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.
Micah71381:I am not sure if you are not understanding me or if you simply are not reading my posts at this point but I am not claiming the regression theorem is broken. I am claiming that BitCoins meet the requirements set forth by the regression theorem.
Yes I am trying to understand you just. At this point it seems like your trying to state that BTC's were at some point traded for direct exchange. Whats odd about the argument is, unless I am mistaken, the whole purpose for creating bitcoins in the first place was for indirect exchange. What purpose does it serve in direct exchange? Who ever traded BTC's for consumption? Can you consume a BTC?
I know it's dissmissive of me but I write such arguments off as being silly. BTC's were always intended as a mediumf of exchange. Direct exchange would imply that they had some other purpose, they do not. So again, sorry to be dissmissive, but I write the argument off as extremely unthoughtful.
Micah:No one here, as far as I know, has stated that BitCoins will become widely adopted. The claims have always been that BitCoins could become widely adopted. The reason we are arguing in circles is because you kepp forgetting this and using it as a straw man.
Then as I said before, your talking past me as you and I are not discussing about the same things. The issue I raised, and I repeat, was that it will not become a generally accepted(Widely adopted) medium of exchange. See link. Your the one that chose to engage me on topic. If your one of these people who allegedly, "Are not arguing that BTC's will become widely adopted" then why are you addressing me at all?
Micah: BitCoins have use for direct exchange for someone
Bitcoins were invented/created/ and designed for what purpose? Hint(It says "Coin" in the name #$#%)
filc: Yes I am trying to understand you just. At this point it seems like your trying to state that BTC's were at some point traded for direct exchange. Whats odd about the argument is, unless I am mistaken, the whole purpose for creating bitcoins in the first place was for indirect exchange. What purpose does it serve in direct exchange? Who ever traded BTC's for consumption? Can you consume a BTC? I know it's dissmissive of me but I write such arguments off as being silly. BTC's were always intended as a mediumf of exchange. Direct exchange would imply that they had some other purpose, they do not. So again, sorry to be dissmissive, but I write the argument off as extremely unthoughtful.
Are you suggesting that items can only be consumed in their designed way? That it is impossible for someone to consume an item in a way other than what it was designed for? I can say that this is untrue because I have used items and seen items used for purposes other than their design in the past. A chair as a ladder. A phone book as a booster seat. A cardboard box as a fort.
filc: Then as I said before, your talking past me as you and I are not discussing about the same things. The issue I raised, and I repeat, was that it will not become a generally accepted(Widely adopted) medium of exchange. See link.
Then as I said before, your talking past me as you and I are not discussing about the same things. The issue I raised, and I repeat, was that it will not become a generally accepted(Widely adopted) medium of exchange. See link.
See my response to your link here: http://mises.org/Community/forums/p/9853/411856.aspx#411856
filc: Your the one that chose to engage me on topic. If your one of these people who allegedly, "Are not arguing that BTC's will become widely adopted" then why are you addressing me at all?
Your the one that chose to engage me on topic. If your one of these people who allegedly, "Are not arguing that BTC's will become widely adopted" then why are you addressing me at all?
Because you are trying to claim that BitCoins cannot become widely accepted. I believe this statement is not true. I believe that BitCoins can become widely accepted. I am not claiming that BitCoins will become widely accepted. I am not making any claims for any level of probability of success. Only that it's possible.
I believe I backed up my point in the link above, particularly the two tables. One table shows a potential route to wide acceptance while the other table shows a potential route to non wide acceptance. Both are possible outcomes unless you know the minds of every human on the planet (or at least the majority of them). Since I do not believe you can predict the action of a significant number of humans I therefore do not believe you can predict the failure of BitCoins.
AJ:The question that seems unanswered isn't only, "Why would enough people be like Saro?" but also, "Why are there people like Saro at all?" Without knowing that, I don't see how we can know there won't be more.
