One day, while I was learning about cipherspace, I discovered BitCoin. BitCoin is a completely decentralized, anonymous online monetary system that relies on a distributed database to facilitate transactions. The creator put a great deal of effort into ensuring that the system is secure and reliable. Unfortunately, there are no real assets backing he currency of BitCoin (and no coercive government backing it either). Thus ends BitCoin.
I can imagine, though, a system like BitCoin that allows people to write promissory notes and sign them with an RSA digital signature (to prevent couterfeiting). These promissory notes could be backed by gold, silver, fiat currencies, stocks and bonds, or pretty much anything. Then, these notes could be transfered from one person to another anonymously.
Couple this with an ebay-like service that allows people to swap these virtual currencies. Say, for example, that I have a gold note issued by a bank in South Africa. Since taking delivery of the gold could be a problem, I trade my notes for notes issued by a bank in U.S.A. Then, I can redeem those notes and have them FedEx me the gold (insured, of course).
This system would be Fed-proof, IRS-proof, FBI-proof and judgment-proof. This system would protect the users against monetary inflation, making it Fed-proof. Since nobody has a bossman ratting out their earnings, it is IRS-proof. It is FBI and NSA proof because all transactions are encrypted and anonymous. And, most importantly, it is judgment-proof because it is perfectly legal.
There are, at present, no laws that could be used to criminalize what I propose. Laws against money-laundering, for example, do not apply because there is no way to prove that the money came from an illegal source, such as drug dealing. Laws against tax-evasion do not apply either, because no taxes have ever been levied on imaginary currency. In addition, if you had your day in court, you could defend yourself on First Amendment grounds. Besides, international free trade agreements also have generous loopholes.
So what we are dealing with is anarcho-capitalism and wildcat banking on a global scale. If not for my non-existant programming skills, I'd be forking a new project off BitCoin right now.
Anybody here know C++?
"As long as there are sovereign nations possessing great power, war is inevitable."
@gabriel: Oh, man, you're begging for a flame-war.... ;-)
Of course, C++ and Perl are not even in the same solution-space... but I absolutely love Perl. Unfortunately, Perl has lost its roots with Perl6, which I think is going to be a fork, I don't think Perl5.x is ever going to be truly end-of-life'd, the code base is a large part of what makes Perl so powerful. Ruby and Python are Perl's closest relatives but they both lack the "down-and-dirty" quality of Perl5 that I fell in love with.
Clayton -
No worries, I'm just being inflammatory. I write C/C++ (C#, and some assembly) for a living, so I have a certain affection for them :). Now if there's any "God that Failed" book that should be written about a programming language, it's Ruby. Not a fan.
what is bitcoin the question is?
(english is not my native language, sorry for grammar.)
Why is it so important what it is? It's interesting. I don't have the urge to classify it in order to analyse it.
My question is, how do you start mining? :-/
Peter Šurda:This thread is about Bitcoin, not about money.
Allow me to be the one to nitpick now. The topic is labeled, "Is BitCoin the currency of the future?". This necessarily involves the definition of currencies, moneys, and mediums of exchange. Forgive me for interpriting that title differently then you would. And forgive Micah and I for going on for 20+ pages regarding the definition of money(A discussion you must have missed).
Peter:it's some of the Austrians who object to Bitcoin that usually attempt to bring up the topic of money although the other party never mentions it.
IF the argument is that BTC offers technological enhancements that help facilitate exchange, transactions, and trade then no Austrian in his right mind is going to denounce new innovative technology. It is the Austrian position that markets decide the ultimate utility found in those new technological advancements. Be they Dwolla style, components and features of bitcoin, or whatever.
The entire Austrian objection here is that we are simply pointing out that it's not money, not a currency. Can you substantiate your claim that Austrian's object to Bitcoins for any other reason? Can you post a link to an actual economist whos against BTC's not as a currency but as a technological advancement?
Peter:You went on a rampage how Bitcoin is a fraud,
Lol, a rampage? BTC is fraudulent if it is sold as a money. If I sold you a gold coin, but it actually was gold plated copper, that would be fraud. If I sell you something, lieing to you about it's actual object, that is called fraud.
If on the other hand I sell you the object for what it is, then there is no problem.
Peter:it you started metaarguing.
What on earth are you going on about? My argument has consistently been the same since page 1. Weren't you just attacking me for being consistent, or in your words repetative? Now I'm meta-arguing?
Peter:Are you going to address my argument or not?
I've yet to see any argument from you. I don't even know exactly what your issue is. You just like to pick on me I think. ;)
filc,
In the Austrian terminology, money has a very specific meaning. Government fiat are probably examples of currencies, but they are not money according to the Mises' regression theorem. Currency is not an Austrian term, in fact I am not aware of any solid definition of "currency", so there is no clear way to conclude if Bitcoin is or isn't one. You yourself admit that the reason for your objection is that Bitcoin is neither money nor currency. So, we're back to the problem of pointlessness of the terms "money" and "currency" in this thread. If it's neither money nor currency, then don't call them that. End of story. Now, can we move on?
Since I do not know any Austrian who is offering Bitcoin as money, I see no fraud. People who are not Austrians in general do not accept the Austrian definition of money, so if they trade Bitcoin and call it "money", there is no fraud either.
