Тег: Criticism

Arguments about the shortcomings of bitcoin. What do you think?

I feel that this article pointed them out as accurately as possible.

Anal Magician

The article was written on 17.03.18 shortly after the crash from historical highs. Let’s review the arguments from the perspective of the years passed.

1. So far, this is pure theory, not proven by practice

Bitcoin is believed in by adepts of ancap and AES, others don’t need it. For most, the state is fine, and anarchy is not fine.

True. There is no point in trying to persuade. They will come themselves when life forces them.

2. “Solvable problems” are made up

Blockchain is inconvenient as a real estate registry, etc.

True. The bottleneck is the mechanism for confirming the truth of the information stored in the blockchain. The maximum amount of information about the non-digital world that can be entrusted to a blockchain is a certification that an event took place no later than the addition of such-and-such a block to the blockchain. It’s like photographing a person with a newspaper to certify that they were alive at the time the newspaper was published—it’s possible, but it’s using a newspaper for something other than its intended purpose.

3. Irreversibility of transactions

Examples are given of handing over bitcoins under duress without the possibility of return.

With the same success, one could shake out a PIN code and cash out a bank card. Large sums in bitcoin are not hard to protect, for example, via multisig. It works no worse than additional confirmation of bank transactions. The problem is contrived, unlike the problem of blocking bank accounts.

4. Cryptocurrency payments: expensive and slow

Fast and cheap on-chain payments are a vanishing luxury, the infancy of the technology. Those wishing to stay in the game need to master second-layer protocols.

5. Unsuitability as a medium of exchange

The exchange rate is unstable.

Those for whom it is critical can use stablecoins, and convert small amounts into fiat immediately. There are plenty of tools.

6. Unsuitability as a means of long-term investment

The author is not talking about what one might think based on the headline, but about the fact that bitcoin’s capitalization is small, and if one invests a large sum, it will be impossible to withdraw it within a reasonable timeframe without crashing the rate. That is, it is about low liquidity, not long-term price trends.

True. With the current capitalization, medium capitals are entering bitcoin—large ones still cannot.

7. Blockchain as a noose for the economy

Deflation is harmful.

For hard money, this problem does not exist.

8. Blockchain democracy is worse than existing systems of separation of powers

A Belarusian explains to Russians that the state system of checks and balances works perfectly, while bitcoin’s mechanisms for ensuring decentralization are somehow dubious.

Incorrect. Bitcoin’s decentralization is stable because it is beneficial to everyone. Every participant has something at stake: funds invested in miners, in the bitcoins themselves, in maintaining a node, or in software development—an attempt at dishonest play leads to losing those funds. This is how the creators of bitcoin cash manipulated the price and suffered losses.

9. Inequality and market manipulation

There are whales in the crypto market who control serious amounts; they are capable of playing with prices.

I can offer my old posts on this as an answer: one, two, three.

10. Technology does not save from collusion

For various small cryptos, things like a 51% attack are relevant.

All the worse for small cryptos. Bitcoin has already passed the stage where it could be attacked for a reasonable amount of money.

What is the result?

Cryptocurrencies lost the first round; work on mistakes is necessary. The demand for crypto-anarchy ideas will fall; the “straight guys” choose centralized solutions.

From the height of the past two years, no loss is visible. Bubbles burst, the viable strengthened. Centralized solutions may be useful for small payments, but decentralized ones do not tolerate haste, and solid gentlemen prefer them.

The downsides of agorism

I have promoted agorism quite a bit here, and you may have gotten the impression that it is the only worthy way to fight the state: minarchism quickly stalls, panarchism also bogs down in the very first stages of implementation, and only agorism is indestructible, actually helps many people live, and forms useful qualities in them, meaning it strengthens itself. Nevertheless, it has its downsides. Today I will try to bring them together, but, of course, I will provide a counter-thesis for every thesis, because the goal of the post is not to induce gloom.

As a reminder, by agorism I mean any non-violent entrepreneurship that is either directly prohibited by the state or, at the very least, not regulated by it in any way.

Thesis 1. Due to state opposition, the agorist must spend effort on disguising their activities or other ways to stay out of harm’s way. The costs for this are not zero even for micro-businesses, and they grow rapidly as the scale of the enterprise increases.

Counter-thesis. Russians, as well as subjects of other natural states, might object that for white businesses in their jurisdictions, the costs of opposing state raiding also grow rapidly with the success of the enterprise; therefore, it is important to hide turnover and profit not only to avoid taxes, but also so that the security forces do not seize the enterprise itself.

