Topic: A positive view (Read 1406 times)

True, despite my desires to the contrary the greenback refuses to die
However I am rejecting debt based currency. I will still trade in it but I will not save in it or one of it's derivative products (CDs, bonds, stocks (maybe someday), mutual funds) I'm sure to a greater or a lesser extent you are too. We want to leave fantasia and never come back.

If there is however a currency crises and/or the tropical fruit has impacted the rotary cooling device then the current banking system will sheer apart and BTC even at it's current level of development will be a much better option.

It's hard to tell. I'm from South Africa and the man residing over the Reserve Bank here during the financial crises is now working for Goldman Sachs. He was sent for "economic training" by them in the 90s. Governments might not be able to push for co-ordination but their owners can. They already have the world on global debt based fiat currency and are consolidating that position into SDRs from the International Monetary fund. The mere fact that they convinced every country on earth to abandon gold or sovereign money (with very few exceptions) should give us pause.

But I'm harshing my own buzz ;-) I hope they respond in their normal sluggish way and one morning we just wake up and the Chelsea buns are in mBTC or uBTC.

Go von Mises!

Thank you for offering us your positive view.
This will be a great post to re-read every so often. 

don't go out there ... I hear it is dangerous out there.

Edit: good thoughts in the piece ... worth reading.

Write for me! http://bitcoinweekly.com/pages/submission

I like what you said. A couple comments:

1) It's unreasonable to conclude the meteoric rise of btc has much to do with a falling dollar at this stage. If gold and silver were rising substantially in this short timeframe, then one could make such an argument. The more likely reason btc is skyrocketing is because thousands of new people are discovering it every day, and deciding that it's a damn cool thing and worthy of marginal investment. Further, there will be nothing remotely close to btc replacing the dollar or other currencies until the system of btc is smooth, easy to use, reliable, and convenient. We need bitcoin credit/debit cards, bitcoin banks, bitcoin insurance, etc. We need to be able to buy food at the grocery store and gas at the pump with a direct btc payment. These services will be built by entrepreneurs but it will take a while. The terrible fiat currencies will never be fully replaced until we have this.

2) The most likely way the US would outlaw BTC is by making it illegal to accept BTC as a form of payment, because it's easy to find and prosecute vendors who advertise this. Let's remember, though, that the US is not God of the Universe. There are dozens of other countries that would have to make it illegal as well for btc to be totally screwed. I doubt politicians are effective enough to coordinate such a global attack. Further, I think the kind of political environment where that attack could happen is the kind of environment where sh*t has hit the fan, fiat currencies have collapsed, and the public is panicking. I doubt many people will CARE if governments outlaw btc at that point. Rebels will be plentiful!

3) Yeah I agree the whole deflation concern is silly. BTC is always increasing in supply (though at a diminishing rate) and thus there is technically never deflation, anyway. And besides, a world in which money increases steadily over time in value is nothing to be scared of. Us Austrians aren't too concerned =)

I hear a lot of really troubling talk out there;

Mainly it boils down to;
1.The speculative nature of Bitcoin
2.The possibility of having Bitcoin declared illegal somehow
3.Concerns raised from not understanding the value of a limited money supply.

1.The speculative nature of Bitcoin
Fiat currency is deathly ill. It is issued on the basis of debt and cannot be paid back unless inflated into oblivion. It enslaves both borrowers and savers. Perhaps one way of looking at the meteoric rise in the price of BTC is to instead view it as the process of replacing fiat currency with sound currency. This has happened over and over with gold and silver and often happens between currencies that are hyperinflating and currencies that are still stable. First the good money is hoarded, to the point where there is enough in reserves to replace the bad money. BTC has a VERY limited supply relative to the USD. If the USD alone was to be replaced with BTC the price would likely be around $5,500,000 per BTC (yes 5 million dollars). The price when replacing all fiat currency is mind boggling. The current rise is simply the educated early adopters climbing into something brand new. Many bitcoin holders have basic training in Austrian economics and that is what piques their interest in BTC.

2.The possibility of having Bitcoin declared illegal somehow
Doing this would be a legislative nightmare. What exactly would they make illegal? Trading BTC for other currencies? Trading goods and services in BTC? Owning BTC? Mining BTC? Running the client in support of the network? Accessing a website with a Javascript miner?
My point is that it would be difficult to pull off successfully even in a hostile environment.
Most likely a smart legal step would be to focus on the first question and make trading for currency illegal. However in the absence of the other controls this would prove futile. Imagine for a second an exchange running in Switzerland trading Francs and Euros for BTC. If they as simply listed the calculated USD price for BTC this would give the US market a pricing on BTC and enable widespread internal and international trade in the US. Exporters would be able to charge daily updated prices in BTC and would be able to horde at least some percentage of their income in BTC. Internal markets could accurately price their goods and services in BTC in the absence of a local exchange.
Importers might even begin to put pressure on the law makers since outside producers might insist on BTC payments.
The above might not seem extremely alluring now but under a deflationary collapse or a hyperinflation access to a stable pricing mechanism will be invaluable.
Furthermore, so much as one liberal jurisdiction will effectively provide anyone in with a BTC account in another jurisdiction with the equivalent of a secret Swiss bank account.

3. Concerns raised from not understanding the value of a limited money supply.
Lots of these arguments seem to stem from some belief that by manipulating the currency supply somehow people will be made to behave in a productive reasonable or charitable fashion. It does however ignore the rights of the productive party to keep what they make.
Bitcoin enforces the idea of property ownership very well. What you produce you keep, no-one gets to take what you've made. Mining is a mild violation of this principle in that it rewards those who guard the money supply by initially debasing it. I'm not sure what the long term side effects will be of this but it's better than any other system we have so far. It's also a very minimalist intervention that is needed to introduce currency into the Bitcoin economy.
All in all limited money supplies are good. If you produce earlier, rather than later, your eventual reward increases thanks to deflation. Deflation will eventually stabilize. People will once more see the virtue of saving. Entrepreneurs will not unwittingly be suckered into unsustainable segments of the economy due to artificially low or high interest rates. As a result progress should be much faster as resources are aligned along the needs of real people.