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

Re: Online Cash Bitcoin could Challenge Governments, Banks

#111

Post by ataggart » Sat, Apr 16, 2011, 9:12 PM UTC

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…

>I meant intrinsic value in that context.

I'm heading out the door, but just wanted to note that nothing has intrinsic value. All value is subjective.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#112

Post by lhnn » Sat, Apr 16, 2011, 9:15 PM UTC

ender7 wrote: post #103

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, bitco…

1) That's the point. It wants to be similar to gold. We traded based on a third party commodity (gold/silver) until 1974 and did alright.

2) So? I don't see your point. The goal of BTC is not to eliminate fees, but to make digital currency that you can use P2P.

3) I don't think government currencies are going away any time soon, but BTC provide an alternative.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#113

Post by cookiecaper » Sat, Apr 16, 2011, 9:18 PM UTC

Every time btc gets press mtgox jumps. We were looking at averages between 70 and 80c / btc, now it's up to $1.11. I would encourage people to let the furor die down a bit before investing in bitcoins, until they're back in the 80-90c range at least.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#114

Post by cookiecaper » Sat, Apr 16, 2011, 9:23 PM UTC

Bitcoin is awesome because it stands to make electronic payments extremely easy without any hassle from banks or outsiders. No more e-commerce hassles like a merchant account or payment gateway.

The anonymity is less strong than many initially presume since ALL PAYMENTS ARE PUBLICLY REGISTERED, including the payment chain. This is why it's important to generate a new btc receiving address whenever you perform a new transaction. The entire exchange history of that bitcoin is public knowledge, from the day it was generated until the very last transaction. Hence, if you use a bitcoin that was sent to a publicly disclosed address to pay for something, that transaction is linked to you forever. So people need to be careful about how they use which bitcoins, and the client doesn't really make that easy.

There really is a lot of potential in btc, I've been excited about it since I first learned of it, though as soon as the government catches on they will outlaw it (if they can't find a current law to justify prosecution and/or destruction of the btc network, which is doubtful) and do everything possible to destroy it. They won't like it at all, and neither will the banks that even btc users rely on to store their country's regularly denominated currency. I am scared and interested to see what happens to btc as demand rises.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#115

Post by [deleted] » Sat, Apr 16, 2011, 9:36 PM UTC

tcoppi wrote: post #108

ZitchDog wrote: post #100

Earlier quoted context omitted.

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 incredi…

[deleted]

Re: Online Cash Bitcoin could Challenge Governments, Banks

#116

Post by barmstrong » Sat, Apr 16, 2011, 9:43 PM UTC

Just realized, BitCoin could become a force to recon with overnight if just one step happened: Paypal started supporting BitCoin.

Peter Thiel is a libertarian and seems like he would be very sympathetic to the idea - who knows, crazier things have happened.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#117

Post by [deleted] » Sat, Apr 16, 2011, 9:49 PM UTC

weavejester wrote: post #47

zacharypinter wrote: post #8

Earlier quoted context omitted.

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.

That wouldn't necessarily make accepting bitcoins illegal, it would just make accepting bitcoins from anonymous sources illegal. I think they'd also have a hard time justifying why I can buy a product anonymously in cash (or with a pre-paid VISA), but I can't buy a product anonymously using bitcoins. Particularly since bitcoins have less anonymity than cash, because a history of all transactions is maintained.

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Re: Online Cash Bitcoin could Challenge Governments, Banks

#118

Post by quanticle » Sat, Apr 16, 2011, 9:50 PM UTC

weavejester wrote: post #96

fauigerzigerk wrote: post #77

Earlier quoted context omitted.

That's completely unrealistic. There is very tight cooperation between the major currency blocks when it comes to the crackdown on anonymous payments and on everything anonymous for that matter.

No there isn't. Anonymous paper money is still used in every country in the world, anonymising P2P networks like Tor and I2P have not been outlawed, you can buy pre-paid VISAs and pre-paid phones legally and anonymously and many people send routinely anonymous donations to political organisations.

you can buy pre-paid VISAs and pre-paid phones legally and anonymously

I thought legislation had been passed stating that purveyors of pre-paid debit cards and cell phones had to ask for ID and keep records so that, if the cards or phones were used in a crime, the purchaser could be traced. I do know that legislation to that effect was introduced. I'm not sure if it was ratified, but even if anonymous cards and phones are legal now, I have no confidence that they will continue to be legal for the foreseeable future.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#119

Post by cwp » Sat, Apr 16, 2011, 9:50 PM UTC

kd0amg wrote: post #75

cwp wrote: post #30

Earlier quoted context omitted.

I'm hardly an expert in bitcoins, but: simply having more computational power isn't enough, you have to use it. That computational power is valuable; if you're mining bitcoins you're not using it for whatever it is that you bought all that capacity for in the first place. I doubt that Google or Amazon or the NSA are going to abandon what they're doing now to mine bitcoins.

simply having more computational power isn't enough, you have to use it You can say that about any resource. It's still generally easier for someone who's wealthier to put up more of that resource.

Yes, that's the nature of wealth.

The point is that Bitcoin really is different from other currencies in terms of how bitcoins are created. Dollars are largely created by banks. They get special permission from the government to create dollars and lend them out. Bitcoins, in contrast, can be created by anyone with some computing power, no permission needed.

The fact that one must expend resources to create bitcoins is what makes them valuable - a currency that anyone could create with no effort would be worthless.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#120

Post by quanticle » Sat, Apr 16, 2011, 9:54 PM UTC

vrotaru wrote: post #91

ZitchDog wrote: post #78

Bitcoin is a fantastic idea, with one crucial mistake: the finite nature of bitcoins. The fact that coins will one day "run out" will almost certainly lead to increased speculation, which will in turn lead to a deflationary spiral, followed by a "bubble burst" when speculators sell all their bitcoins and average coin holders are left holding the bag. Infinite coins would tie the value to the opportunity cost of compu…

> There has never had been such a thing a deflationary spiral , though.

Yes there has. The Great Depression was a deflationary spiral. Bank failures caused people to hoard currency. This hoarding led to decreased investment and economic activity. The decrease in economic activity led people to lose jobs, which caused them to hoard even more money.

In addition, the decrease in the money supply greatly increased the value of debts. You were getting paid less, but the your mortgage payment remained the same. This ended up being a crushing burden even for those who managed to keep their jobs.