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Why Charles Stross Wants Bitcoin To Die In a Fire

timothy posted about 7 months ago | from the compare-and-contrast-with-unbacked-fiat-money dept.

Bitcoin 691

Hugh Pickens DOT Com writes "SF writer Charles Stross writes on his blog that like all currency systems, Bitcoin comes with an implicit political agenda attached and although our current global system is pretty crap, Bitcoin is worse. For starters, BtC is inherently deflationary. There is an upper limit on the number of bitcoins that can ever be created so the cost of generating new Bitcoins rises over time, and the value of Bitcoins rise relative to the available goods and services in the market. Libertarians love it because it pushes the same buttons as their gold fetish and it doesn't look like a "Fiat currency". You can visualize it as some kind of scarce precious data resource, sort of a digital equivalent of gold. However there are a number of huge down-sides to Bitcoin says Stross: Mining BtC has a carbon footprint from hell as they get more computationally expensive to generate, electricity consumption soars; Bitcoin mining software is now being distributed as malware because using someone else's computer to mine BitCoins is easier than buying a farm of your own mining hardware; Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination and drugs and child pornography; and finally Bitcoin is inherently damaging to the fabric of civil society because it is pretty much designed for tax evasion. "BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions," concludes Stross. "The current banking industry and late-period capitalism may suck, but replacing it with Bitcoin would be like swapping out a hangnail for Fournier's gangrene.""

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691 comments

Pay for Laundry jobs with it (4, Funny)

hawkinspeter (831501) | about 7 months ago | (#45735219)

So, it has come to this.

Re:Pay for Laundry jobs with it (0)

Anonymous Coward | about 7 months ago | (#45735303)

Indeed it did.

"... commodities like assassination and drugs and child pornography;"

Mod Parent Article Down. (4, Funny)

ElementOfDestruction (2024308) | about 7 months ago | (#45735227)

Whether or not Charles Stross is correct is irrelevant; BitCoin is bigger than Jesus.

Re:Mod Parent Article Down. (-1, Flamebait)

dbIII (701233) | about 7 months ago | (#45735351)

You took a thorny argument and nailed it.

Re:Mod Parent Article Down. (0)

Anonymous Coward | about 7 months ago | (#45735425)

That was beautiful. Thank you. :)

Re:Mod Parent Article Down. (0)

Anonymous Coward | about 7 months ago | (#45735359)

BitCoin is bigger than Jesus.

Sí, pero Jesús es corta.

Bigger than Jesus? (5, Informative)

tepples (727027) | about 7 months ago | (#45735367)

BitCoin is bigger than Jesus.

How so? Google returns 124 million results for Jesus Christ and 40 million for Bitcoin.

Re:Bigger than Jesus? (0)

Anonymous Coward | about 7 months ago | (#45735419)

Netcraft now confirms it.

Re:Bigger than Jesus? (5, Funny)

squiggleslash (241428) | about 7 months ago | (#45735437)

Well, that just means each Bitcoin is worth 3.1 Jesuses, proving it's a better currency because scarcity is the only thing that matters when picking a currency, duh!

Re:Bigger than Jesus? (5, Funny)

serviscope_minor (664417) | about 7 months ago | (#45735591)

Plus Jesus is more deflationary than Bitcoin since the world supply dropped from one to zero, briefly peaked at one again and then dropped back to zero and stayed there.

Just imaging if the church had also thought to hoard their Jesus. Due to the low supply, it would be worth so much that they'd have more money than Je... uh god.

Re:Bigger than Jesus? (2)

oodaloop (1229816) | about 7 months ago | (#45735441)

Because Google resutls are how we measure things now? I guess?

BTW, I believe the reference is to when John Lennon said the Beatles were bigger than Jesus.

Re:Bigger than Jesus? (2)

rmdingler (1955220) | about 7 months ago | (#45735445)

Jesus had a 2000 year head start. 40 million since 2009 is quite an opening, but in any system that returns 630 million hits in .42 seconds for a justin bieber search is just fatally flawed.

Re:Bigger than Jesus? (1)

gmclapp (2834681) | about 7 months ago | (#45735447)

His comment is utilizing hyperbole....

Re:Bigger than Jesus? (1)

Anonymous Coward | about 7 months ago | (#45735501)

lets see jesus christ has 124 M / 2000 = 62 000 results per year. Bitcoin has
40M/5 = 8M results per year. I'd say bitcoin is beating jesus easily.

Re:Mod Parent Article Down. (-1)

Anonymous Coward | about 7 months ago | (#45735491)

Fuck you and fuck bitcoin. This shit will be non existent in 5 years. God people like you need to die in a fiery crash.

Re:Mod Parent Article Down. (4, Funny)

CanHasDIY (1672858) | about 7 months ago | (#45735525)

Whether or not Charles Stross is correct is irrelevant; BitCoin is bigger than Jesus.

So, what, it has 13 followers?

Yawn. Wake me when Bitcoin becomes something millions of people are willing to kill each other over.

