[cryptography] (off-topic) Bitcoin is a repeated lesson in cryptography applications - was "endgame"

Benjamin Kreuter brk7bx at virginia.edu
Sun Feb 26 10:08:48 EST 2012

On Sun, 26 Feb 2012 08:48:05 -0500
dan at geer.org wrote:

> Well put, James.  Warren Buffet's arguments are, to my eye,
> aligned with yours.  He argues that gold has no intrinsic
> value, unlike farmland or a company like Coca Cola.  In that
> way, his evaluation is as instrumentalist as is yours, to the
> extent that I understand the both of you.  His discussion of
> gold, per se, is getting some press.  See
> 2011 shareholder letter
> www.berkshirehathaway.com/letters/2011ltr.pdf
> What I would add to your analysis of fiat currency is to agree
> that nails, moonshine liquor, and antibiotics are replacements
> for fiat currency, but I must also note that the modern economy
> is all but totally dependent on large enterprises which, because
> of their largeness alone, simply cannot engage in barter.

It is not just about big business, it is also about maintaining a
functioning government.  There is too much specialization in society
for courts to assign damages in terms of nails, whiskey, cattle, rice,
or whatever else.  How does the government assess a fine in terms of

Money and government go hand in hand.  Governments need money in order
to manage taxes, fees, fines, and so forth; yet money becomes valuable
because of the legal structure that surrounds it, which is as true for
gold as it is for fiat currency.  Even if you could become completely
self sufficient, to the point of not have to trade with anyone, you
would still need to pay taxes and fees (property taxes, hunting license
fees, etc.), and you will need to make those payments in a manner that
is accepted by the government (i.e. the money issued by the
government).  Barter systems, de facto currencies and so forth only
work on small scales.

-- Ben

Benjamin R Kreuter
UVA Computer Science
brk7bx at virginia.edu


"If large numbers of people are interested in freedom of speech, there
will be freedom of speech, even if the law forbids it; if public
opinion is sluggish, inconvenient minorities will be persecuted, even
if laws exist to protect them." - George Orwell
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