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Comment by lostmsu | Hacker News Reader

Sure it doesn't. Except you can use it to transfer value without first consulting your potentially totalitarian government without much effort for the first time in the entire history.

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ROFL, "the first time in the entire history".

Gold would like to have a word with you... And seashells. And giant stone coins. And on and on and on.

In fact, as far as history goes, government backed fiat currency is a very recent invention.

Government-backed fiat currency is also by far the most successful and most useful. People object on abstract principle but it's been nothing short of miraculous for human development.

You forgot about effort and risk.

Fiat currency was the first currency, developed in Mesopotamia as an accounting system run by the temple-governments of their city-states. Accounts were recorded in clay ledgers, and withdrawals could be made in the form of clay tokens that could be traded within cities and between cities (i.e. accepted for deposit by the temple of another city-state). A large trading network developed based on that money. The entire system was backed by the authority of the governments to levy taxes (mandatory offerings to the temples), collect debts, and resolve disputes (the same things that back our modern fiat currencies).

Performing economic actions that your govt doesn't approve of is illegal. Bitcoin is great for people that want to use it for illegal purposes. If that's the only use case for CC they will always have a place in human history, but I'm not sure they're really worth ~100B USD at this point, if there's no other major use case.

Nothing new there. The hawala system has been doing the same thing since the 8th century.

that's funny, I don't remember consulting my government this morning when I paid for a cup of coffee with cash

Did you pay with cash or credit card?

You must live in: Alaska, Delaware, Montana, New Hampshire or Oregon. (Or be oblivious)

States where the sale of a cup of coffee doesn't involve a tax.

must? there's more to the world than the United States

I live in the UK, there's no sales tax and the sole trader selling coffee at my local railway station is almost certainly below the VAT registration threshold, so there's no tax on the purchase at all

regardless, paying a tax embedded in the price of a good is not the same thing as consulting the government on the purchase

I am impressed how you mentioned UK, and parent mentioned a cup of cofee, but both of you failed to recognize, that I was talking about billions of people, who actually live under totalitarian governments. Where illegal stuff mentioned in some other comments might be buying certain books under threat of death penalty in some extreme, but still dangerously common cases. First world people still can only see first world problems.

What stops a totalitarian government from blocking Bitcoin at the national level?

Nothing; but they wont. Do you think the VPN ban applies to banks? Selective network enforcement for social control, not economic damage to yourself.

The currency being used has no bearing on whether or not the government will find out if you're buying illegal goods. What matters is the ability of the government to discern the nature of the transaction, which has more to do with its ability to co-opt others (e.g., banks) into identifying and reporting such transactions, and (to a rather limited degree) the ability to prove existence of transactions via the payment method (which Bitcoin is actually bad at since it is basically a public ledger of who paid whom, if you can map names to keys).

Weird how whenever I try to buy something with bitcoin on Overstock it still makes me pay sales tax. Bitcoin must be a big government conspiracy.

Tax just tracks that the transaction occurred, it doesn't track who's doing the transaction.

But if you don't like even that much, then replace "cup of coffee" with "lemonade from a neighborhood lemonade stand".

Moreover, most cash transactions at small shops aren't even tracked individually. The merchant will just report the sum of sales for a given period if he's honest, or a completely unrelated value pulled from thin air if he's not.

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