Selling infected glass beads to Indians

December 20, 2017 § 168 Comments

In this post I will present an argument that it is immoral to sell digital pornography and/or bitcoin.

Premise 1: It is immoral to sell property for an unjust price.

Premise 2: Context can make particular property more or less valuable; for example, water is more valuable in the desert than in a mountain lake. Call this a context multiplier.

Premise 3: Personal preferences or needs can make particular property more or less valuable to a particular buyer. I like whiskey but I don’t care for wine. Call this a subjective multiplier.

Premise 4: It is possible for particular property to have zero or negative intrinsic value: for particular property to be literally useless or harmful.  (Alternatively, it is possible for the typical and intended uses of a particular kind of property to have zero or negative intrinsic value.  Call this “Premise 4 light”).

Premise 5: When property (or its typical use case: call this “Premise 5 light”) has zero or negative intrinsic value, neither a context multiplier nor a subjective multiplier can make its just price greater than zero.

Digital pornography has negative intrinsic value: its typical use case is destructive to the user.  Unlike paper pornography it has no useful material substrate which enables atypical uses: paper pornography might be used as fuel for a fire, for example, but digital pornography cannot even be burned to produce heat.  Purchasing copies of digital pornography might be justifiable when doing so is part of a plan to destroy it or to attack its production; but this limited warrant to purchase-for-destruction does not justify the sale of digital pornography to purchasers who are likely to use it for its intended purpose.

Pornography has negative intrinsic value because it promotes vice, a false picture of reality, and other disorders in relation to the truth about the good.

Bitcoin is also a digital product which promotes vice, a false picture of reality, and other disorders in relation to the truth about the good.

Therefore selling bitcoin is immoral.  (“Light” version: therefore selling bitcoin to buyers who are likely to use it for its typical use cases, is immoral).


Obviously Premise 5 is doing the heavy lifting here, though Premise 4 may also be controversial.

§ 168 Responses to Selling infected glass beads to Indians

  • djz242013 says:

    two things are marked “Premise 3”

  • Zippy says:

    two things are marked “Premise 3”

    Thanks, fixed it.

  • mjstallman says:

    I think you meant “paper” or “physical here”:

    Purchasing copies of digital pornography might be justifiable when doing so is part of a plan to destroy it

  • Zippy says:

    I did mean digital. One might purchase the only copies of particular digital porn in order to destroy those copies; or one might purchase digital copies as part of a plan to get the producer shut down. These purposes are ‘negative’ in the sense that they are set against the very being of the thing purchased, as the kind of thing it is.

    I am having a hard time coming up with any positive ‘alternative purpose’ scenario for digital pornography, whereas recovering the actual paper for its varied uses as paper is easier to envision with paper porn.

    In any case though I think the exceptions prove the rule: when selling these things on the open market they are presumptively being bought for their typical use cases, therefore the just price cannot exceed zero, therefore selling them is immoral.

  • Copied from a comment I wrote on the other post, just delete that one:

    As I understand just price theory, the natural law does not dictate the just price of non-necessaries, so any market price that prevails for such an item will be just. (See A Manual of Moral Theology for English-Speaking Countries, p. 337)

    Even Aquinas acknowledged the moral distinction between necessaries and non-necessaries. (Summa Theologica II-II.LXXVII.IV)

  • Zippy says:

    Can the just price of digital pornography exceed zero?

  • If people can freely give away their property for free (as no one disputes), then I don’t see why it would be illicit for them to give it away in exchange for items with no objective value (but which have subjective value to many people). IOW premise 5 seems highly questionable. The normal concerns about fraud and duress which accompany excessive pricing are not pertinent, since no one needs bitcoin and the price it’s usually sold at is well above zero.

    The argument from immoral use is stronger, but I don’t think it holds either. If it’s granted that trading in bitcoin isn’t wrong in itself (which it must be for this argument to be non-redundant), then it would seem to be similar to selling firearms, alcohol, or any other thing which is frequently put to both good and evil uses.

  • I don’t think the sale of digital pornography violates justice, though it’s different in that its only use is morally wrong. Thus selling it will be morally wrong absent unusual circumstances.

  • Zippy says:

    It isn’t subjective tastes that typically motivate purchase of bitcoin though. It is disordered, false ideas about reality.

  • It’s true that bitcoin exists as a result of anti-realism, but that doesn’t mean each purchase is an expression of anti-realism. People who use bitcoin as a means of transaction do so because they believe that they will be able to promptly exchange it for cash on an exchange. People who invest in bitcoin do so because they believe it the market price will likely increase, and they can sell at a profit later.

    The former belief is practically certain to be true. The latter may or may not be true (probably not given how economic bubbles work), but everyone knows that such investments are a gamble. I doubt most people who buy bitcoin care about whether it’s objectively valuable.

  • Zippy says:

    If trading in bitcoin typically involves adopting indifference with respect to objective value then doing so typically involves anti-realism.

  • Whatever subjective false beliefs other bitcoin users may hold are not intrinsic to the transaction and will not be affected by whether or not a given other person participates.

    This logic could just as well be used to argue that the use of any form of currency is wrong, since most people have false ideas about how it works,

  • Zippy says:

    ArkansasReactionary:

    Whatever subjective false beliefs other bitcoin users may hold are not intrinsic to the transaction and will not be affected by whether or not a given other person participates.

    Whatever you mean by that is as true of porn as it is of bitcoin. Porn encourages the vice of lust and instantiates anti-realism about sex. Bitcoin encourages avarice and instantiates anti-realism about property.

  • tz says:

    You don’t define what a just or unjust price is. The late Spanish Scholastics argued for the market price, where a voluntary exchange would occur, assuming no coercion (e.g. if the person wasn’t near death from starvation wanting food).

    Context cannot be separated from persons. If there is no one near a mountain stream, then the water will have no value, similar to a tree falling in a forest – though it makes a sound based on physics, no one hears it. There is no absolute context for humans, only God. Humans cannot know all the sources of water available, only those they do know or are offered. I’m not even sure a price can be just or unjust as it is a measure of supply and demand, what people will voluntarily pay. Someone can assign a higher price and no exchange will take place, or a lower price and everything will be sold quickly. Usually those seeing lower prices than they would voulntarily pay will not make up the difference but celebrate the bargain, yet it can be equally unjust if there is a just price.

    A personal preference gives value. It is called by Austrian economists “marginal utility”. I should point out that “value” is a slippery word here. I can value something subjectively. If you argue there are objective values (needed if there are just or unjust prices apart from voluntay exchange), you haven’t created a theory that would allow that value to be assigned or discovered. Put simply, if there is a “just price” for anything, you should be able to tell me what it is. What is the “just price” for an iPhone X? A Netflix subscription? Your labor or my labor? An ounce of Gold or Silver (if that is not the monetary unit being used to measure)? If you cannot tell me the “just price” for ordinary things, why should I accept that a “just price” is below zero because you assert it?

    You smuggle the objective/subjective division by saying something can have any “intrinsic” value. You can only mean an objective value. But this merely goes back to context (you don’t want something radioactive, but I can use it for disagnostic imaging or sterilizing things). But that doesn’t create or assign any objective value. If something is of zero or negative value, the normal thing is to pay to dispose of it (assuming disposal creates positive value) or abandon it (where such can be done legally). If I discover a pile of porn, I would dispose of it, but someone discovering it might assign a positive value – for him. Adam Smith and others thought there was a labor theory of value. Others – often socialist – try to assign just prices to everything but just create gluts and shortages, or are those effects of just pricing?

    You say a context or subjective “multiplier”. The multiplier itself may be negative, or by limiting the function to the linear slope coefficient, you constrain the argument illicitly. Lacking the framework to determine objective value (which I don’t know if it is apart from any human contact, or is the value which should or is assigned by some archetypical or platonic human, or a good person, or a typical person), I don’t see more than a tautology. To restate 5: If something has an intrinsic/objective value below zero, then its just price is below zero.

    You then mention digital porn and it’s “typical” use case. Is the objective or intrinsic value supposed to be the TYPICAL, best, worse, or some other use case, or what it could or could not be used for. This is similar to guns which can be used for crime or defense – is the “typical” the deciding factor or is the best case? When you leap to Bitcoin from porn this is important.

    You also don’t define pornography. Does it include great art nudes? Is it Playboy or Hustler? Is a low neckline pornography? Are old National Geographics? “I know it when I see it” is bad argumentation, and you are NOT making that, but this also needs definition. And there is one – pictures without any artistic, scientific, etc. use, but they can be used to incite lust, so pornography can be contextual. But assume something is actual porn…

    Another tautology, any vice itself has negative objective value, by definition. Can you name any vice with positive intrinsic value? Pornography is merely a subset of vice.

    “Bitcoin … promotes vice”. You have not made any case I can see. You use the word “selling”, but you mean a voluntary exchange. An amount of BTC for USD fiat (evil for evil?), BTC for gold, BTC for furniture. Having/owning pornography is immoral, but I don’t see people masturbating to their bitcoin wallets. Or other activity indicative of vice other than Avarice, but that is true of any and every bubble including the Tulip mania, South Seas bubble, Mississippi scheme, and Ponzi. Avarice is a deadly sin, but it contaminates any money or security it touches, BTC, USD, Au, Ag, Euros, Yen. Excepting physical metals, they are all electronic ledger entries and NO DIFFERENT from Bitcoin. I’ve missed the long tirades against book entry currency, other than it is all debt, but you have not made the link between Federal Reserve Notes and mutuum loans and usury if there is one, or the basic fraud where US Dollars can be created ex-nihilo by fiat, which even bitcoins can’t be (it requires a great deal of computation – mining – effort, much like finding, panning, or mining metals).

  • Whatever you mean by that is as true of porn as it is of bitcoin. Porn encourages the vice of lust and instantiates anti-realism about sex. Bitcoin encourages avarice and instantiates anti-realism about property.

    The difference being that bitcoin can have legitimate uses, porn can’t.

  • I’m not seeing here how bitcoin has “zero or negative intrinsic value”. A stateless transaction protocol has a lot of value.

  • Zippy says:

    ArkansasReactionary:

    The difference being that bitcoin can have legitimate uses, porn can’t.

    That is precisely what is in dispute.

  • Zippy says:

    cyborg_nomade:

    You may be conflating blockchain technology, for which there may be legitimate uses, with bitcoin specifically. By analogy one might mount a defense of Playboy magazine by extolling the usefulness of magazines.

