Don't Be Silly, The Entitlement State Won't Allow Bitcoin
forbes.com
forbes.com
The more they try to stop bitcoin, the more it will succeed. Why? Because of the network effect it is built upon. The more people hear about it, the stronger it gets.
If the US tries to block bitcoin. Opponents such as Russia and China will do the opposite. Why? Because the US will shoot itself in the foot. They will automatically lock themselves out of a rapidly growing economy currently worth $1.5BN.
US Government, take note of a simple fact: Tax evasion existed before bitcoin, and it will continue to exist regardless of if you accept bitcoin.
To the people. The more the government takes note of bitcoin, the more you should. They are worried because at last, they cannot control YOUR hard earned money or dilute it. Let me remind you about how much the fed has devalued the US dollar since the financial crisis... trillions.
If that's your worry, how are bitcoins different or better than investing gold, oil, Euros, Swiss Francs or any of the other myriad of options available to you that cannot be diluted by the US fed?
This depends on a lot of things.
* Bitcoin, as a floating currency, depends on other currencies (or they on it, depending on your perspective) for relative purchasing power
* In order to arrive at that relative value, exchanges need to function--either explicitly, like MtGox, or implicitly through barter or private sale.
* There's not much the governments can do about private barter, but there's hella lot they can do about controlling organised exchanges. And, well, they've already started doing it.
In short, Bitcoin could well end up like flax or bags of flour or pigs or whatever else currency people want to use to get things from each other. But if you want to sell your pigs at market, you gotta pay the market fees or get out. And if they really want to stop Bitcoin, you simply won't sell them at market.
Put another way, the government regulates their currency, and while you want your currency to have some value in their currency, you have to find a way to move it between you and them. Either you do it their way, or you find an unofficial alternative. In the criminal world, they call this money laundering, and that's not going to succeed in the mainstream, network effect or not.
>I defend laissez-faire capitalism, using Ayn Rand's Objectivism.
Why not keep an open mind? This sort of personal statement seems more apt for a religious proselytiser than a Philosopher.
Anyway, the article is not worth reading, just a political polemic without any worthwhile thought about the actual issue he raises, what effect will a cryptocurrency have on tax enforcement?
Your question is like reading an article by someone advocating the end of slavery, and you ask, "but who is going to do my work for me then?"
Perhaps you won't realize how apt my comparison is until you read at least this: http://en.wikipedia.org/wiki/Taxation_as_slavery
I hope you realize that as long as a government has a monopoly on money, they don't need to tax you at all.
It is funny that the author equates left-leaning with freedom limiter. In reality, a left-leaning government limits economic freedoms, and a right-leaning government limits social freedoms. A virtual currency is not only a threat to economic control but, since economics underpin the rest of social interactions, it is a direct threat on social policy monopoly. So it is also a threat to right-leaning governments.
So it is not the entitlement state which will fight bitcoin but, quite simply, "The State". It doesn't follow the state will succeed.
"When men are free to choose, they choose gold."
Ha! Those men who are free to choose, pay as little a wage as possible to some other poor bastard who will sell his time in order to perform all tasks related to arcane metal verification, so that he can be halfway certain that their gold is really gold, that it is properly stored, and that it is properly handled during transfers (to pay for things, otherwise what is the point?). They will also pay journalists to write articles about how great gold is.
For any men to choose freely, technology must come helping, to lower the costs of handling the value storage. Bitcoin is here for that. Maybe rich men will continue to hoard gold, but the cost of doing so will be much higher than those of handling bitcoins. So, one would assume, at some point rich men will do their math and switch to bitcoin. Of course, not before all risks associated with bitcoin have been cleared - rich men are very conservative with regards of where to put their savings, prefering high fees (which they make up for with their multiple businesses, or government association) to uncertainty. Later, when they move to bitcoin, they will sing the "I-knew-this-bitcoing-thing-would-fly-and-was-there-since-the-beginning" song.
Obviously the idea is that if everyone uses bitcoins then nobody will use dollars, but in that case the gov't just decides to declare bitcoins currency, and tax things as usual.
In a universe where everyone is using bitcoin, the global economy will be pretty fucked though, considering that everybody would be in a de facto liquidity trap (since inflation would no longer exist). But so long as property tax exists, that issue might not come up.
Well, Bitcoin may not be backed by anything, but neither is gold.
The reason for that can be manifold, as you mentioned there may be other uses for the material. But then, Bitcoin also has some of these properties: you may not be able to wear it around your finger, but you can display your digital wealth online quite easily, which may not be so far-fetched in an age that seems to move everything online.
What I meant to say was "as soon as you declare Bitcoin having no intrinsic value, you'll introduce premises that will make it hard to attribute anything else such a value without a no-end argument".