Blockchain Bingo

Two weeks ago I was on a three person half hour panel on “Bitcoin and the Future” at an O’Reilly Radar Summit on Bitcoin & the Blockchain. I was honored to be invited, but worried as I had not been tracking the field much. I read up a bit, and listened carefully to previous sessions. And I’ve been continuing to ponder and read for the last two weeks. There are many technical details here, and they matter. Even so, it seems I should try to say something; here goes.

A possible conversation between a blockchain enthusiast and newbie:

“Bitcoin is electronic money! It is made from blockchains, which are electronic ledgers that can also support many kinds of electronic contracts and trades.”

“But we already have money, and ledgers. And electronic versions. In fact, bank ledgers were one of the first computer applications.”

“Yes, but blockchain ledgers are decentralized. Sure, compared to ordinary computer ledgers, blockchain ledgers take millions or more times the computing power. But blockchains have no central org to trust. Instead, you trust the whole system.”

“Is this whole system in fact more more trustworthy that the usual bank ledger system today?”

“Not in practice so far, at least not for most people. But it might be in the future, if we experiment with enough different approaches, and if enough people use the better approaches, to induce enough supporting infrastructure efforts.”

“If someone steals my credit card today, a central org of a credit card firm usually takes responsibility and fixes that. Here I’d be on my own, right?”

“Yes, but credit card firms charge you way too much for such services.”

“And without central orgs, doesn’t it get much harder to regulate financial services?”

“Yes, but you don’t want all those regulations. For example, blockchains make anonymous money holdings and contracts easier. So you could evade taxes, and laws that restrict bets and drug buys.”

“Couldn’t we just pass new laws to allow such evasions, if we didn’t want the social protections they provide? And couldn’t we just buy cheaper financial services, if we didn’t want the private protections that standard services now provide?”

“You’re talking as if government and financial service markets are efficient. They aren’t. Financial firms have a chokehold on finance, and they squeeze us for their gain, not ours. They have captured government regulators, who mostly work to tighten the noose, instead of helping the rest of us.”

“OK, imagine we do create cheaper decentralized systems of finance where evasion of regulation is easier. If this system is used in ways we don’t like, we won’t be able to do much to stop that besides informal social pressure, or trying to crudely shut down the whole system, right? There’d be no one driving the train.”

“Yes, exactly! That is the dream, and it might just be possible, if enough of us work for it.”

“But even if I want change, shouldn’t I be scared of change this lumpy? This is all or nothing. We don’t get to see the all before we try, and once we get it then its mostly too late to reverse.”

“Yes, but the powers-that-be can and do block most incremental changes. It is disruptive revolution, or nothing. To the barricades!”

I see five main issues regarding blockchain enthusiasm:

  • Technical Obstacles. Many technical obstacles remain, to designing systems that are general, cheap, secure, robust, and scaleable. You are more enthusiastic if you think these obstacles can be more easily overcome.
  • Bad Finance & Regulation. The more corrupt and wasteful you think that finance and financial regulation are today, the more you’ll want to throw the dice to get something new.
  • Lumpy Change. The more you want change, but would rather go slow and gradual, so we can back off if we don’t like what we see, the less you’ll want to throw these lumpy dice.
  • Standards Coordination. Many equilibria are possible here, depending on exactly which technical features are in the main standards. The worse you think we are at such coordination, the less you want to roll these dice.
  • Risk Aversion. The more you think regulations protect us from terrible dark demons waiting in the shadows, the less you’ll want a big unknown hard-to-change-or-regulate world.

Me, I’d throw the dice. But then I’d really like more bets to be feasible, and I’ve known some people working in this area for decades. However, I can’t at all see blaming you if you feel different; this really is a tough call.

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  • Alex Flint

    Would love to hear more about why you’d throw the dice Robin, beyond the points you’ve alluded to here.

    • arch1

      Yes – including why we should throw the dice *now*, given that *later* we will presumably know more about how to make such a transition (if still even looks desirable) less, well, dicey.

  • TaymonBeal

    Are the technical obstacles related to clever cryptographic schemes, or are they just that you have to *actually* keep your data (i.e. Bitcoin wallet) secret, and that’s hard to do because information security in general is so difficult? (Contrast credit card data, where there’s somebody who can take responsibility for a breach and fix it, so our inability to reliably secure it isn’t fatal.)

