Bitcoin 'Ought to Be Outlawed,' Economist Joseph Stiglitz Says

[Mordan]

Bitcoin's principles are here. Notice the section titled "Low Trust". Bitcoin/Ethereum/etc. are not trustless. They are low trust, relative to the fiat money system. So, the goal is not and never has been trustless because trustless is not in the achievable set of properties.

Let's break it down graphically:

[User] --> [Fiat money (very high trust)] --> [Business (moderate trust)]

versus

[User] --> [Crypto (very low trust)] --> [Business (moderate trust)]

Do you see how the overall trust of the system has been brought down substantially from "very high" to somewhere around "moderate"? You can get screwed by the business you are dealing with, of course, but you're not going to get screwed by the money you are using. That eliminates a huge problem with doing business and, thus, lowers resistance to doing business, thus, facilitating the free market.

Ethereum allows arbitrarily complex smart-contracts. This makes it different than Bitcoin. Beyond that observation, I don't see what all the fuss is about.

You failed to address my point.

The smart contract does not help nor the business nor the customer in the trust relationship. I am not talking about the money part of ethereum. but the business code that works with the money. Ethereum Business code needs input from external flight delay oracle.

[ClaytonB]

You failed to address my point.

The smart contract does not help nor the business nor the customer in the trust relationship. I am not talking about the money part of ethereum. but the business code that works with the money. Ethereum Business code needs input from external flight delay oracle.

But I did address this point. The business (moderate trust) in this case is whoever is authorized to input the flight data into the smart-contract. Note that nobody's compelling you to trust this entity, even if you hold ETH! This is in contrast to fiat money, where you are compelled to trust the banking system (and you are guaranteed to be screwed over if you are stupid enough to do that).

We trust businesses with our assets on a regular basis. When you allow a valet to park your car, you are trusting that the business has hired someone competent and that there is insurance in case there is damage to the vehicle, etc. Almost everyone trusts their employer to follow through on paying them for the last pay period. For some people, that is an entire month's wages! We have no problem doing this because we make the gut calculation that the people we are trusting have so much more to lose from trying to screw us over than they stand to gain from screwing us over that it's in their own self-interest to play by the rules. This is precisely why we categorize these kinds of relationships as "low trust" or "moderate trust" - they are not trustless because it is possible for you to be screwed over, yet, there's no self-interested reason for anybody to screw anybody else over, so such situations must arise extremely rarely.

[Mordan]

But I did address this point. The business (moderate trust) in this case is whoever is authorized to input the flight data into the smart-contract. Note that nobody's compelling you to trust this entity, even if you hold ETH! This is in contrast to fiat money, where you are compelled to trust the banking system (and you are guaranteed to be screwed over if you are stupid enough to do that).

We trust businesses with our assets on a regular basis. When you allow a valet to park your car, you are trusting that the business has hired someone competent and that there is insurance in case there is damage to the vehicle, etc. Almost everyone trusts their employer to follow through on paying them for the last pay period. For some people, that is an entire month's wages! We have no problem doing this because we make the gut calculation that the people we are trusting have so much more to lose from trying to screw us over than they stand to gain from screwing us over that it's in their own self-interest to play by the rules. This is precisely why we categorize these kinds of relationships as "low trust" or "moderate trust" - they are not trustless because it is possible for you to be screwed over, yet, there's no self-interested reason for anybody to screw anybody else over, so such situations must arise extremely rarely.

OK! up to this point we agree.

Since you already need to put moderate trust in the business inputing flight delays in a program (smart contract or smart web service). Why do you need a smart contract which is low trust. The weakest link is the business. The business therefore can use a simple web service to reimburse you. Using a smart contract on ethereum does not improve the trust relationship that you need to have with the business.

in a trust chain, the weakest link is where you need a lot of trust, the more trust in a link the weaker.

Blockchain fundamentally solves one problem. Trust that the value you just received hasn't been double spent. That's all.

[ClaytonB]

Since you already need to put moderate trust in the business inputing flight delays in a program (smart contract or smart web service). Why do you need a smart contract which is low trust. The weakest link is the business.

I assume that it's about business costs and not about trust. I mean, you use ETH because ETH is low-trust, instead of fiat because fiat is funny-money. But the rest of the value-prop in using smart-contracts would then be (I am guessing) that they are able to lower business costs this way.

The business therefore can use a simple web service to reimburse you.

But then you need to build that web service, staff it, maintain its front-end and back-end, etc. etc. With an ETH smart-contract, all you need is some kind of web front-end (for info and customer support) and then an ETH back-end. Again, I'm just guessing here, I don't know what the actual business model is from the armchair.

Blockchain fundamentally solves one problem. Trust that the value you just received hasn't been double spent. That's all.

This is the Bitcoin view (kind of... BTC also has smart-contracts, they're just not as smart as ETH smart-contracts can be). Bitcoin is all about moving assets from one ledger to another, with a few extra enhancements added on top. ETH is more of the long-range view, IMO. What happens when we start building AI-based business management that can plan business operations more efficiently than any human being, including a system that is "mostly autonomous" with occasional human intervention? We're going to want an ETH-like system for this kind of futuristic business. People keep calling DAOs scams but there's no necessary reason why a DAO is a scam. It might be a scam, but it could also be an ingenious piece of engineering that wipes out an entire business sector and replaces it with a few hundred lines of well-crafted code.

