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Bitcoin and the Blockchain Will Stomp Out Wall Street Fraud

Q&A with Caitlin Long, a former Morgan Stanley managing director, cryptocurrency enthusiast, and recent convert to Austrian economics.

Bitcoin, the world's first and largest cryptocurrency, and the blockchain, which is its underlying technology, have the potential to change everything from record keeping to the global financial system.

The blockchain is a decentralized database that allows individuals to trade directly without the need for a third-party intermediary. Bitcoin is free-market money that runs on the internet, and it isn't controlled by a political entity or central bank.

It's easy to see bitcoin and the blockchain as logical extensions of the internet, with the potential to shift power from governments to individuals. It's also not clear how a fully decentralized money and public-ledger system are going to be implemented and brought to bear on everyday life.

Reason's Nick Gillespie sat down with Caitlin Long, one of Inc. magazine's "10 business leaders changing the world through tech," a former managing director at Morgan Stanley, and the current president of Symbiont, which is bringing blockchain technology to Wall Street.

Interview edited by Mark McDaniel. Introduction edited by Jim Epstein. Cameras by Jim Epstein and Sarah Siskind.

"Modum" by Kai Engel is licensed under Creative Commons.

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This is a rush transcript. Check all quotes against the audio for accuracy.

Nick Gillespie: You became interested in the Austrian School of economics in 2008 during the financial crisis.

Caitlin Long: Yes.

Gillespie: Why did it take the financial crisis to make you interested in the Austrian School, and what are its essential insights into kind of Bitcoin or blockchain technology?

Long: Sure. I was in the industry for 16 years before the financial crisis happened, and the system worked pretty well. Even today, it still does, but that hiccup, I knew there was a bigger story than what we were reading in the mainstream press, and it was, ironically, Tim Geithner's interviews that he gave very close together, in the first one of which he said interest [rates] were too low, and that's why the mortgage market imploded. The second one, he said we should lower interest rates even more, and that-

Gillespie: So you had somebody who clearly was talking out of both sides of his mouth-

Long: Yes.

Gillespie: ... or didn't understand from minute to minute what was going on.

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  • CE||

    What really isn't clear is how long the government will tolerate competition for their money.

  • Qsl||

    It's a bit more nuanced than that as the dollar isn't the only game in town.

    If (big if) other countries start incorporating blockchain technology and there are sufficient gains in efficiency, as she puts it: "capital goes to the place where it is treated best".

    That alone should be tattooed on every Federal Reserve chairperson.

  • Diane Reynolds (Paul.)||

    That alone should be tattooed on every Federal Reserve chairperson.

    As a tramp stamp, so their colleagues can read it as they leave.

  • Qsl||

    If we are going there, you might as well go whole hog and do econ porn.

    My central bank is unable to control this rising inflation. I need to open to bond market NOW!"

    Wait? what?

  • ||

    It's also not clear how a fully decentralized money and public-ledger system are going to be implemented and brought to bear on everyday life.

    And on the 8th day The Dollar Sky-Daddy said, "Let there be double-entry bookkeeping." and it was so. And ever since, the fiat-ledger atheists have been doing their best to dispel the myth of economies of scale and micro-to-macro level economics.

  • ranrod||

    Bitcoin is driven by greed, it's in no way a rational solution to our monetary problems. It's global, scarce, cashless and soon the first banks will provide usurious lending.
    The lesson is: as long as we hope to breed money from money, not realizing it's usually our own labor that breeds money for those holding a lot of it, we will be fooled by units like this.
    Money must be cheap (interest-free) and plentiful, but stable. Only then can it be a good medium of exchange, allowing the producers of society the benefits of their labor, instead of the providers of capital.
    Bitcoin offers none of these features.
    It has the Money Power's fingerprints all over it.

  • 2whlrider||

    Money must be:
    A unit of account
    A store of value
    A medium of exchange
    Fungible
    Easily recognized
    Portable
    Scarce
    Durabile
    Evenly Divisible

    Bitcoin checks all the boxes so it is money.

  • pxm||

    Except that it is deflationary and transactions are atomic, which make it a non-starter for any real economy.

  • Sevo||

    ranrod|11.2.17 @ 5:46PM|#
    "Bitcoin is driven by greed,"
    Lefty/populist bullshit; meaningless. Strike one

    "The lesson is: as long as we hope to breed money from money, not realizing it's usually our own labor that breeds money for those holding a lot of it, we will be fooled by units like this."
    The "Labor Theory" of value was discredited within a short time of its proposal; it takes captical for labor to return value.

    "Money must be cheap (interest-free) and plentiful, but stable. Only then can it be a good medium of exchange, allowing the producers of society the benefits of their labor, instead of the providers of capital."
    That is among the most imbecilic statements I've seen. Try finding any functional economy without interest.
    You're an idiot.

  • ranrod||

    Bitcoins a cashless society

    As its publicity rose it became a target for fraudsters and the Bitcoin market was forced to discontinue PayPal. Hackers were able to access one of the admin accounts from which hundreds of thousands of sell orders are issued. This caused the price to slump to a low of US$0.01 per Bitcoin. This represented the vulnerability of online currencies.

  • Austrian Anarchy||

    Will Stomp Out Wall Street Fraud

    Wow, Cosmotarians say the funniest things.

  • 2whlrider||

    Regarding the alleged crypto-Ruble. I don't think it's even possible to issue a centralized-decentralized, permissionless-regulated, transparent-secret, borderless-bordered crypto-currency. Who would buy it?

  • Sevo||

    I've been reading on N. Korea, and it seems that even the government itself now only accepts the Won under certain circumstances. All other transactions must be conducted in Yuan, Yen, Dollars, or Euros.
    I think the Ruble is by now a market rate currency, even if it sucks, so it's better than the Won, but...

  • scJazz||

    What I really hate about this "Interview" is how soft it is... the leading questions by the "journalist" followed by expected positive answers from Long. This is more a propaganda puff piece aka MSNBC interviews with H. Clinton than some interesting bit of news or even interesting 7 minutes of my life wasted. Points raised are semi-valid bordering on total garbage without any counter-point being raised. No tough questions.

  • pxm||

    This interview and the content within is aimed squarely at everyone that hasn't taken a single economics course in his/her lifetime.

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