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Bitcoin: Great Libertarian Hope or Already Co-opted By Wall Street Banks?

Q&A with Nathaniel Popper on his new book, Digital Gold.

"People were telling the libertarians to shut up," says New York Times reporter Nathaniel Popper, "but they were the only ones willing to put their money on the line and keep Bitcoin alive."

Popper's new book, Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money, tells the story of how the "cryptocurrency" went from an idea sketched out by an anonymous programmer in a nine-page whitepaper in the summer of 2008 to a global phenomenon with multi-million-dollar investments staked on its potential.

Some believe Bitcoin will be as transformative as the Internet itself while others—including many governments and traditional investors and analysts—see it as a threat or scam that should be shutdown or heavily regulated.

Reason TV's Nick Gillespie sat down with Popper to talk about rise of Bitcoin and its underlying blockchain technology, which advocates say has virtually unlimited application.

The topics they covered include:

  • How radical libertarians championed Bitcoin and kept the technology alive when nobody else was paying attention (2:50) 
  • How libertarians clashed with another faction of early Bitcoin champions, who worried that ideological posturing could hurt its chances of wide adoption (5:27)
  • Whether Wall Street banks, the very firms Bitcoin was meant to route around, has co-opted this technology (7:27)
  • How Bitcoin is being used as currency in Argentina (10:57)
  • The evidence that convicted Silk Road founder Ross Ulbricht engaged in murder-for-hire (13:52)
  • The startup OpenBazaar and the ongoing decentralization of commerce (16:30)
  • Whether Bitcoin is truly here to stay. (18:30)

About 23 minutes long.

Shot by Joshua Swain and Alex Manning. Produced and edited by Jim Epstein.

Scroll down for downloadable versions and subscribe to Reason TV's YouTube Channel to get automatic updates when new material goes live.

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  • adamthompson||

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  • TheZeitgeist||

    Cryptocurrency is radical new idea in money, but Bitcoin itself has some fundamental problems which preclude it from mass adoption. Bitcoin will be the Myspace of cryptos, but the Facebook iteration will be the game-changer; and I wonder what that crypto implementation will be.

  • ||

    Cryptocurrency is radical new idea in money, but Bitcoin itself has some fundamental problems which preclude it from mass adoption.

    New? Yes. Radical. No. Minting coins began in the 7th Cent. B.C. Only the state carried the ability to mint/back coins and it collected a fee for such. Bitcoin is *very* little different.

    Not only does it have problems regarding mass adoption, it has, as the author pointed out, some fundamentally compromised principles.

    It is a social signal at best. Whether it is heard remains to be seen. I agree with the author, it's here to stay and it will change things moving forward, but hailing it as a/the sign of a revolution is like suggesting the King was defeated by Tom Paine's relentless pampleteering. And even that is pretty blatantly inflating it's importance.

  • TheZeitgeist||

    New? Yes. Radical. No. Minting coins began in the 7th Cent. B.C. Only the state carried the ability to mint/back coins and it collected a fee for such. Bitcoin is *very* little different.

    Bitcoin is radical idea not in virtualization of trinkets or scrip, but in the distributed nature of its manufacture and lack of a true controlling authority - public or private. That in itself is a radical idea for money.

    And the 'fee' collected by ancient states was not for minting the coins, but in the fiat mandatory conversion of foreign money into the local scrip - the 'moneychangers' of old. Flipping dollars to BTC on, say, Coinbase, is modern equivalent of such, not the fees for bit-miners.

  • ||

    Bitcoin is radical idea not in virtualization of trinkets or scrip, but in the distributed nature of its manufacture and lack of a true controlling authority - public or private. That in itself is a radical idea for money.

    Many of the early mints were privately held and run at the behest of the varying states. *Very* shortly after coinage, decentralized banknotes were created specifically to obviate the need coinage. Only relatively recently (in the history of money) has money been forged/printed under direct control of the State as a, sort of, "Creating Your Own Country: Step 1". Moreover, the fiat backing and isn't simply a backing of the coinage but of the exchange as well. *Little* about bitcoin is new. Most of it is re-framing old practice in a modern technical and political light. IMO, this is where bitcoin fails overwhelmingly. It is an M0 solution to M1+ problems.

  • Cytotoxic||

    " *Little* about bitcoin is new."

    Aside from the entirely revolutionary blockchain tech and decentralization, and total control of the M0 by mathematical formula. But hey what's all that next to some stuff about 7th century BC?

  • ||

    A blockchain is nothing but an encrypted ledger. Bookies have been doing this how long? Probably not as long as banknotes and moneychangers have been 'decentralizing' central banks. You don't/can't have total control of the M0 by mathematical formula. Just ask any government.

    And, while I don't oppose cryptocurrency intrinsically, I do loathe the worship of "total control by mathematical formula". Thanks for the usual pitch perfect defense of all things bitcoin.

  • Cytotoxic||

    "A blockchain is nothing but an encrypted ledger. Bookies have been doing this how long? "

    You just went Full Retard.

