Topic: Bitcoin revolutionary? - page 2. (Read 3547 times)

   There are binaries- hot-cold happy-sad day-night. State control-free market is another such pair. If you look at history, both state control and free market lead to disaster in extreme. After a period of free markets people see the problems and opt for more state control, and with more state control people see the problems and move towards free markets.

  Or take predator prey- rabbits overbreed, leading to a boom in wolf population, then the wolves overeat, which leads to starvation and dying off of wolves due to a lack of rabbits, which allows for another boom in rabbit population. If you were to project this relationship in two dimensions, it would look a lot like the double helix structure of DNA.
 
    There are evolutionary leaps. I remember learning that genome researchers discovered that in the course of evolution, the eye evolved five times independently in different organisms on the earth at different times.
     I think bitcoin represents such an evolutionary leap, in the social sphere.

I don't agree. I believe for the most part our economy is supply and demand. A 100% free market without government intervention is an ugly thing - think industrial revolution with little or no rights or powers in the hands of workers. Workers united to form unions which forced governments to intervene and create laws which limited free market action primarily through taxation / spending and economic policy.

Taxation, primarily income tax but sales and other taces are used to redistribute wealth by providing services like healthcare, education, military and sometimes by direct spending usually on infrastructure like road building, bridge building, damns...

Economic policy, what I think you're referring to is the ability of the government / federal bank to directly stimulate or slow down the economy. They do this by by loaning money, 'creating it' in a sense, to banks at their best interest rate. When they decrease the prime interest rate banks can lend at lower rates, more people will borrow and the economy will be stimulated and when they increase it the economy will tend to slow down - that's the idea at least. Creating too much money can lead to inflation and too little to deflation.  The whole point of economic policy is to smooth out the highs and lows of a free market so that we don't end up in a recession or depression. It's not perfect and usually doesn't work well (!) but this is not the fault of the policy - it's a good idea in theory but in real life attempts to affect the economy take a long time to play out so a policy decision today might start showing it's effects months and months from now. So policy makers are always in a position of trying to figure out if what they did had the intended affect and what they should do next

Why do you think this is nonsense? How do politicians fit in here? Accommodate them how?

Let me first say, that I believe a stable government and a fair administration is an absolutely must have for a modern society. Therefore I agree to the need to collect taxes and to enforce that by law. States will continue to create FIAT and this currency will surely be the basis for taxation - no cryptocoin is going to change that. In that aspect Bitcoin is just another "foreign" currency as there are plenty worldwide, looked at from the standpoint of the local government.

In my option, Bitcoin could just be a "better" currency due to less tendency for inflation, less costs doing (even international) trading because of much lower fees than any other financial transaction and due to the fact, that a globally accepted currency doesn´t force one to change in foreign FIAT.

It doesn´t change the systems it is used in - whether thats pure capitalism, social market economy or even more regulated economies. And it doesn´t change the political system - though it could give individuals more freedom from the impact governmental decisions may have to the "official" FIAT of any given nation.

The only way bankers and politicians would be able to enforce their laws and regulations is to change the rules of the Bitcoin protocol.  If they were to do this, there would be separate protocols and two separate blockchains.  One that followed the rules established by bankers and politicians and another one that followed the rules established by the free market.  They could force you to pay taxes in their currency, but that's about it.  For the products or services that you consume, you would be able to offer the more valuable free market currency as payment.  For the products or services that you provide, you would be able to insist that payment be made in the more valuable free market currency as well.  Also, there is no way to guarantee that you will get your Bitcoins back once they have been transferred to someone else.  If this aspect of Bitcoin were to change, then you would have a hard fork and this new coin with reversible transactions would be a new currency.



No, nothing about the current system is "free market".  Any system that allows for redistribution, amasses massive debt and passes it on to future generations, and gives bankers the ability to expand the money supply to accommodate politicians is completely corrupt.  Bitcoin is not a debt-based currency and the protocol does not allow for any of this nonsense to occur.  There is nothing wrong with a bank giving out loans and charging interest as long as they are loaning out money that someone else has deposited with them.  It's when they have the ability to create additional money and expand the money supply in order to lend it out that problems begin to arise.

But this wouldn't solve anything since they can simply swap coins or move over to the new chain. What if for example I had 100,000 bitcoins and I decided to open up the Bank of Esenminer. I'm willing to loan out money but I want interest. Or I'm willing to give you interest on money for storing in with me - who knows maybe I will invest in some up and coming ventures. Suddenly I've got a bank. Maybe there is also the Bank of shawshankinmate37927. Now I want to make sure that people pay me back so a law is passed or a regulation is passed or some technology is applied so that I can guarantee I get my money back. People who put their money in my bank also want to make sure I'm not going to just spend it so again some regulation or some technology is applied so that this doesn't happen. Eventually though we end up exactly where we are now expect instead of FIAT it's Bitcoin.


