Тег: Bitcoin

How to bring ancap as close as possible in countries with a post-communist economy?

Everything looks quite smooth in the USA, but conditions are different in the former USSR. Often, loss-making state enterprises, mono-towns, an economy tied to the military-industrial complex, and micro-district housing developments hinder individualism and state non-interference — eliminating or minimizing the state and closing loss-making enterprises in a short timeframe would lead to unemployment and the demise of all public sector workers, while the survivors would hang the reformers, disregarding the NAP. Does Russia have a chance for successful libertarian reforms?

анонимный вопрос

Answer by Alex Murin

And why rush? Ancap and libertarianism are an ideology. If people share it, they will be guided by it. If they don’t, they won’t. You cannot force people to live without a state. These are free people; they decide for themselves how to live. It is only in mono-towns and at loss-making state enterprises that people more quickly come to the realization that the government is not their friend. Instead of shops with beautiful displays, kiosks with cheap beer begin to appear; instead of excise vodka, people switch to moonshine. Instead of saying “I am an honest taxpayer,” people prefer to hide their income and conduct cash transactions without documentation.

High-rise development, where neighbors do not know each other and the concept of “one’s own” ends at the apartment threshold, is a serious problem for a free society. Until people become owners of their land and understand that their home is a fortress belonging only to them, it is difficult to speak of freedom and self-government. But we have another factor playing in our favor — poverty. A person who has nothing to lose is more likely to stop supporting the one who robs them year after year than a person who has their own house or firm, who is not ashamed to say “my grandfather and father voted for the Republicans, and I support them too.” There are many paths to a free society; we chose the path through poverty and extreme social inequality. And I would not want to specify deadlines; I would rather indicate the direction.

Addition by Ancap-tyan

During the collapse of the state, we should all take an example from Venezuela. While official propaganda there glorified the victories of the socialist economy and inflation hit record highs, people invested in what was beyond the state’s control — in bitcoin. The volume of bolivar transactions on the localbitcoins service noticeably exceeds, for example, the volume of euro transactions. However, Russians do not particularly need my advice, as the volume of ruble transactions on localbitcoins also exceeds the volume of euro transactions. So, even when the state demonstrates extreme inefficiency, it is by no means necessary to lose everything because of it. When a chance arises to change something in the country, it is better to have resources than not to have them.

Of course, bitcoin is not the only possible investment beyond the state’s control. Even more important are investments in horizontal ties. You may not be a civil society if you believe that political methods are currently ineffective, or if you despise political methods as such. But as atomized loners, you will not survive without the state. Therefore, the well-known communist slogan calling for the unification of the world proletariat should also be taken into account and creatively reworked for yourself, simply by removing the restrictions on the class composition of your community.

Finally, if for some reason you are a public sector worker receiving pennies for meaningless and ineffective work for the state, it would be foolish to discourage you from this job — you would have left it long ago yourself if you could. But you should not obsess over it. They say that in the late Soviet Union, which consisted of public sector workers just a bit more than entirely, terms absent from socialist political economy, such as “shabashka,” “kalym,” and other names for counter-economic phenomena, enjoyed extraordinary popularity. And so it is now — a good leftist under socialism strengthens not the marriage, but the personal budget. You can receive a salary from the state, but it is better to spend your main efforts on side jobs.

What’s going on with Bitcoin?

anonymous question (paid in the amount of 0.0002btc)

In short, everything is fine with Bitcoin. Throughout the year, the price has been gradually falling, as have trading volumes, commission sizes, and the frequency of Bitcoin mentions in the press. In other words, the bubble that burst at the end of last year has been successfully deflating, and now the price is approximately one-fifth of its peak. This drop is comparable in amplitude to the decline that lasted throughout 2014, and is far smaller than the catastrophic crash of summer-autumn 2011, when the dollar price of Bitcoin fell 13-fold.

Of course, the lower the trading volumes, the greater the possibility of causing significant price jumps using relatively modest funds. But high volatility attracts speculators, and volumes begin to grow again, which means the opportunities for price manipulation begin to decrease; thus, these market feedbacks prevent the cryptocurrency from spiraling out of control.