  • Ed says:

    I take it venezuelans buying and selling bitcoins to escape hyperinflation as a specific valuable and legitimate use of bitcoins (similar to using porn paper to make a fire), and i do agree with your arguments in regards to anti-realism and all…(i think bitcoins are just the latest attempt to escape the liberalism singularity by means of a double down martingale strategy instead of a cooked up unprincipled exception )

  • Zippy says:

    Ed:

    I’m not 100% committed to the proposition that selling bitcoin is immoral; but I think the arguments to that effect are much stronger than most reactionaries are willing to admit. Fighting against economic anti-realism by doubling down on it is a good qualitative description of bitcoin, certainly as originally conceived.

    If the arguments against bitcoin work then stocking up on it as a hedge against local currency hyperinflation is analogous to stocking up on pornographic magazines as a hedge against local currency hyperinflation.

  • Zippy says:

    tz:

    … but you have not made the link between Federal Reserve Notes and mutuum loans and usury if there is one …

    Actually I have, in this permapost.

  • donnie says:

    If the arguments against bitcoin work then stocking up on it as a hedge against local currency hyperinflation is analogous to stocking up on pornographic magazines as a hedge against local currency hyperinflation.

    Stocking up on pornographic magazines as a hedge against local currency hyperinflation isn’t the same thing as stocking up on empty digital ledger entries.

    If you were to begin bartering your stockpile of dirty magazines, you could be reasonably confident that those with whom you bargain with would use said magazines for destructive ends.

    If you were to begin bartering your stockpile of empty digital ledger entries (bitcoins), there is always a risk that those with whom you barter with will use said digital ledger entries for destructive ends, but not any risk greater than bartering seashells, lumps of coal, or Pokemon cards.

  • Zippy says:

    donnie:

    I’ll just point out that you are begging the question, assuming that selling bitcoin to the typical buyer does no harm to that buyer. But again, that is precisely what is at issue. That this may also be the case for other ‘bubble’ currencies is like pointing out that there is “soft” porn as well as “hard” porn.

    And when it comes to financial anti-realism, bitcoin is as hardcore as it gets.

  • Couldn’t the same argument that you are making against Bitcoin be made against any currency that is not backed by the gold standard?

  • Ed says:

    “If the arguments against bitcoin work then stocking up on it as a hedge against local currency hyperinflation is analogous to stocking up on pornographic magazines as a hedge against local currency hyperinflation.”

    Yes but I was thinking in a more dire situation, that’s why I brought up the venezuelans and Venezuela. I suppose many people who use bitcoins there were not hedgers but were caught in a situation where certain markets (black markets for sure) only operate with bitcoins, thus the contingent and very situational morality of bitcoins and not other tokens such as other cryptocoins, blood diamonds, pokemon cards, etc.
    The fact that bitcoin is a irrational bubble only adds to these people suffering as having to trade in a medium that gains tens of thousands of dollars in appreciation (and possibly loose?) in such a short time window is far from reassuring.

  • Ed says:

    Complementing: if bitcoin is, like you said, actually like soft porn/ hard porn than I don’t see how it can even be contingently moral and have to agree with the OP.

  • Zippy says:

    Ed:

    … but were caught in a situation where certain markets (black markets for sure) only operate with bitcoins …

    A real world analogy I’ve used before is a prison in which pornography acts as currency for transactions and store of economic value. What if that were the only way for a diabetic to get black market insulin that he needs?

    But if we have to resort to this kind of casuistry to cast doubt on the immorality of selling in extraordinary cases that tends to cut against the morality of selling in typical cases.

  • donnie says:

    I’ll just point out that you are begging the question, assuming that selling bitcoin to the typical buyer does no harm to that buyer.

    I can see how selling bitcoin to the typical buyer in the current environment likely harms that buyer for the reasons you’ve stated. However, if in the future the exchange ratio between empty digital ledger entries (bitcoins) and US marketplace tickets (US dollars) stabilizes such that the empty digital ledger entries become a reliable store of value relative to other property, I am not seeing what harm would be done by trading them.

    In your prison example, the fact that printed pornography might be a stable store of value relative to other things does not change the fact that it still encourages vice, a false picture of reality, and other disorders in relation to the truth about the good. However, if someday the current bitcoin trading frenzy ends and the rate of exchange for bitcoins stabilizes, I’m not seeing the harm done by selling the empty ledger entry.

    To use a historical example, selling a tulip bulb to a typical buyer during the Dutch tulip mania probably was immoral. But selling a tulip bulb to a typical buyer nowadays would not be immoral. While selling a bitcoin to a typical buyer now may indeed be immoral, it is not obvious to me that it will always be so in the same way that selling pornography will always be so.

  • Zippy says:

    donnie:

    In your prison example, the fact that printed pornography might be a stable store of value relative to other things does not change the fact that it still encourages vice, a false picture of reality, and other disorders in relation to the truth about the good.

    So does treating literally empty ledger entries as if they were a store of any value whatsoever.

  • LarryDickson says:

    (Sigh) You are veering into excessive moralism, Zippy. If there is ANY good and valuable use of a commodity (such as evading currency regulations in tyrannical countries like China), then it has positive value and selling it is not per se immoral. Your logic is equivalent to saying that women are a biological product that promotes vice, and therefore it is immoral to introduce your daughter to any man who still has sex hormones. And women can allow themselves to be photographed to produce pornography — CASE CLOSED! Introducing women to men is ALWAYS AND EVERYWHERE IMMORAL!

  • Zippy says:

    LarryDickson:

    If there is ANY good and valuable use of a commodity (such as evading currency regulations in tyrannical countries like China), then it has positive value and selling it is not per se immoral.

    I’ll just point out yet again that to the extent that argument works, it works as well for pornography as it does for bitcoin.

  • donnie says:

    So does treating literally empty ledger entries as if they were a store of any value whatsoever.

    If something has a stable exchange rate relative to some form of property (or properties) and maintains that exchange rate better than other things, is it not a de facto store of value?

  • Is a bitcoin a real commodity that just has zero intrinsic value or is it some sort of pseudo-commodity: something which isn’t actually anything pretending to be something?

  • Zippy says:

    donnie:

    If something has a stable exchange rate relative to some form of property (or properties) and maintains that exchange rate better than other things, is it not a de facto store of value?

    No, and that is exactly the problem. Value always has an inextricably objective component, and the sale of what does not exist is immoral in itself even in the presence of willing buyers.

  • Zippy says:

    TimFinnegan:

    Bitcoins are empty ledger entries and treating them as having actual value is intrinsically anti-realist. The presence of willing buyers doesn’t sanitize away the anti-realism here any more than it does in the case of usury.

  • So the difference is that fiat currencies are issued by taxing authorities and Bitcoin is not?

  • donnie says:

    No, and that is exactly the problem. Value always has an inextricably objective component

    So then, is it immoral for me to treat a collection baseball cards as a store of value?

  • My question was I think more tangential to the topic of the OP than on topic. So a difference between usury and selling bitcoins is that usury is selling that which doesn’t exist and selling a bitcoin is selling something which does exist but has no value? I find your argument convincing I’m just making sure I understand the basic principles.

    So my question I guess is whether or not an empty ledger entry actually is something that is being transferred from person to person (but has no actual value) or is it something which doesn’t actually exist that we are just pretending exists? I have a hard time believeing that a bitcoin is anything actual; pornography is actual, but harmful and so has a negative value. But a bitcoin seems to have zero value which to me implies that it doesn’t exist, but my understanding of blockchain and bitcoin are admittedly limited.

  • Zippy says:

    winstonscrooge:

    Fiat dollars are issued by an institution and grant a defined structure of financial rights to the property of that institution. Company stock is a similar case.

    Bitcoins (by design) are not issued by any institution and do not grant any property rights whatsoever.

    It would be possible to use blockchain-type technology as a way of issuing and authenticating ledger entries recording (for example) who owns which shares of stock in a corporation, etc. But bitcoins specifically (and deliberately, by design) don’t do that: the bitcoin blockchain is a literally empty ledger granting no property rights whatsoever to anyone.

  • djz242013 says:

    bitcoin is actual, in that it actually can be transferred, and really does exist as a record of wasted computing power.

  • Zippy says:

    donnie:

    It isn’t immoral to sell baseball cards for a just price. But it is immoral to “sell” the transfer of an empty ledger entry granting property rights to nothing whatsoever, for any price. It is a species of selling what does not exist.

  • Zippy says:

    Strictly speaking, bitcoin cannot be transferred. Access keys to blockchain entries can be used to generate new empty ledger entries in the distributed database.

  • Zippy says:

    When property ownership is transferred by ledger, new ledger entries are created to record the transfer of rights to the actual property, whatever it may be.

    When a bitcoin is used to generate new ledger entries in the distributed database this has a similar formal appearance to recording the transfer of property rights in an accounting database. The difference is that there is no property, let alone are there any rights to this nonexistent property to transfer.

    By its nature and design the bitcoin blockchain ledger is metaphysically anti-realist. And the fact that traditionalists will defend it on the basis that the presence of willing buyers demonstrates actual value is testament to the harm done by trading in and otherwise promoting bitcoin.

  • So if you follow ledger entries on transfer of gold, then at the end of the line there is some amount of gold, the ownership of which is recorded by all the ledger entries. With bitcoin, when you get to the end of the line there is nothing, the ownership of which is recorded by the ledger entries in the distributed database. Do I have that correct? If I buy a bitcoin I am buying something that is supposed to be ownership rights in some property, but which doesn’t actually entitle me to any property whatsoever?

  • Zippy says:

    TimFinnegan:

    Correct. A bitcoin transaction is the recording, in a cryptographically authenticated ledger stored in a distributed database, of the transfer of no property rights whatsoever.

  • donnie says:

    It isn’t immoral to sell baseball cards for a just price.

    OK great. How about digital baseball cards?

    You probably see where I’m going with this. Am I to believe that the inextricably objective component of value for a bitcoin is zilch, but the inextricably objective component of value for a baseball card (or a digital baseball card) is somehow greater than zero?

  • Zippy says:

    donnie:

    You seem to be assuming that everything involving digital technology is equivalent. I don’t share that assumption. An mp3 of Mozart is different from a pornographic jpeg is different from an empty ledger entry in a distributed database.

  • Mike T says:

    Zippy,

    Somewhat related, a while back I posted on W4 that if conservatives wanted to pull a real shitlord move on the porn industry what they’d do is simply exclude it from copyright protection. The result would be that porn could no longer be thought of as property and thus anyone who engages in amateur porn would have to go to a prosecutor and swear out an affidavit that she did not, in fact, consent to the production. It would make revenge porn laws their last chance of a hammer minus local support for an obscenity charge (which would snare the butthurt conspiratory).

    Needless to say, I was a knave for suggesting that.

