Bitcoin Frenzy

by Henry on March 10, 2016

I’ve a piece in today’s Financial Times about the political fights racking the Bitcoin community.

Bitcoin, the decentralised, mainly digital currency that is neither issued nor guaranteed by central banks, has always seemed like a magic trick. … Radical libertarians have desperately wanted to believe in it … Politics disappears and a combination of technology and cryptographic proofs is conjured up in its place. Unfortunately, the magic is wearing off. Some of the technological innovations associated with bitcoin will stick around. The political project will not. … As more people have started to use bitcoin, the system has grown more unreliable.The problem is that coming up with a fix requires political agreement. Because there is no centralised authority within bitcoin, there is no one who can impose a mandate. … This free-for-all demonstrates the main problem of technological libertarianism. It does not escape politics but temporarily displaces and conceals it. … The apparent value of bitcoin depends on a suspension of disbelief. It is hard to see how the illusion can work when the magicians are punching each other out on stage.

NB one error which crept in (completely my fault) during the editing process: “protocols to make the blocks bigger so that more bitcoin are released at one time, speeding up transactions” should just read “protocols to make the blocks bigger, speeding up transactions.” NB also, more interestingly, this piece by Ben Thompson at Stratechery, which I wish I’d seen before writing my own, especially since it has a couple of lovely and apposite quotes.

When the block size debate was first heating up last summer, Bitcoin Core developer Gregory Maxwell put his finger on the philosophy of Bitcoin issue … What I found most interesting, though, was what Maxwell stated in the previous paragraph:

We’re talking about tuning one of the fundamental scarcities of the Bitcoin Economy and cryptosystem — leaving the comfort of “rule by math” — and venturing into the space of political decisions.

Maxwell has made similar comments elsewhere, including in this forum thread:

The rules are Bitcoin. The stability of Bitcoin’s rules is the soundness of the currency. If the rules can be easily rewritten against the will of some users by others according to political whim then what can be trusted? Is the supply fixed? Will coins be confiscated and awarded to others? If that gate is crossed then there is almost always some excuses which is “good enough” — as was lamented in some of Bitcoin’s earliest announcements…

I think governance is incredibly hard and that the development history of fiat currencies shows that mankind is ill-equipped to create a strong and sound system via human governance — not through lack of trying, but because mankind is fundamentally not cut out for it: there is always some excuse that makes people feel justified in compromising the property rights of some for the benefit of (potentially many) others. Bitcoin was specifically created and promoted to replace that kind of subjectivity with machines, but it can’t do it if we go around undermining it.

I find this perspective fascinating, and for reasons that have nothing to do with the block size debate (which again, I’m not stating an opinion on!). I can certainly see the allure of a system that seeks to take all decision-making authority out of the hands of individuals: it’s math!

The problem, though, is that the consequence of embracing this sort of “Them’s the rules” philosophy is itself the sort of political statement that Maxwell is so eager to avoid. After all, in the case of the block size, the implication of not changing Satoshi’s “rules” is to limit the number of transactions and support the “Bitcoin is digital gold” worldview. If humans made the rules, then appealing to the rules can never be non-political. Indeed, it’s arguably worse, because an appeal to “rules” forecloses debate on the real world effects of said rules.

This is a nice illustration of the urge behind Bitcoin (and Hayekian theories of central banking, and much of the literature on incentive compatible mechanisms) – to replace politics with all its messiness, with some neutral and purely technical system. For better or worse, the politics are always just moved somewhere else, and always sidle back in. I had a bit in the original draft about how when you keep on trying to stuff rabbits into a hat, sooner or later they start eating their way out. The metaphor’s a bit too purple, but the point stands, I think.

Also, and changing the subject a little: two way pegging. Has there ever been a more unfortunate technical term? (nominations welcome in comments).



JoB 03.10.16 at 9:26 am

I thought it was known as ShamCoin by now.