Re:Mod Parent Article Down. (1)

Lumpy (12016) | about 7 months ago | (#45735529)

Actually Jesus was about 5 feet tall, and all bitcoins that are possible can fit on a single hard drive. So in fact Jesus is still far larger than bitcoin. This is assuming he is still "living". otherwise a human turned to ashes/dust fits in a 6"X4"X4" cube that is still larger than a hard drive.
I suggest using several 1980's hard drives to make bitcoin bigger than Jesus.

Dune (5, Insightful)

James McGuigan (852772) | about 7 months ago | (#45735231)

“Control the coinage and the courts -- let the rabble have the rest.” Thus the
Padishah Emperor advises you. And he tells you: "If you want profits, you must
rule." There is truth in these words, but I ask myself: "Who are the rabble and
who are the ruled?"

-Muad'Dib's Secret Message to the Landsraad from "Arrakis Awakening" by the
Princess Irulan

Re:Dune (4, Funny)

DaveV1.0 (203135) | about 7 months ago | (#45735495)

Yes, science fiction novels are a great source of political theory and quoting them definitely bolsters your point. Nothing better than that~

Fine (0)

Anonymous Coward | about 7 months ago | (#45735233)

Don't use it then.

FIRST (-1)

Anonymous Coward | about 7 months ago | (#45735235)

bizatch

Summary is a troll (5, Informative)

Anonymous Coward | about 7 months ago | (#45735241)

The link to Fourier's gangrene on Wikipedia is totally unnecessary, and the article includes an image that is decidedly not safe for work.

Captcha: unclean

Re:Summary is a troll (0)

Anonymous Coward | about 7 months ago | (#45735293)

If education is not safe for work, you're in the wrong workplace.

Summary is polemical, but accurate. Bitcoin is for the impotent power-dreamers, and it has no advantages whatever over any other system. Anyway, the first thing a government would do if the currency took hold (which it won't, because it's less safe than putting your money under a mattress) is to change the algorithm so it could create more bitcoins.

Re:Summary is a troll (1)

houstonbofh (602064) | about 7 months ago | (#45735493)

If education is not safe for work, you're in the wrong workplace.

If pictures of dicks are OK at work, you have the wrong job!

Re:Summary is a troll (1)

Anonymous Coward | about 7 months ago | (#45735513)

If pictures of parts of the human body presented for education are a problem, you're in the wrong society.

Not surprising that an Internet Libertarian is complaining that, while goofing off at work, someone hasn't catered precisely to his requirements.

Shitty essay! (1, Funny)

Anonymous Coward | about 7 months ago | (#45735343)

Huge crabon footprint, hideous markets, damage central banking, hide transactions from government, tax evasion, ... I mean, if this has a case against Bitcoin, why doesn't he list some negatives about it?

Geeze! What a shitty essayist!

Re:Summary is a troll (1)

Anonymous Coward | about 7 months ago | (#45735385)

"[...] an image that is decidedly not safe for work."

Reading Slashdot isn't doing work.
You can read it at home and do actual work at work.

Re:Summary is a troll (2)

Alioth (221270) | about 7 months ago | (#45735417)

The image of Fournier's Gangrene on the Spanish Wikipedia is far, far worse, trust me.

Re:Summary is a troll (1)

gbjbaanb (229885) | about 7 months ago | (#45735527)

true, why a link to something horrible that is not goatse. You kids, don't know what omfgwtfit is anymore.

But I think its the first time that the actual *summary* can be considered -1 Offtopic. What was the editor thinking?

Boo hoo. (1, Interesting)

Anonymous Coward | about 7 months ago | (#45735243)

Too bad you can't just have bitcoin killed like the last 4* out of 5 presidents who made any attempt at ending the fed.

*Andrew Jackson was just too stubborn and mean to die by being assassinated.

FUD (0)

Anonymous Coward | about 7 months ago | (#45735251)

FUD.

edit: captcha is "attack". seems appropriate.

I'm a Libertarian (0)

Anonymous Coward | about 7 months ago | (#45735263)

I don't like Bitcoin and I know many other Libertarians who feel the same way.

Re:I'm a Libertarian (1)

Havokmon (89874) | about 7 months ago | (#45735305)

Me too. I don't like gold, but I like Bitcoin. I guess we've split the party 50/50.

Re:I'm a Libertarian (3, Insightful)

Lumpy (12016) | about 7 months ago | (#45735509)

So you are going to pay for a loaf of bread with your American eagle gold coin? Awfully expensive bread, because I'm not making change. A lot of libertarians are pretty dumb going nuts buying gold and silver, you are buying it at the highest inflated prices and IF the economy collapses it will drop in value like a stone. so your $1000 an ounce gold becomes worth about $5.00 an ounce as trading coins.

Worst investment in your life is gold and silver right now because it is overinflated.

Re:I'm a Libertarian (1)

OakDragon (885217) | about 7 months ago | (#45735587)

Exactly - real Libertarians buy guns!

Why I want Bitcoin to Die in a Fire (0, Insightful)

Anonymous Coward | about 7 months ago | (#45735267)

Because shitty /. articles keep being submitted about it.

Anyone Who Talks About Deflation...... (0, Troll)

segedunum (883035) | about 7 months ago | (#45735273)

.....you know they are a moron, know nothing about economics........and are probably an economist.

