- CNN Reporter: "You were quite rude to the President"
- Medea Benjamin: "I think killing innocent people with drones is rude."
Reblogged from thecheekylibertarian with 3,591 notes
Bitcoin’s Untapped Possibilities
Our favorite little cryptocurrency that could continues to overcome pitfalls and exceed the expectations of even the most starry-eyed of its early adopters. Since its inception a mere four years ago, Bitcoin has weathered at least five significant price drops and one major protocol exploitation. The Schadenfreude enjoyed by some of Bitcoin’s noisier detractors was short-lived.
Rather than foretelling the certain demise of this quirky digital currency, these trials tested and strengthened the network’s resilience. Bitcoin prices quickly re-equilibrated following each crash. The protocol exploitation became a case study in how quickly the Bitcoin community is able to spot and respond to coding problems: After a problem with the update in March was spotted on a Bitcoin forum, all of the major exchanges voluntarily suspended payments while the problem was patched. What could have been a death knell for this fledgling network was quietly handled before most traders even noticed. After withstanding considerable uncertainty and stress-testing, it appears that the Bitcoin model is here to stay.
While the viability of Bitcoin as a decentralized peer-to-peer payment system is becoming less of a question, the regulatory future of the cryptocurrency is still murky. An early red flag shot up with the reveal of FinCEN’s guidance on Bitcoin users and exchanges this March. The guidance appears to have been applied for the first time last week when the Department of Homeland Security suspended operations and seized the assets of Mt. Gox’s mobile payments account serviced by Dwolla.
Despite the troubling uncertainty that this new regulatory environment injects into the Bitcoin platform, Bitcoin prices have remained steady since the unprecedented expropriation. Still, public regulatory wishes from other powerful agency heads should give us cause for concern about the government’s capacity to stifle the full potential of this still-nascent technology.
Many people, if they have heard of Bitcoin at all, associate it with libertarian pipe dreams of overturning the dollar and that rascally Federal Reserve. I can’t blame anyone for holding this impression; after all, the average Bitcoin user is an atheist libertarian male in his early 30′s. However, to primarily view Bitcoin as, for better or worse, a libertarian dream currency is to overlook the wonder of its potential as a platform for financial innovation. The problem that Bitcoin’s mysterious creator, Satoshi Nakamoto (he will never be found), outlined in his original white paper is how to replace relatively-costly third party trust-based transfers with a system based on relatively-inexpensive cryptographic proof. I think that people of all political persuasions can find something to like about Bitcoin’s properties as a decentralized digital payment system.
First, Bitcoin holds enormous potential to help lift the world’s destitute out of abject poverty. Insufficient access to basic financial services is one of the biggest problems facing the poor in developing countries today. Jeff Fong observes that mobile payment services, like M-Pesa, are already wildly popular in countries like Kenya, Tanzania, and Afghanistan. An open, global system like Bitcoin will be a natural financial fit for the fiduciary needs of the world’s poor–and with the benefits of no middleman and more discretion. Additionally, Bitcoin’s capacity to cheaply transfer funds will save new immigrants the 20% fee that they currently pay to send remittances back to capital-starved relatives in their home countries.
Bitcoin’s assurance of privacy will also improve the lives of those in oppressive situations who need to make confidential transactions. Both women who need to gather their children and discreetly flee from a domineering husband and exploited citizens of oppressive regimes need some way to transfer funds away from the prying eyes of their particular tyrant. Already, citizens in Argentina are turning to Bitcoin as a way to escape the devastation of the 25% Argentine inflation rate. On the other side of the transaction, Bitcoin’s pseudonymity ensures that persecuted groups will not be blocked access to capital because of their ethnicity, gender, sexual preference, or disability.
Conservatives will find much to like about Bitcoin’s potential to help lift developing countries out of poverty through market means and export the Western values of industriousness and self-sufficiency. Progressives will be excited to learn of Bitcoin’s ability to help subvert to despotic regimes and obviate the potential for race-based and gender-based discrimination in transactions. Both groups will likely appreciate the privacy that Bitcoin can restore to our over-tracked and over-marketed digital lives. And of course, libertarians like myself will continue to enjoy sticking it to the central banks. But in terms of Bitcoin’s capabilities, these ideas still only scratch the surface of what is possible.
Many functions built into the Bitcoin protocol have yet to be harnessed. During the Bitcoin 2012 convention last year, Mike Hearn, one of the original developers of the Bitcoin protocol,unveiled a few of Bitcoin’s dormant features that programmers can harness. In true Satoshi style, the mastermind only provided a few comments on these in-built features, called “contracts,” before digitally vanishing. Hearn took to the task of discovering these capabilities himself; the possibilities are promising. The Bitcoin protocol contains the ability for seamless micropayments, dispute mediations, assurance contracts, and smart property, among other features that can be developed independently. This allows for the easy development of cheap internet translation services, Kickstarter-like services, and peer-to-peer stock and bond markets. If you’re excited about Bitcoin now, trust me: You ain’t seen nothing yet.
As I write now, scores of Bitcoin developers, investors, journalists, plain old enthusiasts, and one lucky Ümlaut editor are gathered in San Jose for the Bitcoin 2013 convention, discussing plans and possibilities for Bitcoin’s future. Amid high profile calls for protected areas of open experimentation and floating rumors of a new autonomous region that will officially recognize cryptocurrencies, the Bitcoin community is standing at a precipice. Either we can convince government regulators of Bitcoin’s promise as a financial innovation and procure a pledge for open experimentation, or we can risk losing the core capabilities of this cryptocurrency to the confused dictates of the state. It is time for the Bitcoin community to educate policymakers and the public of the vast untapped possibilities that this cryptocurrency can create, lest government regulators be allowed to unknowingly extinguish the potential of this force for good.
