
Why Bitcoin is not a socialist’s ally - panarky
https://www.yanisvaroufakis.eu/2020/07/27/why-bitcoin-is-the-not-socialists-ally-reply-to-ben-arc/
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nknealk
Bitcoin presumes (1) everyone owns a computer (or a smartphone/similar) and
(2) everyone has network connectivity all the time. Without these two things,
one cannot transact.

There are huge swaths of the world where this isn't true. Short of making
computing devices and internet connectivity human rights, these assumptions
compound existing inequalities.

~~~
wmf
You could always issue "paper" bills that are denominated/backed by BTC. Such
currency wouldn't have all the benefits of Bitcoin but it wouldn't be worse
(from a coiner's perspective) than existing paper money that people are using
today.

~~~
ianmobbs
Who is the one backing those paper bills? This brings back centralized
banking, which is what most folks in favor of replacing fiat currency with
Bitcoin are working away from

~~~
wmf
Yes, there would be a centralized entity printing and custodying the BTC
behind the bills, but all paper money today is also controlled by centralized
entities. So in this scenario, digital BTC would be "real Bitcoin" and paper
BTC would be "Bitcoin light".

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ogogmad
> Under the gold and silver standards, the public money supply was fixed – and
> could not be easily manipulated by the state (either the government or the,
> then non-existent, Fed). But that did not stop private bankers from
> leveraging public money out of thin air to create huge quantities of private
> money with which to fund the Robber Barons, i.e. the Jeff Bezoses, of the
> era.

But didn't the creation of private money happen because gold was so expensive
to hold and transport? Assuming Layer 2 solutions like Lightning get off the
ground, Bitcoin won't have this problem, right?

~~~
kerkeslager
Lightning has nothing to do with holding and transporting Bitcoin. Holding
Bitcoin is literally free. Transporting Bitcoin can also be free, depending on
what you mean by transporting.

~~~
VikingCoder
> Holding Bitcoin is literally free.

Interesting claim.

How do you secure it, back it up, and bequeath it to people on your passing?

Don't those things cost time and actual money?

~~~
kyboren
> How do you secure it, back it up, and bequeath it to people on your passing?

Keep the private key, mnemonic, seed phrase, etc. only in your brain and
perhaps your will, potentially split into pieces that are kept in the physical
control of independent trusted entities.

> Don't those things cost time and actual money?

Time: yes. Actual money: perhaps, but that is not fundamentally required. For
example, oral traditions are a time-honored means of transferring information
to heirs.

Keep in mind we're talking about just 256 bits of information. You can scratch
it on a rock and bury it in your back yard if you want.

~~~
VikingCoder
Grant Imahara just died of a brain aneurysm. You can't count on whispering a
password on your deathbed.

Do you think a carved rock is safe and secure?

[https://en.wikipedia.org/wiki/2011_Joplin_tornado](https://en.wikipedia.org/wiki/2011_Joplin_tornado)

~~~
shard
Not sure what your reference to the tornado was trying to point out. I could
not find any references on the page to the tornado abrading away carved rock.

~~~
VikingCoder
Doesn't need to abrade a rock, it merely needs to throw it through the air.

Any time someone has "backups" that are all on one property, I think of large
floods, fires, or tornadoes that can eradicate everything, or displace it all.

~~~
shard
I suppose if you didn't bury it deep enough in your back yard, the tornado
could pick it up and toss it. So then the question is what severity of events
do you want to prepare for? Once-in-a-decade events? Once-in-a-century events?
Or once-in-a-millenium events?

------
kerkeslager
Of course Bitcoin is not a socialist's ally _in the long run_. It's
fundamentally a way to get government _out_ of money, which is exactly the
opposite of socialism. Bitcoin is an anarcho- _capitalist_ tool.

The article rightly notes that the ability to print money is relevant here,
but I think they could have expressed it in simpler terms. In short: printing
money is _always_ a redistribution of wealth. If you print a million dollars
and give it to a group, you've effectively taken money away from everyone else
and redistributed it to that group. The pot of wealth in the country hasn't
changed size, the recipients of the newly-minted money just have more of the
pot.

In a socialist ideal, this is a key tool because it's one of the main ways of
redistributing wealth from the rich to the poor. You print money and give it
to the poor. This isn't creating value, obviously, it's just decreasing the
value of the money held by the rich, and giving that value to the poor. A
decentralized value store can't do that.

