For any thing that has both positive uses and negative uses, it seems reasonable to weigh the positives against the negatives. The dollar has substantial non-infringing uses that benefit people. Bitcoin less so, and particularly when weighed against the great harms (environmental or criminal) that Bitcoin brings, I don’t find the criticism baseless.

I don't disagree about weighing pros and cons, of course. But I think that bitcoin advocates would argue that the bitcoin has the same "non-infringing uses that benefit people" and that it's simply a matter of time/popularity until the proportion of "good" uses vs. "bad" uses is similar to the dollar.

Not saying that it's true, necessarily. Just that the current balance isn't the end game and it's not totally fair to criticize a brand new tech/tool/whatever against well-established and well-optimized status quo.

>But I think that bitcoin advocates would argue that the bitcoin has the same "non-infringing uses that benefit people"

I think it would be difficult to argue that it's useful primarily for buying your groceries.

I don't think Bitcoin advocates like following this train of thought any further than "USD is also used for crime".

My point is that the true believers do want to eventually buy groceries with cryptocurrency.

My point is that this conversation is unfair:

Person A: I've just invented a new currency! I think it has better intrinsic properties than USD.

Person B: Well, I can't buy groceries with it right now, so it sucks.

Similar vein:

Person A: I've invented a new thing called the lightbulb. I think it will revolutionize lighting.

Person B: It's more expensive than oil lamps and electrifying buildings would be a massive undertaking. Lightbulbs suck.

If lightbulbs were primarily used for buying opium and running scams on widows in the 19th century I could well understand there being some pushback on the whole idea.

As it was, they were primarily used for lighting rooms from the getgo.

I imagine some historian could probably dig up some sort of analog from 100+ years ago (possibly on tech that never did take off) but this isn't it.

I never owned any BTC. I wouldn't put all of my savings into BTC, but it would be useful for (semi-/sometimes-) anonymous transactions. That makes it better than credit cards, checks, or cash because it can't be CC skimmed or physically robbed.

I would like to buy groceries with it, but I don't want to hold much BTC for very long.

I don't find that they do.

The things that make cash useful for money laundering and black market purchases also make it easy for me to quickly, and without unnecessary ceremony, drop a few dollars in a tip jar, give some money to a panhandler, split the bill at a restaurant, chip in to an office gift pool, pay my kids an allowance, envelope budget, buy ice cream from an ice cream truck, etc. etc. etc.

Bitcoin in particular fails miserably at these sorts of use cases because nobody wants to sit around waiting 10 minutes for a transaction to confirm over a $2 soft serve.

Crypto in general fail because they're complicated and fiddly to work with. This creates way, way too much friction these sorts of casual transactions, and effectively shuts out people who aren't technically sophisticated enough to feel comfortable messing around with this stuff.

That isn't to say that crypto doesn't work as a store of wealth. But, as a circulating, everyday currency, it seems to be stuck in the same situation that Linux on the Desktop has been for the past couple decades: for a variety of reasons, some of them very good and no real fault of its own, per se, the community just doesn't seem to be capable of sorting out the UX.

Monetary value and its instruments are amoral. They're neither good nor bad, so "weighing" their uses would be entirely unfair. The demonetization in India was a perfect example of moralizing currency instruments. (The IMF loved it because of the resale of data from digitizing transactions and India loved it for tracking people's financial habits. Modi loved it because it punished poor people.)

If you're trying to ban cash because you can buy illegal things with it, then you have a logic problem.

Now imagine comparing child pornography (and other things) in mediums before the internet and after. These comparisons are not useful for exponential, paradigm changing technology.

Child pornography was never a significant use of the Internet.

Facilitating CP wasn't the intent behind the internet, but there is significant use, at least if you believe the government when they're trying to justify new regulations.

The same thing holds for BTC and illicit transactions.

But if we weigh up pro- and con- Bitcoin is pretty solidly pro. Having a government-resistant unit of exchange was one of the things keeping Wikileaks alive for example.

All the negative stuff was going to happen anyway - including energy waste. Humans waste a lot of energy. Wikileaks on the other hand would have folded like an origami in any pre-cryptocurrency era.

