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I've seen much criticism of cryptocurrency that hinges on the environmental impact of computing, the fear of mob rule of the ledger system – or the trust we place in cryptography itself.

I think the worst part of virtual currency is the exactitude with which it enshrines our debts.

@stephen ledger is a very good technical idea for a very slow database that allows low trust parties to have a consistent agreement on the state of the world.

Someone thought this is currency! Without really understanding what currency is. And a million grifters joined the chat.

@stephen I don’t think there are any debts on Bitcoin, only assets, unless I’m missing something. 🤔

@teknari but the reality of our financial institution is based on credit, not currency. Any sufficiently large purchase is made through credit and paid with interest. How do we plan to reckon that with cryptocurrencies?

To answer my own question, I think the proposed solution is "smart contracts". What does debt forgiveness look like in a system that never forgets?

@stephen

I don’t think currently there is a way of having a debt based system in crypto. By debt based system I mean a way of transacting with something you don’t have as you described.

You can ‘stake’ some or all of what you have, but there is no effective way to enforce a debt by an actor staking more than they have.

The ability to enforce debts relies on the threat of violence in meatspace.

You could experiment with reputation systems, but I think they could be gamed.

@teknari this is an interesting problem and I wonder if someone has written about how "credit" might reconcile with cryptocurrencies. Credit and debt is such an integral part of existing financial institutions, so it's hard to imagine bitcoin being the "future of money" since essentially what you're saying is that one would need to pay for everything up front. It's hard to imagine it would ever catch on if you couldn't buy anything for which a loan is required.

@stephen

Yeah, it is interesting, and non-intuitive.

Much of this 'non-intuitiveness' comes from the fact our current system is so murky.

I deposit a dollar into my bank. The bank then loans you a dollar. Who now has the dollar?

My bank statement says I have a dollar. There is a dollar on the asset side of the bank balance sheet, and you have a dollar bill in your hand. There are 3 of them.

Who owns that original dollar?

@stephen

When push comes to shove, it is who a judge and the men with blue suits and guns say owns the dollar and what they can enforce.

In crypto it is very clear cut. If you have the private keys, it is yours.

It becomes very clear when you deal with 'cross-over' companies like blockfi.com where you can "Earn interest on your bitcoin."

@stephen

Well it isn't really true. You have to give up your keys, so you are giving up photographically enforced ownership, and accepting a contract between you and the blockfi corp that ultimately depends on men with guns to enforce.

You no longer have the bitcoins.

I would like to see the experiment run. I think we can come up with something better than a society based on violence, or at least we can get much less of it.

@stephen

*cryptographically

although I like photographically 🙂

@teknari We will have to become enlightened. I think typically people believe credit is a new thing because credit cards were invented in the 70s or whatever. According to Graeber, money only came about precisely because of violence – as a way to subjugate conquered people, and pay soldiers.

I have my doubts that cryptocurrency will be effective to extricate currency from violence – and if it doesn't, what's the point?

youtube.com/watch?v=CZIINXhGDc

@stephen

Yeah, I have read his book, and I would disagree on that point, though I learned much from him.

You can teach primates and parrots the concept of money. It was ALMOST there for them, and my guess is that it was deeply in us from our "beginning". We know it predates writing.

I think there is something deeper and more profound here though.

When I say I would like to see the experiment run, it is just a statement of my attitude toward it.

@stephen

It WILL be run because what has been created is a computer system that for all practical purposes is outside human beings ability to stop. Bitcoin was designed with this specifically in mind, because it is the only way that it works.

So whether you or I like it, we now share the universe with a computer system that we can't stop, not because it threatens us with violence like Skynet in the Terminator.

It was designed smarter than that.

@stephen

It can't be stopped because by using it, you will become wealthier than if you don't, and the more people who opt out, the wealthier you will get if you opt in.

That makes it unstoppable.

@teknari my point is that bitcoin as an asset functions like gold. But paying for things in gold is impractical not just because of the physical constraint but because there’s no way I could amass enough gold to buy a house outright. Bitcoin doesn’t mean credit and debt goes away - so it’s solving problems of fiat currency but not problems of debt or credit.

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Merveilles

Merveilles is a community project aimed at the establishment of new ways of speaking, seeing and organizing information — A culture that seeks augmentation through the arts of engineering and design. A warm welcome to any like-minded people who feel these ideals resonate with them.