Re:Anyone Who Talks About Deflation...... (1)

segedunum (883035) | about 7 months ago | (#45735289)

...oh, and who is Charles Stross and why should I give a shit?

Re:Anyone Who Talks About Deflation...... (1)

Fishchip (1203964) | about 7 months ago | (#45735421)

My first guess would be someone who hates Libertarians.

Re:Anyone Who Talks About Deflation...... (2, Informative)

hawkinspeter (831501) | about 7 months ago | (#45735517)

An ex-software developer turned sci-fi/horror author.

I personally love his Laundry series (modern day Lovecraftian/spy horror stories) and haven't read too much of his other stuff.

You should really hand in your geek card if you haven't heard of him.

Re:Anyone Who Talks About Deflation...... (2)

brian0918 (638904) | about 7 months ago | (#45735377)

Indeed - that was my first reaction. How dare the price of things go down over time! If you care about the poor, you should make everything more expensive by giving (certain) people more free money to spend.

Re:Anyone Who Talks About Deflation...... (0)

Anonymous Coward | about 7 months ago | (#45735521)

what bank will ever loan you money to buy a home if the value is going to drop?
deflation means your salary will also drop as well

Re:Anyone Who Talks About Deflation...... (1)

gbjbaanb (229885) | about 7 months ago | (#45735589)

Inflation: where the cost of stuff goes up every year and you can buy less with it - ie the worth of your currency goes down. Consider that we've had inflation for decades - you can no longer buy a car for $1000.

So deflation means the opposite - your currency goes up in value, so you can buy more stuff. Of course this means the people who own things would have things (typically property) that are worth less, and they don't like that. So we have inflation-based economics that uses words like "growth" to make it seem you're getting a good deal whilst at the same time handing out large chunks of yield on investment to ensure their money assets don't go down in value overall.

The poor, meanwhile, can keep begging for payrises just about equal to the rate of inflation so they can stand still, at best.

So you decide if deflation would be good for a while. (my opinion - we need a bit of both fluctuating around a nice balance to keep things stable)

Re:Anyone Who Talks About Deflation...... (1)

west (39918) | about 7 months ago | (#45735397)

Another who understands that "deflation" is simply a conspiracy by the Trilateral Illuminati, who meet in Davos each year to develop new methods of sapping our vital bodily fluids.

OMFG (3, Insightful)

Rinisari (521266) | about 7 months ago | (#45735277)

This article has been flying around for the past couple of days, and it's so riddled with misconceptions and pure falsehoods about Bitcoin that this guy should be laughed out of his job.

You know what has a carbon footprint from hell? The whole payments industry, and industry that could go away overnight if retailers, service industry, and wholesalers switched to digital currency.

Anti-malware software simply hasn't caught up yet, but sucking someone's power for pure financial profit sure is better than sucking someone's power to barrage others with email. Sure, there's still evil here, but Bitcoin itself is not the problem: there will always been viruses doing something.

Bitcoin's lack of regulation is not a Bitcoin deficiency, but rather a legal one. Blame government for treating Bitcoin as a commodity instead of as a currency, subject to the same laws as cash. Oh, wait, it basically is subject to the same laws as cash, except it's a whole lot easier to carry and the government can't create more of it out of thin air (which is a good thing, if you want your money to have the same or better purchasing power tomorrow as it did today).

At least he didn't give the argument "There isn't enough Bitcoin to go around." I'm sick and tired of defending that. There's 21 quadrillion units of Bitcoin (That's enough for 3000 satoshis per person on the planet), and it would be very easy to convince miners to further subdivide it.

This author reads like the worst kind of Keynesian: the kind that misleads and lies about alternatives, rather than attacking the principles and stability of the system itself.

Re:OMFG (-1)

Anonymous Coward | about 7 months ago | (#45735329)

This article has been flying around for the past couple of days, and it's so riddled with misconceptions and pure falsehoods about Bitcoin that this guy should be laughed out of his job.

You know what has a carbon footprint from hell? The whole payments industry, and industry that could go away overnight if retailers, service industry, and wholesalers switched to digital currency.

Anti-malware software simply hasn't caught up yet, but sucking someone's power for pure financial profit sure is better than sucking someone's power to barrage others with email. Sure, there's still evil here, but Bitcoin itself is not the problem: there will always been viruses doing something.

Bitcoin's lack of regulation is not a Bitcoin deficiency, but rather a legal one. Blame government for treating Bitcoin as a commodity instead of as a currency, subject to the same laws as cash. Oh, wait, it basically is subject to the same laws as cash, except it's a whole lot easier to carry and the government can't create more of it out of thin air (which is a good thing, if you want your money to have the same or better purchasing power tomorrow as it did today).

At least he didn't give the argument "There isn't enough Bitcoin to go around." I'm sick and tired of defending that. There's 21 quadrillion units of Bitcoin (That's enough for 3000 satoshis per person on the planet), and it would be very easy to convince miners to further subdivide it.

This author reads like the worst kind of Keynesian: the kind that misleads and lies about alternatives, rather than attacking the principles and stability of the system itself.