This is the sort of press freedom that humanity has been longing for since ... I don't know. The birth of the press. It is really hard to financially abuse the truth out of conversation now. Which is part of why the blowback is so panicked.

Edit for spite: "contrary to the interest of civilisation" is the sound of a wealthy man who is friends with wealthy men who are terrified of what an organisation like Wikileaks could uncover.

That is the thing, many people do not believe having anything "government-resistant" is good, as they believe government is good, thus if something is resistant to government it must be bad.

If anything the last 2 years has shown me how fragile freedom is, and how much people are willing to give up freedom for safety and security. Sadly people like you and me that see Government as something that should be controlled and feared are in the minority as most people view government as the solution to all their problems, and as their moral compass.

The explicit purpose of bitcoin is to avoid government interference. In all other respects, it is inferior to standard government-backed currency, with slow transactions and huge amounts of wasted electricity. We should therefore expect BTC's primary use-case to be activity the government would interfere with, i.e. illegal activity.

> with slow transactions

How are bitcoin transactions slow? Bank transfers and credit card payments take forever to settle.

Bank settlement is basically instant in Europe

So? It’s not instant for most of the world.

And cash is instant everywhere.

True, but "illegal" is dependant on the nation it is relevant to, as an international currency legality is relative. Another way of seeing this: the benefits of global government / infrastructure without the need for global control - few nations are so democratically representative that the tax laws well represent the wills of the people.

Also true - but you might call that a separate problem, and one for which the solution is very unlikely to be "no government at all". Bitcoin takes currency permanently out of the purview of all forms of organized governance, barring unreasonable invasion of privacy. All of us now have to live in that world, and none of us were consulted - Satoshi didn't take a vote. That is far less democratic. Deliberately and unilaterally undermining our organized institutions - flawed as they are - is, if not illegal, then certainly antisocial.

Of course, you could say all the same things about e2e encryption, which society seems to have decided - grudgingly, and with much pushback - is ultimately a good thing. But perhaps free speech and financial exchange are different animals, McCutcheon vs. the Federal Election Commission notwithstanding.

> All of us now have to live in that world, and none of us were consulted

No one consulted me wrt the existence of other nations (outside my own) and their laws either, I'm not sure democracy needs to extend globally for all things.

To some degree, I think the "more/less democratic" argument is a little "whataboutism: individual freedoms are the goal of democracy, not the other way around, and btc/e2e are a form of power and civil disobedience that might help get them.

> undermining our organized institutions

Many of those institutions are private banks - they are not "mine", even though they get bailed out by tax money on occasion. Is it antisocial to be antisocial towards antisocial institutions?

> you could say all the same things about e2e encryption

You could, and the reason is a terrible record globally wrt privacy rights. I don't consider it a matter of free speech - free speech (to me) is primarily about what you can say/promote in public, privacy (to me) is about what you can keep private.

The difference is that someone can safely collect a Bitcoin ransom far from the police and can use it far from the police (no way to freeze a wallet etc.). This is called the "perfect crime" in research on ecash dating back to the early 90s.

criminals tend to prefer privacy coins like monero over bitcoin because of how easy it is to track bitcoin transfers. If any of their bitcoin transfers ever touches a KYC wallet they are screwed; until taproot gets activated for bitcoin it requires a ton of work to truly stay anonymous

> criminals tend to prefer privacy coins like monero over bitcoin

This is speculation with very little connection to reality. If you actually go on crime forums you will see that privacy coins are not as widely used as you might think.

As far as known darknet markets go they've all switched from Bitcoin to Monero.

If we're talking bigger fish it's speculation that they prefer cryptocurrency over traditional assets or cash in the first place. Follow the money and it often leads you to illegal activity. Banks like HSBC know all about laundering drug money and enabling scams.

https://www.icij.org/investigations/fincen-files/hsbc-moved-...

> As far as known darknet markets go they've all switched from Bitcoin to Monero.

This is not true. A few big markets have switched, not “all”.

Besides drug markets, all the conventional cybercrime markets and forums still run on bitcoin.

The vast majority of goods sold in those markets is just drugs. Though admittedly I'm not a criminal and don't know anything about the more evil corners of the dark web.