    • http://overcomingbias.com RobinHanson

      There are a great many technical obstacles.

    • D.#dwards

      Bitcoin is more secure than credit cards for certain people to do certain things. Credit cards allow you to get your money back though.

      Ideally if you have concerns about the direction of cryptocurrency it is an evolving industry. Simply create a alternative cryptocurrency or extension to Bitcoin which allows people to do everything they can do with credit cards without the need for transmitting a credit card number.

  • W. K. Winecoff

    There’s another pretty significant issue: if blockchain becomes successful at its chief aims — decentralized payments system, evasion of government diktat — then won’t governments just shut it down? The Silk Road fiasco demonstrated pretty clearly that governments will tolerate this stuff only up to a point, and since the dream of blockchain optimists requires *enormous* scale to come to fruition it seems basically obvious that a pure-form cryptocurrency cannot ultimately be successful unless governments want it to be.

    And that’s without even considering the market power of private finance. At least at first blockchain is going to need to interface with the traditional financial structure, and major financial institutions are going to fight that at every turn.

    The status quo system might be suboptimal in a variety of ways, but is it so suboptimal that the mass public would be willing to abandon it completely even at risk of imprisonment, asset seizure, and isolation from traditional bank-based finance? I highly doubt it.

    • http://overcomingbias.com RobinHanson

      Governments haven’t been willing to do what it would take to shut down file-sharing systems that support copyright violations. So it is an open question if they’d be willing to do what it would take to shut down blockchain finance.

      • W. K. Winecoff

        I don’t see how that’s the right analogue. The goal of the cryptocurrency crowd is not to download some Taylor Swift songs without paying for them. They intend to attack the instrumental and structural power of High Finance and the government at its core: control over the payments system. If they are successful they will provoke a response.

        I doubt they’ll be successful for other reasons — only some of which are technical — but it’s worth keeping in mind. Just because governments often tolerate low-level piracy and evasion that pose no systemic threat does not mean that they will allow large-scale challenges to their authority to progress uninhibited.

      • http://overcomingbias.com RobinHanson

        I agree the finance sector is much bigger than music and movies, and so has more potential opposition to mobilize. Even so, I still think it an open question.

      • D.#dwards

        Robin I think the purpose of Bitcoin is to encourage entrenched interests and government to finally wake up and innovate. Governments have let the infrastructure crumble and collapse to the point where if they won’t do anything to improve the state of finance people will work outside the system to evolve the entire financial ecosystem.

        It appears to be working. Now banks and governments are paying attention and will sooner or later have to improve their technologies. This means we all win.

        As for the regulations I do think we have too many for our own good but I don’t think people using Bitcoin are using it to dodge regulations. There is a vocal group of Bitcoin early adopters who are true crypto anarchists but as Bitcoin goes mainstream the community will begin to change.

        The Internet was similar early on back in the 1990s. It wasn’t until around 2000 when the Internet started to go mainstream and wasn’t just associated with computer nerds anymore. The same will happen with blockchain tech and 10 years from today we will have a look back at these posts and wonder how we could have the community we have now again.

    • adrianratnapala

      I think the real question is whether the blockchains can succeed in their own terms. If they do, then I don’t see governments being able to shut them down. Or to put it another way: Silk Road already has more competent successors, and those successors will have successors.

      It is possible that the *reason* that blockhains don’t succeed “in their own terms” is that governments successfully limit them to Internet black markets.

    • http://twitter.com/tonyswish Tony Swish

      Right now the Bitcoin network has wildly eclipsed all of the most powerful supercomputers in the world, as in they aren’t even in the same league. Obviously it could be shut down, but practically it’s next to impossible.

      Blockchain technology already has hit the finance sector, I know for a fact Citi are embracing (as in the organization and not just the Coinbase investment) it and other decentralized technologies. PayPal has entered the game and there are a lot of people leaving the traditional finance sector to start bitcoin groups (see bitnet).

      The reason the finance sector were so hostile toward it and became more and more interested is because they slowly saw what was happening and bankers aren’t stupid people.

      Bitcoin is in it’s infancy and the fact that many of the earliest successful bitcoiners also tended to be associated with other things, it led to a lot of people who were scammers. The protocol is solid, extremely solid. With $500+ million going into developing it in the next few years, you are going to see it will be a slow replacement you won’t even notice.

