alt Hacker NewsWhat crypto purists don’t appreciate is that money, commerce and economic activity is all a social function they’re not “technical problems”
When I first read the Satoshi white paper the immediate response I had as somebody who has studied political economics is that “this will never work because governments will never allow for disintermediation of their currency because it’s one of, if not THE, primary sources of control over a population”
The promise of crypto fundamentally misunderstands how humans work, relate, exchange, and negotiate energy and power.
Contracts are just an extension of politics, digital contracts are no different
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I agree as it relates to bitcoin: It's positioning itself as a store of value... and it kind of works as long as the collective delusion that it _is_ a store of value holds up. But that sort of self-fulfilling prophecy is kind of flimsy. Governments get to decide what money is based on charging taxes and demand how it gets paid.
Legal contracts are similar. They 100% are reliant on social and institutional forces for enforcement and meaning. But I think smart contracts are different because they are self-enforcing. It would be very difficult to use a smart contracts as a replacement for legal contracts in most circumstances. But when the contract relates to state and digital assets on the network then it's a great tool. And if you end up with a network that hosts a lot of these important contracts, then the native crypto asset (which is used as gas to power said contracts) has value as a commodity. And if that commodity also shares all the properties of good money (fungibility, durability, portability, etc.) then all of a sudden you have money.
> this will never work because governments will never allow for disintermediation of their currency because it’s one of, if not THE, primary sources of control over a population
Isn't this similar to saying "democracy will never work because kings will never allow it"?
I'm not saying it's exactly the same, just the fact that some existing power structures do not like the change does not guarantee they will manage to stop it. Sometimes they do, sometimes they don't.
> this will never work because governments will never allow for disintermediation of their currency because it’s one of, if not THE, primary sources of control over a population
So, has trump coin and world liberty financial proven your friend wrong? What about El salvador or the cayman islands?
It seems that it was you who misunderstood human nature. Greed always wins.
At least in theory though on chain contracts could have value in that they could lower the cost of the transaction. Of course in practice it did not happen and it’s just speculation on the price.