Of course Treasury would want to kill it. But it is not merely a question of how, but why? Why would you kill something of so much value to so many libertarians anarcho-capitalists local governments and mom-n-pop bakeries? The longer they wait to kill it, the harder it is going to be to justify it.

BTC at this writing 102.94USD (off from a high of 105.99 earlier)

Surely a bubble, mainstream analysts say.

“Money is the bubble that doesn’t pop.” — Mencius Moldbug

Bitcoin is an enabler based around the ideals of peer-to-peer, open source, and decentralization. That’s the future and bitcoin is the vehicle that will take us there. It takes the banks and the humans and the Federal Reserve out of the equation. Without those institutions, we can do things more freely and easily. It allows us to get things done without all of the friction, and whatever we do will be built around these ideals.

Is not at all inconsistent with Occupy. Occupy protestors I imagine would embrace the p2p/screw the banks/crony capitalism (damn the man) aspect of bitcoin and not link it to the other social inequality/welfare concerns they may have held… Isn’t that consistent with the something for nothing/high time preference diagnosis? And isn’t that another reason why bitcoin is so diabolically clever? If it properly works it’s going to take revenge on an awful lot of people who thought it was their friend.

[My initial knee-jerk on this was way too harsh. The interview is fascinating, and Yifu Guo is clearly a brilliant, creative guy, doing Cthulhu’s work. The Occupy connection is absurd though — they’re a bunch of crypto-commies who want to grow the redistributive State.]

I think smart Cathedralists work more through inertia than through deep thought ont the situation.
I mean, some contrarians have a pretty bad analysis of what liberalism is really about, but how many liberals can really analyze their thoughts to the same depth as, say, Jim Kalb?
A really sober, deep analysis of liberalism shows the ugly corollaries it has. If smart liberals thought that far they’d knew. But of course they don’t. They are just pushing for the next budget.

I’m not so sure about that at all. Whence the confidence?

The first line of evidence is their success. If the top ranks of Cathedral institutions were filled with people who are seriously detached from reality, some opposition would have figured out a way to subvert the system. Yet it always turns out that they’re thinking two steps ahead, and running circles around their opponents (as well as their naive and confused non-insider allies and followers).

The second line of evidence are the occasional glimpses of Cathedral insiders speaking with their guard down. I can’t really offer any systematic list of examples here; it’s more like a general impression from many examples over the years, none of which would be particularly significant by itself.

Of course, if you somehow got to have an honest conversation with them, and you really pushed hard, you’d get to the point where they’d display O’Brianesque doublethink. But note that this is something very different from the naivete, ignorance, and propaganda-induced delusions among the broader ranks of true believers.

5) Bitcoin makes a large impact AND that’s just how certain USG Departments want it.

Bitcoin is, more or less, anonymous… but NOT by anywhere near as anonymous as cash. As pointed out here, referencing Moldbug’s monetary restandardization post, transactions, while psuedonymous, are fully public and traceable.

There is no financial secrecy in Bitcoin – it’s a completely transparent system.

Which means that, if money launderers try to launder money through Bitcoin, they are actually doing the authorities a massive favor. It is very easy to track dirty bitcoins. If you know Pablo, a drug dealer, is using Bitcoin address X, you can download the entire graph of parties that X trades with, and roll up Pablo’s whole network. Instead of shutting down the real-money exchanges, you can secretly force them to send you their entire customer database. That way, the terrorists, drug dealers, etc, are not hiding their transactions at all – they are sharing their most intimate details with the government. Heck, the DEA probably understands Pablo’s finances better than Pablo’s own people. That’s what he gets for using Bitcoin.

The FBI would, I think, rather have BTC exist. It’s a lot easier to track pseudonymous btc addresses than serial numbers on $100 bills. The Treasury department would obviously prefer BTC not exist… but who wins? And how long does the intramural struggle take?

As for TOR coming out of DARPA… and being the free gift of Greeks… Same deal possibly. The CIA and DoD would very much like to have ways of hiding end-nodes (e.g., spies) from middle nodes and vice-versa. In order to do that, you’ve gotta get a diverse network of nodes. Give it away, even for unsavory purposes. TOR works as advertized. Of course it doesn’t encrypt at the exits… there are other publicly available protocols for that. And criminals tend to be pretty lazy and pretty stupid. You catch them in meat-space and then search their computer for their suppliers.

I just don’t know… we in the Hate-o-sphere tend to see in the Cathedral a monolithic mind. But that’s just the geostationary view. Wherever we dig down, we find large powerful branches of USG fighting other large powerful branches. It is not at all implausible that big pieces of USG actually want BTC to succeed.

I’m not so sure about that at all. Whence the confidence?