In my opinion, the whole principle of bit-coin is like a manifesto for financial sovereignty - i.e. it says that money should be above government, and above democracy. Personally, I do actually want the government to be able to levy taxes to pay for public services, to be able to trace corrupt payments, to be able to seize the assets of fraudsters who have convicted under a fair judicial process, to be able to nudge the value of a currency to pursue wider macro-economic aims, and so on. Ultimately, living in a society means being subject to its laws. To accept Bitcoin at face value is to accept a future where every country operates by default with a financial system like Switzerland, and I don't believe that the vast majority of the population want that to happen.
I also don't really object to currency manipulation by central banks because they are a stabilising influence and (in theory) are there to stop the money supply from becoming a negative economic factor in times of recession etc.
I quite like the article, and I've made many of those arguments myself. I don't know that bitcoin will fail. It may be that there are enough people to keep it going indefinitely, people who buy in to the politics, who don't care about the politics, or don't know about the details. But I'd not be sad to see it go.
Crypto-currency is really cool. Next time I'd quite like one that isn't inherently deflationary and doesn't require burning millions of dollars worth of electricity to keep the system safe from attack. There has to be a more elegant way. But then I don't give a crap about decentralisation so there are multiple good schemes IMHO.
Peercoin, for one, has a 1% annual growth rate forever, and is designed to be more energy-efficient over the long term because it relies partly on "proof-of-stake" instead of just proof of work. There are a couple other proof-of-stake currencies too, and some unimplemented ideas like proof-of-burn. Another interesting currency is Freicoin, which uses proof-of-work but has demurrage.
Proof-of is just a waste. Currency is a means of exchange rather than a store of value or an actual representation of value. Proving that you've burn't so much electricity is a fun idea for some stuff (spam prevention is the best one I've heard) but when it comes to currency, who cares?
All I really care is that someone else values it about the same as I do, so it can be exchanged freely.
> Personally, I do actually want the government to be able to [...]
You will be able to do help the government to do so, even with Bitcoin.
Other user might get a choice to whether they want to participate, and you might not like that, but it is a little dishonest to qualify that statement with "Personally"
> Other user might get a choice to whether they want to participate, and you might not like that
Well, you can hardly ask the corrupt official whether he wants his payments to be traceable, or the fraudster whether he wants his assets to be seizable. Like any other law which does not impede a human right, these things are decided through democratic processes, and applied to everyone.
We also can't ask the corrupt official whether he wants his communication to be traceable and seizable, yet cryptography enables him.
There were very smart people trying to limit the use cryptography in the 1990s and they failed, and recently there were governments trying to sabotage the development of cryptographic standards, and they also failed, probably because they know what happens when individuals can communicate securely.
The cat is out of the bag. Bitcoin is just another application of cryptography.
> We also can't ask the corrupt official whether he wants his communication to be traceable and seizable, yet cryptography enables him.
I take the point, but communications privacy is much more of a cultural norm than an individual choosing whether or not to pay tax. We could live in a world of communications privacy far more easily than a world without government.
Also, from a technical point of view, communications are pure data (with an origin and a destination), a currency is much, much more. The ability to hide data is not enough to make a currency functional.
People having more power over their wealth does not necessarily mean the end of government. It increases the incentive for government to convince people to pay voluntarily.
I also agree that cryptography alone is not enough to eliminate the distinction between data and currency, but the consensus mechanism of Bitcoin could have been the missing piece of the puzzle.