It is true that when I hear some talking about BlockChain that it sounds like the All-Digital God is coming to deliver us from All Things Bad. Maybe somebody should investigate how similar these arguments are to those once made for the existence of the Still-Analog God.


BruceJ 03.10.16 at 2:08 pm

Even if all the politics were smooth and settled, the built-in goldbuggery-ness of Bitcoin makes it thoroughly unworkable as a currency.

There can only ever be 21 million bitcoins, ever, and it’s likely that the functional limits on mining them will reached far sooner (as in you’ll STILL pay more in electrical and computing costs to mine those last few blocks than they’ll be worth)

Wider use of it *enforces* deflation, and these people are too ignorant of basic economics to understand how bad that is.

We in the reality-based community learned that lesson in the 30’s, but the randian techbro’s who are the main boosters of it still don’t believe in reality.


The Raven 03.10.16 at 3:11 pm

We need simple stories about real macro that can be assimilated into public consciousness. Maybe, with that in hard, we can get widespread advocacy for sensible digital money. Metallic currencies (we have found) don’t work very well. Why should electronic simulations of them work any better?

Which opens the question of what would work better. Somewhere, in some obscure journal or corner of the internet, there is probably some brilliant and mostly ignored economist who may have that answer.


JW Mason 03.10.16 at 4:15 pm

The first sentence seems off. Lots of currencies are neither issued nor (formally) guaranteed by central banks. What makes Bitcoin special is that it is also supposed to eliminate the need for *private* banks. The language has always been about eliminating the need for “trusted third parties” in general not central banks or government specifically.


JW Mason 03.10.16 at 4:27 pm

Or again the statement ” modern states in effect have a monopoly over the currencies that markets need in order to work.” is just factually wrong. It’s a pity because the larger point seems right and important. But it was muddied when “the need for some form of political authority” gets conflated with the need for the specific form of the state.


JoB 03.10.16 at 4:27 pm

True, the whole blockchain thing is about removing the need for intermediaries. Which is probably why hard-liners are attacking everything that moves in politics or – I guess that’s their synonym for it – human governance.


infovore 03.10.16 at 6:09 pm

What bitcoin is, is defined by the software, and the bitcoin community decides what the software does. So the community ends up in the Central Banker role, whether they want or not (and despite the notion that this role should not exist at all). The members of the community have three different roles (with overlap because members act in multiple roles): users of bitcoin — who use it as money, holders of bitcoin — who use it as an investment, and miners of bitcoin — who run the infrastructure that ensures the whole edifice works. In terms of power relations, I think the miners have the upper hand, and will be able to impose their terms should they feel the need to play hardball. And the set of miners is small and looks like it is shrinking.

To an outsider like me this doesn’t look like a long-term stable situation.


tom 03.10.16 at 6:18 pm

I have a hard time with the first sentence too. Fiat money is not guaranteed by any central authority. Its value is based on the belief that others will accept it as a medium exchange. If tomorrow everybody wakes up and decides not to accept dollars anymore, there is not much you can do with them except maybe using them in your fireplace.


Rich Puchalsky 03.10.16 at 6:22 pm

I thought that the value of fiat money issued by nations is that it can be used to pay taxes in those nations. Everyone in the U.S. (for instance) is going to have to pay taxes to the IRS, and the IRS only accepts U.S. dollars, so everyone is going to have to acquire dollars for this purpose. The money is in effect backed by the existence of the population and the state’s control over taxation of that population.


Anarcissie 03.10.16 at 6:36 pm

The Raven 03.10.16 at 3:11 pm @ 3 —
I think one would want to represent human labor abstractly, rather than simulate material commodities à la Bitcoin.


JW Mason 03.10.16 at 6:45 pm

Rich, I invite you to contemplate two facts.

1. You can pay your taxes with money in your bank account — that is, by transferring to the government an IOU owed to you by your bank. And the bank can freely issue new IOUs to you, by making you a loan, without needing to first acquire anything from the central bank. So it is not the case that the state is the monopoly supplier of the medium used for tax payments.

