By Oleg Andreev
Monday, August 4, 2014
Bitcoin and State do not go together at all. Neither logically, nor economically.
Logically, if you think that the state is a useful
and viable institution and Bitcoin is a useful and viable technology,
you are lying to yourself. State is a hierarchical construction of
“trusted third parties” (TTPs). In theory, some social interactions may
involve a conflict that may be resolved by a trusted third party
(arbiter). In a nation state it is ultimately some government agency
(e.g. a cop). In case there’s a conflict between a citizen and a
government agency, there is another government agency to watch over it.
Thus, a cop is watched by his chief, a chief is watched by a court,
court is watched by a parliament or a president, and those are being
overthrown by an angry mob from time to time. The theory goes that every
single conflict can be justly resolved by the state if parties cannot
resolve it by themselves.
Bitcoin is an attempt to remove some trusted third parties from
equation. That is all sorts of financial institutions including
government regulators. From the Bitcoin perspective, it is a moral
hazard to enable control over money supply and monetary flows to a
hierarchy of trusted third parties. History is full of examples when
private banks and government agencies could manipulate and destroy
entire economies by being able to produce money without limits or censor
its use. Bitcoin is strange and a bit complicated way to protect all
users of money. Users can transact without need for any third party to
record and acknowledge their transactions, and what’s more, no one can
even become a third party by hijacking the system and imposing controls
and rules on its usage. The former is not possible without the latter.