Inflation lowers inequality. Specifically, inflation is good for labor who often carry large debts in the form of mortgages and education loans and whose income is entirely dependent upon aggregate demand. This is why you'll often see labor economists advocating for a higher inflation target then the Fed's measely 2% target.
The answer is taxes. Taxes were cut drastically in the 1980s, across the board, at the state and federal levels. It's a good idea to compare the US to Europe. These nosebleed levels of inequality are actually unique to the US. Europe has experienced rising inequality since 1980 but nothing compared to the US. Compare, say, the US and France [1].
The reality is Americans like massive inequality and they have voted for it again and again.
No serious blockchain relies on proof-of-work. Bitcoin (being forked now) doesn't and ethereum (already forked twice) definitely doesn't.
Blockchains are a social construct and what ultimately protects them are the participants. Exactly like actual currencies they are subject to market forces; people either believe in and want the currency or they don't. It's this confidence that gives the currency strength.
More simply:
"On medium to long time scales, humans are quite good at consensus. Even if an adversary had access to unlimited hashing power, and came out with a 51% attack of any major blockchain that reverted even the last month of history, convincing the community that this chain is legitimate is much harder than just outrunning the main chain’s hashpower. They would need to subvert block explorers, every trusted member in the community, the New York Times, archive.org, and many other sources on the internet; all in all, convincing the world that the new attack chain is the one that came first in the information technology-dense 21st century is about as hard as convincing the world that the US moon landings never happened. These social considerations are what ultimately protect any blockchain in the long term, regardless of whether or not the blockchain’s community admits it (note that Bitcoin Core does admit this primacy of the social layer)." [1]
The subtlety here is making the distinction between confidence and resistance to attack. They're not the same thing at all. And what's interesting here is that, going off the model of real currencies, one could assume market forces will prevail here. Developed nations let their currencies float precisely because on the whole they're confident that the market will ultimately punish any malicious attacker who attempts to destroy the currency by selling large amounts of it.
Trading is the zero sum activity par excellence. But GP doesn't know what "zero sum" (and neither do a lot of commenters in this thread apparently). For every trade, there is a winner and a loser [1]. Financial profits require this axiomitically.
What's interesting is that it's not necessarily the case that losers in a trade are worse off than they were before. Every month thousands of retirees "cash out" of the stock market as they begin to draw off their savings. These trades are almost all losing trades made by unsophisticated, uninformed "traders" who are essentially forced to transact irregardless of price. But now the retirees have money to buy food so arguably even though they lost they're doing better than before because now they won't starve.
Society can benefit from zero sum games (eg trading allows price discovery, locking up prisoners and guarding them saves others) but zero sum games do not produce actual wealth, utility is just being to and fro and usually this happens along information differentials. The end result of zero sum games is inequality: better informed winners keep winning and becoming better informed, poorly informed losers keep losing and becoming even more poorly informed. Adair sort of dances around it and he's got a very prestigious reputation to keep up but the reality is productivity growth means virtually nothing in the massively unequal economies like those of the US and the UK. The winners accrue any and all benefits from productivity growth and then translate this into political power which is further used to ensure the winners keep winning and the losers keep losing. The decoupling of productivity and welfare is exactly what you would expect in any feudal society where the serfs, no matter how hard they work, cannot improve their station.
It's remarkable how libertarians can turn on a dime from insisting that the free market is the highest good to complaining about censorship by private actors. Does the irony really escape them?
If you don't like Google censoring terrorist videos start your own video hosting site. Feel free to focus on terrorist videos if you like.
If you don't like Twitter censoring extremism and hate start your own microblogging site.
See the pattern here? Stop trying to force your childish views on private actors (who have built their own platforms at enormous risk and expense) and start actually using those freedoms you claim to cherish so loudly.
The various majority of comments on HN are negative but they are also deeply ignorant. It's easy to dismiss blockchain technology because it's hard to understand. It takes a while for this stuff to come in and it requires careful and deep understanding of computer science, economics, and distributed systems.