2. A large fraction of international transactions are denominated in US dollars, even where neither of the parties has any tax liability to the US government.

The best general discussion of these issues I know of is this article by Perry Mehrling.


engels 03.10.16 at 7:00 pm

Looks like I’m going to have to go back to using the Bristol Pound


Zamfir 03.10.16 at 7:07 pm

@JWM, i don’t quite see where those points would lead.

Some bank accounts are recognized as official US dollars, but only because the US government has decided to. Without that, a bank loan would have a similar status as a corporate bond. Valuable, exchangeable and possibly a close substitute for dollars, but not official dollars and you can’t pay taxes with them.

On the second issue: obviously you can do more than just pay taxes. Once a currency has some roles, it attracts other roles. But states bootstrap the currency into those first roles.


JW Mason 03.10.16 at 7:13 pm

Zamfir, the point is that it is not factually correct that the state is a monopoly supplier of “money,” even for purposes of tax payment. The fact that the government has in some sense “decided to” allow private money-creating activity is neither here nor there — in that sense, the government is the monopoly supplier of everything, since any form of production could in principle be prohibited. On your second point, you are simply mistaken as a matter of history. Tax obligations did not play an important role in the evolution of modern money. Again, I recommend the Mehrling piece.


marcel proust 03.10.16 at 7:47 pm

The Raven wrote:

Which opens the question of what would work better. Somewhere, in some obscure journal or corner of the internet, there is probably some brilliant and mostly ignored economist who may have that answer.

Cigarettes,, perhaps plastics.


engels 03.10.16 at 8:51 pm


pnee 03.10.16 at 9:41 pm

The problem with trying to define one set of rules that stands unchanged for all time is that unexpected things happen, subtle flaws become apparent etc.

That’s why Constitutions have amendment processes, sports have rules committees, religions have theologians, and software has to be maintained.


Anders 03.10.16 at 10:08 pm

@JWM: state money is of course not the only type of money, but it is the most important kind. You’ll doubtless know this piece from UMKC

which talks about the hierarchy of money. Private money is not a coherent concept without the existence of state currency; there is no precedent for it historically.

You are referring to’currencies’ being issued privately; I think you’re actually referring to private or inside money.

The disagreement here may stem from different conceptions of what money is. You’re interested in money as a store of value or a medium of exchange, when the logically prior sense of what money is must surely be a unit of account. I don’t think there has ever been a private unit of account.

(Oh, and Merhling is attacking a straw man in his piece…)


Rich Puchalsky 03.10.16 at 10:32 pm

I obviously don’t have any kind of expert knowledge of this, and I’m not an economist. I only had time to skim the Mehring piece (sure, that’ll be good enough) and the conversation will be over by the time I have time to actually read it, so I’m just going to blunder onwards. A critical paragraph seems to be:

“For monetary theory, so it seems to me, the significant point about the modem state is not its coercive power but the fact that it is the one entity with which every one of us does ongoing business. We all buy from it a variety of services, and the price we pay for those services is our taxes.”

All right. I’d actually known that most money is not “issued by nations” in the sense that the government does not print up a big stack of bills and rush them to the bank whenever a bank makes a loan, or make an electronic transfer. Forms of credit are involved. Perhaps it’s that national money is “associated” with nations? In any case, whether you view taxation as a coercive power or as the ongoing purchase of services, doesn’t the state create a demand for its money? You need a particular kind of money in order to buy those services. Having a fairly stable, predictable form of demand for the money is what backs its value.

For international transactions, perhaps I picked a bad example when I chose U.S. dollars simply because I live in the U.S. Most national currencies don’t seem to be used in a lot of international transactions of the type that U.S. dollars are used in, so in that role it’s kind of atypical.


Plume 03.10.16 at 10:53 pm

I think people are overlooking an obvious solution to money, debt, taxes and public goods and services. Death, OTOH, well, we don’t have an answer for that.

