With AI and advanced automation, and possibly crowdsourcing, it becomes credible that any type of economic value could eventually be produced in a decentralized fashion. And one can imagine that such autonomous corporations would evolve to be so competitive (since they can afford to) that they would put all profit-driven concurrents out of business.
The economy would eventually transform into a landscape of owner-less providers of economic value, perfectly "efficient" in the capitalistic sense. That might even happen sooner than fully decentralized governments.
do you really take that paper seriously? In human systems epsilon of the best approximation is pretty relevant. If N (time scale) is millions of years and epsilon is tenths of cents for the reduction to work then it is functionally irrelevant.
Using the word "efficiency" anywhere close to the word "market" and not using an economic definition is bogus. You may as well make the rest up too. Those words have a very well defined and useful meaning (theoretically and practically) to most who interact with or study the markets.
However, we might define an efficient market as one in which price is within a factor of 2 of value, i.e., the price is more than half of value and less than twice value. The factor of 2 is arbitrary, of course. Intuitively, though, it seems reasonable to me, in the light of sources of uncertainty about value and the strength of the forces tending to cause price to return to value. By this definition,I think almost all markets are efficient almost all of the time. ‘Almost all’ means at least 90%.
They have no such thing. Grab a decent dictionary and start looking up random words. Many have at least 2 or 3 different definitions, often unrelated and sometimes even contradictory.
Are mathematicians dishonest as well when they use phrases like "almost everywhere" or computer scientist when they describe a problem as "Hard" or ballet dancers talk about an "adagio"? All those words have very specific generally understood meanings in the field which might confuse someone with no background in the field.
What alternative to you propose? That they make up new words each time they want a short hand to describe a specific concept, or that they use always a long descriptive phrase each time they want to talk about these concepts?
1) We are discussion an economics paper as another reply notes. Of course we are going to use the economics definition of efficiency. We can hardly use anything else, can we? It has NOTHING to do with dishonesty.
2) Jargon. Don't tell me that software development doesn't have weird uses and definitions of words. Meanings of words changes over time, languages aren't static. The term efficiency in the context of economics is rather well established and part of the English language, despite what you may personally think about it.
An important property of corporations is that they are always resolvable to a natural person. This is true even in jurisdictions like Nevada where the corporate laws allow arbitrary levels of blinding and indirection. The "autonomy" would be illusory.
Basically, you can't do much that is interesting unless a computer system ultimately resolves, or is imputed by law to resolve, to a specific natural person.
(EDIT: People are missing the point. What you call it is immaterial. All the handwaving aside, these "autonomous systems" including the ones described by the author are legally not autonomous. It is not possible under the law to construct such a thing. You may claim that it is "autonomous" but no government will recognize that claim as suggesting legal independence from a natural person. True AI would make this weird but we do not have AI today and the underlying fact still remains.)
Actually, that's really really not true, outside of the USA.
It's trivially easy to set up a USA corporation that is: managed by a laywer, that is is owned by a trust in the Caymans, or a similar secrecy jurisdiction, where the beneficiaries of that trust, a.k.a. the owners, are unknown - protected by client-attorney privilege. For an added layer of security, this trust's beneficiaries could be another trust that is governed by bearer bonds. That is, whoever owns the bond, an actual piece of paper, is entitled to the benefits of that trust. They are only legal in some countries.
Make this harder to follow, and you have a series of shell companies in many countries, all with secrecy jurisdictions, and I've just described how organized crime can own lots of very legal and real looking USA companies, with almost 100% chance that you'll never find out who is controlling them. Ones that make large political donations to lobby groups and politicians - not bribes you understand.
EDIT: I think you're all missing the point that this can be done today with the right lawyers and enough USD, but bitcoin just makes it easier. Though the fact that bitcoins can be traced MUCH easier than the flow of USD, is somewhat of a downside.
Interesting read to me, I did not know this. Good to read from someone who knows much more about corporate structure than I do.
I want to add one important point. Bitcoin not only makes it much easier to setup this kind of autonomous corporation, it also makes it transparent and verifiable by outside. It does so through being open source. And since no one actually owns it, it is completely transparent.
I first learned of this world in popular non-fiction: Emergency by Neil Strauss. An excellent book if you want to know more about secrecy jurisdictions, state regulatory capture, the basics of transfer pricing, etc. is Treasure Islands by Nick Shaxson (http://treasureislands.org/).
What you are saying is literal and descriptive. Currently corporations are always resolvable to a natural person. I think the author's point is that new technology (including bitcoin) can effectively cut out the middle-man.
Therefore, future legal (or quasi-legal) entities will be able to be structured in novel ways. Maybe it won't be a corporation by the standards we're used to. But bitcoin itself is an example of this structure - de-centralised and not "owned" or "managed" by any particular individuals.
Corporations are legal fictions, and have their own set of legal rules. Besides being resolvable, they exist somewhere. They are registered/incorporated/created/etc. There is some jurisdiction. There is usually an agent.
There are all sorts of agency/etc laws that would have to be built to support such a system.
Corporation is literally the wrong word for what this describes.
A "horseless carriage" may be a bit of a contradiction, from a certain point of view, but we don't have a strict definition of what is and what isn't a carriage, so it's not particularly misleading. We have a very strict definition of a corporation, so "autonomous corporation" is misleading. True, language evolves, but the law hasn't yet.
> An important property of corporations is that they are always resolvable to a natural person.
Just like an important property of cars is that they are always driven by a natural person?
> The "autonomy" would be illusory.
Until we have strong AI, any autonomy will be illusory (i.e. humans will out compete agents at writing agents). I still find the word meaningful to distinguish such types of mostly autonomous corporations from traditional corporations.
You are probably right for now regarding how the legal system would currently handle such corporations.
Non-citizen national here. I have a special passport, and am considered a non-specific, non-naturalized person. I have to create (foreign-owned) LLC's in order to work within the system/collect or pay taxes/earn a wage in Dollars. I've met at least a hundred people that have the same status as I do. I'm told there are thousands of us.
Yes, but practically, does it matter as long as the autonomous systems continue to provide sufficiently lucrative reasons for real people to sustain its operation, e.g. by continuing to mine or maintain the network under the governments' radar?
Who exactly will have the ability to enforce laws against a swarm of decentralized systems? In all practical terms, it does not look like "laws" can take out crypto-currencies at all. Jim Bell shows that the opposite is not true. I think that BTC is the beginning of the end of politically-centralized "law" as we know it.
