oscpacey / Oscar Pacey is on Nostr

Are you aware of https://x.com/RichardJMurphy? He has a popular YouTube channel where he opines regularly on financial topics. He’s given an unfortunately ignorant anti cryptocurrency tirade. I have responded with a long form comment. Please amplify its reach so viewers see it.
Comment link: https://www.youtube.com/watch?v=-zpijANwCIQ&lc=UgxFQpzCWg2ehaoAmUx4AaABAg&si=KOoqmRr3XDbpKwlM
Comment text here in full:
Hi Richard, you have made a series of errors, Id like to address each of them. In fact almost every sentence has factual issues so I'll iterate through each chronologically. I would appreciate deeply if you read to the end, even if you just scan it at first.
Part 1 of 5
0:03 - "Con trick": Bitcoin (the original cryptocurrency) was an ideologically motivated project and elaborately documented, pored over and extended by millions of people over 16 years, not a con' which would be an intentionally deceptive act for personal gain. If you think this is a con of the mass delusion type where only a few have some kind of insider information then everyone who has benefited from it had to take some risk on it in the first place because the only rug to be pulled from under bitcoin is in the form of owning the coins in order to sell them later hopefully at a profit, and if you know that then someone else will have thought of that trick too and may do so first. This is an incredibly long and patient game of chicken if so - not normal for such a set up. Other crypto projects vary - we'll discuss later on.
0:09 - "hate of government": Most bitcoiners would choose to have a government if you took a survey. Most would choose a more laissez-faire, smaller state I would expect too. 'Hate' is tabloid sensationalisation. This comes up later on in more detail.
0:10 - "Hate of banks": Bitcoiners (in my experience) tend to be pro hard, rules based money, and anti soft, fiat, centrally planned money. Modern commercial and central banks run like public private partnerships and typical bitcoiners do not like the government created and protected monopoly power of the commercial banking sector. They are not anti the premise of banks as custodians and credit institutions (see Hal Finney 2010) and in many cases as currency issuers operating in a much freer model than the current one (see Cashu and Fedi mints).
0:11 - "Hate of systems": Bitcoin is a far more rigid system than what it competes with. This statement is ill defined - sensational again. What they tend to dislike (and in some cases of course, hate) are systems of coercion and control in which participants may not opt out - I think you confuse the ideology.
0:17 - "There no stability": Bitcoin is yet to deviate from its promised rules based, time bound issuance schedule and anti-counterfeit assurances. It is built to track this issuance schedule without any central authority and despite the multi-billion dollar opportunity to undermine it, no one has managed yet. Price stability (and erosion) is the goal of soft fiat credit money. Bitcoin proponents tend to hypothesise that quantity-restricted money will tend to increase in value, and though it makes no such promise, this has so far been true (it started at $0, and today is >$100,000).
0:18 - "No foundation": It is a self sustaining incentive model where consumers who demand bitcoin transactions, fund the producers who confirm bitcoin transactions - the miners, achieved in a self organising, self regulating manner. That is the foundation it offers. Define foundation if you wish to argue the point further.
0:19 - "No proof of value": nothing has 'proof of value' beyond witnessing an un-coerced exchange. Value is a subjective measure of worth and so cannot be proved any more than I can prove I like bananas. I hope you realise you are resurrecting Marx's half-baked labour theory of value here. You appear to be attempting to convince the listener to assume that a monetary system should have a proof-of-value to be taken seriously, and since bitcoin does not, it may not be taken seriously.
0:21 - "...Literally nothing at all [offered in exchange]" - Bitcoin is not a person so it can offer nothing, however those who have studied it tend to notice it provides a virtually incorruptible ledger of transactions of its monetary units and monetary policy, and THAT is a big deal when it comes to a monetary system. If it offered much more than that it would likely be considered bizarrely bloated, like a hammer with a satellite TV receiver on the back of it.
