Topic: ECB paper on Bitcoin and virtual currencies - page 7. (Read 16899 times)

Ironically, the Bitcoin section of this paper is the most well written, accurate, and easily understood description of the virtual currency that I've seen. Anyone who is writing or speaking about Bitcoin should definitely crib some of that paper.

The euro can take damage from being outcompeted but the minting rate of the competitor is not relevant. It is all about the relative demand for payments using the two currencies. If no one actually paid in bitcoin (even though all merchants accepted it) the euro market would be completely untouched. Minting of new bitcoins would only increase the bitcoin denominated prices but not affect the euro denominated prices. If everyone paid in bitcoin instead of euro then euros would be just as worthless no matter how many bitcoins were minted or not minted.

Precisely the opposite, in fact. Increased arrests and seizures push the price upwards, thanks to our old friend supply & demand.

Edit: switching sarcasm detector back on...

Ask anyone in the drug trade, where we know that government prohibition coupled with extremely strong enforcement has destroyed the value of cocaine and heroin.

http://www.dgcmagazine.com/the-old-radical-how-bitcoin-is-being-destroyed/

I wondered why some here suggested to bind bitcoin to a dollar or so. I mean when this happens then bitcoin wouldnt be a protection against fiat-crashs and somewhat useless because in most cases you would be better to use usd then anyway. Why change in btc?

But i dont quite understand the author. I mean when governments all over the world want to kill bitcoins they effectively should have success. Not because they can block it but they can make it practically useless. I mean nearly all websites for bitcoin are .coms. Can be cancelled. Exchanges .com... are gone. Shops that allow bitcoin... gone... less use for bitcoins. Somewhere have to come updates to the wallet... the developer could be catched. They could make changes into wallet that most users adapt automatically.

And even when there will be other developers that create a fork and a wallet with encryption and so on (could be learned from some previous p2p-projects where isps wanted to make them useless) then... what could be done with btc? I mean a currency lives from its possibilities and his value. The value can be stopped from falling at some point. But useability? How big would the use be when you have to fear the government and could only pay someone in hidden? I think that could practically kill bitcoins.

How you imagine this would work in such case? And are there precautions? I doubt the developers, for example, are anonymous. At least the downloadplace isnt and the software there could be replaced from government.

What do you think?

You forgot to mention a secondary permutation to this one: crack down hard, and also crack down hard on reporting of the crackdown. Maybe in countries where Bitcoin is more widely used, like Finland and Germany, it would be impossible to stop the stories becoming news. But it's not difficult to prevent those stories from reaching countries where Bitcoin is not as widely used. Then, all you have to do is quell your German and Finnish dissenters, and Bitcoin is officially discredited as illegal money.

Could be wrong here but I always assume when people say "tough to regulate bitcoin" and comments akin to this they are referring merely to the fact that bitcoin could exist and function as a black market medium, i.e. impossible to shut it down without global supporter cooperation.  This is actually a good argument for why governments should NOT regulate it if they are smart enough to connect the dots... essentially all those bad things they fear could happen will become the primary use of the system (drug trade, money laundering, terrorist organization funding, tax evasion, etc), while left unregulated or even mildly supported the uses for good can thrive and by the very nature that bitcoin is less anonymous than cash governments can then use the system to much more easily find the negative users in the system (as has been proven in past case studies on the anonymity factor of bitcoin), if it goes dark however I can't see a scenario where tracking negative users is as easy since most users would be using it for these purposes and they would all be purposefully doing things to avoid detection (i.e. common practice to use TOR based coin mixers, binary tree balance dispersion, most servers head to anonymous style hosting etc. whereas currently many of the ins and outs of the system are public and well known and a majority of users are satisfied with the current level of anonymity and there is a certain level of self-policing going on if nothing else than for the purposes to shut down scams as quickly as possible.)

The misguided perception here is a possible failing to see that with government regulation in several key jurisdictions (Euro, U.S., China etc.) then Bitcoin becomes "effectively" shutdown in that it will not be able to garner general public acceptance.  While the 2 points are individual, they go hand in hand with each other.

just wait for an ambitious bureaucrat who wants to climb the career ladder and chooses bitcoin as his agenda

If you mean the positive sides about Bitcoin it says this on page 21: "Users have several incentives to use Bitcoins. Firstly, transactions are anonymous, as accounts are not registered and Bitcoins are sent directly from one computer to another. Also, users have the possibility transactions are carried out faster and more cheaply than with traditional means of payment. Transaction fees, if any, are very low and no bank account fee is charged."

It also mentions other sides of Bitcoin which are more neutral, but which have some positive consequences which can be focused on. It would be would be much more constructive to look for these than the "Look how clever I am, I found a tiny issue that in some respects is slightly incorrect"-attitude that a lot of Bitcoin users have.

good assessment with road runner image by sunnankar in another thread about this: https://bitcointalksearch.org/topic/m.1306412

agree whole heartedly here ... scheme naturally makes one think scheming or to scheme and while their use of the word is more akin to the definition that aligns with a system, the scheming term humans often get in the back of their mind when they see the word feels more like the definition akin to scam i.e. to scheme as opposed to a scheme

you mean it sounds like: "vapormoney scam" ?

the ECB will not "crack down" at all. They are just not in that business. Other arms of the same beast 'd be used for that.

For ease of argument, let's call a certain group of mostly men "the establishment" (the old money) and let's consider their options assuming they have identified bitcoin as a threat to their plans (of a "new world order" or something):

• crack down hard: will generate loads of publicity and might even spawn discussion about what money is, how it works etc... and as a result leave us with an educated public => very bad
• sneakily manipulate public opinion in such a way that bitcoin can maybe even be blamed (at least in part) for the bad shit that is going to happen. More generally: manipulate opinion in such a way that the public will say: "we have enough, look at the rich and the poor: capitalism has failed, we need more central authoritarian control, a world government that runs shit for us and fixes prices at affordable levels so our children can live long and prosper"

Well, I never liked the term they called Bitcoin a 'virtual currency scheme'. Somehow I thought it had a bit of a negative connotation.

well, except the legal tender status fiat-cash has.

I think we'd need to use at least 3 dimensions to have a meaningful system of categorization for money/currency.

Oh if we are talking regular users I think the 10K would be spot on. I would like to buy my groceries with BTC, but its not happening yet.

50-150k would likely include users who have used it now and then, but not weekly by any means. The estimation becomes very difficult if you include degree of "user".

Even savings/hoarding is a kind of use and the other reason I include them is because they make up sleeper-bitcoiners: In the event of high inflation or other crisis they would be likely to switch to BTC since they know about it and have a client etc..


Also; it may actually be bad the ECB is noticing us so soon. We could be set back a year or two if they crack down hard right now. Dunno.

Here's how money should be categorized:

Physical Money
-Gold/Silver/PMs

Digital Money
-Fiat currencies
-Gaming currencies (WoW gold, Linden$, etc)
-Crypto-currencies (Bitcoin)

If you don't think fiat currencies belong in Digital Money category, see this

One might ask where "cash" falls in this organization. Cash is a physical bearer bond for digital fiat currency stored at your bank. It is no different than Casascius Coins which are bearer bonds for digital BTC.

Grinder

Can you be specific?

There is no way you're going to be able to convice average Joe about this, though, and it's not really important at all. Nitpicking on issues like this will make Bitcoin supporters look unnecessarily nerdy, and lower the chances of convincing the public that Bitcoin is a good idea.

Instead we should just use terms like this in the way other people are most likely to understand, and focus on what Bitcoin can do better than other currencies. The paper actually mentions some things, and it would be much more beneficial to discuss how to use this to promote Bitcoin.