Apologist much? "Why dont all the other people trying to manage money electronically just go away now? Bitcoin is here to save our fucking faces, so they have no reason for living." Wow. "Why, your computer was compromised when you installed windows, i just came along and walked through the door..." Amazing. Just when I thought TFS was inflammatory, here we have the other side of the coin. Nicely done.

Re:OMFG (4, Insightful)

Anonymous Coward | about 7 months ago | (#45735337)

You know what has a carbon footprint from hell? The whole payments industry, and industry that could go away overnight if retailers, service industry, and wholesalers switched to digital currency.

You mean the system that is processing many, many orders of magnitude more transactions that bitcoin? So many that bitcoin as it currently exists couldn't even begin to handle them without major overhaul?

Bitcoin is tiny, and is already wasting massive resources during meaningless busywork. If it was expended to that size, it would be far, far larger and even more wasteful.

It's hilarious how its proponents have zero sense of perspective about their favourite little toy.

Now a review without reading TFA? (3, Interesting)

dbIII (701233) | about 7 months ago | (#45735387)

laughed out of his job

So the above poster doesn't even know Charles Stross is a writer - that's a pretty HUGE sign that they didn't read the thing that is being suggested as full of holes.

Re:OMFG (1)

Danathar (267989) | about 7 months ago | (#45735413)

Same here on that "There isn't enough Bitcoin to go around".

I just don't get that people don'd understand that bitcoin is divisible to something like 7 decimal places (or is it 8?)

Re:OMFG (0)

Anonymous Coward | about 7 months ago | (#45735429)

"Anti-malware software simply hasn't caught up yet, but sucking someone's power for pure financial profit sure is better than sucking someone's power to barrage others with email."

I fail to see how direct financial profit could be any better than sending spam. Ultimately spam has the same intention as well.

"(That's enough for 3000 satoshis per person on the planet)"

So having the upper limit of 3000 units of currency for every person is somehow enough? Surely this would mean that there would be a massive group of individuals who would have almost none. If the global market adapts only one currency this would lead into a very strange situtation with pricing of goods.

The way I see it the world is not ready for any single currency whether it is the US dollar or any cryptocurrency. Also, computers, the internet, global economy are all still in their infancy. It is very hard to see the first cryptocurrency to survive in all the turmoil and evolution.

How long? (1)

Ceriel Nosforit (682174) | about 7 months ago | (#45735287)

How lone before we substitute that silly block chain with work units from BOINC or Folding@home? Lack of inherit value in the currency was another complaint, wasn't it?

Where Internet Libertarians come from (5, Insightful)

David Gerard (12369) | about 7 months ago | (#45735301)

I liked the comment [antipope.org] explaining where Internet Libertarians come from:

And if you grow up in your parent's basement, then you are shaped by an environment where the fundamental constraints on what you want to do are shaped neither by scarcity nor malignance, but _by genuine good intent_. Your relatives probably don't wan't you to spend all day smoking pot and playing video games; in some cases they will over-estimate just how much of a bad thing that is. And even if they _are_ right, it's not like anyone facing such hectoring is going to admit it.

Pretty much every libertarian position can be understood in that frame of restrictive but benevolent authority being the root of all 'real' problems. It's a rare parent who literally tortures their kids, so torture is, at best, not a 'real' issue, not a priority. But many make them do stuff for their health, so mandatory health insurance is a big deal. Pretty much no parents kill their child with drones, many read their diaries. And so on.

So to libertarians, Bitcoin is like wages from a fast food job as opposed to an allowance; lets you buy what you want without someone else having a veto. Only money that doesn't judge you can be considered entirely yours...

Re:Where Internet Libertarians come from (1, Insightful)

Anonymous Coward | about 7 months ago | (#45735389)

Never before in human history has a single passage contained so much ad hominem.

Re:Where Internet Libertarians come from (2)

hawkinspeter (831501) | about 7 months ago | (#45735537)

Well, that's just typical of the things that you say.

Re:Where Internet Libertarians come from (3, Insightful)

Anonymous Coward | about 7 months ago | (#45735431)

I liked that comment too, because it told me that the writer's viewpoint can be dismissed immediately, saving me time. (If you've got actual logic, then I'm all ears. If all you've got is a petty grudge, then I'll catch you later -- meaning never.)

Re:Where Internet Libertarians come from (1)

Anonymous Coward | about 7 months ago | (#45735453)

Oh, the government only wants whats best for you like a caring mother!

I think you're the naive child.

Re:Where Internet Libertarians come from (1, Informative)

Anonymous Coward | about 7 months ago | (#45735475)

That quote perfectly describes Democrats and Republicans, not Libertarians. Ron Paul was the only person in the debates who made any real sense and was America's last hope. And no I'm not a basement dweller, I make above average pay and own a penthouse.

The Republicans committed open election fraud and also changed election rules where necessary to prevent Ron Paul from winning.

https://www.youtube.com/watch?v=wIm3FTivtEM

Re:Where Internet Libertarians come from (1)

CanHasDIY (1672858) | about 7 months ago | (#45735575)

I liked the comment [antipope.org] explaining where Internet Libertarians come from:

Because, as we all well know, once somebody posts something on an internet message board, it immediately becomes fact.