  • TomD says:

    It gets more fun. Bitcoin can’t even do what it set out to do anymore – transactions “cost” upwards of fifty ditty fiat dollars just to swap them. Bitcoin cash, meanwhile, continues to at least be able to transact quickly.

    Look up cryptokitties for even more amusement – think reproducing beanie babies on the blockchain!

    I suspect that since the empty ledgers do exist – that they have some very tiny value that’s almost nothing – but so do penny stocks! And it’s pretty clear that running a pump and dump of those (just add blockchain to your stock name!) is going to at best be fleecing suckers, at worst mortally deceptive.

    But even granting that bitcoins are fundamentally selling that which does not exist (search Bitfinexed if you think the anti-realism can’t double down even more) — it would seem possible to *buy them* — but maybe never sell them?

    I guess arguably one of the problems is porn can’t be created morally; but given the energy requirements of buttcoins that may also still apply.

    Still would be amused to buy up all the coins once the bubble crashes down to nearly zero. Put them next to a tulip and a Zimbabwean 100 trillion dollar bill (I bought one as a joke for $6 back then, now they’re selling for $60 on eBay!)

  • Rhetocrates says:

    Tom, your last paragraph betrays the point. You can’t put your ARWC on the shelf next to your encapsulated Zimbabwean misery, because it doesn’t exist.

  • TomD says:

    Well, I can print out the private key or something – just because something’s entirely digital doesn’t mean it has no *reality* whatsoever. After all, you can’t put *anything* digital on your mantlepiece, in a way.

  • Zippy says:

    The nature of the particular thing cannot be ignored. (Notice that usury too is given cover by ignoring the specific difference between mutuum contracts and other contracts: by treating all profitable contracts as an indistinct mass.)

    Bitcoin by its nature and design pretends formally to act like the transfer of property titles by electronic ledger. And by nature and design there is no actual referent property, not even any referent digital property: the whole point is to eliminate referent property in order to make bitcoin transactions independent of any guarantor or promise, of any actual proprietor or property. Each bitcoin transaction is a new empty ledger entry, not the transfer of even an electronic baseball card or piece of music: the seller doesn’t give you his private key in exchange for money etc, he creates a new ledger entry as if he had transferred title to some property to the buyer — except there is no property. Bitcoin was designed by financial anti-realists and its use is intrinsically anti-realist. By design every bitcoin transaction involves the sale of what does not exist.

  • ignacy says:

    Zippy:

    (Disclaimer: I fully accept the argument you presented in the OP, I just vehemently disagree that it applies to Bitcoin).

    Bitcoin by its nature and design pretends formally to act like the transfer of property titles by electronic ledger.

    No it doesn’t. While it is possible to make bitcoins title to some property, it isn’t its intended use. Bitcoin was modeled after shell money.

    Besides, Bitcoin has intrinsic value (cryptographic timestamping), albeit it is negligible with regard to its liquidity value just as it is the case of commodity money. While the timestamping use is the property of the network, not the individual coins, you need individual coins (precisely speaking, unspent transaction outputs aka UTXO) to pay the miner fees for being included in the block. This alone means that your argument fails to apply to crypto

    You may be conflating blockchain technology, for which there may be legitimate uses, with bitcoin specifically.

    On the contrary, it has not yet been demonstrated that Blockchain technology is useful for any other purposes than largescale settlement ledger (aka cryptocurrency) or ICO scams.

    TomD:

    t gets more fun. Bitcoin can’t even do what it set out to do anymore – transactions “cost” upwards of fifty ditty fiat dollars just to swap them.

    Yep. It’s so crowded that nobody uses it anymore 🙂

  • Zippy says:

    ignacy:

    There is what people think they are doing, and then there is what they actually do. And there is the mutual coherence or incoherence of the things they set out to do. In general it is a mistake to conflate what people say they are doing with what they actually do. Usurers will tell you that they are simply being justly compensated for risk, for example; but to accept their account of things is to reject the full reality of what they are actually doing.

    Nevertheless what they say is instructive. In the introduction to the Nakamoto white paper he (or they, if the mysterious Nakamoto was really a group of people) states:

    Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.

    So right at the outset he models the system on an electronic ledger, based on a truncated misunderstanding of what it means to “process electronic payments”. Processing electronic payments involves the transfer of ownership of some specific actual property, which is recorded in a ledger; but he takes away the actual property, leaving only the ledger.

    And this is what he succeeded in actually creating: a crowdsourced distributed publicly verifiable electronic ledger with the unique feature that the entries in the ledger – which would ordinarily record title transfers to some particular rights with respect to some particular property – don’t actually represent title to anything at all.

    Saying “it is modeled after shell money” doesn’t change what it is, in fact. Calling an mp3 file of Mozart a lolcat doesn’t change what it is in fact. Things are what they are, and bitcoin is a distributed software system for transacting in titles to nothing whatsoever.

  • ignacy says:

    Ok, I should be more precise: Bitcoin is successfully modeled after shell money, it *is* a form of shell money. Shells are not that useful on their own, probably even less than crypographic timestamping. Yet the liquidity multiplier can be huge, and be objectlively justified.

    Yes, Satoshi’s paper is flawed in many ways. This however does not change what was actually accomplished.

  • Zippy says:

    I’ve already explained why the analogy to shell money doesn’t work. But I’d be more inclined to believe that selling shell money is illicit than that selling bitcoin is licit by analogy to shell money.

  • TomD says:

    If bitcoins have an inherent value, however small, then any copies thereof must also have inherent values. From about 12 seconds of internet research, it appears a moderately competent programmer can make a copy of the source code and get UsuryCoin™ up and running in a few hours. Since they’re identical save for the name, the inherent value must be the same (well, perhaps one could argue about the marketability of the name). But nobody would care, even if your mom did give you $5 out of pity or something – the inherent value would be nearly nonexistent – but would it be entirely zero?

    (An argument for the “value” of bitcoins stemming from their cryptographically secured unduplicatability is easily shown to have flaws – because it is TRUE you can’t duplicate a given bitcoin, but you can just fork the entire chain.This has already happened “successfully” on the main chain a few times, BCH being the most “profitable” fork so far.)

    Many of the “inherent value” arguments also end up being circular – bitcoins have inherent value because the blockchain is useful for timestamping, the blockchain is valuable for timestamping because miners mine bitcoins, miners mine bitcoins for fees, fees are valuable because they’re paid in bitcoins.

    But as an unbacked currency, bitcoins seem much closer to “greenbacks” than to fiat currency, as greenbacks were explicitly not able to be used to pay “duties on imports” (the US government’s main tax revenue at the time):

    This Note is Legal Tender for All Debts Public and Private Except Duties On Imports And Interest On The Public Debt; And Is Redeemable In Payment Of All Loans Made To The United States.

    Bitcoins don’t even have any guarantee the network will continue running – if the miners stopped mining the reset block might never get mined.

    The main thing that makes me suspicious of the whole thing is that the libertarian singularity is full of buttcoiners. As Aristotle famously may have said, “Where there’s smoke, there’s fire.”

  • Zippy says:

    TomD:

    well, perhaps one could argue about the marketability of the name

    Even the name isn’t property. Nobody can take you to court if you call your fork “Bitcoin”.

  • ignacy says:

    TomD:

    it is TRUE you can’t duplicate a given bitcoin, but you can just fork the entire chain.

    It only shows that you can’t really separate the code from the validating nodes and mining hashrate. I don’t see how that affects the argument.

    Many of the “inherent value” arguments also end up being circular – bitcoins have inherent value because the blockchain is useful for timestamping, the blockchain is valuable for timestamping because miners mine bitcoins, miners mine bitcoins for fees, fees are valuable because they’re paid in bitcoins.

    You are omitting the time element. There is a positive feedback loop which multiplies the effect of the intrinsic value that develops over time and alongside growth of the Bitcoin infrastructure.

  • donnie says:

    I’ve already explained why the analogy to shell money doesn’t work. But I’d be more inclined to believe that selling shell money is illicit than that selling bitcoin is licit by analogy to shell money.

    How much of this inclination is driven by the current bitcoin fenzy? For example, if bitcoin traded at a 1 to 1 ratio with shell money (i.e. next to nothing), would selling a bitcoin still be immoral?

  • Zippy says:

    donnie:

    If the arguments against work then that is like asking if 0.1% usury is still immoral.

  • TomD says:

    If it’s like usury then the underlying thing (in the case of usury the mutuum loan, in bitcoins the bitcoin whatevers) can only be given out of charity but charitable giving of bitcoins is kind of silly (the only reason people want them is that they think they can use them to transact).

    As for “intrinsic value” if it is ZERO then no multipliers or network effects can ever get it off of ZERO. Meanwhile the timestamping method of arguing for value is a side-effect; arson creates “value” by requiring builders and insurance agents to handle it but that doesn’t mean it has intrinsic value.

  • Mike T says:

    I looks like last night reality started to push back on unreality with BTC. Apparently to the tune of a $9k drop at the worst. And yet “no one knows why.”

  • TomD says:

    At some point people wise up and start thinking – what if it’s all true that it’s all nothing?

    And they try to slide out quietly, and sometimes a panic starts.

  • ignacy says:

    Zippy,

    I’ve already explained why the analogy to shell money doesn’t work. But I’d be more inclined to believe that selling shell money is illicit than that selling bitcoin is licit by analogy to shell money.

    Apologies, but I don’t remember any explanation of the failure of the analogy (at least none that is decisive or even remotely successful). Would you mind linking to it or repeat it?

    Maybe it would be easier for everyone to first establish the moral status of shell money and the move to crypto.

    Mike T,

    If the asset’s price is 99% liquidity premium then such volatility is what should be expected. In fact, Bitcoin has lower volatility than some liquid assets (precious metals, some FX) if scaled by aggregate “market cap” (which is imprecise term, but allows to have a glimpse how much value can flow through the network).

  • ignacy says:

    After some consideration, I can concede a point: Bitcoin can indeed encourage avarice, but not in a way you think (i.e. not as antirealism). assessing liquidity and patterns of liquidity in financial assets is primarily the business of traders, not the average Joe’s. By being “advertised” to the general public, Bitcoin can people into trading, which they shouldn’t do, all while seemingly looking as opportunity for quick gains. This is of course a recipe for getting rekt, but it’s obviously not intrinsic to Bitcoin itself.

  • Roger Hammerstein says:

    You are making a huge assumption here, i.e. that bitcoin is always, or even usually, used for negative vice-focused purposes. Clearly, just because something is sometimes used for ill purposes doesn’t mean it is illicit (for example, just because some people buy drugs with gold doesn’t make gold illicit). So, you have a high bar to cross. You need to show that the gold (or in this case the bitcoin) is almost always used for illicit purposes (or, perhaps, is usually used for illicit purposes). Unless you have reputable studies that show that, your argument fails.

