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Aussie Bank Asks "Will Bitcoin Replace The Dollar?"
Zero Hedge ^ | 12/27/2013 | Tyler Durden

Posted on 12/27/2013 7:39:33 PM PST by Errant

Bitcoin is rapidly becoming part of the everyday lexicon. Following David Woo's investigation, National Australia Bank's Emma Lawson looks at its creation, use, and quality as "currency," and find that Bitcoin meets most, but not all the conditions required to be a currency. Lawson concludes Bitcoin may not be the most efficient monetary system, given the costs to create, and that the supply set-up can be seen as both an advantage (hyperinflation is not possible) but also a disadvantage (there are conditions which may create deflation). But, if enough people believe in it, and use it, it may be here to stay as a payment system. Simply put, its success (or failure) will depend on establishing trust and adoption.

(Excerpt) Read more at zerohedge.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: bitcoin; currency; dollar; gold
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1 posted on 12/27/2013 7:39:33 PM PST by Errant
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To: Errant

How many divisions does Bitcoin have?


2 posted on 12/27/2013 7:40:43 PM PST by 2banana (My common ground with terrorists - they want to die for islam and we want to kill them)
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To: Lurkina.n.Learnin; nascarnation; TsonicTsunami08; SgtHooper; Ghost of SVR4; Lee N. Field; DTA

Very good article with plenty of relevant information.

3 posted on 12/27/2013 7:42:20 PM PST by Errant
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To: 2banana

Up to 8 digits.


4 posted on 12/27/2013 7:42:40 PM PST by Errant
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To: Errant

Mmmm...first I hear of Overstock.com, now the Aussie’s. This Bitcoin concept is sure gaining currency (no pun intended). Well, maybe a little.


5 posted on 12/27/2013 7:44:00 PM PST by Paulie (Buy local, bank local, exert your influence locally; the left will fold like a cheap suit.)
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To: Errant

“(hyperinflation is not possible)”

If it were to replace the dollar as a reserve currency it would have to hyperinflate just to catch up.


6 posted on 12/27/2013 7:47:20 PM PST by Lurkina.n.Learnin (This is not just stupid, we're talking Democrat stupid here.)
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To: Lurkina.n.Learnin

No, it would be the opposite. Hyperinflation is when a currency buys less and less. If Bitcoin were to skyrocket in price, say by replacing a country’s currency, it would purchase more and more.


7 posted on 12/27/2013 7:51:25 PM PST by Errant
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To: Errant

Your right. The price of bitcoins would have to raise dramatically.


8 posted on 12/27/2013 8:01:30 PM PST by Lurkina.n.Learnin (This is not just stupid, we're talking Democrat stupid here.)
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To: Lurkina.n.Learnin
I suppose that's were the author is getting the "deflation" characteristic upon adoption. Deflation is were the prices of goods and salaries fall in relation to the currency (i.e., too few dollars chasing too many goods).

I'd rather have deflation than hyperinflation any day, as long as the money is good. Bitcoin is yet to be fully tested, IMO.

9 posted on 12/27/2013 8:04:13 PM PST by Errant
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To: Paulie

Will be glad when Overstock.com starts accepting them. I have my eye on a new watch that they carry. ;)


10 posted on 12/27/2013 8:06:33 PM PST by Errant
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To: Errant

How will the word, “bitcoin” be used in a sentence when used as a verb? Anyone have some good examples?


11 posted on 12/27/2013 8:08:18 PM PST by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; me = independent conservative)
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To: Errant; RichInOC; Prince of Space; JoeFromSidney; TNMountainMan; alphadog; infool7; Heart-Rest; ...

12 posted on 12/27/2013 8:09:08 PM PST by narses (... unless you eat the flesh of the Son of Man and drink his blood, you do not have life within you.)
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To: Errant

No. There’s not enough of them to handle our economy.


13 posted on 12/27/2013 8:09:09 PM PST by discostu (I don't meme well.)
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To: Errant

The idea that deflation is an unspeakable horror that must be prevented at all costs is absurd. This is promoted by entities such as the US federal government and the financial elite who benefit from fiat currencies that constantly diminish in value.

Prior to the establishment of the Federal reserve in 1913 US dollars consistently increased in value. If you stuffed $100 into your mattress in 1850 it would be worth a lot more in 1900.


14 posted on 12/27/2013 8:16:31 PM PST by Junk Silver
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To: Lurkina.n.Learnin; Errant

the current bitcoin market cap is under $10b.

the market cap of a valid world wide currency would have to exceed $1 trillion

that means the bitcoin market cap will need to grow at least 100x it’s current value. possibly 1000x


15 posted on 12/27/2013 8:23:21 PM PST by sten (fighting tyranny never goes out of style)
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To: Errant

Bitcoin is going the way of the unicorn.


16 posted on 12/27/2013 8:23:35 PM PST by Beowulf9
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To: sten; discostu; Lurkina.n.Learnin
the market cap of a valid world wide currency would have to exceed $1 trillion.

Since it's divisible by up to 8 digits, you could have something like 2,100,000,000,000,000 units to work with. And there are other crypto-currencies like Litecoin, of which there will be four times as many. So it should meet the market demand.

17 posted on 12/27/2013 8:30:19 PM PST by Errant
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To: Junk Silver

Agree.


18 posted on 12/27/2013 8:31:03 PM PST by Errant
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To: discostu

22,000,000 bitcoins ... divisible to 8 digits

that’s 2,200,000,000,000,000 units of currency.

the minimal demonization of the US dollar is the penny. there are less then $3,000,000,000,000 in the M1 supply, or about 300,000,000,000,000 units of currency

or 1/7 th the total amount able to be represented by bitcoins

more then adequate to become an M1 currency unit


19 posted on 12/27/2013 8:40:25 PM PST by sten (fighting tyranny never goes out of style)
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To: Errant

I read the whole thing but I don’t know any more than I did before. I don’t understand the language in which it was written. I’m too old to learn it.


20 posted on 12/27/2013 8:48:11 PM PST by WVNan
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