Day one, afternoon session

Birgitta Jónsdóttir MP

This Icelandic heroine gives a speech about the importance of online privacy. At the start of this lecture, conference organizer Amir Taaki mentioned the excellent point that today's politics are not so much about left versus right, as liberty versus tyranny. Last year, Iceland was ranked as the country with the best press freedom on earth. (China, Singapore and North Korea are among the worst. These are differing degrees of totalitarian régimes.)

Birgitta explains that Internet privacy is so important it drove her into politics. It is therefore a little ironic, by her own admission, that she hitherto considered herself pretty much an anarchist (as far as I'm concerned, there's not much wrong with that). She says that if we allow tyranny and censorship to blossom online, it will adversely affect our lives offline too. Many countries are at the very minimum authoritarian states that have already passed laws requiring people unlock their private-encryption keys on request by the authorities so as to prove innocence. Birgitta believes we in the Bitcoin community need to forge our own paths and write and establish our own basic rules of operation before our currency really becomes entrenched.

Now, new speaker “jaromil” speaks on the challenges for Bitcoin to become a fully-fledged mature economy in its own right. The bankers currently shaft as many people as they can, and the poorest get shafted the most. He says the biggest challenge is to get the bitcoins circulating (this seems obvious but sometimes that needs to be stated).

After a brief intermission I move rooms to hear economist/programmer Peter Šurda and what do we have here? He's reiterating elements of Economics 101 – but that's ok! What is money? Why does money become money? People base their decisions on what to use for money on transaction costs. But don't confuse transaction costs with specific transaction fees. A key feature of money is elimination of the double coïncidence of wants. What are the merits of inflation versus deflation? Transaction costs/opportunity costs are influenced by state/cartelized price fixing, barriers to entry, capital controls, regulations, etc. Most significant in the context of Bitcoin: “Economic development tends to reduce [economic sacrifices], with the result that even between the mosts distant lands more and more economic exchanges become possible which previously could not have taken place.” (Menger, 1871) Bitcoin can improve liquidity through more trade and value-added services.

I award bonus points to Šurda for quoting the great Ludwig von Mises in regard to commodity money (sound money!) vis-à-vis the intrinsic monopolistic tendencies (via the state directly or state backing of private central banks) of fiat currency. I consider Bitcoin to be an electronic version of sound money, and for me and presumably a large portion of the Bitcoin community this is essential. Here's a debate on the Bitcoin forums about the value of bitcoins: https://bitcointalk.org/index.php?topic=109746.0

Šurda maintains that a moderate long-term deflation of the money supply will not turn consumers into misers. A real-life encapsulation of this is seen in Moore's Law of computing power (and especially computer power per unit of currency). People aren't dissuaded from purchasing computers because there'll be better computers offering three times as much value for money a couple of years down the line. So it is thus that deflation does not automatically induce major hoarding of currency.