Bitcoin Revolution: More Retailers are now accepting this non-government controlled 'currency'

Townhall ^ | 01/15/2014 | John Stossel

[Dutchboy88]

"You say that Bitcoin is the same as these private markets. But Bitcoin is not controlled by some small private group. It is controlled, if you can call it that, by thousands of independent nodes, each enforcing the rules of the system on a publicly available ledger. One of these nodes, or even a large group of nodes cannot simply create and fill accounts to their benefit. This is substantially different than these private markets."

I am likely doing a poor job of describing the problem with bitcoin that is so similar to all the other "barter" systems. Barter, in general, is loosely understood as any mechanism for which value given and value received is conducted without the use of US currency. Thus, bitcoin is going to turn into a barter system whether the purists wish to designate it otherwise, or not.

Further, you say that there is essentially no way that any individual/group may create a bitcoin out of thin air, thereby "filling their account" (or issuing chits to themselves). Famous last words, my FRiend. Kids can hack NASA, and they can hack bitcoin. Watch for the next few months and ask, "any counterfeits in the system?" That is what barter does...it amplifies the opportunity for counterfeit because the foxes own the henhouse.

But, go ahead and buy into it. When the crash from volatility sets this thing to $ 50 per bitcoin, down from $ 970 (okay, I was admittedly wrong about $ 1700), then notice how many squeal because it won't translate into the US$ they gave up.

[Database]

Thanks for the clarification. The Bitcoin economy is by your definition a barter economy as users are already exchanging value using it outside the USD. No going to be about it.

We’ll see about the script kiddies being able to break the Bitcoin system. While I don’t know every jot and tittle I have a good understanding of the system and it looks solid so far (I’m a programmer).

You indicated upthread that you don’t see the point of Bitcoin. Personally, my interest is in a secure payment system where I don’t have to expose my banking and id information to theft. Having the transaction be cheaper is a plus, though it may not be any cheaper once most of the bitcoin are produced. I would much rather see a stable price so I can transact without the downside risk. So if it falls to $50 and stays stable at that, I’m good.

FRegards,

Database

[Errant]

I absolutely do not understand (read that, "see any point to") the interest in bitcoin.

No argument there. Enjoy your work and your depreciating dollars.

[Semper911]

Got it. So it’s like a stock, there was an “IPO” of sorts, and now people are just trading on faith that there will be value when they want to sell.

But someone had to get the real money for the first set of bitcoins sold. Unless they just gave them away.

I guess it could work. For a while. Until there is a scare like a security breach or something that causes everyone to want to sell at the same time and the faith is diminished.

I am not trying to be a downer here, but it all seems sketchy to me. Honestly, I don’t see the point.

[Errant]

It takes awhile to get your head wrapped around the concept. It has kind of an abstract quality to it. Easier to understand than printing money out of thin air like the Fed does though. All Bitcoins are/were "mined" at some point. People got "real money" or whatever for the first Bitcoins mined, just as you can get "real money" or whatever for Bitcoins mined today or tomorrow.

Try this explanation: http://www.coindesk.com/bitcoin-explained-five-year-old/

[Dutchboy88]

"So if it falls to $50 and stays stable at that, I’m good.

Let me help with that... "So if it falls to one pair of mediocre shoes or a half hour of plumbing and stays stable at that, I'm good..." Weren't we supposed to rid ourselves of that pesky US$???

[Database]

Yes, if I can go out and do an hour of plumbing for 2 BTC and then by a pair of work boots shipped to my door for that 2 BTC without exposing my banking and personal id info, I’m fine.

[Dutchboy88]

"The price of bitcoins, snippets of digital code that can be used as money, has fluctuated wildly since the currency started trading in 2009. The price has swung from more $1,200 to less than $600, then back to around $800 in just the past two months. The most recent plunge followed news that Chinese regulators had decided to prohibit the country’s banks from dealing in bitcoin. But the Kings and other merchants that transact in bitcoins use intermediaries to rapidly convert the currency back into dollars and avoid risks from the price swings."

Excerpted from an article just now appearing on Yahoo Finance. Sounds promising if you immediately convert to US$. Wait...hmmmm.

[Database]

That merchants have a way to accept bitcoin that mitigates downside risk is great news for someone like me as it means adoption is on the way, not as a replacement for the dollar, but as a useful mechanism and medium of exchange. I’ll be able to use a convenient and secure method to make my payments. Widespread adoption should flatten out the price fluctuations eventually, though it will likely mean increases in the USD/BTC exchange rate in the short term.

[Dutchboy88]

"...not as a replacement for the dollar, but as a useful mechanism and medium of exchange."

This is exactly what I have been saying. If it is not a replacement, if you stay in the US$ economy, then you are just adding an layer of activity, but accomplishing nothing substantive. And, all of the risks of piracy, counterfeits, padding of accounts by hackers (or miners) is still right there alongside your disdain for the US$. I wish you well, but this is just not for me.

[Database]

You don’t see anything “substantive,” but others seem to value what the technology accomplishes. I value improved security relative to other electronic transaction mechanisms, merchants value reduced costs relative to the same. We’ll see where is goes.