Can you name a few of those "conventional" crime markets? I'm curious to know.

Exploit.in, verified, maza, xss. Loads of public runet forums, english language crime forums like darkode have all died but the russian forums welcome english speakers.

Fraud shops like unicc, ferum, slilpp move more money than darknet drug markets and primarily use BTC or LTC (I don’t think any accept XMR)

Hydra, the biggest darknet drug market still doesn’t accept monero.

Of course it would make sense for all of these people to be using monero, just like the efficient market hypothesis makes sense.

Cheers!

Hard to say what's the biggest shadow market of course but afaik WHM is the largest one for drugs and they only accept Monero. You're right, Bitcoin is still popular in the Russian forums, but that's at least partly because it's easier to cash it out anonymously over there. Lots of services that let you exchange your BTC for cash and my guess is the remaining coins just go through tumblers until they're clean.

https://news.bitcoin.com/darknet-giant-white-house-market-dr...

FWIW Hydra is vastly bigger drug market than WHM.

A major talking point of the pro bitcoin people is that it is "permissionless and decentralized". And it is a good way to bypass governmental interference. They usually talk about the FED in this capacity, but it also applies to drug and ransomware legal controls as well. I think that is what he is talking about here. He isn't saying that cartels don't deal in cash. I'm sure he understands that.

To steelman the argument here, it sounds me like the concerns isn't in how it's used, but it's usefulness in certain applications.

Bitcoin has many of the traceability problems as cash, while also being easier to transact. While I personally think it's a good thing that companies banned from traditional banking / merchant services are using Bitcoin to fund their operations, there is a reason for them using it.

Dollars are inflationary and therefore primarily currency, not assets. They're also far more useful, so people are likely to only pay the massive crypto tax (exchange fee, loss of liquidity) if they need to be outside of a legal system.

Also, is it "in extremis"? It seems like the vast majority of transactions of crypto are for ransomware, contraband (guns, drugs, humans), or exchange between speculators.

> the vast majority of transactions

Are transactions relevant though? A lot of BTC is just being held, presumably for the sake of future popularity. You could see BTC investment as a bet on the future of BTC as a normal/common currency.

> You could see BTC investment as a bet on the future of BTC as a normal/common currency.

Yes, I totally agree. The question is: what has to happen before it's a common currency?

See my other comment for my thoughts on this: https://news.ycombinator.com/item?id=27104956

I think they're envious and jealous because they didn't think of it and didn't get in on it. (Sour grapes) In that context, associating a financial instrument with particular real-world crimes seems like throwing FUD.

extremis? And the petrodollar is useful to slavers, murderers and colonialists; Show me a currency-issuing superpower with no blood on its hands.

Much like piracy prevented the most deranged attempts of the copyright industry - cyber-currency may put limits on state seizures and overtaxing.

At least for now BTC isn't anonymous (leaves a public paper trail) so it's not so perfect for crime. And an anonymous currency will still be liable at the entry/exit points.

Just bear in mind, what he says you probably shouldn't take at face value. After all, he is king of shorting currencies that has actively ruined lives.

Especially how at one point apparently a high percentage of US currency had traces of cocaine and other drugs on them.

Except the primary use of the dollar is good. The same can't be said about the primary use for Bitcoin (which is, at best, speculation).

I feel the same argument can be make about Tor. While it primary uses are probably illegal (doesn't necessary mean immoral) activity, it helps a lot free press in oppressed regimes (also illegal, but by western standards moral).

>I feel the same argument can be make about Tor. While it primary uses are probably illegal

I very much doubt that. Its primary uses are probably porn and researching embarrassing medical conditions.

Bitcoin doesn't have the equivalent of a "free press."

And TOR is rarely used. Journalists use apps like Signal now.

> And TOR is rarely used. Journalists use apps like Signal now.

Absolutely not. Internet censorship is growing rapidly - worldwide.

A lot of "legitimate" websites like newspapers get blocked around the world and can only be accessed over Tor.

In Russia a few independent newspapers were killed by arresting their bank accounts.

Signal does not let public fund jurnalists.