It is my understanding that BCs have a certain special temporal utility, which enables its users like Saro, to satisfy one need: To become more independent from flawed government money scheme that they (rightly) feel rips them off and suppresses all other attempts of commodity backed private money. The higher the pressure of deception becomes the higher the urge to find different ways to trade.
The flaw in BCs is that they need the very entity that they want to circumvent. If the above mentioned preconditions intensify I consider it possible that the use of BCs gains traction. But I only see dead ends for it at a certain point:
A: The monetary system of the government becomes sound again, so this special utility vanishes. B: The government hijacks BC and integrates it into its structure, which means it is nothing more like Pay Pal etc. (I don’t know if technical possible, if not A,C or D will apply) C: The government declares it illegal and fights it actively and throws its users into jail (as described in an earlier post you cannot do large business without the IRS noticing it) D: The government stops to suppress private money. In this case the special utility vanishes as well and other commodity backed private currencies would outgrow BC easily.
A and C do not exclude one another.
It’s a bit like prisoners who develop their own secret sign language to communicate within the prison in a concealed way because the guards control and restrict what they want to say. Outside of the prison they would immediately stop using it, and it would be very unrealistic to believe that this will become the new main language outside or within the prison. Though within the prison, it might be quite useful if done not too conspicuously.
skylien: It is my understanding that BCs have a certain special temporal utility, which enables its users like Saro, to satisfy one need: To become more independent from flawed government money scheme that they (rightly) feel rips them off and suppresses all other attempts of commodity backed private money. The higher the pressure of deception becomes the higher the urge to find different ways to trade. The flaw in BCs is that they need the very entity that they want to circumvent. If the above mentioned preconditions intensify I consider it possible that the use of BCs gains traction. But I only see dead ends for it at a certain point: A: The monetary system of the government becomes sound again, so this special utility vanishes. B: The government hijacks BC and integrates it into its structure, which means it is nothing more like Pay Pal etc. (I don’t know if technical possible, if not A,C or D will apply) C: The government declares it illegal and fights it actively and throws its users into jail (as described in an earlier post you cannot do large business without the IRS noticing it) D: The government stops to suppress private money. In this case the special utility vanishes as well and other commodity backed private currencies would outgrow BC easily. A and C do not exclude one another. It’s a bit like prisoners who develop their own secret sign language to communicate within the prison in a concealed way because the guards control and restrict what they want to say. Outside of the prison they would immediately stop using it, and it would be very unrealistic to believe that this will become the new main language outside or within the prison. Though within the prison, it might be quite useful if done not too conspicuously.
B is not technically possible. The government could participate in BitCoin but they couldn't take control of it like they can with things such as PayPal, eGold, etc.
I am willing to accept that A, C or D will eventually come to pass. However, I don't necessarily agree with the outcome that you are suggesting. For example, if the occurance of A/D is far enough in the future that BitCoin is able to become a commonly used currency (reach mass market) do you still believe that it will lose favor over a competing currency?
Let's say that none of the options you have proposed comes to pass for 1000 years. In that time BitCoin grows slowly and after 750 years everyone is using it for all day to day transactions. At the 1000 year mark the government returns to sound money and also allows private money. Do you think people will switch away from BitCoin in favor of some other form of currency when they already complete all of their daily transactions in BitCoins? What would be the driving force behind this change? What advantages to BitCoin can a new currency offer to lure people away from BitCoins once it is a well established currency?
In your prisoner scenario, if everyone in the world spoke this prison language and the prison language served the purpose of language as well as any other language, would people switch when outside of prison?
In the case of C the only option is rebellion, unfortunately. If BitCoin were to become the dominate currency before the government outlawed it then it's possible that such a thing would push people over the edge to rebellion but it's hard to say when the camel's back is going to break.
Micah:Are you suggesting that items can only be consumed in their designed way? That it is impossible for someone to consume an item in a way other than what it was designed for? That it is impossible ...
This is why I have a hard time discussing with you. I don't even know how you draw the conclusion that I would be insinuating that. But it would be dishonest of you and very disingenuous for you to try and argue that BTC's were created for any other purpose other then indirect exchange.
