pancakeman Posted January 7, 2014 Share Posted January 7, 2014 (edited) E-gold was under financed and the people who ran it did a very poor management job. They did not do enough to verify accounts or prevent money laundering. The government shut them down but didn't send anyone to jail or anything like that, it was not "a conspiracy". No reason why someone can't start up a e-gold2. All centralized alternative currencies will meet the same end as Liberty Dollar / E-Gold / Liberty Reserve once they reach a certain size: http://en.wikipedia.org/wiki/Liberty_Dollar#Federal_Government_response It ends with the FBI kicking in the door and taking all your stuff: The Liberty Dollar offices were raided by agents of the Federal Bureau of Investigation (FBI) and the United States Secret Service on November 14, 2007. Bernard von NotHaus, the owner of Liberty Services, sent an email to customers and supporters saying that the FBI took all the gold, silver, and platinum, and almost two tons of Ron Paul Dollars. The FBI also seized computers and files and froze the Liberty Dollar bank accounts. Edited January 7, 2014 by pancakeman Link to comment Share on other sites More sharing options...
oakweb Posted January 7, 2014 Share Posted January 7, 2014 E-gold was under financed and the people who ran it did a very poor management job. They did not do enough to verify accounts or prevent money laundering. The government shut them down but didn't send anyone to jail or anything like that, it was not "a conspiracy". No reason why someone can't start up a e-gold2. All centralized alternative currencies will meet the same end as Liberty Dollar / E-Gold / Liberty Reserve once they reach a certain size: http://en.wikipedia.org/wiki/Liberty_Dollar#Federal_Government_response It ends with the FBI kicking in the door and taking all your stuff: The Liberty Dollar offices were raided by agents of the Federal Bureau of Investigation (FBI) and the United States Secret Service on November 14, 2007. Bernard von NotHaus, the owner of Liberty Services, sent an email to customers and supporters saying that the FBI took all the gold, silver, and platinum, and almost two tons of Ron Paul Dollars. The FBI also seized computers and files and froze the Liberty Dollar bank accounts. Kicking down what door? Please explain how this will happen when it's decentralized. Link to comment Share on other sites More sharing options...
pancakeman Posted January 7, 2014 Share Posted January 7, 2014 E-gold was under financed and the people who ran it did a very poor management job. They did not do enough to verify accounts or prevent money laundering. The government shut them down but didn't send anyone to jail or anything like that, it was not "a conspiracy". No reason why someone can't start up a e-gold2. All centralized alternative currencies will meet the same end as Liberty Dollar / E-Gold / Liberty Reserve once they reach a certain size: http://en.wikipedia.org/wiki/Liberty_Dollar#Federal_Government_response It ends with the FBI kicking in the door and taking all your stuff: The Liberty Dollar offices were raided by agents of the Federal Bureau of Investigation (FBI) and the United States Secret Service on November 14, 2007. Bernard von NotHaus, the owner of Liberty Services, sent an email to customers and supporters saying that the FBI took all the gold, silver, and platinum, and almost two tons of Ron Paul Dollars. The FBI also seized computers and files and froze the Liberty Dollar bank accounts. Kicking down what door? Please explain how this will happen when it's decentralized. "All centralized alternative currencies will meet" Link to comment Share on other sites More sharing options...
beb Posted January 7, 2014 Share Posted January 7, 2014 E-gold was under financed and the people who ran it did a very poor management job. They did not do enough to verify accounts or prevent money laundering. The government shut them down but didn't send anyone to jail or anything like that, it was not "a conspiracy". No reason why someone can't start up a e-gold2. Why do I get a feeling you're a gold guy who can't get over this thing that completely slipped by you? You seem obsessed with bitcoin although you've done nothing but ridicule it while simultaneously touting an alternative that's already been shuttered by the feds. With all due respect, this thread has been going on for months now and you haven't seemed to be able to grasp what exactly bitcoin is although several people have directed you to plenty of sources to get educated. Now I realize that you're probably not really interested in learning as much as slamming bitcoin but I have to wonder why you waste so much time on something like this. I mean, I don't dig up gold threads and go off on the gold people. I guess I could but it doesn't interest me so why bother? I'm fine with you lingering around and jumping in with your periodic proclamations about how bitcoins is a ponzi scheme built on tulips and pyramids but people, including me, have actually gone out of their way to provide you and others with valuable information that you ignore again and again. It just seems like it would be common courtesy or perhaps common sense to either quietly move on to another obsession or at least try to become educated so you don't just keep repeating yourself as the entire world continues to spin and advance around you. 1 Link to comment Share on other sites More sharing options...
farang000999 Posted January 7, 2014 Share Posted January 7, 2014 (edited) 1. I'm not a gold guy. 2. e-gold was shuttered because management did a bad job and did not do enough to stop money laundering not because of your conspiracy theories or because the government felt the concept itself was illegal. you might want to actually turn off Alex Jones and Max Keiser once in a while and try to figure what is happening in the real world... Edited January 7, 2014 by farang000999 Link to comment Share on other sites More sharing options...
