Well, I think yes, widely successful distributed currencies will be the end
of the government, but will also be the beginning of a really free market,
where all services provided by governments will be now provided by private
companies, faster, better, cheaper. From justice to retirement to fighting
with crimes. How good of a job Governments are doing at all these things
are quite debatable anyway. Many things governments are classifying as
"crimes" are "victimless crimes" which are not real crimes anyways, from
tax evasion to money laundering to growing weed or whatever. And many
things like pensions are going away without bitcoins too, because they are
the largest ponzi schemes ever.



On Sun, Dec 8, 2013 at 3:44 PM, Amir Taaki <genjix@???> wrote:

> Here's a post I was reading by JR Willet (MasterCoin) which goes well
> with some chapters I was reading earlier from a 90s book called 'The
> Sovereign Individual' about the effects of cryptocurrency.
>
> http://imgur.com/a/eV74v#0
>
> The implications spelled out by that book and Willet's post are
> incredible and mind blowing.
>
> More than ever, I'm convinced that we need to use these new tools and
> the increasing unstable situation to construct a new reality that
> enables us all to persevere as free people and maintain our sovereignty.
>
> ---------------------------
>
> I have seen the future of Bitcoin, and it is bleak.
>
> ======================
> The Promise of Bitcoin
> ======================
>
> If you were to peak into my bedroom at night (please don’t), there’s a
> good chance you would see my wife sleeping soundly while I stare at the
> ceiling, running thought experiments about where Bitcoin is going. Like
> many other people, I have come to the conclusion that distributed
> currencies like Bitcoin are going to eventually be recognized as the
> most important technological innovation of the decade, if not the
> century. It seems clear to me that the rise of distributed currencies
> presents the biggest (and riskiest) investment opportunity I am likely
> to see in my lifetime; perhaps in a thousand lifetimes. It is critically
> important to understand where Bitcoin is going, and I am determined to
> do so.
>
> My hundreds of hours of thought experiments have been productive. I
> published a whitepaper about the future of Bitcoin, and because of that
> paper I’ll have the great privilege of sitting on the “Bitcoin in the
> Future” panel at the 2013 Bitcoin Conference in San Jose. Through these
> years of deliberation I have satisfied myself that the answer to the
> “Trillion Dollar Question” of whether any form of distributed currency
> can ever achieve a stable price, is “yes”. (There are three ways this
> will happen, as I have written elsewhere).
>
> I have been predicting for years that the world’s first trillionaire by
> USD valuation will be an early investor in distributed currency — quite
> possibly Satoshi Nakamoto, whoever he/she/it/they may be. I own a few
> bitcoins, and I intend to keep them until I find a more attractive
> investment (that is, I want to invest in whatever replaces bitcoin or
> builds on top of it).
>
> To many people, this sounds like an implausibly rosy future, and for
> early adopters that is true — it feels like winning the lottery every
> day. However, for most other people, the ascendancy of distributed
> currency systems will feel like a disaster. If you are involved in
> Bitcoin now, you should prepare to be almost universally hated someday.
>
> In this article, we will examine a few simple thought experiments to
> show how the rise of distributed currencies such as bitcoin could create
> massive social upheaval due to governments’ rapidly degrading capability
> to fulfill their core functions of taxation and regulation of commerce.
> We’ll see how the end result could be extremely painful for common
> citizens due to previously unimaginable wealth disparities,
> hyperinflation of previously stable government-backed fiat currencies,
> and a greatly empowered criminal class.
>
> ===================================
> The Bleak Future of Fiat Currencies
> ===================================
>
> Anarchists and hardcore libertarians love Bitcoin, but most people
> outside those circles are not in favor of completely doing away with
> their government. If you aren’t part of a fringe political movement,
> chances are there is something the government does that you like,
> whether it’s handing out entitlement money, killing enemies, putting
> people in prison, building dams and roads, funding research, or any
> number of other things. The government can do these things because the
> government can collect taxes, which in turn they can do because the
> flows of money are highly regulated and tracked at every level. Whether
> you are collecting a paycheck, buying furniture, cashing out
> investments, or simply dying and leaving an inheritance, the government
> knows about it and takes a cut.
