Topic: (Un)Quick post from Japan. No politics please..... - page 3. (Read 4760 times)

@creighto:
The 'You' in my questions refer to the development team. These were views they expounded during previous conversations.

'Bitcoin is no worse in this respect than any fiat currency that you can name.'

Thats actually the point I am making. It is worse as long as you can still pay your taxes in the official fiat or make fillings from gold as there is no final backstop to it.

'That is a risk, but is dependent upon the 'accepter of last resort' having enough credibility to make the case that their version is actually better than Bitcoin.'

Again, thats the point I am making. ANY accepter of last resort would be better than now. But the first credible contender will invariably want their own algorithm, which is not a technically insurmountable problem.

'Why, indeed.  Why would these institutions start their own currency to compete with Bitcoin?  That's not a trivial question, motivation is important.'

Morrocco: Inflation. Weedbars: Security blah blah....all the good things you guys talk about in other posts.

'Applecoins would be centralized'

Technically (please correct me if Im wrong as I probably am) don't Bitcoins have to be centralised to an extent? There must be some form of register showing who owns what? Plus, I don't think the public would care at all if the infrastructure could handle it more smoothly. Most people don't see money as a political act.They see it as a beer and a bag of chips at the pub.

@Silversurfer.
'I LOL'd when he said a big pile of Bitcoins was a problem.'
Its only a problem in as much as you can't eat them, use them to pay taxes, deposit them in a bank or get beer and chips at the pub. You know that. If you had 20,000 of them, the first thing you would do is try and get rid of most of them. Or no??

@Steve
'Well, you implied that gold is somehow better because of its metallic properties and I think its metallic properties are irrelevant'

No,my position is that gold is accepted worldwide (again, Im not a goldbug) therefore people KNOW others will accept it. Thats why its better. A despot in India can escape with his gold to Vietnem secure in the knowledge that his gold has value there. Thats the only thing I am implying.

'Gold and bitcoin are basically accounting units that do not require centralized management'

Except that gold, as a system, cannot be duplicated. No company tomorrow (or government) can suddenly design 'another gold'.

'I'm excited to see where bitcoin leads.'

Me too! I'm just feel it won't be this particular algorithm.

@Dude
'bitcoin can still succeed as a medium of exchange.'

Yes, it CAN.........my question is if it WILL.....
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Thanks for your replies and time everyone. The whole thing is totally awesome. I think that Creighto is a bit pissed at me, but frankly, if you can't take a look from a few steps back then you aren't being objective. I would say further to his 'political act' statement that ALL money is a political act. Bitcoin is a wicked concept, but its replicable which is a fatal flaw.

IF the concept takes off, then the first Government (or massive company) out there to stand behind an algorithm will cause a flood out of Bitcoin to the more 'secure' competitor.And they wouldn't be interested in anything but their own algorithm. Why would they? After all, the interest that the people who made Bitcoin has is tied to their own hard work and the value of the Bitcoin they received in the first few months. If you had 100,000 of the things because you were one of the first miners, you'd be pretty damm excited too.

Your point seems to be that bitcoin is not a good store of value, even if this is 100% true bitcoin can still succeed as a medium of exchange.

You cover a whole lot of ground (and a lot of ground that people have already discussed a great length in this forum).  I won't try to respond to everything, but instead just offer a few points:

- Bitcoin does have plenty of intrinsic value...not as a thing, but as a system (the software platform, trading sites, merchant services, escrow services, the mining community (which secures transactions), and the various people and merchants that use it on a daily basis)

- I think most people would agree that competition from another system that works substantially like bitcoin is a threat to bitcoin...the best way to counter that is to keep improving bitcoin's intrinsic value...at a certain level of adoption, a bitcoin competitor/successor would want to leverage the bitcoin infrastructure (and they would have strong incentive to bootstrap their own currency into existence using bitcoin)

- Gold's metallic properties were only relevant in bootstrapping it as a currency...today, its value has little or nothing to do with its metallic properties.  It is not valuable as money because it's used as jewelry, it is used as jewelry because it is valuable as money.  What does this have to do with bitcoin?  Well, you implied that gold is somehow better because of its metallic properties and I think its metallic properties are irrelevant.

- Gold and bitcoin are basically accounting units that do not require centralized management

- The only thing that will cause bitcoin's value to go to zero is some fundamental technical flaw that renders it useless as money.  That's not out of the realm of possibility.

Are people plotting how to "monetize" their bitcoins (kind of an odd way of putting it since bitcoin is money)?  I really hope so because I would welcome a drop in the price.

So, gold makes for a pretty good and almost pure physical form of money.  While bitcoin is pure money.  I'm excited to see where bitcoin leads.

Have I drunk the bitcoin kool-aid?  yes I have

I LOL'd when he said a big pile of Bitcoins was a problem.

I didn't see a question, only a statement.  Most of us old salts don't think that bitcoin is similar to gold except that it is designed to mimic gold if it could be used in a digital realm.

Right?  Well, at least there was a question mark, but there still isn't a specific concern that can be addressed.

People say no all the time.  That's the default response even in the fiat currency world.  If you were really coming from an economic background, you would know that the market doesn't function anything like the above scenario.
Prices go up, prices go down.  That is the way of the world.  Bitcoin isn't different in this respect, except by a matter of scale at present.
Perhaps they will.  That wouldn't detract from it's usefulness as the currency of the Internet.
Bitcoin is no worse in this respect than any fiat currency that you can name.  And bitcoin has the advantage that no one is passing laws to compel you to use bitcoin.
No, we don't.  Who have you been listening to?
The army stops accepting wages in ZIM because the government has printed so much that it's market value trends towards zero.  The death of a fiat currency is always a political event.
Technically, yes.  Go ahead a try it.  Let's see how successful you are at playing catchup to Bitcoin.  It's taken Bitcoin two years to reach this point.
That is a risk, but is dependent upon the 'accepter of last resort' having enough credibility to make the case that their version is actually better than Bitcoin.

Why, indeed.  Why would these institutions start their own currency to compete with Bitcoin?  That's not a trivial question, motivation is important.
Not everyone.  Not me.  Applecoins would be centralized, and when the government comes to get their cut, applecoins will drop in value relative to Bitcoins.
That depends on whether or not the public actually agrees that Applecoins are the safer option.  I would not.
Wait, you actually still expect the Euro to exist in another decade?

Hi everyone, I'm posting here from Japan.

I have a background in teachnology from decades ago, but come here from an economic background. I came to Bitcoin from financial websites and was very interested in the concept. I have spent a few hours following threads and searching in the forums, but haven't been able to find any queries that address my exact concerns. I think these are pretty much the first things that anyone coming from a finance direction would put forward.

Before I knew the forum etc existed I was in contact with the project development team, but they didn't really offer much in the way of concrete rebuttals. After seeing on this forum that they (as people having first access to capital, in this case as the original miners one presumes...) have a bunch of Bitcoins themselves, that makes sense.

However I was wondering if you, as Bitcoin members/enthusiasts/users etc could give me your personal thoughts on these following matters. Please note, I am not interested in the mechanics of Bitcoin or why fiat goes to zero or how corrupt the Fed is yadda yadda. Thats all by the by and has nothing to do with Bitcoin and its success thereof. 

Anyway, my queries to the development team are pasted below. Sorry if its an essay, but I am intrigued. As I said, this is probably one of my only trips to the tech side of the net, I'll be back with the money pigs soon and want to be able to talk knowledgeably when the topic surely arises. 
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You have already moved Bitcoin beyond the 'hobby' realm, so the next step is actual real finance. Unless you can start to impact in this area it will never be more than it is now (despite exponental recent growth rates). Therefore you have to consider what could be fatal to Bitcoin. I can see some obvious candidates, none of which are it being 'outlawed' or whatever conspiracy people consider being the big dangers mentioned in your interview.

A: You relate Bitcoin most closely to gold in the discussion of intrinsic value. Yet I don't think this is correct. Gold, finally, can be used for something, whether industrially or decoratively. The reason that someone in (say) Vietnam saves in gold and not Dong (which is a GREAT name for a currency btw) is that no matter what happens,the value of gold can never go to zero. A person in Sth Africa or Cuba knows the same thing. They know that someone, somewhere, will ALWAYS want it. That, if you have enough of it, you can escape your country and buy a house in Brazil or whatever. This is a very important distinction between Bitcoin and gold (and no, I'm not a gold bug)....which brings me to my next point.

B: Stability. Going to zero in value (see point C) doesn't even need to happen for Bitcoin to never get off the ground in a significant way. As long as everything flows along nicely, of course there are no problems. But you haven't had a real test of the currency yet. No-one has bought a house with it. No-one has started accepting it as their wage exclusively etc etc. Now, this may happen in the future of course, and I'm sure that it will be all over the media when it does. But for it to get off the ground, people must be able to put their faith in it. Right?

And faith is a weird thing.

Imagine you amassed enough Bitcoin to actually buy something significant. Looking on your site, I see people selling bandwidth for Bitcoin. O.k, say I get enough Bitcoin playing poker to buy a server companies ENTIRE bandwidth. All of it. For 25 years. So I basically own it and then on-sell the bandwidth for Euros. So the owner of that server company is trading his income stream, the one he pays his taxes with and buys groceries with, for Bitcoin. So my problem (a huge pile of Bitcoin) is now his. He is fine, as long as he can trade it for (say) some dudes entire stream of T.Shirt production for the next 15 years. But what happens when someone says 'no'?

We saw it in the housing bust. House prices always go up. Until they don't. A 'million dollar house' is only such until someone pays a million dollars for it. Otherwise, its a million dollar house on PAPER only. You say "Its worth a million bucks." O.k, fine, sell it for a million bucks then. But you can only sell it as long as the next person believes the same thing. The last person left holding the bag loses a LOT. This is the 'greater fool' problem. The first person to blink will cause a cratering in value across the market of ALL Bitcoin.

Therefore people will always hedge their bets with Bitcoin. They won't have much faith. They will say "I'll take Bitcoin to X small amount". Or make sure they can move significant amounts before they will accept any, impacting liquidity. Or run a small side business in Bitcoin but not their main job.

The less 'intrinsic value' something has, the less stable it is, but the main point impacting stability is the currencys lowest bound value. Silver may drop in value by 80%. But you can always sell it for SOMETHING to scrap metal dealers. Houses may drop in value by 80%. But you can always live in them.Linden Dollars can always be used as long as Second Life is going etc etc. This very fact makes them more stable than Bitcoin.  A million dollar house's lowest bound of value (or silver, or Linden dollars) is NOT actually zero. But Bitcoins lowest bound IS zero (see C). Which makes Bitcoin NOT a good currency.

C: Bitcoin could easily drop in value to zero, by becoming a victim of it's own success. You say it has intrinsic value. But thats just it. YOU say it does. But Bitcoin is a concept that has no 'accepter of last resort'. Yes, fiat currency is printed out of the air. But a Government, by decree, will only accept taxes in that currency. Therefore, it DOES have a value. And a big reason that fiat currencies die, is not overprinting per se. Its the fact that Zimbabwe stops accepting ZIM from its own people and demands USD instead. Or the army does.

Bitcoins algorithm itself is not special (if I understand correctly?). Anyone can start another algorithm of their own and say "O.K, THIS is the new digital money." Right?

So Bitcoin has 'value' because enough people are using it that it is established. But as soon as someone with more power as an 'accepter of last resort' shows up, Bitcoin will be shafted. Not instantly maybe. But 100% certainly.The concept will live on of course. Its just that Bitcoin itself won't, making everyones current Bitcoin worthless.

If Hollands weed bars suddenly started using Ganja-coin, or Morroco (being tired of ruinous inflation) start using their own algorithm, Bitcoin will instantly begin dropping in value to zero. Why?

Say, for example, Apple decides it likes the concept. It racks up its own algorithm and with every Itunes or software download it also sends the customer a slice of the AppleCoins it has mined. It also lets people mine AppleCoins themselves.These can be used to buy whatever Apple is selling, from here on out. Boom. You guys are out of business because everyone who likes the idea of digital currency will use that instead.

People will instantly make the mental leap "Well my wealth is in Bitcoins. These non-Bitcoins will also go up and down in value, but at least I will always be able to buy a house in Marrakesh/ 500 grams of weed/ 10,000 copies of Tron/ whatever and SELL THEM." This fact will cause people and businesses to ditch Bitcoin for the 'safer' option.

The very reason that someone with 1,000,000 Euros can sleep at night, even with Greece causing it to go up and down like an elevator, is the fact that the person knows that no matter what happens, Siemans or Vodafone or whoever, will want those Euros to pay their taxes. Or a cop will take it as his salary.

Bitcoin doesn't have this. Therefore Bitcoin will always have this sword of Damoceles hanging over it.

You have half your wealth in Bitcoin xxxxxx (name redacted). I'm sure you have made the calculation yourself. Money, any money, is just a concept until you buy something for actual consumption. Because you, yourself, know that at some point you'll be married with some kids (assuming you aren't already) and want to buy a house. Or have a hospital bill to pay. Or just want to get some dollars in the bank for a rainy day.

So what distinguishes your Bitcoin stash from Pre-IPO stock options on a tech start-up? You have to "Cash-out" if you will. And I'm sure you have started to think how you can monetize your stash of Bitcoin in the final analysis. I put it to you that even your faith in Bitcoin isn't really THAT solid on honest reflection and you are in first place in the queue. How can you expect the millions AFTER you in the queue to have faith?

So the concept of Bitcoin is solid. But because of the reasons above (stability, zero lower bound value and extreme vunerability to competition) it can never be more than a curiosity surely. Comments?
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Thoughts appreciated. Im NOT a hater btw, its a fascinating concept. This is just the first thing that popped into my head when I saw them being interviewed and this wasn't covered at all.