Imagine building a home. You have all the tools you need, including the labor and an excess of funding. You, in fact, control that funding. You create it. You distribute it. You set its value. But because of the arcane, labyrinthine, massively bureaucratic system in place, you can’t just build your home. You have to send out all the funding into the system first, and wait and wait and wait to receive bits and pieces of it later, as a percentage of what you originally held in your own two hands. You never come close to getting back what you originally had, and you’re always in debt.

Rather than doing it that way, why not build your house first, using the labor and the funds you already have on hand . . . and then send out the surplus? No need to ask for any money back anymore. No reason to ever have yearly deficits or total debt. Balance the books up front. Then send out the surplus.

I think we do things bass ackwards.


David Margolies 03.10.16 at 11:32 pm

“You may drive out Nature with a pitchfork, yet she still will hurry back.”
Horace, Book I, epistle x, line 24.


Jason Weidner 03.11.16 at 12:45 am

JoB @1
“It is true that when I hear some talking about BlockChain that it sounds like the All-Digital God is coming to deliver us from All Things Bad.”

The reliance on an implicit sense of good and evil is spot on. However, from the following quote, I think the theodicy is quite clear:

“there is always some excuse that makes people feel justified in compromising the property rights of some for the benefit of (potentially many) others.”

“Property rights” here is akin to an understanding of “the market” as a divine entity, not only in the sense often (mistakenly) attributed to Adam Smith, but in terms of the “magical,” even redemptive, qualities of the freedom of circulatory processes and mechanisms for the determination of prices and value.

One might even go so far as to argue that, just as Carl Schmitt called attention to the theological origins of the idea of sovereignty, today “capital” or “the market” has emerged as a global sovereign: “perpetual and absolute, unaccountable and primordial, the source of all commands” (Wendy Brown, Walled States, Waning Sovereignty).


JoB 03.11.16 at 8:20 am


I think you are right in saying ‘the market’ is mostly referred to for its God-like qualities. It is also not a coincidence that this blockchain movement started in creating something like “the perfect market”. Maybe they’re the Mormons of Hayekianism?

All that said, there really is nothing wrong with money, market, property in itself. They are perfectly natural phenomena that allow human beings to come in contact with each other; and the more human beings are intimately and extensively connected, the better it is. This just means as well that as human phenomena they’re open to the typical epiphenomena of abuse because of unbalance and, therefore, need for political agreement to balance things.

Glad to see Smith referred to, not so glad in the case of Schmitt.


reason 03.11.16 at 9:06 am

I’ve always said this, and it is time to repeat it, taking libertarianism to its logical conclusion is creating a theocracy. And I think history teaches us that theocracy is the worst form of government.


reason 03.11.16 at 9:11 am

And I think Maxwell is right, the reason for the tendency to theocracy, and that theocracy is then the worst form of government (because it holds abstract moral principles – interpreted by unaccountable agents of an inhuman power – as more important than our common humanity) is a flaw in human nature.


JoB 03.11.16 at 9:25 am

The idea that human nature is flawed and that its original sin has to be mended is as theocratic in forcing people to live in some pure inhuman state.


JoB 03.11.16 at 9:28 am

Flawed with respect to what? Inhuman nature?


John Quiggin 03.11.16 at 11:42 am

I don’t see Mehrling as saying anything inconsistent with RP @9, rather the opposite. He’s primarily criticising chartalist/MMT claims about macro that derive from the fact that fiat money originates with taxes but that need not concern us here (and I have no desire to debate MMT again).

Mehrling makes the point that, in principle, a sufficiently credible private firm could issue money backed by promises to provide goods and services (Disney dollars are like this). As for the state “We all buy from it a variety of services, and the price we pay for those services is our taxes”

To put it more sharply, the state (unlike a private issuer) doesn’t need to offer to redeem its money with metal or anything else provide it accepts that money as discharging tax liability. That’s exactly what fiat money means and why only states can issue fiat money.