      • D.#dwards

        Bitcoin crunches useless numbers. Proof of work is a wasteful part of the design. Proof of stake is generally superior because you don’t need to crunch all that numbers to obtain the same level of security.

        Proof of work is only preferable if the work itself is useful.

    • D.#dwards

      Bitcoin as a technology will never be effective at evading government. In fact I doubt any electronic based currency will be effective unless a person has more knowledge of how these systems work than the government.

      Rather than the government fearing Bitcoin and shutting it down they simply would have to hire all the smartest people to obtain and maintain a knowledge advantage. As far as I know they already have some of the smartest cryptographers and computer scientists.

      • IMASBA

        Governments have to pass laws to mark specific crypto currencies as taxable property. This is inherently slow, at least compared to the speed with which new blockchains can be set up (or have their names changed). Identities behind accounts can also be heavily encrypted.

      • D.#dwards

        There already are income taxes and or capital gains taxes. Most people are just paying their income and or capital gains taxes but at this time it’s not like cryptocurrency has taken over the world.

        If they do take over the world then the government can make it easy for people to pay their taxes due to the fact that while cryptocurrency is decentralized there are chokepoints in the network such as Coinbase, Circle, centralized exchanges, large businesses, and most people don’t want to be completely anonymous.

        Also if you start spending a lot of money the IRS will know you’ve got income and you’ll pay. How is this any different from what happens now with cash? If someone starts spending a whole lot of cash out of the blue the IRS will wonder where the cash came from and will investigate based on statistics.

        Bitcoin itself isn’t anonymous. Zerocash is the anonymous cryptocurrency and it’s not developed at this time so anonymous cryptocurrency is mostly still just on the academic wishlist rather than a practical reality but I will admit it’s much harder for the IRS to track Bitcoin than credit card.

        I think it cryptocurrency catches on you’ll see the taxes in different forms. The IRS itself might have a presence on the blockchain so that people can voluntarily let the IRS track their income but in general Bitcoin would have to be threatening the dollar and have a market cap in the tens of trillions of dollars before we would have this problem.

        I don’t think it’s as much of a problem as people think though. When you buy stuff then other people will notice you’re buying stuff and the IRS notified.

      • IMASBA

        No, I don’t think you understand the problem: for the IRS to have a presence on a blockchain the currency the blockchain deals in has to be officially recognized as taxable property (the grass on your lawn is not being taxed, that would change if grass became particularly valuable, but it would take time) while new blockchains could spring up every other day (and convert accounts from older blockchains). This requires some creative solutions by tax revenue services.

  • Joshua Brulé

    Most of the crypto-currencies in use have a hard cap on the total number of coins that can be mined. The one exception, I think, is Dodgecoin which is designed to inflate the currency by a constant number of coins per year.

    The obvious thing (based on my mediocre understanding of economics) to try, that I haven’t seen any cryptocurrency do yet is to mimic Friedman’s k-percent rule, setting inflation at a constant percentage forever. I’d think that this would give the currency much better chance at long-term survival, since the mining rewards wouldn’t “dry up” in the future.

    Thoughts?

    • adrianratnapala

      Friedman wanted “a computer” to do central banking instead of particular humans. But computers are just slaves of particular humans. What he really wanted was a fixed, publicly agreed set of rules. And that’s what a block-chain protocol is.

      Yippie! And you can have fixed inflation if you define it as “percentage increase in the number of coins”, because that’s something the protocol knows about and controls.

      But I assume Friedman wanted to fixing consumer price inflation. Is there are non-gameable way to input the CPI, or some proxy variable into the block-chain?

      • Salem

        “But I assume Friedman wanted to fixing consumer price inflation.”

        Friedman’s views evolved over time, but he’s most associated with the K % rule i.e. constant growth in the money supply.

      • adrianratnapala

        Well then some coins already achieve it, at least for a very simple, direct definition of “money supply”.

    • Mark Friedenbach

      You might be interested in freicoin.

      • Joshua Brulé

        I remember seeing Freicoin – the Freicoin foundation distributes 80% of the money supply through grants via a process that involves the words “a sustainable future is the priority” and no other description.

        I like the idea of demurrage (although, I would have gone for just expanding the money supply, but I think it should be roughly equivalent), but I don’t like the way the developers are mixing causes.

    • ictyr

      You have hit on something really important: by adopting a new hard currency we would be giving up an important technology: the independent central bank. We would have more booms and busts, and more great depressions in a world with no central bank ability to print or destroy money. To the extent a central government wanted to manage the macroeconomy, they would be left only with fiscal policy, and it wouldn’t be as well-managed as most central banks are now (which is NOT THAT WELL but better than a hard currency).

      By the way, you are using the word “inflation” to mean “increase in the money supply,” and I think that might introduce confusion for most readers. It’s is an archaic definition. Most academic papers, textbooks, etc. use that word to mean “a rise in the general price level.”

    • D.#dwards

      This is not true. You have many different kinds of cryptocurrency technologies. It’s not really in my opinion a good design to have a universal token which everyone uses.

      The platform itself should have the token such as with Ethereum or Bitshares. In Ethereum you have Ethers and with Bitshares you have BTS. From these tokens which may have a fixed cap you can set it up so that people are trading BitAssets.

      So $1 worth of BTS is always equal to 1BitUSD.
      Speculation pegs the price so that the buying power of $1 always equals 1BitUSD. This mechanism would work for any asset that can exist and ultimately allows for the stable value people want without having to have a fixed or infinite supply of primary tokens.

      In summary it will not be a problem.

  • pliny

    Wouldn’t a blockchained world make it impossible to correct for externalities? Doesn’t this go far beyond the financial system? I don’t want to see us live out Oryx and Crake.

    • Explodicle

      Prediction markets can go a long way towards correcting for externalities. For negative externalities people bet on a negative outcome as insurance, and this creates an incentive for someone to bet against it and act accordingly. For positive externalities it works much the same way; we’d be essentially crowdfunding a public good. Anonymous programmable money reduces the transaction costs for this significantly; for example Augur (Truthcoin) uses Schelling points to eliminate the need to trust a judge/bookie – or any single party.

  • Cahokia

    How much does your skepticism with regards to blockchain enthusiasm stem from age rather than experience?

  • adrianratnapala

    “Lumpy Change” always happens and is never wanted. Here are two predictions (I’m about 95% confident of each):

    * The 21st century will contain some global crisis much greater than the 2008 financial crash, though probably smaller than than WWII.

    * In the year 3001, the US dollar will not be the reserve currency of the entire human race.

    Of course I have no idea what will actually happen to fulfill those predictions, or how they will relate to cryptocurrency. But let me add a third prediction (this time at about 70% confidence).

    * In year 3001, cryptocurrency or a successor technology will still be a significant tool used by black-marketeers.

  • Tenbar Malloway

    Programmable money. A completely open access payment network. This is always overlooked. Any computer programmer can now create software that handles tokens of real value. This really wasn’t possible before in any kind of future proof manner (being held to the whim of whatever central party controlled the virtual currency, risk of that central party shutting down.) And the innovation it is unleashing is huge.

    We don’t need any particular anti government or anti regulation stance or love of decentralisation or any desire to replace the current financial systems for Bitcoin to still be an incredible game changer.

    Perhaps you might lump this under “evading regulations”, however that’s not the spirit of the thing… Like the move from printing press to world wide web – *money* is now open to all.

    • http://overcomingbias.com RobinHanson

      If blockchains let programmers pay less attention to trust issues, and yet the system as a whole is not more trustworthy, then you must be transferring trust issues to somewhere else, not solving them.

      • IMASBA

        No, he’s saying that converting some part of the monetary system to a crypto currency used to make the system as a whole less trustworthy (because centralized crypto currencies were not trustworthy), but now with blockchains this would be much less of a problem (or not one at all if blockchains are at least as trustworthy as the conventional monetary system).

      • D.#dwards

        Blockchain technology do allow for much more trustworthy infrastructure because there doesn’t have to be a single point of failure. Most of the failures in institutions are human failures so when you decentralize and automate you can have more secure information systems.

        This isn’t always the case because there can be bugs in the code or something can go wrong but it’s a lot easier to audit code than to audit people. Over time the multiple blockchains will compete, evolve, and the fittest blockchain designs will emerge.

    • IMASBA

      The desire to evade taxes alone makes a lot of people very interested in crypto currencies (principal anti-government/regulation stances will indeed be negligible), personally I believe that is going to be a major problem in the future (welfare states might have to resort to “conscription” of resources and other such extreme measures just to survive). Blockchain might make crypto currencies reliable enough for people to prefer the risk of going crypto over paying the effective tax rate for conventional money. Blockchains are also relatively easy to set up so that it will be hard for governments to stamp them out or list them as taxable property.