Speaking of which, I just became Supreme Leader of the Human Race, and hereby transfer all your property to whoever you hate the most. Oh, and you have to flog yourself with rusty steel rods 15 times a day. Let that be a lesson to you, peon.

really? (1, Flamebait)

raind (174356) | about 7 months ago | (#45735313)

"Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography)."

None these existed before?

Re:really? (2, Funny)

Anonymous Coward | about 7 months ago | (#45735427)

Before you had to go through the Assassination Guild and Child Molester's Union. They ensured a painless death and good working conditions for their workers, respectively(?). Now with Bitcoin, we're seeing millions of new hitmen flooding the market, driving prices down so that anyone can have someone killed. This "democratization of murder" appeals to the bitcoin crowd, but it is ultimately harmful for society. There's also been reports that people are starting to molest their own children to produce pornography and selling it for bitcoin instead of kidnapping them or buying them. Bitcoin is not only undermining the family, but it is forcing the Mafia to have to find new ways to find revenue.

Re:really? (1)

CanHasDIY (1672858) | about 7 months ago | (#45735601)

First, off, your post is absolutely hilarious. Good job.

Bitcoin is not only undermining the family, but it is forcing the Mafia to have to find new ways to find revenue.

Perhaps they should consider pizza delivery.

Re:really? (2)

MickyTheIdiot (1032226) | about 7 months ago | (#45735455)

Why does this argument get so much traction? I don't get it. It's a great argument against the USD as well if you want to take it seriously.

Re:really? (0)

Anonymous Coward | about 7 months ago | (#45735597)

Because CP and hitmen are scary. People don't like to think about them, so they turn their brain off when either is brought up.

Re:really? (0)

Anonymous Coward | about 7 months ago | (#45735547)

Yeah, this just reads like a bunch of ranting and raving from some lunatic.
Like tax evasion, child pron and drug markets wouldn't exist if only bitcoin were banned.
And will someone please think of the bankers. Who will look out for the interest of the bankers?

I think there are some legitimate downsides to bitcoin, and he didn't mention any of them.

Limited money supply is a problem? (1)

erroneus (253617) | about 7 months ago | (#45735317)

I thought the whole purpose of currency is as a store of value. It's not an effective store if the amount of that store's unit count can be varied at will the way it is with Federal Reserve money. And how is it different from the gold standard? Sure, mining gold gets harder as the supply runs out too.

Re:Limited money supply is a problem? (4, Funny)

sandytaru (1158959) | about 7 months ago | (#45735379)

You can't make a pretty pair of earrings for your spouse out of bitcoins, though.

Re:Limited money supply is a problem? (1)

Alioth (221270) | about 7 months ago | (#45735467)

In which case Bitcoin fails massively as a store of value. For instance, if you try to sell something in bitcoin, the value of the bitcoin you got paid with may have changed by 30% by the time the transaction is confirmed, it is so massively volatile. Bitcoin - at this stage - is suitable only as an instrument of speculation.

Re:Limited money supply is a problem? (0)

Anonymous Coward | about 7 months ago | (#45735479)

Because capitalist theory since the 17th century holds that the wealth pie is always expanding for everyone playing the innovation game. With finite currencies like the gold standard, oil standard, or Bitcoin, there is always going to be a fixed upper limit on wealth. At some point, wealth devolves into a battle to hoard and steal resources, instead of the natural description of human innovation. This leads to countries invading each other for resources, runaway inflation, etc.

It would be like having a basketball game, where the only rule is that only 50 points can be scored by both teams. In the beginning of the game, you would witness beautiful, creative, graceful ways as both teams try to score. As the teams got closer to that fifty point limit, the game would get scrappy, more physical and violent, and turn to something not resembling the sport at all, as they both try to lock down on defense and generally prevent the other from getting to that 50 points.

Re:Limited money supply is a problem? (1)

njnnja (2833511) | about 7 months ago | (#45735553)

*Assets* are a store of value. Currency is a medium of exchange and a medium of account. So a $20 bill is an asset, and stores value. "Dollars" are a currency because they are a medium of exchange (I can list a price of a thing in "dollars") and a medium of account (I can figure out the equivalent value of my assets in "dollars"). Neither inflationary currency nor Florida swampland are good assets that will store value very well, but a mildly inflationary currency is still a perfectly good currency because it can still be a fine medium of exchange and account. For example, in the 1970's, the US dollar was mildly inflationary, but there was little demand in America to denominate everything in British Pounds or Mexican Pesos because it was still an excellent currency - it was good for transactions and accounting of value even though holding any amount of money in that currency for a period of time was sure to lose value, thereby making dollars a bad store of value. Note that a hyperinflationary currency no longer satisfies these criteria to be a currency and can therefore be a bad currency.

But my only comment about the article itself (which of course I haven't read) is that instead of focusing on the problems with bitcoin, maybe it would be worth thinking about how one might take the best elements of bitcoin and incorporate those into fiat currencies (or a next generation of fiat currencies and central banks). And don't say it's not possible - 10 years ago if you said you wanted to make a uncounterfeitable digital currency people would have said that's not possible either.

