Alex, I appreciate the thoughtful comment and all of the edits. I gave you an upvote, but I’m still far from convinced that this is worth EA’s time and money. Most of what you’ve written so far as convinced me that poor, unstable governance is the ultimate pathology to treat, and Bitcoin is a potential ointment for (some) resultant symptoms. I know EAers work on improving election and democracy systems. A few more follow up thoughts on a few of your remarks:
Responding to (3) and (5): Sure, I see other issues that need to be worked out, for example, governments being able to tax fairly to pay for social goods such as schools and health care. I’m not convinced that the problems solved here outweigh those sorts of bad.
Responding to (6): How much of this is just fundamental though? Any sort of “customer service” will require a middle man, i.e. a brokerage or institution. It’s not like we can retrofit the blockchain to have a “Forgot my Password” feature.
Responding to (7): But how much better? Are we better off into investing into anti-corruption projects or the democracy improvement ones?
poor, unstable governance is the ultimate pathology to treat, and Bitcoin is a potential ointment for (some) resultant symptoms.
Are we better off investing into anti-corruption projects or the democracy improvement ones?
A sound monetary system is a crucial element of a healthy democracy.
It is not enough to address these problems simply with better governance. An institution is vulnerable to the extent that it relies on a small group to govern responsibly; the aim of political reform is instead to construct a system that cannot be hijacked by the incompetent or authoritarian actors that it will inevitably encounter. The most foolproof way of doing that is to make it impossible (e.g. by technological means) for any single entity to wield such power in the first place.
That’s precisely the approach that Bitcoin takes: instead of relying on political leaders to self-regulate, or counting on imperfect carrot-and-stick institutions to police good governance, Bitcoin ends the government monopoly on money altogether. Instead of hoping that people vote more rationally, Bitcoin appeals to people’s economic self-interest, offering a way out of their failing monetary systems.
As a result, Bitcoin is perhaps the only effective measure that could help to democratise societies that are hostile to reform. Members of Effective Altruism have offered many suggestions for strengthening democracy in nations where there is already some kind of avenue for popular change. But when it comes to authoritarian states where the ruling regimes show no interest in ceding power, we seem to have had no answers until now. Bitcoin is unusual in that it initiates institutional change from the ground up; governments can no more stop its proliferation than they can switch off the Internet. It is no accident that the nations most hostile to Bitcoin tend to be the most authoritarian ones.
2)
I see other issues that need to be worked out, for example, governments being able to tax fairly to pay for social goods such as schools and health care.
I don’t see how fairer taxation is made more challenging by Bitcoin. Decentralised money is not an aberration that humanity has never seen before – we’ve been there for most of human history (commodity money, such as gold, is fundamentally decentralised). Bitcoin is essentially trying to create a digital version of the classical gold standard that prevailed until 1914. Lending, taxation, and public works still happened in that era – if anything, it was a relatively peaceful and prosperous time. There is no reason to believe the same would not be possible when using Bitcoin. Government-enforced paper money, on the other hand, is an aberration, and one that has consistently resulted in rapid devaluation (as we are seeing right now).
3)
Any sort of “customer service” will require a middle man, i.e. a brokerage or institution. It’s not like we can retrofit the blockchain to have a “Forgot my Password” feature.
I’ve added this to the appendix:
8. “If you lose your private key, you lose your bitcoins forever”
Then take care not to lose your private key. Alternatively, use custodial wallets: services where your private keys are held by an institution, similarly to how you might entrust your savings to a bank. Multi-signature wallets also allow you to spread your risk between several keys or people. That said, the option to take sole responsibility for your savings is the fundamental point, and the problem is that it’s not currently available to people who need it.
Alex, I appreciate the thoughtful comment and all of the edits. I gave you an upvote, but I’m still far from convinced that this is worth EA’s time and money. Most of what you’ve written so far as convinced me that poor, unstable governance is the ultimate pathology to treat, and Bitcoin is a potential ointment for (some) resultant symptoms. I know EAers work on improving election and democracy systems. A few more follow up thoughts on a few of your remarks:
Responding to (3) and (5): Sure, I see other issues that need to be worked out, for example, governments being able to tax fairly to pay for social goods such as schools and health care. I’m not convinced that the problems solved here outweigh those sorts of bad.
Responding to (6): How much of this is just fundamental though? Any sort of “customer service” will require a middle man, i.e. a brokerage or institution. It’s not like we can retrofit the blockchain to have a “Forgot my Password” feature.
Responding to (7): But how much better? Are we better off into investing into anti-corruption projects or the democracy improvement ones?
1)
A sound monetary system is a crucial element of a healthy democracy.
It is not enough to address these problems simply with better governance. An institution is vulnerable to the extent that it relies on a small group to govern responsibly; the aim of political reform is instead to construct a system that cannot be hijacked by the incompetent or authoritarian actors that it will inevitably encounter. The most foolproof way of doing that is to make it impossible (e.g. by technological means) for any single entity to wield such power in the first place.
That’s precisely the approach that Bitcoin takes: instead of relying on political leaders to self-regulate, or counting on imperfect carrot-and-stick institutions to police good governance, Bitcoin ends the government monopoly on money altogether. Instead of hoping that people vote more rationally, Bitcoin appeals to people’s economic self-interest, offering a way out of their failing monetary systems.
As a result, Bitcoin is perhaps the only effective measure that could help to democratise societies that are hostile to reform. Members of Effective Altruism have offered many suggestions for strengthening democracy in nations where there is already some kind of avenue for popular change. But when it comes to authoritarian states where the ruling regimes show no interest in ceding power, we seem to have had no answers until now. Bitcoin is unusual in that it initiates institutional change from the ground up; governments can no more stop its proliferation than they can switch off the Internet. It is no accident that the nations most hostile to Bitcoin tend to be the most authoritarian ones.
2)
I don’t see how fairer taxation is made more challenging by Bitcoin. Decentralised money is not an aberration that humanity has never seen before – we’ve been there for most of human history (commodity money, such as gold, is fundamentally decentralised). Bitcoin is essentially trying to create a digital version of the classical gold standard that prevailed until 1914. Lending, taxation, and public works still happened in that era – if anything, it was a relatively peaceful and prosperous time. There is no reason to believe the same would not be possible when using Bitcoin. Government-enforced paper money, on the other hand, is an aberration, and one that has consistently resulted in rapid devaluation (as we are seeing right now).
3)
I’ve added this to the appendix: