How is this amazing anonymity going to prevent business’s from keeping accounting records and wanting to only do business with real people? Also are we going to force business’s to only sell to anon? Is a bank only going to lend to someone they have no historical accounting record on?
We would expect consumers to buy from anon? Not allowing them to keep track of business reputation, branding, ect…? If not then why the hypocritical standard applied to business(much to their detriment).
The whole concept is completely backwards and extremely counter-productive. At the same time once we admit that accounting is a fundamental necessity for a healthy capitalistic society we also must concede that accounting records are easily, and often seized, by governments.
So I don’t even know why you guys are discussing about anonymity as if it were anything special.
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IN short while it’s not possible for governments to hi-jack individual transactions they could easily drive the whole operation under-ground and outlaw it.
No, it’s not the same thing as saying “there’s a really high threshold”… the entire line of thinking is deeply flawed. You are presuming a fiat monetary order in thinking about “thresholds”. Natural money is simply an (already valuable) good which begins to be used for indirect exchange until its primary value is derived from its monetary use. There is no cooperation or threshold required for natural money to emerge. The only thing that need be assumed is self-interest. Watch any lecture by Hoppe on money and banking, he explains this in crystal clear language. Only fiat monies need to think about something like a “threshold.”
Please read the post before replying to it. Government making BitCoins illegal was listed as option C. Option B was related to the government taking over BitCoins and controlling them (production, distribution, tracking, etc.). You are straw manning the anonymity thing.
So what you are saying is: While the government causes heavy boom bust cycles with fiat money which pushes people to alternatives, it will prohibit every attempt of a competing currency, except BitCoin, for 1000 years, while a 100% of the people start to use it every day, because it is the only way avoiding a cheating government?
That only would be possible if government itself is involved in a conspiracy to push BitCoin. This is not even a million to one chance scenario (I guess nowadays it would be more appropriate to say trillion to one..).
I did never question what happens if all people already accepted it. You have to explain in plausible way how it gets to that point, and this is for sure not a plausible scenario.
I am not sure. If the government would give way to private money after BC already has a 100% marketshare, what could lure people away from it. Only one thing:
The security of commodities not to be able to lose their entire value
The big danger for BC is that if the value of BitCoins falls below a certain threshold again it quickly becomes worthless, due to a panic that causes a massive selloff of BCs and the missing value for direct use. A gradual shift to any other kind of private money, even to another unbacked crypto currency could cause the death of BC, which at the same time would endanger its own existence if it becomes obvious what happened. A major hacker attack or sudden rise in numbers of hacker attacks due to a security lack found in the BC-software could do that. Even the spreading of the mere possibility of a not stoppable falling value of BCs might cause a self-fulfilling prophecy that slowly starts but ends fast.
A stabilizing anchor is missing, something that backs it if its usefulness as currency and store of value is questioned. Sooner or later anything is questioned. Look at PMs (=precious metals), they have been questioned already, but they are not dead yet. On the contrary it seems they are on the rise again. Not possible for BC, if really questioned once by the market.
I think you overestimate the zero tolerance level of the government (and the guards in the example) heavily.
Then why did you bring up the intended purpose of BitCoins? It is entirely irrelivant to our conversation about their use. Use does not equal purpose. Whether BitCoins were designed as a currency, a collectcible or as music doesn’t matter. How they are used is all that matters.
You state (as quoted above) that “they do not [have direct exchange purpose]”. Purpose does not matter. Perhaps you are trying to say, “they do not have direct exchange use”. Are you making a blanket statement for all humans on the planet? No human could possibly find a use for BitCoins outside of indirect exchange? It is impossible for say, an autistic person to hoard them just because they exist and the person likes mathematical oddities? If you are making the “they do not have direct exchange use” argument then you are necessarily making a claim for all humans on the planet. Is this the case?
It doesn’t matter. The premise only points out any given item has potential to be used by someone in an unintended way.
It doesn’t matter. The conclusion is the logical culmination of the premises and the premise only stated that any item can be consumed for a purpose other than it’s designed purpose. Consumed as a collectoble is a simple possibility if you want an example. Your (or someone else’s) imagination is the limit.
Because you have stated multiple times in this thread that BTCs cannot gain widespread acceptance. If you are changing your position to that of probability of success then discussion is futile because neither of us can know the probability of success. BitCoins have advantages over physical commodities and fiat currency as I have described many times previously (the four attributes of BitCoins). Whether these advantages are enough for people to make the switch is unknowable to you and I.
Again you are trying to understand the why of human action. What matters is that user-0 exists and valued BitCoins. Why he did this is of no importance. Whether he did it with hopes BitCoins would turn into a currency or because he likes collecting SHA256 hashes doesn’t matter. What matters is that user-0 was willing to accept BitCoins in exchange for other goods/services withouth the ability to trade them away therefore he accepted them as something other than a medium of exchange.
Our conversation in a nutshell:
filc: Question A.
micah: Answer A to question A.
filc: But answer A doesn’t address question B.
micah: Answer B to question B.
filc: But answer B doesn’t address question C.
micah: Answer C to question C.
filc: But answer C doesn’t address question A.
I have addressed each of your concerns separately throughout this thread. If you don’t believe me then please provide a list of your questions in a single post and I will address them all in one reply.
The answer to your current question is the 4 attributes of BitCoins that I have brought up many times before. These 4 attributes provided simultaneously are what make BTCs superior to “lumps of crap” as a medium of exchange. These 4 simultaneous attributes also are what make BTCs advantageous to fiat money and physical commodities in my opinion.
The proof uses formal logic so in order to refute it you either need to disagree with one of the premises or you need show a logical fallacy. It’s only 4 lines long so if there is a logical fallacy it should be simple to show. If you disagree with a premise please quote the premise and provide an argument as to what is wrong with the premise.
I can appreciate the argument that it is highly likely that the government will do A, C or D at some point before BitCoins really hit off. In fact, I agree with this line of thinking and believe it is the biggest danger BitCoins face. BitCoins, unlike other potential currencies, are able to survive better under option C which is the route that the government has always taken in the past. This is why I am keeping my hopes up for BitCoins.
If the US/EU government decides to make BitCoin use illegal it will halt the growth of the BitCoin market in those countries but they can still be used in other countries. If China or Japan allows the growth of BitCoins in such a scenario and eventually they do grow to become a national level currency in one of those countries then people can trade BitCoins under the table in the US/EU as well because BitCoins would have a solid exchange rate with USD just as RMB and YEN have an exchange rate with USD right now. This would encourage growth of BitCoins even within the illegal markets for things ranging from blackmarket transactions to simple under the table transactions between friends or small businesses.
I am still somewhat on the fence on this matter but currently I think that once a medium of exchange is established it gains an intrinsic value as a medium of exchange. This means that even if the item no longer has non-exchange value, it now has value as a medium of exchange and that value cannot suffer a sudden loss any more than a physical commodity can suffer a sudden loss of value. For example, if people find a cheaper and more effective industrial solution to the use of gold and also find a cheaper and more effective jewelry solution then gold will not suddenly drop in value to 0 overnight. Assuming gold was used as a medium of exchange (which it really isn’t anymore) it would still be used as a medium of exchange unless something better came along. By better I mean something that can serve the same purpose as gold but also has some advantage to gold (perhaps more scarce, easier to mint, more difficult to tamper with, more difficult to mimic, etc.).
If something better does come along then I agree, BitCoins would drop in value to near 0 though I do not suspect the process would be instant and people would have plenty of time to transfer their holdings over to something new/different.
I’m not suggesting that this qualifies as the much sought after first use, as it probably isn’t, but a rally has been triggered in the bitcoin markets since Friday. I appears that, as a direct result of the international raids that the US FBI performed against three major poker sites, many online poker players have a sudden interest in BTC. Does a poker chip qualify as an alternative use? I do not know.
Because your now arguing that BTC’s are or were used in direct exchange. As if they were an end unto themselves, not a means to an end. Your trying desperately to make BTC’s work with the regression theorum and it’s making your argument look worse.
Convenient, you can’t provide an example.
I am not changing my position and I clarified that in the statement. Don’t try and put my criticisms of you back on me.
The advantages are irrelevant. Can you explain to me how BTC’s are useful in direct exchange? Can you provide an example? Who has carried BTC’s as an end unto themselves, and not as a means to a future end?
FTFY
Your still stuck on answer A. We never got past that. You tried to drag me all over the place so you thought you were making headway but in reality we never got past my original post. You are not desperately trying to prove how BTC’s are used in direct exchange. It’s taken you 20 pages to get that far. I’ll admit it’s good headway.
I don’t ahve a bunch of concerns or details. I had 1 point. Your the one that introduced an ocean of other thoughts and ideas. Many of which had nothing to do with “Question A”.
You mean you claimed. You didn’t show anything. You made an assertion, you have yet to provide any logical framework on this discussion at all.
Just give up. No purchased BTC’s hold and to keep as an end to meet satisfaction.
IF this was followed a bit more rigorously we wouldn’t be here for 20 pages. I’m not sure what of formal logic your aware of, and I’m even more confused that you think what you’ve provided has anything to do with logic.
Do you know the difference between deductive reasoning and an assertion?
Answer the question Mr Logical. In what way can Bitcoins be used other then their designed purpose?