Once again, as in 2014-2015, mining profitability has dropped, which leads to the least efficient miners being sent to the scrap heap. In 2015, during the low exchange rate, bankruptcies of individual pools also occurred. Thus, this market is actively clearing out inefficient players, meaning the end of the crisis is not far off.

Against the backdrop of all this seemingly negative environment, active work continues both on the Bitcoin protocol itself and on the Lightning second-layer protocol, which allows for the creation of direct payment channels outside the blockchain and the movement of money through them with negligible time costs and negligible commissions. Therefore, in the event of a new price surge, the probability that the mempool will become clogged, as it did last autumn, and that the transaction fee will skyrocket, becomes much lower; the community is now far better prepared for such situations.

So, is it time to buy? You know, the Belarusians have a proverb that it is never too late to buy dollars; the same can be said about Bitcoin. It should be acquired whenever there is free fiat that does not need to be spent in the next five years. By doing this, you will not only preserve your purchasing power but also benefit the community.

On a logarithmic scale, it is clearly visible that everything is OK with Bitcoin

Bitcoin’s Anniversary

Congratulations to everyone on the tenth anniversary of Bitcoin’s conception! On October 31, 2008, the white paper of the world’s first cryptocurrency was first published, and everything started…

Since then, the world has changed radically, although many have not yet realized it. Now anyone can open their own settlement account without asking anyone and without introducing themselves, and then send and receive money transfers that cannot be blocked, regardless of what government powers a particular regulator may possess.

In the new world, we have much more freedom and much more responsibility. No one has done more for the coming triumph of ancap than Satoshi Nakamoto, but I will try my best too)))

What’s the deal with Esperanto? Is it worth learning?

Ildar

Language is one of the most vivid examples of spontaneous order arising in society. People have a desire to understand one another, and they use various available means for this purpose; in most cases, this turns out to be the voice, although gestures and facial expressions also retain an important role. The convenience of transmitting information by voice is quite great, and this successful practice becomes embedded in culture, turning into a full-fledged language and gradually being refined: vocabulary tends toward complexity, and syntax toward simplification.

In every sufficiently isolated population of people, its own language develops. You can see this in miniature even in your own family, where there are likely many idioms for internal use that are not used in the outside world. At the same time, as globalization progresses, a reverse trend emerges—toward the unification of language, for now there is a need to understand not only the nearest neighbors but also those with whom contacts occur quite episodically, and there has been no long period of adjustment to develop a communication protocol.

Esperanto is an artificially created language intended precisely to fulfill this task: to facilitate mutual understanding in a global world with minimal common costs for language learning. The fate of Esperanto unfolded roughly as the fate of Bitcoin might have if it had appeared in a world with a gold standard. Yes, Bitcoin is more convenient for transfers than gold, but where is its gold backing? Why are another set of decentralized funds, independent of a trusted intermediary, needed if gold already exists and is actively used? The same goes for Esperanto: yes, one can learn it and become one of hundreds of thousands of speakers, but English is just as widespread worldwide, and it has billions of speakers, for hundreds of millions of whom it is their native language.

So the idea is certainly clever and deserves great respect, but by natural order, people did not follow this idea. However, there is certainly a point in learning Esperanto—some people, for instance, learn Sindarin, and there are surely more speakers of that artificial language in the world than of, say, Vepsian. This means someone needs it.

Of course, forcing humanity to communicate in Esperanto is a solvable task. After all, there are precedents in the world where the Irish artificially recreated their Gaelic and the Jews recreated Hebrew. But the costs for those who would be forced to do so would be very high, and I would prefer that society avoid such a violation of spontaneous orders—there is no need for it, as the natural convergence of languages and the development of machine translation will handle the task much more simply.

1908-kl-t-zamenhof.jpg
L. L. Zamenhof, creator of Esperanto

Response to the article on the value of bitcoin

Wild Turkey

On July 10, I answered a question about libertarians’ love for bitcoin. The author of the question sent their objections to this answer.