However, some socialists would argue that the ability to print money in modern
western powers is primarily used to redistribute wealth from the poor to the
rich, not the other way around. Due to this, a socialist might say it's better
to use a decentralized value store now than to use a centralized value store
that is used to redistribute wealth in the wrong direction.

If you're a socialist, the question on your mind with regards to bitcoin
should be: _Is_ the power to print money being used to redistribute wealth
from the poor to the rich? And if so, is the short term benefit of avoiding
this harm worth the longer-term harm of moving value out of stores where
wealth can be redistributed from the rich to the poor? These are much more
complicated questions: the first might be answerable with data, but the second
question involves a lot of future variables which may simply be impossible to
predict.

~~~
einpoklum
> Bitcoin is an anarcho-capitalist tool.

s/tool/ponzi scheme/... or in other words - I am entirely unconvinced that
bitcoin has a positive short-term effect. Most of what happens with BitCoin is
people buying it in exchange for fiat currency, a bunch of speculation, and
mining (if that's not mostly over). I don't see it empowering workers'
movements.

~~~
Melting_Harps
Then your view(s) is solely fixed on those who benefit from this exclusionary
Monetary System, go ask people who don't have access to bank accounts or are
undocumented how horribly they are treated and marginalized then come back and
see what is and isn't a ponzi scheme. See how many people are unfairly
targeted by the State(s) with policies like Operation Chokepoint in the US,
though similar laws exists in other places as well, while at the same those
very same Governments bail out Banks and Corporations found guilty in money
laundering for Drug Cartels or other illicit crimes and while telling the
People they're not doing enough to keep up with the ever-increasing costs of
living due to these policies and inflated asset bubbles.

Go look up what System D is, and see what worker movements it could help
benefit, because just from that statement alone you show just horribly
informed you are and how narrow and ignorant your view of the World really is.

~~~
wmf
The unofficial economy would benefit far far more from a stablecoin than
deflationary BTC.

~~~
Melting_Harps
> The unofficial economy would benefit far far more from a stablecoin

That's right... Because tether has proven that so well, hasn't it? By the way,
Bitcoin will remain inflationary until the last one is mined 2140, as it
continues to approximately discover the entire 21 million into existence until
then. Which is long after you or I will be around, be even then you can create
a form of colored coin derivative backed by other more stable assets (wheat,
pork bellies?) now if you wanted to.

I thought stablecoins may have had some limited utility, but I feel they're
just re-creating the same problem by using the same tools that fiat does and
further convoluting it by attaching the Cryptocurrency Brand over it. I'm not
impressed by it nor would I think people who are marginalized would want to
rely on yet another centralized system for their existence.

~~~
wmf
I think Tether should be destroyed, but it has never had a 60% drop.
Decentralized stablecoins should be even better.

BTC suffers from price deflation which is what everyone means by deflation.

------
DennisP
A lot of this presumes a scenario in which Bitcoin replaces fiat and become
the world's sole currency. It's hard to imagine why that would happen.

What we seem to actually be getting is multiple cryptocurrencies, in addition
to fiat. Under these conditions, if the world falls into depression, where
money is too scarce, then an easy solution is to launch new currencies. On
blockchains that support smart contracts, this would be easy to do.

If Hayek was on the right track with his advocacy of competing currencies,
this could be a more stable system than we have now. Easy deployment of local
currencies could also help support local businesses over large monopolies.

~~~
vkou
"Money is too scarce" is not ever going to be a problem. If the monenatry
supply, as a multiple of the economy is experiencing contraction, central
banks can _always_ print more.

Bitcoin, in this sense, is once again solving a problem that nobody has.

~~~
DennisP
Bitcoin is not trying to solve that problem. The article is claiming that
Bitcoin would _have_ that problem, if it were to take over the world from
fiat. My claim is that this is false, because there can be more than one
cryptocurrency.

------
yalogin
For me Bitcoin further exacerbates the already terrible distribution of wealth
in our world. BTC is purely a play for the "rich" folks. I say "rich" because
it needs not just tech access and disposable money barriers but also has the
additional tech knowledge barrier to it.

~~~
ColanR
That is a problem which crypto proponents are actively trying to overcome.

~~~
Dahoon
As long as it requires work by CPUs or GPUs it is for rich people.