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Some more logic for you. Mr Logical.
Just because something CAN be used differently doesn’t automatically mean that it ever was. Why on gods green earth would you draw that conclusion and call it logical?
Furthermore I am still flabbergasted as to how BTC’s can be used differently.
Here is an old thread wherein a poster tries to buy uncirculated bitcoins from the genesis block for roughly 20 times their market value at the time. He was unsuccessful.
filc, while you’re waising your life away bashing btcs, other people are actually working on proving you wrong. BTC surpassed USD and it’s heading higher.
Definition: Money is the most widely accepted medium of exchange.
Definition: A medium of exchange is a thing that is used in indirect exchange.
Definition: Indirect exchange is the exchange of a thing for the purpose of exchanging it again for another commodity that one does desire for consumption or for production. (http://mises.org/rothbard/mes/chap3a.asp)
He was referring to BTCUSD being greater than 1. He was not referring to trading volume.
Assuming market equilibrium where BTCs and USD are both equally widely accepted the number should level out at around 47619 (1,000,000:21) meaning BTCs have a long way to go. This is derived from the M0 money supply (1 trillion) over the total BTC supply (21 million).
I hadn’t looked at it that way, and that’s pretty cool, but if Bitcoin is ever going to be as popular as the US FRN then that’s going to happen in the next couple decades, I would think. And then the monetary base of Bitcoin won’t be anywhere near 21 million, as it will take till about 2130 to get there. Around 2018, roughly 16 million will have been issued and around 18 million by 2022.
Perhaps my use of the word “threshold” as if there is some bright line was distracting, but it still seems a question of how many people value the item. It was already conceded above that if a whole bunch of people, for some freak reason, valued bitcoins highly they could become a currency. You keep saying things like that a good was “already valuable,” but that is potentially misleading phrasing because there is no Austrian sense of “valuable” except to specific actors. If we look at specific actors valuing specific things, it becomes clear that if we assume a large number of people value bitcoins for some reason, they could become money.
Neither does noting that there is another intermediate stage (limited use in indirect exchange) really change things. If many people value bitcoins intrinsically (like for some freak reason - I’ve never argued that this is likely), they will be useful in indirect exchange with certain people (and even direct exchange with a few), then they can become “valuable” in that everyday sense for a large number of people who don’t value them intrinsically, then they could become money. (Also, I never mentioned cooperation, so no comment on that.)
Micah, I think filc thinks you are mistaking direct exchange for indirect exchange, which you may have done previously (I don’t know) even if you got it straight now. But I think you (and I) are arguing that some people do - or at least could - value BTCs for direct exchange, like they get a rush off of seeing their hash reach a certain number, or whatever happens. Their “consumption” of the BTCs is that rush, just like the consumption of a seashell might be admiring its luster.
Bottom line: If enough random weirdos decide they love BTCs intrinsically and will accept them for direct exchange for real goods, they could become money. I don’t think anyone here disputes that, so I think all the disagreement is illusory. I am not sure what manner of wordplay is causing people to miss that, but perhaps we have all made some sloppy word choices; if we sit back and just look at the situation, I think we will all agree (all of us who aren’t arguing about how likely anything is).
I am aware that BitCoin production is designed to occur logrithmically with time but speculators know of this as well. Because it is predictable they will speculate the price ahead of the supply curve. That is, a long term investor (investing for 2130) will invest under the assumption that there will eventually be a money supply of 21M and will essentially short BitCoins on the market with the expectation of their devaluation with time. While there aren’t likely to be many investors investing that far out, investing up to 2050 isn’t unthinkable when there will be maybe ~20M in circulation (correct me if you know a more precise number).
What this means is that in a large enough market BitCoin value should approximate estimated future BitCoin money supply. Of course, it won’t match exactly because there is always fear that BitCoins will fall out of favor before they reach their projected production potential which is where the risk of investing comes in and how investors would make money on such speculation.
I could short USD knowing full well that the government is going to keep printing them but the risk of the US (and USD printing with it) collapsing before I dump is too high for my taste.
Also, on the flip side of shorting BitCoins is that an increase in usage will increase demand and therefore have an opposing effect to long term speculation adding additional risk to speculative investment. My number provided previously is purely a hypothetical model of a static market where the demand is is fixed and the supply is increasing at at a known rate. Realistically demand is highly variable making my number just an ‘order of magnitude’ number.
The ~21 million number is based on an arbitrary placement of the decimal, for readability. There will actually be 2,099,999,997,690,000 units of exchange. I don’t think we’re in any real danger of “running out”. As the value of BTC increases, they will be divided into smaller and smaller units, down to 0.00000001. By the time that amount has any significant value, the decimal will have been moved several times for readability.