  • ||

    Being more clear, IMO, you're reading it backwards. The money and exchange of value existed well outside of the state for most of history. It was only through the advance of the state that you could get stable, useful, and widespread financial tools (other than just money).

    Not that the State intrinsically generated these things, but that them being generated and overtaken is nothing new. Bitcoin offers literally *nothing* new in this regard. The notion that our gov't couldn't co-opt or stamp out bitcoin is as foolish as the notion that previous governments couldn't do the same to said moneychangers.

    Bitcoin isn't decentralizing money, the unpopularity of the US Government is.

  • Cytotoxic||

    "Bitcoin offers literally *nothing* new in this regard.:"

    Said no one who actually understands bitcoin.

  • TheZeitgeist||

    The notion that our gov't couldn't co-opt or stamp out bitcoin is as foolish as the notion that previous governments couldn't do the same to said moneychangers.

    Hmmm...I don't recall making any such contention; and that is not what I'm saying at all. I am talking about possibilities, radical ones for money.

    For instance, consider a government-backed Federal Reserve crypto; banks in the Reserve system are 'miners.' Interest rates set by Fed still are, but with no FOMC in the loop - instead algorithm passively adjusts ease of 'new money' creation; based on criteria such as volume and unit-velocity.

    With that blockchain, every transaction is known; such a system could also know items involved in transaction. Suddenly, one has near perfect data in realtime on what an economy is doing, what people are paying for things, the exact amount of currency in circulation, everything.

    Would there be black markets? Of course. Fraud? You bet. Government tinkering somehow (the gamma in the values could be tweaked for instance)? Absolutely. However it would completely change how people go about using money in a way that transforms society at large. That would be radical development.

    Yes, sewing circles have existed since King Croesus, and Facebook is really just a conglomeration of sewing circles, but does that really capture what Facebook is? You're applying a similar logic to the cryptos.

  • ||

    Yes, sewing circles have existed since King Croesus, and Facebook is really just a conglomeration of sewing circles, but does that really capture what Facebook is? You're applying a similar logic to the cryptos.

    I'm not saying BTC isn't changing things. But plenty of what has been posited as its "enemies" is something other than government and something other than M0. Many of these organizations are more flexible and mobile than government as well as more culturally entrenched.

    I'm not saying bitcoin will be an utter failure and without any merit. I'm just saying, in 30 yrs. I don't think we'll be using BTC and heralding it as some sort of libertarian revolution. Will it still be around? Probably. I think it will hang around and have influence; probably better than beta and HD DVD, somewhere between VoIP, Skype and Friendster. It has certainly signaled to it's 'enemies' that they're living on largesse, but it clearly doesn't have everything it needs to be an unquestionable technological/libertarian moment revolutionary blockbuster (which is how I hear *most* people describe it).

  • Cytotoxic||

    "It is a social signal at best. "

    Congrats that's the dumbest you've ever said here. No, the Chinese that comprise 80% of all BTC trading volume and the Argentine money handlers that use BTC to facilitate their work are not engaged in social signalling. Pretty sure you are judging from how hard you are trying to project yourself as some kind of 'hard skeptic'.

  • ||

    Congrats that's the dumbest you've ever said here. No, the Chinese that comprise 80% of all BTC trading volume and the Argentine money handlers that use BTC to facilitate their work are not engaged in social signalling. Pretty sure you are judging from how hard you are trying to project yourself as some kind of 'hard skeptic'.

    Do they give two shits about the actual technology behind or BTC or if I (or they) could cobble together a paper, retail/barter, etc. equivalent and run it better/cheaper would they divest quickly and completely? Probably. Would they be better served addressing actual local political issues rather than relying on someone else's economic ingenuity/trickery? I think so. Are they harming both themselves and their economic ingenuity/trickery by doing so? Again, I think yes.

    And, yes, when I heard the cries for a return to the Gold Standard cripple larger libertarian issues as an absurd non-sequitur and then go quiet and gradually rise again in the form of bitcoin... when I hear phrases like 'total control over the money supply'... I certainly take the hard skeptic role.

  • Cytotoxic||

    You aren't being skeptical, just really fucking stupid. I can't even follow your train of thought. Agile Cyborg makes far more sense than this.

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  • bassjoe||

    Bitcoin the protocol is in a serious quandary right now. Core developers are split on raising the block size limit; two developers have independently released a client that would increase the limit via the completely untested method of a contentious hard fork once it reaches a super majority. Though these two developers are sure they know what they're doing, other core developers are apoplectic on the effects -- known, theoretical and completely unknown -- this fork may cause.

    Appeals to emotion, appeals to authority, the effects of charismatic and/or powerful leaders, name calling, etc., are eating the community and industry from the inside out. This experiment could very well end in failure within a year. It really may not matter what Wall St does out dies not do...

  • ||

    This experiment could very well end in failure within a year.

    IMO, the 'centralize me' signal is already lit and it's not a question of whether the monetary equivalent Batman will show up.

  • RAHeinlein||

    BBC ran a related story today:

    http://www.bbc.com/news/technology-33974826

  • ||

    Libertarian hope or Wall Street co opt ?

    YES !