"In all practical terms, it does not look like "laws" can take out crypto-currencies at all"
Perhaps, but the law can certainly stunt the growth of such currencies, to the point of keeping them small, niche, and irrelevant for the majority of transactions. I suspect that this is already the case, without any modifications to the law.
Jim Bell's theorem clearly demonstrates that the politicians have lost the monopoly on the use of force. At the same time, the politicians have never had any real or valid claim to legitimacy. Libertarians reject government claims to legitimacy on grounds of Occam's razor. Religious people reject it because such claims amount to paganism and often also blasphemy. Therefore, politicians will have to contend with retaliatory measures, which may make any of their attempts at keeping BTC small, irrelevant.
here it comes. Merely accelerates the ineluctable march of capital, which you can conceive of a conceptual mathematical-material virus kept in check so far by social forces and technological constraints.
The author believes that Bitcoin is the first of many future 'autonomous corporations' that are defined by their nature; they run themselves.
Of Bitcoin in particular it says
this corporation has revenues, expenditures and profits.
However... no one owns this entity, it owns itself
...it provides a payment protocol and employs miners to maintain that protocol.
The employs are rewarded with ‘stock’ that is split at most into 21 million units
I really like this concept, but I struggle to link it to the thesis that Bitcoin removes 'the major missing piece of the equation – payments'.
I think Bitcoin is able to be distributed and autonomous by its nature, and that any future autonomous corporations will similarly need to be autonomous by nature. Thus, while allowing for the kinds of payments and receipts an autonomous corporation will require, I don't think Bitcoin is the only thing such a corporation will need, nor the most important.
Instead, it will be innovative solutions that by their nature require decentralisation and autonomy that eventuate in this 'next generation of corporations'. Bitcoin will be an important model going forward; I'm really looking forward to solutions to other problems that surely will be inspired by it in the coming years.
Before bitcoin, a corporation needed a person to open bank accounts, sign off on payroll, write checks to suppliers, etc. With bitcoin, a set of algorithms can do all of those things. A profit making system doesn't need any human contact anymore.
If Bitcoin ever graduates to anything more than a toy currency (last count was a billion or two USD globally?) then it's going to have to deal with graduate level problems. The business cycle is a thing I'm afraid, and the management of a recession to prevent it's becoming a depression is as close to a fusion of science and art as you'll ever see. The necessity for this isn't going to change as long as the human brain continues to function as it does.
In good times people want more money - a discussion on what they should want is irrelevant, lets stick to the facts - and in bad times people want to protect what they have (aggressively so). Now consider that what makes times good vs bad is not determined by money - it's determined and prolonged by some other shock like an asset misvaluation, the destruction of a massive crop, or some combination of external factors underlying the real or nominal non-money thing.
Let's say it's a rice crop. Those dependent on rice freak out, and push all their money into safe assets, those dependent on those dependent on rice do the same. The chain reaction continues until all the economy's money is tied up in safe assets, not being spent, and everyone is sat at home waiting for it to blow over. If policymakers do not intervene correctly at this point, this situation will become a depression, and much misery will ensue.
So what do we do? We make safe assets more expensive to lower the risk/reward ratio for commercial activities: we make bank holdings very unrewarding (lower interest rates), we devalue the money in circulation and provide liquidity in one move (print money), and government invests in big infrastructure (liquidity, jobs, momentum, signalling etc). All of this is designed to keep things moving and ward off a depression. And it works - this is why we abandoned the gold standard.
So given that Bitcoin means nothing to rice, or most other external factors, and not to the rigidities that exacerbate recessions - how exactly do we deal with this in the described autonomous utopia?
I very much agree that the regulators of currency leave a tremendous amount to be desired, but unfortunately this appears to be one of very few economic problems where decentralisation is not the answer.
There is a reason we need to have a global economy for food production. Bad weather in one region? Import from elsewhere. (Same applies to all commodities and services.)
The economy works quite well naturally, but for massive government invervention, such as what you are proposing, which would have massive unforseen consequences (such as improverishing people, which punishes the poor the most).
By the way, were it not for abandoning the gold standard, the US would not be able to finance a perpetual state of war. (It would have to pick wars with terminal conditions and actually win them.) It would also be much harder to finance 1984.Net.
The typical response to this is for me to get screamed at about how I am obviously wrong because all economists disagree with me and because it's just obvious. I don't think that's a legitimate response.
Rice was an example that was palatable to both my lazy fingers and I hoped to those who may not have appreciated a jargon filled response. It does not detract from the clearly presented general case which you are more than encouraged to investigate, I have done my part in spelling it out for you.
> but for massive government invervention, such as what you are proposing
I am not proposing anything, I am merely describing. The issue at hand is not readily solved by the markets, which in this situation a) are in a state of risk aversion and b) possess very bad quality information that is difficult to reason about. This is classic market failure that is documented in places better than my mind - go forth and google.
If you are so used to receiving that response that you describe it as "typical" then I would suggest that you are either quite the revolutionary thinker, or that you are, in fact, typically wrong. Which do you think it is?
> Rice was an example that was palatable to both my lazy fingers and I hoped to those who may not have appreciated a jargon filled response. It does not detract from the clearly presented general case which you are more than encouraged to investigate
I am also using rice as a stand-in for the general case.
> I am not proposing anything, I am merely describing.
That's a meaningless distinction. Academic communists who supported Stalinism also claimed innocence when Stalinism resulted in the deaths of millions. I am not accusing you of anything on that scale, but I am saying that ideas have consequences. You are responsible for the consequences of the ideas you support and promulgate.
> This is classic market failure
Right, and I don't think markets are inherently failure-prone. If I drive my car into a light pole, is that a classic automobile failure? So I dispute the very terminology here.
Case in point: The 2008 mortgage crisis was caused by a massively distorted market for mortgages and easy credit. The first was created by Barney Frank with Freddie and Fannie, the second by the Fed. Future generations will remember this as a "market failure" and use it to justify the existence of future incarnations of Freddie, Fannie and the Fed.
> I would suggest that you are either quite the revolutionary thinker, or that you are, in fact, typically wrong.
There is a third possibility, which is that lots and lots of people think like me.
> I am also using rice as a stand-in for the general case.
The existence of futures, commoditised goods, integrated markets and all the rest have clearly not eliminated shocks of the type I describe. What's your point?
> You are responsible for the consequences of the ideas you support and promulgate.
Again, you appear to be having issues with the concept of description. What I explained is how things actually work, why they need solved, and how they are currently solved by intervention. There is no argument here. I could very easily describe your arguments, and why they're flawed, and in no way would that amount to my supporting or promulgating them.
