Bitcoins

I guess I'm reacting to our friends at /. obsessing over Bitcoins again, but I'm finding it hard to take the idea seriously. At the same time, readers should be aware that I'm not exactly a great predictor of stuff:

- I thought the iPhone wouldn't happen, and when it did I couldn't see how a $600 locked down EDGE-only device could possibly be successful.
- I still don't understand why people want iPads.
- I thought, early on, that Windows 8 would be a hit, although I did couch that a little by saying that I assumed the UI would be worked on and made more desktop friendly before launch.

And then there was my backing HD DVD over Blu-ray. True, I never predicted it would actually succeed, and my subsequent prediction that Blu-ray would be a flop anyway despite the failure of HD DVD turned out to be mostly true. But in all honesty, the only technology I think I successfully predicted would be an outright success in the last decade or so was the original Wii console.

So the fact I'm thinking "Bitcoins? Load of crap" shouldn't mean a whole lot to you. But I can at least write down my reasons here, and then revisit them in five years when the Fed announces that the dollar will be backed by Bitcoins to help with "consumer confidence" or something or other...

So, anyway, here's what I think.

I think Bitcoins are fundamentally a result of the massive confusion and distrust of basic economics that the techie community has, which in turn is why they'll probably fail in the long term.

Here are my major reasons.

First and foremost, Bitcoins are based upon the concept that a "legitimate" currency must be based upon something tangible and rare, and that "fiat" currencies like the dollar are problematic because they're not.

I completely disagree. Fundamentally, currencies like "gold coins" did well at one point in time because people were willing to accept them in exchange for goods, services, or other debts, and no other reason. The fact they were made of gold, a rare and usefulish metal, did little but kickstart the process of making the currency a medium of exchange.

With fiat currencies, the currency is, by definition, something an entity is willing to accept in exchange for goods, services, or other debts. That is, the government is saying "Even if nobody else does, we'll accept it."

From that point of view, a fiat currency is more valuable than a currency based upon tangible goods, because you're aware that there is always a customer, who always will accept the currency at the stated price. True, you can distrust that customer, believe they'll mismanage the currency or whatever, but the degree to which this matters determines how long you'll hold on to the currency rather than whether you'll take it to begin with.

Second, there's the belief Bitcoins are based upon something tangible, like gold.

They're not. Bitcoins cost precious resources to make, but they don't represent those resources once made. If I own a Bitcoin, I don't have access, in any form, to the amount of energy needed to make one. I can't heat my home from a collection of unused Bitcoins. So even if you take the position that "gold coins" beats "dollars" any day of the week, you miss the point of why those gold coins were valuable to begin with.

What are Bitcoins? At best, information, but the information can be shared freely once extracted, so they're not even that.

Thirdly, there's the belief that their uncontrolled rarity makes them useful as a universal currency

If there's one thing the last 100 years of economics has taught us, it's that currencies must grow with the economies they support. A lack of money in circulation leads to stagnation or even to economic depressions. Bitcoins contain no inbuilt mechanism to rapidly expand the amount of cash in circulation if such a need arises. At best, Bitcoins' proponents claim that existing non-BC systems like Fractional Reserve Banking could be used, but FRB is distrusted by people who support Bitcoins because it's exactly the kind of "Wealth being represented by money in a way they don't understand" they're trying to get away from, it's not clear such a system is even viable in Bitcoin world.

Economies that attempt to restrict the amount of cash in circulation end up suffering extreme "Business cycles", booms and busts caused by massive expenditures followed by the amount of cash being available being significantly lower than that needed to represent the new, expanded, economy. I don't know about you, but I don't actually want to live in that kind of world.

My thoughts

Ultimately I think the assumptions behind Bitcoins are wrong. I don't think the promoters understand actual economics, and I don't think Bitcoins even fit the economy they think they're implementing. They've gone all-in for rarity, without recognizing the need for value according to their own models.

Will Bitcoins succeed anyway? Well, maybe. But never as a replacement for actual currency, more as a convoluted and absurd way to pay for things, while simultaneously acting as a conduit for paranoid investments, and possibly even some forms of money laundering.

What will kill it as a way for any substantial legitimate group to consider using it as their primary currency is that the lack of real value in Bitcoins means that the currency will continue to oscillate in value between massive extremes and do so too rapidly to be worth considering as a transactional currency. Ironically, for a currency promoted by people who are obsessed with the dollar being subject to hyperinflation or hyperdeflation at any moment, they've managed to build a currency that's had more bouts of both in the last decade than other major Western currencies have had, all put together, in the last Century.

