Also, in our current system the people with actual power are not at all anonymous. I can name all the elected officials. There are some people with influence whom I don't know, but the power is ultimately in the hands of voters and elected representatives. One way you can tell: Many people will spend billions trying to influence those two groups.

> as long as people are involved it is impossible to not have a government, in one form or another.

That's essential: The power is conserved; the question is, who controls it. Every time someone talks about smaller government, they really are talking about shifting the power elsewhere - to whom? It's not necessarily bad, but shifting power from democratic government, however flawed, to a powerful elite, who are more flawed and have no accountability to everyone else, is not a good deal IMHO.

> The ultimate irony, though, is that even with proof-of-stake, the entire crypto-economy becomes owned by a bunch of pseudo-anonymous elites. The end result is the exact same as our current system.

This section seems to contradict the rest of the comment ?

> Also, in our current system the people with actual power are not at all anonymous. I can name all the elected officials. There are some people with influence whom I don't know, but the power is ultimately in the hands of voters and elected representatives. One way you can tell: Many people will spend billions trying to influence those two groups.

I think it is more accurate to say that we know some of the people who have power, but influence, money, and violence are also major vehicles for real power, and we mostly don't know who has and uses them throughout the world.

The evidence you gave, that some entities out there expend billions to influence the visible power-holders, only actually shows that spending money has a good ROI for the actors doing it. It does not show that all power is in the hands of democratically elected government officials, nor does it show that power cannot be expressed or utilized in other ways which may be far less visible and more difficult for common persons to direct.

I want to be clear that I'm a fan of government, and I think it has a lot of power and should! Also not a big fan of crypto for solving nearly any problems -- just a drive-by reader on this topic right now. But it does not help any normal people to be naive or optimistic about what power is, who has it, who uses it, or why.

> This section seems to contradict the rest of the comment ?

this is intentional. this is why I said pretend to be democracy. like you've pointed out, there's a contradiction, but it's resolved in accepting that we do have an accountable group of people, however they are also being manipulated, but we don't know who the manipulators are. hence, we're being (indirectly) controlled by pseudo-anonymous elites.

in theory there should be a stable equilibrium between the (corrupt) representatives and the population as they are identified.

at least with democracy we can punish the puppets.

> Also, in our current system the people with actual power are not at all anonymous. I can name all the elected officials.

Crypto doesn't replace elections or government?

The government regulates the fiat financial system. Crypto seeks to take on some of the roles of that financial system.

> but the power is ultimately in the hands of voters and elected representatives

Some conspiracy theorists would like to disagree

> Some conspiracy theorists would like to disagree.

Applies to nearly anything. Listening to conspiracy theorists is a very low rate-of-return activity; nearly tautologically.

So? They say whatever they want.

Also, they think anonymous unelected people running cryptocurrencies will somehow be more transparent?

Some conspiracy theorists would like to disagree that the earth is round, that does not give any credence to their argument.

> a tinge of anti-government sort of sentiment.

It might have overtones, but this is the decentralized versus centralized control (peer-peer vs client/server) merry-go-round that we are all stuck on.

There are practical reasons why you don't want a central authority: because other central authorities can destroy it. But with no central authority what do you do when someone tries to make themselves... for lack of a better term, a central pain in the ass?

Peer systems fail when someone can make everything about themselves with far less effort than it takes for a simple majority to stop them. It's asymmetric warfare if I can be naughty for 5 hours and 100 people have to spend an equal amount of time to undo whatever I've done.

The central authority can often do this much cheaper, especially if there is a collaborative health system (eg, report user). But they also paint a target on themselves in the process.

thanks for the reply

I'd argue that pretty much every civilization has tried the peer-to-peer thing in the beginning. I won't get too much into the history of bartering, but to your point regarding a central pain in the ass, I think that's why the entire world has sort of settled on "proof of violence." ultimately, like you've said, the only way to defend your position when you're a large central authority is with violence.

There isn't much evidence that bartering ever was the way people did business.