0:23 - "There is no way in which you can build something of value on the basis that those who have set out to build cryptocurrencies have done". Except of course, you know, the significant valuation bitcoin has acquired in one of the least coerced and most distributed and liquid markets in history. If you don't mean financial value, and some other form of esoterically defined value, like perhaps your own personal subjective value judgement, then I agree, bitcoin has not achieved anything of value, to you, so far - though that isn't a very useful statement.
0:35 - "No proof of value inherent within": There is no such thing as inherent value. All value is subjective. If you really want to force the term, then you must agree bitcoin's market price is a representation of ONLY inherent value and nothing more, because it is not linked to any other financial assets - no rights nor obligations, if it carries a value in a market (which it evidently does) it is because of its own inherent properties because no one else is forcing someone use it - quite the contrary if anything.
0:39 - "Just because someone has to solve a mathematical algorithm using vast amounts of energy to create a coin [..] does not prove that the consequence is something worth having": Miners (who you are referring to) engage in their work as an anti-counterfeit service, not as issuers - they do not create the coins. Every full instance of the bitcoin software executes all of the rules, at very low energy expenditure, to 'create the coins'. They are printed out of 'thin air' as fiat is (but under extremely strict and easily enforced rules), and are allocated during bitcoin's initial issuance era (which is >90% complete) to those miners which are on average providing the most convincing transaction validation (anti-counterfeit) service to the network. The 'energy is used' for anti-counterfeit, not for issuance. Mining will continue indefinitely while bitcoin is in use by more than 1 person, even after the issuance period has ceased. It is not there to prove that bitcoin 'is worth having'. Mining is there to lend verifiable and specific economic weight to any given proposed transaction as being genuine - and does so while simultaneously funding electrical power infrastructure development around the world - not bad! Many people find that valuable as a property of a money and it is clear to me why.
0:57 - "[utterly pointless waste of vast amounts of energy on] alchemy [which] tried to turn things into gold, it wasn't possible": I'll take a bit of a tangent here because this is an example of your missing the forrest for the trees, to put it mildly. Alchemy is an entirely worthwhile venture - it is the hunch that we can transition matter through its elemental states (ie lead into gold, or hydrogen into helium) because it is of the same basic "common essence" (their words) via the application of work or energy (or heat, in their words). It turns out that in fact yes, alchemy is possible and we do it every day - literal physical alchemy in the philosophical basis that they imagined in that medieval period and we today call it nuclear fusion and fission because we better understand the mechanics. They in fact did not have ENOUGH energy available to them to realise their dream, but that doesn't mean they were wrong - their intuition was spot on and eventually their descendants worked out the methods. Alchemists also hoped to achieve immortality - which of course will be possible in the future in the sense that we will unravel the mechanisms of aging and halt them - just as the Turritopsis dohrnii ("The Immortal Jellyfish") demonstrates for us in every ocean. You seem to consider energy wasted when it isn't applied to something you find worthwhile - fortunately you only get to decide that for the energy you have access to control lest we would never have discovered most of modern science which has I'm afraid converted incalculable amounts of higher order entropy sources to lower forms during its endless trials and tests. Energy is not a scarce resource, energy and matter are the most abundant resources, even on earth. When people have a need for energy they are not depriving others of it, they are paying for it, funding the build out of new power generation facilities whether that be wood crops, hydro turbines or nuclear reactors.
1:02 - "Nor is it possible to turn a mathematical algorithm into value": Mathematics is responsible for incomprehensible volumes of cultural, industrial and social development that most people would judge as enormously valuable, I would bet. Monetary projects ARE all mathematical projects, albeit basic ones. Anyway, the way bitcoin "claims to turn energy into value" (which is not its claim of course - that's your projection) is that some participants choose to expend costly resource (electrical power) into an easily verifiable proof that those resources were spent. Other participants can use that proof to collectively and objectively decide on which blocks of transactions become canonical in the ledger and therefore which are valid and which aren't. It's cheaper but also more corruption prone to use an appointed authority to do that job - one is better than the other if you want strong anti counterfeit properties in your money. N.B. Given that you assert that crypto promises to turn power in to value - you are colouring all cryptocurrencies in the model of Bitcoin's Proof-of-Work mining protocol. Most of them do not do this, they use very little energy in fact. You cant both say its all like bitcoin and also all like the worst of scam crypto, they are wildly different ends of a spectrum of ethical propositions.