> I dispute the very terminology here
Dispute the terminology all you like, it's just a name for the what I described, it has no bearing on the concepts which you have failed to address cogently at all.
> There is a third possibility, which is that lots and lots of people think like me.
I think you mean that lots and lots of people think like me, and I would ordinarily dispute that too.
> What I explained is how things actually work, why they need solved, and how they are currently solved by intervention.
Except that the people who disagree with your "description" would point out that they are not solved by intervention, the underlying problems are simply exacerbated until they spiral out of control and experience a black swan event and the entire edifice collapses into an orgy of post hoc problem fixing that just messes things up more and more all the time.
At best this is just delaying the inevitable, and at worst drastically increasing the magnitude of how bad it's going to be when it becomes impossible to delay it further.
In theological terms, your claims are equivalent to appeals for plenary indulgences as effective as an effective long term strategy for the mitigation of sin. ;)
> I think you mean that lots and lots of people think like me, and I would ordinarily dispute that too.
Lots and lots of people think like both of you. Bitcoin takes the question out of the political realm and into the technical realm. If you don't buy keynesian economics and want no part of it, then for the first time in modern history it is largely possible for you to circumvent systems based around those assumptions and management strategies.
There might be arguments that the very fact this is now possible eliminates the ability of keynesian systems to act in what they describe as a benevolent fashion, but it's largely irrelevant now. The cat is out of the bag and nothing is going to put it back in.
> Except that the people who disagree with your "description" would point out that they are not solved by intervention
If the problem is warding off a depression, then the solution I described is indeed a true solution. It may not be optimal, but starting to discuss optimality of the potential solutions was a little beyond the scope of the point I was making.
> At best this is just delaying the inevitable
Let me explain to you what a business cycle is. Here is an example long term growth trend: http://wolfr.am/17dwVbt and here is the same with business cycles http://wolfr.am/1iaDMSa - if there is an inevitability, it's the trend. I can't comment on your inevitability, because you didn't actually say what it was.
> at worst drastically increasing the magnitude of how bad it's going to be when it becomes impossible to delay it further
Money is nominal, it has no long run effects. Everything I've described has been the use of a nominal tool in the smoothing of short-run fluctuations. The long term trend is unaffected.
> If you don't buy keynesian economics and want no part of it, then for the first time in modern history it is largely possible for you to circumvent systems based around those assumptions and management strategies
This is not relevant to what I said. If sufficiently large your Bitcoin utopia will suffer these problems and you won't have a solution. God help you if all your eggs are in that basket when reality strikes.
> If the problem is warding off a depression, then the solution I described is indeed a true solution.
If the problem is warding off an invocation of oomkiller at the kernel level, then just setting the jvm heap size lower is indeed a true solution. We'll just ignore the fact that it doesn't actually address the problem and the memory leak still exists and has actual consequences, because we stopped oomkiller from randomly killing innocent processes which is definitely a noble goal.
Keynesian solutions have consequences, they are not magic. And they are not really solutions at all if you're not deceived by the simple sophistry of them, they're band-aids. That
> The long term trend is unaffected.
Is terribly amusing, I guess that's why we don't have financial crisis anymore or hyperinflation or sovereign debt defaults or poorly managed national economies or anything of the kind.
> If sufficiently large your Bitcoin utopia will suffer these problems and you won't have a solution.
That's because setting a shitty raft on fire so you're forced to deploy life vests instead of drowning is simply not a solution, and pretending otherwise is just stupidity masquerading as tactics.
Whatever, as long as it works for you hope you're happy with it, I'm not buying.
Your posts mostly consists of rambling that the established economics definitions of efficiency, market failure and so forth are wrong. You call an entire profession slippery and dishonest.
You are clearly pushing your agenda, in a fashion that IS intellectually dishonest. Try having a conversation where you actually use the jargon of the subject matter. Market failure means one thing when you are discussion economics, don't try to invent your own definition. That is dishonest and poor argumentation technique.
> You call an entire profession slippery and dishonest
Academic economics isn't a profession.
> You call an entire profession slippery and dishonest.
I didn't call all economists slippery and dishonest. So, this is a bizarre and blatantly false accusation.
I don't even think all economists who accept the jargon and go with it are dishonest. It would be hard to do anything else. But I think certain jargon is inherently biased. Somebody originated that jargon.
> in a fashion that IS intellectually dishonest
How so? I think it's pretty fair to criticize my point of view, but I don't think you can support the accusation that I'm intentionally misleading people. That's a pretty high bar to reach. I'm not going around intentionally inventing confusing terminology.
Re: astroturfing, I regret bringing that up. But the guy I was talking to didn't seem to be interested in discussing the issues, he seemed to be playing language games to "win" an argument. But that is just my perception, I'm not even sure I'm right about that.
Those "language games" (I assume you're referring to my having to twice clarify the definition of description) were necessary a) because you were putting words in my mouth; and b) half of your argument centred around attacking me like I was pushing some agenda: I was describing reality.
> But the guy I was talking to didn't seem to be interested in discussing the issues
I made a clear point with a clear example and well defined boundaries. Some of what's been said here - a lot by you - has been so wrong/irrelevant/flawed that I wasn't willing to entertain it, on this point you are correct. I'm 2 weeks in to a new keyboard layout you see, and the thought of the amount I'd have to type to address them all properly was too much to bear.
That's an ideological statement and an axiom of your belief system, it is not however reality nor something everyone agrees with. That's why people scream at you, you are being ideological but speaking as if it's a fact. Markets fail, they do not always work well naturally, and government is not always the problem.
My economic beliefs are based on observation of reality. I don't know how you want to define "ideological" and "axiom," but I would not call them either. Certainly, they are not "axioms."
> Markets fail, they do not always work well naturally, and government is not always the problem.
Markets always work well eventually, and physical force (which is typically weilded by governments) is the only thing that can arrest that process. In the short term, certainly, there can be market disruptions. There are all kinds of ways to deal with those so they don't have to be problematic.
That's a religious statement, not a factual one. Please open an economics textbooks and find the chapter on market failures. You are talking ideological nonsense, you are not describing reality.
Edit: I checked your profile; you're quoting Ayn Rand; your mind is already fucked. I'm done with this conversation as it's impossible to reason with anyone who thinks highly of that insanity. The only thing Ayn Rand is a good starting point for is how to brainwash young minds with terrible writing and an idiotic philosophy. She's a joke.
To be clear, Ayn Rand didn't write about economics. So, you can't take my economics views as representing her views.
