Topic: Vow not to exchange bitcoin for fiat (Read 3855 times)

I don't 100% follow the business model, but think it's a good initiative.  I don't have a personal interest in an asset guaranteeing a stable dollar price.  I could just hold dollars if I wanted them.  Just do it and see if you get investors.  I understand you're already mining, so it's only lost time writing up documentation, right?

I consider every example you gave as speculation. If a merchant hopes to get USD out of the deal, then speculation (risk) must be part of his equation. Any loss greater than his risk tolerance must be considered irrational gambling, ignorance, or just bad luck which just as easily could have gone in his favour.

I am making no qualitative statement as per bitcoin ("is this good for bitcoin?"); Bitcoin simply is. It is only for humans who use bitcoins to make qualitative statements ("is bitcoin good for me?").

In that respect, each bitcoiner wears two shoes, likely with different weights in each. Am I speculating with bitcoin or do I value a bitcoin in and of itself? Personally, I'm quite comfortable with my bipolar/schizophrenic perspective and I believe early adopters will need to get used to this state of 'crazy'.

Not entirely, as basically any merchant accepting BTC is forced into some extent of speculation no matter what. At the very least, you're stuck speculating until the payment confirms.

But as it stands right now, there's still a lengthy time between when the buyer pulls the trigger and when you have a USD value that's on it's way to your account. Companies like Bit-pay and MtGox (if they start acting as a merchant provider as well, I've toyed with this idea but trusting MtGox with any amount of income is still a bitter pill) can reduce this time by automatically liquidating the BTC for you ASAP, and could potentially do it further by guaranteeing you a set rate at say, the first confirmation. The issue there is that that act moves the speculation onto them, so instability in the currency means they have to widen their margins to stay solvent.

Finally, holding BTC at all is basically speculating. With the uncertainty of the economy (it wasn't long ago that I'd commented about the "stability" around $5 was leading me to develop a frame of reference for the price that didn't involve mentally exchanging the currencies to work out if something was a good price), you can accept BTC for one item, then if your buying power halves before you go to buy something with that BTC, you just got hosed. It's tough to convince anyone to just let that shit slide.

Are you personally backing the price up with dollars?

rofl, nice post.

The bitcoin exchange is exciting because it is volatile and volatile because bitcoin is exciting. Take any revolutionary idea, hell, just about any idea or company, and it will swing violently in perceived value on its slow march toward general acceptance. Ultimate stability will come only after we trade fiat denominated in bitcoin rather than bitcoin denominated in fiat. A system like Ripple will be stable because it has enormous interpersonal friction. That is both an advantage and a disadvantage. Bitcoin is enormously liquid, that is its advantage. This highly liquid 'pure money' (money whose only function is money with neither industrial nor aesthetic value), bitcoin has perhaps the least friction of any quantifiable commodity humanity has every created. Speculation does not harm bitcoin, it only makes is more liquid and ultimately more stable. There are no bitcoin 'bank runs'. No one should ever hold more of a volatile asset than one can handle. Bitcoin is burning gasoline.

The only people who are complaining about the volatility are those who are attempting to speculate but are getting burned. Otherwise, I must suggest: Check your motivations and expectations! If you are holding bitcoin because they are interesting, because you think a bitcoin has a value in and of itself, then you should not care about the exchange rate.

We may wish bitcoin were more stable. Just as a revolutionary wishes for peace.

Speculators are attracted to Bitcoin because during the inflationary stage any time the growth of the economy outpaces the newly minted Bitcoins there's money to be made. We borderline need at least a few speculators as market makers to smooth out the discrepancy between the two factors so we can have some semblance of a stable price. What we don't need is runaway speculation like we had on the way to $30, but I don't think anyone's going to make that mistake again.

I still personally think the focus needs to be on finding new people to join the economy as merchants. New users spending Bitcoin is a shitty way to focus, because in almost all cases (except for shit that's illegal or where privacy is imperative) there is very little to be gained and a whole lot to be lost buy buying something with Bitcoin versus your local currency. Bitcoin benefits me greatly, as it lets me accept micro-payments and/or "group pay" without getting ravaged by fees, and I don't have to worry about chargebacks as much - but beyond the ability for a few guys to sit down and run their GPUs at night in order to get a "free" server for that month, there's almost nothing to be gained for my customers to use it.

I realize it's a catch-22, that merchants won't want to bother with it if there aren't potential customers ready to use it, and that that's where encouraging people to spend rather than exchange could help...

