Watching the rise of bitcoin over the last few years has been very surprising. It's gotten me to question my political philosophy. I'm in political limbo right now as I think this through. Before entering this limbo, I was a fairly liberal democrat.

But if bitcoin succeeds in moving us away from a monetary system based on debt, it's going to completely remake the political landscape. Will it be impossible for governments to continually run deficits? How will this impact how governments ought to spend tax revenues if so? How will this affect how governments will be able to raise revenues? Do we need to totally rethink the role of government in this scenario?

Have any of you thought through what the implications of bitcoin succeeding might be on the political structures of the world? Are any of you like me in that you're in the process of totally rethinking your political beliefs because of this possibility? I'm still in the very early stages of rethinking things, and I'm starting to open up to libertarian political philosophy. But I'm not ready to totally jump ship on my past beliefs just yet. I want to carefully think things through. I'd love to hear everyone's thoughts on here because a time of major disruption may be coming upon us, whether we like it or not. I think we best start thinking about it now.

How would it do that?

The dollar is based on debt. Bitcoin isn't. If bitcoin becomes more dominate than the dollar as currency, then the debt-based system will be severely disrupted.

Bitcoin will be treated like carrying lots of cash, you evil money launderers you.

lol bitcoin's purpose is not to replace the USD or whatever legal tender is in the country. I think bitcoin (or most likely ethereum IMO) will have niche uses. For bitcoin the value proposition is a store of value (think gold) whereas for ethereum business use cases (think any process with lot of paperwork and or human intervention where trust is an issue and prone to mistakes). So for exemple for Ethereum, I think it could disrupt the legal and banking industry fairly soon (< 5 years). I don't think much will change politically.

Libertarians switching from gold enthusiasm to Bitcoin enthusiasm is always entertaining.

I can't see any reason to think it's likely that states would want to abandon their fiat currencies to begin issuing debt in bitcoin. Or, it's hard to imagine states which issue debts in a currency they don't control preferring bitcoin over other fiat currencies, especially as long as the supply of bitcoin is capped, although of course that could be changed or some other cryptocurrency could come along without the cap. There's a lot of interesting uses for cryptocurrencies but bitcoin replacing official state currencies doesn't seem that likely to me.

Maybe states would move to issuing their own official cryptocurrencies in order to take advantage of some of those other features? I haven't thought about that enough to know if it seems coherent. But it seems more likely than the US issuing debt in bitcoin.

I don't see that happening either. What I'm concerned with is that the populace will abandon the state-issued currencies, basically doing the job for world governments, whether they like it or not.

And I just want to state that I'm not the least bit sure if this will happen, or how likely it is. I'm trying to wrap my head around what would happen if it actually happened. So I get that there are going to be a bunch of "lol, that'll never happen" posts ITT, but I'm interested in hearing from people who have seriously considered this possibility. I think the consequences of such a possibility are so substantial that it would be foolish to not at least try to think through this as something that could actually happen. It may not happen, but it can't hurt to consider it.

It depends. If you take the Modern Monetary Money theory to heart then it won't happen. According to the theory the government creates money by spending it (aka printing it) and removes money from circulation by taxing it. Of course people move from USD to other forms of currency (barter, trade, Steam cards, etc) all the time, but it's much easier to simply use USD than to constantly have to exchange your money into the what the government demands (and possibility be gamed by arbitrage) so long as the money's rate of change remains stable.

in US they'll get around to a full ban of crypto obviously.

i for one can't wait for the day when I go to pay for public parking while leaving a parking garage and have to wait in line 10-50 minutes per car in front of me for bitcoin approval!

Meh, the internet was slow and almost unusable in the early days as well. Then innovation kicked in and things worked out. The same thing very well could happen with cryptocurrencies too. We probably can't even imagine what types of soft forks and other changes will arise in the next 20 years.

lolbitcoins lolbubblemonies

Global Poker lets me deposit and withdraw with PayPal in regular old USA#1 fiat bux.