More thoughts on solutions to gun violence

Mike DeAngelo has an excellent contribution to the gun control debate, and he seems to go further than I did, which suggests I may be more liberal (not in the Dems vs Reps sense) than many gun owners on the issue. While I drew a line between "Dangerous" and "More dangerous, requiring more responsibility" weapons, Mike wants responsibility tests for any kind of gun ownership, and wants large capacity magazines banned outside of those kept on shooting ranges.

I thought it was worth raising. For the most part though looking at the "public debate", I'm finding it's unfortunate because the two major sides are too entrenched in their positions. Gun control groups such as the Brady campaign are entrenched in the concept that (a) "Assault Weapons" are especially bad and, yeah, putting a heatsink on a barrel makes it super awesome for mass killings and (b) bans are required and good and will work.

Meanwhile the NRA has reached a point of principle, it seems, that any talk that remotely suggests that any gun might possibly slightly even maybe make it easier to murderize people is blaming guns, and so seems to avoid, for the most part, any restrictions on gun ownership save for token generalizations about the mentally ill.

Here's what I don't think:

• I don't think bans are likely to work. And as a liberal, I don't believe in banning anything except as a last resort. It's not clear to me we've gotten anywhere close to testing alternatives.
• I don't think "Assault Weapons" is an especially helpful definition of a gun that requires a special level of responsibility to own safely.
• I don't think the Brady campaign is a terrible group dedicated to stealing teh freedom. I do think it's made up of victims, direct and indirect, of gun violence who are focused on the wrong things and aren't necessarily expert in the things they want controlled, or banned.
• I don't think the NRA is a good advocate for gun owners. They've turned the entire debate into a left vs right thing and are doing everything they can to alienate liberals, while simultaneously putting forth spectacularly bad arguments. A future Democratic congress is more and more likely to pass draconian anti-gun laws, and it'll be in part because the NRA never engaged liberals or attempted to get them on their side.

A liberal position should involve encouraging those who want guns to own them responsibly, not criminalizing their possession.

How Hollywood glorifies violence

Kinda something that's been kicking around in my head since Wayne LeOutoftouch made his infamous post-Newtown speech blaming video games and Hollywood for the massacre.

I can't honestly say that either of the movies Wayne picked depicted violence positively. In both cases, violence was depicted as insane, horrible, and unpleasant.

But I can say numerous John Wayne movies have depicted it positively. That is, they've described violence as a tool, to be used legitimately under certain circumstances, largely something about killing "bad people". And here's the thing: the speech affirmed those values. The only person who can deal with a bad guy with a gun, said the NRA's chief, is a good guy with a gun. Add some swagger and a pseudo-Texan drawl, and you've got something that'd sound exactly like it was said by John Wayne himself.

Could it be Wayne's right, and that Hollywood does product influential pro-violence movies, but that he, not numerous mass murderers, is the victim of them?

Sensible gun control

Let's accept the following premises:

1. The AWB is a load of crap. It involves weapons not involved in most of the infamous shootings of this decade. While it was internally effective (it did reduce the number of the weapons it targetted circulating), it was ineffective at its intended ultimate goal (reducing gun violence or making it less lethal - there was no reduction in the amount of gun violence during its enforcement.)

2. It's certainly arguable that it's too easy for people who wish to misuse guns to obtain them. And there's quite a bit of concern about any guns that can fire a lot of bullets in a short space of time.

3. Under the current constitution, you can't ban the vast majority of guns.

4. In the current climate, legitimate gun owners would not cooperate with any program, voluntary or otherwise, that requires they give up existing weapons, and they'd lobby hard against restrictions on what they can own.

So what we're looking for is a gesture that would satisfy the concerns of those who strongly believe (2) above, while recognizing (3) and (4), and also doing something that's not already been tried, and not already been completely discredited.

So this is where my mind is at at the moment.

In most states, there's already a set of laws about under what circumstances you can bear arms. The system in most states is:

1. Anyone can bear arms inside their own homes.
2. Anyone with a Concealed Carry Weapons Permit can bear arms outside of their own homes, as long as they keep them out of sight until needed.

The CCW system is relatively popular amongst gun owners. It's not controversial for the vast majority. Most gun owners I've met encourage other gun owners to get the permit, but they see the requirements as actually a good thing.