      • D.#dwards

        The blockchain can be analyzed. It would be more like a honeypot than an actual device for tax evasion.

        People who believe Bitcoin can work for tax evasion don’t have a good understanding of how the blockchain works.

        True a lot of people who believe in the blockchain are spiritual about their beliefs but this doesn’t invalidate the technical and security benefits of decentralization.

        A decentralized system designed properly is less likely to collapse. Also anyone can create their own money now and exchange value on a personal currency basis.

        This will create lots of opportunities for entire new industries. It will single handedly enable the Internet of Things to thrive as an industry and is as important as the birth of the World Wide Web or Internet.

  • A Carraro

    I don’t see what problem is bitcoin is trying to solve to be honest…

    Payment system costs have been solved by legislation in the EU. They simply passed law that forced banks to offer free payments for small amounts. It now costs nothing to do it in most EU countries and you can wire your money using your mobile at no cost… Why do we need a complicated system to do something we know how to do simply already?

    There is no rule we could use to determine the required money supply. Shifting to bitcoin would be like shifting back to the gold standard, an unmitigated disaster. Governments need control of money supply to manage the economy. You’d get massive economic volatility with a fixed money supply (or even with a k% rule). We tried many times and it always ended very badly.

    The proof of work idea is clever, and it might be useful in some other applications. But for money it’s a terrible idea.

    Bitcoins are like stamps or other collectables… Some people are irrationally attracted to them for some personal reason, so they will keep some value, but they are useless as money… More they cannot be useful as money unless the protocol had some kind of monetary policy mechanism built into it… We have no idea how the economy works yet. Thinking we can build a protocol that does seems crazy to me…

    • IMASBA

      “I don’t see what problem is bitcoin is trying to solve to be honest…”

      For a lot of the potential client base blockchain bitcoins solve the problems of having to pay taxes or the problem of the missus/media/authorities finding out about transactions you’d rather want to keep hidden.

      • joeteicher

        Why isn’t cash a good enough solution to that problem? Hookers and blow are just not that expensive.

      • IMASBA

        You have to be in physical contact for cash payment to work. Also cash cannot generate interest and is not very secure (your old sock can get lost or stolen a lot easier than the codes you use to hide your cryptos). If cash were banned it would also be much harder to print not-easily-forgable crypto cash than it would be to create a crypto currency and the crypto currency can be transformed into another crypto currency much more quickly.

      • joeteicher

        You can transfer cash through the mail. Even my grandma knew that. If you need to move lots of cash you can hire people to tape it to their bodies like in Wolf Of Wall Street.

        If you are a consumer of illicit goods then you don’t need cash to earn interest. You can just take it out of the bank when you need it. If you are running a criminal enterprise then you may have to forgo some interest now and then but hopefully your margins ate fat enough so that you don’t really care. Otherwise you should probably be in a different business.

        I see zero reason to think cash will be banned. But if it is then yes, alternatives would be necessary.

        There are 2 big benefits to cash. One is that you don’t have to do any currency conversions to use it. Going from $ to BTC back to $ has significant cost in bid/ask and significant risk depending on how long you hold the BTC. The second is that lots of people use cash every day for normal stuff, so your use of cash does not stand out. If the major use of BTC is criminal then your use of it will seem fishy.

      • IMASBA

        It all doesn’t sound very practical (imagine “sending” $10 million in cash across the world) and you still risk being found out and getting a hefty tax bill as long as cash remains legal tender. When it stops being legal tender it will become harder and harder to get a hold of cash that is properly secure and plentiful.

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  • Grant

    Robin, I think you left out some pro-crypto arguments.

    IMO the elephant in the room is financial stability. Our current systems are not stable. Sure they are better than they used to be in 1929, but still have systemic problems. We are told everyone’s prosperity is threatened unless the government bails out some big players from time to time. This seems less than ideal.

    It seems to me that out financial system needs to be engineered properly, not created by irrational politics or Bitcoin zealotry. We need a system where simulations can be run and bots can attempt to profit as much as possible, by any means necissary. If you distill money down to its core principles, it just may be simple enough for people to engineer well. This isn’t going to happen with our current system, since it is not based on computer code but a staggering amount of legislation.