The bubble money that continues to pop, recover, and reach new heights. The bubble money that has maintained an average annual return of 275% for eight years. Anyone at this point who does not admit that bitcoin has shown itself to be surprisingly robust for nearly a decade is being willfully ignorant. I'm not saying that it's guaranteed to succeed, but I am saying that it's by no means a joke anymore. It has survived way too much already to be so easily dismissed. Smart money is paying very close attention to bitcoin.

Smart money, or people looking to make money off the black market?

Using bitcoin to make money in the black market requires actual work. These people are playing the lottery.

Off, not in

Like, you can't have it both ways here: either Bitcoin is a new thing that's just getting the bugs worked out or else it's a resilient thing that's been around for a decade.

I think the latter is true; Bitcoin has been with us for ten years without collapsing. . I do agree that it's clearly not a joke or a scam like a lot of detractors have suggested. It's certainly found niche applications. But there's no reason for your average slob like me to use Bitcoin if I want to buy a cheeseburger or order stuff from Amazon or do the everyday kind of purchases that make up 99.999% of transactions. Bitcoin has had ten years to become relevant for most people and that hasn't happened at all. It's also not clear that a Bitcoin surge would affect government all that much. Like, stores have invented new transaction methods like credit cards and that hasn't toppled nations.

It also seems pretty obvious that we're in a crypto bubble aorn. IPOs for new crypto coins no one understands are generating seven figures in minutes. Sure looks a lot like the pets.com era to me.

Of course you can. It's fundamental architecture is anti-fragile. Anti-fragile systems aren't perfect, but the architecture is such that they survive and adapt when they're stressed. Mt. Gox and all the other exchange hacks were very serious bugs, but bitcoin brushed them off and became stronger because of them. That's a testament to bitcoin's robustness. If bitcoin's architecture were really something to laugh at, any one of those incidents should have buried it. But they didn't. Bitcoin recovered every time. That's a very good sign of anti-fragility.

The same types of things happened in the early days of the internet. There were tons of bugs, hacks, and DOS attacks on every new system that came online. Google used to be able to be taken out for hours and even days in the beginning. But each attack on Google made it more robust and it evolved to the point where it is now.

Again, I'm not saying it's a totally sure bet that bitcoin will succeed. There are still a lot more tests to be endured. But it's endured so much for so long already that it's not something that can be laughed away and easily dismissed anymore.

why the hell would the growth and implementation of bitcoin as a formal currency have any impact on a country's ability to run budget deficits (aka borrow money from other countries)

You mean it has a history of being used as drug money and other illicit activities along with some of its exchanges meeting sketchy demises. Not to mention its own market is inherently unstable because bitcoins price is made up by speculation and not based upon anything else.

ps If very srs money was paying close attention to bitcoin you would have a ****load of people shorting it.

There really is no other way for it go down. I think we're definitely in a pets.com era. But remember, Google and Amazon came out of that era too. All these ICOs are laughable when looked at in the aggregate, but there might be some Googles and Amazons in there. Or, maybe there are none and bitcoin will totally dominate the space.

There is a ton of variance and risk here. It's one of those things where cryptocurrency will either grow 10,000% from where it is now, or it will shrink 99.9%, or something. And bitcoin may be the myspace of cryptocurrency and we haven't even seen the facebook launch yet. It's complicated and it will be messy before there is any certainty. But there wouldn't be any potential value if it weren't messy or if there were certainty.

What convinced me to hedge a bit of my investments into this space is the anti-fragility of decentralization and the extreme fragility of centralization. Remember 2008? The current system is super fragile. I think it would be extremely foolish to not have a hedge on such a fragile system. Cryptocurrency is the only thing I know about that is actually trying to address the fragility of the current system—a very worthwhile goal IMO, whether it works or not.

All I know is that if cryptocurrency succeeds, it will have massive political implications. I just don't understand what those will be just yet. I made this thread hoping someone could help me think it through. It's probably a bit early to expect that, however.

Just like most other doomsday preparations, hedging with cryptocurrency ignores the fact that if fiat bux collapse the whole world goes down with it and you won't have anywhere to spend your bitcoins, or anything to spend them on. You're better off investing in MRE's and firewood.

It's been money for 50000 years, not like that silly paper stuff.

It's been money for 5 minutes, not like that silly paper stuff.