When I started this thread, my intention was to provoke some answers on the subject.
Now I sow many answers, all of the noticeable. But I would like to bring everything down to basic now in order to come to a conclusion.
Do we really need BTC to get out in to really world economy and therefore be exchanged into Fiat currency ? OR else we can keep it inside the web so that it can have a life on its own ? Why the final usage of BTC has to be into the exchange markets that have been created.
Opening a new thread : WHAT WOULD BE THE VALUE OF BTC WITHOUT THE EXCHANGE MARKETS ?
Follow it if you like.
Topic: CAN BTC SURVIVE WITHOUT FIAT CURRENCY ? (Read 6537 times)
The biggest obstacle that I can think of, is that all the BTC transaction is not traceable, thus government have no way to collect tax in whatever transaction, then it's purely depend on individual merchants's honesty in paying the tax
Or maybe bitcoin just suit a society without any tax at all, so we have to buy insurance for everything basically covered by government today: health care, education, retirement, jobless compensation, road and infrastructure, etc...
Or maybe bitcoin just suit a society without any tax at all, so we have to buy insurance for everything basically covered by government today: health care, education, retirement, jobless compensation, road and infrastructure, etc...
You know, first they ARE tracable, second this has not stopped cash businesses from being taxes for many many hundreds of years
there will still have to be some exchange into fiat for the purposes of tax payments - but that's a separate issue.
... Or perhaps not
The biggest obstacle that I can think of, is that all the BTC transaction is not traceable, thus government have no way to collect tax in whatever transaction, then it's purely depend on individual merchants's honesty in paying the tax
Or maybe bitcoin just suit a society without any tax at all, so we have to buy insurance for everything basically covered by government today: health care, education, retirement, jobless compensation, road and infrastructure, etc...
Or maybe bitcoin just suit a society without any tax at all, so we have to buy insurance for everything basically covered by government today: health care, education, retirement, jobless compensation, road and infrastructure, etc...
Ok, Lets get real - you will NEVER be able to run 100% on bitcoin unless bitcoin is the legal currency in your region.
But what can happen is that we go larger in the chain. RIght now I can accept BTC payments, but at the end I have to exchange them to "local currencly" or finance my expenses in another way. Because my supply chain is not accepting BTC. Well, I can order via proxy, but lets leave that out.
In 5 years, this may not be totally the case. While I may not be able to deal with BTC only, at least a more significant percentage than 0 may accept BTC themselves. Especially on the internet. Imagine for example DHL accepting BTC. Right now I am opening a shop for extesioncables - I need a lot, order them in china, so I can also sell them.
Problem: ALL my expenses are in "fiat". CHinese manufacturer is USD via credit card, Shipping, customs. Then my other side - shipping materials to send them out, everything is fiat.
When I take BTC, I HAVE (!) to change most of htem into local fiat, or finance that. Because at the end of the day, nothing else accepts BTC.
When more and more shops do, then I can also do more and more without exchanging to fiat currency.
THAT SAID: This will be very hard to push through totally due to some large local companies or high value items: rent, electricity etc.
But what can happen is that we go larger in the chain. RIght now I can accept BTC payments, but at the end I have to exchange them to "local currencly" or finance my expenses in another way. Because my supply chain is not accepting BTC. Well, I can order via proxy, but lets leave that out.
In 5 years, this may not be totally the case. While I may not be able to deal with BTC only, at least a more significant percentage than 0 may accept BTC themselves. Especially on the internet. Imagine for example DHL accepting BTC. Right now I am opening a shop for extesioncables - I need a lot, order them in china, so I can also sell them.
Problem: ALL my expenses are in "fiat". CHinese manufacturer is USD via credit card, Shipping, customs. Then my other side - shipping materials to send them out, everything is fiat.
When I take BTC, I HAVE (!) to change most of htem into local fiat, or finance that. Because at the end of the day, nothing else accepts BTC.
When more and more shops do, then I can also do more and more without exchanging to fiat currency.
THAT SAID: This will be very hard to push through totally due to some large local companies or high value items: rent, electricity etc.
Yes, BTC can survive without a FIAT currency.
As time goes by, the power of BTC increases, as such the need to covert to dollar or other currencies will go down.
It is a inversely proportional relationship the more acceptance the BTC has the less of the need for the dollar.
Also most FIAT currencies are not virtual and thefore are for a different market, if you do online transactions you will find the BTC of most value, compare the traditional mail to email they are both useful for different market segments, same with bitcoins, it is not the same sending a dollar bill over the mail, than sending a BTC, on the other hand to pay the bus fare physical money is more practical at least for now.
