Hello folks, I am kmarinas86!I had some problems lately with receivables at the company I work at. It has been several months stuck at the law firm, which has created quite a hassle.
I had earlier been skeptical about the viability of BitCoin. However, now realizing my mistake of generalizing it as a Ponzi Scheme, I see it as a gateway to a worldwide currency, and potentially the first, and maybe only, most widely-accepted digital currency. Such a currency, I know now, could have be used to prevent the sort of problem I have been having at work.
In me, there has been kind of a "good angel"/"bad angel" discussion going on. The "good angel" part of me wants to buy BitCoins and use them only for actual commerce, while the "bad angel" part of me wants to buy BitCoins as a speculative asset to make loads of profit to pay my debts. In practice, I will probably take a middle of the road approach, selling some, but not all of my gains in BitCoins, so that way I still know I am contributing to the market capitalization of BitCoins, which will ultimately provide the actual value to BitCoin. I believe that this practice will help prevent BitCoin from being a "Pump and Dump" scam.
I do have concerns though of what happens when bookkeepers begin creating ledgers in BitCoins rather than traditional currencies. Businesses traditionally have a need to save a good fraction of their revenue every period in order to be considered viable. If this concept is not changed, then we will ultimately see an increasing percentage of BitCoins sitting in ledgers of business accounts. We can easily deduce what happens to the other percentage of BitCoin money, which does not sit in ledgers of businesses.
Of course the entire BitCoin system itself has a ledger, known as a Blockchain. It would not be surprising to see this Blockchain evolve into something like a public ledger where, if permission is granted by both sides of a sales transaction, the revenue of a seller can be matched with the expense of a buyer. Declaring both the revenue-side and expense-side of a transaction would provide full accountability of the source of the revenue. The more companies choose to use the Blockchain as a ledger, then more and more businesses will be able to demonstrate their legal legitimacy.
Furthermore, since BitCoin is all digital, it would appear that a kind of "trickle transfer" system could be created where one conducts transactions having a value measured in Satoshis per second. The amount of Satoshis per second that can be created is without a fixed bound, although the amount of Satoshis per second each transaction could have would have to be capped at one or more levels. The benefits of using Satoshis per second include:
- If someone steals some of your "Satoshis per second", you only lose the amount of x Satoshis per second times the number of seconds of passed. Therefore, the user can put a personal limit on the number of outgoing transactions of "Satoshis per second" that can be added to their wallet, which also puts a limit on how fast their Satoshis can be stolen.
- If you lose your private key to some "Satoshis per second", then you only lose access to the amount of Satoshis that would have been transferred in that period of time.
- Normally, if you are selling a project to a client, such as for construction, and if that project is considered to be high risk for example, both the buyer and the seller of such construction may, understandably, want to receive before they give. However, by conducting transactions in "Satoshis per second", the money can be earned as the project is being done, rather than before or after project completion. Furthermore, the client could stop or pause a transaction in "Satoshis per second" when the service is no longer being rendered according to agreement or other reason. This provides the same concept as partial refund method without actually reversing any transfers of Satoshis.
- Using today's BTC to USD exchange rate, transactions conducted in Satoshis per second are comparable to a pay rate of 1 dollar per week. At the rate of US $150 per BTC, 1 Satoshi per second translates into 0.9072 U.S. dollars per week. If the value of BitCoins increases significantly, then instead of thinking of 1 Satoshi per second as approximately 1 dollar per week, 1 Satoshi per second can be thought of as approximately 1 dollar per day, or 1 dollar per hour, or 1 dollar per minute, etc.. This will eliminate the rather ugly usage of decimal digits that currently pervades the BTC system. Also, instead of rather technical and potentially confusing usage of SI number prefixes such as milli-, micro-, kilo-, mega-, giga-, etc. one can simply change period of time that the "Satoshis per second" are scheduled for. Going from 1 second to 1 year gives you a factor of over 31 million. Illustratively, if the value of each BitCoin goes up by 10080 times (from $150 per BTC to $1,512,000 per BTC), then 1 Satoshi per second translates into 0.9072 USD per minute. Notice the lack of need to use prefixes like "micro-" or "giga-" to express the value of the transaction.