Part 2 of 5
1:13 - "There is no one cryptocurrency": Not an error - a good fact. I was worried you hadn't realised this given the sweeping generalisations you have been making. I take the opportunity though to point out that I am using bitcoin as the example in my arguments here as it is the original, and by far the largest example. It is in my opinion the cryptocurrency that has the most cultural significance and by a wide margin. Others do exist, both in the form of direct monetary competitors to bitcoin and other with more niche intended purposes. Each will have to have its merits tested by the market of observers and participants. There is nothing much binding their form as a category and so there isn't much merit to arguing against or for them as a group. There is endless junk in the group in my opinion but it bares no meaningful resemblance to bitcoin - just as MS Word is very distinct from Google search despite them both being 'software'.
1:17 - "They don't behave like money": This is word semantics again, leading an uncritical listener to think that the behaviour is sufficient to understand the properties. Bitcoin works as money very well for those who want to use it as money. It adheres very well to the commonly accepted properties of a good money, and it fulfils some of the functions of money to many users and all of the functions of money so a smaller group of users. I will elaborate on this further on.
1:22 - "They are at best like commodities": This isn't a bad assertion at one level. Isn't money's role to be the commoditisation of the abstract notion of value? I think it is. In fact I'd go so far as to say that the best money is the one that is the most pure commoditisation of the notion of value. Anything else used as money, like gold, or homes or businesses shares are useful for other things and will be disrupted in their utility markets by the interference of their monetary markets. The sooner we stop using homes as a store of value the sooner the housing market will behave like one. P.S. I think I just "described" bitcoin as a value commodity quite well, and yes, people "use" bitcoin every day... as a value commodity, aka a very good money.
1:30 - "They are far too volatile in terms of value to actually be used as a medium for exchange": Did you just say they have... value? (I'll come back to volatility).
1:36 - "...which is the most basic and common denominator use of money": You mean the most common use of fiat money? Fiat money is intentionally designed to lose value over time - see every central bank's target inflation (devaluation) rate of 2% - specifically to inhibit its use in one of the three functions of money. For the readers, these are typically recited as, store-of-value, medium-of-exchange and unit-of-account. If a money cannot store any value it won't work as a medium of exchange or unit of account. It's kind of triangle of dependence (kind of). Anything which is programmed to lose value over time will be rejected as a store of value, of course. People use things which tend to go up in value as their store of value, and if money doesn't offer that then they will have to engage in markets and speculate upon... housing, blue chip stocks, government and private debt instruments, etc. That's an activity I think should be voluntary and not 'nudged'. If governments didn't devalue their currencies people would naturally flock to them as their stores of value, as money is actually literally the common denominator, unlike the awkward way you used the term above. Did you perhaps have this truth on your mind when forming the statement 'common denominator use of money'?. So while you point out that bitcoin isn't used much as a medium of exchange, which is true, you ignore that it is used enthusiastically as a store of value by millions of people to great effect. Now, people who get paid in bitcoin also spend in bitcoin and they suffer very low volatility effects in their month to month accounts as the time periods in question are so brief. So it's great as a store and it's fine as a medium. If adoption continues and it saturates economies, you will find that its volatility falls dramatically, and probably lower than that of fiat currencies by shear nature of its global scale, solving your critique about MoE volatility vis-a-vis goods and services. Even if volatility were to remain off-puttingly high for MoE use (despite that volatility having a likely gentle but permanent upward bias) there are lots of ways currency users can overcome that by means of futures (I include consumer subscription agreements in that technical term) and insurance - things which can be provided friction free and at micro scale in a digital era. If everything else about the money is more compelling than other money's then I think people would happily accept this minor inconvenience.