  • Zippy says:

    Roger Hammerstein:

    You are making a huge assumption here, i.e. that bitcoin is always, or even usually, used for negative vice-focused purposes.

    If bitcoin were only used to buy and sell legitimate goods and services that would not alter the argument in the slightest.

  • Mike T says:

    If the asset’s price is 99% liquidity premium then such volatility is what should be expected.

    I can give you give you a quick data point that can reasonably establish with high probability that the price is the result of tulip mania 2.0:

    When Long Island Iced Tea changed their name to Long Blockchain, their stock exploded. Because a company that makes tea is going to “pivot” into “exploring the blockchain.”

    WTF are they going to do, create a blockchain that enables accurate, realtime accounting for the price of tea in China?

  • Zippy says:

    Ignacy:

    If I sell you a seashell, I transfer possession of that actual seashell to you.

    If I use my private key and your public key to create a new entry in the distributed ledger, nothing whatsoever is transferred from my possession into your possession and no rights to any actual property possessed by me are transferred to you.

  • Zippy says:

    I suppose one counterargument is that bitcoin “transfer” is a kind of anti-realist financial performance art, and it is not illicit to charge for performance art understood generically.

    Which gets us back to pornography: performance art which by its nature propagates untruth and encourages vice.

  • TomD says:

    It’s also possible that the blockchain itself is entirely useless, too.

    If a bitcoin is “anything” it’s the right to make a new empty ledger entry of a specific “size” and that “right” is what is being transferred.

  • Zippy says:

    TomD:

    If a bitcoin is “anything” it’s the right to make a new empty ledger entry of a specific “size” and that “right” is what is being transferred.

    It isn’t really a “right” though. You can’t go to court to enforce it. If you lose the keys to your car you still own the car, but here there isn’t anything new to possess exclusively in the first place. More of a bragging right as opposed to an actual right: an empty ledger entry without even the referent content and substrate machine1 of a video game high score.

    I am really warming up to the description of bitcoin as a kind of (non-sexual) porn. Asking “what about shell money?” is like asking “what about Renaissance art?” when confronted with Hustler magazine.
    —-
    1. Again by design bitcoin does not attach to any specific hardware in which the “owner” recorded in the ledger entry retains any rights whatsoever.

  • TomD says:

    I guess it really comes down to – can something that is purely digital be a real thing?

    The video game analogy strikes at the heart of it – bitcoins are “items” in a large, multiplayer video game hosted by the players themselves. And the “right” isn’t a civil or moral right, it’s just “permission” granted by the rules of the game itself. Sometimes video game items sell for decent amounts of real currency – does a World of Warcraft sword have any reality that can underlie the transaction?

    What’s really interesting to me is that bitcoin wouldn’t have “exploded in price” if it was actually backed by US dollars – if the US government had said it would backstop bitcoins 1=1 by US currency, the price would have tended to stay quite close to a dollar. It’s only be being free of that backstop that it can swell so much.

  • Zippy says:

    The bitcoin video game is fully open source too: there is no IP involved. So “owning” a blockchain ledger entry is like “owning” a Minecraft building hosted on someone else’s volunteer hardware. Minus the building: a building pointer that points to no building.

    Relevant:

    https://zippycatholic.wordpress.com/2016/09/19/cryptocurrency-as-cuck-finance-or-promises-made-by-pokemon/

  • TomD says:

    Exactly – so the question is first do “cryptologically authenticated records of wasted computation” exist as a thing that can be property, and then second, do they have any intrinsic value whatsoever?

    It’s certainly clear that a bitcoin can’t be a security as it securitizes and refers to nothing, but neither does a lump of gold; it just exists.

    After all, superfund land exists, but has a highly negative value because if the intrinsic value of the pollution therein being negative. But some things that used to be pollutants are now valuable resources (and vice versa, perhaps). But at least we can be sure that the land exists.

  • Zippy says:

    When I used ARWC as a description I was thinking of the ‘coins’ that ‘miners’ produce for themselves. But even this language is deceptive, is merely an analogy. ‘Coins’ are not even discrete digital objects (like an ebook or mp3 file) possessed uniquely by an owner in storage on his own hardware or on cloud hardware he is entitled to use: they are just empty ledger entries in the open source peer-to-peer distributed database.

    The game itself makes no sense unless it crosses the barrier into reality: unless the pretend objects are used as real world currency. Someone might buy a Warcraft sword to improve what he can do inside the game, but there are no ‘interior to the game’ purposes with bitcoin. Its whole purpose is to act as a currency ‘outside the game’.

    So the intrinsic commitment to selling unreality with bitcoin (and other cryptocurrencies) is unique, as far as I can tell. Even selling Warcraft swords has a point to it other than financial anti-realism. But with bitcoin the entire extrinsic and intrinsic point is financial anti-realism.

  • Different T says:

    @ ignacy

    Thoughts on this?:

    (i think bitcoins are just the latest attempt to escape the liberalism singularity by means of a double down martingale strategy instead of a cooked up unprincipled exception )

  • Paul J Cella says:

    Amazon is said to be looking at some kind cryptocurrency for its Prime subscribers. Ten views of Bosch or Sneaky Pete produces one Primecoin (or whatever), which over time can be aggregated to make purchases, quite apart from your credit or debit cards. Different than bitcoin? Maybe.

    Perhaps that would just be a form of equity or claim against Amazon’s asset structure.

    Crytocurrency, a neologism of what? — ten years vintage? I’m disinclined to condemn all of it until the facts sort themselves out.

    But I can appreciate the argument about how bitcoin’s track back to nothing, to no claim at all on anything in particular, makes it inherently disreputable.

  • Zippy says:

    Paul:

    Electronic gift cards / vouchers / coupons / points / etc backed by the balance sheet of an institution are an entirely different (and generically unproblematic) thing.

  • TomD says:

    Anything that produces stuff like this is probably not healthy.

  • TomD says:

    That brings up an interesting question. There seems to be nothing stopping me (or someone) from deciding to backstop bitcoin. If I were to formally swear (in front of a judge or whatever) the following:

    “I hereby backstop the cryptocurrency commonly known as bitcoin on the major blockchain by majority of proof of work at the following value – $1 per million bitcoins, with the understanding that the blockchain shall not have more than 21 million bitcoins, and if there are more, only the first 21 million shall be redeemable, as underwritten by the $21 on deposit with my local bank, further backed by 21 copies of Usury in mint condition, whichever is chosen. No amount smaller than 10,000 bitcoins shall be redeemable due to limitations of US currency.”

    If that would *fundamentally* change the nature of bitcoin, it seems it could be worthwhile to do *just* to make it a bit less real – but perhaps that is the Jesuit line of thinking.

  • Zippy says:

    TomD:

    Assuming I understand the proposal, you (for various values of “you”) still wouldn’t be an institution issuing bitcoin as a security. You’d just be a third party market actor making an offer to purchase bitcoin at a set price, and traders in the marketplace (which you don’t own) would be free to ignore you.

  • Karl says:

    God Bless you, Zippy. Hope you have a peaceful and happy Christmas.

    Karl

  • TomD says:

    In fact I’d be usurping that authority, claiming to be sovereign when I was not.

    So bitcoin is to currency what liberalism is to government – the complete denial of authority.

  • BB says:

    It’s not yet clear to me why value cannot be created by custom. In other cases, it isn’t problematic to say the custom creates something: e.g. the meanings of words are generally determined by custom and some laws are also determined by custom. Likewise manners are determined by custom. For example, there is nothing about the sounds in the word “man” that necessitate or even suggest a relation to human nature in themselves. Similarly, offering to shake someone’s hand doesn’t in itself imply either friendship or enmity. And I don’t think any of us want to say that the determination of the meanings of words or the implications of manners are in every case symptoms of a modern addiction to the unreal.

    Do we have any reasons to think that value is any different? Why not say that the value of a right to a space on an empty ledger can be determined by custom? To be sure, that space probably has no intrinsic value, as Zippy points out. But then again, the sounds in the “word” man have no intrinsic meaning, and that doesn’t prevent us from assigning a meaning to those sounds.

    To be sure, the volatility of the bitcoin market suggests that even if this analysis is correct, we’re not yet dealing with a fully fledged custom at this point. And this alone might count as a reason against selling bitcoin (at least at the market price). Similarly, before the meaning of the word “man” was sufficiently settled by a linguistic community, one would have to at the very least be extra careful when drawing up contracts employing the term “man.”

    Moreover, hopefully everyone agrees that the temptations of greed among the parties of a bitcoin transaction ought to be seriously considered. Even so, if it is possible to make the valueless valuable by custom, a consideration of the greed of other’s might only be a prudential one (albeit a very serious prudential consideration).

    So I return to my original question: is there a good reason to think that what happens in the case of words can’t also happen in the determination of value? Why say one can be created by custom but not the other?

  • Zippy says:

    BB:

    I’d summarize the argument as follows:

    First, assume that nominalism is the case: more generally, assume that meaning is reducible to arbitrary convention constructed purely out of human choice. In a world where meaning is reducible to nothing but arbitrary convention there doesn’t seem to be any objection to also reducing financial value to nothing but arbitrary convention.

    More generally still: first assume metaphysical anti-realism. It follows (by begging the question) that there is nothing wrong with financial anti-realism.

  • TomD says:

    Language is just a representation of the Eternal Word, and He has inherent Meaning. (This is the strongest argument against lying, btw.)

  • BB

    I believe that your analogy fails because you are mixing the standard with the signifier. The sound “man” is the sign of the word or concept grounded in the essence qua known by an intellect. Analogously, price is the sign of the value of a thing grounded in its desirability qua man’s needs.

    The price of bitcoins is a measure of the desire or need of men. The price goes up or down because men desire it more or less. However, this may actually be disconnected from the objective reality of a thing’s value to men. Just as a man may make any sounds whatsoever at least in so far as they are disconnected from a nature known by the intellect, they are just gibberish.

    Custom can no more create value then words can create natures. Custom creates sign-structures which judged against a standard of reality may be more or less wrong or evil. Custom may establish a particular rock as possessing magic powers via superstition and it consequently has a high price, i.e. is highly desired. Yet this is disconnected from reality and so its price is unjust.

  • ignacy says:

    Different T,

    (i think bitcoins are just the latest attempt to escape the liberalism singularity by means of a double down martingale strategy instead of a cooked up unprincipled exception )

    I believe we need to understand first what bitcoin is, then go on to discussing its political implications.