Here's the thing: if you're interested in distributed systems you should understand the blockchain. Regardless of any profit potential, regardless of much of nonsense you'll read here, and regardless of the economic foundations (the most trenchant criticism comes from economics [1]) -- it is a very innovative and powerful new way to do distributed computing. Best of all it is virtually all open-source which means deep understanding is possible by diving into the source code. It's a rich area and it'd be silly to dismiss it completely because of the fluff posted here.
> People have so much more power than they had as little as decades ago in almost every single society and that seems to me hard to argue.
What's remarkable is the historical ignorance that drives such arguments. Citizens of the West enjoy access to information today that would seem like a dream even just 10 years ago. And while the mass surveillance policies of today suck hard they are absolutely nothing compared to the surveillance abuses of the 1970s which were uncovered by the Church or Pike committees.
But combine historical ignorance and fantastic propaganda and you get exactly this sort of nonsense.
Back over here in reality the citizens of the West enjoy unparalleled freedom, peace and prosperity unlike anything that has ever occurred before in the history of the planet. The idea that people are less safe or less free simply has no basis in reality.
We can discuss trends and certainly some trends are very concerning (rapidly growing inequality) while others are probably nothing (any advanced economy will probably have a government GDP share of 30-40%. This is not new, not unique to the USA, and is mostly considered a sign of an advanced economy[1]). But when you start with the fantasy that the government is engaging in widespread oppression of its own citizens (and the irony of reading this on Hacker News!) it's difficult to seriously consider any secondary points you raise.
It's sort of a silly question. It's like asking how telephones can solve a problem. The blockchain is a network not unlike the web, the telephone network, and the highway network. Networks don't solve problems in themselves they enable new collaboration models and collaborators solve the problem. People keep getting hung up on implementation details (BTC is one implementation) and silly hype (the fall of Fed!) which is how these things go. Ignore that.
Go to the source code. This stuff is open-source and well documented. Once you start reading the code this stuff makes sense. Write your own blockchain. In fact it's not that hard and it'll make the basic concepts really sink in.
This is a common error. The blockchain itself doesn't make money. Just like the internet itself doesn't make money. People build collaboration models on top of the communication protocols and they make money.
(You still need to pay the ISPs of course and eventually the ISPs become too powerful and start demanding bigger and bigger fees and then the whole thing turns to shit. See: Bitcoin, the internet.)
It's a public database. That's it. Anybody can write to the database and anybody can read from it.
The problem is that whenever you have a public anything there will be spam. People will come along and they will fill the space up with scam ads and porn and hate speech. See: the internet.
To prevent the database from filling up with spam you need to find a way to make people "pay" for writing to the blockchain. Nothing is free and if you're going to consume resources (storage and cpu) from other's computers then they ought to get something in return. That's what "transaction fees" are and that's why they're measured in costs per byte -- the people who are writing to this public, decentralized, highly resilient database are being charged storage fees.
So blockchains are the solution to spam. And unlike pre-existing spam solutions a blockchain doesn't require storage/delivery nodes to "whitelist" certain certificates or for certificate authorities and CRLs and all that wackiness. This is kinda remarkable.
This innovation enables all sorts of new models of collaboration (read: business models). Just today I saw a very interesting proposal for an Uber-like system built on a blockchain. Everything -- requests for transport, driver availability, driver fees, driver certification, passenger and driver ratings -- gets stored in the blockchain. Anybody can read, anybody can write. Here's the database, here's the type of "transactions" (records) -- go crazy. The interesting thing about this system is that it doesn't rely on huge bureaucracy to protect the database. (And what are many business firms but database maintainers and protectors?) Write whatever you want -- write pics of your cats if you like -- but it's going to cost you.
(There's another element of what's commonly called blockchain which is "block verification." The problem here is that when everybody has a copy of the database how do you decide whose copy of the database is authoritative? This is the concept of consensus and note that it's only a problem if the peers in the database don't trust one another. It's actually not so interesting but it is largely an implementation detail of public blockchains with different strategies proof-of-work, proof-of-stake, electoral-validation etc.)