I have a date with Wild Nothing, Bitcoin, and Rolf Dobelli this week. I got 99 problems, but (bad music|monetary mischief|cognitive biases) ain’t one.
Groovy times.
Clans, States, and Individual Liberty
Imagine a society without a centralized system of law. In this world, people form social groups associated by kinship, marriage, and religious affinity. Through repeated interactions and shared experiences, they gradually develop unique cultures and norms of behavior that do a pretty good job of keeping the peace within the group. Territory among the different social groups is known and generally respected. In the unusual event of an inter-group dispute, both parties designate a mutually-trusted third party arbitrator to peacefully broker the disagreement before tensions escalate. In the absence of a beefed-up executive branch to throw its monopoly of violence around and enforce imposed law, this society still manages to promote harmony and order through an emergent, decentralized process.
At first glance, this kind of social arrangement looks like it could have been copied and pasted from the imaginative pages of For a New Liberty or The Machinery of Freedom. Indeed, liberals (classical, mind you) of all stripes embrace the decentralization of power as a go-to remedy in our toolbox to beat back the prying tentacles of the state and reestablish the primacy of the individual within society.
Any liberal enthusiasm for the society described above would quickly evaporate upon hearing the important details left out of the original description. For one, participation in these social groups is not euvoluntary at best and directly coercive, particularly towards women, at worst. In fact, the very idea of the “individual,” let alone any recognition that individual humans have dignity and rights that should be respected, is foreign to this society. People in this society are recognized and valued in proportion to the power of their social group and their position within it.
The norms of behavior that developed, while useful to maintain order, significantly infringe on an individual’s unique identity and claims. In this society, not only are you only your brother’s (legal) keeper, you are also your aunt’s, your nephew’s, your sister-in-law’s, and your second cousin’s (twice removed)…and they are all yours. This complex and contextual system of influence, history and nuance is not easily navigable by outside parties willing to trade and therefore not exactly conducive to a developed system of exchange. The collective emotions of honor and shame, rather than individual feelings of self-interest and guilt, primarily motivate action in this world. Even the seemingly amicable inter-group arbitration system is backed by the imminent threat of ceaseless blood feud, which has destroyed both clan-based societies and the dreams of star-crossed lovers on more than one occasion.
The world described is the social system of clannism, a form of governance that has marked the histories of most modern nations and still exists in much of the world that the U.S. military attempts to erect states upon today. This system is explored in great detail in Mark Weiner’s new book, The Rule of the Clan. Building upon Henry Maine’s dichotomy between Societies of Status (clans) and Societies of Contract (modern states), Weiner paints lush pictures of clan-based systems in history and today. Whisking us through vivid impressions of life with the Nuer of Southern Sudan, medieval Icelanders, and the Pashtuns of Afghanistan and Pakistan, among others, Weiner illustrates the logic of clannism in societies that completely lack states, have ineffective states, or exhibit some attributes of both.
The book is interesting enough as a series of anthropological vignettes and colorful collection of the world’s more dramatic creation and history myths (“if you liked A Song of Ice and Fire, then you’ll LOVE the Brennu-Njáls saga!”), but it also raises questions for those interested in stateless governance. In one of this month’s featured articles at the Library of Economics and Liberty, Arnold Kling reviews The Rule of the Clan and summarizes the relevant arguments:
1. A decentralized order is possible. Indeed, it is natural for human societies to achieve such an order, rather than degenerate into the Hobbesian war of all against all.
2. The natural decentralized order is, however, highly illiberal. It requires a set of social norms that bind the individual to the clan. Under the rule of the clan, peace is broken by feuds, commerce is crippled by the inability to put trade with strangers on a contractual basis, and individual autonomy is sacrificed for group solidarity.
3. In the absence of a strong central state, the rule of the clan is the inevitable result. In order to graduate from the society of Status to the society of Contract, you must have a strong central state.
Kling concludes that point 2 was most aptly demonstrated by the author and that point 3, while plausible, needs more evidence to be convincing. Weiner closes his book by warning against taking the state’s capacity for protecting a liberal social order for granted and regressing into the stifling and volatile collectivism of clannism. He raises an interesting question: We know that clan-based societies grow more liberal and less violent after they develop states, but would state-based societies grow less liberal if a decentralized order was to emerge and replace the state?
One point that Weiner did not explore in depth was the development of liberal morality that accompanied the rise of the state. Like Henry Maine, who was driven to write about the then-unappreciated distinctions between Societies of Status and Societies of Contract while immersed in the enchanting exotica of 19th century India, psychologist Jonathan Haidt first came to appreciate the deep differences between WEIRD and non-WEIRD moral systems while living among and learning from the Indian families that hosted him. There appears to be a strong association between the development of liberal states and the rise of WEIRD morality. This morality might be enough to save a modern post-state society from the illiberal byproducts of a decentralized order.
As John Hasnas has noted, we already live a large part of our lives in a decentralized order. Much of the order that we enjoy in our lives is not the direct result of government provision, but rather the product of tradition and experimentation among civic organizations and social groups. Where our ancestors’ clan identities used to broil over into honor brawls of all against all, we now channel these tensions into friendly sports rivalries, sorority philanthropic dance marathons, and company chili cook-offs. The state was probably instrumental in promoting the relative peace that allowed for the development of this new face of benign clannism, but this doesn’t mean that it hasn’t outlived its usefulness.
"… irrational passion for umlauts may have been his undoing"
Arika Okrent on Johann Schleyer (from “Trüth, Beaüty, and Volapük.” The Public Domain Review, 17 October 2012)
Happy Birthday, Salvador Dalí! Illustration from Alice in Wonderland, 1969. Watercolor on paper.
Reblogged from surrealism with 285 notes
