[LINK] Blockchain

[Jim Birch]

On 22 September 2017 at 10:53, Kim Holburn <kim at holburn.net> wrote:


> I'm not sure this is the case.  The rising value of bitcoin has pretty
> much matched its uses in China as a way for Chinese to get around
> government restrictions on moving RMB to foreign currencies.


This is a factor but it isn't the full story.  Bitcoin is not locked to
anything much except buyer sentiment.


> But any currency that has major influxes of other currencies flowing into
> it will have similar volatility.
>

Currencies experience fluctuation in value but the fluctuations of bitcoin
are in a different league to virtually any other currency fluctuation.  BUT
THIS IS NOT AN ARGUMENT FOR BITCOIN!   This is an argument for judicious
currency management and controls that armour currencies against
speculators.  The Asian currency crisis in 1997 involved large swings in
currency value - though way less than the range of bitcoin - and resulted
in massive economic loss and hardship.  It might be easy to "whatever" this
sitting in a country with a robustly managed currency but there was
enormous and widespread loss of wealth and livelihood in affected Asian
countries.  For example (Wikipedia):

"Thailand's booming economy came to a halt amid massive layoffs in finance,
real estate, and construction that resulted in huge numbers of workers
returning to their villages in the countryside and 600,000 foreign workers
being sent back to their home countries. The baht devalued swiftly and lost
more than half of its value. The baht reached its lowest point of 56 units
to the U.S. dollar in January 1998. The Thai stock market dropped 75%.
Finance One, the largest Thai finance company until then, collapsed."

Zimbabwe?
>

If you're hoping that Bitcoin allows us to match Zimbabwe in just about
anything I don't want it.  It's not something we should be trying to
emulate, or accidentally emulating.


> Except it seems that ethereum is moving to a different, much less energy
> intensive system of "mining".
>

This is a fundamental problem with computation based mining.  Basically, if
there is no effort obtaining something, there is no scarcity.  It's also a
problem with metal currency mining :)  It is not a problem for an issued
virtual currency.

They are just the mythologies and fantasies we know.  This is all just a
> religious argument.  Which mythologies and fantasies we prefer.
>

No it is not.  These mythologies have real world impacts.  If we are smart,
I expect we would minimise the number of crazy mythologies we believe and
take a consequentialist approach.


> Or just buying online without having to go through the current gatekeepers.
>

I'm totally in favour of frictionless transfers that minimise rentseekers.
If that means we must have economic chaos, tax evasion, or enable a bunch
of nasty criminal activities, I might change my mind on that.

Jim