I think this is completely backward.  Bitcoin is not targeted at speculators and is explicitly designed to facilitate trade.  Speculators are attracted to bitcoin because it is actually valuable.  Bitcoin isn't any more or less aligned with these *isms than those other technologies you point out.  Also, systems like Ripple that are based on debt are not a good idea for the basis of a monetary system (just as the USD and other fiat currencies based on debt are not a good idea).  A debt backed money eventually turns everyone into debt slaves to each other.  As debt becomes further and further extended, you eventually reach a point where people cannot possibly repay and begin to default.  The whole system becomes a house of cards that comes unglued when certain key debtors (or groups of debtors) default.  Ripple isn't as bad as fiat currencies where currency only exists with some debt obligation backing it and there is a central issuer, but it's still debt based and encourages people to mortgage their future in exchange for current consumption.

I'm of and for the 99% as much as the next Occupy Wall Street protester, and my first fiat->bitcoin exchange was at least in part motivated by an anarchist desire to "boycott the federal reserve".  I hopped on the bandwagon and also advocated it as a "people's currency" - decentralized and p2p.  But I was naive.

I don't believe that the founders/early adopters with similar motives were disingenuous.  I think most were genuinely surprised (but perhaps not appalled) to see bitcoin coopted by government fiat - pumped and dumped in a most viciously capitalist manner.  Why would a crypto-anarchist be any more immune to greed than the next guy?

Sure, I want to rage against the machine and I hope I live to see the day that the dominant system is made obsolete by a new paradigm.  I hope I can contribute to that transition myself.  But in the meantime, I'm just another dog in a dog-eat-dog society fighting for survival.

In the current, "real world highly inter-connected economy", "cash moves everything around me".  Everything is for sale, even livelihood has its price and the value of all assets come from speculative powers far outside of my control.  Therefore, I am a gambling man (or dog, so to speak) because I have no other option that I can see (and maybe that's my own failing).


I'm in it for both, though I must admit that thus far, I've done much better with the technology than the 'musical chairs'.

It's clear to me that the technology and potential of bitcoin will only take it so far: a speculative decentralized e-commodity.  Forex for phreaks, gambling for geeks and money laundering/tax evasion for little more than chump change (unless the bubble re-inflates).

Technologically, its a new paradigm.  Socially: more of the same.


Bitcoin embodies the ideals of pure anarcho-capitalism.  Not surprising, given the capitalist hegemony.  Bitcoin alone is not, IMO, a seed for social progress. 

Bitcoin is set square in the sights of speculators (or vampires if that's how you see them).  The infrastructure seems built primarily for them (as opposed to merchants or craftsmen) and the only way they'll ever go away is if the money goes first.

I think you are right to look elsewhere for something more aligned with socialism, communalism, anarcho-syndicalism or whatever you want to call it.  OpenTransactions, Ripple, the MetaCurrency Project, the P2P Foundation, and community gardens seem like good places to start.

The responses have been fascinating. Both positive and negative, the presumptions have generally been unfounded. At no point have I mentioned exchange rates as a motivation. Not once.

"Hi, I want to reduce my dependence upon fiat paper. I want to use and support bitcoin as much as possible. Hey you too? Cool. Let's hang."

"Oh, that guy over there agrees? Cool. Let's work together."



Whether it's called a pledge, vow, gentleman's agreement, statement of intent, or preference, I am in fact looking for names. I do intend to contact people and find out what they are up to and how we can achieve our common goals. Feel free to PM me, and send your PGP key if you have one, 'cuz I think that's cool too.



I don't mean to single the above poster out; It's the majority world view here.



Yes, this would be an excellent project. I think it would be best to integrate with the many existing web sites that already try to do this. Your network could also be a platform for encouraging suppliers outside of the bitcoin economy to join.

I am looking for a community whose finances might be better modeled in OT and Ripple. Bitcoin currently enjoys wider appeal and is generic. Perhaps bitcoin best serves the transaction level and balancing accounts, but not collaboration and trust.

I think OP has a very strong point.

However a "vow" is not really the way the direction I think this is aimed at would be accomplished. Reducing the amount of bitcoins exchanged for fiat is a good thing, if those bitcoins remain in the business volume of the economy.

Simply saving them will not accomplish anything.