Is his reasoning flawed? (1)

Michael Ahlers (2939579) | about 7 months ago | (#45735333)

There is an upper limit on the number of bitcoins that can ever be created so the cost of generating new Bitcoins [sic] rises over time, and the value of Bitcoins [sic] rise relative to the available goods and services in the market.

If I understand correctly, his persuasion is fundamentally incorrect. As bitcoins are infinitely divisible, the market can decide the value of increasingly smaller units (which is impractical with physical commodities, like gold) in response to scarcity brought on by that upper bound, loss of coins, higher mining costs, hoarding, and so on.

Re:Is his reasoning flawed? (1)

MickyTheIdiot (1032226) | about 7 months ago | (#45735407)

Well, not infinitely. They have a smallest possible base unit, the satoshi, which is 0.000 000 01 BTC. Still far more divisible that US dollars and pennies.

Re:Is his reasoning flawed? (2)

supremebob (574732) | about 7 months ago | (#45735423)

They are currently divisible to 8 decimal places, but it shouldn't be that hard to tweak the client software to allow smaller transactions if needed.

That said, it's like a COBOL programmer from the 1970's worrying about a Y2K bug. We're still a long way from needing that kind of precision.

Re:Is his reasoning flawed? (0)

Anonymous Coward | about 7 months ago | (#45735503)

Dividing the coin doesn't increase the total amount of base units, and thus doesn't remove the deflationary aspect at all.

Q: Damage Central Banks ? (0)

Anonymous Coward | about 7 months ago | (#45735341)

A Correct ! :)

Please remember the unspoken tenant of economics is its not WHAT the currency is based on, but WHO controls What the currency is based on. If nobody does than it is a good thing for the people. Ergo Bitcoin is indeed a very good things for the people.

Libertarian Gold Fetish? (0)

Anonymous Coward | about 7 months ago | (#45735345)

I think only idiots (and state banks) have a gold fetish.

Gold is valuable because people think it's valuable. It's not particularly rare (in the grand scheme of things) and it's not terribly useful as an engineering material other than it's nobility. It's value may not be fiat, but it is certainly founded on a global misconception that it is somehow special, which seems to have carried on unquestioned since antiquity when it arguably was. (i.e. can be found native and doesn't corrode)

Queue the legions of slashtard libertarians (0)

Anonymous Coward | about 7 months ago | (#45735355)

Durr free market!

So why not ban cash? (0)

Anonymous Coward | about 7 months ago | (#45735365)

Some of the reasons he gives could be used to support the idea of banning cash because it is too anonymous.

It is all those things and more ! (5, Interesting)

WOOFYGOOFY (1334993) | about 7 months ago | (#45735371)

It's also a commodity. There is nothing to stop someone else from starting their own currency, just as there was nothing to stop BtC from appearing out of nowhere its own line of "value" . As BtC get more expensive and mining get harder we can expect to see "me too" currencies whose "selling" point is to early adopters you can get in on the ground floor and whose "trading / accepting" point is, it hasn't hit its deflationary peak yet, so accept it, it will be worth more tomorrow than it is today.

What's good for the goose is good for the gander. This is the real fundamental flaw in all unregulated fiat currencies. Fiat currencies are worth something because , by law, there is a governed amount of money and no other competing monies which themselves are not also so governed.

With Bitcoin, not so much. The exodus to "other" Bitcoiny type currencies hasn't happened yet, but there's no reason to think it won't and ever reason to think it will.

Oh wait, I spoke too soon. Or not soon enough. Or something.

http://www.coindesk.com/litecoin-silver-bitcoins-gold/ [coindesk.com]

Bitcoin is only version 1.0! (5, Insightful)

MickyTheIdiot (1032226) | about 7 months ago | (#45735375)

Every time there are arguments made like this I remember something I read in the late 90s. It was a scholarly book by a broadcaster (I believe it was about HD TV) that had a section about why Internet video wasn't going to take off. It stated things like "postage stamp-sized video," jumpyness, bad audio... all those problems that were inherent in the early versions of Quicktime and MPEG.

The flaw in the argument comes in the unspoken assumption that what they are looking at is a final version. I personally don't think bitcoin will ever "replace" monetary systems across the world and there is a lot of reasons to hope that it doesn't, but a lot of these arguments make the assumption that no adjustments will ever be made and the ideas and tech. will never improve. And that just *doesn't* happen.

Re:Bitcoin is only version 1.0! (1)

Lumpy (12016) | about 7 months ago | (#45735473)

The problem was not Quicktime and Mpeg. Mpeg has always supported all the way up to 1920X1080p Mpeg2 Was designed for this, Mpeg1 was designed to support up to 720X480 the full video resolution of it's time.

the problem was that the only low bandwidth video at that time was the horrid "realmedia" format that was designed to be crap from day one.

Re:Bitcoin is only version 1.0! (1)

MickyTheIdiot (1032226) | about 7 months ago | (#45735539)

You are right, but the point is that state of the art wasn't frozen at that level. The tech kept improving. The argument was unconsciously assuming that the technology wasn't going to improve and adjust. That's precisely what is happening in some of these anti-bitcoin arguments.