But just as email took a large percentage of the market of traditional mail, bitcoin will do the same to traditional currencies.
Lets also do not forget that bitcoins are like cash, and not credit, as such there are very few virtual currencies in existance today, if we add that bitcoin is p2p, then bitcoins are unique.
As time goes by, the power of BTC increases, as such the need to covert to dollar or other currencies will go down.
It is a inversely proportional relationship the more acceptance the BTC has the less of the need for the dollar.
Also most FIAT currencies are not virtual and thefore are for a different market, if you do online transactions you will find the BTC of most value, compare the traditional mail to email they are both useful for different market segments, same with bitcoins, it is not the same sending a dollar bill over the mail, than sending a BTC, on the other hand to pay the bus fare physical money is more practical at least for now.
But just as email took a large percentage of the market of traditional mail, bitcoin will do the same to traditional currencies.
Lets also do not forget that bitcoins are like cash, and not credit, as such there are very few virtual currencies in existance today, if we add that bitcoin is p2p, then bitcoins are unique.
I made posts about this months ago.
I think you are on the same line of thinking as I am.
I think the root of the problem you are describing is that in order for Bitcoin to remain in existence, it must be converted through some other currency that is accepted by electric companies and hardware manufacturers. Bitcoin must pay for electric in bitcoin and it must pay for its own hardware.
Some will argue well this is just a matter of time and to stop worrying but I think that mentality is what got us into all of the problems we have today. "Don't worry, it'll work itself out"
I think you are on the same line of thinking as I am.
I think the root of the problem you are describing is that in order for Bitcoin to remain in existence, it must be converted through some other currency that is accepted by electric companies and hardware manufacturers. Bitcoin must pay for electric in bitcoin and it must pay for its own hardware.
Some will argue well this is just a matter of time and to stop worrying but I think that mentality is what got us into all of the problems we have today. "Don't worry, it'll work itself out"
this has nothing to do with mining at all
once we have enough people accepting bitcoins, we have complete economic cycles in btc, wherein merchant accepts btc, then pays his supplier in btc, the supplier pays his supplier in btc, they pay their employees in btc, the employees use btc to buy stuff they need, etc.
there will still have to be some exchange into fiat for the purposes of tax payments - but that's a separate issue.
once we have enough people accepting bitcoins, we have complete economic cycles in btc, wherein merchant accepts btc, then pays his supplier in btc, the supplier pays his supplier in btc, they pay their employees in btc, the employees use btc to buy stuff they need, etc.
there will still have to be some exchange into fiat for the purposes of tax payments - but that's a separate issue.
Provocation again, just for discussion :
Even if a large number of merchants would adopt btc as a form of payment ( finding it convenient according to your article ), they still will need a way to change btc into real cash. Unless, of course, the chain does not stop here and they would be able to buy from their suppliers paying with btc, go shopping for their personal needs and pay with btc and so on….
At present, btc move from the exchange market to people who buys them. From these people could move to merchants , providing there would be enough to notice this movement which, at present , is not the case, Than from merchants btc can only move back to the exchange market.
Thus for merchants adopting btc as a form of payment , ( aside from the advantages you have illustrated in this article ) could be considered as a form of investment, a speculation if you like.
This tends to limit the number of merchants interested in btc for obvious reason.
It is my opinion that , in order to boost btc economy, the final place where btc have a real tangible value, cannot be the exchange market alone.
There is nothing wrong in trying to make some extra money in speculation, but this bounds btc potential.
For example e-commerce, would be advantaged from adopting btc as a form of payment. Once the transactions are made, we will have these e-merchants loading up with btc and while they will unload their available stock of goods. Than, what ? They have to go to the exchange market and buy back fiat money in order to fill up theirs werehosues.
If btc economy is confined into this boundaries, it is very unlikely that we would see it booming up like many are expecting.
The underling concept of btc ( being a currency that allows to avoid double spending on transactions cutting of all the middle man ) remains intact even inside the boundaries I have outlined above. Merchants would have benefit from a cost free transaction on theirs sales even if they would have to buy back real cash at the end of the game.
What do you consider to be real cash? Fiat?
In my opinion there is no such thing as "real cash". The only value cash has is as a medium of exchange. The things that are real are typically on the other side of the transaction. Cash is an attribute of the transaction itself and has no "real" intrinsic value. It's only value is as a medium of exchange. For that reason, the USD is no more real than Bitcoin. The primary difference is that people are familiar with the fiat currencies and Bitcoin is new.
why, not enought people in this forum to promote the social network ? There are a lot of people in this forum spending a lot of time every day to support bts, give advise and so on...why not doing it in a brand new social network that at the same time could be a common place for merchants interested in accepting btc as a form of payment ? what else would be better than this for a merchant ?