Your essentially creating a position for me, then trying to tackle that fabrication. Strawmanning.
Micah:Premise: BitCoins can be used for purposes other than their designed purpose (see paragraph above).
What purpose would that be exactly?
Micah:Conclusion: Someone must have consumed BitCoins for a non-exchange purpose.
So describe to us in what way they can be consumed?
Even if I conceded to you that a collector could or would even want to just collect BTC's and you could somehow prove that they would never want to trade them away at a later date, we could still easily make a safe entrepreneurial guess that BTC's are just likely to fail in gaining wide-scale acceptance. But if your not arguing that then why are you engaging me? (A point I frequently ask)
Who amongst us collected BTC's without the intent of at least hoping to trade them away at a later date? Who amongst us collected BTC's for their own sake? Can you point someone out? All you've done is created a hypothetical that fails even your own analysis. Since the first people who adopted BTC's did so under the hope/objection that they could eventually be tradeable. In other words they collected BTC's with the intent of exchanging them at a later date. They never collected them for their own sake to keep and hold.
Micah:See my response to your link here: http://mises.org/Community/forums/p/9853/411856.aspx#411856
The response is completely non-relevant to anything I have argued. Which is why I ignored it in the first place and is why I further think you continue to be confused. I could use your argument to claim that lumps of crap could eventually be widely accepted.
What you did was explain mechanically how any object could ultimately become widely accepted, yet you ignored the fundamental logic of why someone would adopt lumps of crap(BTC's Dollars, or anything) in the first place. Your response completely evades my whole discussion. And as I just stated you are talking past me. In fact I don't even know what your response is relevant for.
Too add insult to injury it looks like your just typing for it's own sake without ever addressing the issue. 20 pages of nonesense and you can't stay focused. To add insult to injury AJ's has to(innoscently) support the continued miscommunication. :p
Micah:I believe this statement is not true.
Yet you can't prove it. Your desperately trying to argue that BTC's are useful in direct exchange. Explain why someone would want to directly hold BTC's for any purpose other then to trade away later in exchange.
Do you understand the difference between Direct Exchange and Indirect Exchange? Do you know how frustrating it is to debate someone who at the same time must be taught the core principles of the discussion?
Micah71381:B is not technically possible.
How is this amazing anonymity going to prevent business's from keeping accounting records and wanting to only do business with real people? Also are we going to force business's to only sell to anon? Is a bank only going to lend to someone they have no historical accounting record on?
We would expect consumers to buy from anon? Not allowing them to keep track of business reputation, branding, ect...? If not then why the hypocritical standard applied to business(much to their detriment).
The whole concept is completely backwards and extremely counter-productive. At the same time once we admit that accounting is a fundamental necessity for a healthy capitalistic society we also must concede that accounting records are easily, and often seized, by governments.
So I don't even know why you guys are discussing about anonymity as if it were anything special.
[edit]
IN short while it's not possible for governments to hi-jack individual transactions they could easily drive the whole operation under-ground and outlaw it.
AJ: Clayton: @AJ: It's a mistake to think of money as having something to do with a "threshold". A monetary good was already valuable in direct exchange before it came into use in indirect exchange and it would already have been among the most marketable goods. The use of money in indirect exchange is a merely pragmatic matter and nothing more than self-interest need be assumed. There is no cooperation or "threshold of adoption" required. But this really just amounts to saying, "Well the threshold is really really high." Saro apparently already values BitCoins in direct exchange, so if you happen to be his neighbor and he has something you want to buy, it already is valuable in direct exchange (for you). I'm saying it's a matter of number of people, and really you are effectively saying it has to be an impossibly huge number of people, which is fine, but I think if you frame it that way it will address the pro-BTCers more to their satisfaction. [Edit: Instead of "threshold of adoption," it would be clearer if I had said "threshold of people who value BitCoins" (enough to trade them for potatoes like Saro apparently would)]
Clayton: @AJ: It's a mistake to think of money as having something to do with a "threshold". A monetary good was already valuable in direct exchange before it came into use in indirect exchange and it would already have been among the most marketable goods. The use of money in indirect exchange is a merely pragmatic matter and nothing more than self-interest need be assumed. There is no cooperation or "threshold of adoption" required.
