The Case Against Bitcoin

Same that happens when you lose anything else of value- it's lost unless you can get it back. I don't need a central authority to decide that I might be able to get my money back without my password, because then someone else can do the same (via social engineering or otherwise, like internal saboteur)

>What if a 51% attack happens, in which 51% of the processing power in a blockchain network come under attack by a group with immense computing power?

An incredibly unlikely event, given the vast size of the network. Though it is a valid concern.

>This is to say nothing of the environmental aspect of Bitcoin mining, which uses more energy than entire nations.

Agree on this point, FWIW, though PoS aims to fix it (which sadly is moving pretty slowly)

>Or the fact that groups like the Al-Qassam Brigades are using cryptocurrency to finance their operations and solicit donations.

What about the fact that banks assist billions in tax fraud (and pocketed millions in bailouts)? The crypto can be blocked at exchanges in the future making people more wary about the issue.

I hope I don't come across as a crypto shill as I own no crypto, but the author argues against crypto as a whole (instead of, say, crypto evangelists).

This could be tautological, if "debt" is defined as fulfilling any agreed upon transaction. Money is a technology. A money system can serve multiple purposes: Such as a medium of exchange, a temporary store of value, and an instrument of government economic policy. (For example). I suspect that the majority of us, who are clueless about the actual mechanics of it, use the US money system for those purposes.

Money that does not serve those purposes, could have different uses. And like a technology, a money system "works" to the extent that it is useful to the people who want to use it. Even within the world of fiat government money, people in many countries will use their local currency as a medium of exchange, but store their wealth in assets that are valued in the currency of another country such as the US or Europe.

In my view a feature of Bitcoin is that it explores the possible uses of a money system that is not expressly designed to serve any specific purpose. It's like a microprocessor: A collection of hardware and software facilities that takes on the purpose that you assign when you choose how to use it.

Alluded to by the article, and not outside the bounds of possibility, is that a government could manipulate Bitcoin, making it into a tool of economic policy. But I imagine it would be a weak tool.

> Munger, in contrast, is expressing contrasting beliefs about human nature and about the nature of politics and markets. Namely, that our inevitable flaws, including our lack of perfect foresight, require guardrails to reduce the risk of unintended consequences, like, for example, speculation in “low-risk” mortgages that drove a global financial crisis. Without borders, languages, culture and, yes, fiat currency, our civilization can be easily placed at risk.

The pro-bitcoin crowd is making a similar argument. Their position is that, since we lack perfect foresight, the government can't be trusted to implement monetary policy. Eventually, they say, the government will screw things up and undo all the good that monetary policy has done over the past few decades.

Who's right? It depends what happens.

One point that never seems to come up in these debates: bitcoin can (and does) coexist alongside fiat currencies. It is clear that fiat isn't going anywhere, it is clear that bitcoin is not a totally suitable currency for reasons listed in the essay, but I don't see bitcoin's existence as a bad thing and I expect various cryptocurrencies will continue to exist alongside fiat currencies.

Sure, Bitcoin is not perfect, but please don't look at the current monetary system as some kind of pristine, god-created scheme.

Inflation, the banking system, counterfeit money... our monetary system is far, far from ideal.

Also, is Bitcoin overvalued? Maybe. What about the stock market, real estate, gold?

The case against Bitcoin has its merit, but it's mostly a list of one-sided arguments that basically ignore the real actual world that we live in, and its flaws.