Thesis 2. Speaking of raiders. Besides state ones, there are also private ones. Black businesses cannot use state protection from such raiding and are forced to defend themselves with their own resources, and the costs for this also grow rapidly as the scale of activity increases.

Counter-thesis. Russians or subjects of other natural states will pat you, you naive soul, on the head upon hearing the words “state protection,” and then tell you many grim tales. De facto, the forceful seizure of business in such jurisdictions is a public-private partnership, where the state seizes and a private person buys for pennies, or where a private person seizes and the state confirms their right through its court, or, finally, where the state pressures lawlessly until the business is rewritten to a private individual.

Thesis 3. It is difficult for an agorist to maintain their libertarian purity—on the black market, they will quite quickly be forced to engage in forceful entrepreneurship themselves, or cooperate with forceful entrepreneurs, or fall into a vassal dependency on them. Legal activity will not make the question of deals with conscience so acute.

Counter-thesis. Yes, this is not ruled out; much depends on the situation. In some places, every street vendor is forced to pay off the mafia, while in others, every government employee may be sent to a pro-government rally or forced to vote according to their boss’s instructions. So legality or illegality itself guarantees nothing, and one will still have to defend their principles, simply out of self-respect.

Thesis 4. The idea of starving the state through agorism could work in the USA, where small business constitutes a significant share of the economy, but in Russia, it languishes on the brink of extinction, and its share of taxes in the state budget is small. Therefore, in Russia, with its gigantomania, agorism will not be able to fulfill its declared task.

Counter-thesis. It is precisely the small business operating “in the white” that languishes on the brink of extinction, which only increases the attractiveness of agorist practices. Nevertheless, I am forced to agree: as long as agorists fundamentally fly below the radar, they will not have a significant influence on the state; for the failure to pay money to the state from scattered individual secret practices to turn into a powerful campaign of civil disobedience, the legitimacy of the state must be seriously undermined by its own failures. The Russian state is currently handling this task confidently; we must seize the moment.

And in conclusion, I will reinforce the message given at the beginning of the article. The main task of agorism in today’s Russia is educational. Nothing rid one of paternalism in their own consciousness better than crude practice. And without eradicating paternalism, you cannot abolish the state.

The condition for the success of agorism

Coronavirus as a challenge to the idea of the nation-state

The apology for the nation-state is primarily based on the idea that it is the best way to solve problems on a national scale. The problem is that there are fewer and fewer tasks for which this specific level of resolution is the most appropriate.

The coronavirus epidemic clearly demonstrated that the task of fighting epidemics cannot be solved at this level. Not a single country managed to resist the spread of the virus into its territory through quarantine measures. Not a single country proved capable of preparing enough equipped hospital beds to provide necessary aid to the sick. Conversely, there are countless examples where the measures taken by states only fueled the spread of the epidemic. I will provide just a few.

The very first case is, of course, the sanctions against the Chinese doctor who first tried to convey information about the start of the epidemic. This is exactly how the motivation system built inevitably by state bureaucracy works. A second example is the conduct of electoral events by states in the midst of the epidemic. Iran experienced a powerful surge in morbidity after parliamentary elections were held there on February 21. On April 22, something similar, though far less rational, awaits Russia. Against this backdrop, the banning of rallies in Russia looks quite inconsistent. A third example is the mass deportation of infected and suspected individuals from the countries where they were located back to their countries of permanent residence, often transiting through third countries, and not always with the observance of proper safety measures.

The nation-state is not only unable to fight epidemics, but it also hinders solving this task at both a lower and a higher level. At a lower level, it suppresses private medicine. Market demand allows for a more flexible approach to providing people with vital necessities. But the state, for example, begins to fight price markups on masks and thermometers, and thereby deprives manufacturers of incentives to invest sufficient funds into expanding production. At a higher level, the state obstructs the work of international organizations by insisting on the priority of national regulations over their recommendations.

One can also recall examples where, in the context of epidemics, the national level of management comes into conflict with the regional level. For instance, a story from 2011 recently surfaced about how the federal government in Germany insisted that the states purchase a huge amount of swine flu vaccine, and two years later, most of what was purchased had expired and had to be burned. In Russia, a significant share of healthcare spending also falls on the regional level, but it is all subject to federal regulations. Thus, any emergency will inevitably cause conflicts because some people steer, while others pay and bear the responsibility.

Thus, it can be assumed that in the coming years, the nation-state will be attacked from literally all sides, as epidemics are only one example of its inefficiency. There will be attempts to dilute its sovereignty, on one hand, in favor of global bureaucracies like the EU and other political blocs; on the other, in favor of local self-government; thirdly, in favor of international non-governmental organizations; and fourthly, in favor of TNCs. And we agorists will surely find a way to profit from these murky waters as well.

