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.
filc: Im not picking on you NLS but I have to just point this out. NLS:To date I may have made a little money, but for the most part I have mostly just broken even. As accounted for in what? Made a little money in what? USDollars? Oops.... :)
Im not picking on you NLS but I have to just point this out.
NLS:To date I may have made a little money, but for the most part I have mostly just broken even.
As accounted for in what? Made a little money in what? USDollars? Oops....
:)
Yes, I am implying US dollars, but not because I don't view bitcoins as money, but rather because I was replying to someone who is unfamiliar with bitcoins. Also I am conscious of the IRS, so I want to be clear that I have not made lots of money using bitcoins. If I was talking privately with someone who like myself, views bitcoins as money, I would refer to both bitcoins and dollars as money.
I've had some minor profits as well, but not in US $. I've bought USB drives, necklaces from Etzy, digital services, and have donated to various blogs and artists. All totalled, if valued based upon the present BTC/US$ exchange rate on MtGox.com, I have spent more 'value' than I originally spent to buy the bitcoins back in August, and still have at least as much as (valued in US $) than I started with. Recently, the exchange rate seems to be in a bear run, so I'm considering on restocking.
Fine I did it. Here.
MoonShadow: I've had some minor profits as well, but not in US $. I've bought USB drives, necklaces from Etzy, digital services, and have donated to various blogs and artists. All totalled, if valued based upon the present BTC/US$ exchange rate on MtGox.com, I have spent more 'value' than I originally spent to buy the bitcoins back in August, and still have at least as much as (valued in US $) than I started with. Recently, the exchange rate seems to be in a bear run, so I'm considering on restocking.
Your using dollars to measure your gains/losses.
Micah71381: His efforts resulted in an increase to his total wealth. It doesn't matter what units of measurement you use.
His efforts resulted in an increase to his total wealth. It doesn't matter what units of measurement you use.
The way you phrase it makes it sound subjective. But thats not what he was saying. Ofcoarse to any hobbyist participating in this they would bring themselves pleasure. That doesn't mean you've created a currency. (I Believe Clayton already said this)
filc: MoonShadow: I've had some minor profits as well, but not in US $. I've bought USB drives, necklaces from Etzy, digital services, and have donated to various blogs and artists. All totalled, if valued based upon the present BTC/US$ exchange rate on MtGox.com, I have spent more 'value' than I originally spent to buy the bitcoins back in August, and still have at least as much as (valued in US $) than I started with. Recently, the exchange rate seems to be in a bear run, so I'm considering on restocking. Your using dollars to measure your gains/losses.
Only as a common frame of reference, and for your benefit at that. I, personally, have not experienced any such gains, in any context much less in US $. I would have to be willing to sell them for US $ to relize any such gains, and I am not so willing. If I can't trade them for my wants, or give them away to my favored people, I'm keep them for myself. If Bitcoin crashes in value to zero, I shall lose what I have left and still be thankful for what I've gained in the meantime. You seem to go to great lengths to catch me in some kind of 'gotcha', with concern of your "Bitcoin is a US $ proxy" theory. The thing is, I don't presently disagree with such a viewpoint. It's a valid perspective. I do not, however, agree with the logic that such leads to the conclusion that Bitcoin could never decouple from the US $, nor that even coupled to the US $ means that it's not a valid currency. There exist a number of fiat currencies that are intentionally pegged to the US $ that have existed and continue to exist, yet even pegged does not grant them immunity from the market forces of monetary exchange. Some have failed, others persist. None are not considered their own currency.
MoonShadow:You seem to go to great lengths to catch me in some kind of 'gotcha', with concern of your "Bitcoin is a US $ proxy" theory.
Its not a theory, its a fact. All goods and services are priced in dollars. Take any good sold in BTC's run the dollar ratio/BTC ratio and you will see the good was priced from USD's. There is no historical exchange ratio in BTC's. There is on the other hand an exchange ratio for Dollars to Goods and BTC's to Dollars.
filc: MoonShadow:You seem to go to great lengths to catch me in some kind of 'gotcha', with concern of your "Bitcoin is a US $ proxy" theory. Its not a theory, its a fact. All goods and services are priced in dollars. Take any good sold in BTC's run the dollar ratio/BTC ratio and you will see the good was priced from USD's. There is no exchange ratio in BTC's. There is on the other hand an exchange ratio for Dollars and Goods, and BTC's and Dollars.
