[P2P-F] bitcoin critique summary

[Devin Balkind]

On Fri, May 20, 2011 at 2:06 AM, Karl Robillard <krobillard at san.rr.com>wrote:

> I don't see how the alternative currency experiments like Bitcoin do
> anything
> to help us move to a more egalitarian, steady-state economy.
>
>
Right now we're suffering from a lack of currency competition.  Central bank
fiat currency dominates the world but we could be using a myriad of currency
systems - IOUs, time, commodities, tokens, etc.  We want a healthy, diverse
marketplace of accessible currencies just like we want a healthy, diverse
marketplace for wheat.


> An economist will tell you that "price is information", but I'm not sure
> how
> they justify that.


The 'information' is where supply and demand intersect, creating the context
for trade.  This is remarkable information because market participants are
motivated by self-interest to share this information and, in doing so,
create efficient transactions.


>  An ounce of crack, a few hours of music lessons, a lawn
> mower, or a couple hours of labor might all be $100.  None of these can
> remotely be considered the same, but yet the dollar value is identical.


If we had more currency systems pricing would be different and more
efficient.  For example, you might buy music lessons in time hours, crack in
bitcoins, a lawn mower in dollars and labor in an IOUs.  Arbitrage
opportunities would be plentiful and accessible, drastically increasing our
capacity to create wealth.


>  Any
> mechanism which equates these is an absurd abstraction which eliminates a
> great deal of useful information.


This abstraction is only absurd in some contexts.  If you're participating
in global trade with massive supply chains, this abstraction is extremely
useful.  But the UD$ and the central banking fiat currency system of which
it's a part is great for global trade but horrible for local trade.  That's
why we need more currencies.


>  This dearth of relational data is a
> fundamental feature of money which turns the economy into a valuation game.
> Over time, the wealth gap between those who game the system well and those
> that don't becomes so great that a jubilee or a revolution is needed.
>
>
... or the emergence of alternative systems.


> I see open source production and modern information technology as powerful
> tools which allow us to more fully value things.  They are important
> because
> they help make money (just a primitive form of information technology, IMO)
> obsolete.


"Money" is extremely sophisticated information technology - from the
materials and processes used to create 'paper' currency to the massive
networks of hardware, software, data and knowledge technologies that makes
it possible for people around the world to transact with each other in real
time.  This technology is - however - highly proprietary.  When the
technologies of money are open sourced we're going to achieve great wealth.


> I just don't understand why people want to continue to treat the
> economy as a game.
>
>
Your closing statement is interesting.  If the economy isn't a game, what is
it?


>
> -Karl
>
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-- 
Devin Balkind
Director, Sarapis Foundation
devin at sarapisfoundation.org
@devinbalkind
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