Good questions. I'm curious to see what others here think...
Seams that no one is answering this question.....but have a look here : http://twitpic.com/5u05i7/full
It seams that most of the answers to my initial provocation, goes in the same direction : we need to start spending btcs to make the ball roll. Interesting discussion.
Of course the bitcoin will survive. It is a currency of its own.
In about 5 years there will probably be a lot of vendors dealing in bitcoins, you will not need to exchange them, for example you go to the supermarket and pay with bitcoins, you work for someone and receive bitcoins, and probably in some countries you could even pay your taxes in bitcoins.
Also in 5 years a bitcoin is probably going to worth a $1000 at least, for 2 reasons the dollar goes down, and bitcoin goes up.
Think about the benefits of bitcoin:
The only currency designed against inflation from the very beginning.
Secure.
No chargebacks.
The value adjusted by offer and demand not manipulated by some wise guy.
Private
No risk of frozen assets.
Can not be confiscated.
Only p2p currency that solves the problem of double spending.
No central authority.
Could you describe any other currency in the world that has some of this features, probably none, bitcoin is the only currency that can do all that.
Have no dough Bitcoin no only will survive, but I will probably take over a lot of bad currencies, specially in third world countries where inflation due to fraud is sometimes over 100%.
Bitcoin is unstoppable, it is the greatest thing that has happened in recent time.
I am running a business entirely based on bitcoins, and it is picking up slowly, what is important is the growth.
For Bitcoin to have success at a faster rate, what we all should do, is try to support a bitcoin economy, for example need to buy groceries then go to the supermarket that accepts bitcoins, do not change the bitcoins to dollars and then spend the dollars, that will not motivate a supermarket to accept bitcoins, need to eat pizza go to the pizza place that accepts bitcoins, need phone service use a company that supports bitcoins, and so on, support companies doing business in bitcoins. Today all the companies doing business in bitcoins depend on us, large companies at present are ignoring the bitcoin, but onces it takes off it will no longer be ignored by traditional companies.
I know at present it is very difficult to conduct business at 100% in bitcoins only, but as time goes by it will be easier and easier.
In about 5 years there will probably be a lot of vendors dealing in bitcoins, you will not need to exchange them, for example you go to the supermarket and pay with bitcoins, you work for someone and receive bitcoins, and probably in some countries you could even pay your taxes in bitcoins.
Also in 5 years a bitcoin is probably going to worth a $1000 at least, for 2 reasons the dollar goes down, and bitcoin goes up.
Think about the benefits of bitcoin:
The only currency designed against inflation from the very beginning.
Secure.
No chargebacks.
The value adjusted by offer and demand not manipulated by some wise guy.
Private
No risk of frozen assets.
Can not be confiscated.
Only p2p currency that solves the problem of double spending.
No central authority.
Could you describe any other currency in the world that has some of this features, probably none, bitcoin is the only currency that can do all that.
Have no dough Bitcoin no only will survive, but I will probably take over a lot of bad currencies, specially in third world countries where inflation due to fraud is sometimes over 100%.
Bitcoin is unstoppable, it is the greatest thing that has happened in recent time.
I am running a business entirely based on bitcoins, and it is picking up slowly, what is important is the growth.
For Bitcoin to have success at a faster rate, what we all should do, is try to support a bitcoin economy, for example need to buy groceries then go to the supermarket that accepts bitcoins, do not change the bitcoins to dollars and then spend the dollars, that will not motivate a supermarket to accept bitcoins, need to eat pizza go to the pizza place that accepts bitcoins, need phone service use a company that supports bitcoins, and so on, support companies doing business in bitcoins. Today all the companies doing business in bitcoins depend on us, large companies at present are ignoring the bitcoin, but onces it takes off it will no longer be ignored by traditional companies.
I know at present it is very difficult to conduct business at 100% in bitcoins only, but as time goes by it will be easier and easier.
The genius behind bitcoin is that is can survive. Its decentralized.
It exists as a connection of relationships, not as an independent thing.
This is also what makes it difficult for a lot of people to wrap their heads around...
...but since bitcoin wont go away, everyone will eventually get it.
