Online Cash Bitcoin could Challenge Governments, Banks • Hacker News Board

Re: Online Cash Bitcoin could Challenge Governments, Banks

#11

Post by lawnchair_larry » Sat, Apr 16, 2011, 3:47 PM UTC

gte910h wrote: post #4

To me this press effort always seems like just people who already have bitcoins trying to get buyers to raise the price of the currency.

I really doubt the true goal is to raise the value of bitcoins already held. I don't think "forex" speculators take a serious interest in bitcoin yet, but rather, those using it would like to see wider adoption so that they can actually buy things with it.

A current problem is that it is highly volatile and fairly illiquid. Most adopters have a genuine interest in the success of an alternative currency rather than trying to profit from the situation.

I downloaded the client and checked out the forums. Although I don't have any BTC myself, I would like to see something like this succeed.

However, I have low hopes that it will not get tagged with propaganda about drug dealers, terrists, and child pornography (I can't believe the article implied that already!), and probably made illegal like online poker. Visa/Mastercard will refuse to process payments for exchangers, who will later be indicted as money launderers.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#12

Post by vessenes » Sat, Apr 16, 2011, 3:51 PM UTC

lawnchair_larry wrote: post #11

gte910h wrote: post #4

To me this press effort always seems like just people who already have bitcoins trying to get buyers to raise the price of the currency.

I really doubt the true goal is to raise the value of bitcoins already held. I don't think "forex" speculators take a serious interest in bitcoin yet, but rather, those using it would like to see wider adoption so that they can actually buy things with it. A current problem is that it is highly volatile and fairly illiquid. Most adopters have a genuine interest in the success of an alternative currency rather than tr…

There are many, many bitcoin speculators. I know because I was one, sort of. Large bitcoin holders currently have in excess of $250k in BTC value, much of it purchased at $.02/BTC -$.05/BTC originally.

There are a few people making their daily living trading, generating and exchanging BitCoins. Just the top of the iceberg, I imagine.

The payment problems are exactly as you describe. Interestingly, it would definitely be possible to run an above-board US-based exchange for BTC; it's called a money transfer business, and they're regulated in a specific way. Getting fully registered and compliant is likely around $1mm USD.

When the BitCoin economy gets big enough, expect someone to try this. I have no idea if it will succeed, though.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#13

Post by vessenes » Sat, Apr 16, 2011, 3:52 PM UTC

zacharypinter wrote: post #8

weavejester wrote: post #5

Earlier quoted context omitted.

There are lots of examples of governments or large organisations taking down networks with single points of failure, but far fewer examples of taking down highly distributed networks like Bitcoin. I don't think this fight is a foregone conclusion. I think it would be difficult to write a law that would make Bitcoin illegal, without making things like MMO currencies or SSL certificates illegal.

One guess is they might write a law that requires U.S.-based online businesses to collect certain information about the transactions they accept that would make accepting bitcoins illegal.

This is called a 'know your customer' plan, and it's already in place and the law for all banks and money transfer businesses.

Accepting BitCoins won't be illegal if you have a know your customer plan. Of course, it won't be pseudonymous at that point, either.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#14

Post by gaius » Sat, Apr 16, 2011, 3:52 PM UTC

zacharypinter wrote: post #8

weavejester wrote: post #5

Earlier quoted context omitted.

There are lots of examples of governments or large organisations taking down networks with single points of failure, but far fewer examples of taking down highly distributed networks like Bitcoin. I don't think this fight is a foregone conclusion. I think it would be difficult to write a law that would make Bitcoin illegal, without making things like MMO currencies or SSL certificates illegal.

One guess is they might write a law that requires U.S.-based online businesses to collect certain information about the transactions they accept that would make accepting bitcoins illegal.

Exactly. The choke point is the same as it for poker: you need the retail banking system to convert your bitcoins or your poker chips to and from something ordinary people can actually spend. Underneath every technical system is other ordinary people who need to pay their bills and mortgages and taxes - you can't not have this capability. And the banking system is highly regulated and will do whatever the govt requires it to do via the regulator.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#15

Post by thedaveoflife » Sat, Apr 16, 2011, 3:57 PM UTC

Money is fiction. The value of money is derived from trust in the central authority that creates it. Therefore I think an entity like Bitcoin (though not necessarily Bitcoin itself) could conceivably come to replace federal currency because its source is not human beings, but an unflappable algorithm.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#16

Post by pnathan » Sat, Apr 16, 2011, 4:03 PM UTC

Bitcoin is really cool.

I just wish I knew what to sell to get some. My dabbling with mining bitcoins has convinced me it requires a on-all-the-time setup to mine with any prayer of success.

Last time I looked, there didn't seem to be a real economy, just people trading bitcoins. ~.~

Re: Online Cash Bitcoin could Challenge Governments, Banks

#17

Post by bonzoesc » Sat, Apr 16, 2011, 4:05 PM UTC

thedaveoflife wrote: post #15

Money is fiction. The value of money is derived from trust in the central authority that creates it. Therefore I think an entity like Bitcoin (though not necessarily Bitcoin itself) could conceivably come to replace federal currency because its source is not human beings, but an unflappable algorithm.

The source of the currency is software written by humans and run on computers built and controlled my humans. The algorithm may be temporarily unflappable (as long as the cryptographic algorithms it depends on remain solid), but the implementations of it depend on humans in every step.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#18

Post by euroclydon » Sat, Apr 16, 2011, 4:08 PM UTC

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.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#19

Post by bonzoesc » Sat, Apr 16, 2011, 4:18 PM UTC

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.

Those are the first uses because online gamblers and muckraking NGOs are the ones most desperate for an alternative to a government-issued currency. If the average person was unable to function with inflationary currencies, they'd find an alternative.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#20

Post by mshron » Sat, Apr 16, 2011, 4:21 PM UTC

tcoppi wrote: post #9

mshron wrote: post #6

As far as I can tell, the only way to actually stay anonymous and have a foothold in the bitcoin economy would be to exchange bitcoins for cash in person with someone. Even then, once you tried to combine that account with any other you owned that was traceable to you (record in an exchange, email sent to a client containing your bitcoin address) it would be easy to link them together, since the entire ledger is publ…

I agree that many articles are a little too glowing on the anonymous aspect, but the level of anonymity you have with any system is proportional to your sophistication, so I don't see it as a problem inherent in bitcoin. See https://en.bitcoin.it/wiki/Anonymity for more info on the anonymity of the current bitcoin implementation and system.

Thanks for the link, and well said that anonymity is basically always proportional to sophistication. What worries me is that other, related systems people will have experience with (like anonymous file-sharing, public-key encryption, onion routing) have many fewer hoops to jump through to feel confident that they're working correctly. Apples to oranges, but expectations work like that.

If I throw a disk containing my 2048-bit private key into a fire, I can be confident that nobody is ever going to decrypt my files. Getting the same level of confidence for Bitcoin anonymity is a lot tougher.