collapsedsquid:

This is important because the longstanding economic argument against bitcoin as an effective store of value has always been that fiat money is ultimately stabilised by the state’s capacity to demand taxes in its own currency. As was noted by Dealbook in 2013, “money is inevitably a tool of the state” and “no private power can raise taxes or pass laws to unwind monetary excesses”.

In 2020, however, that doesn’t seem quite right. Private “hackers” routinely raise revenue from stealing private information and then demanding cryptocurrency in return. The process is known as a ransom attack. It might not be legal. It might even be classified as extortion or theft. But to the mindset of those who oppose “big government” or claim that “tax is theft”, it doesn’t appear all that different.

 A more important consideration is which of these entities — the hacker or a government — is more effective at enforcing their form of “tax collection” upon the system. The government, naturally, has force, imprisonment and the law on its side. And yet, in recent decades, that hasn’t been quite enough to guarantee effective tax collection from many types of individuals or corporations. Hackers, at a minimum, seem at least comparably effective at extracting funds from rich individuals or multinational organisations. In many cases, they also appear less willing to negotiate or to cut deals.

  In an increasingly polarised world where a near majority of people don’t recognise the legitimacy of their governments, a bitcoin enthusiast might legitimately question what really constitutes legal extortion anyway?  When established norms are in flux, everything becomes a matter of perspective and it would be irresponsible for fiduciary agents to bet on only one horse.