Permits are issued under a number of circumstances, but even in "Shall Issue" states (Shall Issue means that it's up to government to prove you're irresponsible, rather than for you to prove you're responsible) there are specific actions from those applying for a permit that encourage responsible ownership. Here in Florida, for example, there's a mandatory gun safety class that needs to be passed before you can get your CCW.

States have massive lee-way in terms of how they implement the CCW program (well, it's their program.)

My thought is this. Rather than an all-out ban on "dangerous weapons" (or worse, "scary weapons"), perhaps a better solution would be to recognize the CCW programs in each State and divide weapons between those that can be owned by anyone (which would have restricted capacities, non-detachable magazines, etc) and those that can only be owned by someone with a valid CCW permit. As a starting point for what constitutes a permit-free weapon, a revolver would pass. A basic bolt-action hunting rifle with a built-in magazine should pass too. Given the popularity of .22LR semi-automatic rifles (.22LR is a relatively weak type of ammunition, so such rifles are extremely popular as user-friendly plinking and target practice guns), it might also make sense to relax the restrictions for guns carrying certain types of ammunition.

It would be up to each state to determine the rules for CCW permits and over time States can experiment with tests of responsible gun ownership, handling things like "Weapons being stolen" on a state by state basis. (I'm not in favor of laws that punish people for merely having their weapons stolen, or otherwise misused by a third party, although I can see a case for doing so where the theft was in part due to carelessness on the part of the owner.)

Recognizing permits in this way would also solve the argument over the "Gun Show Loophole". Whether the loophole really exists or not, it can be taken off the table if you simply require that any gun buyer, in any transaction private or commercial, either passes a background check or shows a valid permit. This eliminates any issues about the rights of private individuals to sell their own property, and prevents gun shows from becoming exclusively gun dealer based.

This shouldn't be controversial. You're using State laws that are aimed at identifying responsible gun owners, and restricting guns that may need more care to those people. Most existing gun owners would probably, in all honesty, be entirely unaffected by this law. You're also providing the States with a means to discourage irresponsible gun ownership without punishing responsible gun owners.

Of course, I expect it to be controversial anyway...

Rules of engagement

1. It is not unreasonable or despicable to, in the wake of a horrific tragedy, demand changes to the law you think will prevent it from happening again.
2. That said, it is unreasonable and despicable to demonize your opponents who have done little but disagree with you, and thus far won the arguments, as responsible for that tragedy.
3. It also doesn't mean you're right.
4. Also the world of politics is a little nuanced. You do not speak for all liberals, or all conservatives.

On the final note:

1. The NRA has itself to blame if an overwhelmingly Democratic government, voted in in 2014, imposes draconian gun control laws. Gun control was a bipartisan issue until you waded in during the mid-nineties and demonized Democrats and liberals, alienating a group that usually sticks up for individual liberties. St Reagan was infamous as Governor of California for getting gun control legislation passed that was aimed at disarming groups he didn't like. The infamous AWB had overwhelming bi-partisan support, attracting the vote of almost every Senator.
2. If you're a liberal (or for that matter a conservative) you need to see through the above. The fact that you can find your political opponents coming up with spectacularly bad arguments for a position you find initially uncomfortable does not make that position wrong. As an example, a liberal might want to actually study the effect of the AWB and its similarity to what's being proposed today. It heavily restricted semi-automatic weapons and crippled magazine sizes. And the studies done do not suggest it made a blind bit of difference when it came to gun crime.

My view?

• There are so many guns of all descriptions in circulation any attempt to limit them will have no affect on availability.
• The difference between an AWB-compliant AR-15 pattern rifle and a standard semi-automatic AR-15 is relatively minor: that is, some psycho who wants the rifle they see on  TV to kill people with (which seems to be the thinking behind banning them) is going to be able to find one, just by modifying a legal rifle.
• I doubt, actually, that America's "gun culture" has much to do with the violence we see. Britain doesn't have a gun culture and there were two major massacres while I lived there. Proportionally to population, the number was much smaller than the US. Proportionally to British gun owners, I'd say the ratio of terrible events to gun owners was much, much, higher. And then there's Switzerland, where there's a semi-automatic version of their military's standard issue assault rifle in many homes, proportionally much larger than here, and there's very little gun crime.
• There are actions that can be taken that would not affect civil liberties, and might help prevent problems, but are treated as beyond the pale by the gun community. Registration is probably the most obvious. Being able to say "We know this person is unsuitable at this moment due to {a relevant mental illness | an injunction after domestic violence | etc }" seems relatively reasonable. A better solution than limiting magazine sizes might be to increase taxes on ammunition not normally used in large quantities by ordinary shooters.
• The other issue people raise is that it's generally felt we don't have an adequate system for identifying people with mental illnesses, with a view that somehow this would have prevented this tragedy. Honestly, I don't know. Lanza is speculated as to having had Asbergers.  Does that normally exhibit itself in a burning need to kill children? Would any treatments for Asbergers  have actually affected whatever it was that caused Lanza to break down?

