Topic: Could bitcoins ever replace conventional money? (Read 1520 times)

I think some sort of digital currency will become dominant eventually, but I'm sure there will always exist in other physical forms too.

Paper wallets are no different to other Bitcoin addresses in this. Each transaction has to take all the money at the address, but it can then transfer "change" back to the same address. So you can effectively withdraw a partial quantity.

(With digital wallets it's common to generate a new address for the change, but that's because some people think doing so improves anonymity, which they care about. It's not necessary.)

You can spend a partial quantity and you can use it like a debit card.

I'm not totally familiar with the whole transaction process but from what I understand it's not possible to withdraw a partial quantity from a paper wallet, it's all or nothing. If a coin came along where you could have a paper wallet and use that paper wallet like a prepaid card and just spend small amounts until the quantity in the wallet was consumed, that would be pretty sweet. A total replacement to government/central bank currencies? No. In fact, I'm still not convinced it won't be banned at some point. Central banks are powerful entities to try to circumvent. Kennedy tried to make 'united states notes' that were issued direct from the treasury instead of the Federal Reserve at some point... that's a no no.

Although in reality almost all our  money supply is created into existence as debt from people taking out loans... very little of it is paper or coin currency.

Governments might not have any choice. They'll have to adapt or move with the times. They still aren't going to just sit back and let us use digital currencies tax-free for long, so they'll have to find a way to tax or deal with them eventually.

Hm, one of the things that effectively could prevent BitCoin to replace or even 100% complement existing FIAT :

People don't understand money, they can only use it. For as long as that works (even with inflationary side-effects and all the implications of using "Legal Tender" debt notes), they can't even be bothered to understand it.
Sounds harsh, but monkey don't care. Monkey function. Monkey working. Monkey consuming. Monkey dies, offspring takes same place. Rinse, repeat, cycle.

Given that state of mind, I can't imagine the average people would ever get their heads around BitCoin or comparable for it to achieve "money" status in their minds.
That would take a full-blown launch of state/mass-media advertising campaigns.

The internet will certainly (and already has) educated a certain percentage of people to allow them to use it, but that's about it. It has limits, which would need to be overcome (the most realistic way would be mass adoption by everyday "around the corner" shops worldwide).
It would certainly require a massive education of folks concerning internet/IT security as well. BIG time that. Not sure "joe sixpack" would be able or willing to process so much knowledge which additionally is dynamic (needs to be kept up-to-date).

To me, in that respect it looks like BitCoin is like a functioning raw engine with all required basic tools/instruments/gauges attached. Usually works like a charm, but it's still a raw design like a prototype - some assembly requried, batteries & instruction manuals not included; available scattered across dozens of libraries.
That's not what people look for, money needs to be as easy to use as opening a beer can or unscrewing a water bottle.
Could be BitCoin needs a nice, dumbo-easy, one-size-fits-all-wrapper that gives a User Interface even joe sixpack or a 5yo kid can use without much brainpower involved.
That wrapper (software & actual hardware) doesn't exist so far.
Call it an "Accessibility Assistant" that allows non-internet/non-techy persons to access & operate beneath-the-hood hightech gear - like a smartphone most people couldn't naked program if their life depended on it - but give it a nice simplifiying Operating System and User Interface - and today youngest kids can (and love to) use them. Such a bridge technology would be required to close that massive usability gap (function vs. usability/accessability).

Simplify, simplify, simplify! - Henry Thoreau, 1817-1862

PS.
I already wrote about some other unresolved (unresolvable?) issues that would speak against it in another thread, if interested :
https://bitcointalksearch.org/topic/m.4919602
(3rd paragraph, others mostly off-topic to the OP)

What it will take is for the people to clearly be shown how they are being stolen from by the banking system.  If it were only inflation, if it were only fractional reserve banking, those two things would be enough. But that is only the tip of the proverbial iceberg.

The big part of how the banking system is stealing from you is, all the loans by bank institutions of every kind
are not loans at all. It says they are loans on the paperwork. But that's because government has allowed them to redefine the word "loan" for banking purposes.

So, if loans are not loans, then what are they? They are creations of new money. It is your signature on the promissory note or other paper that creates the new money. You loan the new money you just created to the bank when you slide the paperwork across the desk to the loan officer after you have signed it. All the loan officer does is to translate the paperwork containing your signature into banking system paper, and ultimately to a check or cash back to you.