Lots of evidence for lending & borrowing though (debt).

indeed - bartering really isn't a sustainable thing, and like you mentioned debt ended up being heavily used to facilitate exchanges. said debt in many cases ended up being centrally facilitated. the rest of history.

> What's fascinating about the proof-of-stake vs. proof-of-work debate is that there's sometimes (not always) a tinge of anti-government sort of sentiment.

For me, the PoS vs PoW debate is a question of system resiliency. In PoS compared to PoW, you not only lack an in-band means of identifying the chain used by the most people (pick the wrong one and you're screwed), but also if sufficiently many staked tokens are knocked offline at once, the system loses quorum and freezes forever. PoW has neither of these weaknesses -- it provides an in-band way to rank forks by usage, and it provides an in-band way to recover from loss of hashpower.

Governments (i.e. the people) will naturally set limits on what blockchains can legally be used for, since they exist in the Real World and create Real Negative Externalities if abused. This may be an unpopular opinion in most cryptocurrency circles, but I actually welcome sensible cryptocurrency regulation.

> as long as people are involved it is impossible to not have a government

What always intrigued me about anarchism is that it doesn't seem that it had devoted much thought about preventing the re-formation of the state/government. Humanity used to live in small, tightly-knit communities, and if you studied (very) ancient history, you know how it ended: those communities banded together into bands, then into tribes, then those turned into proto-states, and... yeah.

You could argue that we're already in an anarchy. Its non-controversial to say that the international stage is an anarchy. All governments are just simply local entities working inside that global anarchy.

Hans Hermann Hoppe has written a book (popular in the ancap community) on the anarcho-capitalist ideals. The dilemma you present has been addressed by the scholars in the field. If you are genuinely intrigued by these questions you might find it interesting.

Democracy: The God That Failed https://www.goodreads.com/book/show/980031.Democracy

Anarchism is traditionally another word for communism. Anti-hierarchy. So but reading about seems the term is loaded and can mean many things: https://en.m.wikipedia.org/wiki/Anarchism

How this got downvoted is beyond me, if you see the link you will find how intertwined their histories are.

> Major schools of thought of anarchism sprouted up as anarchism grew as a social movement, particularly anarcho-collectivism, anarcho-communism, anarcho-syndicalism, and individualist anarchism. As the workers' movement grew, the divide between anarchists and Marxists grew as well. The two currents formally split at the fifth congress of the First International in 1872,

Lenin and the Bolsheviks killed a bunch of anarchists.

But yes, there is anarcho-communism. Most folk don't know of libertarian socialism. See also Murry Bookchin and the Kurds.

Anarchism and Stalin wouldn't jive well, so I wouldn't say it's "traditionally another word for communism"

Nestor Makhno, on the other hand, is generally recognized as an anarchist, and yet he too had argued for centralization of power.

Well I think traditionally to indicate a period before the Cold War. While Stalin was leader of the USSR he was hardly a communist as Trotsky himself would hove told you, I believe his term for it was "degenerate worker's state"

There is libertarian communism, and some actually outright reject authoritarian communism as actually being socialism.

> The end result is the exact same as our current system.

To say that is to ignore all the progress we've made!

In the current system, the elites can literally print free money. But in PoS, all they can do is try to double-spend or censor transactions.

This is far less power for the elites to possess.

Furthermore, there's now a clear path to getting into position as an "elite" — you just need money. You don't need political connections. You don't need to be born into the right family. It doesn't matter what color your skin is. It doesn't matter what nation you are a citizen of. It's now just about money. And what you can do with that money is very boring, and gives you a very small reward.

What!? With cryptocurrencies there’s literally no way to redistribute wealth. How’s that better than the current fiat system where at least we can burn the riches money by printing more and devaluating their portion?

Interestingly, this happened not to a blockchain, but to a protocol: https://www.coindesk.com/steem-will-hard-fork-in-just-hours-...

Justin Sun planned to take over steem, what did the community do? Fork it, and remove his power.

What gives things legitimacy socially is our perception that things are legimiate. On blockchains, one could argue the majority can more easily take away abusive power.