It's because there is no meaningful parallel. Conversations are not economic transactions. Period. You can try to stretch analogies ("walking is illegal because of traffic lights!1") but that's stupid and unhelpful.
The Constitution doesn't guarantee a right to private communications. This is the problem. Period. The 4th amendment was sacrificed during the anti-drug/anti-black eighties. Right now the moment information leaves your home -- whether its a phone call or a letter or a bitcoin transaction -- the government has the right to intercept that. They don't even need a warrant in practice.
It's going to require a Constitutional amendment, really a new 4th amendment, that will clearly and unambiguously extend privacy to a person's communication and data. Complaining about taxes on barter isn't going to help and is nothing but distraction.
Historically, "genocide" was extremely rare and it was definitely not driven by a lack of "squeamishness." It was then, as it is now, a political calculation.
Further, anybody who really understands exactly what the United States did to Japan during WW2 would be very, very hard pressed to declare "modern people are squeemish about killing."
(Seriously, this is almost exactly backwards. Nothing the Mongols ever did could even approach the destruction of modern conflicts.)
> Concentration camps are only necessary now because most people won't stand for such atrocities, and states therefore feel compelled to carry them out in relative secrecy.
Again, this is backwards. Concentration camps are the most basic kind of state terrorism. The goal of modern camps is always to inspire fear in a population in an economically efficient manner. The same is true of historical genocides and slavery. They were tools of terror. What previous governments lacked but the modern state possesses in abundance is the ability to track, contain, and feed large populations. Once you can do this it makes much more economic sense to terrorise your enemy's population than it does to completely annihilate the city (and destroy lots of valuable infrastructure [1]) or enslave the population (slaves are often not very productive from an economic perspective). Hence concentration camps.
The article is probably a bit off too. There are even more sophisticated forms of state terrorism available today which largely obsolete concentration camps. Mass surveillance (once you can convince the population they are always being watched most will self-regulate), mass debt (if you really want to control a man give him a 30 year mortgage, to control a country give them insfrastructure loans) and mass institutionalization (force most people into prison or universities). You are far more likely to see modern statesmen advocating for more surveillance powers and "tougher" laws or economic fines/seizures against whoever happens to be enemy.
[1] To get down to it, the two basic reasons modern states don't annihilate population centers is (a) nuclear weapons which blow out all cost/benefits calculations (b) global trade has produced highly interconnected goods and services networks. Note that (a) and (b) reinforce one another.
Mutiny is likely. American officers in particular will tend not to follow orders to commit an obvious war crime. This isn't an extralegal check , it's very much legal.
But the system will fail if "the whole chain is stupid." This is why it's so dangerous to have a President obsessed with loyalty.
The article is interesting because it gets a lot right but then it fails to clearly state the problem. It's not clear that this group groks it.
It's funny because I just wrote this comment[0] this morning. To sort of repeat myself:
- An extremely slack labor market which is causing a thousands of young men to drop out of the labor market and play video games. [2]
- An extremely slack labor market which is causing unprecedented decreases in labor mobility and entrepreneurship. [3]
- An extremely slack labor market which is causing enormous increases in household debt. (What the Great Financial Crisis was really about.) [4]
- An extremely slack labor market which leads to corporate profits and inequality not seen since the Gilded Age.[5]
- An extremely slack labor market which has led to what is probably negative wage growth as prices rise. [6] (That's just the UK but I'd say the US is probably 2-3 years behind the curve.)
Add in the rise of China and you've got a perfect storm for a severe economic dislocation in the West as most of the population is tossed to the wolves of unemployment.
The problem is that in America you can't simply say the labor market is the problem. People will call you communist or a socialist. So I guess you have to dress it up with terms like "innovation" and "dynamism." This confuses other people and instead of fixing the actual problem -- the labor market -- you get people arguing about cutting back environmental regulations. (Seriously, see elsewhere in the thread.)