Peter T 03.11.16 at 12:05 pm

Ah, money!

If you read a decent history of Sumeria, and then dabble a bit in international commerce, it becomes much clearer. Money originated as tokens of debts, various; and was then simplified by issuing most tokens in a standard unit of account. Coins came along a few millenia later as a convenient way of settling outstanding balances without getting personal, and were later appropriated as a good propaganda medium. Anyone can issue money, and does – from corner stores extending credit to bank letters enabling the purchase of shiploads of ore. Most of the fuss is about whose debt it is and how it ranks relative to other debts, and the competition is always about trying to swap weaker claims for stronger ones. That states are almost always in the strongest position vis-a-vis private parties is an irrelevant truism. And debt, of all kinds, is always politically mediated.


Lee A. Arnold 03.11.16 at 12:35 pm

JW Mason #14: “Tax obligations did not play an important role in the evolution of modern money.”

Depends on how you define the word “modern”. I seem to remember reading that one of the major impetuses for the establishment of the Bank of England was to organize the monarchy’s debts. Because it was already accepted that the whole system won’t work without a go’vt Treasury, so fiscal coin & tax recycling are eternal necessities.

This intention had also been exhibited previously, in various short-lived attempts at public banks.

But the idea of an authority that guarantees the exchangeability of a single money everywhere, finally stuck in the mind, for good. This turned out to be of great benefit to private finance as well, because it eased the development of the market economy.

The standardization of this idea — that money could only be stabilized as public/private partnership — is a major linchpin of the modern era.


Lee A. Arnold 03.11.16 at 12:41 pm

Bitcoin already obsolete. Why? Because the bitcoiners are working under one of the ancient premises of money which is now becoming obsolete.

The premise is that, abstractly speaking, money needs some sort of authority of creation, to keep it scarce. Why? Because it is used to exchange for things which are scarce.

And that is a premise we don’t even question: money needs to be scarce because goods are scarce.

However, that condition would change, if goods and services are no longer scarce. And this is happening, quickly. After millennia of hardship when necessary things were scarce, the end of scarcity is upon us. For purely technological reasons.

Thus the biggest problem is not scarcity, which is disappearing. It is our habitual “‘scarcity-psychology”: our ingrained habit of the previous millennia, which needed money-authority (whether public or private) to try to keep the medium of exchange as scarce as the goods.

It is not so strange that so many people find it difficult to think this all the way through. Scarcity-psychology is a very deep thing, a “psycho-socio-intellectual” complex of desires, intentions, ideas & theories that is a tough nut to crack. Leading academics and computer geniuses are still obviously trapped in these old desires and theories.

Anyway, I think this is the biggest flaw with bitcoins: money itself is quickly becoming unnecessary. Its creators and promoters are still ensconced in the old scarcity-psychology.

However, the abstract idea of blockchaining (apart from the bitcoining) is fascinating. Where else might it be used? Perhaps for a remaining, short-term accounting-function, to keep enough stocks in your local depot? (Rather completely boring, but also quite ancient. The function of local provisioning is another of the ancient, separate functions of money, that has been incorporated into all later redesigns.)

What else for blockchaining? I don’t know enough about the main algorithms of machine-learning to even make a reasonable guess as to whether it might be useful in the future, for various artificial intelligence purposes.

Perhaps we will use blockchaining to analogize some sort of already-existing society-wide brain function — a brain-function we already perform now, by positing that the sympathies and altruisms we derive from our own “mirror neurons” ought to have a social import. I.e. blockchaining not for scarcity, but for its opposite: love.

Then, blockchaining could make The Terminator into a big new facebooking love-button.

He brings the food around from the local depot. We dress him up like an ancient temple priest. He does bird calls; they fly to sit on his shoulders. He sings Verdi and Puccini. When it rains, he carries an umbrella.


reason 03.11.16 at 2:44 pm

Lee A. Arnold
Lee some things are still scarce (we still live on a finite planet in a finite solar system in a possibly finite universe). What may be, possibly, becoming not scarce is some sorts of human labour and also the things that labour can produce. And that is a completely different problem.