    Zippy,

    ‘Coins’ are not even discrete digital objects (like an ebook or mp3 file) possessed uniquely by an owner in storage on his own hardware or on cloud hardware he is entitled to use: they are just empty ledger entries in the open source peer-to-peer distributed database.

    ebooks or mp3 files are not discrete digital objects (unless you mean desktop icons:-) ), these are just sequences of bits stored on hardware. In fact, they are much less ‘property’ on their own than coins, since I can put the same sequence on my hardware without stripping you of your mp3. In fact, it probably isn’t true that software in the general sense of how to structure bits (or things) can be separated from the subjects.

    The above does not hold for coins, since if I have your private keys (or copy of these), I can deprive you of your coins.

    If I use my private key and your public key to create a new entry in the distributed ledger, nothing whatsoever is transferred from my possession into your possession and no rights to any actual property possessed by me are transferred to you.

    What is transferred is a digital commodity, a very real power of changing the set of UTXOs in the network, UTXOs which have usage beyond being marketable.

    I believe that I can add to your argument from the OP: martial act has inherent value from procreation and porn inherently (qua porn) presents sexual intercourse as purely for pleasure. You believe that analogously, Bitcoin perversely represents value as pure “supply and demand” (or pure profit, perhaps best financial analogy of pleasure) and that’s why it is inherently anti-realistic. If this description of Bitcoin was right, then your judgement would seem to be correct to me.

    But I think I was able to establish that this is not the case and bitcoins 1) has intrinsic value as elements of a timestamping vehicle, 2) are digital commodities, assets that are scarce (unlike ebooks or mp3s) and hence a real, albeit digital object separable from the owner. These two points establish enough link to real world to fend off the accusations of anti-realism.

  • Zippy says:

    ignacy:

    In fact, it probably isn’t true that software in the general sense of how to structure bits (or things) can be separated from the subjects.

    Human beings who can reliably memorize a several megabyte pseudorandom binary file are few and far between.

    But I think you are right to intuit that we are proceeding from radically different conceptions of property. In particular you appear to have assumed (I only say appear: I have no idea what you have or have not consciously or unconsciously assumed) that anything which can be construed as an object separate from the subject can be property. Therefore the key, in your approach, is to argue that bitcoins exist. If they exist in any sense they can be property (in this view), and the rest follows — pay no attention to their pornographically anti-realist content and intrinsic purpose.

    But that simply isn’t the case. We often use the word “property” to refer to the object(s) in an authority relation; however, understood more fully, property is a relation between authority, subjects, and objects.

    To own a piece of property is to have and exercise legitimate authority over subjects with respect to that particular property.

    Ledgers are used to record transactions in property relations. I don’t own the ledger entries that say what stocks, bank deposits, etc I own: I own the stocks, deposits, etc themselves. The ledgers are owned by transfer agents, banks, companies, etc — the dreaded “trusted third parties” which bitcoin explicitly attempts to eliminate.

    Bitcoin is designed and structured to look and behave like a ledger while leaving out the actual authority over actual property which a ledger typically records. It was designed that way on purpose: as TomD said above, it attempts to make an electronically transferrable currency absent of any authority. This is the entire point of eliminating the ‘trusted third party’ — the authority which records and certifies the actual transfer of (authority over) actual property.

    If you really do own a shell (whether used as ‘shell money’ or not), you have authority over an alienable object: the shell.

    If you own intellectual property you own a security: usage rights granted under the authority of the sovereign (whatever we may conclude about the scope and moral limits of those usage rights).

    If you ‘own’ a bitcoin you own nothing at all. This ‘ownership’ confers no authority. To ‘own’ a bitcoin is to know a secret cryptographic key – a string of data – which enables you to inexpensively (for values of “inexpensive”) create new empty ledger entries in a public ledger, in a video game with no internal structure and no point to it other than to simulate authority without authority, running on hardware you do not own and to which you have no legal rights whatsoever. The secret key itself isn’t the bitcoin though, as evidenced by the fact that you can (and indeed must) produce and know the secret key before producing any ledger entries.

    The bitcoin itself is the empty ledger entry, designed to look and behave similarly to ledger entries on an authoritative ledger while absent of all authority. Kind of like the pornographic centerfold designed to give an experience similar to an actual woman without the presence of any actual woman. It is a perversion and an expression of anti-realism, intrinsically.

  • Mike T says:

    n fact, they are much less ‘property’ on their own than coins, since I can put the same sequence on my hardware without stripping you of your mp3

    And that has no bearing on property rights or the nature of private property. If replicators were invented tomorrow and anyone with the raw materials could replicate a Ferrari, the average cost of a Ferrari would plummet about to that of a new Honda Civic today. It would also have no bearing on the property rights of individual Ferrari owners.

  • How does Bitcoin leave a false impression of reality. You make the argument but don’t give us the follow-through.

    Also, how do to distinguish Bitcoin from blockchain technology as well as the value of electricity & hardware to complete the computations?

  • T. Morris says:

    How does Bitcoin leave a false impression of reality. You make the argument but don’t give us the follow-through.

    Although I’m trying to learn, Bitcoin is WAY outside my area of expertise. Congress should, nevertheless and herein after, make sure I have the option to invest a certain proportion of my taxes (normally devoted to social security payments) to investment in Bitcoin, … AND/OR the stock market.

    Speculation may not be ‘my bag,’ but it serves the grander purpose, I presume.

  • Andrew E. says:

    Also, how do to distinguish Bitcoin from blockchain technology as well as the value of electricity & hardware to complete the computations?

    Distributed blockchains are extremely inefficient, by design, so how to incentivize the massive computing power needed to run them? By paying them in regular currency? Then it’s not decentralized anymore. By paying them in cryptocurrency? Then distributed blockchain cannot be distinguished from cryptos. How to make cryptos worth something so that ‘miners’ will accept them in exchange for costs of mining? Crypto ponzi bubbles?

  • TomD says:

    The way it’s anti-realist is simple – if bitcoins lead people to think they are a currency, and they inherently cannot be a currency, then they are anti-realist, a lie, a pig-in-a-poke.

    And if a currency needs an authority to exist, and bitcoin attempts to use blockchain to “be” that authority, then it lies again, for authority can only rest in persons, (whether physical, moral, or juridical – basically humans, divine, or human or divine institutions) not in “code” or “laws”.

    Even recourse to the Magisterium or Canon Law, in the end, is recourse to the juridic person of the Church Herself, guided by the popes, and rooted in the Lawgiver Himself.

    I find it interesting that the main “bitcoin” doesn’t even have the expected “benevolent dictator” that Linux has in Linus, for example. Satoshi (price be upon him) is merely a dream now.

  • It seems the authority in bitcoin rests in the community of persons using bitcoin, rationed by processing power committed toward the activity. That’s why when someone has 50% +1 of the processing, they gain complete control, something that persons involved in bitcoin fear.

    Authority as exercised by members of the organization is a democratic type of authority, something that is recognized as a real source of authority, even if not ideal for many institutions.

  • Zippy says:

    And again, material control is not at all the same thing as authority. If I steal your car I gain material control of it, but I do not acquire the authority of ownership with respect to the car. A mob producing and trading pornography does not morally legitimize pornography, whatever one may think of appeals to democracy as authority.

    The entire bitcoin paradigm is intrinsically anti-realist with respect to ownership, which is not mere possession or control but is a kind of authority — specifically a kind of authority over subjects with respect to particular objects.

    It is also anti-realist with respect to property, inasmuch as it treats (empty) ledger entries which would ordinarily record property transactions as if those empty ledger entries were themselves property the rights to which are exchanged.

    The entire enterprise is based on a gross and perverse misunderstanding of the nature of property, currencies, and authority: an understanding which fundamentally sets itself against reality. Much as the entire enterprise of pornography is based on a gross and perverse misunderstanding of the nature of sex: an understanding which fundamentally sets itself against reality.

  • The ledger contains information on only half the transaction. I record an entry into the ledger -100 btc me and +100 btc you, something seen in the ledger, but unseen is the transfer of some property or service (unless the action was a gift). That 100 btc can later be exchanged for goods or services, given that there is a party willing to exchange using bitcoin. This effectively works in the same manner as when I use a debit card or a check to transfer USD from me to you except the ledger is open instead of closed. The difference is merely in the source of BTC vs. USD. BTC is a democratic activity based on participation in the bitcoin network, USD is based on the authority of the United States government.

  • Zippy says:

    thinkingaboutideas:

    There is obviously no authority, democratic or otherwise, associated with btc. Theft is indistinguishable from legitimate transfer — again by design.

    The ledger is public and records “ownership” (though really just “possession” since again by design there is no authority) of a btc. And what is this btc, the possession of which the ledger records?

    Nothing whatsoever.

    This effectively works in the same manner as when I use a debit card or a check to transfer USD from me to you except the ledger is open instead of closed.

    This explanation demonstrates my point rather than undermining it. It shows that you don’t grasp what fiat dollars are (and what property they attach to, and the manner in which they attach to it). It shows that you don’t understand bank deposits (and what property they attach to, etc). And it shows that you don’t grasp what actually happens in an electronic transfer of money (transfer of title to bank deposits, recorded in a ledger whether public or private).

  • >you don’t grasp what fiat dollars are…you don’t understand bank deposits…you don’t grasp what actually happens in an electronic transfer of money

    Let’s ignore my masters in economics and my time working with account transfers in the US. You tell me what you think they are.

    >There is obviously no authority, democratic or otherwise, associated with btc. Theft is indistinguishable from legitimate transfer — again by design.
    >
    >The ledger is public and records “ownership” (though really just “possession” since again by design there is no authority) of a btc. And what is this btc, the possession of which the ledger records?

    These aren’t illustrated any differently at my local bank when I make a deposit or spend money from my account into someone else’s. They look the same as a fraud event. Bitcoin has the disadvantage that these transactions are difficult to reverse but both would be shown as illegitimate, not in the respective ledgers, but by a police report and follow-up rulings in a court of law. This is as true for theft using bitcoin as it is with theft using US checking accounts.

  • Zippy says:

    Let’s ignore my masters in economics and my time working with account transfers in the US. You tell me what you think they are.

    Those activities have apparently (and unsurprisingly) left you understanding-impaired. Feel free to peruse my sidebar permaposts. Don’t miss the comment threads.

  • Right. So you have no idea. Disappointment. “Look elsewhere from our discussion. I’m not going to risk a wrong answer.”

  • Zippy says:

    I have all sorts of posts on fiat currency, bank deposits, etc. Dig in.

  • I’ve read through your site before. You don’t answer my question in your writings.

  • Zippy says:

    thinkingaboutideas:
    You didn’t ask a question. You presented an explanation ( https://zippycatholic.wordpress.com/2017/12/20/selling-infected-glass-beads-to-indians/#comment-47733 ) which exhibited anti-realist ignorance about the nature of fiat currency, bank deposits, and electronic funds transfer.

