byfield on Sat, 30 Dec 2017 23:42:30 +0100 (CET)


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Re: <nettime> Ten years in, nobody has come up with a use for blockchain


On 30 Dec 2017, at 8:51, Felix Stalder wrote:

And besides, the ever rising transaction costs (because of the low
number of exchanges that can be settled per second, which Zooko puts at 3, rather than 7) make it as an actual means of exchange almost useless
for everyday transactions (including illegal ones).

The joke is that the rising cost and slow rate of transactions look like bugs in the context of a rising bubble, but they could just as easily be features in other contexts: just call them something different, say, processing/application fees, queues, cooling-off periods, etc.

Right now, Bitcoin's value seems to lie in the nexus of speculative profit and supposed anonymity. Imagine a scenario — let's ignore for now whether it's technically or politically realistic — in which (a) someone figures out how to steal enough coins from enough people, and (b) some magical global entity retroactively ~insures lost Bitcoins and effectively introduces legal amnesty at every level. People around the world would happily sign up to get their money back. For them, Bitcoin's value would suddenly lie in the nexus of 'nymity' and minimizing losses.

After the 2008 meltdown it became clear that taking entire nations hostage, with ransoms paid in form of public bailouts, was a viable business strategy. Would it really be surprising if Bitcoin, in some aspect, turns out to be TBTF? The concentration in ownership suggests that there might be ways to (1) drive its value down suddenly, (2) buy up coins for 'pennies on the dollar,' (3) negotiate with key national governments to immunize the covered transactions, then (4) drive the price back up again. Someone, somewhere is planning something like this — maybe with variations that'd involve exchanging Bitcoin for new coins promoted as 'clean,' say, through association with well-known entities, like an ICO backed by Goldman Sachs. Is it any more exotic than the Hunt Brothers trying to corner silver, Soros attacking the pound, vultures hovering around Argentina for years on end, etc, etc? Rocket science ain't what it used to be. And a few governments might be interested, in part because it'd help to isolate the criminal wheat from the speculative chaff, both retrospectively and prospectively.

But beyond the speculative bubble, there are very powerful ideological
drivers in this development. One is anarcho-capitalist ideology which
wants to break the government monopoly over money (along lines developed
by F.A. Hayek in the 1970s) and the other is techno-libertianism that
believes, as Zooko puts it, that if you "empower" people, the resulting
good will, somehow, outweigh the bad. Someone from the audience raised
the question about enormous inequality in coin ownership, to which he
had no reply beyond "that's a really good question!".

These guys are, as they say, priceless.

Apropos, at the risk of provoking the Wrath of Morlock, here's something a recent talk by Tim May talking about 'thirty years of crypto anarchy':

	https://youtu.be/TdmpAy1hI8g

As you said about Zooko's tallk, really interesting and entertaining because it's so full of contradictions.

Cheers,
Ted
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