    Then of course there is regulation. I’m sure you’ve noticed the number of Bitcoin prediction markets which have been started, while Intrade has shut down? There are undoubtedly many other financial mechanisms which would be possible under a less-regulated system, such as many implementations of assurance contracts.

    Still I’m skeptical block chains are the answer, thought I admit I am far from an expert on them. Returns on mining seem to increase when one exceeds 50% of the world’s mining power. In this manner the system seems to incentivize 51% attacks.

    • http://overcomingbias.com RobinHanson

      Having something be based on computer code is not sufficient to achieve stability. Until we have concrete reasons to think crypto based finance is actually more stable, stability is not a pro-crypto argument.

      • Grant

        Of course I agree that putting something in computer code does not in itself imply it will be stable. However it does mean it can be tested far more easily than a system based on computer code, legislation and human interaction.

        You can write automated tests which try to create fraud and instability in fully automated monetary systems. You cannot do that with the traditional system. I suppose it is possible to come up with stable systems without experimentation, but this seems unlikely.

  • http://www.truthcoin.info/ psztorc

    I’ll probably just join RH in being misunderstood, but, as a longtime OB fan, and as the inventor of Truthcoin (a blockchain-based prediction markets solution -to be completed this year-), let me humbly link to my own blog post, which attempts to explain where blockchains are likely to be useful and where they are likely to be useless (and why).

    http://www.truthcoin.info/blog/limits-of-blockchain/

  • Pete

    Guys why do we get so hung up on bit coin. The block chain protocols are really about a way verifying something without reference to a central source.

    In the case of bit coin it is a currency but other uses are not hard to imagine and every bit as trans formative.

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  • Jamshed

    It’s simply too risky to use this. I do Forex trading with OctaFX broker and there i can use many options for deposit including my favorite Skrill and I don’t need to pay any fees at all so that helps even further. Also, I am able to get all my payments instantly because of their automatic system that they have in place so really enjoy trading with them with such lovely features and offers that they have for all clients.

  • https://LeastAuthority.com/ Zooko

    Dear Robin: this is a great post, but it seems to be assuming some sort of rapid and widespread switch from traditional currencies to Bitcoin. This sort of cataclysmic modification of society seems to be the dream/spectre implicit in the minds of both boosters and alarmists. Perhaps we’ve gotten trained to think of powerful new technology as completely taking over, because we’ve seen events in our lifetimes, such as landline phones almost completely replaced by smartphones in a mere couple of decades.

    But, I don’t think major national currencies are like landlines in this way. I think even in the rosiest (from my perspective, as a dice-thrower) scenarios, if Bitcoin (or its successor) continues to work, and if it gets into the self-accelerating curve of a successful technology, then it will still not displace a major national currency like the US Dollar within the next 30 years.

    Now as opposed to currencies, payment systems like SWIFT, PayPal, or Western Union are a different matter. Maybe one or more of those could be completely replaced by a cryptocurrency-powered alternative in the next 10 years. But this would not trigger the alarm bells, right? In fact, it should make us feel less alarmed, because we’re going to get a chance to see what effect cryptocurrencies have on some specific niches long before they come for our national currencies.

    Also, weak national currencies, which tend to self-destruct every few years anyway, might get replaced by a cryptocurrency within the next 10 years. When Zimbabwe’s national currency self-destructed in 2009, it was replaced by a Babel of the national currencies of other countries (mostly US Dollars). You could imagine that a similar disaster in today’s cell-phone powered world could result in mass uptake of a cryptocurrency.

    (Cue: “We do not influence the course of events by persuading people that we are right when we make what they regard as radical proposals. Rather, we exert influence by keeping options available when something has to be done at a time of crisis.”—Milton Friedman)

    But again, the prospect of some miserable population losing all of their money and then switching to a cryptocurrency shouldn’t really ring these alarm bells. First of all, the alarmists don’t live there, so this should make them feel more at ease that they get to observe what happens to the unfortunates long before it happens to them. Secondly, having a cryptocurrency as an alternative, next to the national currencies of other nations, when you’re losing all your money seems a lot less threatening than the — in my humble opinion unlikely — spectre of waking up one day and finding that your otherwise healthy national currency has secretly been replaced by Folger’s Crystals, I mean Bitcoin.

    • http://overcomingbias.com RobinHanson

      I agree that national currencies are unlikely to be replaced anytime soon. But many fears could be realized even if alt currencies become large and robust, without “taking over.”