My old college roommate John R. Levine, who was a techie before anyone knew such creatures existed (let alone that they would rule the world), sends me a note about Bitcoin that confirms some of my own suspicions[...]
My current guess is that the Bitcoin bubble will collapse when there is some bad news, e.g., a regulator demands registration of Bitcoin wallets, people try and cash out, and find that that while it’s easy to buy bitcoins, it’s much harder to find people willing to buy back nontrivial amounts, very hard to collect the sales proceeds, and completely impossible without revealing exactly who you are.Levine also touches on a point that I really hadn't thought much about before. Bitcoin is really a majority rule currency---which is very scary when you take into consideration what majority rule has brought to the forefront in general public policy. Levine writes:
Bitcoin has its decentralized blockchain which is a very clever recasting of the problem so that the state of the “bank” is whatever the majority of bitcoin miners agree that it is.So in other words, it is false when Bitcoin advocates claim there is no central planner. It is actually mob rule by Bitcoin miners and if I understand this correctly probably by Bitcoin holders, if a majority call for a change in protocol! But changes can certainly be made at the mining level.Very, very, very, different than gold, where there truly is no central control. Gold is gold. It has specific characteristics that a majority can never change.
Who knows what mad dog changes to Bitcoin could be advocated in the future. For those who doubt that changes can occur, note that there has been technical changes already made to Bitcoin. From Bitcoin stack exchange:
It has been changed in the past. For example, the version message was updated. It was carried out by basically saying: "Okay, on this and this date, the protocol will be changed" and giving enough time for non-standard clients to update. Then, at a predefined time all clients updated their protocol version internally and started communicating in the normal way.
If Wenzel starts growing a beard...............I'm outa here.
ReplyDeleteWhat's next?
ReplyDeleteKrugman's babysitter on Bitcoin? His barber?
"Bitcoin is really a majority rule currency---which is very scary when you take into consideration what majority rule has brought to the forefront in general public policy."
ReplyDeleteThat's funny, considering Krugman's gamed system of Democracy is supposedly about 'Majority Rule.' Democracy is a disaster, read Hoppe's and works by others as to why.
"My current guess" Guesses and ignorant opinion are now intensive study and academic research?
ReplyDelete"is that the Bitcoin bubble will collapse when there is some bad news" Bitcoin is not in a bubble, by any definition.
", e.g., a regulator demands registration of Bitcoin wallets," A regulator in which jurisdiction?
"people try and cash out, and find ... it’s much harder to find people willing to buy back nontrivial amounts" this is a pure straw man.
"and completely impossible without revealing exactly who you are." This is just nonsense; people trade Bitcoin person to person every day without knowing who they are trading with.
I simply cannot believe that Krugman is now quoted here as an authority not on economics, which he knows something about, but on Software Development, which he knows absolutely noting about. This is the same man that predicted that the internet would, "amount to nothing much" quoting some obscure academic's untested law.
All the Austrians who have come out against Bitcoin are now in a hole so deep they have to run to Krugman as an ally to dig them out.
I thought that this day would never come!
No Central Planning in Gold eh? Tell that to the FED, who through their surrogates, move paper gold (and consequently physical) around the chess board, seemingly at their whim.
ReplyDelete