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Johnny Bartlett: Bitcoin and the social value of trust

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It is very interesting to study a technology that doesn’t rely on trust. However, in the end, the most interesting thing it tells us is not how we should build a network but rather the social value of trust in society.

More than economic power, more than scientific advances, trust is really what builds wealth in a society. When you can trust your neighbor not to steal, not to lie, not to try to ruin you, the increases in efficiency are gigantic. In the comparison between Bitcoin and the Visa network, the performance gain in efficiency of trust vs. lack of trust is 400,000x.

My hat is off to Bitcoin. Not only for developing an interesting technology, but also for teaching me in quantitative terms just what it is that I gain by raising trustworthy children. The time and effort spent to make sure that my children are trustworthy and just is more valuable than all of the STEM education I could throw at them. More.

Jonathan Bartlett is the Research and Education Director of the Blyth Institute.

See also: See also: Is Bitcoin safe? Why the human side of security is critical (Johnny Bartlett)

“Artificial” artificial intelligence: What happens when AI needs a human I? (Sometimes it’s really people pretending to be machines)

and

Johnny Bartlett on why we should teach algebra

2 Replies to “Johnny Bartlett: Bitcoin and the social value of trust

  1. 1
    random.dent says:

    I consider Bitcoin an economically illiterate, libertarian idea. I check the prices occasionally because it’s funny. If you bought a single bitcoin 11 days ago you’ve lost $800 by today. If you bought one bitcoin in December you’ve lost $13,000 by now. There are so many reasons it would make a terrible currency. It’s inherently deflationary, which means you’re better off putting your money into virtually anything else.

  2. 2
    johnnyb says:

    random.dent:

    You are largely correct except for your last sentence:

    “It’s inherently deflationary, which means you’re better off putting your money into virtually anything else.”

    I don’t have any real money in Bitcoin (I was gifted some once, and have just held onto it). I agree that its many drawbacks mean that you are better off putting your money into other things. However, its deflationary value is *not* one of those reasons. With *deflation*, holding on to the transactable entity is *great*. If we were in a deflationary economy, then holding onto cash would be the way to go.

    If Bitcoin were to take over just in the US (and I hope it doesn’t, and for reasons given in the article it probably can’t), then a single Bitcoin would be worth well north of $70,000, assuming that the economy doesn’t get more productive. If it does get more productive, then it will be worth more.

    Since our current money is continually inflated, progress in the economy doesn’t benefit dollar-holders / savers. It benefits spenders.

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