To be quote honest though, I'm currently of a mind that there just may not be anything that can "be done" after this massacre that would have prevented it from happening, if only it had been done before.

Fiscal Cliff FAQ

There seems to be a little confusion as to what the effects of the Fiscal Cliff are, so here's some help.


1. What is the Fiscal Cliff?

It's a package of spending cuts and tax hikes that'll take effect on the 1st of January unless Congress acts to overturn it.


2. I've spent my entire career protesting about the deficit. Is the Fiscal Cliff bad?

Can you clarify your question?

2.1 OK, I'm against the deficit because I truly believe the government shouldn't have such a deficit.

Then the Fiscal Cliff is ideologically sound to you. Although many economic models, including those based upon Keynesianism, say that it'll end up increasing or doing nothing about the deficit because decreased revenues due to a stagnant economy and accompanying deflation will also be the result. But you don't believe in Keynesianism anyway, so that shouldn't be a problem. To you.

2.2 I'm against the deficit, but that's because as I understand it, it's a "bad thing", that's caused by "wasteful government spending", such as the government spending money on things I don't like, and not spending enough on things I do.

Then you should worry about the Fiscal Cliff because while it cuts money to things you don't like, it also cuts money to the programs you support. Also it too is a "bad thing", like the deficit. That is to say, it is something lots of people are worried about, and you sound like the kind of person who worries about things that other people are worrying about.


3. I'm concerned about my job. Is the Fiscal Cliff going to help?

No, your job will objectively become less safe if we go over, although some economists argue that long term, because most models point to a complete collapse of the economy, or that such an action will somehow cause all badly run businesses to fail while leaving all well run businesses alone (it's not clear what model they're using), you'll find it easier to get a job, probably in 2032 when the economy recovers.

4. I don't have a job because I have a lot of money, several million dollars actually, hidden under my mattress. Will the Fiscal Cliff help me?

Kinda. Make sure you don't let anyone know about the mattress though.

Please make it stop

Some time ago, but after my daughter's birth, my mother related to me a tale of a neighbor who, one day, ran out into the street crying and screaming. She banged on the hoods of nearby cars, and continued to scream, and people ran out to see what was going on.

SIDS.

The story terrified me. I honestly had a three day anxiety attack. I read up on SIDS, and read everything I could possibly find on the subject. I finally, after a few days, started to calm down and was able to be rational, but the story...

And the anxiety never completely stopped of course, but then yesterday I read another story via CNN, this time of a case of child abuse [lest anyone is in the same situation as I am, I shall not relate the story itself, but it involves a two year old physically abused to the point of brain damage and a coma by a - frustrated? - mother.] which caused a similar anxiety attack, with me finding it impossible to concentrate for the rest of the day. And just to make matters worse, I visited my mother today, who knew I was having issues with said story, who proceeded to relate stories of her sister, and how when her sister was three she repeatedly hit a baby over the head with a brick (drawing blood and probably more serious damage) wanting to know "what was under the skin", and who grew up to at least mentally abuse her children.

I'm having a freak out over all of this.

I'm hoping that I'll be able to calm down in time, mostly by applying a filter to what I read and listen to. I know much of this has to do with B's vulnerability.

B cries a lot. Well, she's a baby. I'll pick her up when she's crying and try to calm her down. She'll look at me, and she'll usually try to stop for a moment, but her face will still be all upset, and she'll have an unmistakable expression on her face as she looks at me: "Please, make it stop."

Sometimes it's easy to "make it stop". She's hungry. She just needs to be fed.

Sometimes though... well, we'll burp her if we can, or give her gas drops if the her tummy's gas is too far along. Worse still, she might just be tired, and she's too young to know that sleep will solve that particular problem.

But that expression is the killer, because it's right at the heart of why these stories affect me - actually, I'm guessing 99% of parents - so much. "Please make it stop" is the cry of a baby who has no control over her life, who cannot make her own choices, who is desperate for support from the adults she's learning to trust.

And the idea of someone in the same position as B in the hands of someone who wouldn't make it stop, or worse, is a terrifying idea.