Isn't this exactly how wealth is distributed currently? It's a modified free market system - modified so that the government can redistribute some of the wealth through taxation. But essentially if you have goods or services you want to sell you invest capital into it, sell it and hopefully make a profit. If you don't have capital you get capital from the bank or VC. Banks can only survive by lending money on interest that's how they make revenue - if they didn't lend it to people buying houses and cars and businesses for operating costs and capital investment they wouldn't exist. I'm not sure that constitutive control of how money is distributed or who is allowed to accumulate wealth. The banks will get behind anything that's going to make them money so if you're widget is going to mean extra interest for them you can bet they will be more than happy to finance it.

I think this is a good point, independence from the decisions of a single government is very interesting - how do you reconcile that with the need of governments to collect and use taxes - for example to fund health care, education, military?

I can only agree that it's inherent to our current economic system. I don't believe making money as a talent should be rewarded more than any other talent but in fact that is how our current economic system works and that's who it rewards. I'm not passing judgement on it that's just how it's designed. People with capital and the ability to use that capital effectively are able to accumulate more capital. Capital itself is fixed and the accumulation of it in one person necessarily means that other people are without. Capital purchases resources like talent but talent itself - for example being engineer talent or say mathematical talent doesn't mean wealth.

If they were to transfer a lot of their fiat into bitcoin mining and then try to enforce rules that benefit themselves at everyone else's expense, then everyone else will be able to create a hard fork in the blockchain.  Everyone would then be free to choose which of these two currencies they prefer to continue using.  The one that the bankers and politicians control or the one they had before that maintains the current rules.  (They could actually continue using both if they wanted because they would now have coins on two separate blockchains.)



Wealth will be spread to others through the exchange of goods and services for bitcoins.  Supply and demand for these goods and services will determine how wealth is accumulated.  Those who provide goods and services that are in high demand and low supply will benefit the most.  Instead of bankers and politicians being able to decide how money is distributed and who is allowed to accumulate wealth, the free market will decide.  This is why bitcoin is the best alternative out there right now.  Something better may come along, but I think it's more likely that Bitcoin will continue to evolve and would implement any improvements that another alternative currency comes up with.

The really revolutionary thing about Bitcoin is definitely the independence not only from banks (or bankers) but the independence form decisions of a Government with severe, sometimes life-threatening consequences for millions of people.

Despite all economical crises in the past, citizens in the US did never experience the potential complete loss of all money because of Government´s decision to abandon their complete FIAT currency. They always kept Dollar as official currency.
On a broader view at this time 330 Million citizens of the so called "Euro-Zone", 17 Countries in Europa who pay and get paid in EURO, have no clue, if or how long the EURO will survive. No one knows what happens to savings, pensions, when their currency will be replaced by somewhat nobody even knows today. Since 2009 "Officials" of all those countries discuss, what may be the right move to get out of the "Euro-Crisis". They will decide, how my monetary situation is in future, how much my savings are valued in a new currency etc etc.

A globally usable, accepted and stable currency beyond the direct reach of a single Government would only be endangered if the whole global economy collapses - and could even then continue to exist, because there will be always the need for trade.

Just my two cents

There will always be wealth disparities since people don't have equal talents. Some are better at making money than others.

If we were to start again with a new currency and everyone would get 100 units of it within a few decades there will be people who have more and people who have less.

So this is not inherent to Bitcoin it is inherent to humanity.

I don't think I attacked Bitcoin at all. In fact if you read my OP it praises the technological advances it brings to currency. And I'm certainly not whining about hoarders of Bitcoin! Good for them? Us? Who knows how many bitcoins I have or you have?

My post was a response to seeing dozens of ill informed posts about how the government is attacking Bitcoin. My question then was 'Do governments really have something worry about if Bitcoin is adopted? i.e. is Bitcoin Revolutionary?'. The thread was meant simply to flush out this idea and get people thinking about how a Bitcoin economy would be different from our existing economy. My thinking led me to believe that there would be little difference in the underlying distribution of wealth.

I'm not sure I or any of us have to accept your assumption that there will always be rich and poor. Economies are artificially constructed though rules, laws and regulation, like you mention. For example capitalism simply could not exist without law enforcing the idea of ownership (property or otherwise). There is nothing which prevents us in constructing it in such a way that wealth is distributed equally.

I also believe it's naive to think that governments will not play a role in regulating Bitcoin. If you make income mining Bitcoin do you believe you government has no right to tax this income? Alternatively if you purchase goods with Bitcoins that you mined aren't you in affect earning income and spending?

In any case I don't want to steer to far away from the topic. The question is simply if Bitcoin were adopted today would this cause a revolution in the current economic system or would the people who hold on to power now simply swap their FIAT for Bitcoins and continue in the same way.

There is nothing wrong with saving, in fact, production and savings is what allows an economy to grow and a currency to gain strength, the reason I bring this up is because you sound like these people who more openly whine about people 'hoarding' Bitcoins. What Bitcoin addresses is the problems of central banks and government regulation, the problems that occur in the current economy happen precisely because people are trying to artificially engineer the distribution of wealth.  You need to accept the fact that there will always be rich and poor and there will always be problems an economy, the best thing we can do is make it so its easy to get out of the situation yourself or make being poor fairly comfortable.

