However, in reality there are huge obstacles to moving fiat money around and the market is simply not allowed to improve liquidity how it desires.
One of the problems with people advocating for a free market is that they don't understand what it really means: might makes right.
2. Free market for me is about protection, not aggression. Bitcoin network is a free market in a sense that everyone's property is very cheap to protect and very expensive to extract. No matter what I think about how government should work, your BTC is safe and same for my BTC regarding your opinions. We simply have no other way, but to stop arguing and start cooperating voluntarily or just ignore each other. With BTC scripts we can fully insure our contracts without any need for neither "law", not its "enforcement". You can be very-very rich guy, but it still will be more expensive for you to steal my coins than just to trade honestly.
Expanded argument: http://blog.oleganza.com/post/71410377996/crypto-anarchy-doe...
2) Using your own personalized definition of free market changes the discussion. "Free market" isn't about protection or aggression, or power of any kind. The common definition is that that the market is free of external influences, so that market forces determine all outcomes. Indeed--by the common definition of "free market" Bitcoin is the absolute opposite--it's the pinnacle of socialized currency: everyone owns the currency and everyone is responsible for protecting it. BTC scripts don't eliminate the law or its enforcement, they become the law. (Law is simply regulation--in whatever form it takes place. For example, in the US law is both statutory, case-based, and practice-based, depending on the context.)
That seems an incredibly preposterous statement to me. Also why isn't the market free exactly?
Sometimes I feel bitcoin people live on a different plane of reality.
1. http://www.forbes.com/sites/kashmirhill/2013/08/12/every-imp...
2. http://blogs.marketwatch.com/thetell/2013/08/30/bitcoin-exch...
3. http://www.businessinsider.com/charlie-shrem-arrested-bitcoi...
4. http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001....
5. http://www.nbcnews.com/tech/tech-news/bitcoin-goes-mainstrea... - scanning hands of the customers to protect ATM from raid. etc.
If you are a merchant slightly interested in Bitcoin, your concern number 1 is "is it legal? Won't my taxman hit me with huge fines so I have to close the shop just because I did something suspicious?"
If you are a guy building an exchange your concern number 1 is "won't I go to jail for 'laundering' money for some guy who then goes and buys drugs elsewhere with coins he bought through my service". Also: FinCEN tells you to get "money transmitter" licenses in 48 states which is VERY EXPENSIVE, so only a few guys are allowed to even try.
If you are a guy with an ATM, your concern number 1 is "won't they confiscate it for investigation for several months and put me in jail meanwhile for aiding terrorists and child pornographers?"
There's a lot of pending demand to do anything related to Bitcoin. And the reason it's not serviced yet is a big legal concern and very-very-very harsh law enforcement behaviour. If you are a suspect, you've already lost. Even if you are free to go later, you already lost time, money, opportunity, some property etc. You simply can't do business in such landscape.
Free market would mean that there's no uber-controller over the entire property of the whole multi-state country. If every shop owner is free to own his piece of land how he wants and resolving disputes directly with anyone who's concerned, then you could see many more bitcoin ATMs and other businesses. But currently you are at a permanent risk of well-equipped guys with guns coming to you and taking your stuff and yourself, just for doing something innocent which is not yet explicitly allowed.
Any organization which is tax-funded has inequality and discrimination built in. Some are net tax payers, others are net tax receivers. Then, net tax receivers dictate why it's good and honest for them not to pay, but receive and why it's good and honest for them to extract payment from others. And under what "regulations". Obviously, tax-funded regulations cannot be applied indiscriminately to all participants.
Free market is not about equality. It's about ability to protect property against anyone's opinion. Bitcoin and the internet themselves are a fine example of a nearly free market: no matter what you think of me and no matter what I think of you, we both can avoid each other and no one can take each other's coins. But if we don't have such technology and have to keep our cash in a bank, then we both depend on someone's opinion how the money should be used and how much we can spend and where.