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  • Win Bear||

    Wall-St can't "co-opt" anything. If they want to trade in Bitcoin, all the better.

    The problem is that government is stomping down hard on Bitcoin. Wall St may be indirectly responsible by lobbying for that, but it's ultimately government regulations and political pressures that are likely to do Bitcoin in.

    Keep in mind that the assumption under which European governments, and increasingly the US government, operates is that government has a right to know about every single financial exchange that takes place in the country, so that it can be taxes and so that sale of goods the government disapproves of can be punished severely.

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  • Ted S.||

    Thank you for posting a story with four-day-old comments.

  • straffinrun||

  • straffinrun||

  • AlmightyJB||

    So we can dusarm all cops then?

  • ||

    Another good example of the mendacity and insane reasoning of the gun-grabbers.

    They were better able to take out the gunman because they didn't have guns? If they had had guns the gunman would have been more successful? How does that work?

  • Sevo||

    I am amazed that the guy wasn't beaten to death, rather than just unconscious.

  • *GILMORE*||

    "How does that work?"

    Its the same basic logic which says that "electric cars" are "green"...

    (despite often using coal-fired-generated electricity transmitted inefficiently over power lines cutting through land which otherwise would be undisturbed, using batteries which require some of the most toxic chemicals on the planet and which have a limited lifespan before requiring toxic-waste-like disposal)

    ....and organic food is "sustainable"

    (despite requiring 2X the labor and energy inputs, higher waste-runoff into water supplies, and produces 30% higher product-spoilage ...oh, and far more susceptible to catastrophic loss from weather events or blight, etc.)

  • Cytotoxic||

    Over the last five years, just two percent of European Union’s terrorist attacks have been religiously motivated. Most terrorist attacks in Europe have been from white separatists.

    IOW, they are counting things as terrorism that probably aren't.

  • ||

    The only separatists I was aware of that engaged in violent acts are the Basques, and even they have been quiet for the past ten years. Must be a lot of shit going on I don't hear about. That is possible.

  • B. Woodrow Chippenhaus||

    Not one of 62 mass shootings in the United States over the last 30 years has been stopped (by armed bystanders).

    Gee, maybe because if the shooter had been stopped prior to killing several people the incident wouldn't be counted by Mother Jones as a mass shooting?

  • Cytotoxic||

    It’s tough to imagine how things might have turned out differently if the two good samaritans were armed on that French train. Multiple guns would have just added to the chaos and potentially to the injury or body count.

    Yeah, and it's a good thing there was no one with a gun to oppose Anders Breivik. That might have gotten real ugly. Cunts.

  • Paul.||

    the fragmentation of the existing community.

    Can't be stopped. What this means for cryptocurrency in general... too early to say. But to suggest there will be one (1) cryptocurrency-- a monopoly, if you will-- is as silly as saying there will be one operating system, or computing platform, or ridesharing service.

    The only question is, how will markets react to the different competing currencies.

  • Cytotoxic||

    There are already competing currencies. BTC will be the MySpace of crypto.

  • Bruce Hall||

    I went to the store and pulled out my iPhone to pay for my purchases with bitcoins. The cashier said, "We don't recognize that." I said "Byte me." The cashier said, "Leave now voluntarily or get rebooted out."

  • Cytotoxic||

    The anti-XT dissenters are stupid. You can't have a functioning BTC with so few transactions per second.

  • Sevo||

    OT.
    One of the arguments in support of moonbeam's choo-choo regards avoiding the TSA. Well:
    "WASHINGTON — The attempted attack by an armed man aboard a high-speed train in Europe has raised new concerns in the United States about the vulnerability of rail passengers and whether current security measures are adequate."
    http://www.nytimes.com/2015/08.....-rail.html

  • Plàya Manhattan.||

    I've seen them in the Port Authority bus terminal.

    Soon, they'll be searching me before I get into my own car.

  • SIV||

  • Paul.||

    I don’t mean status, I mean age. More and more women I know are dating men twice, yes twice, their age

    Well, this could be a positive development for us on the older end of the spectrum. I haven't read the entire article, but I wonder if this has something to do with so many millennial-aged males going full Pajama-boy.

  • SIV||

  • ||

    Women have always wanted to date older men. They are stable, mature, have already sown their oats, and have money.

  • ||

    I am 58 and my beautiful young wifey is 29.

    It was her idea that we marry.

  • Plàya Manhattan.||

    pics

  • Jane C||

    100% ownership of water, food, land, silver, gold; and knowledge of a meaningful, saleable/trade-worthy craft. As one of the newly poor folk, I now stay away from the more volatile, risk-inherent methods of payment like bitcoin, and um, the Federal Reserve dollar.

  • Vampire||

    Real coin matters more than Bit
    Coin. If individuals were free in using a media of exchange of their choice, they could use today's technology and utilize physical commodity money, or debit cards. Banks would be warehouses, where the only way they can touch a depositors money is by the consent of the depositor.

    Auditing, reviews and so on are better handled by private firms. As we've seen, the gov't doesn't care to audit (or abolish) the fraudulent FED as it robs everyone, so why would it care to audit and go after other corrupt institutions they get donations from?

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