Henry Farrell 03.11.16 at 3:13 pm

Hi J.W. – without wanting to dive too deep into post-Keynesianism, it looks to me as though our disagreements mostly stem from different notions of what a currency is – I’ve a relatively narrow definition, and you want to have a wider. The political aspects of currency that I’m interested in have to do with the ways e.g. that the US is able to use the USD and clearing to exert direct political power via sanctions and influence on offshore banks (e.g. the kinds of things that Patrick Emmenneger writes about, or that Juan Zarate lauds). This is political economy in the political science economy sense – you seem to want to go towards deeper questions which is fine, but not what I am trying to do here. My point is simply that there is an important political difference between a system such as 21st c US where the government prints the bills, and 19th c US where a variety of private banks each had their own individual dollars, with exchange rates between them.

Tom – yep . From the piece:

The advocates of bitcoin got one thing absolutely right. Money is a confidence trick, a form of “frozen desire”, as the writer James Buchan describes it. We only believe in it because everyone else believes in it. So if bitcoin believers believed hard enough, and convinced other people to believe, they had a shot at making it generally accepted.

The sociology of money as belief has a lot of value as a way of thinking about Bitcoin.

Infovore – that’s all right and interesting. I wanted to work in something about concentration of power among the miners but couldn’t in 750 words. There is also a real risk of selection bias in my argument – I’m inevitably focusing on the chattier people, who tend to be the true believers. Who knows how the more quiet types who are just in it to squeeze out a few dollars are thinking?


Lee A. Arnold 03.11.16 at 4:31 pm

Reason #32: “a finite solar system in a possibly finite universe”

The finite solar system and possibly finite universe are unlikely to require the re-institution of money within the next half-millennium (just guessing, there!)

Back in the here-and-now on the finite planet, technological change in solar energy etc. is presently ending the scarcity of “high energy sources that are not ecologically destructive”. I am also just guessing that materials science will take care of scarcities in other physical resources for economic production.

One of the very few remaining scarce items will be real estate. How do we apportion where to live? Money? I sort of doubt this. It would mean that we will maintain the obvious fiction of requiring human work for money-reward — human work that is strictly unnecessary, because it could be more easily performed by machines — simply in order to jockey ourselves through houses.

But it’s a big issue, and I cannot imagine the likely answer. Land-tenure passage was a primary problem of many of the earliest sedentary cultures, and their various solutions became their primary organizing principles. It could be that human society will slowly evolve into an advanced version of this condition, i.e. that our solution to land-tenure-passage is once again the primary organizational concern. And it may reduce the accent on the nuclear family even more. The ethnographic reports clearly show that the idea of nuclear families was never a human constant, and tribal societies lived in many sorts of arrangements, all of which had worked forever, so far as we know. Maybe we’ll just go super-communal & keep running around to different Burning Men?

Of course the most desirable real estate might slowly pass into public parkland status, as some historical mansions are already maintained. Enough land for wildlife to survive is similarly scarce, but observe that this is already solved by taking it away from money valuation, i.e. it is preserved by taking it out of the market system.

Other than this, what is there that will remain scarce?

Will it be necessary to keep imposing the system of scarcity, to make an unconscious mechanism to automatically control human population growth? I imagine that most people think that won’t be necessary, and that there are better ways.


Tom 03.11.16 at 4:41 pm

Ok, thanks, Henry.


Dipper 03.11.16 at 5:14 pm

@ tom @8

a great example is scottish pound notes. For those outside the UK, some paper money is printed by scottish banks. These are legal tender throughout the UK, but increasingly London tax drivers do not accept them, and many people in England will hand them back if given them in change and ask for “proper” ones.


Tom Slee 03.11.16 at 5:23 pm

Other than this, what is there that will remain scarce?