If you want to stay an economy where two different groups are conspiring to steal everyone's wealth and redistribute it at will ( usually for corrupt individuals ) to get people re-elected and gain more personal wealth and to force you to work for much longer hours and for less pay be my guest, no ones stopping you, I don't understand why people so rabidly attack Bitcoin sometimes.

Never! LOL!

How would Bitcoin remove the interest factor?

If there was no FIAT and you wanted to build cars (say) wouldn't you have to borrow enough Bitcoin from somewhere? Wouldn't that somewhere be a person or entity with a large amount of Bitcoin? They certainly wouldn't lend you those Bitcoins without some sort of compensation.

The mechanisms for creation and transfer are defn unique and do not resemble FIAT at all, agreed. And yes we can call Bitcoin money because as you mentioned eruo / usd exchange doesn't mean euro is a commodity.

But what you say here:



Yes it's completely fair but it still comes down to capital investment - i.e. investment in hashing power. Even though bankers, politicians and others you mentioned might not be interested in Bitcoin now, mining is going to last another 15-20 years, there is nothing preventing them simply transferring their FIAT into Bitcoin and then using that wealth to enforce or create systems which benefit them.

and here


How is it that wealth will be spread to others? What mechanisms? Simply spending BItcoin won't redistribute wealth. Sure the wealthy spend money but because of the large numbers of people who are not 'wealthy' the distribution when spending tends to go the wrong way.

You last sentence is why I put up this post. Is the the best alternative? I agree that from a ease of use, transferability i.e. technical points that it is but i don't think it addresses (and nor does it seem it was designed to as one poster mentioned) the social divide and inequality that the current economic system creates.

By distribution and accumulation I am referring to the bias in capitalistic markets wherein people with more wealth can more easily increase their wealth by investing. Over time the total wealth of a country sits in the hands of a very small minority of the population. Governments redistribute some wealth through taxation and government spending (i.e. healthcare, education etc) but over time the disparity grows. Bitcoin does nothing to address this. A bitcoin based economy will have the same disparity over time.

Agreed that compared is a better word.

Whitout the "interest" factor, and a without bank money creation scheme, BTC will tend to equalize within its users.  The fact that whealthy fiat owner are making more and more just by having tons of fiat is largely due to the interest thing, linked with bank's money creation system, wich cannot really apply to bitcoin.  Yrs there is mining, and those with a lot of BTC can invest more in mining, but this is minor whealth creation compare to the interest scheme we see in the fiat world.

IMO, bitcoin is a much more fair system than the modern fiat monetary mechanic.

Bitcoin will revolutionize our current economic system because it gives individuals the ability to opt-out of fiat currencies and transact or save in a currency that bankers have no control over.



Sure it does.  New bitcoins are distributed to the miners that process the transactions, validate the blockchain, and secure the network.  This is a brilliant way to distribute bitcoins because it rewards those that are providing value and offers an incentive to join the network and become a miner.  With fiat currencies, newly created money is distributed to bankers, politicians, those with political connections, and people that are taking on debt and living beyond their means at the expense of savers.  With Bitcoin, wealth is accumulated by those who choose to save, those who invest wisely, or those who provide goods and services that others are willing and freely choose to pay for.  With fiat, it's the bankers, politicians, and people with political connections that accumulate the wealth.



New bitcoins are distributed to miners according to the amount of hashing power they contribute to the network.  If you're like me and don't mine, then you can purchase bitcoins that someone else mined at market value.  It doesn't get any more fair than that.



We have to have exchanges because it takes time to transition to a new currency.  This sort of thing doesn't just happen overnight, especially when you're talking about the world's reserve currency.  We are still in the early stages of transitioning to honest, sound money.  It's going to take a while, you'll just have to be patient.  As more and more people come to understand the benefits of Bitcoin, more of their transactions will be in Bitcoin and there will be less need to exchange back and forth between fiat.

Gold isn't a commodity.  That's what bankers want us to think.  Gold is money.  There is also an exchange rate between euros and dollars.  Does this mean that the euro is a commodity?



Yes, a minority of people have the majority of bitcoins right now, but over time they will be sold or spent and that wealth will be spread out to others.  Clearly, the Bitcoin monetary system is the best alternative out there right now because it in no way resembles the current fiat monetary system that bankers and politicians are so fond of.

It's also important to remember that one of Bitcoin's greatest features is that it is completely voluntary.  As of right now, there is no banker or politician forcing anyone to use bitcoins.  If there is some aspect of it that someone considers unfair, they don't have to use it.  In fact, anyone is free to copy the code, modify it to their liking, introduce a new currency and then let the free market determine it's value.

Bourbon will work in a pinch but I'd walk all the way to Glasgow for a bottle of Glengoyne. 

I'll let you in on my current revolutionary theory. Don't tell anyone though. It's a secret. I think BFL is going to ship en mass within the next month or two. I just bought a shitload of Bitcoins to add to my mining savings. When the diff skyrockets because of the mining increase price will follow and I'm gonna sell all, move to Thailand and wage war on a bottle of Scotch for the rest of my life. What do you think. Good plan?