@AJ: It's a mistake to think of money as having something to do with a "threshold". A monetary good was already valuable in direct exchange before it came into use in indirect exchange and it would already have been among the most marketable goods. The use of money in indirect exchange is a merely pragmatic matter and nothing more than self-interest need be assumed. There is no cooperation or "threshold of adoption" required.
But this really just amounts to saying, "Well the threshold is really really high." Saro apparently already values BitCoins in direct exchange, so if you happen to be his neighbor and he has something you want to buy, it already is valuable in direct exchange (for you). I'm saying it's a matter of number of people, and really you are effectively saying it has to be an impossibly huge number of people, which is fine, but I think if you frame it that way it will address the pro-BTCers more to their satisfaction.
[Edit: Instead of "threshold of adoption," it would be clearer if I had said "threshold of people who value BitCoins" (enough to trade them for potatoes like Saro apparently would)]
No, it's not the same thing as saying "there's a really high threshold"... the entire line of thinking is deeply flawed. You are presuming a fiat monetary order in thinking about "thresholds". Natural money is simply an (already valuable) good which begins to be used for indirect exchange until its primary value is derived from its monetary use. There is no cooperation or threshold required for natural money to emerge. The only thing that need be assumed is self-interest. Watch any lecture by Hoppe on money and banking, he explains this in crystal clear language. Only fiat monies need to think about something like a "threshold."
filc: Micah71381:B is not technically possible. How is this amazing anonymity going to prevent business's from keeping accounting records and wanting to only do business with real people? Also are we going to force business's to only sell to anon? Is a bank only going to lend to someone they have no historical accounting record on? We would expect consumers to buy from anon? Not allowing them to keep track of business reputation, branding, ect...? If not then why the hypocritical standard applied to business(much to their detriment). The whole concept is completely backwards and extremely counter-productive. At the same time once we admit that accounting is a fundamental necessity for a healthy capitalistic society we also must concede that accounting records are easily, and often seized, by governments. So I don't even know why you guys are discussing about anonymity as if it were anything special. [edit] IN short while it's not possible for governments to hi-jack individual transactions they could easily drive the whole operation under-ground and outlaw it.
Please read the post before replying to it. Government making BitCoins illegal was listed as option C. Option B was related to the government taking over BitCoins and controlling them (production, distribution, tracking, etc.). You are straw manning the anonymity thing.
Micah71381:You are straw manning the anonymity thing.
Negative.
Micah71381:Let's say that none of the options you have proposed comes to pass for 1000 years. In that time BitCoin grows slowly and after 750 years everyone is using it for all day to day transactions. At the 1000 year mark the government returns to sound money and also allows private money.
So what you are saying is: While the government causes heavy boom bust cycles with fiat money which pushes people to alternatives, it will prohibit every attempt of a competing currency, except BitCoin, for 1000 years, while a 100% of the people start to use it every day, because it is the only way avoiding a cheating government? That only would be possible if government itself is involved in a conspiracy to push BitCoin. This is not even a million to one chance scenario (I guess nowadays it would be more appropriate to say trillion to one..).
I did never question what happens if all people already accepted it. You have to explain in plausible way how it gets to that point, and this is for sure not a plausible scenario.
Micah71381:Do you think people will switch away from BitCoin in favor of some other form of currency when they already complete all of their daily transactions in BitCoins? What would be the driving force behind this change? What advantages to BitCoin can a new currency offer to lure people away from BitCoins once it is a well established currency?
