ANSWER GIVEN TO http://falkvinge.net/2011/07/03/bitcoins-four-drivers-part-3-merchant-trade/#comment-87785
I have followed all your articles on BTC so far. They are all very insightful and interesting. Thanks.
It still remains to solve the issue regarding what people can actually do with btc ?
At present, they can only be traded on the exchanges markets.
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.
We need to have some alternative ways for merchants to spend their btc rather that buying back fiat money. Or , at least , a way to spend some of the btc they would accumulate. Perhaps a way that would allow them to increase their sales more and more like Advertising on the internet paying with BTC……
Topic: Google & Co. Mining ?!?? (Read 6652 times)
BASIC STAFF - PART FOUR USERS A RESOURCE BASED ECONOMY
http://pointapp.blogspot.com/2011/07/basic-staff-part-four-users-as-resource.html
http://pointapp.blogspot.com/2011/07/basic-staff-part-four-users-as-resource.html
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Facebook & Economy : The big guys "moving the other way"... Check this out !!
http://mashable.com/2011/06/29/amex-facebook/
Facebook & Economy : The big guys "moving the other way"... Check this out !!
http://mashable.com/2011/06/29/amex-facebook/
aren't the large pools really just a form of company? They could also corrupt the block chain if they gained 51%.
My comment given on another discussion on this forum. http://forum.bitcoin.org/index.php?topic=5373.360
You Think it has nothing to do with BTC
You Think it has nothing to do with BTC
A COMMENT ON THE VENUS PROJECT
This is taken from the Venus Project at http://www.thevenusproject.com/en/a-new-social-design/resource-based-economy
"Money is only important in a society when certain resources for survival must be rationed and the people accept money as an exchange medium for the scarce resources. Money is a social convention, an agreement if you will. It is neither a natural resource nor does it represent one. It is not necessary for survival unless we have been conditioned to accept it as such."
[Quoted]
Absolutely True ! In the article the author advocates that in a Resources Based Economy, all the Earth Resources become a common heritage for all humans, this making the monetary system no more needed and thus allowing a generalized growth for all people that would experience a better ( enhanced ) life - style. In addition, he states that : " our practice of rationing resources through monetary methods is irrelevant and counter productive to our survival." [Quoted]
This rationing comes from the unproper use of the available resources that must be rationed since we are wasting them.
What else could be more appropriate for our world survival ? My hat off to you, Author.
Now, Human Intellect is also a natural resource. Most of the times it is , unfortunately, rationed through money and wasted even thought Human Intellectual is not a Scarce Resource.
Could be argued that Human Intellect is not a resource for survival, but I think this is a far fetched hypothesis.
The whole thing is therefore addressed to a better use of the available resources promoting thus a MUTUAL BENEFIT for all people.
My previous post (Basic Staff - Part Three) goes exactly on the same direction.
I haven't deepened my knowledge of the Venus project to such an extend that I can see if they have a starting point for the whole project, any entry. Most probably they have and they are already operating it ( would be glad if someone points my in the right direction about this matter so that will save me a lot of time ).
My project, instead, has a very clear starting point : the world wide web and more specifically the USERS of the web. All of us.
Good Theories are always welcome, but they need to be practical and applicable, possibly in the Near Future.
As I have already said, I am working, with a very restricted team of people, on a new web based project that would involve actively the Users. The project aims, at first , to gain control of the web by the users by re balancing the economy of it. Than goes on and on......
Anyone interested in sharing some thoughts, can contact me privately at [email protected].
This is taken from the Venus Project at http://www.thevenusproject.com/en/a-new-social-design/resource-based-economy
"Money is only important in a society when certain resources for survival must be rationed and the people accept money as an exchange medium for the scarce resources. Money is a social convention, an agreement if you will. It is neither a natural resource nor does it represent one. It is not necessary for survival unless we have been conditioned to accept it as such."
[Quoted]
Absolutely True ! In the article the author advocates that in a Resources Based Economy, all the Earth Resources become a common heritage for all humans, this making the monetary system no more needed and thus allowing a generalized growth for all people that would experience a better ( enhanced ) life - style. In addition, he states that : " our practice of rationing resources through monetary methods is irrelevant and counter productive to our survival." [Quoted]
This rationing comes from the unproper use of the available resources that must be rationed since we are wasting them.
What else could be more appropriate for our world survival ? My hat off to you, Author.
Now, Human Intellect is also a natural resource. Most of the times it is , unfortunately, rationed through money and wasted even thought Human Intellectual is not a Scarce Resource.
Could be argued that Human Intellect is not a resource for survival, but I think this is a far fetched hypothesis.
The whole thing is therefore addressed to a better use of the available resources promoting thus a MUTUAL BENEFIT for all people.