1:45 - "Neither party to an exchange is willing to partake in it": What? 99.999*% of bitcoin trades and transactions have had no other motivation aside personal will. Perhaps you're thinking of fiat money again which is a partially coerced money (other forms of money are permitted but taxed, other forms of money are rejected for settling tax bills, only fiat gets 'legal tender' status for debt settlement in most jurisdictions, etc).
2:03 - "crypto has proved itself to be an utterly useless store of value over time": Again, what? It was worth $0 in 2009, and is worth >$100,000 today. Thats not a trick or sleight of hand, that's millions of people speaking, putting their money where their mouth is, that they wish to store value in bitcoin. Thats not a seriously debatable point.
2:32 - "Money should be very boring and mundane [...] that's the last thing they want in crypto": this isn't a bad point on the surface, I agree with it, but it isn't a good criticism. Good money should indeed be as boring as possible. Bitcoin is really boring, just try discussing it with almost anyone :) We want money to be an easily understood, reliable and universal measure of worth, and not much else. We want to understand it once, then use it forever. The fact that a unit's purchasing power is reasonably volatile isn't ideal however, this is a temporary situation if bitcoin becomes the default money on Earth. So why is it so volatile so far? That's because its issued quantity is rigidly dictated by protocol and not by supply and demand - this is a feature. Supply and demand dynamics therefore get fully expressed in the price. Given that it is a novel and useful asset people expect adoption to go up, and given the unresponsive issuance curve they expect the price to follow and so they invest. When it falls they sell and we get a whipsaw effect. Most current users indeed expect the price to rise over time and experience significant volatility and they quite like that. The latter doesn't invalidate the former. The volatility will subside as the growth opportunity becomes saturated and by then hundreds of millions of people will necessarily have learnt how to use it - this is just the nature of markets and it doesn't hinder bitcoin's use today or tomorrow as money - if anything it is one of the core drivers of adoption (get rich speculation -> wealth -> spending -> reinforcement learning).
2:50 - "One thing we know it is good for is criminal activity": Criminal activity, albeit potentially immoral, is no less relevant monetarily. If you are stating that it's good for the black market then you are saying bitcoin is good money just not appropriate for the white market. You are introducing an inconsistency to your line of value argument.
3:01 - "indeed [illicit drugs purchase] is one of its biggest uses as far a anybody can work out": Do you think that bitcoin, sitting at a 2 trillion dollar market cap is primarily supported by buying and selling of drugs? Also, are you forgetting what is mainly used for the drugs trade? Is it bitcoin? Is it really? Or is it national fiat currencies, mainly the dollar, to the tune of something like 99.999%? Yes, that's right, ask your local dealer what they want and much like your local grocery they will ask for dirty fiat cash please. Bitcoin is useful in black markets because is it a liquid, fungible, bearer asset, like fiat paper and metal cash. It isn't as good as physical cash because it leaves a permanent record but it will do fine. So you are levelling a critique at cash forms of money in general, something most people will most associate with the notion of money in fact. In any case, the massive overwhelming screaming use case for bitcoin so far is store of value. Taking one's hard-earned devaluing fiat, swapping it for appreciating bitcoin and holding it until one wants to or needs to spend it, and hoping that it will be worth at least as much then as it is now, and guessing that it will probably be worth significantly more. That is the use case and if you don't see that you are missing the forest for the trees. If you don't believe me, check any source, there are many... exchanges, forensic blockchain analysis firms, investment firm research publications and so on.
Part 3 of 5
3:35 "this appeals heavily to those who are trying to avoid laws and taxes": You are conjuring in the reader's mind the idea that cash (ie, the historical normal form of money) is some kind of wondrous innovation for evasive behaviour - because the property of crypto that makes it useful for the black market is the lack of payments intermediary. You are therefore saying that all money until we achieved telegraphed bank money was facilitating rampant evasion and crime and we should therefore logically outlaw all cash and use only intermediated forms of money and payment. No passing a coin to an unknown needy person, no tipping, no birthday gift to a child, unless there is a government regulated super surveillance and control intermediary institution opining and agreeing to each and every transaction? Economic expression by voluntary trade is in my opinion more foundational to a healthy society than democracy is, and if it is prohibited you raise the spectre of an omniscient and omnipotent central command. Does that sound like the way nature works? It sounds like the way hell works to me. Some of the most wonderful acts in history have been criminal: The Underground Railroad, Civil Rights Sit Ins, Whistleblowing (like Wikileaks), Harbouring Jews during Nazi occupation, and so on - were all legally criminal acts popularly deemed heroic and moral (and helped by cash). Bitcoin is cash, and cash is foundational to healthy society, don't knock it until you've lost it.