I'd put it like this: you always have a government and regulators if you live in civilization.

Best-case scenario, you get to participate in a free election to choose them.

Crypto governance claims to be democratic, but it practice it is plutocratic.

I'm not sure how Proof of Stake is actually going to roll out in Ethereum or on other cyptocurrencies where it's already rolled out...

In theory, for the system to be controlled by the elite - I guess we first have to define the elite. Let's say that's the top 0.001% - or the richest ~70k people on the planet.

1) That's still A LOT of people.

2) There's no way they're all going to collude together.

3) They don't (yet) have >50% of the world's wealth.

What am I missing?

The top 0.001% don't need to meet in a smokey room to collude. If they have similar enough motivations (remain wealthy) and operating framework (buying power) they can "collude" by simply acting the same way. Most drivers on the road all behave similarly even though they didn't all meet and coordinate ahead of time. They have similar goals and a framework to operate in.

It isn't them though - it is a far narrower group. All blockchains have a rich get richer problem - the earlier you are, the cheaper it is to amass an unassailable position.

Even in something more difficult to collude/setup like BTC, 4 pools could execute a 51% attack. As of Q2 2020, 65.08% of hash power was in China.

It doesn't take many people, especially because you need both money and a desire to be in Ethereum. As another example, 2241 individual wallets hold 42% of all BTC, while 35,604,096 wallets hold 1.24% of BTC - I would expect concentration to happen even more quickly in PoS.

So if all it takes is 4 miners to pull together - and that's never happened - but it would take 70k individuals with Proof of Stake - wouldn't that make it much less likely to happen???

That's only in a fully deployed system. 70k people won't participate in the first buy of PoS ETH - you'll have a far smaller number, likely less that BTC at scale.

Also, ETH has already forked over a doctrinal issue - I don't doubt it could happen again, but the PoS leaders will just directly double down.

This isn't a PoS/PoW argument - more that most public blockchains are inherently winner take all systems.

If someone figures out how to determine the stakes needed to rig up a cheap 51% attack, it breaks the network.

The thing with PoS is that when you control >51%, you better not mess up, or you will soon own >51% of nothing.

With PoS the people who have the most control also have the most incentive to keep the value up for everyone involved.

PoW is not like that, since the one who has the most computational power doesn't necessarily own the most coins.

Multiple governments in the world, and multiple means of payment and value stores seems like the most robust to me.

It's not quite the same: in cryptocurrency even stakers/miners cannot break or manipulate the consensus rules themselves. They only really have power in a small number of decisions (most significant is the power to censor transactions in a 51% attack). This is not the same as existing financial institutions where the powers that be have in principle much more power. In practice the main power associated with the community is in those voices which are most heard: this correlates with wealth but not necessarily strongly. These are the ones who have most power over what consensus rules are used (much like in democracy).

Crypto is take it or leave it. You are free to choose if you wish to use any given cryptocurrency. Government, not so much. Those who refuse to participate in compulsory government programs are typically compelled by violence.

I want a Star Trek TNG style utopia.

If scarcity is eliminated (with technology like the replicator), we won’t need cryptocurrency or any currency at all.

I always wondered how much is The Federation actually involved in people’s lives. With no businesses to regulate, it really seems like their government is almost entirely consumed with Starfleet affairs (i.e., diplomacy with other non-federation peoples).

We will never achieve utopia by elimination of scarcity.

The most valuable commodity in the world is power: the ability to get others to do what you want. Even if all you want them to do is leave you alone, it still requires you to have power to prevent them from coercing you.

Power is always relative. Being a millionaire does not give you unbridled liberty if everyone around you is a billionaire.

Thus there is a natural incentive to never have enough. It's always useful to have more if for no other reason than to prevent bad people who would harm you from having it instead. This means there is a natural incentive to create scarcity for others.

Good culture and institutions can mitigate this but there is no natural stable equilibrium where we can all automatically live in peace without effort.

Maybe the only way everyone can have all the power they want (or at least the perception of having it) is to build the Matrix, put the power-hungry people in it, and make it so they only ever interact with AIs.