I am not sure. If the government would give way to private money after BC already has a 100% marketshare, what could lure people away from it. Only one thing: - The security of commodities not to be able to lose their entire value The big danger for BC is that if the value of BitCoins falls below a certain threshold again it quickly becomes worthless, due to a panic that causes a massive selloff of BCs and the missing value for direct use. A gradual shift to any other kind of private money, even to another unbacked crypto currency could cause the death of BC, which at the same time would endanger its own existence if it becomes obvious what happened. A major hacker attack or sudden rise in numbers of hacker attacks due to a security lack found in the BC-software could do that. Even the spreading of the mere possibility of a not stoppable falling value of BCs might cause a self-fulfilling prophecy that slowly starts but ends fast.
A stabilizing anchor is missing, something that backs it if its usefulness as currency and store of value is questioned. Sooner or later anything is questioned. Look at PMs (=precious metals), they have been questioned already, but they are not dead yet. On the contrary it seems they are on the rise again. Not possible for BC, if really questioned once by the market.
Micah71381:In your prisoner scenario, if everyone in the world spoke this prison language and the prison language served the purpose of language as well as any other language, would people switch when outside of prison?
Micah71381:In the case of C the only option is rebellion, unfortunately. If BitCoin were to become the dominate currency before the government outlawed it then it's possible that such a thing would push people over the edge to rebellion but it's hard to say when the camel's back is going to break.
I think you overestimate the zero tolerance level of the government (and the guards in the example) heavily.
filc: filc: BTC's were always intended as a mediumf of exchange. Direct exchange would imply that they had some other purpose, they do not. Micah:Are you suggesting that items can only be consumed in their designed way? That it is impossible for someone to consume an item in a way other than what it was designed for? That it is impossible ... I don't even know how you draw the conclusion that I would be insinuating that. But it would be dishonest of you and very disingenuous for you to try and argue that BTC's were created for any other purpose other then indirect exchange. Your essentially creating a position for me, then trying to tackle that fabrication. Strawmanning.
filc: BTC's were always intended as a mediumf of exchange. Direct exchange would imply that they had some other purpose, they do not.
BTC's were always intended as a mediumf of exchange. Direct exchange would imply that they had some other purpose, they do not.
I don't even know how you draw the conclusion that I would be insinuating that. But it would be dishonest of you and very disingenuous for you to try and argue that BTC's were created for any other purpose other then indirect exchange.
Then why did you bring up the intended purpose of BitCoins? It is entirely irrelivant to our conversation about their use. Use does not equal purpose. Whether BitCoins were designed as a currency, a collectcible or as music doesn't matter. How they are used is all that matters.
You state (as quoted above) that "they do not [have direct exchange purpose]". Purpose does not matter. Perhaps you are trying to say, "they do not have direct exchange use". Are you making a blanket statement for all humans on the planet? No human could possibly find a use for BitCoins outside of indirect exchange? It is impossible for say, an autistic person to hoard them just because they exist and the person likes mathematical oddities? If you are making the "they do not have direct exchange use" argument then you are necessarily making a claim for all humans on the planet. Is this the case?
filc: Micah:Premise: BitCoins can be used for purposes other than their designed purpose (see paragraph above). What purpose would that be exactly?
It doesn't matter. The premise only points out any given item has potential to be used by someone in an unintended way.
filc: Micah:Conclusion: Someone must have consumed BitCoins for a non-exchange purpose. So describe to us in what way they can be consumed?
It doesn't matter. The conclusion is the logical culmination of the premises and the premise only stated that any item can be consumed for a purpose other than it's designed purpose. Consumed as a collectoble is a simple possibility if you want an example. Your (or someone else's) imagination is the limit.
filc: Even if I conceded to you that a collector could or would even want to just collect BTC's and you could somehow prove that they would never want to trade them away at a later date, we could still easily make a safe entrepreneurial guess that BTC's are just likely to fail in gaining wide-scale acceptance. But if your not arguing that then why are you engaging me? (A point I frequently ask)
Because you have stated multiple times in this thread that BTCs cannot gain widespread acceptance. If you are changing your position to that of probability of success then discussion is futile because neither of us can know the probability of success. BitCoins have advantages over physical commodities and fiat currency as I have described many times previously (the four attributes of BitCoins). Whether these advantages are enough for people to make the switch is unknowable to you and I.
filc: Who amongst us collected BTC's without the intent of at least hoping to trade them away at a later date? Who amongst us collected BTC's for their own sake? Can you point someone out? All you've done is created a hypothetical that fails even your own analysis. Since the first people who adopted BTC's did so under the hope/objection that they could eventually be tradeable. In other words they collected BTC's with the intent of exchanging them at a later date. They never collected them for their own sake to keep and hold.