Just like they days of trying to explain this new "Internet" thing to everyone...any why would they bother using it.
why, not enought people in this forum to promote the social network ? There are a lot of people in this forum spending a lot of time every day to support bts, give advise and so on...why not doing it in a brand new social network that at the same time could be a common place for merchants interested in accepting btc as a form of payment ? what else would be better than this for a merchant ?
Good questions. I'm curious to see what others here think...
You see, I am sure that 99.99% of the people in this forum own some btc. Either bouse they have mined them or because they have bought them on the exchange markets.
BUT ALL OF THEM ADVOCATES FOR BTC ECONOMY ............so why not ? Make the btc economy grow by spending your btcs on merchants that accept btcs rather that waiting for the market price to go up and make a profit re selling your bts for fiat money. DO IT !!
why, not enought people in this forum to promote the social network ? There are a lot of people in this forum spending a lot of time every day to support bts, give advise and so on...why not doing it in a brand new social network that at the same time could be a common place for merchants interested in accepting btc as a form of payment ? what else would be better than this for a merchant ?
Good questions. I'm curious to see what others here think...
Exactly !! Very good, my friend.
But a social network, does not have to focus on BTs. It is a platform to make the btc's economy flourish. With all adds from merchants that accepts bts and pay adds with bts....what's your tough ?
But a social network, does not have to focus on BTs. It is a platform to make the btc's economy flourish. With all adds from merchants that accepts bts and pay adds with bts....what's your tough ?
It could work, maybe. If merchants saw a return on their ad investment in the form of real paying customers then it could work very well in fact. But forming a new and viable social network is a tough proposition.
why, not enought people in this forum to promote the social network ? There are a lot of people in this forum spending a lot of time every day to support bts, give advise and so on...why not doing it in a brand new social network that at the same time could be a common place for merchants interested in accepting btc as a form of payment ? what else would be better than this for a merchant ?
Exactly !! Very good, my friend.
But a social network, does not have to focus on BTs. It is a platform to make the btc's economy flourish. With all adds from merchants that accepts bts and pay adds with bts....what's your tough ?
But a social network, does not have to focus on BTs. It is a platform to make the btc's economy flourish. With all adds from merchants that accepts bts and pay adds with bts....what's your tough ?
It could work, maybe. If merchants saw a return on their ad investment in the form of real paying customers then it could work very well in fact. But forming a new and viable social network is a tough proposition.
How about a Social network where we can all discuss about BTC, invite friends and explain them what btc is, letting merchants advertise and sell only using btcs...would that be a workable idea to further develop btc economy ?
I'm not sure a Bitcoin focused social network would be viable at this point simply because the economy is too small. At the same time though, I think throwing someone to the forums here could be a bit daunting as a first introduction to bitcoin.
My advice is focus on getting merchants involved in the economy: formal brick and mortar merchants, internet merchants, mom and pop merchants, tabletop individual merchants, everyone selling something. Develop a pitch that explain what bitcoin is and how it could benefit them. Focus on benefit of bitcoin while not totally trashing the dollar since that might make you come off as loony. Remember that every merchant that comes on board adds legitimacy to the currency and will serve to inspire consumer confidence. Remember that the best way to convince a merchant is to show results. So offer your own goods and services for btc and show them the results YOU get and how YOU'VE invested in the currency.
Talk to friends and family about bitcoin, get them involved, evangelize a bit. Always focus on why it's a better alternative to their fiat even if you don't go into exactly what fiat is and why it's bad (many people don't care. They just know money works).
Eventually, you'll see the economy start to grow and you'll be able to buy more and more of your own needs in pure BTC with no need for conversion at all. At some point, we'll reach a tipping point and the economy will flourish.
Exactly !! Very good, my friend.
But a social network, does not have to focus on BTs. It is a platform to make the btc's economy flourish. With all adds from merchants that accepts bts and pay adds with bts....what's your tough ?
fiat currency could in the future be backed by bitcoins.
Then it wouldn't be fiat currency.
CAN GOLD SURVIVE WITHOUT FIAT CURRENCY ?
Fiat currency derive from gold, actually.
see :http://www.rocketboom.com/bitcoins/
fiat currency could in the future be backed by bitcoins.
CAN GOLD SURVIVE WITHOUT FIAT CURRENCY ?
Fiat currency derive from gold, actually.
see :http://www.rocketboom.com/bitcoins/
Not totally true. Some national currencies were pegged to gold at some point (like the US dollar) but FIAT never was. That's the very definition of fiat. So, no, fiat doesn't derive from gold. It's derived from greed and poor economics coupled with a lust for control.
Jump to: