Bitcoin's Libertarian Fantasy Co-Opted by Vladimir Putin's Authoritarian Reality

Hey remember how Bitcoin was going to be like Atlas Shrugged meets virtual currency, a money for free individuals beyond the controlling hands of government control, untraceable by the authorities? Yeah funny story there, except not at all:

At a time in which Russia prepares to legalize Initial Coin Offerings (ICOs), a company co-owned by Russian President Vladimir Putin’s internet ombudsman Dmitry Marinichev reportedly plans on raising as much as $100 million through an ICO, in order to help Russian entrepreneurs challenge China’s bitcoin mining supremacy... RMC plans on using semiconductor chips designed in Russia, designed to be used in satellites, to minimize power consumptions in cryptocurrency mining operations. Putin’s internet advisor even added that Russia has the potential to be a dominant player in the cryptocurrency mining industry, stating: “Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future.”

Vlad's actually late to the party, because a large part of the Bitcoin ecosystem is already controlled (at least on a de facto level) by an equally authoritarian regime, i.e. China:

[T]he block chain is controlled by Chinese miners, just two of whom control more than 50% of the hash power. At a recent conference over 95% of hashing power was controlled by a handful of guys sitting on a single stage. The miners are not allowing the block chain to grow. Why is that such a problem? Ironically enough for a currency that is so appealing to libertarians -- because of well, the Chinese Communist Party: [T]he Chinese internet is so broken by their government’s firewall that moving data across the border barely works at all, with speeds routinely worse than what mobile phones provide.

This is an ironic but not surprising outcome that makes for yet another case study in the failure of libertarian fantasies against a reality that doesn't work as simply as, say, Atlas Shrugged:

Since it's untraceable by authorities, the individuals with the most incentive to use a virtual currency like Bitcoin are criminals, and quasi-criminal regimes like Russia. And since Bitcoin is minted through a "mining" process outside the mainstream, regulated market, the individuals and organization with the most inventive to get into Bitcoin mining tend to be those outside the market -- easy money speculators, fly-by-night operations, and, of course, criminal or quasi-criminal firms/governments.

But don't worry, the whole thing will eventually collapse around their heads, since it's still the case that hardly anyone actually uses Bitcoin as money. (Except you know who.)

Hat tip: @jayfader.

Comments

[Medhue]

Well, if you are talking about true, hardcore libertarians, we, as well as Rand, only believe gold and silver is money, as the U.S. constitution also implies. Yeah, there are many libertarians that bought into the bitcoin craze, but those are mostly the libertarian youth that think they can perform digital alchemy, coined by Peter Schiff. Peter was also recently on the Joe Rogan Experience where Peter talked about GoldMoney. It makes gold digital, and able to trade using a normal debit card. Gold and silver is real money, and every good libertarian knows it.

[Han Held]

...and no true scotsman er, objectivist, er libertarian yeah that's it ...would ever get behind bitcoin because reasons...

*cough*bullshit*cough* anyone got a lozenge?

[Medhue]

@Han - There are different categories of libertarians. For instance, I'm an Anarcho-Capitalist libertarian. Really, I was pointing out Hamlet's wrong assertion that bitcoin is a libertarian's dream. It's not. Gold is. It might be true the many libertarians talk about bitcoin, but that is because libertarians have more of an understanding of money than most other groups. We talk about money more, gold more, silver more, and bitcoin more than any other groups. If you need reasons to not get behind bitcoin, just compare it to gold. Bitcoin bugs think they have created digital gold, but what makes bitcoin any better than any other cryto-currency. None of them have any real value. Today they are $600 or whatever, but tomorrow they could be ZERO. Gold, real money, can't ever go to ZERO. The value of gold has essentially remained stable for thousands of years. Bitcoin, has never been stable.