Isn’t that the same for gold? That it’s for speculation? Or stocks.

Stocks represent an ownership in a company. They can be speculated on but that's not the primary purpose.

I very much disagree. How many people with 401ks and/or other retirement vehicles actually know what companies they "own"? How many of them vote? How many of them actually have enough of the right kinds of shares to vote?

To say that stocks are about owning a company in practice is the same as saying bitcoin is just money like the dollar. It's true in theory, but it's not the practical reality of this moment in history.

If they bought the stock they are helping fund the business. The shareholders are keeping the stock because it represents their stake but the actual money paid can be used by the company selling its stock and that’s the primary purpose. Whether the buyer/investor votes, or knows what they bought, doesn’t change anything in that respect.

Well, of course there are other subtleties involved, but even the money that I pay for a given stock doesn't just go to the company unless it's an IPO. It might indirectly benefit the company because I'm adding to the demand and driving the stock price up, which helps all holders of the stock, including the company that issued the stock originally.

However, my point is that people are not buying stocks to own OR to benefit the company. They're buying stock so that a "bigger sucker" will come around later and buy it from them and they can make a profit.

So I guess it depends on who we're talking about when we say "primary purpose", but for anyone who is purchasing stocks, the primary purpose is NOT to be an owner of a company. The primary purpose is to speculate.

A trillion dollars a year are disbursed by the companies of the S&P 500 to their shareholders, in the form of dividends and stock buybacks. Berkshire Hathaway itself bought back $25B of its stock in 2020.

Buybacks absolutely count under speculation-then-bigger-sucker.

The difference between a stock buyback and iterative speculation is that the "bigger sucker" in a stock buyback is the customer interested in the actual product being sold by the company.

If you buy into an IPO you're helping the business raise funds. If you buy stock from other stock owners it doesn't help the business.

The existence of a secondary market helps the business to sell their IPO in the first place. Additionally they can raise more funds by selling additional shares.

Additionally the people who own shares own the company so what benefits the shareholders benefits the company and vice versa as their interests are the same.

> If you buy stock from other stock owners it doesn't help the business

Incorrect. That's what keeps the market for the stock liquid, and that contributes to value which the company can exploit through future stock issuing. Not to mention the indirect benefits to stakeholders within the company in terms of price and liquidity.

If I buy the stock in order to hold it for 30 years, doesn't that reduce liquidity?

No, because your holding increases the price until someone else decides it's time to tell. In other words, the lack of liquidity increases price. Regarding your original question, that increase is GOOD for the company because it can raise more money for selling the same amount of stock.

You cannot argue that buying raises the price and selling drops it, since every trade has a buyer and s seller.

Gold has a practical application creating demand, in addition to it being a speculative product. I guess you could argue the same for BTC in that you can put short messages in it, but I don't think that's a very valuable thing to have.

You forget the payment network without a third party.

Have you traveled? Enough places where the dollar is not the national currency but still accepted and used for purchasing drug and weapons.

I'm not familiar with foreign drug and weapons markets, but even so,

That is still a significant minority compared to USD as a whole. BTC as a whole is used for just that and gambling.

Even the most Pollyanna reports from firms that exist to ‘fight’ crime say it 2% criminal. I don’t know how much of that is illegal source versus regulatory evasion. World black market GDP is estimated somewhere around 25%.

And it make sense that it would be so low. Let’s say you just got $1M in Bitcoin and you have to pay your suppliers $500k in cold cash. Not going to happen. Only from other criminals that take profits in cash. But there is obviously a limit to that. I think the point is that those 2% can help a lot in fighting the 25%.

The fear is that illegal commerce could be conducted without fiat conversion. That would require that regular commerce would also be done in the same currency that the criminals use. This is fiat’s game to lose.

And by the way, this is why I love crypto. It has promise as an amazing technology for choosing financial participation according to personal and private community values. Although I’ll admit we’re not there yet, and a lot of the stuff might now be owned by people we wouldn’t want to have power over us. We’re still in the phase of speculation and fear and power struggles. I just hope that fear of the old power structures doesn’t bring good people to ally with values that we would not want in a new system.