My previous post (Basic Staff - Part Three) goes exactly on the same direction.
I haven't deepened my knowledge of the Venus project to such an extend that I can see if they have a starting point for the whole project, any entry. Most probably they have and they are already operating it ( would be glad if someone points my in the right direction about this matter so that will save me a lot of time ).
My project, instead, has a very clear starting point : the world wide web and more specifically the USERS of the web. All of us.
Good Theories are always welcome, but they need to be practical and applicable, possibly in the Near Future.
As I have already said, I am working, with a very restricted team of people, on a new web based project that would involve actively the Users. The project aims, at first , to gain control of the web by the users by re balancing the economy of it. Than goes on and on......
Anyone interested in sharing some thoughts, can contact me privately at [email protected].
This scenario is really unlikely. But it would be terrible for miners, great for early adopters, and awesome for BitCoin itself. Obviously, miners would be screwed because the difficulty would go through the roof. Early adopters would be thrilled because the value of a BitCoin would go up and they could consume a very high fraction of the market volume selling off their BitCoins without causing it to crash. Not only would they get absurdly rich, but they'd be *helping* BitCoins by doing it. It would be awesome for BitCoin itself because the value of coins would go up and the involvement of large companies would legitimize BitCoins further.
The only motive I could see for them doing this would be to try to kill BitCoins. But like the Goldfinger attack, this is an absurdly inefficient way to do that.
Wait until people start building there own circuits to mine... if they have not already! The only motive I could see for them doing this would be to try to kill BitCoins. But like the Goldfinger attack, this is an absurdly inefficient way to do that.
How does the value going up make the entry barrier any higher? A number is just a number. Regardless of whether you can get 10 or 100 bitcoins for $100, 100 dollar worth of bitcoins is 100 dollar worth of bitcoins.
I was going to Photoshop a chart with a pound of feathers and a pound of rocks but I'm too tired.Google Images is your friend, my friend: http://www.google.com/imgres?imgurl=http://www.schenectady.k12.ny.us/users/pattersont/IBDT%2520Website/Page_Generators/feathers.jpg&imgrefurl=http://www.schenectady.k12.ny.us/users/pattersont/IBDT%2520Website/Page_Generators/MassAndDensity.html&usg=__-TS0F9A2dgU4xdOT6H20z9I3ubk=&h=175&w=303&sz=18&hl=en&start=0&zoom=1&tbnid=FmpyiZAXdsaDMM:&tbnh=116&tbnw=200&ei=BFIJTty5CcXcgQep7bjyAQ&prev=/search%3Fq%3Dpound%2Bof%2Brocks%2Bpound%2Bof%2Bfeathers%26um%3D1%26hl%3Den%26sa%3DN%26biw%3D1040%26bih%3D768%26tbm%3Disch&um=1&itbs=1&iact=rc&dur=471&page=1&ndsp=26&ved=1t:429,r:0,s:0&tx=170&ty=98&biw=1440&bih=809
:]
As to whether BTC has the power to bring governments to its knees, the answer there is "
" - Frankly this is another perspective problem too though. Many of us have come to see that Governments all around the world are in the process of bringing themselves to their own knees under the sheer weight of debt they've taken on to stall the financial sectors systemic insolvency. That happens whether Bitcoin was ever invented or not, so the question isn't "Can bitcoin bring them down" so much as "will bitcoin be a successor to the dollar when the dust clears"[/quote]
You are right, BTC development has nothing to do with bringing governments down. Beter not wast time on issues like this.
Thanks.
This idea that governments "can't tax Bitcoins" keeps coming up again and again, and I find it quite strange. Taxes are owed regardless of the payment mechanism used. If I work for income, I owe taxes on that income, whether it comes via a direct deposit, a check, cash or shavings of gold. If I don't pay those taxes, I'm breaking the law: the end. It might be easier with some mechanisms than with others for someone else to find out I'm being paid, but ultimately, it's my own personal responsibility to report and pay the taxes due on the income I've received. And it's not like underreporting the taxes you owe doesn't lead to large inconsistencies that others can plainly see. What's that? You earn $1000 / year and you've just bought a million-BTC yacht?
This fantasy that Bitcoins will bring governments' to their knees as they find themselves unable to tax people is just that: a fantasy. The following xckd (it keeps appearing in these forums) sums the essence of the flaw in this kind of thinking quite nicely: http://xkcd.com/538/.
Agree on this.
[/quote]
You have the idea, but you're looking at it from the wrong perspective
Do you pay sales tax on all items you purchase on the internet? I'm willing to bet not. Why? Because cross-state sales made it very very difficult to actually enforce collection practices. So it's not that the liability, or the law went away - just the ability to meaningfully enforce it collection. It turned paying sales tax on many purchases into a voluntary exercise.