>
> For our first thought experiment, let’s imagine a world where
> distributed currencies like bitcoin have become wildly successful due to
> technological advances which make them easy to use and completely
> stable. In this world government-issued money is as good as dead. It may
> take a few years for everyone to realize it, but there will come a point
> when the ever-increasing outflows of money from fiat money into
> untaxable, unseizable decentralized currency will reach a tipping point,
> and we’ll have a financial panic like the world has never seen.
> Frightened lawmakers and banks will try to stop people from cashing out,
> but that will just increase the panic. Those who don’t get out before
> the door closes will be in dire straits indeed. This is the ultimate
> bank run — the run on the world’s central banks, and who could possibly
> step in and restore order?
>
> When people think of hyperinflation, they usually envision a Zimbabwean
> printing press running around the clock in the dark corner of a mud hut,
> putting ever more zeroes on cheap paper. Has it ever occurred to you
> that hyperinflation can happen while the printing presses are off? The
> value of the money in your pocket is not ultimately guaranteed by your
> government, but by simple supply and demand. The government controls the
> supply, and we control the demand. If demand falls precipitously, we
> have hyperinflation without ever needing to print another dollar or
> euro. If people start fleeing government currencies en masse,
> hyperinflation is the inevitable result.
>
> The good news is that you don’t need to worry about current government
> debt in this scenario. If government currencies lose their value
> rapidly, debts which previously seemed overwhelming suddenly become much
> more manageable. Perhaps your debt-laden government will someday
> completely pay off it’s national debt by simply selling a few gold bars
> and a couple national parks.
>
> ==============================
> The Bleak Future of Retirement
> ==============================
>
> For our next thought experiment, let’s consider what will happen to
> Grandma. For her whole life, she has carefully saved her money, and now
> she is living in reasonable comfort. She gets money and health care from
> the government, and she has her own savings to fall back on. Grandma has
> done everything right, including taking her savings out of the stock
> market; most of her savings are now invested in the safest asset known
> to man: U.S. Treasury Bonds.
>
> Rather suddenly, things start to go wrong. At the same time all her
> expenses start skyrocketing, the government has a liquidity crisis; they
> are having trouble collecting taxes and can no longer pay for her health
> care. Her savings are still “safe” in the sense that she will get U.S.
> Dollars out of them, but that is little comfort when those dollars which
> should have lasted years can barely pay her weekly grocery bill.
>
> Grandma’s retirement has been sabotaged by the rise of a new kind of
> money that she can’t even begin to understand. All she knows is that she
> did everything right, and now she has nothing.
>
> ===================================
> The Bleak Future Wealth Disparities
> ===================================
>
> All the world’s wealth has essentially been stolen, but by whom? By you,
> dear reader.
>
> We’ll be very lucky if we aren’t all rounded up and summarily executed.
> Thankfully, you’ll be able to use some of that money to purchase
> protection, but I’m not at all convinced that it will be enough. A
> wrathful government backed by an enraged population is a fearful enemy.
> Satoshi foresaw this long ago, and I doubt he/she/it/they will ever
> voluntarily come into the light.
>
> If there are enough of us, and we are very careful and charming, we may
> be physically safe. However, the massive displacement of wealth will
> still have some awful consequences. People argue all the time about the
> societal benefits and drawbacks of wealth disparities, and the rise of
> distributed currencies will create disparities that previously did not
> seem possible. It seems clear that there will be a lot of jobs created
> by the new wealthy, but whether the average person is better off or not,
> one thing is sure to rise: resentment. What right do we have to take all
> the wealth of the world and put it in our pockets? Sure, a nifty new
> idea should pay off for early visionaries, but nobody ever expected a
> new idea to suck all the wealth out of the world like a financial black
> hole!
>
> ===================================
> The Bleak Future of Law Enforcement
> ===================================
>
> This is where things get really bleak. Currently distributed currencies
> facilitate money laundering, black market commerce (the Silk Road), and
> insider trading (TorBroker). These applications in their current form
> are just a snowflake on the tip of the iceberg. Not only will they get
> MUCH bigger, but we will see applications which are much less savory.