Mises, in creating the theory of money, formulated the regression theorem, according to which today’s value of money is determined by its value yesterday, and this can be traced back to the point when money was an ordinary commodity having only simple consumer value. The fact that gold specifically became the sole standard for backing money by the 20th century was the result of government regulations; in a free banking system before that, a bimetallic standard took hold, which is described in sufficient detail by the aforementioned Rothbard.

These are details; the history of bimetallism is a separate topic. Either way, money consisted of either precious metals themselves or obligations to issue them with varying degrees of reliability.

Cryptocurrency lacks this property, as does any other modern fiat currency.

Another classic of libertarianism, Hayek, openly advocated for private money…

He advocated for private money issued by banks with an obligation to quote its value pegged to a declared basket of goods. Obviously, bitcoin lacks this property.

In order to understand exactly how and thanks to what bitcoin acquired its value, I recommend reading the classic article by Jeffrey Tucker, kindly translated in 2014 by the Bitnovosti resource.

Tucker completely forgot about the subjectivism of value and sought the notorious intrinsic value, finding it in the properties of the blockchain as a payment system similar to PayPal, and the value of crypto-coins as virtual shares of such a system. A beautiful solution, but not in the spirit of the AEL and contradictory.

Thus, bitcoin, acting as digital peer-to-peer gold, does not contradict economic theory as presented by both the classics of the AEL and their modern followers.

The comparison with gold remains problematic, because gold is a unique commodity, whereas an infinite number of crypto-algorithms can be invented, and the value of any one of them is ultimately given only by novelty or the hype caused by distrust in the modern financial system.

Tell us about decentralized exchanges, their advantages and disadvantages

anonymous question

Well, at least someone is no longer asking why libertarians push for bitcoins, and is starting to ask rather specialized questions.

Why are exchanges needed

An exchange trader is the best friend of any cryptocurrency user because, in the hope of buying low and selling high, they provide the cryptocurrency system with the necessary liquidity; and the greater the liquidity, the smaller the difference between the buying and selling price of the currency (spread), the smaller the rate fluctuations (volatility), and, accordingly, the higher the attractiveness of crypto as a means of payment for goods.

A classic exchange (currency, commodity, stock — it doesn’t matter) is structured this way. The exchange acts as an intermediary that maintains a registry of assets in client accounts, provides the ability to place trading orders and close them with opposing orders, and, of course, to deposit assets into the exchange and withdraw them from it. The vast majority of cryptocurrency trading transactions and exchanges of cryptocurrencies for fiat are conducted on such classic centralized exchanges.

Naturally, any crypto-enthusiast starts to cringe at the mere word “centralized.” Moreover, these exchanges generally live up to their reputation: they are regularly hacked, with significant sums of money stolen from wallets, and there are complaints regarding possible market manipulation, fake volumes, and so on.

What is special about decentralized exchanges

Therefore, for several years, there has been a trend in the cryptocurrency community toward creating decentralized exchanges. At the very least, it is relatively easy to make an exchange hybrid: orders are processed on a central server, while private keys to the wallets remain in the hands of the users, and accordingly, all transactions are recorded on the blockchain. This is the principle on which, for example, Waves, the largest hybrid exchange in Russia, operates. But a question immediately arises: in which blockchain, specifically, should the transaction be recorded if I am buying, for example, ether with bitcoins?

What qualities must a blockchain possess to ensure the operation of a decentralized exchange? First, the blockchain must allow any tokens to be issued on its base. This is possible for the aforementioned Waves, Ethereum, and many others. Second, the blockchain must be as fast as possible. If blocks are written once every ten minutes, as with bitcoin, it’s not serious at all. The performance leaders today are blockchains based on the Graphene engine — from 3,000 operations per second, with new blocks written to the blockchain every three seconds. With such lags, one can already trade normally. Moreover, with such an engine, even exchange orders can be written to the blockchain, which means the possibility of creating not hybrid, but fully decentralized exchanges.

The oldest and most venerable Graphene blockchain is bitshares, but there are newer competitors, the full list of which is pointless to provide. I will only note the deex project, which is interesting for three things. First, based on the Graphene blockchain, not only a decentralized exchange is implemented, but also a decentralized messenger and a number of other tools. Second, its own network of ATMs is being launched, and bank cards are on the way. This, of course, no longer has anything to do with decentralization, but it has a huge impact on the convenience of the technology’s penetration into the masses. And third, one of the LPR members participates in the work on the project, and this is, of course, a strong reason to distinguish deex from the others.

And finally, about the downsides of decentralized exchanges

If you want to trade there using fiat, it won’t work directly. First, tokens corresponding to that fiat are purchased through a separate gateway, and then trading is conducted with them. As for how to exchange these tokens back into fiat — ask something easier. Perhaps the notorious deex will allow this in its ATMs, but in general, the problem is not solved. Therefore, the main niche for decentralized exchanges is the exchange of different types of crypto for one another.

As a result, volumes on decentralized exchanges are significantly lower, which means relatively low liquidity and a high spread.

And finally, high blockchain performance does not come for free. Instead of honest POW, as with bitcoin or ether, decentralized exchanges lean toward POS, as with Waves, or even DPOS, as with Graphene blockchains. Each new step that speeds up operation reduces the overall level of system decentralization, as it decreases the number of nodes verifying transactions.

So love the exchange traders; they take high risks — all so that we, simple users, don’t have to worry our heads with all these aforementioned high matters.

Especially since bitcoins for LPR-tyans can be transferred even from a regular bank card, without resorting to such complex tools as decentralized exchanges. Here, give it a try: 1A7Wu2enQNRETLXDNpQEufcbJybtM1VHZ8

Who will you choose: a tyan or a kun?

anonymous question

Murmur! A series of cute questions about personal relationships has started! I’ll answer with pleasure.

I am very, very much lacking tyans. In the best case, they make up about ten percent of the total roster.

Tyans rarely interest themselves in firearms. This is a terrible, unforgivable mistake! With your own shotgun, you’ll be the star at any shooting range, and with your own carbine at 23, you’ll strike any kun dead without any violation of the NAP, so get your first gun right at 18.

Tyans rarely interest themselves in bitcoins. They can actually be understood here: because even under the new law, a tyan will retire a couple of years earlier than a kun, which means her bitcoins won’t grow as much. But, girls, why be so petty?

Tyans rarely interest themselves in economics. It’s terrible, but it’s true. You’d think it’s forgivable for a kun to think that money is bred in a bedside table, but we should know about all these matters much more fully. Girls, fuck the etatist mainstream, study the Austrian school of economics—there’s none of that nasty, nasty mathematics!

But the strangest thing is that tyans rarely interest themselves in politics. You should have heard how Yabloko-tyan lit up the stage at the rally on July 29! The whole square just melted!

Politics is kawaii.

This is the kind of tyan that’s missing

Yes, you’ve noticed that now you can donate bitcoins to me not only by a direct transfer to the wallet 1A7Wu2enQNRETLXDNpQEufcbJybtM1VHZ8, but also simply via bank card? Everything for you!

Libertarians campaign so actively for cryptocurrencies and Bitcoin in particular; why are they not bothered by the fact that this seriously contradicts the gold standard, which 19th-century liberals and, for example, Mises and Rothbard, cared so much about?

Wild Turkey

Mises, in creating the theory of money, formulated the regression theorem, according to which the current value of money is determined by its yesterday’s value, and this can be traced back to the moment when money was an ordinary commodity having only simple consumer value.

The fact that gold specifically became the single standard for backing money by the 20th century was the result of government regulations; prior to that, a bimetallic standard had taken hold in a free banking system, which is described in sufficient detail by the aforementioned Rothbard.

Another libertarian classic, Hayek, openly advocated for private money…

In order to understand exactly how and why bitcoin acquired its value, I recommend reading the classic article by Jeffrey Tucker, kindly translated in 2014 by the Bitnovosti resource.

Thus, bitcoin, acting as digital peer-to-peer gold, does not contradict economic theory as presented by both the classics of the Austrian School of Economics and their modern followers.

And yes, it is high time to donate a few bitcoins to the development of the channel: 1A7Wu2enQNRETLXDNpQEufcbJybtM1VHZ8