[Cryptography] On Security Architecture, The Panopticon, And "The Law"

[Phillip Hallam-Baker]

On Mon, Dec 30, 2013 at 4:45 PM, John Kelsey <crypto.jmk at gmail.com> wrote:

>
> I am pretty skeptical that much of the economic theory around monetary
> inflation or deflation applies very cleanly to bitcoins, given that it's
> all online, with very low transaction costs, and is likely used only to do
> specific transactions.
>

Krugman has some examples of deflation observed in very similar systems,
babysitting vouchers is one example.

As with the dotcom bubble it is easy to see that it will pop but impossible
to know when it will pop and so there is no way to make money from the
expectation.

BitCoin is currently indistinguishable from a penny stock in a company that
has no revenues, no assets or expectations of any in the future. The only
reason to hold bitcoin in preference to another currency are the belief
that Bitcoin will appreciate relative to other currencies or the perception
that transactions are effectively anonymous.

The second belief is essential to support the first. If the belief that
Bitcoin is anonymous is ever seriously challenged then the drug dealers
will dump their coins as quickly as possible and the value of Bitcoin will
drop as fast as cowrie shells did back in the day


Depending on the legal theory the FBI wants to concoct, shutting down
BItCoin could be as simple as asserting that everyone who participates in
BitCoin in any way is a co-conspirator with the cryptolocker/silk road/etc.
organized crime gangs and thus subject to civil forfeiture and criminal
prosecution under RICO. Sure, the theory might well stink but after the US
courts have spent ten years desperately looking the other way to avoid
recognizing torture, murder and imprisonment without trial, anyone who want
to rely on the US courts protecting their civil rights is suffering from
sillier delusions than their belief in the inevitability of BitCoin.

As with Sealand and the rest of libertopia, it all looks so much better
when you can pretend that the authorities are taking no action because they
can't or are too clueless to make a move rather than because they might
have some tactical reason not to.

-- 
Website: http://hallambaker.com/
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://www.metzdowd.com/pipermail/cryptography/attachments/20131230/b43e3818/attachment.html>