3:38 - "Strong link between tax havens and cryptocurrency": That link is between either the very wealthy or businesses who have no need to be onshore - you will find that in all social and commercial sectors, not just with crypto. If crypto itself were as in demand for evasion as you assert, then there is no point to using tax havens for those people.
3:43 - "[strong link between the far right of politics and crypto because they want to disrupt order]": the people you are characterising do not like governmental control. This is not all bitcoin/crypto users but is a material part of the culture. Never the less, they tend to espouse free market money over centrally planned money (and economies and societies) because they deem that to be a higher grade of order. The presence of central planners in their view is a vulnerability which causes disruption and disorder. You may disagree with their philosophy but at least present it accurately. When you say "they are trying to destabilise our economies, our banks, our institutions" you are using 'othering' language, us versus them, it's another subliminal word game. It is only your bank if you hold shares in it. No one owns an economy it is an emergent phenomena. You could call them 'our institutions' if you are referring to the public sector but that is still a stretch. The people you characterise often quote the meme "bitcoin is the separation of money from state" in the tradition of the disestablishment of church from state. This is not the sensationalist 'taking our stuff' philosophy you colour it as.
4:10 - "Libertarianism is a philosophy of hate": Where do you get this language from? Go and read any libertarian text or speak to any self labelled libertarian and you will find philosophy closer to 1970s hippies than anything you are imagining. Their guiding axiom is "the non aggression principle". You have not and do not make any case for why it is a philosophy of hate. Such strong language should be backed up by strong reasoning.
4:24 - "A basis of trust has to be inherent in any currency": This is another unfounded poorly defined assertion. The core purpose of money is the alleviation of the need need for trust between counterparties. If we were looking for a system of trust, barter based IOU and personal credit is your system. My local shops have signs saying "please don't ask for credit as refusal can offend" - so good luck with that. We want to trust the MONEY is good, so that we don't have to trust that our customer's credit is good. Proper bitcoin wallets mechanically verify every incoming payment is valid, un-counterfieted, bearer, first class units of the currency, which is more than other moneys have achieved. If trust in the validity of incoming money is what you want, accept no substitute. This is why it has a public and permanent ledger of its history, so that every person may trivially check that every received coin is of genuine origin from the issuance mechanism - no other money works that way and can only simulate such assurances (for example by embossing the monarch's face intricately on a coin [energy use], and running ridges down its edge to make clipping obvious).
4:32 - "There is no right to use in exchange, it isn't legal tender": Yes, there is, people have a right to do anything that isn't illegal in the UK (unlike Germany where people only have the right to do legal things). And it is not illegal to use foreign or virtual currencies in the UK - for the avoidance of doubt. There is no need for anything more formal however if you want that please see Freedom of Contract, Bills of Exchange Act 1882, Sale of Goods Act 1979, Absence of Exchange Control Laws and that legal tender is not mandatory in private contracts. Legal tender in the UK asserts that due debts, if offered for settlement in legal tender, may not be further sued - making it explicitly clear that people are free to transact in any money they like (as long as it is not explicitly illegal). If you are suggesting that anyone selling something should be compelled by force of law to accept a singular currency (ie not a right to use but an obligation to accept), such as the national fiat, then you are suggesting that without that, the currency is much less valuable - that is consistent with your opening premise. I'll go with a money that people actually want to use when not coerced to as that is likely much more durable. Historical fiat currencies don't have a great track record in durability.
