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Why Bitcoin Matters

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Re: Why Bitcoin Matters

#141

Post by ChuckMcM »

pyvpx wrote: post #46
ye wrote: post #36

Earlier quoted context omitted.

Yeah, you described pretty much the worst case scenario where everything goes through fiat. But once Bitcoin penetration is significant and people start getting paid in Bitcoin (already happening) and accept it as payment (also already happening), all these exchange fees go away. With fiat you're stuck with the fees forever. Also your 0.5% assumption is wrong. You can place a buy ad on LocalBitcoins and actually buy…

does bitcoin have an intrinsic value? if so, what?

Not sure why people are voting your question down, it it not an uncommon question. The answer no. Bitcoin, like most currencies, does not have any intrinsic value.

To understand how a currency works (and why intrinsic value isn't required, difficulty in counterfeiting is the only requirement ) Will be covered in a text or class covering microeconomics.

Re: Why Bitcoin Matters

#142

Post by dllthomas »

wmf wrote: post #75
jellicle wrote: post #37

Earlier quoted context omitted.

So what's the term for something shadier than fiat currency, something not backed by collateral NOR by government dictate? It should convey all the scorn directed at "fiat currency", but moreso.

Cryptocurrency.

Also, "scrip"

Re: Why Bitcoin Matters

#143

Post by walden42 »

ye wrote: post #36
minimax wrote: post #16

Bitcoin is the first Internet-wide payment system where transactions either happen with no fees or very low fees (down to fractions of pennies). Existing payment systems charge fees of around 2 percent to three percent As long as consumers are paid in their local currency and vendors pay their employees, their taxes, and their other costs in local currency, then bitcoin as a payment technology has similar costs as cr…

Yeah, you described pretty much the worst case scenario where everything goes through fiat. But once Bitcoin penetration is significant and people start getting paid in Bitcoin (already happening) and accept it as payment (also already happening), all these exchange fees go away. With fiat you're stuck with the fees forever. Also your 0.5% assumption is wrong. You can place a buy ad on LocalBitcoins and actually buy…

The idea is that bitcoin gives you the option of value-added services, like conversion and what not, but you definitely don't have to use them. With fiat you don't have that option.

I accepted bitcoin for some freelancing work and I didn't convert it.

Re: Why Bitcoin Matters

#144

Post by oafitupa »

dllthomas wrote: post #129
interstitial wrote: post #116

Earlier quoted context omitted.

The dollar's value comes from the barrel of gun. I thought that was plain enough. Bitcoins not so much.

While I wouldn't put it past the USG to use arms to prop up the dollar, I'm not sure if there are specific actions you're referring to.

Uh, every invasion of a country or coup/assassination in the last decades?

Re: Why Bitcoin Matters

#145

Post by jjh42 »

riemannzeta wrote: post #109
eurleif wrote: post #103

Earlier quoted context omitted.

>If the BGP is about solving the problem of fraud, then Bitcoin hasn't solved it. Do you have any idea what the BGP is?

I'm not an expert, but I read the paper. So you don't need an intermediary to confirm that a particular digital transaction took place between two people. By analogy to the original problem as stated, that's like saying you don't need an intermediary to confirm that a message with particular content was delivered between two generals. You still need an intermediary to confirm that the recipient is going to act on it…

There is some academic interest in ability to use bitcoins scripting language to build "smart contracts."

In practice, escrow isn't necessarily needed. In a typical consumer transaction the merchant is more trustworthy than the consumer (think me ordering from amazon). Amazon could just steal my money but that'd quickly destroy their brand. OTOH amazon accounts are free and so amazon is much more worried about me defrauding them. If amazon accepted bitcoin I'd pay them without worrying about escrow.

Re: Why Bitcoin Matters

#146

Post by timr »

ye wrote: post #106
mgulaid wrote: post #68

Earlier quoted context omitted.

But the bottom line argument is that when everyone gets paid in the same currency, the exchange fees go away. This can happen with US $ or Yan.

But transfer fees and payment fees won't go away with fiat. Credit card fees eat into many businesses' profit margins, especially the ones with low margins. And that's not the only Bitcoin's advantage.

You should stop saying "with fiat", unless you mean it to include Bitcoin, which is very much a fiat currency. It has value only to the extent that you say it has value.

Fiat currencies are to be contrasted with currencies that have intrinsic commodity value -- like gold, or livestock. Bitcoin has no intrinsic value.

The only difference between a governmental fiat currency and a distributed fiat currency (like gold) is that there is no government backing the latter. This has no bearing on the existence of fees for transfer and storage. If you're willing to carry physical currency around and store it in your mattress, payment via US dollars is fee-free as well.

Re: Why Bitcoin Matters

#147

Post by base698 »

nether wrote: post #128

Remember when everyone said bitcoin was doomed because it's deflationary?

That's only people that read the 101 level of how the economy works and don't consider that bitcoin is infinitely divisible practically, unlike gold.

Re: Why Bitcoin Matters

#148

Post by reqres »

atmosx wrote: post #98
ye wrote: post #36

Earlier quoted context omitted.

Yeah, you described pretty much the worst case scenario where everything goes through fiat. But once Bitcoin penetration is significant and people start getting paid in Bitcoin (already happening) and accept it as payment (also already happening), all these exchange fees go away. With fiat you're stuck with the fees forever. Also your 0.5% assumption is wrong. You can place a buy ad on LocalBitcoins and actually buy…

> [...] But once Bitcoin penetration is significant [...] I think we passed that point, there is an adoption of bitcoin, but it will NEVER be used as a currency IMHO. I really hope the price stops fluctuating so we can use it as a value storage medium, but even that can be disputed.

I hope so too - but I think it's unlikely because Bitcoin is decentralised by design.

When money supply is controlled by central authority, it can be used as a tool to control prices and volatility. It's still early days but the inflation-targeting independent monetary policy experiment happening in some developed economies over the last 2 decades seems promising.

I'd be interested if anyone were willing to start a "centralised" Bitcoin governed by benevolent dictators for life. I'd rather put my savings with people who understand monetary theory and how to use big data to inform supply decisions than a system prone to cycles.

Re: Why Bitcoin Matters

#149

Post by drcode »

nhaehnle wrote: post #135
drcode wrote: post #94

Earlier quoted context omitted.

You're assuming no progress will be made in bitcoin scalibility in the near future, and comparing it to another technology stack that arguably hasn't seen any meaningful innovation in 40 years (since the advent of the debit/credit card.)

If there really hasn't been any meaningful innovation in that other technology stack, then the situation looks actually looks worse for the long-term fate of Bitcoin, because it means that the other technology stack could easily improve given the incentive. That doesn't mean that Bitcoin will disappear or anything like that. It's just not going to become the prevalent unit of account as a currency.

Oh no question, MasterCard et al are going to change their tune greatly in the coming years due to this new competition, and we're all going to benefit from this.

Re: Why Bitcoin Matters

#150

Post by rib3ye »

minimax wrote: post #16

Bitcoin is the first Internet-wide payment system where transactions either happen with no fees or very low fees (down to fractions of pennies). Existing payment systems charge fees of around 2 percent to three percent As long as consumers are paid in their local currency and vendors pay their employees, their taxes, and their other costs in local currency, then bitcoin as a payment technology has similar costs as cr…

Investment related fess are tax deductible. To my knowledge, Visa fees are not.
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