So, probably, words do matter. If this group called themselves the "Labor Innovation Group" it would be a sign they understand the issues. But as it is now it's probably a good idea to be a bit wary.
> The article is not mentioning that QE flooded the capital markets with money globally.
I don't know why Americans keep going on about QE. It makes absolutely zero sense. Do people seriously think QE causes low interest rates? I mean this is pure bunk and yet it's repeated over and over like an article of faith.
> More money, more VCs, more funding, more pressure on VCs to deliver returns, less interest in radical new ideas.
Literally the opposite is true. If money were cheap and plentiful it would lead to bigger risks.
But yes, now is a tough time to be a startup. It has nothing to do with QE. The reality is if you're not Google/Amazon/Apple/Facebook then you've got a long road ahead of you.
But this sort of "lucrative stagnation" isn't unique to tech. Look closely and you will see this in virtually every industry. Highly profitable incumbents deploying various tools to kick out startups and competition. These incumbets then go on to command *very( high profits. This absolute triumph of return on capital is probably not a good thing [1] (unless you happen to be an executive at one of the various titans that rule the industry).
Look, this isn't rocket science. You've got:
- An extremely slack labor market which is causing a thousands of young men to drop out of the labor market and play video games. [2]
- An extremely slack labor market which is causing unprecedented decreases in labor mobility and entrepreneurship. [3]
- An extremely slack labor market which is causing enormous increases in household debt. (What the Great Financial Crisis was really about.) [4]
- An extremely slack labor market which leads to corporate profits and inequality not seen since the Gilded Age.[5]
- An extremely slack labor market which has led to what is probably negative wage growth as prices rise. [6] (That's just the UK but I'd say the US is probably 2-3 years behind the curve.)
Add in the rise of China and you've got a perfect storm for a severe economic dislocation in the West as most of the population is tossed to the wolves of unemployment.
So if you really want to see more startups, more entrepreneurship, more labor mobility, heck, simply more labor, you might do better than to keep going on about QE.
My experience is rather different. I've done some benchmarks. A basic Java app written with performance in mind (read: control gc and use high-performance libs like Chronicle[1]) will absolutely blow Erlang away. It's not even close. The JVM is so much faster than the Erlang VM that when you graph the results it's almost comical. And at the end of the day it's much easier to hire Java ninjas, especially in finance.
Still, I encourage people, especially startups, to make big bets on strange "new" technologies. Somebody has to do it and many conservative firms these days won't consider anything but the JVM these days.
I'm old fashioned so I make a distinction between programming and software engineering.
If you want to become a great programmer: read. Read anything and everything you can get your hands. Don't just read books but also read code. Study the great programs written by other great programmers. Then write. Put what you learn into practice. Write some more. It's been said a great programmer can solve pretty much any problem in two weeks and if it takes more than two weeks it's impossible. Not exactly the truth but you should be able to sketch out solutions to even the most sophisticated problems fairly quickly. The intuition comes from your own experience but also because at that point you've learned how to learn -- if somebody asks you to solve X you're at least passingly familiar with system Y and Z that are sort of like X.
A great engineer is something else. This involves careful analysis and deep understanding of the domain. This involves knowledge and contribution to specialized academic and corporate research. This involves the ability to communicate clearly and succinctly. But mostly it involves a highly developed sense of the problems that your clients are actually trying to solve. The big part of it is actually being able to work with and manage a team to evolve a solution that exceeds the client's expectations.
It's rare to be both. These are the mythical "10xers" that can not only deliver innovative solutions but also create systems that make those around them more productive.
The answer is taxes. Taxes were cut drastically in the 1980s, across the board, at the state and federal levels. It's a good idea to compare the US to Europe. These nosebleed levels of inequality are actually unique to the US. Europe has experienced rising inequality since 1980 but nothing compared to the US. Compare, say, the US and France [1].
The reality is Americans like massive inequality and they have voted for it again and again.
[1] https://www.theatlantic.com/business/archive/2013/08/why-is-...