> Historically, the “Dark Net” accessible by Tor and private networks has
> been nothing more than a hidey-hole for illegal files and a hangout for
> paranoid schizophrenics, but it is quickly becoming the platform of
> choice for large-scale illegal commerce.
>
> For this thought experiment, we will imagine that your child has been
> kidnapped and put up for sale on “TorSlaver”. Their business plan is to
> kidnap children and sell them to the highest bidder, whether parent or
> pedophile. The winning bidder is sent the location of the child,
> probably bound and gagged and dumped somewhere. As long as they don’t
> get caught doing the kidnapping, the kidnappers can do this again and
> again with complete impunity. Once someone proves it can be done,
> copycats will come out of the woodwork, and it won’t matter if the first
> mover gets caught.
>
> As a parent of three small children, I cannot describe to you how awful
> this makes me feel. I have always been a very reluctant bitcoin
> investor, for this very reason. I don’t invest in bitcoin because I
> think it will bring about a happy utopian world. Quite the opposite. I
> invest in bitcoin because the rise of distributed currency is
> inevitable, and owning some bitcoins seems to be the best way to prepare
> for the chaos ahead. And just maybe, if I position myself correctly, I
> can make things a little less awful.
>
> ===========================
> The Government Strikes Back
> ===========================
>
> Does anyone really expect the government to sit back quietly and watch
> while their currency is debased, terrorism is funded, and children are
> kidnapped? The only question is when and how they will strike back
> against these forces. While the government does have a lot of options,
> ultimately those options only slow things down. At some point, we
> collectively with our governments face a difficult choice between trying
> to survive this deadly storm or attempting to destroy all decentralized
> computer networks (including the internet). The former seems
> unthinkable, the latter, impossible.
>
> I wouldn’t be surprised if this chaos gives rise to a strong,
> centralized, one-world government which gets its revenues by tightly
> reigning in freedom of commerce in order to collect taxes. For instance,
> I will not be surprised to see a requirement someday that every person
> buying or selling have an implant which tightly binds their identity to
> the sale. Perhaps the implant will even be located on the back of the
> right hand or the forehead! This may seem repugnant to you now, but wait
> until you have lived in the storm for a while before you call it
> impossible. The natural reaction to the deadly chaos of decentralized
> currency is for the populace to embrace increasingly centralized
> controls on commerce. The battle lines are only just starting to be
> drawn, and your guess is as good as mine for how it will play out.
>
> ==================
> What Should We Do?
> ==================
>
> We need people thinking about this. I’ll admit that many of the things I
> wrote about may not happen at all, or may happen very differently than I
> imagine. However, there are lots of people touting the fantastic
> benefits that bitcoin and its children can give us, and I don’t see
> anybody talking about how bad things could potentially get.
>
> We need solutions. When the government finally starts taking
> decentralized currency seriously, it will probably be doing so in a
> state of panic. We need to be advising governments now about how they
> can survive the storm and protect their populace. We need to think of
> ways the government can pay for its most critical operations, and what
> legislation makes sense to mitigate these new risks while preserving as
> much freedom as we can.
>
> The Lifeboat Foundation is attempting to provide this thinking, advice,
> and solutions. They are already getting ready for a new advisory board,
> culled from computer scientists, economists, and bitcoin experts. If you
> make a fortune from your investments in decentralized currency, I urge
> you to consider how you can help all the people harmed by these rapid
> changes. Many bitcoin enthusiasts seem to think they will get to retire
> on a private island with a harem and a stable of Italian sports cars.
> This is wrong. Bitcoin investors need to someday become bitcoin
> philanthropists, and our giving needs to be targeted at helping all the
> people we have harmed. The Lifeboat Foundation is one option, but I’m
> sure there will be others.
>
> I first published this article on the blog of the Lifeboat Foundation:
> http://lifeboat.com/blog/2013/04/bitcoins-dystopian-future
> Reddit version is here:
> http://www.reddit.com/r/Bitcoin/comments/1cos8x/bitcoins_dystopian_future/
>
> tl;dr: Wildly successful distributed currencies could hurt a lot of people.
>
>
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