Bitcoin virtual currency challenges world’s centralized monetary systems

[phantom power]

I'm interested to see how this kind of idea fares. The value of any currency has a large component of emergent-behavior to it.

If open-source advocate Scott Nelson is right, banking-industry executives around the world will soon be looking over their shoulders.

What they will be watching, according to the cofounder of Free Geek Vancouver, is an emerging digital currency called Bitcoin. As a peer-to-peer virtual currency, Bitcoin can be created, purchased, and traded in a decentralized manner without the use of a bank or payment processor.

...

As the Bitcoin websites explain, to hedge against inflation and other challenges faced by fiat currencies—those declared legal tender by a government and not backed by gold or another commodity—the number of Bitcoins released will not exceed 21 million. This differentiates Bitcoin from national currencies like the Canadian dollar, which can inflate—or lose real value—if too much is introduced into the money stream. Through cryptography and the decentralized network of tech-savvy people like Nelson, Bitcoin will be self-regulating.

“Peer-to-peer technology has been enormously disruptive to the music and the movie industry, because it overturned the control and the way things had been going,” he said. “I think Bitcoin is the disruptive technology for the banking industry in the same way that BitTorrent was for the music and movie industries, in that it’s really going to force them to change the way that they work.”

http://www.straight.com/article-391684/vancouver/bitcoin-peertopeer-currency-challenges-worlds-centralized-monetary-systems

[MineralMan]

1. Open-source currency, eh?

Oh, I don't think so. When the majority of PC users are using open-source operating systems, then we can talk again.

But, you're welcome to use Bitcoin, if you choose. Good luck with that.

The title of your post makes me think of: "Mouse challenges pride of lions."

[MineralMan]

2. More fun. Looking at the lists of where this Bitcoin

is accepted made me laugh. It's a list of gaming sites, ripoff download sites, and other such nonsense. Bitcoin - The currency of geekdom.

I wonder how many LINUX consultants there are behind this? It could be hot in those circles. When you can go to a restaurant or supermarket and hand over your Bitcoins, you let me know, OK? Until then, it's gonna be off my radar completely.

[phantom power]

3. so what I hear you saying is "I don't think it's going to fare very well"

:rofl:

[MineralMan]

4. No. What I'm saying is that I'm very sure it won't fare very well.

Your opinion may differ.

[phantom power]

5. No, my opinion is actually about the same

I just think it's a cool idea anyway. And I hope they get somewhere just because.

:toast:

[phantom power]

6. BTW, your reaction is a great example of the phase-change aspect of currency adoption.

Very reasonably, your response is "hardly anybody uses this, and therefore it's senseless for me to use it."

It seems pretty similar to the days when individual banks each issued their own paper currencies, and it was a perfectly open question about whether anybody chose to trust those or not. Currencies like the US dollar made it through the phase change, to where a person looks around and says "most people will accept this, and so it makes sense for me to use it." From there, it's a short hop to "everybody accepts it."

[MineralMan]

7. Yes, that's the battle any alternative currency faces.

It's all been tried before. Like Esperanto, it's tough to come up with a universal anything.

[Art_from_Ark]

8. That's not quite how it worked

From the beginning of the Constitution, the Federal government, and not the States, was given the right to coin money. Private banks got into the act of issuing their own paper after the end of the Bank of the United States, and as long as they claimed that their paper was convertible for silver and gold, Uncle Sam, and the states that chartered them, didn't seem to pay much attention. At the same time, private minters were making gold coins, and as long as the gold coins met Uncle Sam's standards (15 grams of gold in a $10 coin, for example), they were OK. The problem came when private banks issued paper in exchange for depositors' gold and silver, then split town, leaving depositors with worthless paper that was often called "wildcat notes".

[orangeapple]

9. the real problem came

when Congress realized it could found a bank to pull the same rip-off...

Federal Reserve Notes only gained acceptance because, initially, they were convertible. Legal tender laws aren't necessary for 'honest money'.

When you confiscate gold and force people to take depreciating paper instead (depreciating because you keep printing it), then you need legal tender laws, and laws to forbid contracts in gold, as was eventually done...



$100 used to represent the work it took to find, mine, and process a particular weight of gold. As the foundation of exchange it represented trading work (gold) for work (some other good or service). Now we're stuck using Federal Reserve Notes that have no relation to work performed. They can be and are created at the whim of banking cabal that impoverishes everyone else through inflation. Until we end this monstrosity (again!), they will continue to rob the workers and the savers.

You don't need to stand in front of the gas pump or grocery store checkout and wonder what is happening.
They already told us what they're doing:

"Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.
What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services." -Benjamin Bernanke, 2002

[Art_from_Ark]

10. You have a point

Wildcat notes could lose their value overnight, but FRNs lose their value gradually through inflation. I have seen the latter occur over the past 40 years

[dixiegrrrrl]

12. I am following the idea closely.

So far, the people i listen to have called all the right moves, and they are seeing the pros of this idea.
It may be that Bit Coin itself will not make it, but the idea for a workable equitable way to exchange things keeps cropping up, esp. as our Reserve system keeps failing.

It know the idea is threatening to TPTB, that gives it validity.

[Art_from_Ark]

13. And then again, "Bitcoin" could be a modern version of a "wildcat bank"

"Wildcat bank" was a usually derisive name given to a bank that was set up, usually in the American backwoods, to accept deposits of specie and issue paper money that was used as currency in the local area until the banksters decided that they had fleeced enough gold and silver out of their hapless depositors. They they would close up shop in the middle of the night and move away with the gold and silver, leaving depositors high and dry.

Since Bitcoin is out of the reach of regulators, it also stands to reason that if it is, indeed, a type of wildcat bank, that "depositors" will have no recourse if something happens to their "deposits".

[Name removed]

11. Deleted message

Message removed by moderator. Click here to review the message board rules.

[jmowreader]

14. Get rid of the haxor crap and this is a decent idea

Bitcoin is NOT a new open-source currency, no matter what these guys are calling it. There is government-issued money at both ends of a Bitcoin transaction--okay, you could set up a store online that accepts these and use the ones people pay you to buy stuff from other Bitcoin-accepting stores, but someone has to use government-issued money to buy them, and someone else has to cash them in for government-issued money at some point.

What this actually is, is a universal payment method for small international transactions--basically, a prepaid debit card that morphs between currencies effortlessly.

Let us say you had an e-commerce venture that sold things people in more than one country bought. I don't know...t-shirts or something. It doesn't matter. What DOES matter is that outside the Eurozone every country in the world uses different forms of currency. If this store is in the US and someone from Australia wants one of your shirts, one of you is going to have to get into forex. Probably you, since you don't want to piss off the customer, but SOMEONE is going to have to make a currency exchange.

OTOH, if you're selling a shirt for two Bitcoins, your Australian customer buys them with Australian dollars and you redeem them for US dollars. Simple and easy.

And almost no one in the world is going to fuck with this so long as these assholes are running around talking about toppling the world banking system. If they approach it as "a Bitcoin is a Bitcoin no matter where you spend it," it'll take off.