Star Trek spent a lot of time dealing with scarcity problems for a show about people who don't get paid a salary.

Waste is a problem that has its own friction built into it. As long as waste costs you something, you have some greater incentive to end it. Until we have some better way to prevent waste, the opposite of scarcity is excess, not satiation.

There are not an infinite number of things, and there are not an infinite number of places to externalize the consequences without feeling them.

On a ship in the literal middle of nowhere, scarcity is still breathing down your neck at every turn, and there is a strong group incentive to controlling waste, otherwise everybody dies. I'm not sure the STNG utopia plays out the same way on inhabited worlds.

Is it possible to completely eliminate scarcity though? Sure it is for everyday things but there will always be scarcity.

Even if we can replicate entire planets, someone will want to own the original earth. Also no matter how good our simulations get, there will likely still be demand for the world's oldest profession (along with attempts to regulate it).

The Federation as depicted only looks like a utopia if you are easily pacified and lack ambition. Those with goals are lured into academia or Starfleet. However, they still won't give you big replicators. And genetic engineering, well ... if you stop and think about it, they have a secret group of genetic engineers designed to make cross-species hybrids happen, without getting too close to the prohibitions left behind by the Eugenics Wars.

Want land of your own? Umm ... What about starting off on your own planet? Ask the Maquis how well that worked out.

And of course you don't get to wirehead it. They'll pry you out of the holodeck whether you like it or not, even if you do your best work there.

Goodness knows what kind of social engineering goes into keeping everyone so tractable.

For that to happen we need virtually endless resources.

Do mind though that in Star Trek throughout the federation currency/status still exists in the form of honour and scientific/military accomplishments.

To paraphrase Alan Perlis, would you like a lollipop with that?

I think I see the anti-government sentiment not merely as a tinge, but as the foundation and cornerstone on which the entirety of cryptocurrency rests. Every watt of inefficiency comes entirely from an obsessive desire to avoid having any trusted authority. Efficiency can never be present in such an environment.

Governments rely on physical violence to exert their power. Crypto "elites" don't.

I see no problem with someone hoarding a lot of money/crypto through non-violent means. I see problem with someone using physical violence or coercion to oppress people.

It’s probably more useful to use “coercion” rather than limiting it to violence.

The threat of losing something one finds important is incredibly serious whether it’s through slow motion coercion or fast paced physical violence. You’re being threatened either way.

Concentrated power absolutely exerts coercion in more ways than just through governments.

Until violence is used to gain access to people's key chain passwords.

With enough wealth, you can buy violence. Wealth inequality begets power inequality.

Yes, but in what way can their incentives become misaligned from yours?

The cryptocurrency world is also implicitly accepting the Austrian economics definition of money as a commodity that's useful as a means of exchange and becomes currency naturally without coercion or government intervention. It's useful to point out that this is not a mainstream economics view of money, at all. The Austrian view is easy to grasp intuitively but it leads to some bizarre conclusions and adverse events in the long run. There's a reason we don't use the gold standard.

Bitcoin looks like a great proposition if you automatically accept the Austrian / libertarian view of money, but its value seems contingent on holding that view, and it seems that Bitcoin proponents are not adequately interrogating their own assumptions about money and economics that underpin their bullish views. Fish that don't see water, so to speak.

> There's a reason we don't use the gold standard.

Some things take a long time to fail, but will undoubtedly fail. There are numerous examples of failed fiat currencies in modern times and ancient times. Just because dollars, euros and yen survive now, doesn't mean it will survive forever.

The core reason for this is simple: humans are bad at decision making in groups. Economic policy becomes sensitive to election cycles, populism, partisan agendas, etc. Every economic recession becomes a dire problem to be solved with state intervention. Every economic expansion becomes evidence of good policy decisions that emboldens some economic theory, convincing people that good times can continue indefinitely with the right policies.

The rules for that govern economic systems SHOULD be concrete, they should not be subject to human opinion so frequently. But we find ourselves pushing the edges of what amount of debt is acceptable, or how inflation is even measured.