Again you are trying to understand the why of human action. What matters is that user-0 exists and valued BitCoins. Why he did this is of no importance. Whether he did it with hopes BitCoins would turn into a currency or because he likes collecting SHA256 hashes doesn't matter. What matters is that user-0 was willing to accept BitCoins in exchange for other goods/services withouth the ability to trade them away therefore he accepted them as something other than a medium of exchange.
filc: Micah:See my response to your link here: http://mises.org/Community/forums/p/9853/411856.aspx#411856 The response is completely non-relevant to anything I have argued. Which is why I ignored it in the first place and is why I further think you continue to be confused. I could use your argument to claim that lumps of crap could eventually be widely accepted. What you did was explain mechanically how any object could ultimately become widely accepted, yet you ignored the fundamental logic of why someone would adopt lumps of crap(BTC's Dollars, or anything) in the first place. Your response completely evades my whole discussion. And as I just stated you are talking past me. In fact I don't even know what your response is relevant for.
Our conversation in a nutshell:
I have addressed each of your concerns separately throughout this thread. If you don't believe me then please provide a list of your questions in a single post and I will address them all in one reply.
The answer to your current question is the 4 attributes of BitCoins that I have brought up many times before. These 4 attributes provided simultaneously are what make BTCs superior to "lumps of crap" as a medium of exchange. These 4 simultaneous attributes also are what make BTCs advantageous to fiat money and physical commodities in my opinion.
So in http://mises.org/Community/forums/p/9853/411856.aspx#411856 I show that anything can become a medium of exchange. The 4 simultaneous attributes of BTCs (anonymous, remotene/digital, secure, distributed) addresses why someone would choose BitCoins over alternative mediums of exchange.
filc: Micah:I believe this statement is not true. Yet you can't prove it. Your desperately trying to argue that BTC's are useful in direct exchange. Explain why someone would want to directly hold BTC's for any purpose other then to trade away later in exchange.
As stated many times before, it doesn't matter why user-0 would collect them, only that they did. I show a logical proof that that this is the case here: http://mises.org/Community/forums/p/9853/414756.aspx#414756
The proof uses formal logic so in order to refute it you either need to disagree with one of the premises or you need show a logical fallacy. It's only 4 lines long so if there is a logical fallacy it should be simple to show. If you disagree with a premise please quote the premise and provide an argument as to what is wrong with the premise.
@skylien
I can appreciate the argument that it is highly likely that the government will do A, C or D at some point before BitCoins really hit off. In fact, I agree with this line of thinking and believe it is the biggest danger BitCoins face. BitCoins, unlike other potential currencies, are able to survive better under option C which is the route that the government has always taken in the past. This is why I am keeping my hopes up for BitCoins.
If the US/EU government decides to make BitCoin use illegal it will halt the growth of the BitCoin market in those countries but they can still be used in other countries. If China or Japan allows the growth of BitCoins in such a scenario and eventually they do grow to become a national level currency in one of those countries then people can trade BitCoins under the table in the US/EU as well because BitCoins would have a solid exchange rate with USD just as RMB and YEN have an exchange rate with USD right now. This would encourage growth of BitCoins even within the illegal markets for things ranging from blackmarket transactions to simple under the table transactions between friends or small businesses.
