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Online Cash Bitcoin could Challenge Governments, Banks

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Re: Online Cash Bitcoin could Challenge Governments, Banks

#101

Post by cturner »

seanalltogether wrote: post #94
tcoppi wrote: post #87

Earlier quoted context omitted.

There is a finite amount of bitcoins because it is designed to mimic a natural resource - easy to "mine" at first, much more difficult to mine as time goes on, and eventually there are none left. If there were an infinite amount of bitcoins that could be generated, there would always be inflation in place roughly proportional to the amount of computational power being used to mine, and soon your bitcoins would be wor…

You know I've thought about this for awhile and I'm starting to come to the conclusion that inflation is a good thing. Having a currency that doesn't inflate is bad for 2 reasons. 1. The population keeps growing, 2. Humans are hoarders. Having currency inflate encourages society to use their money instead of squirreling it all away. Everything in life devalues over time and I don't think currency should be any differ…

    Everything in life devalues over time
That's not true. Violins, clinker bricks, gold, wine, classic aston martins, original prints of the Book of Mormon tend to appreciate. Some wisdom for you: cheese. When sovereign debt collapses, those of us who have been quietly stashing wheels of cheese will laugh all the way to market.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#102

Post by joelthelion »

tarkin2 wrote: post #80

I don't think Bitcoin solves the main problem of new currencies: confidence of their acceptance. John Law introduced paper money into France by getting the government to accept it for paying taxes. Every Frenchman and woman was confident the state, no matter who took over, would still collect taxes. And the state, knowing the currency was valuable to everyone--even foreigners, could also use it. Where's my confidence…

Confidence comes gradually. When bitcoins started, confidence was extremely low. Thus the whole bitcoin economy was worth maybe $1000.

Now confidence has grown significantly, and the whole bitcoin economy is worth approximately 5 million dollars.

I wouldn't bet my life savings on it yet, but I find that already pretty good for something that has less than five years, and isn't backed by anything.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#103

Post by ender7 »

Bitcoin is both a really great idea, and a really stupid idea.

sage_joch has already pointed out the reasons why it's a really cool idea.

It's also flawed in a number of ways. First, the limited supply means that you've essentially just created an electronic version of gold. It's more easily tradeable, but its behavior as a commodity will be similar.

If you like investing in gold, that's great. I guess.

Second, bitcoins do not necessarily remove the issue of paying a fee for transactions. Instead of paying a fee per transaction, you will instead pay a fee in order to transform normal currency into bitcoins (this is not as readily apparent now, but if the system ever becomes large enough to actually have stable value, then you will need to pay someone to convert real currency to bitcoins). Will this be cheaper than credit-card fees? Probably? Keep in mind that credit card companies are offering just that: credit, which is a service. Someone has to pay for it (either you, the merchant, or the marketers who they sell your buying profile to).

Third, bitcoins ignore the fact that national currencies are an incredibly valuable tool for modern governments. They can of course be misused (see: Argentina, post-WWI Germany), but adjusting the value of your currency is one of few ways of improving your country's competitiveness globally (see: the trouble Ireland, Greece, and other European nations have had recently because they do not have control over the Euro). So, don't expect national currencies to go away, or become obsolete.

Perhaps the Bitcoin community has an answer for these concerns...

Re: Online Cash Bitcoin could Challenge Governments, Banks

#104

Post by rapind »

ovi256 wrote: post #84
whackedspinach wrote: post #82

Earlier quoted context omitted.

I'd like to see them raid every single Bitcoin user worldwide, which is how I think it would have to happen in order to shut it down. Actually, they would probably only need to raid a substantial amount (maybe half?) in order to control the block chain.

They don't need to shut down the network to win, just like you don't need to destroy an adversary's weapons to win a battle. You can win by destroying his will to fight. In this case, scare bitcoin users into abandoning the currency. Some high-profile prison terms would ensure that.

This has worked really well in the war on drugs, I.e. three strikes law. It's pretty impractical and extremely expensive to fill up your prisons with bitcoin holders.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#105

Post by Duff »

pyre wrote: post #81
weavejester wrote: post #43

Earlier quoted context omitted.

You can send bitcoins directly to a person's account without going through an intermediary, such as Paypal or a bank. This means that it would potentially be cheaper, but more importantly it would be easier to automate, and easier to start up interesting financial web apps.

Exactly. The vendor wouldn't be paying the tithe to the credit card processor.

You're just shifting from the credit card processor to the dollar/euro/bitcoin exchange person.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#106

Post by lutorm »

sgornick wrote: post #59
clistctrl wrote: post #57

Earlier quoted context omitted.