The rules for money should be transparent, mathematical, algorithmic.

Economic systems failing in the past is not evidence that the current paradigm will fail and it’s certainly not evidence that it will fail because it’s fiat. Economic systems in the past have failed for countless reasons that had absolutely nothing to do with the dominant paradigm of the economic setup.

> The rules for that govern economic systems SHOULD be concrete… The rules for money should be transparent, mathematical, algorithmic.

Why?

I’m not being pedantic when I ask this, Why?

If there’s one thing we all should have figured out by now, it’s that humans, society, stuff, and the almost unlimited amount of chaotic ways these interact with each other, we should have learned by now that we have to be fluid, we have to be agile, we have to be ready to adjust. Why should the rules be rigid and unable to adjust for the almost infinite ways wrenches can be thrown in to the gears?

Are there still a large number of people who don’t yet understand the complexity of human nature and everything we touch?

Look, I live, work, and play in a technological wonderland. Along with the people in this community, I’m about the furthest away from a luddite that one can find, but we’d be foolish if we failed to recognize how early in the iterations we are from letting math be the sole decider of infinitely complex societal interactions. If we don’t recognize this yet, we’ve somehow let hype get in the way of an accurate analysis.

> Economic systems failing in the past is not evidence that the current paradigm will fail and it’s certainly not evidence that it will fail because it’s fiat.

If the reason for failure is hyperinflation, then it is a pretty concrete pattern relating to a debt crisis.

> Why?

Because state monopoly over money is not a free nor fair, and leads to an eventual weakening of money.

https://www.youtube.com/watch?v=tfba4FFErrQ

Yes, governments and elites often make terrible mistakes about monetary and fiscal policy. But it's also important to recognize that the rules of a monetary system controlled by an algorithm are not derived from incontrovertible laws of space-time, they are created by an organization of people. Those rules will have implicit assumptions about society and power that may not hold true in 10, 50, or 100 years. It may also be unable to respond to changing real-world conditions. For example, if we find that aliens are about to blow up the earth, some flexibility in the money supply may be beneficial to redirect capital to planetary defense. "The elites may make bad decisions in the future" is not a convincing argument to me, because they also may make good decisions in the future. I think it's important for society (and money) to be agile in the face of tough decisions.

- Open source money is flexible, you just have to convince enough people to be willing participants rather than coerce them. Competition ends up making everything better for everyone.

- If the state needs to borrow or raise money, it can still do so. It will make an offer to the capital market. These were previously called "war bonds".

> Some things take a long time to fail, but will undoubtedly fail. There are numerous examples of failed fiat currencies in modern times and ancient times. Just because dollars, euros and yen survive now, doesn't mean it will survive forever.

I take it that goes for gold too, then?

> The rules for money should be transparent, mathematical, algorithmic.

1) Sez who?

2) But OK, if we stipulate that: How are ordinary fiat currencies any less so than blockchain just-as-fiat ones?

i think you 're forgetting the part where people can just use a different currency, i.e. vote with their feet. Usage is not enforced with guns in the crypto world (hopefully; PoS creates that possibility though). It doesn't solve the problem of fracturing by elites, but it's actually more "individualist" in choice than democracy is.

I had not considered the idea that bitcoin whales could get together and form a bitcoin central bank. I love how terrifying that is.

Well the reality is the blockchain is programmed by people, right? So any network established to act as the new government is still at the will of the people who write it.

What I could imagine is an open source "constitution" of sorts enforced by the blockchain in some capacity, at least on the economic level. A socialist society therefore could implement something like a strong UBI or equalization of people's net worths just via the blockchain itself and you rid yourself of the "elites" - but this still requires that everyone in the physical side agrees to such a system.

There won't be a way to rid yourself of the physical government.

cryptocurrencies, but not blockchain more generally.

I don't need to know anyone's name, just show me the code.

This is HN so I won't go /s but I'm pretty sure half the crypto world thinks that what you described will be solved by adding another layer or tokenized protocol. xkcd127 in spirit