the big problem with using bitcoins for real life transactions is it takes ~10 minutes to confirm the transaction. this makes it useless for buying a lot of things like fast food, stuff from the store, etc. you would need to layer a trusted third party like a credit card on top of bitcoin to use it for normal transactions.
I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins
51–60 of 139 posts
Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins
#52Earlier quoted context omitted.
You are building a straw man. There are plenty of reasons why paperclips are unsuitable as money. They are easy to forge and there is no guarantee of how many will ever be in existence to name a few. Trading oil or gold directly is obviously impractical. But Bitcoins are not. You can store an unlimited amount of Bitcoins on your smartphone or USB stick and you can securely and anonymously transfer them to someone els…
How is it different from ordinary coins? (Obviously, in a hypothetical gold-coin economy credit cards would be in gold, too). Btw, practicality was not the reason the world abandoned the gold standard, political and economical needs obviated it. P.s. obviously, paperclips are not a good figurative example. The central banks might just give you a list of banknote numbers to exchange (and an API to verify their uniquen…
Giving someone coins is similar to Bitcoin. Still, Bitcoin is more practical than carrying around a bag of coins.
You can send them instantly across the globe without fees and keep as many as you want in your pockets to name a few.
Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins
#53the big problem with using bitcoins for real life transactions is it takes ~10 minutes to confirm the transaction. this makes it useless for buying a lot of things like fast food, stuff from the store, etc. you would need to layer a trusted third party like a credit card on top of bitcoin to use it for normal transactions.
I wouldn't call this a big problem. It is a minor issue at worst. In the Bitcoin forums there has already been several discussion on how to solve this issue by paying a third party to facilitate the transaction while preserving anonymity.
Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins
#54The most important by far rule for currency is stability. With stability comes acceptance of the currency. You don't have that - the owner first looked up the exchange rate to US dollars. What you have is a medium of exchange, but you don't have a currency. A medium of exchange is useful, and can eventually become a currency. But bitcoins are not yet a currency. Perhaps someone can make a bank, where you store US dol…
Don't know why this is getting upvoted as it contains a bunch of factual errors. It's definitely being used as a currency already, as the article proves. It's a highly fluctuating currency, but that doesn't remove it's properties as a currency.
Care to explain the errors?
People tends to vote on divisive issues in whichever post they agree.
Although not perfect and not entering in details, maybe because of generalization, I found his explanation resonating with what I know about monetary history, but I'm not a monetary economist.
Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins
#55If bitcoin was a currency the meal would have been denominated in bitcoins not dollars. Bitcoin is an asset like gold or a stock certificate, not a currency.
Following your logic, s/bitcoin/Euro/ would mean that the Euro is not a currency. That's just plain goofiness -- the USD is just the default currency at this establishment.
The logic seems to say more that the owner is not treating it as a currency. You can't really define something as a currency or not based on one person's actions.
Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins
#56Earlier quoted context omitted.
Then they aren't accepting euros as currency. At the end of the day they will immediately convert the euros to GBP. They are willing to use euros as a medium of exchange, but only because they know they can exchange them for (to them) real currency. (Currency is relative, obviously. And just as obviously it helps that somewhere in the world there are people who use that type of money, which gives you comfort that eve…
Plenty of people save in BitCoin, some would even argue that's where much of it's value comes today. Look at the article from Richard Falkvinge that he linked to for an extreme example. Nowhere did he suggest that the restaurant owner exchanged his BitCoins for USD. Maybe he saves them and uses them to buy something else. Who knows, maybe he buys the ingredients for his Meze using Bitcoins?
No, plenty of people do not save in BitCoin, for values of plenty and save that most people would understand.
You might more accurately have put 'a few people hold bitcoins for reasons of speculation'. This is not the same as saving.
[Disclosure - I hold no bitcoins]
PS - it's probably about time that people disclose whether or not they hold bitcoins when commenting.
Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins
#57The most important by far rule for currency is stability. With stability comes acceptance of the currency. You don't have that - the owner first looked up the exchange rate to US dollars. What you have is a medium of exchange, but you don't have a currency. A medium of exchange is useful, and can eventually become a currency. But bitcoins are not yet a currency. Perhaps someone can make a bank, where you store US dol…
Whether it fits the strict definition of "currency" is not very important, imho. The value of Bitcoin, being a very undeveloped market, is highly volatile. This is certainly true.
Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins
#58It should be noted that the only reason Meze Grill is accepting bitcoins is because Bruce Wagner, host of the 24/7 Bitcoin show (http://onlyonetv.com/?page_id=178), loves the restaurant and convinced the owner to accept bitcoins. The owner himself (on Bruce's show) has admitted it's basically a cute little gimmick and doesn't actually any real volume using bitcoins at his shop.
Yes, the above is as ridiculous as it sounds.
Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins
#59Excellent article. My favorite quote: > Apart from whether there is a central bank somewhere to bid against George Soros, doesn’t the difference between a real currency and an imaginary currency lie in some sense in the composure with which a customer can ask if the currency is accepted here and in the composure with which a merchant can say yes? Every currency is valuable only because other people consider it to hav…
> Every currency is valuable only because other people consider it to have value. Two counterarguments: - the idea of `legal tender' [1]. Usually the physical manifestation (coins and banknotes) of official currency in a given country/region/whatever is also codified by law as legal tender. Which means, when used for settling a debt, the creditor is obliged to accept it. Contrast that with gold, for example: it's con…
>the idea of `legal tender'
This idea doesn't work in the country with hyperinflation :) As long as people don't consider that the currency is valuable, no legal force can convince them.
Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins
#60Earlier quoted context omitted.
The cost of electricity per Bitcoin in turn depends on the computing power invested in the network. The strength of the next block is adjusted so that it takes approximately 10 minutes for the network to solve it. Also there are optional transaction fees.
Right, that's what I'm saying: As more people join the network it becomes uneconomic to mine bitcoins, because since it's harder now, it costs too much electricity. So those with the least efficient setups stop mining. So the price settles at the cost of electricity. Then they reduce the number of coins per block. So suddenly it comes even less worth it to mine. Until the value of each bitcoin rises to match, causing…
"If the value of each bitcoin did not rise, no one at all would mine and the network would grind to a halt (no confirmed transactions)."
This isn't true. The system has several modes of adjustment and it will always be worth it for someone to generate blocks. If the value of a coin didn't rise to match generation costs, people /should/ stop mining -- but those that remain will collect more coins or transaction fees as the difficulty drops to compensate. Overall the economy as a whole shrinks, but never grinds to a halt.