Carthage must be destroyed.

Italy fights the epidemic

The social contract is a fiction

or
silence does not mean consent

Bitarch’s Column

The notion that the state is a product of a social contract is an important factor in legitimizing the state; therefore, etatists cling to this theory with all their might, despite the fact that, for instance, the stationary bandit theory explains reality far more accurately. A bandit indeed behaves like a bandit, whereas no one has ever seen a social contract, nor can anyone produce its text.

You may have heard about the laws against sexual violence recently adopted in several European countries, known as “No means no.” Their essence is that sexual abuse (violence) is now considered not only the commission of “lewd acts” amidst active physical resistance by the victim (when she uses all possible strength to fight back), but any resistance where she unambiguously makes it clear that she wants to leave. Among Russian social media users, these laws were received ambiguously and were mainly used as an excuse to once again mock “Gayrope” for having lost all traditional values. Nevertheless, there is common sense in these laws. All criticism should be directed at the states in these countries, which, as always, will distort the essence and apply these laws with bias.

Let’s return to the state. I think a significant portion of people, most likely more than half, would similarly like to say “no” to the state. However, the bureaucrats in power are not fools either; they intuitively understand game theory and do everything possible to ensure that for an individual, any expression of discontent carries the highest possible costs, while the benefit from such a request should be zero! Look, even a request as trivial for the state as building waste processing plants instead of simply dumping trash in landfills remains unanswered. The authorities understand—if you concede such a trifle, in a couple of years they will demand the recognition of the right to create their own sovereign jurisdictions. The cattle must clearly know that they will get nothing, while the costs will be enormous (sleeping in tents near Shies in the freezing cold and constantly being hit on the head with clubs is not exactly like going to a picket line once).

It is exactly the same with the “social contract”—every person understands perfectly well that they alone can do little to change the status quo (depriving the state of its territorial monopoly on governance), but they will get into deep trouble if they start complaining. And so they nod along with the stationary bandit, like a fragile girl with a rapist, even though in their soul they fiercely hate him!

Therefore, I suggest that fans of the “social contract” stop mincing their words and say it straight: “They are raping you, and you aren’t resisting? Then how is that violence; it’s completely voluntary!”

Containment Doctrine, Response to Criticism

Bitarch’s Column

The admin of the “Anti-state” public page Ved Neumann wrote a critical review of the article co-authored by Ancap-chan and me titled “Containment Doctrine — Coercion to Non-Aggression“.

I want to immediately point out the main point of his review, as all subsequent criticism will be based on this fact. Ved does not account for the difference between corporate (CorpETU) and ideological (PolitETU) jurisdiction providers. He himself is a supporter of the former, which is why a clear bias toward them is evident. CorpETU is a “cyberpunk world,” meaning ETUs that prioritize economic calculation and financial gain. PolitETU are, in essence, ideologized extraterritorial states where the criteria for membership are political views, culture, or religion. Examples could be socialist, Marxist, Catholic, Orthodox, traditionalist, transhumanist, or liberal ETUs.

The differences between CorpETU and PolitETU are vast, including the willingness to sacrifice one’s life, renounce habitual comfort, and the likelihood of attracting the majority of the ETUand population (who are not libertarians). These differences are well-described in Oleg Tarakanov’s article “Not Ancap: The Difference Between Extraterritorial States and Private Security Companies“.

Brief conclusion: Ved is completely right regarding the inapplicability of the containment doctrine (CD) to CorpETU (he promotes panarchy with an emphasis on them, so he thinks with some bias), but CD can certainly be used to “divide” the state into PolitETUs.

Next, I will try to analyze some points of this review separately.

> “The difference implicitly implied by you (which in fact is not a difference, as any separatist groups count on the same thing) is that people will consider your actions just and will not view you as terrorists and crazy psychopaths. But this is just another delusion, stemming from the fact that you think many different people can be convinced of the justice of some single ethical theory or political paradigm. ‘Since I believe in something, others believe in it or will believe if I tell them about it.’ They will not believe. Even without considering propaganda, they will not believe. For the absolute overwhelming majority of people, the state is not something bad, evil, a monopoly on violence, or even some single subject of social relations that needs to be opposed for some reason. Which is fair, because it is not such a subject — all this is merely a conceptual simplification, based moreover on a certain set of axioms. But more on this later.”