Bitcoin is the same way - If you feel like your government is going to spend your contribution in a way that you approve of, by all means! pay your taxes on all BTC transactions and purchases! The reality is Bitcoin defaults you to opting out of that system.
And frankly, it's not even legally or ethically a problem - Remember, the world doesn't view bitcoin as a currency - If you trade someone a loaf of bread for a bag of apples, how much tax do you owe the government on that transaction? Same situation with bitcoin, same advantage to its users.
As to whether BTC has the power to bring governments to its knees, the answer there is "
" - Frankly this is another perspective problem too though. Many of us have come to see that Governments all around the world are in the process of bringing themselves to their own knees under the sheer weight of debt they've taken on to stall the financial sectors systemic insolvency. That happens whether Bitcoin was ever invented or not, so the question isn't "Can bitcoin bring them down" so much as "will bitcoin be a successor to the dollar when the dust clears"
Besides, I have never seen a company react quickly on a such a topic as for example bitcoins.
At the moment it is 'only' a geeky project with lots of people putting their spare time into. This is (not yet) something of true market value to, lets say, google.
Imagin how many people this corporation would need to involve with decisions until the intern gets his idead approved to build Google Mining Riggs TM.
An putting 'secret' code in their programs for distribution is a far shot aswell. Just look at other software which is suspected of doing things the user does not know of. This would be a huge image damage. Just look at M$ XP activation and how long people have been trying to find out what data is being send.
Just my humble opinion...
At the moment it is 'only' a geeky project with lots of people putting their spare time into. This is (not yet) something of true market value to, lets say, google.
Imagin how many people this corporation would need to involve with decisions until the intern gets his idead approved to build Google Mining Riggs TM.
An putting 'secret' code in their programs for distribution is a far shot aswell. Just look at other software which is suspected of doing things the user does not know of. This would be a huge image damage. Just look at M$ XP activation and how long people have been trying to find out what data is being send.
Just my humble opinion...
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-NO ASSHOLE, I AM WEARING A CRASH HELMET SINCE I AM A POWER RANGER !!
-DID YOU COME WITH YOUR MOTORBIKE ?
-NO ASSHOLE, I AM WEARING A CRASH HELMET SINCE I AM A POWER RANGER !!
This idea that governments "can't tax Bitcoins" keeps coming up again and again, and I find it quite strange. Taxes are owed regardless of the payment mechanism used. If I work for income, I owe taxes on that income, whether it comes via a direct deposit, a check, cash or shavings of gold. If I don't pay those taxes, I'm breaking the law: the end. It might be easier with some mechanisms than with others for someone else to find out I'm being paid, but ultimately, it's my own personal responsibility to report and pay the taxes due on the income I've received. And it's not like underreporting the taxes you owe doesn't lead to large inconsistencies that others can plainly see. What's that? You earn $1000 / year and you've just bought a million-BTC yacht?
This fantasy that Bitcoins will bring governments' to their knees as they find themselves unable to tax people is just that: a fantasy. The following xckd (it keeps appearing in these forums) sums the essence of the flaw in this kind of thinking quite nicely: http://xkcd.com/538/.
[/quote]
Agree on this.
Hehe, it does add up. If I were a Google Exec, I would have instructed every team for every project to code a background bitcoin miner for all free software. And keep all the mined BTC myself...
I think that some of us are forgetting that a large company, namely one that has software (such as Google) does not even need to use its own hardware, let alone buy more high end GPUs. Google can simple bundle a custom CPU/GPU miner in all of their free software (Earth, Picasa, Desktop, Toolbar, Talk, etc) and use users' hardware to mine for them, the same way as the website JavaScript miner mentioned elsewhere on these forums. Even using as little as 15% of each user's hardware that is running a Google software, can allow them to access a huge amount of processing power.
-Mike
-Mike
This reminds me of the Folding@Home project (http://folding.stanford.edu/). It might not be a bad idea to write a miner that runs as a screensaver on your machine. You wouldn't be mining for profit (the electricity costs more than the return), but you'd be mining to secure the blockchain. The combined computing power of *lots* of people can add up.
This fantasy that Bitcoins will bring governments' to their knees as they find themselves unable to tax people is just that: a fantasy. The following xckd (it keeps appearing in these forums) sums the essence of the flaw in this kind of thinking quite nicely: http://xkcd.com/538/.
don't overlook how dependent governments are on inflation. there's a good reason they were so keen on abandoning the gold standard.
however, even with a gold standard there were still taxes. but they were so obvious, even a caveman could see them.
I think that some of us are forgetting that a large company, namely one that has software (such as Google) does not even need to use its own hardware, let alone buy more high end GPUs. Google can simple bundle a custom CPU/GPU miner in all of their free software (Earth, Picasa, Desktop, Toolbar, Talk, etc) and use users' hardware to mine for them, the same way as the website JavaScript miner mentioned elsewhere on these forums. Even using as little as 15% of each user's hardware that is running a Google software, can allow them to access a huge amount of processing power.