I am still somewhat on the fence on this matter but currently I think that once a medium of exchange is established it gains an intrinsic value as a medium of exchange. This means that even if the item no longer has non-exchange value, it now has value as a medium of exchange and that value cannot suffer a sudden loss any more than a physical commodity can suffer a sudden loss of value. For example, if people find a cheaper and more effective industrial solution to the use of gold and also find a cheaper and more effective jewelry solution then gold will not suddenly drop in value to 0 overnight. Assuming gold was used as a medium of exchange (which it really isn't anymore) it would still be used as a medium of exchange unless something better came along. By better I mean something that can serve the same purpose as gold but also has some advantage to gold (perhaps more scarce, easier to mint, more difficult to tamper with, more difficult to mimic, etc.).
If something better does come along then I agree, BitCoins would drop in value to near 0 though I do not suspect the process would be instant and people would have plenty of time to transfer their holdings over to something new/different.
I'm not suggesting that this qualifies as the much sought after first use, as it probably isn't, but a rally has been triggered in the bitcoin markets since Friday. I appears that, as a direct result of the international raids that the US FBI performed against three major poker sites, many online poker players have a sudden interest in BTC. Does a poker chip qualify as an alternative use? I do not know.
Micah:Then why did you bring up the intended purpose of BitCoins?
Because your now arguing that BTC's are or were used in direct exchange. As if they were an end unto themselves, not a means to an end. Your trying desperately to make BTC's work with the regression theorum and it's making your argument look worse.
Micah:It doesn't matter.
Convenient, you can't provide an example.
Micah:Because you have stated multiple times in this thread that BTCs cannot gain widespread acceptance. If you are changing your position to that of probability of success then discussion is futile because neither of us can know the probability of success. BitCoins have advantages over physical commodities and fiat currency as I have described many times previously (the four attributes of BitCoins). Whether these advantages are enough for people to make the switch is unknowable to you and I.
I am not changing my position and I clarified that in the statement. Don't try and put my criticisms of you back on me.
The advantages are irrelevant. Can you explain to me how BTC's are useful in direct exchange? Can you provide an example? Who has carried BTC's as an end unto themselves, and not as a means to a future end?
Micah:ur conversation in a nutshell: filc: Question A. micah: Answer B to question A. filc: But answer B doesn't address question A. micah: Answer C to question A. filc: But answer C doesn't address question A. micah: Answer D to question A. filc: But answer D doesn't address question A.
FTFY
Your still stuck on answer A. We never got past that. You tried to drag me all over the place so you thought you were making headway but in reality we never got past my original post. You are not desperately trying to prove how BTC's are used in direct exchange. It's taken you 20 pages to get that far. I'll admit it's good headway.
Micah:I have addressed each of your concerns separately throughout this thread.
I don't ahve a bunch of concerns or details. I had 1 point. Your the one that introduced an ocean of other thoughts and ideas. Many of which had nothing to do with "Question A".
Micah:So in http://mises.org/Community/forums/p/9853/411856.aspx#411856 I show that anything can become a medium of exchange.
You mean you claimed. You didn't show anything. You made an assertion, you have yet to provide any logical framework on this discussion at all.
Micah:As stated many times before, it doesn't matter why user-0 would collect them, only that they did.
Just give up. No purchased BTC's hold and to keep as an end to meet satisfaction.
Micah:The proof uses formal logic so in order to refute it you either need to disagree with one of the premises or you need show a logical fallacy.
IF this was followed a bit more rigorously we wouldn't be here for 20 pages. I'm not sure what of formal logic your aware of, and I'm even more confused that you think what you've provided has anything to do with logic.
Do you know the difference between deductive reasoning and an assertion?
Answer the question Mr Logical. In what way can Bitcoins be used other then their designed purpose?
Some more logic for you. Mr Logical.
Just because something CAN be used differently doesn't automatically mean that it ever was. Why on gods green earth would you draw that conclusion and call it logical?
Furthermore I am still flabbergasted as to how BTC's can be used differently.
http://www.bitcoin.org/smf/index.php?topic=581.0
Here is an old thread wherein a poster tries to buy uncirculated bitcoins from the genesis block for roughly 20 times their market value at the time. He was unsuccessful.