Kevin D Williamson writes one of the best pieces yet on Bitcoin:

To argue that bitcoins are not “real money” because they have no central-bank regulation or central issuer is like arguing that a prepaid disposable cell phone is not a “real phone” because its number doesn’t appear in the directory and you don’t get a bill. That’s the point, or at least part of the point. 

I am skeptical of the Bitcoin model, but it has in no small part been a victim of its own popularity, with speculative investments in bitcoins overwhelming their use in commercial transactions. But this phenomenon is not unknown among traditional currencies. Consider the lengths to which the Swiss have had to go in recent years to stabilize the value of the franc as euros (and, to a lesser extent, dollars) bounced about. 

But that misses the broader point in a couple of ways. The first is that bitcoins and other private currencies are intended as replacements for greenbacks in approximately the same way that the Internet was intended to be a replacement for the printing press: They may do that, sure, but they will have other uses as well. Wresting control of currencies away from politicians is the only way to let money evolve. Twenty years ago, you didn’t know that you’d want to take photos with your telephone or use it as a boarding pass at the airport. Now you do. Nobody planned that. Nobody knows what “real money” is going to mean in twenty years. 

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“The economists are right about economics but there’s more to life than economics” Nydwracu tweets, with quote marks already attached. Whether economists are right about economics very much depends upon the economists, and those that are most right are those who make least claim to comprehension, but that is another topic than the one to be pursued in this post. It’s the second part of the sentence that matters here and now. The guiding question: Can the economic sphere be rigorously delimited, and thus superseded, by moral-political reason (and associated social institutions)?

It is already to court misunderstanding to pursue this question in terms of ‘economics’, which is (for profound historical reasons) dominated by macroeconomics — i.e. an intellectual project oriented to the facilitation of political control over the economy.  In this regard, the techno-commercial thread of Neoreaction is distinctively characterized by a radical aversion to economics, as the predictable complement of its attachment to the uncontrolled (or laissez-faire) economy. It is not economics that is the primary object of controversy, but capitalism — the free, autonomous, or non-transcended economy.

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In an article that might be the most important contribution to the understanding of Bitcoin since its launch, Eli Dourado writes:

[Bitcoin] is a currency, of sorts. You can spend it on things, especially drugs and gambling and getting around capital controls. Krugman and other economists have analyzed Bitcoin in these terms, as a substitute for dollars. This is rather like regarding the Internet as a substitute for, and not a quantum leap beyond, previous communication technologies. It is true that Bitcoin can substitute for other currencies, but as with the Internet, the abstraction of a permissionless application layer means that it is much more than a substitute: it is like a transport layer for finance.

Every Bitcoin transaction is defined in part by a bit of code, called a script, written in a programming language called Script. The script in one transaction defines how the next user can access the coins. In a conventional transaction, the script specifies the hash of the public key that is needed to spend the coins next, and demands a signature from the corresponding private key.

Script is not limited, however, to these conventional transactions that merely transfer coins from one person’s control to another’s. It can evaluate statements, execute conditionally, do math, and move bits around. It is not a Turing-complete programming language (there is no looping), because that would be a security risk; we do not want viruses to spread via Bitcoin’s blockchain, nor do we want Bitcoin transactions to run indefinitely or, if we ever figure out AI, become self-aware. Despite the lack of loops in Script, it can be used to construct some very interesting scripts. … 

Sometimes ratchets work right.

ADDED: In the comments thread to the article, Eli Dourado suggests: “It’s … possible that democracies won’t respond effectively against Bitcoin because they don’t respond effectively to much of anything.”

Multiply the world population by 365 and it comes out as something significantly north of two trillion human days in which to make things happen. It has impressed me, then, to note that roughly 20% of the last year’s Gross Global Occurrence Volume has taken place in the comments threads of this blog. (I received an activity report from WordPress this evening that suggested I thank VXXC, fotrkd, Spandrell, and Thales in particular for being cranked-up comment monkeys.) Tack on the rest of the reactosphere, and what remains of the planet has been fighting over scraps (which we’ll get to later).