  • Clark says:

    Bitcoins let you transact on the bitcoin network. Yes, transactions consist in making new empty ledger entries typically in exchange for real goods, but a bitcoin is a ticket to engaging in that action–it grants the right to make transactions, which is not nothing. Does that ticket contain any intrinsic value?

    Someone can trade all their wealth for bitcoin, memorize twelve words, and escape a war. They can literally lose every physical item they possess and recapture their wealth once they leave the war zone. Doesn’t being able to transact on the network that supports that have some intrinsic value?

  • Zippy says:

    Clark:

    There is a difference between a security – a moral authority or entitlement rooted in real property – and actual property. Tickets are the former. Gold is the latter. Bitcoin is neither.

    A ticket (to a theater performance, etc) is a security which entitles the bearer to a performance — to an experience rooted in actual property.

    A bitcoin entitles nobody to anything whatsoever. At the same time it is literally nothing in itself: the ledger entry is a public recording of title to nothing whatsoever.

  • Clark says:

    A cryptographic key does entitle you to create new entries on the blockchain in the same way a theater ticket entitles you to see a performance. Both are dependent on the cooperation of others–miners and actors–and both have a high subjective multiplier. You cannot create new unspent output without a key and you cannot see the show without the ticket.

    I’m not seeing the distinction between a bitcoin and a theater ticket. Creating a new entry on the blockchain is an actual, tangible, thing that you have the right to do on account of your access to a specific key.

  • Zippy says:

    Clark:

    I’m not seeing the distinction between a bitcoin and a theater ticket.

    Clearly. Like some other commenters you fail to distinguish between a (material) capacity to do X and the (moral) authority to require the cooperation of others in doing Y. This isn’t surprising, because modern people operate under the equivocal pretense of disbelief in authority, as we’ve discussed here numerous times.

  • TomD says:

    I sometimes feel you’d have a hard time getting people to agree that digital child pornography has zero or negative intrinsic value.

  • Clark says:

    So the difference is that the actors are morally obligated to perform on account of the contract implied by the ticket, whereas bitcoin miners are not? That the ticket represents authority that a crypto key is missing?

    Given that miners actually do (for the time being) update the blockchain and the “bitcoin” lets you affect that, the “bitcoin” is still really permitting you access to a tangible thing that other people care about. That is not nothing. That is not wholly without intrinsic value even if it’s different in kind from a performance ticket.

    The crypto key is letting you participate in a community in a tangible way even though the members of the community aren’t obligated to care.

  • Clark says:

    The ledger entries on the blockchain have properties that gold doesn’t: they can prove a transaction (or interaction, since nothing is actually “transacted” I suppose) occurred in a way that cannot be deleted or obscured and that can be verified by anyone. It’s public and secure and disruption reistant, and that’s a new kind of thing that has never before existed, and people value using this network to record their interactions. It’s not the individual ledger entries themselves that matter here–it’s the links between the blocks that are essential to what bitcoin is. It’s not digital fool’s gold–it’s digital contracts for fool’s gold.

  • Zippy says:

    Clark:

    … and that can be verified by anyone.

    Even that isn’t true. Bitcoin interactions are anonymous by design. The peer to peer open source video game conventionally called bitcoin is a mimicry of contract, authority, and property without the actuality of any of them.

  • Zippy says:

    TomD:

    Modern people resist the very concept of intrinsic value, because they see man and his will/desires as the totalizing measure of all things. Concretely in economics, something is property as long as some group of human beings treats “it” as property and something has value as long as anybody is willing to pay for “it”. Metaphysical anti-realism, in the domain of economics.

    Bitcoin is a useful test case, in that sense, for determining who has perverted anti-realist views about property, authority, and economics.

  • ignacy says:

    TomD,

    And that has no bearing on property rights or the nature of private property. If replicators were invented tomorrow and anyone with the raw materials could replicate a Ferrari, the average cost of a Ferrari would plummet about to that of a new Honda Civic today. It would also have no bearing on the property rights of individual Ferrari owners.

    Yes, and copying mp3’s on my hard drive has no bearing on your hardware. However, this may or may not be an infringement of copyrights. And only these copyrights can be property, not mp3 files, because mp3 files aren’t objects.

    Zippy,

    But I think you are right to intuit that we are proceeding from radically different conceptions of property. In particular you appear to have assumed (I only say appear: I have no idea what you have or have not consciously or unconsciously assumed) that anything which can be construed as an object separate from the subject can be property.

    I believe that your conception of property is correct. I do not claim that anything which can be construed as an object separate from the subject can be property. I showed that bitcoins are object as necessary (but insufficient on its own) prerequisite to be treated as property.

    There is obviously no authority, democratic or otherwise, associated with btc. Theft is indistinguishable from legitimate transfer — again by design.

    This is true inasmuch that cracking into a server is indistinguishable from legitimate authentication or obtaining administrative privileges.

    Yet, people have no difficulty in distinguishing between malicious privilege escalation and administrative rights (while code “cannot” make such distinction). Similarly, we successfully refer to thefts of coins. Competent authority can order to e.g. return stolen coins with full moral force. While it is (relatively) more difficult to enforce than e.g. returning a car is not relevant.

    I agree, though, that there was intent to make Bitcoin anti-authority, anti-property, etc just as you describe it. My thesis is that these efforts failed and what we now have is a very interesting digital commodity.

    Bitcoin is a useful test case, in that sense, for determining who has perverted anti-realist views about property, authority, and economics.

    Honestly, I hope not. In fact, the slander like this is the most convincing argument you made so far against Bitcoin. I mean, your writings convinced me of many things, including the nature of usury, liberalism, and also property and authority. I don’t agree with your arguments against bitcoin, but you personally arguing against it (the argument from your authority) is the single one which really makes me doubt my conclusions.

  • Zippy says:

    ignacy:

    … mp3 files aren’t objects.

    They are though. Like a CD or vinyl record, or a book for that matter, an mp3 file is information recorded on a particular substrate object which can – the combined information and substrate object – be owned. The fact that the information is easily duplicated doesn’t make this ontologically not the case, nor does it impair the owner’s moral and physical capacity to use the property as intended. I believe this was Mike T’s point.

    A ‘bitcoin’ is not information recorded on a particular substrate object which can be owned; and it is not intellectual property. Even if one argues that the private key is property, as I pointed out upthread the private key mustn’t be conflated with the bitcoin itself: ‘transfer’ of bitcoin isn’t a transfer or even a copying of the private key. You have to create and possess the private key before you can even interact with the blockchain at all.

  • Zippy says:

    ignacy:

    … but you personally arguing against it (the argument from your authority) is the single one which really makes me doubt my conclusions.

    FWIW I think many people simply don’t understand the actual nature of what we call bitcoin, qua technology. So from my point of view I see both as sources of error: misunderstanding of what the blockchain actually is and how it works, and metaphysical anti-realism.

  • Zippy says:

    I should amend:

    So from my point of view I see both as sources of error: misunderstanding of what the blockchain actually is and how it works, and metaphysical anti-realism.

    There is also a kind of handwaving obscurity: bitcoin (it is thought) is a ‘digital asset’ like mp3 files etc; those exist at least in a sense which makes it possible for them to be property (either actual or intellectual); therefore bitcoin can be property, nash equilibria and liquidity multipliers, yadda yadda yadda.

    But intellectual property (like securities generally) consists of (moral, authority-based) property rights in some configuration or other backed by the balance sheet and authority of some institution. Bitcoin by design and by its intrinsic nature confers no rights backed by any legitimate institution, authority, or balance sheet. Its entire point is to cut out the middle man of authority. So bitcoin cannot be intellectual property.

    Actual property consists minimally in the ownership of some substrate physical property, however easy or difficult it may be to make copies of any information on or configuration of that substrate. Bitcoins themselves do not consist in the ownership of any actual property whatsoever, even if we stipulate ‘ownership’ of the private key on a local hard drive, since the ‘coin’ is not the private key and indeed the ‘owner’ of the private key must create and possess a private key before he can even play the game.

    So btc is actually uniquely anti-realist in the domain of finance. I’ve criticized gold and its conflation with sovereign currencies, and that conflation is indeed an error based in anti-realism.

    But merely selling gold at all is not intrinsically anti-realist. Selling a ‘coin’ on the blockchain is intrinsically anti-realist, because what is sold is quite literally no thing at all.

  • TomD says:

    There’s a “crypto currency” called XRP released by the Ripple company or something that might actually be more real than Bitcoin – an identifiable central authority exists (the company that premined all the coins).

    And so of course the crypto community hates it as being a fake, a fraud, centralized. But it’s bubbling now so people are “investing” in it.

  • Zippy says:

    TomD:

    Yes, it seems that a number of the ‘altcoins’ are actually a kind of coupon backed by an issuing company.

    But bitcoin is not even a coupon.

  • Clark says:

    ” because what is sold is quite literally no thing at all.”

    What is sold is the ability to interact with the blockchain in ways that other people care about. That ability has actual value.

    Yes, much of the talk surrounding bitcoin contains misunderstandings about the nature of fiat currency and the like, but at the end of the day the private keys let you interact with the blockchain, and that’s a real, tangible thing you can do that has nonzero intrinsic value.

  • Zippy says:

    Clark:

    What is sold is the ability to interact with the blockchain in ways that other people care about. That ability has actual value.

    This (again) is a fundamental, subjectivist, anti-realist error.

    Actual value doesn’t arise from nothing but human will or opinion — from the fact that (some) human beings think so or assert so.

    Some people value child pornography, but that doesn’t make child pornography actually valuable. Some people value arson and mayhem, but it doesn’t follow that arson and vandalism create economic value.

    In order to be actually valuable it is not enough that (some) human beings think or assert that a thing, power, or piece of performance art is valuable. The “some people think X is valuable” criteria is insufficient, and the fact that folks keep retreating to it is demonstrative of an underlying metaphysical error.

  • Clark says:

    So interaction with the blockchain cannot have any actual value? A transaction recorded therein has properties that objectively make the recording useful to people. It’s not valued simply because others value it. People value it for its unique useful properties that cannot be found in other systems that record interactions between people.

  • Zippy says:

    Clark:

    A transaction recorded therein has properties that objectively make the recording useful to people.

    No they don’t. Some people are deluded by the illusion that they do, but shared delusion about economic value doesn’t conjure actual economic value out of nothing.

  • Clark says:

    The recording cannot be erased or falsified and can be verified to have occurred by the other party while remaining anonymous to everyone else. Also, it’s impossible to deprive you of the ability to make recordings by limiting you physically in any way. Why is access to a network with these properties without value?

