My government will enforce a contract even if it is denominated in some foreign currency, will it not? Currency used is independent of jurisdiction.
They may award damages in legal tender, rather than in Bitcoin, but I have to pay taxes in legal tender anyway, so there will always be a market to convert back.
Right now they might be confused by Bitcoin enough that they won't effectively be able to assess damages, but that's not necessarily a permanent state of affairs.
Usually, the same as it would for a contract for some non-currency commodity: by converting it to what it considers an equivalent value at the time of injury (not time of award or payment) in the legal tender currency.
That seems counter to the ethos of the BitCoin enthusiasts.
I also doubt it will necessarily work for large sums. Governments may enforce contracts related to foreign money (if they find that the contract itself is in their jurisdiction, which isn't always the case) because they have quid pro quo agreements with other states, and it is mutually beneficial to global trade if global contracts can be enforced. (In a way, it similar to foreign mail being carried by local postal services.) But there is no quid pro quo with any friendly BitCoin government, so there is no incentive to enforce contracts.
That's because it's a non-realistic ethos.
If you are a business, why would you ever try to run on bitcoin alone? There would have to be a huge advantage. And we see that in many small cottage industries where that is an advantage, like buying drugs online or illegal gambling.
But without the need for pseudo-anonymity why would anyone ever use it? Why would your grocery store use bitcoin over dollars? They wouldn't.
So crypto will probably be a currency in the long run, but it won't overthrow regular fiat.
Plus, if there was a huge benefit to crypto, the Fed could just do a crypto dollar and peg it to the real dollar.
To some extent yes, but for any more serious business this really isn't a problem at all. I've been running a business that makes income in bitcoin only for 5 years now, and converting for taxes and accounting is quite trivial actually. Hardly any work is spent on those problems. You know, that kind of stuff is very trivial to automatize using those computers, unlike many other problems.
Because the want the money from people which have bitcoins? Because creditcard fees are to high? (just forget about the BTC fees or the nearly fictional double spending problem) Another reason could be that the owner has Bitcoins and wants to support them. There might be more reasons.
Sure, if usage of that other currency is trivial enough volume that it doesn't threaten the government's currency. That's the sticking point. Bitcoin is allowed to exist at the whim of the government.
This is not actually true. The concept of money (quantifiable debt in a standard unit, such as coinage) was created by early states to lock subjects into what anthropologist David Graeber has called the "military–coinage–slave complex". Money cannot be separated from state violence.
I've read David Graeber's book. I do agree with him that the common (e.g. John Locke) narrative about money arising from direct barter is probably wrong. Money actually comes from credits/debits (aka delayed consumption).
However, I disagree you need government enforced violence for the basic apparatus of money. Perhaps it's a matter of defining "money" in different ways. I'm talking about "money" as a more basic expression of human bookkeeping.
If you have a small community where everybody knows each other, the people can cooperate to keep track of "accounts" of who owes what. They can write the debts/credits on a public church ledger or hypothetically leave it to the reliable memory of a trusted village elder. (E.g. you don't need government for women to spontaneously start trading scrips for future babysitting hours.) What governments enable is scalability. With government standardized money, strangers can transact the units of account across a larger administrative area.
Well, those people are then the government. In small scale communities it's one and the same -- they can all join together and deal with anybody who doesn't play nice. And these punishments are the analogous of e.g. prison.
So, what you say is true, but not very important in practical use, as we don't live in such small communities, and don't deal strictly in our own community even.
Sure, 2 people also don't need government. They can keep tabs, and if one doesn't repay or cheats, the other can always beat them up or stop dealing with the first. But they're basically acting as a government in themselves (in that they assume the role of government officials like law enforcement, law-making, etc).
"Government is not required" would made actual practical sense if somehow the technical solution used instead of money took care itself of debt repayment and ensured punishment (or make it so that punishment is redundant) of wrongdoers.
Right, that's today's situation. My "government not required" is talking about how ancient money can arise spontaneously without a separate entity that we think of today as "government". If we think of "money" at its basic level of keeping track of "promises", "favors", and "trust" ... all those human instincts of coordination can precede old governments like the Roman Empire and Egyptian pharaohs. It just can't do so on a large scale among strangers.
>2 people [...] they're basically acting as a government in themselves
If we go back & forth by then redefining "government" to mean "any humans coordinating" then I suppose we could stretch "governance" all the way back to human invention of fire. If we use this all-encompassing idea of "government", then I suppose it means nothing preceded government.
And what would be strange about that? I see no reason to constrain government to only mean the modern(-ish) state. Ancient Rome was also a government, Babylonians had kings, jungle tribes had rulers and elders, etc etc.
I'd say any human community had a governance structure way into prehistory.
>If we use this all-encompassing idea of "government", then I suppose it means nothing preceded government.
Yes -- but I don't find that strange. What would precede government? If there was anything, it would more like primate animals living in packs akin to animals, but with no other structure in their "communities". As soon as some structure emerges, they also need ways to decide what they do, assign responsibilities, punish bad behavior, etc.