> I just hope that fear of the old power structures doesn’t bring good people to ally with values that we would not want in a new system.

That's why people need to call BS on the current hype train. Otherwise, when a sufficient solution surfaces, people are going to distrust it just as much as the old power structures. And I'd say we're already getting close to that point.

The problem is, with equal distrust, people will tend to choose the option that doesn't require change.

It is getting pretty ridiculous out there. The gas price today was higher than recent memory with about half of it spent on dog coins. Also, Vitalik is now far wealthier in dog coins than Ethereum. If he was a US citizen he would owe billions on that, and last I checked, the treasury doesn’t accept dog coins.

I’m kind of neutral on which financial system prevails so long as it’s the best for society. I stand to gain a lot more if it’s the cypherpunk version, but, I’m not sure that the conditions that would bring that on would be good. The rule of all aspects of society by a maniacal banking elite is pretty dystopic too though.

Ultimately I think the best monetary system will emerge through competition among societies. Obsolescence more than decision. That might take a long time, and perhaps it’s too hopeful. What evidence do I have for that?

I'm not even pro-crypto really, but you keep making this wild claim without substantiating it. You're speculating anecdotally on the majority usage pattern of Bitcoin.

Looking at your comment history, it's too bad we're seeing this type of trolling leak out of Reddit onto HN.

The primary use case of Bitcoin is to evade governments control over capital. Sometimes that’s good (governments disgorging kidnappers of their ransom). Sometimes that’s bad (Nazis seizing wealth of targeted groups). Sometimes it depends on your perspective (governments preventing the trade in illicit drugs).

Overall how you feel about this in aggregate will depend on how comfortable you are with government power. Let’s even ignore the fact that Bitcoin today is being used to circumvent unquestionably oppressive governments (Venezuela, China, Iran). Even as a hardened libertarian, I’ll freely admit that Americans and Europeans live under a generally fair and just government. Bitcoin is still worth it as a fail safe against future totalitarianism.

It’s the same reason I support the Second Amendment. Having a bunch of people run around with guns probably doesn’t help much today, and may even have ongoing social costs. But it would make things a hell of a lot harder for any would be tyrants. Not that it’d be impossible, but small frictions can have big impacts on the course of history. That’s a civilizational insurance policy worth paying.

> It’s the same reason I support the Second Amendment [...] would make things a hell of a lot harder for any would be tyrants.

Yet, somehow the rest of the democratic world spins around just fine without millions of semi-automatic weapons sloshing about.

Most of the democratic world fell under fascist and/or Marxist-Leninist totalitarian regimes within living memory.

There’s only four independent democracies uninterrupted over the past century. Two have widespread civilian firearm ownership.

> Most of the democratic world fell under fascist and/or Marxist-Leninist totalitarian regimes within living memory.

Are you suggesting that a few extra light weapons floating around in the 1930s would have stopped the Nazis and Soviets steam rolling across the Europe?

Are you suggesting civilian firearm ownership somehow prevented the Nazis from skipping over the Atlantic and taking over America? Why did America waste all that money on submarines and aircraft carriers, when they had such deep reserves of plucky gun enthusiasts at the ready?

I'm so confused by your comment.

Based on your numbers, owning guns has no affect or even a negative affect.

100% of democracies with widespread civilian firearm ownership remained democracies during the entirety of the past century. Less than one in ten democracies without widespread firearm ownership did. How is that a negative effect?

You… really think a tyrant would fail because of a bunch of armed general population? The make or break is having public support, a bunch of people armed with guns don’t make a difference - maybe they would when the amendment was written, but the efficiency gap between a person with a gun vs US military has increased 1000x.

This logic only holds if you assume that the US military are merciless killing machines that unquestioningly follow orders. There are plenty of examples of much weaker revolutionary forces prevailing over modern well-funded militaries.[1] Heck, there are many examples of civilian areas that are so persistently violent that the state simply refuses to enforce laws there.[2]

No leader has unilateral control to unleash the full force of the military on their own citizenry. Imagine what would happen if POTUS tried to order a nuclear strike, or even aerial bombing, on an American city? The Joint Chiefs would almost certainly arrest him immediately. Ordering soldiers to fire on their fellow citizens drastically raises the probability of outright mutiny. This is true even in the most oppressive regimes. Even the Nazis were genuinely scared of average German citizens turning on them for perceived abuses.[3]

[1]https://en.wikipedia.org/wiki/Egyptian_revolution_of_2011 [2]https://en.wikipedia.org/wiki/No-go_area [3]https://en.wikipedia.org/wiki/Battle_of_the_Netherlands#The_...