  • Zippy says:

    Clark:

    “Owning” a bitcoin (the nothing-at-all referred to in the ledger entry) doesn’t entitle you to anything at all. I keep pointing this out, and reframing to ignore the very points at issue doesn’t make them go away.

  • Clark says:

    Having access to bitcoins gives you the ability to use the blockchain network. Is it only of intrinsic value if it’s an entitlement? Is the issue that you can’t morally compel anyone to include your transaction in a block they commit? Or that the only thing you can do with unspent outputs is create more transactions?

  • Zippy says:

    Clark:

    Is it only of intrinsic value if it’s an entitlement?

    For all values of “it”, it is property only if the owner has (moral) authority over subjects (non owners) with respect to “it”.

  • TomD says:

    Fun fact – any amount of buttcoins would let you “record on the blockchain”, which would thereby even if granted intrinsic value all coins would be worth the same, no matter how big or how small.

  • KevinD says:

    TomD:

    If assuming “record on the blockchain” gives 100 bitcoins a value of 1, and I then give those 100 bitcoins to a hundred other people, the same “amount” suddenly has a value of 100 instead of 1. Repeat indefinitely for infinite value.

    Sounds like magic money to me.

  • Rhetocrates says:

    Fun fact – any amount of buttcoins would let you “record on the blockchain”, which would thereby even if granted intrinsic value all coins would be worth the same, no matter how big or how small.

    No it wouldn’t. ‘Ownership’ of bitcoins has nothing to do with ‘ability to access and use the functions of a blockchain network’. I don’t ‘own’ any bitcoins and I could go do that right now.

    That’s what Zippy’s trying to get at.

  • Step2 says:

    Happy New Year Zippy. As part of my resolution I’m changing my screen name to Step2Blockchain so that I can be a broker for Ponzicoin. (h/t to Matt O’Brien’s twitter)

  • Clark says:

    “I don’t ‘own’ any bitcoins and I could go do that right now.”

    Not without paying fiat dollars to do so, though. “Owning” bitcoins lets you use the bitcoin network without a fee (you only pay in BTC which have no value outside the network but acts as a sort of count of the number of interactions with it you can initiate.)

    I agree 100% with all the arguments re: lack of intrinsic value of BTC, but I suppose I am not convinced you can’t bootstrap from nothing to something if viewed as a service. It’s likely that this line of reasoning ends in a dead end though.

    So what does “using the bitcoin network” mean? There are non-economic uses, but those are likely at worst only as illicit as video games or gambling (Satoshi Dice) and at best totally unobjectionable (timestamping, proving you have access to a number of BTC for some purpose, etc.) But they are there and may have objective value and having private keys lets you access them.

    Then there is the main use: records of economic exchange. Abbot Bob, fleeing Henry VIII’s stormtroopers, trades the monastery’s assets for a private key which lets him prove he has access to 100 BTC. He then memorizes the key (easy for a monk) and his assets are secure. When he gets to safety, he trades the key for his possessions back. The key is property that has a nonzero intrinsic value because it allows access to the network. (Or maybe I am just wildly misunderstanding what intrinsic value means, or property, or both.)

    Thanks for this discussion. I am honestly trying to understand the argument and I haven’t closed the gap yet from “BTC have no value” to “therefore access to the bitcoin network has no value.” It seems that the bitcoin network is a service and services have value.

  • Zippy says:

    Happy New Year Step2Blockchain.

    Clark:

    I suppose I am not convinced you can’t bootstrap from nothing to something if viewed as a service.

    My own best counter against my own arguments is to first concede that a bitcoin is indeed not property, and neither mining nor transactions produce any actual property. Rather, mining and transactions are a kind of performance art: a buyer exchanges real property for a public ‘performance’, that is, the creation of a new contentless entry in the public ledger. You aren’t paying for a ‘coin’, you are paying for a ‘transaction’ – a transaction in which you receive no property after the transaction, just a public performance.

    Note that every btc transaction (other than ‘gifts’ of btc I suppose) involves the exchange of actual property for an empty ledger entry.

    But if the transaction is a kind of performance it is a pornographic performance, not in the sexual sense but in the sense that the very nature of the particular performance – btc transactions trading actual property for empty ledger entries – intrinsically promotes avarice and a false, anti-realist picture of reality.

    Another way to think about btc (again in particular, not blockchain tech more generally) is that it represents an attempt to produce an electronic simulacrum of a bearer security. Electronic transactions cannot be ‘bearer’ in a strict sense — well, unless they involved the literal physical passing of a USB key or CD or something, in which case the transaction itself isn’t really electronic. But making electronic transactions simultaneously publicly verifiable, untraceable, and anonymous using a peer to peer open source cryptographic ledger comes close, functionally speaking, to how bearer securities work. (That’s why crooks like them so much: for the same reason crooks like dealing in cash, which is a bearer security.)

    The problem of course is that the ledger entries are not actual securities at all: they confer no rights whatsoever rooted in any actual property whatsoever upon anyone at all.

    Abbot Bob, fleeing Henry VIII’s stormtroopers, trades the monastery’s assets …

    To whom? A local who is remaining in the country?

    If so then that local just traded literally no entitlement whatsoever, no actual property or title to any property whatsoever, in exchange for actually valuable property. That the monk may or may not be physically able to later perform a similar ‘trade’ (in the sense of being physically able to do a piece of public performance art if and only if the open source peer to peer game happens to still be running after he makes his escape) — ‘trade’ this to some ‘greater fool’ upon leaving the country, does not turn the nothing he received into something.

    … for a private key …

    The private key isn’t the bitcoin. Abbot Bob must already possess a public/private key pair to participate in the game at all. The bitcoin is a ledger entry in the public, open source, peer to peer ledger — a ledger entry which entitles nobody to anything at all.

  • Wood says:

    I think one of the confusions surrounding bitcoin – and I know this becasue it was how I viewed bitcoin initially – is thinking of “it” in terms of a company, stock, etc. I had initially thought when one purchased a bitcoin, what one was purchasing was stock of sorts in Bitcoin Corp. But there is no “Bitcoin Corp.”. It’s interesting how many people talk about “investing in bitcoin” like it’s the same as “investing in WalMart.” I know that is blindingly obvious to most here, but understanding that helped the less financially savvy like myself. (Who comment on these financial posts with great trepidation!)

  • TomD says:

    If bitcoin “investing” is anything it’s like forex investing; but forex investing is not based on thinking a country will do well or badly. You might buy Walmart stock because you think the company is run well, you might sell it short because you think it’s dumb; but a country could be doing wonderfully well and it’s currency still drop relative to another’s; in fact, often they’re connected.

    The fact that bitcoin transactions do not transfer the private key but instead involve a cryptographically (to be fair, wonderful) intricate baton-passing is perhaps the biggest misconception. It’s true that if you give me your private key, I can transfer your ‘coins’ – but so can you, if you retained a copy; it becomes a race to see who transfers first.

    A quite simple but remarkably accurate portrait of bitcoin is taken via this route: assume a fiat currency. Remove the government monopoly on printing – but now anyone could make it. Using cryptography and wasted computing power, make it hard to print new fiat, and impossible to duplicate. Bam – crypto”currency”, or pure fiat, a “let it be” without a Speaker.

  • Zippy says:

    “Fiat currency” is actually a derogatory and deceptive name, since sovereign currency is a security rooted in the sovereign balance sheet. It is kind of like calling a company’s capital stock “fiat stock”, or calling bank deposits “fiat deposits”. The name itself misapprehends what it purports to designate.

    Bitcoins on the other hand truly are ‘fiat currency’ — non-things referenced by a ledger of empty entries, treated as if they were tradable securities even though they represent title to / ownership of nothing whatsoever.

  • TomD says:

    Fiat currency implies that other currencies are somehow more “real” – usually used by gold buggers and other similar groups.

    I do find it interesting that the term they use is the term of Our Lady; the term that can be said to have begun our very salvation. Appropriate, as those who commonly use “fiat currency” as a term are looking to economics for salvation, in one way or another.

  • Zippy says:

    Hah! Yeah I don’t think “faithful currency” is what the term typically means.

  • Hrodgar says:

    “Faithful” isn’t even what it means when used by the Blessed Virgin. Fiat is “may it be done” or “let it be done,” as in “Fiat mihi secundum verbum tuum,” or “May it be done unto me according the word of yours.” I’m a bit rough on the endings, but faithful would be fidelis or fidelium or something like that, depending on context.

    Faith does look fairly similar to fiat, but, at least according to etymonline.com, that we get faith via the French feid, a corruption of the Latin fides. I suppose it’s possible that fides and the verb with the root fi- have a shared origin – I can kind of see how a verb for making or becoming might get extended a bit and wind up meaning faith, or possibly the reverse- but I don’t know of any evidence it’s not just one of those fortuitous linguistic coincidences that pop up every now and then.

  • Mr. Green says:

    There are many suggestive lines of thought here, but I don’t think any are cogent enough to constitute an actual demonstration one way or the other. To get that far, we’d need clear definitions of what Bitcoin is, what effects it has, and was intended to have, what principles are relevant, etc.

    Democracy may not always be right, but sometimes it is. If we get together to play a game of Monopoly, our little group is democratically run — the rules are just what we collectively agree to, and those rules carry authority only insofar as we agree to be subject to them. If we decide to put money on the “Free” Parking space, neither the king nor the CEO of Parker Bros. nor anyone else can order us to do otherwise. And I would agree with characterising Bitcoin as a (rather boring) computer-game. Now games like Monopoly or Bitcoin are not wrong in themselves (even if they are an avenue for some immoral behaviour)… but isn’t that precisely because, as games, they are divorced from reality?

    Note that the issue is not that games are “anti-realist”. Man cannot create ex nihilo, but he does possess the image and likeness of the Creator, and can truly be said to create in his own way. (Interestingly, it might be the case that man can create only in a democratic fashion — that is, only with the co-operation of others. Obviously this applies to pro-creation, but whether inventing a language or inventing Monopoly, it is necessary for other people to play along; even if you play a game “by yourself”, you do so by acting out multiple players. Well, perhaps solitaire is a counter-example, I’ll have to think about that more. Cf. also Wittgenstein on private languages.)

    So while we must not ignore or “override” the value that created objects have in themselves, we can add value to them, or value them in arbitrary or conventional ways. If convention had no true meaning or value, then winning would be the same as losing. (Now that’s anti-realism!) If you’re losing the game, I can offer you $100 in Monopoly money to make me a sandwich, and it would not be immoral to propose or accept the deal. BB is right that we do this with language. The value of a baseball card or meaning of a sound in English is real even though it is in a sense made-up. (Again, because there must be a community in these cases, there is an objective aspect in that the rest of the community and its members are distinct from any one person’s own subjective state.)