That said, we'd need to agree on definitions of "state" here. Some kinds of money surely existed before anything recognizable as a "state", but then again, such notions of money are likely as meaningless as this kind of unrecognizable state.
I wouldn't be so sure. As far as I know, current academic consensus is that in primitive societies, where everyone knows everyone, it comes down to a system of favors and everyones natural sense of what's "fair". These are relatively small groups of people, so there's a lot of trust involved. No need for any sort of currency there
That doesn't require a distributed ledger, just a database. In the UK it costs £3 and is searchable online.
If it costs $300 then that is because someone wants it to cost that much.
My short text didn't give enough context. In the USA, that $$$ isn't really for the "search"; it's to pay for the "title insurance". That title company insures that the buyer is getting a "clean title" with no conflicting claims of ownership from others he doesn't know about. The "search" is just one component of labor of what you're paying for. (I looked at my mortgage documents again and my title insurance actually cost $4000.)
With a distributed ledger for property deeds and title transfers, that was used by say -- 1 million people -- that essentially means you have 1 million "witnesses" to the transactions. Therefore "title insurance" becomes superfluous.
I'm not predicting that DLT would be used for property records but proposing that hypothetical scenario as something more realistic than bitcoin replacing the Euro/USD.
That would also solve the problem. Once again it seems like this is a social issue not a technical issue.
The governments (e.g. county courthouses) do store copies of the documents such as deeds and transfers. They stamp them with their seal so in that sense, they do "hold the authoritative title records".
However, there is no computer database with rows for all real estate that has a binary column called "CLEAN_TITLE" with values TRUE/FALSE.
Therefore, the actual state of a "clean title" isn't a flag but a case-by-case determination based on documents analysis. What an employee from a title company will often do is actually drive down to the court house and sit there looking through document archives to trace the chain of sales. This also includes looking at microfiche films[1] if the courthouse hasn't migrated all their images to electronic image databases. If the worker feels confident there are no outstanding claims, the title company can issue "insurance" that the title is clean. (Occasionally, the determination was wrong and the title company has to pay out the insurance because of their mistake.)
If the property gets sold again, another title company worker may do the same redundant "documents analysis". (Because new claims can be recorded against the deed since the last time the property was sold.) Yes, it's a really inefficient process!
Conceivably, a buyer could buy property without title insurance but since most people require loans, a bank won't lend money unless it has assurance the title is clean (because that property is the bank's collateral so it has to have confidence that nobody else has claims that supersedes the bank's.)
Could the governments create a convenient centralized database to solve those issues? Yes. But some people might prefer to have a distributed ledger to bypass the government holding those records. (E.g. the courthouse charges $20 to "record deed documents" or "$1 per page for copies of deeds", etc). The distributed ledger could theoretically not require those fees or make them very small.
[1] https://www.google.com/search?q=microfiche+reader&source=lnm...
Sure, in a limited sense... every distributed ledger use case can be replaced with a centralized database. The reason people would choose a distributed solution is to bypass the controls of the centralized authority. Similar reasons that bitcoin proponents prefer it over centralized fiat government currency.
Whether those distributed reasons are cost-effective or sensible remains to be seen. Who knows, maybe distributed ledgers will become so mainstream that it will be the county governments themselves that seed the real estate blockchain so they don't have to bother administering a central db.
(To be clear, I'm not trying to convince anyone of switching to distributed ledgers but laying out possible use cases.)
Normally, to verify ownership, each transaction is reviewed to verify that they follow a direct chain back to the property's origin.
Compare that to a blockchain, where an algorithm which all involved parties must agree to, traces ownership through each transaction involving the property back to its origin.
Both have situations that result in conflicts that have to be resolved, whether by algorithm or in a court room.
I'm not sure they will fundamentally change anything either. You're making the same implicit assumption that there is an appetite in the market for a wide but not-quite-real-time distribution mechanism. I submit to you that outside of medical records and other specialist applications, there isn't.
As for the currencies, when they are backed by the promise of more energy as opposed to backed by the promise of spent energy I'll find that more interesting. I see the big weakness of Bitcoin being that it exists as it does only so long as the majority of computing power within it does not hijack it.
I'm pretty sure there are people/organizations who invested into such positions.
Isn't that a sort of control that may be worst then government power?
A more accurate statement may be: today's modern money is very much an instrument of power over government
Yes, the concept of "money" existed before governments and therefore doesn't require government. That said, today's modern money is very much an instrument of government power. This is why alt-coins will not overthrow fiat currencies like some enthusiasts believe because Bitcoin does not come with its own Bitcoin-police-force and Bitcoin-law-courts.
The distributed block chain may eventually prove useful for other recordkeeping such as real estate property transactions (e.g. no need to pay $300 fee for title searches in the future), or maybe buy/sell internet domain names (e.g. don't need Verisign as middleman to buy dot com domains). Those scenarios are more realistic than Bitcoin/Ethereum replacing government approved fiat currencies. DLTs may still transform the economy -- but not in the ways people expect.
There's definitely some interesting applications of distributed consensus ledger but the idea of bypassing government money is overhyping its potential.
[1] https://news.ycombinator.com/item?id=11934120