What we would need is some sort of 'Bitcoin supply and demand network' were Individuals and Companies can list their demands for raw materials, goods, services, etc.. and the things they are able to supply.
This could be a simple website like little than online bitcoin yellow pages or something more sophisticated where available volumes and locations are indexed and mechanisms provided to find the best matching business partners depending on requirement. The thing could even be decentralized in a separate p2p network or, most fancy integrated into the blockchain mechanism.

Independently what solution will emerge we are at the point where we need something like it, no way around that, unless we wait till the storm is over, people have left and there is only a core group left and start the effort in a calmer environment. (But don't complain about selloffs then....)

The problem with this is that most Bitcoiners would view the only workable solution as counter-productive.

No one, no one is going to insure Bitcoins that you hold "in your hand". The only plausible solution is a "bank" style service where they hold your Bitcoins, they invest in security that's measurable and displayable to the underwriter. Even that's fraught with pitfalls though: how does this entity make money? I can see only two ways: 1) Charging fees to hold your Bitcoins (pretty unpalatable, really) or 2) Loaning them to short sellers at interest.

Even if you figure out how to pay for it, the underwriting process is not particularly attractive to any insurer as well - the actual value of the underwriting would need to be recalculated almost daily, can swing wildly, and how much it would cost to buy X more Bitcoins at some point in the future is tough to forecast. Heck, I think about the only person able to insure such a company would be someone who already has a fuckton of Bitcoins (either an early adopter or a heavily invested speculator), as I don't think throwing USD at this problem will fix anything.

I'm sure someone, somewhere will solve this problem eventually. There's almost certainly money to be made for anyone who does. But until that happens, any comparison between Bitcoin and fiat money is mostly apples to oranges, as they're both insecure in their own respective ways.

Me is!  


I like the idea of taking a personal vow.  For many reasons. Not the least of which is reflecting on what one really wants to accomplish.
'The unexamined life is not worth living' as Socrates supposedly said ( a kinda personal vow of his perhaps )... but I won't get into a
philosophical essay.

And taking a vow, or making a similar public announcement, of what one holds dear ( the image of Arlo Guthrie and Pete Seeger singing
"This Little Light of Mine" at the Occupy protests just now comes to mind ) often can have a magnetizing effect to spark up another's
passions.    

But I emphasized personal because I feel it is best to let others, look within ( or not ), and find their own relationship and way with
the changing world and the novel things it provides.  

Are you, by chance, a JW? You can PM me with your answer. I'm guessing after reading the first paragraph of the quoted post above.

To date, I've yet to cash out Bitcoin.

Your position is understandable but, assuming you purchase Christmas presents, could you not buy gifts for your loved ones with Bitcoin? If you were planning on spending fiat for gifts, use that for paying the electric bill, and Bitcoin for gift buying.

As soon as somebody does not plan on converting Bitcoins to fiat, the current exchange rate becomes less important. I think it would be very important to slowly decouple the value of a Bitcoin from the current Mt.Gox exchange rate. This is what we would expect to see anyway once the Bitcoin economy is big enough.

A possible way to support such a development, would be to switch to some moving average when pricing products and services.
This would be some kind of a middle ground between a "I sell for fiat immediately" and "I hereby solemnly swear not to exchange Bitcoins to fiat ever". Everybody could sell Bitcoins whenever they like, but the prices would be much less volatile and with longer averaging windows, the value of Bitcoin would become more independent.

A downside of course is, that falling exchange rates would make spending Bitcoins even less favorable and that it could be used by merchants to justify overpriced offers (if they used longer averaging windows in a downturn and shorter during an upturn).

What do you think?

Netrin, I think I understand where you are coming from, but your "solution" isnt one, for reasons others have explained. You are basically asking merchants to hoard bitcoins, thats not a solution to anything, its more of a problem, reinflating the bubble.

A more useful vow would be one to vow not to speculate on bitcoin exchange rates, ie not buying them with fiat currency with the sole intent of selling them for fiat currency again. A pledge to only buy BTC you intend to spend as bitcoins, and only sell BTCs you acquired through trade or mining.

Such a vow is still pointless and wont change anything, but if people would actually behave like that, we would get a much more viable bitcoin economy.

Bitcoin must be attractive to normal people,
not scared to normal people by "vow" or "pledge".

I think Green Address tech is a good step.

Scalability and FastDownload is other problems.

Bitcoin is not built on VOW. 

Why vowing not to exchange Bitcoin for fiat? Who is going to enforce that vow? Are you advocating for binding contracts on this subject?

If people trust Bitcoin, people will stay. Otherwise, they will leave. As simple as that.