You provided more evidence for my case - you don’t need an armed population, just enough public support that can overwhelm armed forces and would cause a bloodbath/loss of military and police loyalty. You linked Egyptian revolution which was literally triggered by civil disobedience. Same for Nazis afraid of average German citizens.

None of the no-go areas sound like historical examples you would want to follow unless you like anarchy. They are messy pro-longed conflicts unlike eg Euromaidan.

It worked out horribly. They were shot, prosecuted, embarrassed, fired from their jobs, and forever surveilled and hunted by the entire domestic apparatus.

Your othering use of ‘you guys’ suggests a derogatory view of this event, but your suggestion of its applicability to the text implies that it was a failed protest against ‘would be tyrants’. So it’s a little confusing ideologically, but your rational point is spot on. The notion of any kind of physical power held by citizens over the government was overwhelmingly refuted. Any weakness shown by lack of enforcement against the prior summer of violence, was shown to be fully at their discretion. Absolute physical power. No more delusions.

But we’re talking about crypto here, and the international response to this has apparently been an unprecedented wave of panic crypto buying, or equivalently, state fiat selling. Imagine what they must think. I believe the markets; not the ‘official’ sources, not the press, and definitely not social media.

I'm confused by this statement. The primary use of the dollar is as a currency. The primary use of Bitcoin is as a currency. The fact that so much of Bitcoin's traded volume is used for speculation is actually an issue with excess dollar liquidity available for speculation, not because of some problem inherent to Bitcoin. That liquidity would just move to some other financial product that probably wouldn't make the news because the concept is too complicated to grok, unlike "BITCOIN BAD AND NOT REAL MONEY".

> The primary use of Bitcoin is as a currency

An intended hypothetical use, or actual use in paying for goods or services now?

I also find it strange. The same thing could be said of airplanes, slow cookers, and propane tanks.

There are harmful, fringe, uses of those items but the vast majority of the use-cases fit a slow cooker aren’t harmful. The same cannot be said of bitcoin, where the primary use-case is facilitating nefarious business.

For better it worse, the primary use case of Bitcoin is as a store of value. I find it misleading to tell people that the “primary use-case is facilitating nefarious business”. Do you have some data to back up a statement which says that the vast majority of Bitcoin is used in that way? I’m not suggesting there aren’t bad actors out there. But there are plenty of bad actors who deal in fiat as well. But this was the point I was trying to make. The nefarious actors are an edge case.

Bitcoin wouldn't function as a store of value if it didn't have an underlying use case. This is true of all stores of value - with gold it's shiny and useful, with cash you can pay taxes, with a home you can live in it, etc.

In Bitcoin that use case is wealth transfer that is uninhibited by law.

That essentially makes it kind of like an index tracker for the underground economy.

Something is valuable because someone else also believes it has value. Have you considered that people put their money in Bitcoin to avoid it being stolen by nefarious/oppressive governments or to hedge against inflation or as speculative investment that Bitcoin will offer additional use cases in the future? Those all seem like legitimate use cases to me.

I don't disagree that it's an underground economy, but that's only because it hasn't hit the mainstream. But being underground doesn't necessarily mean nefarious or illegal. Those bad actors definitely exist in the Bitcoin economy and all other economies. But without some data I'm having trouble coming around to the idea that the majority of Bitcoin is used for illegal purposes.

I have considered that. Nonetheless, the people who try the hardest to get money out of oppressive countries are typically the corrupt - they know that their rackets have an end date and they want an exit strategy when that happens. We shouldn't kid ourselves - this is who we are really helping here. It's the same people who buy luxury apartments in New York and London and leave them empty just in case.

I find it hard to believe that anything beyond a small minority of transactions are the "good kind of underground transaction".