Topic: How to fix bitcoin - page 3. (Read 10311 times)

What action exactly do you think the Federal Reserve is going to take?

creighto:  you're very much like me in what you've stocked.  however, i believe in stock mkt cycles and we've way over reflated the last 2 yrs and its time for Ben to let alittle deflation in.  you're starting to see it today i stocks.  anything but USD cash is very risky right now.

I doubt it; since the FedReserve is functionally owned by the membership banks while also being beholden to the federal government due to it's charter monopoly.  If BB ever openly screws either side, the game is up.

Personally, I keep a significant portion of my savings in things other than US $ denominated assets, but admittedly not a majority.  I have silver rounds (no gold, can't use gold, can use silver for it's antimicrobial properties), more guns & bullets than everyone in my family could use at the same time, a well stocked pantry, tools and the means to make other tools, (makerspaces are an awesome resource) and a relatively small value in bitcoins.  I actually buy stuff in bitcoins, but save in material objects.

"So would every other currency as compared to the US $, so long as a functioning federal government exists and people continue to expect that to persist.  This isn't an issue unique to Bitcoin."

you're right about that not being an issue unique to Bitcoin but as you said everything would tank while the USD does a moonshot.  this is how i foresee Ben saving the Fed and their franchise of the USD as a reserve currency.

Funny!

I ment that they are a good bartering item, and those three calibers are the most commonly used in the United States.  22lr is the king by a wide margin.  And if the future ever looks anything like Zombieland, finding a handgun in one of the two latter calibers should be relatively easy.  At least in the land of 'Life, Liberty and you can have my gun when you pull it from my cold dead hands'.  Places other than the US are probably going to have more difficulty, but those places don't let civilians buy bullets to begin with.

Especially if you can throw them, really fast.

So would every other currency as compared to the US $, so long as a functioning federal government exists and people continue to expect that to persist.  This isn't an issue unique to Bitcoin.

Investing in any currency is a bad idea if you think Armageddon is near.  Even gold has near zero utility under such chaos, but at least silver still has antibacterial properties that makes it worthwhile to keep some of it around.  Before the modern era of safe city supplied water, most people had cisterns.  Americans would take a 50 cent silver piece and drop it into the cistern.  Powdered silver was used on wounds during the Civil War, and up until WWII, field surgical devices were often plated in silver to reduce the need of disinfecting of the devices between surgeries in a combat situation.

No currency is useful without a functioning market, and that requires a civilization.  Bulletts are a good idea, though, even if you don't own a gun.  22lr, 38special and 9mm are the best choices.

personally, i'm preparing for very hard times here in the US.  i don't think we avoid the austerity that the Europeans and Middle Easterners are facing right now.  our debt is just too big and the banks just won't let us off the hook.  my bet is that Ben reverses the liquidity spigot right here right now to wrong foot every inflationist on the planet (which is just about everybody).  in that case, bitcoin values plunge.  but that doesn't mean its a doomed concept.  ppl are just plain sick and tired of the Fed yoyoing the economy with their hairbrained policies regarding the cost of money.  bitcoins promise is that it gets rid of money manipulators like Ben.

If we don't have a world-wide mesh network and bucket sized fusion reactors, I don't think it can be helped. Better to keep some silver beside your paper money and/or bitcoins. You could invest in guns and bullets, though. Or food and water. All of these are investments you make based on your predictions about the future. Investing in Bitcoin is not a good idea if you are preparing for Armageddon.

We're also only about 5-10 years away from the possibility of a fully p2p internet based on long-range wireless mesh networks.  In fact, within 25 I'd bet the internet will be essentially armageddon-proof.

In that scenario, I'd prefer to own bottled water and tins of creamed corn.

I'm sure everyone would accept that Bitcoin is an experiment. It's not about accepting Bitcoin's conclusive victory over gold, but addressing the notions about "backing". Also, stellhouse seemed to say that we need new merchants to fill in for the old ones that stopped accepting bitcoin because it's not backed by anything. If you say that we need services that accept Bitcoin payments, you're preaching to the choir, but I fail to understand the reasoning of steelhouse.

Edited for the obvious typos.

as a holder of PM bullion, i'll argue that PM's have history behind them as well as a physicality.  ppl like to touch and feel there money.  also the hobo on the street can trade it as well as USD.  these are the advantages of the current system.  having said all that, i do see potential in Bitcoin but it has a long uphill battle to fight.  Steelhouse is right, ultimately you need large merchants who will accept it.  all this talk here about how bitcoin is already a currency is way too premature.  i've looked at many of the transactions and they are way too small in value and volume to be conclusive.  in fact, there is an attempt by the geek community to "prop" transactions and commerce to legitimize the bitcoin concept.  not saying it to criticize, but it is what it is.  its just way too early to tell.

if you look closely at the MtGox All Time chart, you'll see its value leaps correlate very well to QE2 and the subsequent stock mkt ramp.  this whole drive to develop a new currency, Bitcoin, is by ppl like you and me who are trying to get away from Ben and his devaluation of the dollar.  the stock mkt is a mood indicator reflective of this sentiment (at least for now) of the dollar down, assets up mentality.  if this indicator reverses (i think we are there) and we get deflation with a subsequent rise in the dollar, you will see Bitcoin values crash as ppl scramble for dollars.  you're already seeing today in the drop in Bitcoin as stocks are down.