How do I transfer my coins from one computer to another? I found digging through my application data to find the wallet.dat file is unintuitive.. along those same lines, how many less technical users have lost extremely important data because they never made a backup? Additionally what if I want one wallet so I can go to a physical store, and use my phone to pay? The shuffle seems very inefficient to me. Perhaps peop…

Baby steps. Try starting out using an eWallet, such as MyBitcoin: http://www.mybitcoin.com Then buy your Bitcoins with PayPal here: http://coinpal.ndrix.com use the bitcoin address generated at MyBitcoin. You'll get your bitcoins in less than an hour at MyBitcoin. Then those bitcoins can be spent using your example, at StrongGames.

So if I put my bitcons on MyBitcoin.com, I'm under the impression that they have complete control over my wallet. Just like if I gave my wallet to someone and asked them to please accept payments on my behalf. Correct? That's an awful lot of trust to put in a random website. If they decide to run the website until they are sitting on enough coins and then just transfer them to themselves, is any court going to believe me when I claim they stole my money??

The fundamental problem I have with Bitcoin web transactions is that it requires trusting the other party, since I can't exchange the goods at the same time. How do I make that determination and what recourse do I have if I'm defrauded? This would seem to be the fundamental obstacle to adoption to me.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#107

Post by lutorm »

zefhous wrote: post #37
euroclydon wrote: post #18

I have a hard time getting excited about a currency when the main reasons given for it's existence are for online gambling and Wikileak donations. I would be excited about a dollar alternative that allowed the common person to protect themselves from the inflationary rot that the US Congress is hell-bent on subjecting us to.

I feel the same way, but there is a much more lucrative reason to use bitcoins: The lack of transaction fees. I don't know about you, but it really bothers me that you have to give up ≈3% of your revenue to the credit card companies if you want to do business online.

You could think of it as insurance against fraud. (The customers can, that is.)

Re: Online Cash Bitcoin could Challenge Governments, Banks

#108

Post by tcoppi »

ZitchDog wrote: post #100
tcoppi wrote: post #87

Earlier quoted context omitted.

There is a finite amount of bitcoins because it is designed to mimic a natural resource - easy to "mine" at first, much more difficult to mine as time goes on, and eventually there are none left. If there were an infinite amount of bitcoins that could be generated, there would always be inflation in place roughly proportional to the amount of computational power being used to mine, and soon your bitcoins would be wor…

Rather than debating the validity of the Gold Standard (which is essentially what this discussion boils down to) I would direct you to a great set of podcasts from Planet Money[1] in particular [2][3] which discuss the general current thought on the Gold Standard, and show why most economists agree it is untenable in the long run. [1] http://www.npr.org/templates/archives/archive.php?thingId=13... [2] http://www.npr.…

Most of these arguments apply if you are going to be using a finite supply of money as your "main" currency. I agree that not having an inflatable supply is bad in such situations. However it is incredibly unlikely that bitcoin will ever occupy this niche(I highly doubt anyone is going to ever pay taxes in BTC). For what it is, an easy and quick way to transact payments anonymously* and securely online, it is incredibly valuable and I hope it caches on.

*How anonymous it is obviously depends on how sophisticated you are at using it.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#109

Post by jerf »

lambda wrote: post #99
ataggart wrote: post #88

Earlier quoted context omitted.

>Is a $20 bill something of value? No, it's merely somewhat hard to forge, and accepted as currency by lots of people. I think perhaps you and I are using different definitions of "value". If someone is willing to accept something in exchange for something else, that act reveals that they value it, either for its use value or for its exchange value (i.e., as money). >The only reasons the $20 bill or the entry in the…

> I think perhaps you and I are using different definitions of "value". If someone is willing to accept something in exchange for something else, that act reveals that they value it, either for its use value or for its exchange value (i.e., as money). I meant intrinsic value in that context. Of course I agree that it has value based on what people are willing to exchange it for. That's precisely the point I was tryin…

"All I'm saying is that there is as much intrinsic value to a bitcoin as there is to a dollar, or a euro..."

The intrinsic value of a dollar is that the United States Government is obligated to accept a dollar as a payment of tax and other obligations you may have towards the government. A dollar is not an arbitrary thing, it fundamentally profoundly is a warrant to discharge a debt obligation against the United States Government. The rest of its value emanates out transitively from that.

A BitCoin is fundamentally more arbitrary than a dollar. (At least at the moment. Hypothetically this could change.) Perhaps it will make it anyhow, despite my skepticism, but it is absolutely, empirically true that a dollar is not an arbitrary value store. It has a base case for its value chain. BitCoins do not have this.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#110

Post by weavejester »

Duff wrote: post #105
pyre wrote: post #81

Earlier quoted context omitted.

Exactly. The vendor wouldn't be paying the tithe to the credit card processor.

You're just shifting from the credit card processor to the dollar/euro/bitcoin exchange person.

I'd imagine there's more scope for competition. Setting up a new credit card takes a lot of money, whilst exchanging dollars for bitcoins is essentially free (so long as you have enough bitcoins).

That said, I don't think this is the most interesting part of bitcoins.

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