Re:Bitcoin is only version 1.0! (1)

jythie (914043) | about 7 months ago | (#45735505)

One of the weaknesses of BTC though is it was essentially set up with big design up front, all the tuning was done in the initial design with the hope that the market would adjust around it in the future.

Re:Bitcoin is only version 1.0! (1)

MickyTheIdiot (1032226) | about 7 months ago | (#45735555)

Yes, and this another great reason I don't think that Bitcoin is a version 1.0 idea and that we'll see some sort of refining of the cryptocurrency in the future.

Bitcoin is not anonymous (5, Informative)

Engeekneer (1564917) | about 7 months ago | (#45735393)

I agree with some points, but in general he seems to be only somewhat correct.

First of all, BitCoin is not anonymous. BitCoin is pseudonymous. Once mining dies out (which also solves a lot of his other qualms), you need to trade bitcoins some way. You have to exchange your real money to bitcoins. ALL transactions are public which means it's really easy to start profiling people. In the future it's probably easier to trace a person's bitcoin transactions than normal ones.

Oh noes... (0)

Anonymous Coward | about 7 months ago | (#45735395)

Looks like somebody didn't mine his coins...

Use of possessives (3, Insightful)

Roadmaster (96317) | about 7 months ago | (#45735399)

I hate being a grammar nazi but, this Stross guy being a writer, I think it's warranted. Lack of mastery in his own craft makes me distrust his research a bit, even if it's a bit of an ad hominem on my part.

to damage states ability to collect tax and monitor their citizens financial transactions, as seen both in TFA and the Slashdot summary, lacks possessives [commnet.edu] and looks just plain bad.

Um.. (2)

Threni (635302) | about 7 months ago | (#45735403)

> Bitcoin's utter lack of regulation permits really hideous markets to emerge, in
> commodities like assassination and drugs and child pornography;

Emerge? Yeah, lets ban Bitcoin before those markets turn up.

Re:Um.. (2)

rnturn (11092) | about 7 months ago | (#45735581)

I think his point -- though not as well written as you might expect from a guy whose job it is to work with words -- is that Bitcoin would allow those markets to flourish as their transactions would be untraceable. ``Real'' monetary transactions for something like an assassination can be traced, even if they flow through a bank that likes to keeps its customers' business private. (Recall that UBS, if memory serves, had customers hiding money from governments in ``secret'' accounts to avoid taxation and they were, eventually, tracked down.)

Even a libertarians opion matters (0)

Anonymous Coward | about 7 months ago | (#45735415)

"For starters, BtC is inherently deflationary"
Yea that's a great thing about BtC, deflation is better than inflation. No more cheap shortcut for holding debt.

Lack of regulation can easily be fixed. The chain is public so government can always backtrack who made what purchase.
Naturally having to pay taxes and disabling the use for criminals will lower the value of a BtC, but it will also become more stable.

The carbon footprint of regular banks is much bigger, they have massive buildings, IT systems to process transactions, etc...

If the malware is not for BtC it's for something else, fact remains that users should keep an eye on their system and developers should make software more secure.

BtC gives the people freedom, where centralized banking gives control to big monolithic institutions that abuse it.

Just because I'm - apparently - a libertarian does not mean I'm wrong.

Zealots will be zealots (0)

rebelwarlock (1319465) | about 7 months ago | (#45735433)

The people I know that harp on about bitcoin all the time think every last one of these is a plus side. Tax evasion? Taxes are robbery anyway. Assassination markets? Some people deserve to have bounties on their heads. Deflationary currency? That's exactly how you want your currency to be!

I find it very unlikely that this will dissuade anyone who thinks bitcoin is the bee's knees.

Re:Zealots will be zealots (1)

jythie (914043) | about 7 months ago | (#45735523)

I think it is less that people deserve a price on their head, and more their own fault for not being able to outbid the entity that wants them dead. After all it is the individual's fault if they are not rich, well, unless the government or banks or immoral rich people have somehow stopped them, THEN it is all their fault.

What is this guy's problem? (1)

Lumpy (12016) | about 7 months ago | (#45735439)

"BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks"

This is a GOOD thing, a very VERY good thing. Central banking is designed to only make a very very small number of people insanely wealthy and powerful. Only power hungry scumbags bent on world domination would be against this.

Incredibly poor logic here (5, Insightful)

wbr1 (2538558) | about 7 months ago | (#45735471)

Bitcoin comes with an implicit political agenda attached

Whose?

Libertarians love it because it pushes the same buttons as their gold fetish and it doesn't look like a "Fiat currency".

One, any currency is a fiat currency. People have to agree to use it, be it beads, dollars, bitcoins or polished turds. Just because you have a problem with libertarian views (I do on some), does not mean an insulting argument is valid or appropriate

Mining BtC has a carbon footprint from hell as they get more computationally expensive to generate, electricity consumption soars;

Printing and minintg currency has a big carbon/environmental footprint as well.

Bitcoin mining software is now being distributed as malware because using someone else's computer to mine BitCoins is easier than buying a farm of your own mining hardware;

It is always easier to steal someones wallet than work for it. There will always be those that try to do just that. Your point?

Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination and drugs and child pornography;

This one really gets my goat. These markets (whether hideous or not), exist already, regardless of the currency. It doesn't matter if you by crack with blowjobs or acid with BTC, the market is there.

and finally Bitcoin is inherently damaging to the fabric of civil society because it is pretty much designed for tax evasion. "BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions," concludes Stross.

The blockchain is public. Once a wallet is tied to an individual, all its transactions are public, be they income that is untaxed or 'hideous market' purchases. Even years down the road, if a wallet I used to buy ecstasy in 2012 is tied to me in 2042, that purchase is now and forever tied to me (as well as all other transactions done with that wallet).

Libertarianism (2, Insightful)

Akratist (1080775) | about 7 months ago | (#45735499)

Since libertarians are sort of getting to be the "new Jews" (i.e. a misunderstood community targeted on the basis of what their enemies say about them), here's a recap: 1. Libertarians favor peace over war. 2. Libertarians don't want to run other people's lives (or have their own lives run by other people) 3. Libertarians don't trust government because it is made up of individual people and don't understand why those who don't trust individuals trust government. Libertarian views on bitcoin are divided, much like views on everything else. Trying to say "bitcoin is a libertarian ideal," is the same as saying "war is a government ideal."

Charles Stross (0)

DarkOx (621550) | about 7 months ago | (#45735535)

Well I want Charles Storss to die in fire!

Laws and tax levels should be things that are mostly agreeable to everyone. People mostly are decent unless they become to powerful. Most people want to pay their 'fair' share and follow the rules. Its when the rules become to onerous you get more misbehavior, which in turn begets more misbehavior as people get more used to flaunting the law.

On the other hand when you make governments ability to enforce so effective breaking the rules becomes impossible, you take away the incentive to keep the rules reasonable for all. It how you get abusive shit like the war one drugs.

Behold, the art of meta-ironic sarcasm... (1)

Libertarian_Geek (691416) | about 7 months ago | (#45735543)

This story is so Tinfoil hat.

hmmm (0)

Anonymous Coward | about 7 months ago | (#45735557)

"BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks"

I'm sorry... How is this supposed to make me not like bitcoin?

There are truly some great benefits to Bitcoin (1)

Flammon (4726) | about 7 months ago | (#45735571)

I, know, you hate videos but have a look and you might learn a thing or two about Bitcoin.

http://www.youtube.com/watch?v=Cs6F91dFYCs [youtube.com]

Some analysis (1)

jirikivaari (2468926) | about 7 months ago | (#45735583)

I don't like this polemic article which is basically telling good vs evil story. I don't own Bitcoin but I think it deserves a fairer treatment than this.

For starters, BtC is inherently deflationary ... Less money chasing stuff; less cash for everybody to spend (as the supply of stuff out-grows the supply of money).

BtC maybe deflationary but so is the price of say PC components too. The real value of computers has declined exponentially since the 1970s yet the market is booming. Anyone knows that most PCs will sell a lot less next year than today yet people buy PC's. There's a great book called Less than Zero [amazon.com] about this. I think bigger problems of deflation come around business cycles when wages don't adjust but deflation does not have to be the nightmare everyone is afraid of. In fact deflation is the whole purpose of economy, to get more stuff with less resources.

Mining BtC has a carbon footprint from hell (as they get more computationally expensive to generate, electricity consumption soars). This essay has some questionable numbers, but the underlying principle is sound.

Lack of deeper abstract thinking. Carbon footprints are moral masturbation because anything you produce has carbon footprint, either in fixed or marginal costs. By trying to regulate the end products, the author falls to economic calculation problem [wikipedia.org] . As long as the externalities of pollution are paid by those who produce them it doesn't really matter for which purpose the carbon is produced. Saying one product is preferable to another is just politics. You can redistribute money for whatever things (research, medicine etc.), but that's beside the point.

There're valid points about problems but I think it's quite one-sided article. The reality has much more dimensions to this. I can see both good and bad sides of having an anarchist crypto-currency, just like piracy. On other hand it prevents the big institutions from rent-seeking (in piracy, making things cost more than their marginal and fixed costs and with crypto-currency excessive taxation), on the other hand it comes with all the problems anarchy comes with.

Get past currencies. . . . (1)

galaxybeing (2773313) | about 7 months ago | (#45735595)

I have to agree with Stross, YAC is not going to help the bottlenecks currencies produce. As he alludes, all currencies take on a life of their own, mostly parasitical to the actual "economy" they're supposed to be "means-of-exchanging." What we need is what I'm calling "direct logistics" (DL) where supply and demand are directly connected a la a Leontief-like input-output matrix. The means no pricing vis-a-vis a currency, but simply the actual, direct supply and demand statistics. What you can "purchase" (more like procure) would be based on your "batting average," which the IO-matrix would figure out based on how well you're making the IO-matrix hum, which, in turn, would be dependent on how many "networks" you were involved in in a positive way. In the best DL world, resource usage would be rationed and, hence, a huge chunk of the IO-matrix would be devoted to getting more out of less, i.e., recycling and more-with-less consulting, since resource allotment would be merit-based. A further dream would be for all means of production to be "open source," i.e., anything and everything would be open for anyone to peruse and possibly improve . . . just like, theoretically, open-source code.
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