You have failed to react to my argument even though I posted it twice in different formulations, plus I posted a reference to a thread on the Mises blog where I go in detail into the topic.
Moneys by decree do not invalidate the regression theorum. They only show that exchange ratio's can be formed if forced. No Austrian would say that the dollar isn't a currency or a money. It's exchange ratio is set by the historical prices of yesterday. PRices going forward will be influenced based on the prices of today. AKA Regresion theorum.
[EDIT]
I actually recall this already being covered 10 or so pages ago.
No Austrian would say that the dollar isn't a currency or a money.
Actually, I've often heard Austrians refer to the dollar as counterfeit money. That is, not real money at all.
faber est suae quisque fortunae
Your being pedantic. Are you saying those very Austrian's, who make this statement, don't think economic calculation is done in USDollars?
Or are you just simply trying to push buttons?
I have hear many Austrians object to calling government fiat "money". If you look at Mises Wiki article about money, it says:
Money did not and never could begin by some arbitrary social contract, or by some government agency decreeing that everyone has to accept the tickets it issues.
and
For a good to become money, it must have the physical properties and be considered valuable by itself.
Based on this definition, government fiat is not money, especially in case of currencies which did not began as a debasement of existing money (such as the Euro). However, elsewhere Mises Wiki says about fiat money:
Often called paper money, fiat money is in a wider sense any money declared to be legal tender by governmentfiat (ie law).
These two definitions contradict each other. The article continues:
In the narrower sense used here, fiat money is an intrinsically useless good used as a means of payment and a storable object.
So, obviously, even Austrians use the term "money" in at least two distinct meanings. Furthermore, the quotes as well as this debate only underscore that the term "money" as defined by Austrians is confusing and meaningless. It's completely unpraxeological.
Most importantly though, you avoid the issue at hand again. I would like to point out yet again that it was you who addressed my post to Clayton, so it is up to you to say what is wrong with it.
The next time you use the word "money" or "currency" when talking about Bitcoin, I'll know that you're not interested in a debate and are just chanting mantras.
this debate is ridiculous. it is austrians expressing their bias toward government activity with these osfuscated arguments that dont make any sense. the bottom line is, people use dollars and bitcoins for trade, exchange, that is it is money. that is the reality. you can fiddle with your definitions and regression axioms all you want, the reality wont change from that.
Whats rediculous is the lack of understanding. I keep repeating words like "Exchange Ratios" and economic calculation and in my mind I see everyones eyes glaze over like I'm speaking French.
Everyone here has an opinion yet no one actually wants to spend the time to research, learn, and study information to re-enforce their opinion
"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance." — -Murray N. Rothbard There is nothing wrong with bitcoin as a transaction method, a laundering mechanism, and an existing facilitator of trade. Whats wrong is when you fraudulently sell it as money. Or when you misunderstand what money is, and how it is created. In doing so your ignoring all of the great things BTC actually can offer(especially to already existing moneys), while focusing on a detail thats not really important, and one that is in error. @Peter, most of my statements flew right over your head. Your arguing to air dude. | Post Points: 20
aervew: this debate is ridiculous. it is austrians expressing their bias toward government activity with these osfuscated arguments that dont make any sense. the bottom line is, people use dollars and bitcoins for trade, exchange, that is it is money. that is the reality. you can fiddle with your definitions and regression axioms all you want, the reality wont change from that.
Disclaimer: I may be wrong - don't bite my head off please.
This debate is not ridiculous. In fact it is very important, as it is debate about whether there are any theoretical and logical arguments against bitcoin becoming money (general medium of exchange, unit of account and store of value). Now, if you don't care whether bitcoin is money then this discussion is of no interest to you and IMHO whether bitcoin is money or not is not a condition for its success. In my opinion bitcoin is like visa or mastercard or even like banknotes (from old gold standard days) - they may be accepted almost everywhere but these themselves are not money. Personally I see no reason for me to accept bitcoin, other than that it may be converted into 'normal' money - just like banknotes or credit cards. That does not mean bitcoin will not be successful or that there will be no need for bitcoins. If bitcoins are not money it means that we will store our wealth or pay our debts using different medium and maybe using bitcoins as convenience (bitcoin in mobile phones with NFC!) and/or necessity (in totalitarian tax-eating state, assuming there will be a way to anonymize it). Even if bitcoins themselves are not money they can still revolutionize the way we live and lets hope they will :)
NewLibertyStandard:Bitcoins are immaterial and potentially infinitely divisible, yet they are valued much more than dirt by people who have a more accurate sense of worth than you.
That's not very nice.
I feel like I have read this very same paragraph on here before are Bit Coin bots spamming these boards?
boniek: In my opinion bitcoin is like visa or mastercard or even like banknotes (from old gold standard days) - they may be accepted almost everywhere but these themselves are not money.
In my opinion bitcoin is like visa or mastercard or even like banknotes (from old gold standard days) - they may be accepted almost everywhere but these themselves are not money.
This is wrong. Credit cards and banknotes are proxies for physical cash. Bitcoins aren't.
To me they are at best proxies. I would not accept them if they were not redeemable in fiat, they would be mere tokens proving that somebody somewhere computed something insignificant and how is that supposed to preserve my wealth?