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Bitcoin is the same principle, more or less. It's an unreal, digital commodity that might or might not have value, depending on the perceiver. That bitcoins even exist are proof to me of the human ability to create and recreate stores and transfers of value, no matter how ridiculous those stores may seem to some:
http://www.wondermondo.com/Countries/Au/MicronesiaFS/Yap/Rai...
Earlier quoted context omitted.
I don't think that's an analogy you really want to draw. The Euro's current problems are due to governments with Euro-denominated debt being unable to take the easy way out of servicing their debt by printing money. One of Bitcoin's defining features is that it's impossible for governments to devalue the currency by just printing money. Since both currencies behave the same way in this regard, a Bitcoin economy would…
"Easy way out of servicing their debt" is a facile misrepresentation of the problem. The problem for a country like, for instance Spain, is that their current account balance has gone highly negative. This can be due to government overspending or private overspending and contraction. In fact Spain didn't have a big public debt problem before the crisis. Their problems stem mostly from contraction of the private secto…
Spain not only didn't have a public debt problem, it was running a surplus on a debt of 60%. And Spain understood the risk of the asset bubble and tried to stop bad property lending by reforming its banks - no help at all, since German banks stepped in to provide inadequately covered loans to finance the bubble... Now PIIGS countries must not default so that foolish non-PIIGS banks don't have their balance sheets destroyed.
The simple morality tale that many try to weave does not survive a closer look at events.
While I agree with your characterisation of the problem, devaluation is no panacea since (i) it tends to cause inflation, (ii) it only works as advertised if there is adequate global demand, and (iii) the devaluation is equivalent to a default from the point of view of creditors. I lean towards some sort of Eurobond supported by an intra-Eurozone investment programme to support trade imbalances.
Finally PIIGS is an awful acronym, who came up with it? PIGIS would be much better, and could be pronounced "piggies".
I really like the concept of "metacurrency" that this article talks about. This is exactly the area I think Bitcoin will be most successful. I don't ever see it replacing the dollar, or even credit cards. The one thing that Bitcoin really excels at is the instantaneous transfer of unlimited amounts of money from one place in the world to another. Rick Falkvinge talks about this a bit in his "four drivers" series: htt…
Not sure why you're getting downvoted for this, especially since this is the main idea of the article. So what's to keep a loose network of independent merchants from popping up around the globe to undercut Western Union?
>This presents a bit of a puzzle for Bitcoin skeptics. Uh, no, it presents absolutely no puzzle at all for those of us who believe Bitcoin will follow a boom-bust cycle without ever providing a truly stable currency.
Wonder what will last longer, the euro or bitcoin.
Bitcoin now is like the internet was in 1985. There is a huge stack of infrastructure yet to be built in order to deliver on the early pre-hyped promises. I don't think anybody understands this domain well enough to predict the outcome; it's very clearly in an experimental phase. It may well be ridiculous to believe Bitcoin will replace the dollar (much as some believed the internet would replace all manner of things…
The article suggests that government can't get rid of bitcoins. But given the upper limit on the number, couldn't the government simply buy them all?
And then once they did it, people could just start a new chain anyway.
I really like the concept of "metacurrency" that this article talks about. This is exactly the area I think Bitcoin will be most successful. I don't ever see it replacing the dollar, or even credit cards. The one thing that Bitcoin really excels at is the instantaneous transfer of unlimited amounts of money from one place in the world to another. Rick Falkvinge talks about this a bit in his "four drivers" series: htt…
I'm being somewhat pedantic here but Bitcoin is absolutely terrible at this, because Bitcoins are inherently not unlimited.
On a less pedantic note, I'm not sure Bitcoin is any better than the alternative of a Bitcoin-free world for your example usage. Lots of "real" US Dollars these days are little more than bits in a database that can be transferred easily across the world, and that's true with or without Bitcoin.