We will always have some version of Adam Smith’s linen shirt, which is taking and will continue to take an increasingly large fraction of our spending:

A linen shirt … is, strictly speaking, not a necessary of life… But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.


JoB 03.11.16 at 5:30 pm

Status is currency as well: I’ll allow you into my network if you allow me into yours. In this sense the rich might up not needing a lot of non-taxable bit coins between them.


Brett Dunbar 03.11.16 at 6:37 pm

Scottish banknotes are not legal tender anywhere. In Scotland in fact no notes are legal tender. Scottish banknotes are legal currency.

Legal tender is solely for the guaranteed settlement of debts and does not affect any party’s right of refusal of service in any transaction.

In the 19th century, gold coins were legal tender to any amount, but silver coins were not legal tender for sums over 2 pounds nor bronze for sums over 1 shilling. This provision was retained in revised form at the introduction of decimal currency, and the Coinage Act 1971 laid down that coins denominated above 10 pence became legal tender for payment not exceeding 10 pounds, non-bronze coins denominated not more than 10 pence became legal tender for payment not exceeding 5 pounds, and bronze coins became legal tender for payment not exceeding 20 pence.

Throughout the United Kingdom, coins valued 1 pound, 2 pounds, and 5 pounds Sterling are legal tender in unlimited amounts. Twenty pence pieces and fifty pence pieces are legal tender in amounts up to 10 pounds; five pence pieces and ten pence pieces are legal tender in amounts up to 5 pounds; and pennies and two pence coins are legal tender in amounts up to 20 pence. In accordance with the Coinage Act 1971, gold sovereigns are also legal tender for any amount. Although it is not specifically mentioned on them, the face values of gold coins are 50p; £1; £2; and £5, a mere fraction of their worth as bullion.

Maundy money is legal tender but may not be accepted by retailers and is worth much more than face value due to its rarity value and silver content.

Bank of England notes are legal tender in England and Wales and are issued in the denominations of £5, £10, £20 and £50. They can always be redeemed at the Bank of England even if discontinued. Banknotes issued by Scottish and Northern Irish banks are not legal tender anywhere in England and Wales but can still be accepted with agreement between parties. Whilst banknotes issued by the Scottish banks are legal currency, that is approved by the UK Parliament, no banknotes issued by Scottish banks, Northern Irish banks or the Bank of England are legal tender in Scotland. Thus legal tender in Scotland is limited to coin as noted above, however notes issued by Scottish banks fall into a special category of promissory notes and are freely accepted within Scotland.


Lee A. Arnold 03.11.16 at 9:47 pm

Tom Slee #37: “We will always have some version of [status]”

I am not as sure as you are about this, if you mean the need to permanently have more than others. There are already lots of people who don’t give a hoot, so it is unclear if this is a necessary or healthy psychological condition.

There may be, apart from that, a sort of “keeping up with the Joneses” effect, so you remain socially adept, savvy, “with it”.

If by “status” you mean instead the reaffirmation that you are good at what you do, or the merry condition of having won a game or a sporting contest, then I agree that will always be with us, and it’s a way for children to learn, but does it necessitate a scarcity of money?


Anarcissie 03.11.16 at 9:52 pm

Only sentient beings can suffer, and only humans can suffer on a human level. Some enjoy the suffering of others, even many others — ‘it’s a statistic’ — yet the number of humans is finite, so perhaps there could be a monetizable scarcity in this realm.


Lee A. Arnold 03.12.16 at 2:37 pm

Anarcissie #41: “Some enjoy the suffering of others”

What if this enjoyment is a disease, and curable as chicken pox?


Anarcissie 03.12.16 at 4:07 pm

I was trying to think of things only human beings can provide. Art, prostitution, suffering, death, cannibal fare. (Now I hear that sex robots are going to knock out the first. The kind of art we have in the Art World now can probably also be handled by machines.) Your pox vaccine would probably eliminate capitalism, anyway. So, what’s the plan?

Comments on this entry are closed.