Coinbase Is Now Selling Over $1M USD Of Bitcoin Per Month

You go to their website, and say how much you want to deposit (lets say $100). They will give you a final deposit amount that is pretty similar, but different (e.g. $99.86), which allows them to identify your deposit. Once the deposit is made, they verify it, and if there are any problems, they will request your receipt.

They already did! You just need to buy a bitcoin, and wait 30 days. Coinbase does this to limit fraud.

> and splitting it is ad-hoc patchwork

What are you talking about here?

> The network was obviously not designed for such a thing

Are you talking about Section 7 "Reclaiming Disk Space" and section 8 "Simplified Payment Verification" in the initial design document, which have a profound influence on the design— as Bitcoin uses a hash tree to aggregate transactions instead of just a simple hash in order to accommodate those design features?

> There is still no easy integration method with extant payment systems.

Unfortunately existing online payment systems are highly reversible for months after the transaction completes. This is problematic for many kinds of merchants and it's one of the reasons that digital goods sales on the Internet have mostly been a failure outside of a few special marketplaces.

> In many cases you must supply a lot of personal documentation to do anything meaningful on the exchanges.

This is common anti-money laundering law conformance— same thing you deal with w/ paypal... not exactly a limitation of Bitcoin.

> The system of block verification makes it impossible to do truly instantaneous transfers.

Nothing requires you to do payments in Bitcoin by directly transacting on the Bitcoin network. Scalability and speed require that not all transactions are made directly— likewise, the USD is a dumb piece of paper that can't be sent over electronic networks... and yet the USD is a widely used currency. You can do instant transaction trivially in Bitcoin, e.g. using mtgox codes and less centralized systems can be built if anyone cares.

> The system is vulnerable to 51%+ attacks.

Can you suggest any currency or system of agreement that doesn't have an analogous weakness?

At least in the context of Bitcoin the things a majority hashpower attacker can do are strictly limited: they can reorder transactions (and only recent ones unless they are a very big supermajority).

Compare this to a government created currency which can be inflated boundlessly by a small percentage of the population choosing to mint a trillion dollar 'coin' on a political whim.

> single-home GPU farms are going to be enough to compete

Mining's rewards are linear. Participants make on average their share of the new coin relative to the computing power they provide to secure the currency. And indeed, it's specialized. Is the USD uncompetitive because printing your own gets you imprisoned or gold uncompetitive because gold mining is hard?

Get a job, Kid. It's a currency not a free-money-for-nothing-thing.

> Many of the perceived benefits of bitcoin are illusory or misunderstood.

Well, that's true of many things.

> every transaction ever made with bitcoin is published publicly

Not so— a significant fraction of transactions are made off the blockchain, perhaps even a majority. Even within the blockchain the transactions are pseudonymous.

> I have "actual reasons" for it.

You may, but many of your perceived weaknesses are also illusory or misunderstood.

> A currency that doesn't have (at least most of) these issues will be super awesome, and bitcoin is an important predecessor, but it's not the end of the story

The most important difference between Bitcoin and your hypothetical perfect digital currency is that Bitcoin exists and it works. Satoshi didn't waste time waxing philosophical on the internet, he shut up and wrote code. If there is one thing you could learn from Bitcoin, this should probably be it.

Show me a fiat currency the appreciates over time and maybe I'll look at it differently. Have you ever thought of that the root of our over-consumption society might be caused by the need to keep our money always moving to prevent it from depreciating?

Well, in general the price level of bitcoins, how much individual bitcoins are worth compared to other goods, is going to end up being governed by

  MV = PQ

Where M is the quantity of bitcoins, V is how fast they criculate, P is the price things in bitcoins, and Q is the size of the economy that bitcoins are used for. Since the bitcoin design prevents M from increasing that much, and since V tends to fluctuate a lot but remain stable in the long run, you should find that the value of each bitcoin mirrors the size of the economy that uses bitcoins in the long run. So buying bitcoins is essentially a bet that people will use them for more and more things.

With US dollars the government (or central bank). tries keep M at a level where Q doesn't move around too much, but bitcoin doesn't and can't have an institution like that.