Thursday, February 15, 2018

Bitcoin, Blockchain, and Beating the System

Matthew Anderson emails:
It’s no secret you believe Bitcoin was created by the devil for the sole purpose of destroying all mankind, however, allow me to pose a serious question to you regarding cryptocurrencies in general: Do you believe blockchain technology could possibly, in the future, be used as a means of circumventing the central bank stranglehold on society? As an asset to free oneself from the “system”? Or, on the other hand, do you believe cryptocurrency technology, in general, is simply gimmicky and should not be trusted?
RW response:

Cryptocurrencies are extremely trackable. Once government understands the blockchain, they will welcome cryptocurrencies with open arms. They won't circumvent central banks. They will become the desired tool of central banks.

13 comments:

  1. Bob, I've said this before, but here it is again: There are other cryptocurrencies that, unlike Bitcoin, do not display the account key publicly, so there is no way for an observer to link multiple transactions, or even to know which electronic wallets participated in a transfer.

    This does not mean of course that these other cryptocurrencies are immune from governments, only that the failing of Bitcoin to provide privacy of this sort makes it especially vulnerable. If you want to defend the argument that all such vehicles are doomed or will be welcomed with open arms by governments, please do so in light of this fact.

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    1. The only problem with this is easily converting them into fiat or goods without governments noticing. Without fiat inflation and governments thinking they have rights to personal property, cryptos never would have existed. So unless you are saying cryptos are openly being created to avoid taxes, then RW is correct about trackability and future use of cryptos.

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    2. I don't agree about trackability, I've explained that, and privacy has value itself aside from tax avoidance, so I disagree about that also. However, if a government wants to put roadblocks in the way of cryptos, for example, prohibiting conversion of cryptos into the currency they control, then widespread adoption will be difficult maybe even a revolutionary act). I'm not saying that some cryptos aren't trackable so all is well, I just want the reasons for disparaging cryptos not to be based on a false claim.

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    3. Scott, please give examples of untraceable cryptos.

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    4. Read about Monero: https://en.wikipedia.org/wiki/Monero_(cryptocurrency) , though being a tool of our masters Wikipedia has to associate it with "people interested in evading law enforcement" and "malicious hackers".

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    5. Another one is DASH. https://en.wikipedia.org/wiki/Dash

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    6. The correct link for Dash is https://en.wikipedia.org/wiki/Dash_(cryptocurrency)

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  2. I view the private sector's battle with the state in a similar way to how Rocky fought Clubber Lang in the final scenes of "Rocky III." The state, like Clubber, looks very strong, but is slow and lumbering. The private sector needs to be continuously hitting the state from all directions, using speed and staying power, putting the state on the back foot. Maybe one day it will topple. Crypto-currencies are one example of this agile attack on the state from various directions at once. Sure, we'll have some setbacks -- Clubber got a few good shots off at Rocky -- but we should never stop swinging with our advocacy, and we should cheer on those who are willing to actually get into that ring.

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    1. I would counter that cash is like Rocky, it is the true fighter against the state's ultimate theft, taxation. I would never do this, but I've heard of people not reporting cash transactions to the state. What's more Rocky than that?

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    2. Yes, cash has that distinction. However, cash has drawbacks in terms of needing to physically carry it, and in terms of sending it long distance. So cryptos are superior in that regard.

      Note that it's not just explicit taxation that is the issue. It's also monetary inflation (implicit taxation), with respect to which gold and cryptos may be better than cash.

      Lots of pluses and minuses for different forms of non-fiat money.

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  3. As long as the majority of people supports the State's legitimacy to take whatever they want from you, or put you in a cage if you decide to fight them, no amount of crypto-tech can make you or your wealth safe. The central bank is a tool of the State, and the thugs will take what they will.

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    1. majority...supports... the Grammar Police commend you!

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