Polls show exactly the opposite — trust in the state is constantly declining even in developed countries like the USA, and is currently at a minimum level, while the polarization of views is at a maximum. This is excellent soil for the legitimization of PolitETU in the eyes of the majority of the population. Of course, a powerful advertising campaign is needed.

Supporters of the nation-state and democracy were also considered crazy at first, and a decade later it became a mainstream idea. The same can be said about the abolition of slavery.

> “If the system is fragile (very authoritarian with a strong power vertical tied to one person), then with the removal of this person, everything will simply collapse like a house of cards and a civil war will begin. It is not clear how the formation of ten warring Thailands in place of Thailand will help the hypothetical systeders; most likely, sooner or later, not one army, but two or three will come to them, and they will be much more aggressive. It is also unclear how this will help the establishment of ancap or ETU anywhere else. Local residents will definitely not be grateful to ancaps.”

In the original article, the emphasis was placed on the protection of extraterritorial sovereignty, and these systeders (who tried to create a very small but territorial state) were cited only as an interesting example. CD is indeed applicable mainly for the creation of ETUs, but not for territorial separatism.

Ancaps and CorpETUs might not be welcomed in a hypothetical Thailand immediately. But there are certainly ideological disagreements there, and they could become a good basis for turning Thailand not into ten new territorial states, but into, say, five PolitETUs.

> “More to come. How do you intend to define the target for your attack or your influence? Every state system consists of thousands of functionaries, and it is practically impossible to figure out who among them is an important actor by observing from the outside. By being interested in politics, we know a few dozen key figures in the Russian establishment, and often these are not the people that foreign journalists would notice (Indeed, how do you understand whether Milonov, Mizulina, or the head of Roskomnadzor possess real power?). And what about neighboring Turkey? How much do you know about the actors in Erdogan’s government and the balance of power in their country? What about New Guinea or Ecuador?”

On one hand, I want to point out that the victim always knows best where to direct the retribution, so even if it is decentralized, it will be targeted accurately enough; on the other hand, for a deterrent effect, indirect involvement of the object of retribution in the aggression is sufficient — for example, it could be one of the deputies who voted for a repressive norm, or a key government contractor whose affiliation is beyond doubt, even if some details remain in the shadows.

> “What such terrorist activity can really do is harm democracy by redistributing power between public and non-public figures in the governments of many countries (As we saw after September 11, 2001).”

It is worth distinguishing between terrorist activity (against the civilian population) and extremist activity (against the state). Extremism will most likely look positive in the eyes of the population (as I noted earlier, the majority of the population even in wealthy countries now hates the state). As for the destruction of democracy, it only plays into the hands of libertarians, as it legitimizes the territorial monopoly of the state.

> “And finally, it is simply madness to fight a knowingly stronger opponent using his own methods.”

What “same” methods?! The opponent is territorial; his objects are fixed and located in the same places. ETUs, however, are not tied to a territory, and an attempt to arrest even one member of an ETU will likely lead to huge collateral casualties (which is unacceptable damage for the authorities).

> “The success of Bitcoin is that it is a completely new technology that the state system has never encountered and has no idea what to do with.”

Nevertheless, the state has unerringly figured out how to maximize the difficulty of wide Bitcoin adoption and, if it wishes, easily declares its use for purchasing legal goods illegal. Law-abiding citizens are forced to remain in fiat for everyday purchases. Similarly, the state can hinder the activities of extraterritorial jurisdictions in areas where people are forced to act openly and offline. But this defensive tactic is unable to bring the state victory, both in the case of Bitcoin and in the case of ETU.

> “It is impossible to forbid performing mathematical calculations on your own computer (which is what it was originally intended for), which means it is impossible to forbid mining. It is also impossible to forbid the exchange of data about the results of these calculations (how do you imagine that?), which can happen even offline, which means the circulation of Bitcoin cannot be forbidden. Because it is not money. Blockchain can be camouflaged as something as far removed from money as possible, so that not even the most absurd regulation can do anything to it without simultaneously forbidding the Internet and computers. This is exactly the point of Bitcoin. And this is exactly how the confrontation with the state should look — through technical and intellectual superiority over its slow and clumsy system, using all its flaws and weaknesses inseparable from the state, filling all the gaps in the legal, political, and economic system. And finally, creating an alternative that is impossible within the framework of the existing state system, but surpasses it in all parameters.”

I completely agree here. Projects like Bitnation will greatly help the creation of ETUs.

> “And in the maximum volume, having achieved success, you will simply become ‘another intelligence agency,’ i.e., another machine of violence and another Gestapo, deciding who lives and who does not.”

