[148850] in cryptography@c2.net mail archive
Re: [Cryptography] On Security Architecture, The Panopticon,
daemon@ATHENA.MIT.EDU (Phillip Hallam-Baker)
Tue Dec 31 03:33:33 2013
X-Original-To: cryptography@metzdowd.com
In-Reply-To: <C4D742F6-CA07-493A-8E49-B525E4559972@gmail.com>
Date: Mon, 30 Dec 2013 23:12:56 -0500
From: Phillip Hallam-Baker <hallam@gmail.com>
To: John Kelsey <crypto.jmk@gmail.com>
Cc: Russ Nelson <nelson@crynwr.com>,
Cryptography Mailing List <cryptography@metzdowd.com>
Errors-To: cryptography-bounces+crypto.discuss=bloom-picayune.mit.edu@metzdowd.com
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On Mon, Dec 30, 2013 at 4:45 PM, John Kelsey <crypto.jmk@gmail.com> wrote:
>
> I am pretty skeptical that much of the economic theory around monetary
> inflation or deflation applies very cleanly to bitcoins, given that it's
> all online, with very low transaction costs, and is likely used only to do
> specific transactions.
>
Krugman has some examples of deflation observed in very similar systems,
babysitting vouchers is one example.
As with the dotcom bubble it is easy to see that it will pop but impossible
to know when it will pop and so there is no way to make money from the
expectation.
BitCoin is currently indistinguishable from a penny stock in a company that
has no revenues, no assets or expectations of any in the future. The only
reason to hold bitcoin in preference to another currency are the belief
that Bitcoin will appreciate relative to other currencies or the perception
that transactions are effectively anonymous.
The second belief is essential to support the first. If the belief that
Bitcoin is anonymous is ever seriously challenged then the drug dealers
will dump their coins as quickly as possible and the value of Bitcoin will
drop as fast as cowrie shells did back in the day
Depending on the legal theory the FBI wants to concoct, shutting down
BItCoin could be as simple as asserting that everyone who participates in
BitCoin in any way is a co-conspirator with the cryptolocker/silk road/etc.
organized crime gangs and thus subject to civil forfeiture and criminal
prosecution under RICO. Sure, the theory might well stink but after the US
courts have spent ten years desperately looking the other way to avoid
recognizing torture, murder and imprisonment without trial, anyone who want
to rely on the US courts protecting their civil rights is suffering from
sillier delusions than their belief in the inevitability of BitCoin.
As with Sealand and the rest of libertopia, it all looks so much better
when you can pretend that the authorities are taking no action because they
can't or are too clueless to make a move rather than because they might
have some tactical reason not to.
--
Website: http://hallambaker.com/
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<div dir=3D"ltr"><div class=3D"gmail_extra"><div class=3D"gmail_quote">On M=
on, Dec 30, 2013 at 4:45 PM, John Kelsey <span dir=3D"ltr"><<a href=3D"m=
ailto:crypto.jmk@gmail.com" target=3D"_blank">crypto.jmk@gmail.com</a>><=
/span> wrote:<br>
<blockquote class=3D"gmail_quote" style=3D"margin:0 0 0 .8ex;border-left:1p=
x #ccc solid;padding-left:1ex"><br>
I am pretty skeptical that much of the economic theory around monetary infl=
ation or deflation applies very cleanly to bitcoins, given that it's al=
l online, with very low transaction costs, and is likely used only to do sp=
ecific transactions.<br>
</blockquote><div><br></div><div>Krugman has some examples of deflation obs=
erved in very similar systems, babysitting vouchers is one example.</div><d=
iv><br></div><div>As with the dotcom bubble it is easy to see that it will =
pop but impossible to know when it will pop and so there is no way to make =
money from the expectation.</div>
<div><br></div><div>BitCoin is currently indistinguishable from a penny sto=
ck in a company that has no revenues, no assets or expectations of any in t=
he future. The only reason to hold bitcoin in preference to another currenc=
y are the belief that Bitcoin will appreciate relative to other currencies =
or the perception that transactions are effectively anonymous.</div>
<div><br></div><div>The second belief is essential to support the first. If=
the belief that Bitcoin is anonymous is ever seriously challenged then the=
drug dealers will dump their coins as quickly as possible and the value of=
Bitcoin will drop as fast as cowrie shells did back in the day=A0</div>
<div><br></div><div><br></div><div>Depending on the legal theory the FBI wa=
nts to concoct, shutting down BItCoin could be as simple as asserting that =
everyone who participates in BitCoin in any way is a co-conspirator with th=
e cryptolocker/silk road/etc. organized crime gangs and thus subject to civ=
il forfeiture and criminal prosecution under RICO. Sure, the theory might w=
ell stink but after the US courts have spent ten years desperately looking =
the other way to avoid recognizing torture, murder and imprisonment without=
trial, anyone who want to rely on the US courts protecting their civil rig=
hts is suffering from sillier delusions than their belief in the inevitabil=
ity of BitCoin.</div>
<div><br></div><div>As with Sealand and the rest of libertopia, it all look=
s so much better when you can pretend that the authorities are taking no ac=
tion because they can't or are too clueless to make a move rather than =
because they might have some tactical reason not to.</div>
</div><div><br></div>-- <br>Website: <a href=3D"http://hallambaker.com/">ht=
tp://hallambaker.com/</a><br>
</div></div>
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