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Why Bitcoin Matters

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Re: Why Bitcoin Matters

#171

Post by ye »

plock wrote: post #167
ye wrote: post #158

Earlier quoted context omitted.

First of all, I can pay taxes in Bitcoin. There's a company that handles it for me. Second of all, your dollar's "intrinsic value" being an American criminal law makes zero sense. It's geography-specific. Suddenly if I'm not from US, that "intrinsic value" disappears. So much for that dumb definition. > It doesn't matter how easy it is to transfer something to someone else if they don't want it. That thing must be se…

>First of all, I can pay taxes in Bitcoin. There's a company that handles it for me. That company doesn't pay the US government in bitcoin. They just buy dollars on your behalf. Every dollar owed in taxes must be paid in USD. >Suddenly if I'm not from US, that "intrinsic value" disappears. So much for that dumb definition. It doesn't 'disappear'. There are still millions upon millions of people who need USD to pay th…

You're still confusing the burden to pay taxes under the penalty of law in one particular country with value.

You have a fundamental misunderstanding of what "value" means.

> That company doesn't pay the US government in bitcoin.

But I don't care. I paid in Bitcoin.

> That's where the backing comes from

I doubt dollar "intrinsic value" comes from the fact that you have to pay taxes in it. It can spiral into a 10000%/year inflation and lose most of its value, and you will still be able to pay taxes with it.

In fact, you've been required to pay US taxes in dollars for the last 100 years. It didn't stop the dollar from losing 97% of its value.

Again, you're confusing value with some criminal law.

> I'm sure the people that hire them to transport goods value what's being transported.

What? You can't transport something that has no value? Like an empty box?

> Freedom from prosecution is pretty important to the people in the US that owe taxes to the US government

Ah, red herring. I was talking about "majority of the world", and you switched back to the Americans, as if that somehow proves that most of the world doesn't give a crap about US criminal codes, which, according to you, somehow back the value of the dollar.

> Ease of transportation is a feature of bitcoin

Which adds to its value, like features of... everything.

Trying to play with words will get you nowhere.

> But ease of transportation does not itself give anything value

We already went over this. Multibillion transportation industry.

Re: Why Bitcoin Matters

#172

Post by tptacek »

guscost wrote: post #162
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.

What do you say to the idea that Bitcoin is backed by established laws of math and economics?

"That speculative credit default swaps were also backed by established laws of math and economics"?

Re: Why Bitcoin Matters

#173

Post by SilasX »

comex wrote: post #56

Future email systems and social networks could refuse to accept incoming messages unless they were accompanied with tiny amounts of Bitcoin – tiny enough to not matter to the sender, but large enough to deter spammers, who today can send uncounted billions of spam messages for free with impunity. Heh. Talk about historically backward: http://en.wikipedia.org/wiki/Hashcash#Bitcoin

I was thinking the same thing. If you want to impose costs on people who send you emails, you can just strip out the proof of work component of bitcoin (which indeed predated it), and use that as a challenge/response system.

Re: Why Bitcoin Matters

#174

Post by Crito »

base698 wrote: post #147
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.

I'd say that gold is infinitely divisible in practice, as much or moreso than bitcoin. There is what, a USD dollar or two worth of gold leaf in Goldschläger? You can trivially get down to flakes of gold worth fractions of pennies.

The only problem is the cost of division (making leaf is somewhat labor intensive, but not prohibitively so by any stretch).

The hard limit is $1e-20, according to wolfram alpha. IIRC bitcoin will only get you down to e-8.

Re: Why Bitcoin Matters

#175

Post by SilasX »

sskates wrote: post #35
vasilipupkin wrote: post #15

So, one big reason for merchants to accept bitcoins is the high fees charged by credit card processors? So, suppose they cut the fees? Does that kill bitcoin ?

On any payment network the fees are a result of the risks of credit card fraud. Card processors can't cut fees without losing money. It's an efficient market as it is.

I thought the credit card fees were mostly to cover the escrow-like service they provide, in which you can challenge a merchant who fails to keep their end of the bargain but insists on billing you anyway?

Re: Why Bitcoin Matters

#176

Post by shredfvz »

nazgulnarsil wrote: post #163
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…

wrong, with credit cards you have a 2.5% fee with every single transfer you ever make. A pays B pays C pays D, each step has a fee. With Bitcoin ONLY the people who do fiat exchanges pay a fee, A pays B pays C pays D, only A and D pay a fee. This has massive economic implications if bitcoin starts getting penetration.

Actually, depending on your respective tax authority's treatment of Bitcoin taxes, it's more like:

A pays B (A now owes taxes on realized gains)

B pays C (B now owes taxes on realized gains)

C pays D (C now owes taxes on realized gains)

However, as a commodity with limited supply, BTC may still be a good store of value.

Basically what you guys need to realize is Bitcoin only makes sense when you completely disregard "the system". If nobody pays any taxes, nobody does AML/KYC, and everybody uses BTC ubiquitously, then yes, it's a cheaper and more efficient system. What irks me to no end as a proponent of Bitcoin is how many people are into Bitcoin nowadays purely as a get-rich-quick scheme or because it's en vogue. There are real, significant societal conversations that need to be had on a massive scale before Bitcoin makes sense for the average person, and most people just aren't willing to bring that conversation to the forefront. Too busy raising VC.

Re: Why Bitcoin Matters

#177

Post by wmf »

guscost wrote: post #162
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.

What do you say to the idea that Bitcoin is backed by established laws of math and economics?

If a currency is "backed" by something, it means the issuer is willing to exchange it for another resource, usually at a fixed ratio. For example, a gold-backed dollar (when they used to exist) could be exchanged for a certain weight of gold. There is no such thing for Bitcoin.

Re: Why Bitcoin Matters

#178

Post by shredfvz »

lukifer wrote: post #160
kolev wrote: post #64

Earlier quoted context omitted.

LocalBitcoins.com is one of the most expensive places to acquire (only small quantities of) bitcoins... and the riskiest.

Risky how? If you meet in a public place and use cash + escrow, it's as safe as a trip to Walmart.

It's not risky in and of itself. It's risky because scammers are getting _really_ good at scamming people on localbitcoins. I've seen stories of criminals printing up fake receipts from Chase. I've also seen stories of con artists who will trick a completely unrelated third party into sending cash to your localbitcoin's bank account, then telling you "cash sent", meanwhile the rightful owner of the cash has no idea their money is being used for these purposes and will inevitably open up a fraud suit with their bank. And then there's people paying with counterfeit bills. Not exactly a walk in the park. Then again, I guess this is all to the buyer's advantage, but this higher risk is reflected in higher prices than what you'll find on vetted online exchanges.

Re: Why Bitcoin Matters

#179

Post by wmf »

kaonashi wrote: post #54
dmix wrote: post #11

Earlier quoted context omitted.

1. no, but stability will increase with mass adoption. It's not tied down to one specific geographic market as nation-state currencies. Once it's based on global trade then it requires global instability, which is a higher threshold. USD has a similar global stability because of that vs other currencies. 2. no, how would this would decentrally? You could pay into an insurance policy maybe, that pays out in alternativ…

> but stability will increase with mass adoption I don't see how this is realistic; the needs for bitcoins will be endogenous to the people using it, whereas the supply increases based on arbitrary constants (until it stops increasing altogether). That says to me that the more people that use it, the more volatile it will become (especially after the supply freezes). When it becomes less volatile, it's merely because…

Mass adoption may increase liquidity on the exchanges and thus provide short-term stability. I agree that Bitcoin cannot have any long-term stability.

Re: Why Bitcoin Matters

#180

Post by seabee »

atmosx wrote: post #164
smtddr wrote: post #117

Earlier quoted context omitted.

This might be me being hyper-pedantic, but I'd argue that not even USD is a particularly good store of value. If you have a significant amount of money it should probably be in at least low-risk stocks or re-estate. Not just sitting in a regular savings account in a regular bank. But, I do get the point that at least the USD dollar doesn't lose/gain 50% value in a few hours by wild speculation every month.

I wasn't thinking of USD, I was thinking more about something used for a couple of millenia as a value storage, but yes sure... Compared to today's BTC even the USD seems okay.

USD fluctuates a lot less than silver/gold, in case you are implying the opposite.
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