These discussions seem to boil down to whether there is intrinsic value or not. It's very hard to argue that the concept of intrinsic value has an instance in the human world. Also it's very hard to define philosophically. What is it that you value, for a reason that is in itself not a value?

And there is this, in my opinion, false statement that gold, and "things like gold" have intrinsic value. What's backing that statement? I think the thought comes from the apparent contrast between gold and bitcoin. But bitcoin is a currency (and Bitcoin is a protocol) and gold is a chemical element. Currency of gold on the other hand is not too distinct to bitcoin. Bitcoin is too high tech, but I'm sure we can devise a scenario where Bitcoin has value and gold doesn't.

I disagree. Care to argue why you think this is the case?

in the short term, bitcoins success will be pegged to the stock mkt.  if it goes down, as i suspect it soon will, then the value of bitcoins will follow it down.  bitcoin is an inflationary phenomenon.

Actually I agree with Bill on this. A lot of gold bugs fail to realize in the midst of their anti-government/anti-centralist rants, that 'backed by gold' means government decree "This note is worth so-and-so many of an .oz".

Saying that a currency has no intrinsic value and is just created out of thin air is like accusing a clock of making time out of nothing. The value comes from the economy, the dollar lost over 90 percent of its value in the last hundred years because the economy has grown in value by that much in the last hundred years. Are central bankers trying to optimize their advantage at the expense of everyone else? Probably, but they are a monopoly and can expect to behave like a monopoly.

I like bitcoin because it breaks out from the monopoly, not because I am against communities choosing to value something as a means of exchange, be it shells or little pictures of dead presidents. Besides, an economy should be able to grow regardless of who happens to own what shiny metal.

Gold-buggery can fuck off, so can monopoly-moneterism, the democratization of money is what I beleive in, and that's what I see bitcoin as. If the economy needs bitcoin to be worth a widget, good, that's what the economy and all the people in it need. No middle-men, no authorities, no money monopolies. If one day bitcoin is used to pay for hospitals and schools and roads by the communities chosen government made honest by improved democratic information and the rolling back of power monopoly... then I'm all for that.

Gold-fetish sociopaths that despise society can love bitcoin too, I don't care, so can nazi's, fraudsters, drug-dealers and socks sellers.

There already are several alternate currencies built using Bitcoin's code, each using a separate blockchain. So alternate bitcoin-type currencies are not hypothetical, they already exist.

For example in the bitcoin IRC channels I have a sample IRC bot that supports a number of these alternate currencies.

The way the bot currently works is each currency has an account with each of the other currencies. For example the Brits have a Botcoin account and a Canadian Digital Notes account and a General Retirement Fund shares account and so on.

This has the effect of each currency having balances of various other currencies it can use to "buy itself back" aka to redeem its coins.

If for example someone (such as the Canucks for example) had bought some Britcoins using Canadian Digital Notes then Britcoins would have a balance of 100 Canadian Digital Notes available to be used as "backing" for Britcoins, that is, available to be used for the purpose of buying Britcoins by spending Canadian Digital Notes, much as the Canucks already did to cause the Brits to have that 100 CDN on hand.

The bot keeps these backing balances separate. That is, it will not spend any more than the Brits actually have of each other currency/commodity on buying back Britcoins.

This is looking to be an interesting market, because of course once someone has managed to buy those (for example) CDN from the Brits in return for Britcoins, then that is it, the Brits have no more CDN left with which to "back" aka "redeem" Britcoins.

In other words the bot does not lump all CDN together, it tracks separate balances per each other currency, so CDN it obtained by selling Britcoins will only be used to buy Britcoins, not to buy for example Martian BotCoins. Martian Botcoins would have their own distinct CDN balance, consisting of CDN that had been used to buy Martian BotCoins, and only those CDN would be used to buy Martian BotCoins.

That simple mechanism makes the bot in effect act on behalf of each currency as an administrator of a "backing facility" providing "backing" individually for each currency.

These currencies seem especially well suited to situations in which moving of hard goods is awkward, such as when remote operators operate robotic/waldo facilities in remote galaxies so far away that only consciousness/telepresence/data can reasonably be shipped.

Instead of trying to ship you a hundred thousand tonnes of deuterium from, say, a galaxy in the http://galaxies.mygamesonline.org/ group of galaxies to, for example (though maybe forbidden by Zorg's terms?) a galaxy in the Zorg Empires group of galaxies, I could sell deuterium in one group of galaxies for digital coins then use those digital coins to buy deuterium in your local galaxy to ship to you, thereby saving shipping costs and thus maybe provide you with deuterium cheaper than if I shipped it from a galaxy far far away...

-MarkM-