4:37 - "There is no authority to intervene in a crisis": Yes there is, we have a legal system and police to handle fraud and theft. "Meaning there is no lender of last resort"... there is no need for lenders in asset based monetary systems unlike fiat which is an intentionally debt based money system so of course the lender of last resort is a significant role in such a system. The crises you allude to are inherent only to the type of money you are advocating and that's where we get dystopian phrases like "systemically important banks" from - there is no such thing in a bitcoin economy.
4:46 - "There is no one to bail you out": Unless you engage in insurance contracts of course, which is the appropriate service for risk mitigation. The currency in question (bitcoin) does not need bailing out mechanisms because they are only needed in bankruptcy situations and bankruptcy is only possible where there is debt and bitcoin has no notion of debt. Individuals and firms may engage in bitcoin denominated debt but that is their personal choice and needs no systemic centralised interventions.
4:55 - "Governments will always bail out someone who holds their currency": What kind of propaganda are you reading!? Shall I list the top 10 government defaults of the last 5 decades chronologically or by size? Let's see, Argentina, Brazil, Greece, Iraq, Lebanon, Mexico, ... and that's the case of governments directly owning people money and they still default on their obligations. Were you suggesting that governments bail out private deals gone awry just because they are denominated in national fiat? This isn't a coherent point at best. Perhaps you meant governments will bail out the necessarily highly levered fiat licensed commercial banks when they misjudge their liquidity duration risks and fail to pay back demand deposits. They didn't with Lehman, they did with NatWest and lost a lot of taxpayer money in the process. Choose your poison carefully. The UK guarantees retail bank balances up to £85k but this is not costless - it is an insurance product paid for by those bank customers and only if that isn't sufficient will the government step in but you know what they step in with - tax payers money of course. So no, governments do not back their currency - we are on the hook for its inherent and real instabilities - the damage is spread out into broader society, but that doesn't mean it isn't very damaging. Stack a few such mechanisms up and you get a stagnant economy with low productivity and somehow inexplicable price inflation.
5:11 - "There is no national deposit insurance scheme": YES, because we don't need one in bitcoin because the money is asset based, not an IOU on a liquidity challenged commercial bank balance sheet operating in some form of fractional reserve risk game. IF a bitcoiner chooses to deposit their bitcoin monetary units with a third party custodian, there are lots of private market insurers available to cover them. It's a choice, take it or leave it, but it isn't going to become a systemic crisis harming those who were never party to risky games in the first place.
Part 4 of 5
5:36 - "There is an absence of regulation which assists those facts": The type of issue you want regulating by a central government doesn't exist in a bitcoin model. It is always to possible to regulate something more, there is no end and further regulation can be enacted if the people want it, I believe they do not currently as there isn't benefit to doing so. Again, where risk mitigation is wanted it is abundantly available in the competitive private sector. You are worrying about exchanges (de-facto crypto banks) defaulting on demand deposits - I worry about that too, but there is one very simple solution and that is for people not to use them for storage and to handle the currency themselves (a benefit of a bearer instrument - aka cash). If they don't want to do that then they can choose from an ever growing list of insured crypto custodians. Bitcoin gives people options and limits cascading risks. US banks and asset managers are currently building out their custody services in production and many will have built in insurance terms - just as you are asking for.
5:40 - "Cryptocurrencies operating in legal grey areas": Even if they do, legal system are malleable and perfectly capable of giving full legal colour to anything. However in the UK, they do not operate in a legal grey area. Foremost, people have the right to do anything that isn't illegal, as stated above, that is full legal colour enough is it not? Secondly the UKJT in 2019 declared bitcoin as 'property' in 2019. Thirdly the FCA has exerted jurisdiction over certain cryptocurrency exchange activities and fourthly the HMRC has had comprehensive guidance on applicable tax rules since 2014. Yes, bitcoin has no central bank or universal (capped) insurance - this is because it doesn't need them to survive. It is regulated in the UK in most of the ways people understand regulation to mean.
