~~~
oleganza
See my answer below in sibling comment thread.

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jdmitch
_When researchers and policymakers begin to have even an inkling of Bitcoin’s
deeper significance – more than “anonymous digicash created by evil hackers to
buy contraband from drug dealers” – there’s a better chance that banks and
governments of the world will start to get serious about cleaning up the
global mess they’ve created._

Can bitcoin's unregulatable nature really provide an example for how
establishment financial systems should be better regulated? Bitcoin can be an
alternative, it seems, but not a "city on a hill" to fiat currencies, and
their financial systems.

~~~
betterunix
What makes you think Bitcoin is unregulatable?

~~~
oleganza
1\. Politicians can't change the rules of the protocol.

2\. Politicians can't print more bitcoin as they like. Only according to the
protocol and in competition with others.

3\. It's virtually impossible to censor Bitcoin transactions (unless you shut
down the whole internet in the country).

~~~
betterunix
1\. So what? Politicians also cannot change the laws of physics that govern
paper money transactions, yet paper money is regulated.

2\. That is not an issue of regulation.

3\. The same applies to paper money, and again, paper money is regulated.

~~~
oleganza
I was just listing aspects of Bitcoin that are "unregulatable".

Regulation = laws = rules = instructions to cops when to apply rubber hose.

1\. Cash transactions require meeting in person. This makes people more
vulnerable to meeting with rubber hose.

2\. The value of your paper cash is diluted when owners of rubber hose print
more of it.

Bitcoin reduces these threats by more than 90%.

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oleganza
Quote from article:

> This past June Dutch Finance Minister Jeroen Dijsselbloem gave a Bitcoin-
> friendly report to Parliament. He said: «Bitcoin is not electronic money… At
> present its eventual I'mpact on the real economy seems negligible…Bitcoin is
> not a financial product as defined by law. (Mediation in) the purchase or
> sale of Bitcoins is not a financial service either, so the Financial
> Supervision Act does not apply.»

This is the same Dijsselbloem who said that deposit confiscation on Cyprus is
not a template for similar confiscations in the rest of EU:
[http://www.bloomberg.com/news/2013-03-19/cypriot-bank-
accoun...](http://www.bloomberg.com/news/2013-03-19/cypriot-bank-account-levy-
unique-eurogroup-s-dijsselbloem-says.html)

This is the same Dijsselbloem who said that Cyprus _is_ a template for
"haircuts" on deposits in the EU:
[http://www.businessinsider.com/dijsselbloem-cyprus-deal-
is-a...](http://www.businessinsider.com/dijsselbloem-cyprus-deal-is-a-
template-2013-3)

When time comes, all these guys will change their minds 180º without blinking.
Fortunately, it will be too late.

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jqueryin
Here's a mirror as it appears as though the site went down due to HN traffic:

[http://webcache.googleusercontent.com/search?q=cache:http://...](http://webcache.googleusercontent.com/search?q=cache:http://bitcoinmagazine.com/7725/the-
economic-singularity-from-holland-with-love/)