- If you want to create a budget within your revenue that undergoes automatic "sequester" on a continuous basis according to the fluctuation of incoming revenue, budget line items could be literally transacted in a direct manner, and in real-time. For example, say you get a raise of "100 Satoshis per hour". If you wanted to budget 50% of your raise to your personal savings wallet, you could do this automatically. If you wanted to budget 10% of your raise to a new living room set, you could do this automatically. If you wanted to pay a 10% tithe or pledge according to your income, you could do this automatically. Just set the transaction id of your "100 Satoshi per hour" to "_____ Income". If you have to play fair with all the non-BitCoin users and pay a flat tax of 20% of your income, this too could be set as well. Now after all this, you have 10% left which is "10 Satoshis per hour", which by default value goes to your savings.
- If you think about it, it should be possible to allocate exactly 100% of your "Satoshis per hour" to various expenses. In this way, it would be theoretically possible to deal exclusively in "Satoshis per [unit time]" and avoid having to safeguard BitCoins yourself. This perfectly balanced budget can generate as much revenue as it consumes. In other words, all the money that is spent can be reearned accordingly, at the same rate. No hoarding required. Furthermore, instead of the focus on value per good, with a "perfect budget" the focus would transition to goods per value. In other words, the value requested is set by the customer equal to a percentage of one's income, and the seller provides the goods and services according to the ability of the company. The premium that the customer paid relative to normal goods or services rendered can be rewarded with proprietary currency expressed as coupons, discounts, private offers, special packages, customer points, travel miles, etc.. With this arrangement, services become more elastic and the prices become less elastic, driving higher innovation per cost than what exists in the current system, as well as increasing the financial competence of transactors. Competition becomes more "shop quality given price"-driven and less "shop price given quality"-driven.
- Of course, capital investment (the thing that normally requires excess revenue (or "profit") to exist) can itself constitute as a part of the service expenditures, if marketed properly of course. All this could be designed to be accrued in real-time as well. This solves problem whose existence was formalized by C. H. Douglas, inventor of the Social Credit model based on the "A+B Theorem". We can set "B equal to 0" (periodic). No money has to be borrowed in order to sustain revenues provided that "B equal to 0" (periodic), and no "Social Credit" in the Douglas sense is required to maintain the cyclical circulation of money. Stated another way, the demand for unearned money (i.e. borrowing, social credit, etc.) caused by the existence of B in all present-day economies can be eliminated entirely by eliminating B periodic itself. I also argue that, present day economics require B periodic > 0, which implies nominal growth in the money supply. If money supply growth is zero (even under a "gold standard"), the B of the economy is forced to stagnate, B periodic approaches 0, resulting in meager profits. This causes disaster in past and present incarnations of capitalism where productivity of capital is seen as tied to net accumulated revenue/investment (stock) which relies on the accumulation of B periodic over time as opposed to the rate of service expenditure/divestment (flow). See http://en.wikipedia.org/wiki/Stock_and_flow.
If we assume that computing power availability will not be scarce in the future, I think these extra features, if implemented in BitCoin first, will be very hard to duplicate on other digital currencies. Having a network effect that extends beyond BitCoin's functionality as a P2P digital currency and into accounting, audit, budget, and legal simplification will put in on the map and thereby prevent its value dilution by making 99.999% of all digital transactions in the form of BitCoin. By virtue of the much untold benefits of this approach, it may even become the "Universal Accounting System", making systems like QuickBooks, SAP, TurboTax, and such as transitional relics of the late 20th century.
You may call this idea by the catchy acronym
"P2P-SPS", which means
"Peer-To-Peer Satoshis-Per-Second".
