I’m depressed about the global network of tax police being organized by the OECD and high-tax governments. If successful, it will lead to much bigger, more oppressive government. But maybe there’s a way of fighting back. Here’s a video from the folks at Reason TV about something that governments would hate – anonymous, digital money.
And here’s a video from the bitcoin people. I have no way of knowing how well this system will work and how insulated it will be from government interference, but I very much hope it will be successful. Governments will never behave if they think people have no escape options.
If anybody has an informed opinion about this, I’d welcome some feedback.
International Liberty 
[…] I don’t understand cryptocurrency and I don’t own any, but I definitely think it’s important to have alternatives given the track record of […]
[…] I don’t understand cryptocurrency and I don’t own any, but I definitely think it’s important to have alternatives given the track record of […]
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[…] it’s worth, one way of getting the benefits of a cashless world without the risks is with private digital monies such as […]
[…] As I’ve previously noted, there are two reasons why statists don’t like cash and instead would prefer all of us to use digital money (under their rules, of course, not something outside their control like bitcoin). […]
[…] As I’ve previously noted, there are two reasons why statists don’t like cash and instead would prefer all of us to use digital money (under their rules, of course, not something outside their control like bitcoin). […]
[…] As I’ve previously noted, there are two reasons why statists don’t like cash and instead would prefer all of us to use digital money (under their rules, of course, not something outside their control like bitcoin). […]
[…] As I’ve previously noted, there are two reasons why statists don’t like cash and instead would prefer all of us to use digital money (under their rules, of course, not something outside their control like bitcoin). […]
[…] As I’ve previously noted, there are two reasons why statists don’t like cash and instead would prefer all of us to use digital money (under their rules, of course, not something outside their control like bitcoin). […]
[…] As I’ve previously noted, there are two reasons why statists don’t like cash and instead would prefer all of us to use digital money (under their rules, of course, not something outside their control like bitcoin). […]
[…] for the same reason, I like alternative currencies such as bitcoin (click here is you want to see a short and informative primer). These “cryptocurrencies” give people a way […]
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[…] since I sometimes get asked about the online currency, I’ll take this opportunity to say that I hope that it is ultimately successful so that we have alternatives to government monetary monopoli…. That being said, I wouldn’t put my (rather inadequate) life savings in […]
[…] good to see the evolution of private forms of money as a hedge against bad government policy. As I wrote back in 2011, “I have no way of knowing how well this system will work and how insulated it will be from […]
[…] good to see the evolution of private forms of money as a hedge against bad government policy. As I wrote back in 2011, “I have no way of knowing how well this system will work and how insulated it will be from […]
[…] Why statists hate the idea of private money. […]
I scanned a paper (Bitcoin: An Innovative Alternative Digital Currency) about bitcoin and will give a few comments:
First, it isn’t clear the market they’re going after. At minimum, they talk about being an alternative to government issued currencies, providing anonymous payments, and as a cost effective payment system, in particular for micro payments (under $1.00).
In terms of an alternative currency, if they move into the general market (as opposed to limited scope “currencies” used by some games, facebook, etc) then governments will shut down them down. The paper discusses various legal issues and tries to argue that they don’t violate various laws, but the government will find a way to shut them down if they are perceived as undermining confidence in the US dollar or similar currency.
In terms of anonymity, I haven’t looked at the technical details. I am concerned that the paper on bitcoin mentions possible technical failures but does not mention counterfeiting. I’m skeptical that a counterfeit proof, anonymous, distributed (no centralized information) system can be created.
For micro payments, since the value of a bitcoin is not fixed to the dollar, I can’t see it going into common usage. People want to pay for something, not guess at what their account is worth each day. A good micro payment system would be useful, but needs to be based on commonly used.
The bitcoin paper notes the problem of criminal activity — some alternative payment systems have been shut down because they are used for illegal activity (drugs, child pornography, online gambling, etc). As soon as an alternative payment system becomes popular it risks being used for criminal activity.
A system like bitcoin also needs some application which enables widespread use. PayPal became ubiquitous due to the need for reliable payment for eBay auctions (since these are between individuals). The alternatives to PayPal lost out due poor implementation (Citibank’s attempt) or inability to combat fraud (Western Union). (I can give details on request).
In terms of an alternative to government currency, most people aren’t going to even consider it. It might be used by a few who want anonymity or want to avoid government currency, but if it gets very big it will be shut down.
From Wikipedia: “The total number of bitcoins is programmed to approach 21 million over time” A fixed money supply? My initial take on this is that it is too bizarre to succeed. Seems more like a speculation game than a monetary system.
“These limited edition collector plates from The Franklin Mint are sure to increase in value over time! Each contains a handcrafted image of the Royal Wedding Couple you will treasure for years to come!…”
Don’t just hope that it’s successful, Dan. You can actively help bitcoin succeed by buying coins and, for example, posting a bitcoin address that people who like your work on this blog can send donations to. When possible, you can use bitcoin to actually buy useful things (there’s a service that will buy things on Amazon for you, there’s an outfit that’s selling food and so forth for bitcoin, etc.).
If you are interested in a very technical discussion of how bitcoin works, check out http://twit.tv/sn287. This podcast was where I first heard about bitcoin.