When you repay the loan, you are not really repaying anything. In fact, you can't repay the loan, because there isn't really any loan. It's redefined words. The debt was settled when you received the money that the loan officer gave you in return for the paperwork with your signature on it. When you attempt to repay the loan, you are really GIVING the bank something that it has no right to receive. And the whole thing has been done this way with the help of our government representatives along with the banks so that they can RIP US ALL OFF. On top of everything, the government taxes us on the money.

Google "Modern Money Mechanics" and "Two Faces of Debt." These are two Federal Reserve Bank publications that are out of print, but you can still find them up on the Internet here and there. They are a bit of a twisted read, but you will find the banking system admitting to the new-creation rather than the loan in them.

When the people wake up in unison about this, they just might become so angry that they will cancel the use of money altogether. Bitcoin would be the ideal replacement. The lying-loan money system has become the system in use around the world with all the major currencies.

This seem correct to me.

The bubbles and Ponzi schemes we see with fiat currencies are made possible by dumping the gold standard, that in addition to a lot of spin-doctor mathematics to make air look like a good investment

It's the next step in the digitalization of society.
Our mail has been digitalized, our TV's have been digitalized, our phones have been digitalized.
There is place in society for this technology.
It will complement the other digital technologies if it's used in a responsible way.

Some of the older generations don't even have a cell phone of a computer that connects to the internet...

 

I'm sure people said that about credit cards too, but they're much more commonly used than cash these days -- people will get over it with time 

Why not?

If bitcoin is seen as the better currency, vendors will want to be paid in it, so they'll offer lower prices to people who pay in bitcoin. (Their freedom to do that is why Gresham's Law doesn't apply.) Then employees will want (some of) their salary to be paid in bitcoin, because it will have more spending power and be less subject to inflation. This applies to government employees also. The government with then have a need for large amounts of bitcoin to pay its employees and suppliers, and it will make sense for them to accept bitcoin in taxes as a way of getting it. The same logic applies to them as to anyone else.

Do you imagine a future in which the only role for dollars is paying taxes, and only government employees get paid in dollars? It so, I guess it will suck to be a government employee.

Of course. That's the plan: cashless society. The Secret Government will soon completely replace cash with digital currency and force every individual to put nanotech microchip in the body. This way they will control wealth of every individual. Orwellian dream finally comes to fruition.

Can bitcoins replace conventional money? No, for the simple reason that governments will never accept bitcoins for paying taxes. As long as you have to pay taxes, you will need your national currency for that (except if you can convince the government of your country to give up the national currency, or to abolish taxes altogether, which seems unlikely).

Can bitcoins complement conventional money? Yes, they have already started doing so and will hopefully do so to a larger extent in the future.

Also, pluralistic systems have always proven more successful than monolithic ones. Why not have pluralism with respect to currencies?

It already is a currency. And their value will probably stabilise at some point. The currency is volatile because it's new and is still gaining its footing.

No not possible, but hopefully it can be a permanent alternative. People need a physical currency that they can hold in their hand and spend. No matter how easy it becomes to use, there will still be old school people using matress money

They will forever be an alternative to fiat, just like credit cards, money orders, and personal checks are alternatives for fiat.

Nothing more, nothing less.  

Fiat will always ultimately be the easiest 'go to' method of payment anywhere in the world, be it in a small village in africa with no electricity, or the middle of tokyo.  But alt currency does indeed have its own purpose.

Their value wouldn't change at all if bitcoin was not based on any fiat currencies (if bitcoin did replace all fiat currencies), but the goverments would never let that happen. If bitcoin was as accepted as fiat today, volatility would be reduced to almost nothing.

Yes, because money is nothing more than a way to trade. Lots of other ways exist. Now, and in the past. Digital currencies are, in that way, just a new way to trade. Change goes slowly often. Maybe not now, but in 2-3 centuries yes.

But, in my opinion, just like trading goods (your car for my motorbike) of friends doing something for each other (you fix my car, I paint your house), I believe that people will always have different kinds of way to trade with one another. Digital currencies is a another and new way to do so.

No. Their value changes too quickly. Also it would need to be governement restricted and I'm talking about mining. Just imagine if it'd be a currency. People would save 10 K in bitcoins then start mining. Everyone would do it so there would be no companies or so except for asic. Bitcoin is made for virtual and only virtual in my opinion