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In the last couple of months, Bitcoin has passed the phase of "BC is nature's way of teaching economics to nerds" and entered the phase of "BC is natures's way

In the last couple of months, Bitcoin has passed the phase of "BC is nature's way of teaching economics to nerds" and entered the phase of "BC is natures's way of teaching political power to nerds" Reading through the recent Treasury Department guidance this morning, it looked to me like the U.S. is initially attacking where hard currency comes in and leaves the system -- no matter where in the world that takes place (plug: http://freedom-or-safety.com/blog/the-other-bitcoin-shoe-drops/ http://freedom-or-safety.com/blog/the-other-bitcoin-shoe-dro... ) I imagine they'll leave that decision out there for a while -- months or years -- before they start heavy enforcement. But enforcement is coming. And reading through the AJ link, it looks like BC is beginning to integrate quite nicely into the EU banking system. So now I have an anonymous virtual currency -- that governments can track the movement of. Which might require special licensing, permits, and insurance to broker. Perhaps I'm missing the point here? We're getting to the point where the big boys step in, and my bet is that it's not going to be comfortable for the people who started the whole thing. I expect more "integration" into the traditional banking system, at least until there's no value-add between cash and BC, and then we've reached our starting point. BC becomes nothing more than "collecting sharp sticks" in such a fashion as to be closely monitored by world governments.

lukasb 14y ago
Anonymity isn't the only value of Bitcoin. There's also the matter of exchanging money electronically without paying fees to banks, Visa, or Mastercard. Regulation might make transacting Bitcoin more expensive but still leave it cheaper than traditional approaches. I'm not a fan of Bitcoin personally (too much speculation for me to be comfortable using it as a medium of exchange, much less a store of value) but I think people underestimate how badly we're getting screwed by the current payment oligopoly.
- jacoblyles 14y ago
  This is exactly why I don't like the transaction fee model of funding mining in the long-term, and would prefer a coin with a slowly-growing uncapped money supply.
  - gigq 14y ago
    While I don't think it will ever see the support that bitcoin enjoys (or even litecoin for that matter) the model you are describing is provided by another alt coin call PPCoin (http://www.ppcoin.org/static/ppcoin-paper.pdf http://www.ppcoin.org/static/ppcoin-paper.pdf).
- DanielBMarkham 14y ago
  So then it truly becomes just another collector's item, but one where when you "cash out" it's all automatically reported? Why not just trade in something else like gold or coins, where you can buy and sell without having a state security system looking over your shoulder? I frankly don't know if I'm a fan or not. I haven't been, but the movement seems persistent, and I admire that. I also admire the concept of trying to use technology to free us from ever-more-oppressive governments. However I'm cautious: BC is "version 1.0". Might take until version 3 or so to get the bugs worked out. I just hate seeing a lot of really smart people work hard to end up in the same spot they started from.
  - patrikr 14y ago
    Try sending a gold coin to the other side of the planet in 10 seconds...
    - drcode 14y ago
      2 hours for the confirmation on the blockchain to come in.
      - w-ll 14y ago
        2 hours? what no, try less than an hour, and you can also send coins that arn't fully confirmed if you do raw transactions
  - YokoZar 14y ago
    In principle if bitcoin takes off you could hold a bitcoin account and purchase things in bitcoin directly, making some of your transactions not subject to the "cash out" overlooking.
- rmc 14y ago
  There's also the matter of exchanging money electronically without paying fees to banks Instead you'll have to pay fees to miners as transactions fees. This is the medium to long term stated goal of bitcoin.
danenania 14y ago
That would still be progress, and the fact that bitcoin's value is dictated by democratic fiat rather than governmental fiat is still very powerful and a major differentiator. It is more similar to gold than cash in that respect.
anologwintermut 14y ago
Bitcoin is not anonymous. All the transactions take place between cryptographic pseudonyms (the ECDSA keys used to sign transactions). Just how much information you can infer from the resulting anonymous social graph is unclear, but it's probably a fair amount.
mhartl 14y ago
I think the main value of Bitcoin is that it's a perfectly hard currency, not that's it's anonymous (or not). Monetary dilution is alarmingly easy with today's fiat currencies, and replacing them with Bitcoin would fix that basic flaw. (Disclosure: I currently hold Bitcoins.)
- seldo 14y ago
  I think one of the core assumptions underlying people who adopt Bitcoin is "Inflation is bad". I'm no economist, but I don't think this is always the case. Currencies being able to rise and fall relative to each other allows governments to stimulate the domestic economy by increasing the value of exports, or cool down an overheating economy by doing the reverse. Meanwhile, there are some other basic features of the currency which seem undesirable to me. In particular, the built-in (and ever-increasing) scarcity of coins means that the value of the currency will always, continuously, rise. That seems great, except that an economy built entirely on Bitcoins would therefore have an economic disincentive to investment -- if you can make 5% return by just sitting on your coins, why would you invest in a new business and create jobs and risk getting less than that? Bitcoins do seem pretty attractive on an individual level, but at the macro scale they worry me, and I'd love to hear somebody with an economics background chime in on these points.
  - mhartl 14y ago
    Virtually no mainstream economist advocates a perfectly hard currency. This is either an indictment of hard currencies, or an indictment of mainstream economists. You can probably guess how I feel. Unfortunately, discussions on this subject can rapidly become arbitrarily politically incorrect. If you're interested, I'd be happy to send you a link to a very non-mainstream source (but would rather not post it here). My email address is in my profile.
  - effn 14y ago
    Bitcoin has experienced more inflation than any other developed country's fiat currency in recent times, with prices rising 700% in just a few months.
nunb 14y ago
>In the last couple of months, Bitcoin has passed the phase of "BC is nature's way of teaching economics to nerds" >and entered the phase of "BC is natures's way of teaching political power to nerds" That is one of the best quotes I've read on bitcoin. The western world is waking up to distrusting their governments. In a low-tech way, most 3rd world countries have been there for decades. Squirreling away savings is a behavior enforced upon citizens with acquisitive governments (hello Cyprus!). The world is changing, and bitcoin is there to help.
gasull 14y ago
> "BC is nature's way of teaching economics to nerds" The acronym for Bitcoin is BTC.

lukasb 14y ago

Anonymity isn't the only value of Bitcoin. There's also the matter of exchanging money electronically without paying fees to banks, Visa, or Mastercard. Regulation might make transacting Bitcoin more expensive but still leave it cheaper than traditional approaches. I'm not a fan of Bitcoin personally (too much speculation for me to be comfortable using it as a medium of exchange, much less a store of value) but I think people underestimate how badly we're getting screwed by the current payment oligopoly.

jacoblyles 14y ago
This is exactly why I don't like the transaction fee model of funding mining in the long-term, and would prefer a coin with a slowly-growing uncapped money supply.
- gigq 14y ago
  While I don't think it will ever see the support that bitcoin enjoys (or even litecoin for that matter) the model you are describing is provided by another alt coin call PPCoin (http://www.ppcoin.org/static/ppcoin-paper.pdf http://www.ppcoin.org/static/ppcoin-paper.pdf).
DanielBMarkham 14y ago
So then it truly becomes just another collector's item, but one where when you "cash out" it's all automatically reported? Why not just trade in something else like gold or coins, where you can buy and sell without having a state security system looking over your shoulder? I frankly don't know if I'm a fan or not. I haven't been, but the movement seems persistent, and I admire that. I also admire the concept of trying to use technology to free us from ever-more-oppressive governments. However I'm cautious: BC is "version 1.0". Might take until version 3 or so to get the bugs worked out. I just hate seeing a lot of really smart people work hard to end up in the same spot they started from.
- patrikr 14y ago
  Try sending a gold coin to the other side of the planet in 10 seconds...
  - drcode 14y ago
    2 hours for the confirmation on the blockchain to come in.
    - w-ll 14y ago
      2 hours? what no, try less than an hour, and you can also send coins that arn't fully confirmed if you do raw transactions
- YokoZar 14y ago
  In principle if bitcoin takes off you could hold a bitcoin account and purchase things in bitcoin directly, making some of your transactions not subject to the "cash out" overlooking.
rmc 14y ago
There's also the matter of exchanging money electronically without paying fees to banks Instead you'll have to pay fees to miners as transactions fees. This is the medium to long term stated goal of bitcoin.

danenania 14y ago

That would still be progress, and the fact that bitcoin's value is dictated by democratic fiat rather than governmental fiat is still very powerful and a major differentiator. It is more similar to gold than cash in that respect.

anologwintermut 14y ago

Bitcoin is not anonymous. All the transactions take place between cryptographic pseudonyms (the ECDSA keys used to sign transactions). Just how much information you can infer from the resulting anonymous social graph is unclear, but it's probably a fair amount.

mhartl 14y ago

I think the main value of Bitcoin is that it's a perfectly hard currency, not that's it's anonymous (or not). Monetary dilution is alarmingly easy with today's fiat currencies, and replacing them with Bitcoin would fix that basic flaw. (Disclosure: I currently hold Bitcoins.)

seldo 14y ago
I think one of the core assumptions underlying people who adopt Bitcoin is "Inflation is bad". I'm no economist, but I don't think this is always the case. Currencies being able to rise and fall relative to each other allows governments to stimulate the domestic economy by increasing the value of exports, or cool down an overheating economy by doing the reverse. Meanwhile, there are some other basic features of the currency which seem undesirable to me. In particular, the built-in (and ever-increasing) scarcity of coins means that the value of the currency will always, continuously, rise. That seems great, except that an economy built entirely on Bitcoins would therefore have an economic disincentive to investment -- if you can make 5% return by just sitting on your coins, why would you invest in a new business and create jobs and risk getting less than that? Bitcoins do seem pretty attractive on an individual level, but at the macro scale they worry me, and I'd love to hear somebody with an economics background chime in on these points.
- mhartl 14y ago
  Virtually no mainstream economist advocates a perfectly hard currency. This is either an indictment of hard currencies, or an indictment of mainstream economists. You can probably guess how I feel. Unfortunately, discussions on this subject can rapidly become arbitrarily politically incorrect. If you're interested, I'd be happy to send you a link to a very non-mainstream source (but would rather not post it here). My email address is in my profile.
- effn 14y ago
  Bitcoin has experienced more inflation than any other developed country's fiat currency in recent times, with prices rising 700% in just a few months.

nunb 14y ago

>In the last couple of months, Bitcoin has passed the phase of "BC is nature's way of teaching economics to nerds" >and entered the phase of "BC is natures's way of teaching political power to nerds" That is one of the best quotes I've read on bitcoin. The western world is waking up to distrusting their governments. In a low-tech way, most 3rd world countries have been there for decades. Squirreling away savings is a behavior enforced upon citizens with acquisitive governments (hello Cyprus!). The world is changing, and bitcoin is there to help.

gasull 14y ago

> "BC is nature's way of teaching economics to nerds" The acronym for Bitcoin is BTC.