> your mind is already fucked. I'm done with this conversation as it's impossible to reason with anyone who thinks highly of that insanity. The only thing Ayn Rand is a good starting point for is how to brainwash young minds with terrible writing and an idiotic philosophy. She's a joke.
That's completely untrue. I'm a very intelligent and very well-educated person, and I agree with Ayn Rand. And there are a lot of people like me.
Ayn Rand's views are actually quite intuitively reasonable---and there is a lot of techincal philosophical work that has been done to show that they are true.
(a) there is an objective reality
(b) we can gain knowledge about it
(c) we should act self-interestedly in the pursuit of happiness
(d) we need freedom (in the classic liberal sense) to do that
Which of these views causes you to automatically dismiss me out of hand?
If you want to make a cogent criticism of Ayn Rand, I will tell you why I think it fails.
> That's a religious statement, not a factual one
It's not a religious statement. I realize that you are accusing me of believing certain things on faith, and I completely reject that. I am a scientist.
I definitely suspect we probably disagree on what "always work well eventually" means, though, which I left undefined.
> By the way, were it not for abandoning the gold standard, the US would not be able to finance a perpetual state of war.
you're correct, but a few things:
1) the gold standard never fully went away; while we implemented Keynesian fiat money, we then pegged it to Oil production, hence the term "Petrodollar". It was a little amusing that we went to war in Iraq (under the WAR ON TERROR banner) immediately after Hussein switched to the Euro as the default currency.  Even in it's weakened state, the Petrodollar is still the main currency of choice.
2) The Gold Standard switch is the tip of the iceberg. We should be talking about the US Bankruptcy. Check out the Trading with the Enemy Act of 1917 (specifically, the 1933 amendment) , and House Joint Resolution 192 of June 5th, 1933 . Those two acts set up the perpetual state of war in the US, though some would say it happened when congress went sine die during the civil war.
3) Fiat money is _awesome_ in a world in bankruptcy. Since 1933, people/citizens are the source of all money. we live in a world of abundance now since the industrial revolution, and in the next 20 years, as machines take over all the old grunt-labor jobs, we're going to have a glut of people unable to do the jobs they were trained to do. under any resource-backed economy (gold, oil), this would be catastrophic. However, this is why we have institutions like the Bank of International Settlements in place, to post bonds and discharge debt for insolvent countries/corporations. Money is debt, as the Youtube video tells us. We're now in a world where a Promise to Pay (an IOU) is in fact the money itself . In this world, everyone that has a "Sophisticated Investor" level of understanding of the game can act as their own BIS, effectively becoming another Carnegie, Rockefeller, Warburg, or Oppenheimer.
I suspect you're a lewrockwell.com reader, or at least one who follows a more libertarian leaning (correct me if wrong). Back when I was championing the gold standard, I used to say a lot of the same things. Much of what they said was right, but was missing the massive caveat that it was only correct within the confines of HJR-192. Gold/Silver is only payable for private commerce outside the jurisdiction of Wickard v. Filburn  nowadays. Michael Badnarik, former Libertarian Presidential Candidate, teaches a common law class that explains many of these concepts, so that you can preserve and exercise those pre-1933 rights .
> If Bitcoin ever graduates to anything more than a toy currency (last count was a billion or two USD globally?)
This isn't a response to any of your points, but I'm deeply amused to see someone still calling Bitcoin a 'toy currency' at a market cap of $2b. Many people were calling Bitcoin a toy currency when the market cap was more like millions. Truly, people can differ in opinions a great deal.
I knew I'd get called out on that no matter how I worded it. I have nothing against Bitcoin, but in regard to the points I made - yes, it's a toy currency: it's magnitude is nowhere near enough to be even close to relevant to the business cycle. There are many circumstances where the phrase "Bitcoin is a toy currency" would not apply, this just isn't one of them.
The point is $2bn is a significant amount of money. There's a LOT that can get done transaction-wise with that kind of money. It's the start of a mini-economy of its own... but only mini in comparison to current economies.
It's already a bigger economy than some small countries. That's a pretty decent size in my book. Add to that the fact that it's increasing in size exponentially at the moment and it's looking like it's going to be a pretty serious currency.
Th problem with bitcoin, if nothing else, is that the exchange market, USD:BTC is rather illiquid. Doesn't MTGOX take forever to process the withdrawals in USD?
This is a big problem that does make it a toy currency. The slow exchange probably brings up the price. I expect, without much proof, that the USD:BTC ratio would be lower, at least short term, if you could exchange them easier.
$2b in circulation is pretty decent of course, but if you cannot convert those BTC to USD with ease then the valuation is flawed.
By three days, I mean, I initiate a transfer from bitstamp, and I get it into my thai bank account within three business days. The transfer is always verified and initiated on the other end on the same day I make it.
Not following my logic at all. This is the currency of a country, which has a business cycle - it's relative magnitude is not relevant. Bitcoin is a global currency - the impact of the business cycle of the underlying assets is directly proportional to the amount of global assets represented by Bitcoin. Bitcoin BC's won't affect us until Bitcoin holdings are sufficiently large.
Edit: or it's not evenly distributed. A few thousand people holding all of their wealth in Bitcoin would be enough to study this.
> We make safe assets more expensive to lower the risk/reward ratio for commercial activities: we make bank holdings very unrewarding (lower interest rates)
Wouldn't this force people already worried about the future to buy into less abstract stores of value like houses? Wouldn't that just end up monetizing houses eventually leading to a bubble? Isn't the risk/reward ratio an indicator for the health of an economy and isn't skewing it treating the symptom not the cause?
> we devalue the money in circulation and provide liquidity in one move (print money)
But we use this newly created money to buy assets which the market had no interest in buying inflating their price and funding contractors at the expense of everyone else.
> and government invests in big infrastructure (liquidity, jobs, momentum, signalling etc)
But unlike market investors, there's no worry about ROI. Building these large infrastructure projects may pay off but theres no downside and they could just end up making a few people very rich.
> And it works - this is why we abandoned the gold standard.
I thought the gold standard was abandoned because Nixon refused to convert France's dollar holdings back to gold in 1971.
> Wouldn't this force people already worried about the future to buy into less abstract stores of value like houses?
It forces people to spend/invest money primarily, which keeps the economy growing, prevents job losses etc. Houses are one form of investment, but they're no less tangible than many others from the point of view of your average investor.
> But we use this newly created money to buy assets which the market had no interest in buying inflating their price and funding contractors at the expense of everyone else.
This is not about magicking up new demand, it's about restoring the previous demand before the fear set in. Inflation is a reality, yes, but it's not inherently a bad thing - in these situations there's an acceptable level where the benefits outweigh the costs.