The first — tentative and unconvinced — post here went up in mid-February, so Outside in is a creature of 2013. There’s nothing remotely unusual about that. Other 2013 reactionary monster babies include Radish, Anarchopapist and Occam’s Razor (January); Habitable Worlds, The Reactivity Place, and Amos & Gromar (April); More Right (May); Theden (July); Handleshaus and The Legionnaire (August) … which is just to scoop from my regular reading list. The sheer quantity of explicitly reactionary writing has to have surged by at least an order of magnitude this year. This timeline (by Handle) sharpens the contours of the phenomenon (expanded to encompass the burgeoning new genre of excited anti-reactionary push-back). Even if many of the greatest Outer Right blogs preexisted this wave of dark energy, 2013 was surely the year in which Neoreaction really established itself as a thing.

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Political language is systematically confusing, in a distinctive way. Its significant terms are only secondarily theoretical, as demonstrated by radical shifts in sense that express informal policies of meaning. Descriptions of political position are moves in a game, before they are neutral accounts of the rules, or even of the factions.

It would be excessively digressive to embark on yet another expedition into the history of such political terms as ‘liberal’, ‘progress’, ‘fascism’, or ‘conservative’. Everyone knows that these words are profoundly uninformative without extensive historical qualification, or rough-and-ready adaptation to the dictates of guided fashion. If consistent theoretical use of any political label conflicts with its maximally effective political use, the former will be sacrificed without hesitation — and always has been. That is why neologisms are typically required for even the most fleeting approximation to theoretical precision, whenever political affiliation is at stake.

A point in favor of the ‘crypto-‘ prefix is that it plays directly into such confusion. As a politically-significant marker, it bears two strongly differentiated, yet intersecting senses. It indicates (a) that a political phenomenon has been re-assembled in disguise, and (b) that cryptographic techniques are essential to its identity. Hence, respectively, ‘crypto-communism’ and ‘crypto-currencies’. Any attempt to engage in an initial clarification cuts across the intrinsically occulted character of both.

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A glimpse into the anarcho-capitalism of the dark web:

Despite his caution, [Dread Pirate] Roberts’ personal security remains an open question. But the potential lifetime in prison he might face if identified hasn’t slowed down his growing illegal empire. “We are like a little seed in a big jungle that has just broken the surface of the forest floor,” he wrote in one speech posted to the site’s forums last year. “It’s a big scary jungle with lots of dangerous creatures, each honed by evolution to survive in the hostile environment known as human society. But the environment is rapidly changing, and the jungle has never seen a species quite like the Silk Road.”

(via)

Outside in is preparing an open letter to the government of the PRC, recommending the creation of a Bitcoin clone. The state-level incentive for such an initiative would be to refashion the global financial order in preparation for the ending of US Dollar status as the world reserve currency. It does not seem difficult to present this as a matter of clear Chinese national interest, with definite spin-off benefits to the country’s political and economic elites, its ordinary savers, and supporters of economic freedom worldwide.

Sinocoin (to use its English name), would be released by the PBoC, and then — like BitCoin — be irretrievably autonomous. The Sinocoin algorithm would be a perfect Bitcoin clone, assuming (realistically) that the PRC government would not be inclined to upgrade it with strengthened user anonymity patches. However, PBoC reserves could be used, in accordance with a publicly announced policy, to sustain a floor valuation for the currency in its initial stages. Limited controls on RMB / Sinocoin exchange might provide a longer range mechanism for the suppression of Sinocoin volatility.

Sinocoin would be a complementary initiative to Bitcoin, designed to avoid the disruptive effects that large-scale Chinese forex interventions would have on the latter currency. Bitcoin / Sinocoin exchange rates would provide a valuable index of Chinese financial integration into the emerging (Modernity 2.0) global economy. Parity is to be considered the ultimate natural equilibrium (with Sinocoin outperforming Bitcoin during its early decades).

If anybody has suggestions to make about the technical, economic, or political implications of such a development, they can be discussed here, and carefully considered prior to drafting the proposal. Unless specifically requested, contributor information will not be willingly passed on to either Chinese or US financial authorities or intelligence services.

In January, Moldbug spake prophetically:

Bitcoin dies in two very simple steps.

1: A DOJ indictment is unsealed which names everyone on Planet Three who operates, or has ever operated, or perhaps who has ever even breathed on, a BTC/USD exchange, as a criminal defendant.

The charge: money laundering.

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The brilliance released by this economic intelligence collision is almost intolerable.

What comes through most clearly is raw incomprehension (with an undertone of panic):

It would really be something if intelligent people chose to invest more trust in a currency system built and managed, in large part, by anonymous computer hackers than they did in currency systems built and managed by governments of the people, by the people. Fortunately, we are not there yet.