Pretty much the only critique for my proposal to consider bitcoin as an ideal basis for John Nash’s Ideal Money I get from bitcoin maximalists is some form or version of “central banks can’t create money that has comparable utility to bitcoin”. This is generally a reference to bitcoin’s censorship resistance and privacy implications.
This is actually what caused @MustStopMurad to make this declaration:
He had been a patient inquirer into the proposal Ideal Money and my writing about it until he started asking questions with the assertion and axiom that bitcoin was superior and would be evaluated as such by people in the future.
The question he would ask would be something like “If bitcoin is better in every way then how can it be viewed equally to fiat?”
I would continually tell him I reject his baseless assumption and he would repeatedly come back to me with a new form of the same question.
“Yes okok, but let’s say in the future there is centrally banked money and there is bitcoin and people prefer bitcoin because it is so much better…why then would people value centrally banked money at all?”
I had to tell him if he doesn’t stop asking the same question repeatedly I’m just going to have to ignore or block him.
Eventually I gave up.
Mintchip: a Comparably Superior Centrally Banked Digital Currency
Recently in an MIT panel discussion Peter Todd discussed a possible innovation that is quite relevant to the maximalist complaint;
Todd pointed to an abandoned project from the Royal Canadian Mint, who produces coins and paper currencies for various countries around the world. Todd briefly outlined the plan, known as MintChip, during the panel discussion.
“I think they institutionally wanted to survive, and they proposed a hardware-based digital currency system where — long story short — it would be very difficult for the Canadian government to censor once they created it.
The release and government support of this technology, Peter Todd explains, would provide a very significant competitor to some of the qualities of bitcoin that maximalists espouse as fatally superior to government issued money:
Todd added that, had this plan been approved, the world would have effectively had anonymous payments over the Internet that were difficult to shut down.
“That would have been a very powerful thing,” said Todd. “Will a government go and decide to actually make this happen? Maybe.”
Correctly the Error of Starting From An Assumption
This doesn’t perfectly end the “debate”. Even if maximalists steelman my argument and allow it to be true that central banks could issue money with comparable or superior qualities to bitcoin they will still mistakenly assert there is one last hurdle-value.
These people function on the belief that fiat exists only for the reason that governments can devalue it at the expense of the citizenry.
This would also mistakenly return people like Murad back to the assumption and assertion that people would rather have bitcoin-thus returning us to the idea that fiat can never be stable in exchange versus bitcoin (see how Murad created this circle once again!).
But although its true that many central banks basically target some slight inflation, ie 2%, is not an implication that the goal of the central bank is to devalue the money they issue anymore than the observation that a cup is half empty of water is an implication that some force is trying to empty that cup.
From another view a central bank ensures that there is not 3% inflation (or more) which is comparable to the idea that someone is actually trying to fill what would otherwise be an empty cup.
It’s just a limited perspective that has maximalists seeing this way and their want to justify their otherwise baseless and fanciful conclusions.