    Nor would it seem to be a problem if our Monopoly sandwich-sale caught on amongst our circle of friends, and evolved into a mini-Monopoly economy — people who win money in the game can trade it to other players to pay them for bringing snacks, and so on. We could use Monopoly money in our poker games, too, instead of real—er, government-issued money. Of course, just as he has no authority to set the rules, neither does the king have the authority to, say, arrest someone for cheating at Monopoly. That does not mean there is no authority at all, though: there is the morally-binding authority of honesty, of keeping promises, that applies to everyone who has agreed to play the game. (Ultimately, that obligation traces back to the moral authority of God — perhaps parallel to showing that morality is impossible without God, there is an argument to be made that one could not play Monopoly without God.)

    Anyway, there are a lot of details to be worked out. It may be that using Bitcoin is imprudent to the extent that it should never be used in practice. It may be too complicated or too misleading or too potentially flawed to be relied on for honest financial transactions, or it may unavoidably imply a tacit approval of authority when there is only democratic consensus, etc.
    But there could nevertheless be acceptable limited uses (e.g. within a circle of close friends, or as part of an actual game).

  • Zippy says:

    Mr. Green:

    Now games like Monopoly … are not wrong in themselves (even if they are an avenue for some immoral behaviour)… but isn’t that precisely because, as games, they are divorced from reality?

    The difference is that bitcoin transactions by design involve the trade of in-game ‘currency’ (that is, the creation of a new empty ledger entry) for actual property. That is, every transaction involves the sale – not a faux-sale within a game, like buying a house for Park Place – of what does not exist.

    We would immediately recognize the fraud if someone paid monopoly money for his groceries. That is precisely what takes place in every bitcoin transaction, except that there isn’t even any actual monopoly money: there is just a new entry for the transaction in the peer-to-peer ledger.

  • Zippy says:

    The bitcoin game seems real to people because most modern people engage in magical thinking about finance. The worst are “educated” people with economics degrees and the like — economics is to finance what “climate science” is to farming.

    To everyman, the fact that a merchant gives you stuff in exchange for scanning a QR code on your phone seems magical. Even paper money seems magical.

    But like a caveman seeing a rocket launch, the reason it seems magical is ignorance. Bitcoin transactions don’t just encourage magical thinking about finance and currency — though they certainly do that. They concretely instantiate magical thinking about finance and currency, since every exchange involves trading real goods and services for a fraudulent ledger entry which is not in fact any sort of property or entitlement at all.

  • TomD says:

    You can now get loans collateralized by bitcorns. So this is a new wrinkle; how far down the rabbit hole can we go? Usury on top of non-existent currency?

    As for the game, I think there would be something at least minorly immoral about changing the rules (or not explaining them) during game play. So while it might be arguably hardly sinful at all for someone who truly believes that bitcoins are real currency with intrinsic value to sell them (maybe not at all through ignorance) it doesn’t change the reality. And someone who wants to “get out before it crashes” would seem to already know too much to transact justly. The standard “disclaimers” that everyone likes to point to don’t remove the requirement for “suitability.”

  • Zippy says:

    OT:

    If someone knows how to contact this fellow, and assuming he really is a parish priest, have him send me an email. I’ll send him free copies of both Noonan and Usury:

  • donnie says:

    Pretty sure that’s Father Brendon Laroche of Holy Infancy Church in Bethlehem, PA. You can find his contact info via the Diocese of Allentown directory here:
    http://www.allentowndiocese.org/about-us/priests-and-deacons

  • Zippy says:

    If someone knows him, they can ask him to email me if he is interested.

  • Mike T says:

    Seeing if I can dumb it down for a more general audience…

    Bitcoins on the other hand truly are ‘fiat currency’ — non-things referenced by a ledger of empty entries, treated as if they were tradable securities even though they represent title to / ownership of nothing whatsoever.

    Rather than Monopoly money with groceries, I think it would be more akin to pulling out a notepad and saying “OK, Harris Teeter now has a grand total of 5 ZippyDollars according to my ledger and can spend them wherever ZippyDollars are accepted (nowhere).”

    The fact that a bunch of people might agree to accept “ZippyDollars” on that ledger doesn’t make ZippyDollars a real security. At the end of the day, a ZippyDollar is just something scribbled on a legal pad which only has a perception so long as the players are convinced that they it means something.

    But you cannot “cash out” ZippyDollars from the ledger into a token you can exchange to another system or user. Be that electronic or physical. As Zippy said about BTC, they don’t actually point to something beyond a self-referential “ZippyDollars entitle you to ZippyDollars.”

    With USD currency and near-money like monetized debt denominated in dollars, you can unwind the fiscal stack to get back to something in actual USD (even if it’s a fraction of the USD you theoretically are entitled to) and that USD can function as a real claim. If we do everything with BTC, it all unwinds into a catastrophic explosion wherein we find that the base “value” is just a scribbled note like “so long and thanks for all the fish.”

  • Mike T says:

    ** Monopoly money has some theoretical intrinsic value as paper and an asset that could be auctioned off for $0.01 or donated to the Good Will for $0.10 of tax write off. BTC doesn’t even get the grocery store that.

  • Zippy says:

    Mike T:

    Extra points for the highly topical Douglas Adams reference.

  • Rhetocrates says:

    Switch over to ZDC today and stick it to the man!

    To complete the metaphor it’s important to point out that nobody ever gets anything they could actually call a ZippyDollar, and that the ledger entries are made by a team of trained cockatiels instead of a person, for ‘security’.

  • wdydfae says:

    Possibly relevant to the side thread above. This recent book (2017) has a 25 page Appendix on usury which could be useful:

    I’m working through the Appendix slowly as an aid to understanding Zippy, but also to see if it stacks up to the Zippean perspective.

    Thomas Storck (a Distributist, though the book itself does not specifically push Distributism) leans heavily on Noonan for the history, while vehemently rejecting Noonan’s doctrinal view, that usury is no longer a big deal.

    Otherwise, the book mainly covers all the social encyclicals and documents, starting with Rerum Novarum. It’s very comprehensive, if a bit dry. It has helped me a lot.

  • Zippy says:

    wdydfae:

    I just read that appendix.

    Unfortunately it is a vague muddle, because Storck makes the typical Distributist move of trying to recruit the usury doctrine to provide the foundation for his more general views on how economic life should be practiced. He rambles about how much a caterer should charge (a just price issue not a usury issue — Noonan apparently snookered him into that). He falls for all of the usual tricks, even dismissing Pope Sixtus V’s arguably infallible condemnation of any profit on full recourse contracts, going down the “extrinsic titles” rat hole even when profit is the reason for making a mutuum, getting lost in the nature of money (or the nature of the property lent) versus the nature of the contract, etc.

  • wdydfae says:

    Good to know. Thanks, Zippy. I think I never would have been able to put that together.

    I wonder if his overview of the social encyclicals (in the rest of the book) holds up better than Appendix 1.

  • Mike T says:

    Speaking of usury and unjust pricing, VD noted several times that high finance has gone from about 3% of corporate profits to about 30-40% since the “Reagan Revolution.” By itself, that stat may not be solid proof of any argument made on this blog, but put into the rest of the context I think it provides a useful metric for showing how far the cancer has grown on a national level.

    I’m not sure what the solution is, but ignoring the problem definitely isn’t it.

    To complete the metaphor it’s important to point out that nobody ever gets anything they could actually call a ZippyDollar, and that the ledger entries are made by a team of trained cockatiels instead of a person, for ‘security’.

    I’ve had cockatiels in my life (for better or for worse) for about half of it so far. Speaking from experience here, your ledger is going to be useless within 24 hours because those Australian runt chickens will have shat all over it (a healthy bird goes every ~15-20 minutes).

  • Zippy says:

    Mike T:

    … high finance has gone from about 3% of corporate profits to about 30-40% since the “Reagan Revolution.”

    I’d have to know what, precisely, that means before drawing any significant conclusions from it. Finance is the ‘brains’ of economic productivity, and setting ideological preconceptions aside an organism having a large brain isn’t necessarily a bad thing.

  • TomD says:

    My personal feeling is that some of “hgh finance’s” return is due to things like usury, but that the majority of it is simply due to how much excess production we’re capable of these days, and how much people have a “need” to gamble with it (or otherwise burn it off).

  • djz242013 says:

    zippy has hammered in that bitcoins do not entitle people to anything. They are a security for nothing. But is this strictly true? It seems like “owning” bitcoins does entitle you to “transfer” bitcoins at any time of your choosing. While this may be negligible, this is in fact some thing you can do with bitcoins, intrinsic to the nature of bitcoins. This seems like something that bitcoins entitle you to.

    Now it may be that this “thing” (ability to transfer) is itself intrinsically worthless, or nearly so, in which case most of zippy’s argument holds, but if we’re being precise, it seems like bitcoins do in fact come with at least one entitlement.

  • Zippy says:

    djz242013:

    It seems like “owning” bitcoins does entitle you to “transfer” bitcoins at any time of your choosing.

    Be careful with that word “entitle”. By design, bitcoins entitle you to literally nothing whatsoever. That is what makes the game independent of established authority, which is such a compelling property for criminals and libertarians (but I repeat myself).

    Knowing a private key may mean that you have a material capacity to create a new empty ledger entry which will (hopefully) validate through the “miners”. But it doesn’t entitle you to anything. Lose the key to your car and you still own your car. Lose your private key (which again is not itself a ‘bitcoin’) and spend the next thirty years trying to convince the local government to let you go prospecting in the landfill for the hard drive you accidentally discarded.

  • TomD says:

    I think the distinction between a material capacity and an entitlement is a huge one that’s overlooked, in many areas.

  • Rhetocrates says:

    Zippy does have a huge number of posts about authority, disambiguating (horrible word) moral obligation from material capability, and how moderns have a hard time, so I think you’re right, Tom.

  • TomD says:

    It’s interesting that most people who argue against bitcoin in its various modes argue that people shouldn’t value it – not that it’s something that is inherently impossible to have value; i.e., they grant that value is created by “consensus” but that the consensus shouldn’t pick bitcoins. Kind of like how most people who argue against a given politics stay within the frame of the political system itself (even the anarchists and the communists stay within the liberal system today).

    But this is amusing, either way.

  • Mike T says:

    Offtopic, but y’all gonna like this

    Cue the nervous laughing of evangelical “complementarian” men at that level of shitlord truthbombing from the Babylon Bee on their manhood.

  • […] in the comments of Zippy’s recent post in additional to an old comment of his I’ve started to change my […]

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