> But unlike market investors, there's no worry about ROI. Building these large infrastructure projects may pay off but theres no downside and they could just end up making a few people very rich.
It barely matters if they pay off at all, the end product in this kind of capital expenditure is much less important than the process of doing it. Making a few people rich is the usual outcome of high-value expenditure, why would that be any less true in a recession? It's a nothingness on the scale of rescuing a flailing economy.
> I thought the gold standard was abandoned because Nixon refused to convert France's dollar holdings back to gold in 1971.
I'm not a historian. It's certainly why we don't go back to it, and why not a single country on the planet uses a fixed monetary system anymore.
The problem isn't investment in houses, its the monetization of houses. Unlike gold or bitcoin with finite supply, demand for houses creates a corresponding increase in supply which is a waste of resources which could have gone elsewhere. If inflation is particularly bad you could end up with Chinese ghost cities.
Lowering the difficulty of exams so that previous scores are reached again sounds like curing the symptom to me. How are the benefits outweighing the costs?
> Making a few people rich is the usual outcome of high-value expenditure
Its high value expenditure with newly created wealth taken from the savings of everybody else. It matters a great deal if it doesn't pay off.
The benefits outweigh the costs because the alternative is a depression - and that's a really bad thing, people die etc. Also this isn't a symptom of a problem needing cured, it's more a symptom of the human condition.
> Its high value expenditure with newly created wealth taken from the savings of everybody else.
It's either savings or new wealth, it can't be both.
> It matters a great deal if it doesn't pay off.
I'm not sure you'd be of that opinion in a depression.
> - and that's a really bad thing, people die etc.
I'm all for saving people, lets call it charity though and not investment.
> It's either savings or new wealth, it can't be both.
True, I meant currency, its new currency taken from the savings of everybody else
> I'm not sure you'd be of that opinion in a depression.
Hypothetically if we used a global hard money system, like bitcoin, and the government was so sure that spending now would boost the economy in the future. I see no problem in them taking a loan and building some highways.
That's a real effect, but implicit in your description is an assumption that there's only one standard currency, like dollars or gold.
An alternative is to allow anyone to issue currency. Worgl, Austria got itself out of the Great Depression by doing just that, creating a currency with built-in devaluation (until Austria's central bank shut it down).
We already have multiple bitcoin-style currencies, and it's easy to create more. Some even devalue, much like Worgl's currency. So I don't think this is likely to be a problem, unless somebody is silly enough to make bitcoin the only legal tender.
This is an novel thought, but I don't see how this does much to mitigate agent expectations as regards the valuations of real assets, which is the underlying issue here. Theres also the question of how practicable such a scheme could ever be with global capital markets.
I've done some reading. This idea is about refining the concept of money, to give control to the agents and remove the untrustworthy and incompetent regulatory control. Interesting indeed. However the mechanics of maintaining stability as described by Hayek are largely the same, it's only the controlling party who has changed.
Edit: And back to the point - Bitcoin has no controlling party, it cannot be manipulated in this way at all. It cannot respond to business cycles.
> So what do we do?
(1.) We make safe assets more expensive to lower the risk/reward ratio for commercial activities:
(2.) we make bank holdings very unrewarding (lower interest rates),
(3.) we devalue the money in circulation and provide liquidity in one move (print money),
(4.) and government invests in big infrastructure (liquidity, jobs, momentum, signalling etc).
I clearly see how 3. is not possible with Bitcoins, but how are the others not possible?
Regardless of how the boom/bust cycle originates, an elastic money supply can accommodate those swings so that they do not cause harm to the overall economy.
Bitcoin is the opposite of an elastic money supply, and eventually it becomes a completely static money supply. This is a feature as far as a store of value goes, but a liability when it comes to medium of exchange.
You could also automate the backend – set it up so that the botnet could draw on the BTC account to purchase new VPS hosting for its command and control servers, migrate when the old ones get taken down, etc.
Of course, without the creativity to come up with new C&C mechanisms, the pattern of migration and purchases might eventually become predictable enough to stop the botnet.
Make something that scrapes content and SEO-izes it. Add affiliate links. Run on AWS. Make payout to affiliate commissions to the same account that pays AWS. Make the system capable of growing/shrinking its AWS capacity on its own. bam. self-perpetuating and potentially self-optimizing/growing income with zero outside intervention (except for when google corrects around it).
I think this is an interesting example but it doesn't address the concerns that a single actor could modify the program behavior at will, making the system hard to trust if multiple parties are trying to benefit from it. I believe a key idea of autonomous corporations is the inability of a single participant to alter it's function without consensus of other participants.
Does anyone have an example other than the BTC blockchain that provides a valuable service guaranteeing consensus is required for changes to the system's behavior?
Seems like consensus is the tricky part. In the case of the affiliate link example, where all of the business is online, you could host the code under a version control system that allows people to fork and modify the code, but requires majority approval for that code to get deployed. Also if all of the financial assets are in BTC, you could have a corporate wallet that is governed similarly (so expenses and disbursements need to be approved by the majority). Of course this isn't exactly an 'autonomous' system, more like a decentralized system.
I for one welcome our new autonomous corporation overlord, which would hire people via TaskRabbit to become its shareholders, and hire lawyers via emails to protect its interests. It would commission new servers on various cloud providers on the fly to avoid being shut down. It would generate revenue by running a SilkRoad that cannot be stopped. It would employ security guards and hitmen to stop people going after it. It would commission black hat hackers to help it infiltrate various intelligence networks, and rely on Mechanical Turk to translate human language into something that makes semantic sense for it to act upon.
... people are willing to pay for terrible things, especially if they're provided by autonomous businesses. And people will do anything for money including working for an autonomous business doing terrible things. And who's to say that an autonomous business providing a nice service, such as electricity, won't keep trade secrets and also needs no human workers (thus robots could be doing, in secret, some terrible deed hated by humans to provide a resulting service liked by humans... and that secret business plan might have been concocted by an algorithm with no human intervention).
The conviction some commentators have that somehow Bitcoin is more secure, ethical and predictable than FIAT (central-bank-controlled) currency is hilarious.
Given the fact that 98% of BTC belong to 2% of portfolios and there's a way stronger anonymity compared to fiat currency (you all know who Bernanke is and where his power comes from) and early adopters can drive easily the market up or down. Personally I believe that's the main reason BTC didn't fall after SR bust. Because, what most believe is not controlled is TOTALLY controlled (big players didn't opt out).
That said I can see how BTC is useful and has awesome qualities, especially for people who understand technicalities of a digital currency and how money works.
