Why Don't Objectivists Seem to Care about Cryptocurrency?

[Peter]

I worry about inflation after trillions of dollars we don't have are printed, then handed out or spent in the next four years. Five bucks for a gallon of gas?  

[Michael Stuart Kelly]

11 hours ago, algernonsidney said:

I actually think it will still be at least twenty years before the dollar "goes to shit." Most of the countries in Central and South America guarantee that, for example. There are many other currencies that stink worse than the American dollar.

Chris,

I agree with you if President Trump or another problem-solving kind of person gets into office. If the political winds stay where they are, with the sheer amount of new money that has been created recently, I already have a good idea of what will happen. 

 

Brazil as a case study--indexes

Here's what happened in Brazil. A whole series of indexes started popping up. Some took inflation into account more than others. This was so the government and crony insiders could use the values from indexes that ignored inflation the most to pay its bills, and used the indexes that kept up with inflation to collect from people. The banks did this, too. they tried this crap with imports and exports and only managed to generate one crisis after another.

When a person in a foreign country realized he was only going to get half the money agreed on for his product, if he had not yet shipped, he didn't ship (unless there was a subsidy, but that's another issue). And people who wanted to buy product simply canceled orders when they found out they had to pay double the agreed amount due to index changes. Both essentially said fuck you and Brazilian politicians yacked up a storm to the people to make excuses.

There were so many indexes, there was even a dollar index and a "black market dollar" index published in the financial section of papers and openly talked about by politicians. In fact, the black market dollar index was one of the best indications of the true value of the Brazilian money, but you could not make contracts based on it that would stand up in court.

 

Brazil as a case study--new currencies

When the indexes scam didn't hold enough to keep the country from exploding, the wise ones governing the Brazilian monetary policy cancelled the old currency and issued a new one. Simple. Get rid of the old. Make the new. How did that work? Basically, they chopped off zeroes from one thousand so that 1,000 of the old currency equaled 1 of the new.

There was the real (before my time--this lasted to 1942), then the cruzeiro, then the cruzeiro novo, then the cruzeiro again (when I arrived in Brazil), then the cruzado, then the cruzado novo, then they recycled the cruzeiro again and so on. You can see the full list here: Brazilian currency. Wikipedia sucks, but it is still good for things like this.

Since the article is short, here's the full thing. Notice the last line.

Quote

The official Brazilian currency since 1994 is the Brazilian real (plural reais, sign R$, code BRL).

Through its history, Brazil had a number of other currencies:

• Portuguese real
• Brazilian real (old) (Rs$), pl. réis; from colonial times to 1942
• cruzeiro (first) (₢, Cr$) = 1,000 réis; from 1942 to 1967.
• cruzeiro novo (NCr$) = 1,000 cruzeiros; from 1967 to 1970
• cruzeiro (second) (Cr$) = 1 cruzeiro novo; from 1970 to 1986
• cruzado (Cz$) = 1,000 cruzeiros; from 1986 to 1989
• cruzado novo (NCz$) = 1,000 cruzados; from January 1989 to March 1990
• cruzeiro (third) (Cr$) = 1 cruzado novo; from 1990 to 1993
• cruzeiro real (CR$) = 1,000 cruzeiros; from August 1993 to June 1994
• real (modern) (R$), pl. reais = 2,750 cruzeiros reais; from 1994 to present

Thus, one modern Brazilian real is equivalent to 2,750,000,000,000,000,000 times the old real, that is, 2.75 x 10¹⁸ réis.

I believe that's where the dollar is headed. I don't know what they will do about the name changes, but I bet something similar and maybe a little more nuanced will happen.

That will never happen with Bitcoin. It is constructed in such a manner that this can't happen. 

In fact, the mad rush into cryptocurrencies in general will probably slow down the fate of the dollar.

 

USA indexes

Also, the new USA indexes are already happening with more frequency than before--see here for example. Over time, newer and newer items on that list will appear. Then conditions for each index, such as one index will be used only for energy commitments, another will be used for government employees, another (a more official one) will be used for inflation, another for the maximum a person can earn in short-term capital gains, another for... and on and on... Each will come with new laws and regulations.

Some indexes (old and new) favor the ruling class crony insiders (and make them gobs of money) while others screw the middle class and non-insiders. There's as reason the top 1% exists and only seems to get richer daily by magic. These different indexes are--and will be--assigned by law.

That's the way this stuff works. This has nothing to do with capitalism. 

 

Back to Bitcoin

They can't do this to Bitcoin, although they can do it to any cryptocurrency that has a centralized foundation once they find the leverage point of the people at the center. And Bitcoin will not be able to be outlawed. They can try, but it won't take.

That is why a strong movement in the mainstream media against Bitcoin is now underway. The reality that Bitcoin is not issued by any bank or government or governing body, and it is totally severed from the state, is making the big bad dogs go crazy. They don't know how to confiscate it or index it by whatever they can make up in order to steal. 

 

To me, that's about as Objectivist as it gets. Maybe not in words and jargon, but definitely in concepts like objectivity (as opposed to power-enforced whims), individual rights and so on.

Michael

 

EDIT: I cross-posted this to here. The reason? The name of that thread is Bitcoin and Crypto and DeFi and Sometimes Ayn Rand.