Its not a theory, its a fact. All goods and services are priced in dollars. Take any good sold in BTC's run the dollar ratio/BTC ratio and you will see the good was priced from USD's. There is no exchange ratio in BTC's. There is on the other hand an exchange ratio for Dollars and Goods, and BTC's and Dollars.
*sigh* Okay, fine. Everything has a price in US $, so therefore every currency on Earth is actually a US $ proxy. Including the Euro. So what, then, is the US $ a proxy of? One could argue that it would be gold, but even that is lacking. More generally one could argue that it is energy (which has actually be argued by others than myself). So in a broad sense, all currencies are proxies for oil.
How would that change anything?
Orly? He starts with $10, spends $5 on 100 BTC and then he spends 75 BTC on 15 goods. He is left with 25 BTC, 15 goods and $5. That is a loss of $5, a profit of 25 BTC, and a profit of 15 goods. His original statement that his profits have not been in dollars is true. Your implied contradiction of his statement is false. There is no gray on this one, you are wrong, he is right.
Edit: Writing from phone. Corrected two numbers.
In order for something to be a proxy currency to currency X, doesn't that require it to be pegged to currency X? That is, if some medium of exchange has a variable X:USD ratio which fluctuates in response to market forces doesn't that mean, by definition, it is not a proxy to the USD but rather an independant currency in it's own right? If this is not the case then I don't think I understand how you are using the phrase "proxy currency".
As stated previously, would the EUR, GPB, RMB, YEN, etc. all be considered independant currencies because they are not pegged to any other more popular currency or would they be considered proxy currencies to whatever preceded them, even though they are no longer pegged?
I honestly don't think of the worth of my bitcoins in US dollars because I'm not interested in selling my bitcoins for dollars. I think of the value of my bitcoins in terms of the amount of services which I pay for using bitcoins. Why would I want to sell my bitcoins? I have enough dollars and I can't buy in dollars what I buy using bitcoins. What is the one thing you can't buy using dollars? Anonymous (legal) remote services. And that has great value.
filc: MoonShadow:You seem to go to great lengths to catch me in some kind of 'gotcha', with concern of your "Bitcoin is a US $ proxy" theory. Its not a theory, its a fact. All goods and services are priced in dollars. Take any good sold in BTC's run the dollar ratio/BTC ratio and you will see the good was priced from USD's. There is no historical exchange ratio in BTC's. There is on the other hand an exchange ratio for Dollars to Goods and BTC's to Dollars.
NewLibertyStandard:That is not a fact, that is verifiably false. Sure, people who sell products which they have purchased using their national currency are probably going to peg the price of their products in bitcoins to however many bitcoins they can sell for the amount of their national currency that they spent on the items, but products purchased with national currencies are not the only products available.
Besides labor, which one could argue has costs like rent and food, which service provided with Bitcoins doesn't have inputs that are paid in dollars?
NewLibertyStandard:Bitcoins are an international money regardless of how many times you state that it is a fact that they are not. I'll take common sense intelligence over scholarly stupidity any day.
That's not an argument or a set of facts. It's just an opinion. We all have them. They don't add any objective truth, only YOUR point of view.
NewLibertyStandard:And to the moderators: The worst language that has been complained about in this thread is common place on this forum, so how about instead of promoting a double standard of threatening to ban people with whom you don't agree while encouraging people with whom you do agree, you instead first get your supporters to lead by example? Go ahead, Google site:mises.org naughty words.
I'm not really concerned with your accusations of a double standard. If you don't like the standard here, leave. If you see a problem, report it.
NewLiberty Standard:My thought is that it is glaringly obvious that you have no more than superficial understanding of how Bitcoin works.
So now there is a learning curve before using BTC's? Doesn't sound like a medium of exchange that is very accessible.
liberty student: NewLibertyStandard:That is not a fact, that is verifiably false. Sure, people who sell products which they have purchased using their national currency are probably going to peg the price of their products in bitcoins to however many bitcoins they can sell for the amount of their national currency that they spent on the items, but products purchased with national currencies are not the only products available. Besides labor, which one could argue has costs like rent and food, which service provided with Bitcoins doesn't have inputs that are paid in dollars?