However, BTC is a hoarding system. Much like gold and nothing like fiat. BTC is not inflationary, by design. Inflation is the first quality a fiat currency must have, in order make people willing to spend.
Well, Apple was perhaps a bad example since they tend to hold their value for a little longer than most brands, but iPhones weren't the same price for years. I really don't know where you got that from. An iPhone 4 is far cheaper now than it was on release 3 years ago.
I live in Greece I don't know the exact amount but basically every new version of the iPhone had the same price (say 620 € for 16GB). However, inflation is measured against CPI (consumer price index) not a single product which might have specific market niche (i.e. Luxury goods).
Now, a currency that doesn't slightly inflated tends to be seen as an investment by consumers rather than an exchange medium. I would very much welcome bitcoins as a payment since I believe their value will go up in the future, but how many people are willing to end bit coins instead of dollars?
Deflation is relative. One thing is deflationary relative to another. Dollars are deflationary relative to iPhones. Dollars are inflationary relative to Oil. People will buy oil because if they wait to buy it tomorrow their dollars will buy them less. People won't buy iPhones because if they wait to buy it tomorrow their dollars will buy them more.
I don't think autonomous 'corporations' are anything new. If you replace Bitcoin with the gold market , most of the statements in the article still apply.
Gold can be thought of as the first real autonomous ‘corporation’ although you probably don’t see it that way. Think about it – it provides a payment protocol and employs traders to maintain that protocol.
The idea is the same – this corporation has revenues, expenditures and profits. However, once again, no one owns this entity, it owns itself.
There's one major flaw in this spectre of the unstoppable killing machine known as the "autonomous corporation":
If the whole premise of its autonomy rests solely on it's ability to engage in metered economic exchanges by way of some kind of bitcoin-style protocol, then an "autonomous corporation" MUST, by definition, persist on a distributed global network of continously available computers. So, if this entity has that dependency, then who's providing the hosting?
He who opts in on hosting the protocol, carries a say in the fate of the entity, thus this is no more "autonomous" than any other body of distributed human decision making. Whether it be voting, the purchase of publicly traded shares, or the organization of a bond to fund a bridge to nowhere.
It comes down to this: In order to mine bitcoins, or rather, add value to the system, you have to be constantly connected tothe internet. You can't mine a bitcoin in isolation. You can't power up a stand-alone, air-gapped machine, and mine bitcoins and expect them to have value when you connect it to the internet.
If you can't mine your own bitcoins in a vacuum, then very obviously, this requires you to interact with the world at large, over public networks. Those other systems must be available and complicit in such activities. That certainly doesn't fit my definition of "autonomous" in the sense of some massive force-of-nature style artificial intelligence boogey man. These systems need to be switched on, activated and tended to by someone. Someone will eventually want to extract value from these economic crypto-currencies.
So, here we are, coming back to the drone/remote control debate. Is a drone really "autonomous" when there's a pilot manning a set of remote controls from a bunker? Similarly, is this truly an "autonomous" corporation, when there are people deploying agents onto client hosts and services onto servers, all with the goal of gaining wealth? However you want to encapsulate the skill sets involved, that still requires expertise, and human intervention in my book, and certainly doesn't sound autonomous at all, to me.
Autonomy is a relative term. Whose autonomy are we talking about, here? And autonomy from "what" precisely?
A lot of very smart computer scientists then, are the ones who claim stewardship of the system.
Let's say the computer scientists die, and leave these systems behind. If their legacy is ignored, it will not persist in humanity's absence. Unless people continue to employ these tools, the tools will not spring back to life and animate themselves for their own sake.
Just because you have an idea, and you throw up a wiki, and some client code on github, does not an A.I. make. This all sounds so much like it's just a Simple Matter of Programming (SMOP).
As humans, we generate the electricity, we manufacture the chips and lithium-ion batteries. We buy the remote controlled quad-copters, and send them flying through the air. We turn the radios on and off. We plug in the network switches and routers, and administer the servers and prevent them from overheating. These things don't produce and care for themselves. There's a person on the other end, no matter how much they attempt to obfuscate their identity, or piggyback on crowdsourcing. Even with distributed peer-to-peer crowdsourcing, you still need peers and you still need a crowd.
Are there self-replicating computers out there, building 3D printed copies of one another, fabricating their own solar cells, growing legs, walking themselves over to wall outlets, plugging in, and then executing block transactions for the sake of their own desire to be a bitcoin node?
You're arguing against a strawman. Autonomy doesn't mean complete independence. It just means self-governance. An human is considered autonomous, even if he relies on other people for survival, like we all do.
No, but pseudonymity, with no appreciable tie to a 'real name', is, and therefore if you can pay for your business expenses with Bitcoin and find some way of extracting the value without providing a name (i.e. buying commodities to dead-drops, via silk road, etc), you can run a corporation entirely pseudonymously.
You are not attaching any form of ID to the transactions. Bitcoin is anonymous.
The fact that the NSA can track you down by various means is a whole different thing. And by that logic nothing in the Universe is anonymous, since it's deterministic and it doesn't lose information, so theoretically everything could be traced back to its origin.
"You are not attaching any form of ID to the transactions. Bitcoin is anonymous."
That is kind of like saying, "StackOverflow is anonymous. You do not attach any form of ID to your questions!" Of course, that worked out pretty badly for a certain high-profile Bitcoin user recently (yes, he leaked his real name at one point; however, he had also used his pseudonym in many other places, which was part of the problem):
"by that logic nothing in the Universe is anonymous, since it's deterministic"
Hardly, in fact, all the evidence points to a probabilistic universe; by extension, probabilistic approaches to anonymity might be possible. It just so happens that in the context of electronic payments, that is entirely possible, and for more than 25 years cryptographers have been studying such things (and there is a pile of published research). Yes, you can even have an electronic payments system that protects your privacy from the NSA.
So either he attached his ID, or he was traced by other means. Stackoverflow can be anonymous. It doesn't require an ID verification. But you can put your real name if you want to, nothing is stopping you.
And again, by your logic you won't be able to give me an example of something that is anonymous: Whatever you say, I will say that the NSA planted a cam in your home. BOOM! Not anonymous anymore.
> Hardly, in fact, all the evidence points to a probabilistic universe
Not a physicist, but AFAIK that's the old interpretation of quantum mechanics, disproved by some cheap but crazy experiments.
Nowhere in there it says that information was lost. It just says that to reverse the process it requires introducing energy to the system and that the impossibility resides in that the changes occurred in an "not easily predictable". So it's a practical impossibility, not theoretical.