~~~
colecut
Gold requires actual physical mining equipment and labor.

You could make the argument that gold is also for rich people, but no one
seems to have a problem with it.

~~~
wmf
Many people object to gold _being used as money_. Now that gold is mostly for
jewelry and investment people can afford to not care about it.

------
m12k
Not mentioned here, but bitcoin is also a much better tool for tax evasion
than banks are, with all their mandatory reporting to the tax authorities.
That also makes it less of an ally for a socialist, since it helps the wealthy
starve the state of tax revenue, further increasing inequality.

------
heidegger
all socialists snicker at the mention of bitcoin. it is a punchline, a jab at
"Libertarians" and their silly faith in technological solutions to social
problems

~~~
H8crilA
Yeah, if only more people knew some history:
[https://wtfhappenedin1971.com/](https://wtfhappenedin1971.com/)

~~~
sudosysgen
This is a correlation without causation. The root cause of both fiat currency
and the worker being ripped off, is globalization.

Fiat currency did not cause the disconnect between productivity and wages, the
same way that the disconnect between productivity and wages did not cause fiat
currency. They were both caused by the shift to a complex global economy.

~~~
H8crilA
And you're sure of this root cause analysis because ... ?

Also, if that's the root cause then surely you can point me to some
correlation between "globalisation" and some measurable ills of the world?
After all - causation does mean correlation.

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AcerbicZero
Sooooo the issue with bitcoin+socialism would be the lack of easily
centralized controls by which the party/state can manipulate the currency and
that people are incapable of doing altruistic good, therefore the party/state
_must_ have those controls?

Authoritarians are gross.

~~~
einpoklum
> The lack of easily centralized controls

No, BitCoin has basically _no_ control of the currency. The algorithm is what
it is, and the initial "players" who have the most BitCoin are who they are.

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joosters
Normally, a big problem in crypto-currency blog posts is that an ill-informed
author blathers on about supposed technical features of blockchains.

But this article is remarkable in that it doesn't mention any feature or
property of bitcoin at all! You could replace the word 'bitcoin' in the page
with any other currency, monetary system or whatever means of accounting that
you like (using shells for currency, perhaps?), and _nothing would change_.
The article is amazingly content-free, and its arguments & propositions could
be re-applied to whatever you like/dislike!

~~~
sudosysgen
It isn't an ill-informed author, Yanis Varoufakis is a very respected and
competent economist.

Of course! You could replace Bitcoin with _any other fixed supply currency_.
This is literally the point of the article! He is arguing that Bitcoin cannot
work for the common man, because it has all the issues of fixed-supply
currencies that lead to fiat currency. Transitioning to Bitcoin would be akin
to restoring the Bretton Woods system, and would be disastrous for everyone.

He is indeed addressing a feature and property of Bitcoin. That feature is
fixed supply. That is what matters to an economist, because it has huge
impacts. Varoufakis, in this essay, doesn't talk about the tech, because not
only has he already done so, but because it is _irrelevant_ to the analysis
that he, as an economist, makes about the consequences of a switch to Bitcoin.

~~~
chrisco255
Why would restoring Bretton Woods be disastrous? The late 40s through the late
60s were among the biggest economic boom years in world history and perhaps
the greatest expansion of wealth and quality of living in human history.

~~~
sudosysgen
The late 40s through the late 60s were amazing economic booms because of a
small event called World War 2.

It was removed because it gave very little flexibility in monetary policy, and
gravely prevented deficit spending. This led to failure to control the
business cycle, as well as inflation in general, which would have been
disastrous.

If we restored Bretton Woods, 2008 would have been a complete disaster, and
the current recession would be orders of magnitude worse and would last much
longer. As for why control over inflation and deficit spending is helpful in
recession, read Krugman, or Keynes if you like the classics.

~~~
chrisco255
That's not strictly true. The suburbs were rolled out, interstate highway
travel became widespread, commercial air travel took off, computing was just
beginning, television started to proliferate, retail expanded, air
conditioning became widespread...there were numerous technological expansions
and improvements in quality of life.

Sound money ensured that money was invested in things that actually produced
productivity improvements. We coasted on the residual returns of investments
from earlier eras, but productive investment, I would argue, has declined
since those earlier decades. ROIs on loaned money have declined in the zero
interest rate era.