Think about the "algorithmic difficulty" of the average corporate worker's job. What they do at their desk each day is so simplistic, most of the time, that the code to replace their job could be written manually with sufficient investment effort. In fact, this has already happened with office automation software, phone-answering software, etc. etc. But now we have Deep Learning based AI coming and this kind of software package can be trained on-the-spot to learn tasks it has never been exposed to before. Systems like OpenAI Universe enable AI packages to be trained on the "input/output" of computer systems so that you can completely automate white-collar jobs, even the stupid little hiccups that are the main cause for needing human intervention (e.g. removing/reinstalling a driver or things like that). People throw up their hands when they see these developments and say, "All is lost, the AI is going to take away all our jobs!" instead of looking at the long view - we can relieve the economy of the need to pay for valuable human time to be expended on low-value, repetitive tasks. Just like nobody misses the days before the invention of tractors when 80+% of all jobs were agricultural, nobody's going to miss the days before AI when huge swathes of the economy are tied up in performing low-value, repetitive work.

And smart crypto, like ETH, will be able to play a huge role in making this future come about because, as we all know, nothing important gets done unless someone is paid to do it, as a rule. So, people are going to have the incentive to build these futuristic, autonomous systems because they will be able to make money by doing it and a virtuous circle of investment and competition will ensure that the highest quality, lowest price products win out.

[Mordan]

I assume that it's about business costs and not about trust. I mean, you use ETH because ETH is low-trust, instead of fiat because fiat is funny-money. But the rest of the value-prop in using smart-contracts would then be (I am guessing) that they are able to lower business costs this way.

But then you need to build that web service, staff it, maintain its front-end and back-end, etc. etc. With an ETH smart-contract, all you need is some kind of web front-end (for info and customer support) and then an ETH back-end. Again, I'm just guessing here, I don't know what the actual business model is from the armchair.

i have worked as a programmer/designer in Entreprise Application Integration development. I don't believe you can use ETH as a back end. Bugs are impossible to fix unless you deplay a new contract upon the old one. Use ETH for your business back end AND business logic?
I love the idea but I don't believe it is practical. For once, ETH does not have database connections.. you need a decentralized database blockchain. you need encryption. you need so many things to create a full back end and business module.

And keep in mind that EVERY SINGLE ETH NODE will have to run EVERY SINGLE smart contract.. It is like those BCash trolls who expect to record all billions of everyday purchases on the bitcoin blockchain.

Yea they are talking about sharding but that's just to keep the wheel of the marketing scam turning.

[CCTelander]

What Joseph Stiglitz (aka Joseph Hissyfits) is saying is,

"So it seems to me freedom ought to be outlawed. Freedom doesn’t serve any authoritarian statist function."

Yep. Freedom is definitely UNpopular among the statist elite. Go figure.

[r3volution 3.0]

I do know that if the government decides to eradicate it, they will.

Indeed

The BTCers cheering comments like Stiglitz's as evidence that BTC is "working" are rather missing the point.

[dannno]

Indeed

The BTCers cheering comments like Stiglitz's as evidence that BTC is "working" are rather missing the point.

No, you are missing the point. The more these type of people go against it, the more shills that come out fighting it, the more transparent your bull$#@! becomes and the more (or Moore) we win.

[ClaytonB]

Indeed

Note that they've outlawed many other things that are still readily available, like street drugs. How's that whole "outlawing" thing working out?

[r3volution 3.0]

Note that they've outlawed many other things that are still readily available, like street drugs. How's that whole "outlawing" thing working out?

The the BTCer goal is for BTC to become the predominant money of the black market, that's entirely possible.

But it's also a far cry from BTC replacing the USD/EUR/etc, since black markets are a small fraction of total economic activity.

[ClaytonB]

The the BTCer goal is for BTC to become the predominant money of the black market, that's entirely possible.

But it's also a far cry from BTC replacing the USD/EUR/etc, since black markets are a small fraction of total economic activity.

That's missing the point. If the government cannot ban Bitcoin, then Bitcoin may just replace USD/EUR whether the government likes it or not. Sure, Leviathan can keep everyone with a mortgage or a small-business in line with threats of audit, seizure, time-behind-bars etc. But unless the State can stop the informal economy, it may take over by de facto means rather than de jure. When enough people do business in Bitcoin without snitching themselves out to the State about it, it won't matter whose name is on the house, its use will go to the people who can actually afford it based on their real economic purchasing power. Perhaps Mom & Pop will stay away from owning Bitcoin and keep their name on the house out of fear of being punished for transitioning out of fiat - but they'll still have to rent the house out to people with Bitcoin so they can afford to put food on the table and keep the lights on when that devaluated SSI just doesn't cut it anymore. One can dream...

[r3volution 3.0]

That's missing the point. If the government cannot ban Bitcoin, then Bitcoin may just replace USD/EUR whether the government likes it or not. Sure, Leviathan can keep everyone with a mortgage or a small-business in line with threats of audit, seizure, time-behind-bars etc. But unless the State can stop the informal economy, it may take over by de facto means rather than de jure. When enough people do business in Bitcoin without snitching themselves out to the State about it, it won't matter whose name is on the house, its use will go to the people who can actually afford it based on their real economic purchasing power. Perhaps Mom & Pop will stay away from owning Bitcoin and keep their name on the house out of fear of being punished for transitioning out of fiat - but they'll still have to rent the house out to people with Bitcoin so they can afford to put food on the table and keep the lights on when that devaluated SSI just doesn't cut it anymore. One can dream...

I started to write a response to this, about the limits of the black market, and ended up starting a thread instead.

http://www.ronpaulforums.com/showthr...56#post6561756

[Mordan]

I started to write a response to this, about the limits of the black market, and ended up starting a thread instead.

http://www.ronpaulforums.com/showthr...56#post6561756

man how can you write about something you do not understand.

The black market is not using Bitcoin anymore. They use privacy coins like Monero. And if they bring it down, they will use Dash or ZCash..

The crypto currencies are a reality. deal with it.