6:02 - "We face massive inflation if crypto becomes common place": I assume you mean 'massive inflation in GBP denominated prices'. This is not true. The circulating quantity of GBP is already highly elastic - if more is wanted more will be created, this in fact keeps prices quite stable - a nice feature of soft fiat. If people demand their units in a different denomination, such as dollars or bitcoin, or anything, that wont inflate prices because in order to obtain those moneys people will have to swap their GBP for them, they are just shuffling the same wealth around the boardgame. If they had £10 and wanted to buy bread with it using bitcoin, they will first sell their holding of pounds and then increase their holding of bitcoin and then buy the bread with that. The bread merchant feels no effect from this and keeps prices the same.
6:29 - "There is no insurance": Yes, there is, see above. You just have to pay for it yourself and not expect the costs of that to be socialised over unrelated tax payers. Also remember that there is no insurance for the fiat money in your pocket unless you buy it yourself. Custodied fiat and bitcoin have thriving insurance services available. The hair you are splitting has fallen out and isn't very pertinent given the systemic-risk prone nature of fiat versus the anti-fragile nature of bitcoin.
6:40 - "Crypto provides the ultimate ripoff possibility": How? You didnt explain this at all, unless you mean any of your previous points which you'll find elaborated refutation of above. In summary, bitcoin is asset based, cannot go bankrupt, cannot default in anyway, and if left with a custodian (an ill advised move for something so easily secured personally) may be insured just like any other thing of value left with a custodian. Bitcoin held personally can be time locked, distributed in copies to be safe from natural disaster, and have its spending power delegated over multiple key locations and holders to prevent accidental or malicious spending/loss. It is even possible to arrange personal holdings to be insured from loss too. If you mean nonsense crypto scams yes they exist, but if you make all of crypto illegal (however you legally define it), scams will not go away - only education will reduce the prevalence of scamming. Something I am trying to do. We already have laws about fraud and theft and they cover such crimes already - there is no need to make theft illegal again. Punching someone in offence is illegal, we don't need to specify that punching someone with a chicken tikka masala is also illegal.
6:49: "Bank mistakes can be corrected": This is rarely true. Believe it or not, people want to be able to trust the money, and that means they don't want it to be revoked retrospectively without their say so. The banking system was built to make revocation of past transactions very difficult and in many cases impossible. When they do reimburse errors it is typically at the cost of their own insurance provider and that cost will be passed on to the customer indirectly. See The Bangladesh Bank robbery. See Authorised Push Payment Fraud. See Conveyancing Fraud. All of these are examples of people losing life changing amounts of money and neither the banks nor the legal system offering reimbursement. The fiat banking system doesn't work how you suggest it does.
7:14 - "The crypto creator does actually hold all the power": This is not true of Bitcoin. It CAN be true of other cryptocurrencies but isn't true for many of them. It's like saying 'animals are furry' - some are, many aren't - not even all mammals are fury. Cryptocurrencies are political experiments stretching in design from the anarchic (PoW, no pre-mine) via oligarchic (PoS/DPoS) all the way through to totalitarian (PoA). I wouldn't touch 99% with a £1 note, but that's because I've studied them and decided which are of value to me and in that remaining 1% is bitcoin an anarchic, structured, self organising, incredibly valuable system where the creator has no power whatsoever ever other than their written thoughts recorded in public forums. In the worst case, Satoshi could reemerge, convince everybody that he really is him, criticise the project and sell the likely large holding he has. Even that would likely not harm the project significantly and certainly not durably. So when you say the creator can "create accounts" that is not true in almost all cryptocurrencies, "block users" that is possible only in the totalitarian systems (which are easy to recognise), and "change the rules" is again only possible in the totalitarian systems. Same for "expand the numbers without consent". For bitcoin and many others these are provably false assertions.
7:48 - "Play with crypto all you want but understand what it really is": I would counter, criticise it all you want, but understand what it is first.
