I encourage readers to see the whole thing, but I wished to emphasise a few points (bolded them).
Obviously, I have no inside information at all and am just speculating—as a devout student of the fascinating organism that is USG. However, my guess is that this event will happen soon—ie, probably in 2013. Why? Because of the ECB report on Bitcoin, which quoth:
All these issues raise serious concerns regarding the legal status and security of the system, as well as the finality and irrevocability of the transactions, in a system which is not subject to any kind of public oversight. In June 2011 two US senators, Charles Schumer and Joe Manchin, wrote to the Attorney General and to the Administrator of the Drug Enforcement Administration expressing their worries about Bitcoin and its use for illegal purposes. Mr Andresen was also asked to give a presentation to the CIA about this virtual currency scheme.
Further action from other authorities can reasonably be expected in the near future.
Neighbor, if you’re at all involved with BTC, I’d advise you to heed this remarkably direct warning. You’ll note that (a) the people who wrote this report do have inside information (since the ECB and our own dear “other authorities” operate, of course, in practice as a single global institution) and (b) these are people with actual power, and people with actual power tend to do what they say they’re going to do—regardless of how Reddit might feel about the matter.
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And when it comes to USG, and USD—creating a successful distributed digital currency is what I call “coup-complete.” Ie, as a difficult problem, it is fundamentally equivalent to the well-known difficult problem of regime change. Are coups impossible? No, of course not. What’s impossible, however, is pulling a coup when you don’t know you’re even trying to pull a coup.
Government control (excuse me, “public oversight”) of all major monetary transactions is one of the basic attributes of sovereignty in the modern world. If you can get away with “money laundering,” ie, circumventing this control, you can get away with anything. If you can systematically disable it, perhaps you yourself are the new regime. You’re certainly on the way.
Indeed, if we all traded in our dollars and dollar assets, and fully restandardized the global monetary system on BTC (technically a far superior design), it’s quite possible that Satoshi Nakamoto himself would simply emerge as our new global overlord. I suspect he’d be richer than the Rockefellers. How do you indict that?
My guess, solely from the broad public hint above, is that the collective bureaucratic decision to unleash the full right arm of USG on BTC was almost certainly made in 2012 or even 2011. An easy decision—since it makes a lot of work for all the deciding agencies. Meanwhile, the Bitcoin economy is buzzing merrily along, as if there was nothing wrong at all with Bitcoin. Technically and economically, there is nothing wrong. It’s a remarkably beautiful architecture—in fact, I would say, a genuine work of art in the field of system software. Its problems are entirely political.
If the government is competent enough to shut down BTC by force (which I kinda doubt), then they’re probably competent enough to do something (for them) better: spread the meme that BTC is untraceable and then trace the illicit transactions. I don’t think the average user of BTC is capable of pulling off an information-theoretically-untraceable transaction, if such a thing is possible at all. And how can you be sure that the FBI/CIA isn’t actually running the coin-mixers?
Either way, I give a low probability of bitcoin vanishing in the next year. 5%? 10%? I think I put down 5% on gwern’s predictionbook entry.
This makes sense if you assume the USG shutting down bitcoin is likely to actually be about the illicit transactions. Moldbug isn’t making that assumption. Neither would I.
He seems to model government as a single agent that plans and executes according to its best interests.
I model government as a collection of agents, mostly incompetent, with different incentives and interests.
If BTC indeed drops to zero via the mechanism he outlines in the coming year, I will be impressed and increase my opinion of him, which is (at the moment) somewhat low (this article being the only thing of his I’ve read).
It’s also worth noting that most (all?) of BTC’s supposed regime destroying powers depend on its magical ability to allow untraceable transactions (e.g., to avoid income tax). Since I don’t think it has that ability, it follows that I don’t think it’s as much of a threat to governments.
Interesting, I can’t recall an article Moldbug wrote with which I would agree as strongly as with this one. Maybe his recent spur of activity is worth following after all, just ignore the comment section.
I see Moldbug continues to ignore TGGP’s offer of a bet on his claim that Bitcoin will probably go to zero in 2013. I’d be happy to bet, say, $50 with either you or Konkvistador that it won’t go to—zero seems unfair, so maybe 5 cents—in 2013.
I wish he accepted the bet, it would increase how seriously I take him (not very much except this article). I’m willing to predictionbook it and make a karma bet on it. Sorry I’m really poor and waaaay to risk averse. Its irrational I know :(
I put 30% chance on BitCoin on your 5 cents benchmark by January 1st 2014.
How Bitcoin Dies by Mencius Moldbug
I encourage readers to see the whole thing, but I wished to emphasise a few points (bolded them).
If the government is competent enough to shut down BTC by force (which I kinda doubt), then they’re probably competent enough to do something (for them) better: spread the meme that BTC is untraceable and then trace the illicit transactions. I don’t think the average user of BTC is capable of pulling off an information-theoretically-untraceable transaction, if such a thing is possible at all. And how can you be sure that the FBI/CIA isn’t actually running the coin-mixers?
Either way, I give a low probability of bitcoin vanishing in the next year. 5%? 10%? I think I put down 5% on gwern’s predictionbook entry.
This makes sense if you assume the USG shutting down bitcoin is likely to actually be about the illicit transactions. Moldbug isn’t making that assumption. Neither would I.
reads article
He seems to model government as a single agent that plans and executes according to its best interests.
I model government as a collection of agents, mostly incompetent, with different incentives and interests.
If BTC indeed drops to zero via the mechanism he outlines in the coming year, I will be impressed and increase my opinion of him, which is (at the moment) somewhat low (this article being the only thing of his I’ve read).
It’s also worth noting that most (all?) of BTC’s supposed regime destroying powers depend on its magical ability to allow untraceable transactions (e.g., to avoid income tax). Since I don’t think it has that ability, it follows that I don’t think it’s as much of a threat to governments.
Interesting, I can’t recall an article Moldbug wrote with which I would agree as strongly as with this one. Maybe his recent spur of activity is worth following after all, just ignore the comment section.
I see Moldbug continues to ignore TGGP’s offer of a bet on his claim that Bitcoin will probably go to zero in 2013. I’d be happy to bet, say, $50 with either you or Konkvistador that it won’t go to—zero seems unfair, so maybe 5 cents—in 2013.
I wish he accepted the bet, it would increase how seriously I take him (not very much except this article). I’m willing to predictionbook it and make a karma bet on it. Sorry I’m really poor and waaaay to risk averse. Its irrational I know :(
I put 30% chance on BitCoin on your 5 cents benchmark by January 1st 2014.
http://predictionbook.com/predictions/14963
Gwern’s comment was good but about two thirds of the commenter’s are horrid.
lol