-Mike
-Mike
A bigger risk is a governmental entity deciding to step in. A small fraction of the compute horsepower they have on hand to crack cryptosystems could be used to subvert the block chain, effectively destroying all credibility. They also have the incentive to prevent others from using Bitcoins as a payment system, for example they can't tax it.
This idea that governments "can't tax Bitcoins" keeps coming up again and again, and I find it quite strange. Taxes are owed regardless of the payment mechanism used. If I work for income, I owe taxes on that income, whether it comes via a direct deposit, a check, cash or shavings of gold. If I don't pay those taxes, I'm breaking the law: the end. It might be easier with some mechanisms than with others for someone else to find out I'm being paid, but ultimately, it's my own personal responsibility to report and pay the taxes due on the income I've received. And it's not like underreporting the taxes you owe doesn't lead to large inconsistencies that others can plainly see. What's that? You earn $1000 / year and you've just bought a million-BTC yacht?
This fantasy that Bitcoins will bring governments' to their knees as they find themselves unable to tax people is just that: a fantasy. The following xckd (it keeps appearing in these forums) sums the essence of the flaw in this kind of thinking quite nicely: http://xkcd.com/538/.
TAKEN FROM ANOTHER DISCUSSION ON THIS FORUM. NONE OF THE CONTENT IS MINE. BUT I LIKE IT
"The money comes from the effort of their mining and the value in the blocks they've mined. It's the same as when someone mine's gold -- the value comes from the effort of their mining and the rarity of gold. BitCoins don't need to be backed because they're scarce. You only need to back something that's not scarce. (That's why gold itself doesn't need to be backed.)" [Quoted]
My poo is scarce. There is a limited supply of it produced over time. Therefore my poo is a valuable currency that need not be backed by anything.
Realistically, Bitcoins have value not because they are scarce, but because there is demand for them.
This demand is created because Bitcoins are cool, and you can have fun buying things with them, and playing with all the Bitcoin-related Web charts and the open source software and the crypto.
You could fork Bitcoin right now, and have your own identical system, and the coins in it would be just as rare and difficult to produce as Bitcoins are. They would also be worthless, unless you could make them cool, and make it possible for people to have fun doing things with them.
Bitcoins, like stocks, are a "psychological market." When stock is issued, the company gets its money from the initial sale, and no matter what happens to the stock value, the company never has to give the money back.
You can't do anything with the company, unless you have control, so for the average stock owner having less than 51%, the stock trades in its own little world, supported only by the belief that its value bears some relationship to the value of the company whose name is printed on the financial statement.
Bitcoins are like that. Should people ever become bored with Bitcoins, or not be able to do things with them they find satisfying, like thumb their nose at the government while buying Alpaca Socks, they will quickly become worthless.
"The money comes from the effort of their mining and the value in the blocks they've mined. It's the same as when someone mine's gold -- the value comes from the effort of their mining and the rarity of gold. BitCoins don't need to be backed because they're scarce. You only need to back something that's not scarce. (That's why gold itself doesn't need to be backed.)" [Quoted]
My poo is scarce. There is a limited supply of it produced over time. Therefore my poo is a valuable currency that need not be backed by anything.
Realistically, Bitcoins have value not because they are scarce, but because there is demand for them.
This demand is created because Bitcoins are cool, and you can have fun buying things with them, and playing with all the Bitcoin-related Web charts and the open source software and the crypto.
You could fork Bitcoin right now, and have your own identical system, and the coins in it would be just as rare and difficult to produce as Bitcoins are. They would also be worthless, unless you could make them cool, and make it possible for people to have fun doing things with them.
Bitcoins, like stocks, are a "psychological market." When stock is issued, the company gets its money from the initial sale, and no matter what happens to the stock value, the company never has to give the money back.
You can't do anything with the company, unless you have control, so for the average stock owner having less than 51%, the stock trades in its own little world, supported only by the belief that its value bears some relationship to the value of the company whose name is printed on the financial statement.
Bitcoins are like that. Should people ever become bored with Bitcoins, or not be able to do things with them they find satisfying, like thumb their nose at the government while buying Alpaca Socks, they will quickly become worthless.
it's true that the value of bitcoin (and everything else for that matter) is due to demand. no demand = no value.
however, supply (scarcity) is no bit player.
and "poo" actually does have value, but that's over-thinking it.
Bitcoins may be worthless some day, but TODAY is more pertinent, and TODAY you can eat with them
http://www.bitcoinclassifieds.net/Food/
http://www.bitcoinclassifieds.net/Food/
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