Even if we consider a “hard scenario” (bloody meat grinder, realization of the futility of war, emergence of tolerance for people with different views, renunciation of territorial monopoly and the creation of competing ETUs), which is unlikely given the global trend toward humanization, the result will be a panarchy with peacefully coexistng people of various views, and by no means “another Gestapo.” History has a great example of such a transition — the emergence of tolerance toward non-believers and peaceful coexistence with them on one territory after the Reformation and the subsequent religious wars.

Minarchists are not marginals? Well, excuse me.

Yesterday I published an article by Bitarch “Minarchism is a Marginal Ideology”. In it, the author criticizes the minarchist approach, arguing that minarchists are unable to come to power through democratic means if they run openly on a minarchist platform.

Indeed, this thesis does not contradict history. The USA was formed as a result of a revolution, Georgian reforms happened after a revolution, Chilean reforms after a coup; in Singapore and New Zealand, minarchist reformers came to power through deception, broadcasting a social-democratic agenda before the elections. Only Margaret Thatcher was honestly elected under the banner of shrinking the state, and indeed honestly pursued it, but she failed to achieve stable success in this matter, and today statist reaction reigns supreme in Great Britain.

Bitarch concludes that minarchists, understanding their marginality, will gravitate toward violent methods of imposing their ideology, which gives him reason to state that from the perspective of the average person, minarchist politicians are liberal fascists. Naturally, such a loud thesis could not fail to provoke a sharp reaction.

Alex Kotov, host of the Crypto-Libertarian channel, published an article with objections today. Due to the somewhat disjointed nature of the article, it is difficult to comment on, so I will touch upon just a couple of theses.

Bitarch writes that a minarchist state assumes the unity of laws throughout the entire territory, meaning that conditional leftists will miss their leftist laws. Thus, they will simply vote against the minarchist party and keep their labor code, minimum wage, veteran benefits, and other achievements of the welfare state. Panarchy, however, assumes a peaceful separation, where each interest club has its own rules, including those regarding the organization of social security and the resolution of labor disputes.

Alex responds that the forced redistribution of income contradicts libertarianism, and therefore panarchy is not a variety of libertarianism, and accordingly, the article criticizes not only minarchism but libertarianism as a whole.

This is a slightly strange thesis, since within the framework of contractual relations, a subscription fee for an agreed package of services can be stipulated. Another matter is that any contract can be terminated at any moment; otherwise, it is already slavery. So it is not surprising that another of Alex’s theses — “minarchists leave only the function of ensuring the fulfillment of contracts to the state, regardless of the content of the contract” — will logically be perceived by any anarchist (and even a supporter of panarchy) as a very bad sign. It happens that people sign oppressive contracts because at that moment they see no other way to make ends meet. When circumstances change, they leave these oppressive relationships with a sense of deep satisfaction, and, of course, a court of a minarchist state that decides to demand compliance with the original terms of the contract at that moment will be perceived as a violation of justice. A well-known ancap like Mikhail Svetov speaks quite extensively and in detail about the importance of the fact that any contract can be refused.

Now, another argument against panarchy seemed quite interesting to me. Supporters of panarchy claim that free competition between contractual jurisdictions will lead to the victory of the most free in the competitive race, so that leftists will gradually dissipate on their own. However, in the real world, the opposite is observed. Free competition between states with different laws leads to the fact that freedoms are curtailed everywhere, and governments are happy to adopt each other’s experience specifically in curtailing freedoms. Thus, competition alone is not enough; a moral compass is needed. Therefore, natural law rules, and contractual law sucks.

Overall, this is a fairly strong argument, but I want to draw attention to a very important difference between territorial and extraterritorial jurisdictions. It is much easier for extraterritorial ones to expand. Take such a wonderful liberal territorial jurisdiction as Hong Kong. People are practically climbing over each other there, so great is the desire of residents of neighboring China to live under liberalism. If this jurisdiction were extraterritorial, there would be no need to go huddle on an island; you simply sign a contract and live under Hong Kong law, pay Hong Kong taxes, and receive Hong Kong social services. And if you want handouts in your old age, you enter into a contract with some leftist jurisdiction where you are entitled to a basic income. What will the competition between such jurisdictions lead to? Either leftist jurisdictions will begin to impose entry restrictions, admitting only the young and healthy, or they will break under the weight of the social burden.

So, progress in social mores occurs not by ethics alone, but also by the competition of economic systems.

In conclusion, I want to announce an article where I intend to bring ancap, minarchism, panarchy, and agorism into a more or less coherent picture. I hope to release it within a week and count on the fact that there will be fewer such disputes after that.