18 Dec 2013 joey   » (Master)

what charlie's missing about bitcoin

(Posted as a comment to Charles Stross's blog post about bitcoin)

Bitcoin is a piece of software which tries to implement a particular SFnal future. One in which the world currency is de-centralized, deflationary, all early bitcoin adopters own their own planetoids, and all visitors are automatically charged for the air they breath.

Thing is, the real world is more complicated than that. Assuming Bitcoin did manage to become an important currency, countries would naturally try to regulate it. In 30 years, by the time bitcoin mining has slowed right down, the legal system will be fully caught up to the internet.

Bitcoin tries to make its code the law (as Lessig used to say), but the law can certainly affect its code.

The law could, for example, require that bitcoin be changed to stop increasing the difficulty of mining new blocks. Then bitcoin is suddenly an inflationary currency. This would be a hard fork in the block chain, but one enforced by financial regulators. Miners would be tracked down and forced to comply. Some would perhaps go underground and run the deflationary bitcoin network on TOR hidden services. Lots of possible ways it could play out.

That's only one scenario, covering one of the many problems with Bitcoin that make Charlie hate it. So it seems to me that Bitcoin should be a gold mine for Science Fiction authors, if nothing else..

Syndicated 2013-12-18 20:40:23 from see shy jo

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