The Universe doesn't lose information. The one thing that made physicists believe for a moment that it did, was something about blackholes, but it was then proven to be wrong.
Thank you for the paper. But did you read it? Bitcoin Fog works, and the paper goes into detail about why it works.
In the Silk Road investigation, the investigators basically threw up their hands and said "don't bother trying to analyze the transaction graph." So there's some evidence that tumblers are effective in practice.
I do not think the takeaway is that Bitcoin Fog works; rather, it is that Bitcoin Fog protects you from the specific strategy used by the authors of the paper. Another approach might work against Bitcoin Fog.
"In the Silk Road investigation, the investigators basically threw up their hands and said "don't bother trying to analyze the transaction graph." So apparently tumblers are effective in practice."
Do you have a citation about mixing services specifically thwarting investigators? Maybe the investigators felt that Bitcoin itself was too much to deal with. It would not be the first time a law enforcement agency has pointed to a system with little-to-no security and claimed that they cannot attack it.
I think it would be more interesting to imagine that such a company could theoretically pay its taxes. If such an entity is to be trusted and utilized by the majority, having it "play by the rules" to some extent could be valuable.
There is no moral value whatsoever in playing by politically-controlled rules. To libertarians your statement sounds very anti-libertarian and to religious people, your statement sounds like a blasphemous heresy.
Libertarians and religious people come to the same conclusion by entirely different routes: Calling people to obedience to any other laws than the ones of the Creator, the original lawmaker, amounts to pronouncing a blasphemous heresy. Anybody doing that will deservedly burn in hell.
Nice idea, I've been looking forward to the 'self-operating-business-in-a-shrinkwrap-box' for quite a while, and this discussion sounds a lot like the kinds of things Charles Stross likes to put in his sci-fi stories.
Still, keeping a private key safe for a distributed corporation will be a challenge. One attack I can think of - set up a fake hosting company that claims to offer cheap hosting, wait for the corporation to move some of its agents there, then bam, you've got the private key. That kind of thing might be difficult to pull off, but if any of these corporations controlled significant assets, then the amount of resources an attacker would be prepared to expend would be very high.
I suppose it suggests a mechanism where spending resources requires the cooperation of a number of agents that must be contracted with different hosting companies, and perhaps a period of warm up, where for the first x months, an agent might do useful things but would not be given power to control money.
Hmm, I am trying to imagine what the system would look like. Seems like you could borrow some of the features of Bitcoin to create a control structure. Maybe require some type of proof-of-work/approval process by a network of shareholders to approve financial/business transactions. That way, anyone could attempt to participate on behalf of the corporation, but only transactions brought forward by trustworthy agents that are deemed to be beneficial for the corporation are approved. Essentially you would adopt the trust model of bitcoin but apply it more broadly.
Fascinating concept. It would need a very specific kind of product for such a cooperation to be able to withstand human competition though. The OP mentions a storage service & autonomous cars, but I'm thinking that a good candidate would be a product with such thin margins, supporting human labor could not be feasible.
It does not necessarily have to withstand human competition though.
Let's say there is an agent A whose source is on Github and which makes X BTC/month. If the agent is programmed to pay out dividends to shareholders and auto-update its code, (large) shareholders have a shared interest in improving the agent.
Likewise, an ambitious developer could fork agent A and try to improve it. If he can convince a lot of people that his agent will beat out the other agent, he can get people to invest in it in order to bootstrap agent B (assuming the agent requires an initial investment).
If agent B is more profitable than agent A, people will start investing time and money on it and abandon the other agent.
PS: Agents would not necessarily need investors assuming they can bootstrap themselves to profitability. This is just a possible scenario. However, I think is likely that agents who rely on some form of human input are more likely to beat the competition.
You could use something like Shamir's Secret Sharing  to make sure that most of the funds would need multiple people to approve expenditures, and give small amounts of money to groups within the organization.
This is incredibly interesting. Corporations essentially crowdsourced the way bitcoin is. I disagree that these applications will reside in the cloud however, because those are essentially provided and administrated by a central entity.
It's more likely that such an autonomous corporation would provide a cloud service. The protocol could be designed like bitcoin to reject hosts that don't meet certain criteria (such as latency or security). With Homomorphic encryption techniques being advanced these types of clouds could even be somewhat secure.
A single cloud service is provided by a central entity, but the application could be spread out across many such services (e.g., a distributed system running on EC2, Rackspace, a bunch of no-name VPSs and even home computers by offering a downloadable application that did something useful in return).
It is not a fiat in a sense "imposed by the ruler". The point of fiat is that someone has control over it. Bitcoin is exactly like gold: people simply agree that it has some value for them, without anyone forcing them to accept it as payment.
It's pretty much the opposite of fiat. A fiat currency can have its value directly manipulated by the issuing state through excessive currency issue or regulation, manipulation by 'fiat'. Bitcoin is only worth what people think it's worth. It's not regulable in the sense a national currency is and the supply is controlled not by state actors, but an algorithm.
It's a understandable analogy, but an autonomous profit making systems wouldn't need to act like a corporation. Depending on what it's decision making system is like, it could have behavior for which we don't a prior from which to make an analogy.
Any kind of libertarian community/market/state will need to shield itself from all other political states in the world just as well. An army would be required for that, yet it's not clear if libertarians would collectively defend themselves.
One thing to note is that bitcoin not only made this autonomous system possible, it also made it transparent to outside (through open-source and public blockchain). In that sense, it could be considered more trustworthy than an actual corporation.
The aside in the third sentence really bugged me. It seemed to imply that Bitcoin isn't a fiat currency, but considering it, like the US Dollar which it mentioned, doesn't have any intrinsic value, isn't it also a fiat currency?
Depends what is meant by being "fiat". Most people consider fiat to be government/state created money rather than just having no intrinsic value. 3 definitions listed here: http://en.wikipedia.org/wiki/Fiat_money
I think the intrinsic value argument is pointless. Gold for example, has some value outside of it being a medium of exchange, but the price of gold is very divorced from its usefulness in industry or its attractiveness so the fact that it has "intrinsic" value doesn't mean much.
Betting on profits of the agent conditional on various code changes. "Agent profits will increase X% by date Y, given code change Z." If code change Z isn't chosen, money is refunded to the people who bet in the market. If it is chosen, then it stays open until date Y, where it pays off depending on the eventual profits.
a blockchain that finances its ops by access to aquaponic food dispensaries would be an interesting future innovation. Similar to current cryptocurrencies, but the "backing" is that the dispensaries will take the currency for purchasing produce, and the mining process itself is linked to the creation and maintenance of those AP microfarms.