7:50 - "It's just a game of financial speculation": ALL finance is a game of speculation. Finance is a collective hallucination that it is possible to store real labour and resources in an abstract number for use in another location and future time - finance entirely defies physics and yet it is one of our crowning achievements and has facilitated technological and artistic development beyond all comprehension. What you imply by 'speculation' is a zero sum, unproductive, casino of entertainment and anguish only - but that is a weasel worded criticism because it pretends that productive speculation does not exist. In fact, economic theory (the incentives of scarce value) indicates that speculation is generally a productive endeavour because where it isn't it is quickly unsustainable and humans are self-interested in being good at foreseeing what will be productive.
8:00 - "This is not something that is ever going to meet a real world need": It already does for millions. See the Human Rights Foundation website for some compelling examples. See Gridless mining website for examples of power infrastructure development in poor rural communities bringing electric light to the night time so that books can be read once daytime toil is finished. See the Roya Mahboob Afghanistan based female only software company which could only thrive once bitcoin enabled salary payments which husbands were unable to surveil and seize. And do not dismiss the millions of already comfy people who are storing value for the future using it - they matter too.
8:11 - "Probably facilitating illegal activity somewhere near you": So... again, it has value, broad, powerful, useful value - just to a class of activity that you do not like. Also this is a wild exaggeration anyway - as said earlier, almost all illegal activity is associated with what ever the dominant currency is, which is national regional fiat. If money doesn't work for selected activities it isn't good money for the other activities - You would not switch from pounds to supermarket tokens for example even through they are good for most of your purchases.
8:32 - "In the vast majority of cases people don't understand the risks": and you haven't helped that in your video. You are doing the equivalent of saying electricity, air travel, nuclear power, the spinning Jenny, the printing press and social media are capable of destroying all that we hold dear so ignore them, don't use them, don't waste your time trying to understand them. You are right, people do not understand the risks as a whole, but they are perfectly capable of doing so when they feel inclined. They also do not understand the risks in much detail of many of the activities they engage in but do so to the level they are comfy with. That's how humans do things, by experimentation and risk-taking through judicious and metered risk analysis including judging social consensus (a foundational component of bitcoin by the way).
Part 5 of 5
8:36 - "Crypto should be so heavily regulated and so ring fenced by consumer protections that nobody should go near it": There is nothing in creation that warrants that level of behaviour. What is so dangerous that nobody should go near it? Murderous psychopaths, hungry lions, toxic chemical waste, black holes, we do and will continue to (or will do one day) go near all of those things. We even take small children extremely near ferocious predatory beasties in zoos. Yes the iron bars are regulation, but not so much regulation that no one should even go near. And here you are talking about not those things, but non-governmental money, that's it. You know what regulates crypto money from doing damage, we all do, by understanding what it is and deciding whether to or how to use it. Bitcoin is a self regulating machine, like a steam engine is. You must have such low respect for people to come up with a notion like this. We are not fools, we have achieved everything you see around you, knowingly and willingly. Crypto shops are already regulated in the UK and most nations. Would you like to go further and make it illegal for me to write code that tracks private key control over a ledger of numerals and place that in the public domain licence and fee free? Would you make it illegal for me to download and run that code on my computer? Would you like to make it illegal for me and a wiling counterpart to use that ledger as a form of money when we exchange goods and services with one another? If so then you are the dangerous tyrant I want to be aware and wary of, not bitcoin.
Conclusion: I have written this in conversational style using the emotions I experienced while listening to your piece. I do respect your apparent sincerity and intelligence though I am dismayed at what I believe to be a lack of effort in studying primary material. I am not here to sling mud and would very very much welcome a debate with you as we have the perfect makings for one - two opposed views on a modern important and contentious topic. Via YouTube, Twitter, private phone call any forum you're willing to use - I care about this, I care about you, I care about them.
P.S. I even bought your book "the Joy of Tax" because it's a f*cking inspired title that made me smile and does every time I think of it. I thought "this will be a well thought out argument for me to grapple with". I haven't read it yet, I hope it is better thought through than this to-camera piece on cryptocurrency which I am sure was beneath your abilities. Perhaps you were consumed by care for your fellow people and wanted to protect them, but that belies a lack of respect for their analytical and self-preservation abilities.