The existing, politically-controlled system of finance and corporations has numerous and powerful enemies, hellbent on bringing it down, in whatever way possible. Furthermore, even without enemies, it is patently clear that the fiat money system is happily busy destroying itself: raising debt ceilings, engaging in quantitative easing, and so on. The libertarian movement is probably one of their smallest enemies in terms of headcount but at the same time it really looks like the most powerful one. If you read the original paper by Satoshi Nakamoto, you can see that the entire purpose of bitcoin is exactly to bring the current system to its knees. I hope that BTC succeeds in doing that and save its supporters from being dragged along in the quagmire, before the current fiat system finally destroys itself.
Fiat system will end without help of Bitcoin. Bitcoin is here as a place where to run when things start falling apart (without it, some other regime's currency would prevail).
Gold is not a solution since it needs to be stored and moved by someone. We tried that in growing ecenomy of 19th century and it lead to a banking cartel and legalized fractional reserve lending. I think gold will collapse with fiat currencies for the exact same reasons: counter-party risk. No one wants to trade in gold/silver coins because they can't be moved and protected like bitcoin.
It's a question of comparing cost of protecting 1 ton of gold (vault, armed guards, managers, video surveillance and finger print scanners) with a cost of protecting 200K bitcoins.
No matter how many bitcoins do you have, you can lock them up with M-of-N transaction where N separately generated keys belong to your partners and friends. And the encrypted wallet can be backed up on any number of computers for a very low cost.
Each fiat currency is destined to crash due to constant debasement (there haven't been yet a king or a republic that did not debase its currency). But each crashed fiat currency is quickly replaced by another one, so in theory fiat system may see no end.
Unless people start using Bitcoin universally and won't need any fiat currency at all. Which I expect is going to happen over the next decade.
Debasement is a silent shift of wealth (aka "purchasing power") from one group of people to another. The more savings you have, the more you are punished compared to those who have less. Since in monetary economy biggest decisive power is in hands of those with savings (aka cash, aka most marketable resource), power is shifted from those who earned and economized their money to those who have political power to print and distribute money to themselves and their allies.
You may think that "regular wage earners" who have no savings are not affected at all, but that's a double mistake:
1. Folks without savings are highly depended on those who have (aka capital, aka infrastructure, aka ecosystem). They depend on their boss having enough money to sustain ups and downs and not go bankrupt. They depend on productivity of the producers around them who make food and goods - those have to save to invest in the future development to increase quality and lower prices. The less wealthy people you have around you, the less comfort and service you get (obviously). In the middle of Sahara any bum is much less safe or wealthy than on Manhattan.
2. Folks without savings can't even start having savings when they are heavily taxed by debasement. Thus existing class of powerless people stays powerless and those who have depreciating savings join that class over time. Which is understandable: continued debasement simply moves all the capital to the very few close to the printing press leaving everyone else in the powerless "workers" category.
Extra twist is that folks without savings are bribed to support the system by offering low-cost artificial credits (created from printed money, not from someone's savings) and it only adds insult to injury: at the cost of destroyed local productivity, risk of hyperinflation, 3rd world hate towards them, people not only cannot save money, but have to pay some interest rate to get at least some stuff to preserve whatever money they got right now.
If you look at the whole picture consisting of net receivers and net losers in this great wealth transfer, it's very-very sad.
The crash would come from malinvestment that is caused by debasement via credit. If the purchasing power was adjusted instantly the moment you print another dollar bill (i.e. prices would grow the same second), then there wouldn't be any malinvestment - some people would simply lose or gain wealth.
However, owners of new money do not outbid savers on all markets in all products the same day. They go and invest in some particular market changing prices there. E.g. stock market, or housing market, or some foreign production facilities. The money slowly flows to more and more hands finally ending on high street and competing with all existing money there - prices grow, savings diminish, purchasing power of "regular" consumers goes down. But the investment was not accounting for that because it was not known how much and how quickly all this new money will come on the market. Especially if there are numerous capital controls and high friction: the money saturate some other markets for a while until on day X it flows to your market and destroys your business in one month.
Example: imagine you look at current price structure and expect that investment in iPhone factory will let you sell 1 billion iPhones and make some profit. You go and build your factory, pay your bills and finally after 1 year produce 1 billion iPhones. By that time all your investment money is being moved to hands of many private persons who drive up the prices on all goods in the markets they participate in. If they are on your market, bad news for you: food will be more expensive and people will spend less money on your iPhones; and you will go bankrupt (unless you borrow more of printed credit to stay in the game longer). In reality, it's more complex. Trillions of dollars are being held outside U.S. and do not cause enormous price increases inside (official stats say "1-2% inflation") because for foreign holders of dollars there are either no things to buy from U.S., or it's hard/expensive to do due to regulations, tariffs etc. So U.S. effectively outsourced destructive effects to other countries where people get poorer faster than in U.S.
The bad news: the longer you keep artificial barriers, the harder market will punch you back. The longer U.S. market does not see its own printed dollars, the more and faster these dollars will flood in on some random day when foreign economies will be so depressed, that they'd try hard to get rid of their greenbacks where they still have high value.
Then, of course, U.S. gov would disallow citizens selling stuff to "enemy" countries to prevent too many dollars increasing prices at home. This will effectively move country to a closed loop North Korea-style. No one outside U.S. would want to sell stuff for dollars, and americans won't be able to sell their goods to foreigners. Since most of the production is outside the U.S., country would need to build new factories inside. But to do that you need genuine savings. Since all savings are effectively destroyed, huge depression would be on the horizon. So the government would continue printing money, but this time it will go to the home market to build production inside. This will quicker lead to very noticeable inflation and even more bankrupcies and depression. The course of things can be changed by two means: either government intervention will be stopped (e.g. people make a bloody revolution or they switch to Bitcoin), all losses are accepted and people can start saving agin. Or government begins another war and forces other countries to accept dollars and produce stuff for U.S. But that can be done only to the extent on how many productive facilities other countries have and how much can they protect themselves. If the war path continues, it'll be just a misery everywhere until USG has nowhere to go and collapse after too much destruction.
The currency of the Roman empire got debased (silver content of coins) until it became worthless. The combination of raising the debt ceiling and the practice of quantitative easing do exactly the same today. Eventually, even the imperial Roman treasury ("fiscus") began to refuse its own coins for payment of tax liabilities. They switched over to paying taxes in kind. So, yes, in my impression, history is indeed repeating itself.