farang000999 Posted January 7, 2014 Share Posted January 7, 2014 And I am not some e-gold advocate. I am simply pointing out that an e-gold accomplishes everything bitcoin strives for but it actually has intrinsic value. You think bitcoin > centralized currency because THE FEDS WILL KICK IN THE DOOR ALEX JONES TOLD ME SO.. Everything is a conspiracy for you gold bugs/libertarians/bitcoiners. Link to comment Share on other sites More sharing options...
farang000999 Posted January 7, 2014 Share Posted January 7, 2014 (edited) i and others have pointed out numerous flaws in bitcoin and failure of logic of those who advocate but all you have really offered in response is 1. BUT THE PRICE IS GOING UP THEREFORE I AM RIGHT and 2. Anyone who doesn't believe in Bitcoin is a government shill/doesn't understand it, etc What is it exactly that you think I don't understand about bitcoin or is complicated? 1. it is decentralized 2. it costs money to mine 3. libertarian douchebags think that it's going to change the world and bankrupt the banksters... 4. the quantity is limited 5. it will reduce fees associated with transferring money. Edited January 7, 2014 by farang000999 Link to comment Share on other sites More sharing options...
farang000999 Posted January 7, 2014 Share Posted January 7, 2014 http://krugman.blogs.nytimes.com/2013/12/29/an-ubernerd-weighs-in/?_r=0 obviously does not understand bitcoin... Link to comment Share on other sites More sharing options...
farang000999 Posted January 7, 2014 Share Posted January 7, 2014 http://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/ Link to comment Share on other sites More sharing options...
farang000999 Posted January 7, 2014 Share Posted January 7, 2014 (edited) Okay. Suppose that you’re on the island of Yap and it is the late 18th century… You want to get richer. You can either work on Yap doing something useful, or catamaran over to Palau where the limestone is, carve a big piece of limestone into a disk, catamaran it back, and use it as money. If the value of stone money is too low, it won’t be worth anyone’s while to catamaran over to Palau. Thus the stone money supply will stop growing if the price dips. As long as the relative desire to use stone money does not shrink faster than per-capita income on Yap plus the population of Yap grows, the value of stone money on Yap will be determined by its cost of production–that is, the cost of catamaraning it over to Palau, carving the limestone disk, and bringing it back… We can see this at work come the late 19th century. Europeans show up with steel tools that make it a lot easier to carve limestone disks on Palau. Thus there is a huge boom in the limestone disk-carving stone money-mining industry. And the value of stone money on Yap Falls as the money supply grows… Now suppose that you were on the Internet and it is the early 21st century… You want to get richer. You can either work doing something useful, or you can set up a botnet to mine BitCoins, or you can fork the code behind BitCoin and set up your own slightly-tweaked virtual cryptographic money network. Setting up a new, alternative network is really cheap. Thus unless BitCoin going can somehow successfully differentiate itself from the latecomers who are about to emerge, the money supply of BitCoin-like things is infinite because the cost of production of them is infinitesimal. How can BitCoin successfully keep itself differentiated from the latecomer copiers? By asserting, over and over again, simply that it was first. And this might work. But I am skeptical. By stressing that it has a trustworthy track record of being a safe store of value–and thus appealing to a history that the latecomers do not have. This works until someday, for some reason, demand for BitCoins falls. Then supply and demand drives the value down. BitCoin is then no longer differentiated as a safe store of value. Then the people who were holding BitCoin because they thought it was a safe store of value dump it, its price falls even more, and so it becomes even more questionable as safe store of value. And the downward spiral continues. Note that in these respects–unless it can successfully and permanently differentiate itself from other virtual cryptographic money networks–BitCoin is like fiat money, and unlike 18th and 19th century Yap stone money, in that its cost of production is zero. So how do actual fiat moneys maintain their value? Well, they don’t always do so–cough Zimbabwe, cough Weimar Germany. When they do so, it is because a government (a) accepts its money in payment of taxes, thus giving people a reason to hold it, ( doesn’t want the financial chaos that hyperinflation would generate, and so © sets its central bank the mission of being a currency sink–of maintaining the value of the currency by buying it back and burning it up if necessary. Thus I tend to be a “chartalist”: commodity moneys can maintain their value via their cost of production, but fiat moneys maintain their value when some very large too-big-to-fail entity backs them. In my view, BitCoin’s chances would be a lot better if there were some large and durable entity that promised to be a BitCoin sink if necessary. If, say, Google Cayman Islands were to start GoogleCoin, and announce that it would always stand ready to buy back GoogleCoins at a fixed real value, it could make a (small) fortune and, I think, eliminate BitCoin’s business in a month… http://equitablegrowth.org/2013/12/28/1466/watching-bitcoin-dogecoin-etc Edited January 7, 2014 by farang000999 Link to comment Share on other sites More sharing options...
farang000999 Posted January 7, 2014 Share Posted January 7, 2014 http://krugman.blogs.nytimes.com/2013/12/31/cynical-fantasies/ Link to comment Share on other sites More sharing options...
oakweb Posted January 7, 2014 Share Posted January 7, 2014 Okay. Suppose that you’re on the island of Yap and it is the late 18th century… You want to get richer. You can either work on Yap doing something useful, or catamaran over to Palau where the limestone is, carve a big piece of limestone into a disk, catamaran it back, and use it as money. If the value of stone money is too low, it won’t be worth anyone’s while to catamaran over to Palau. Thus the stone money supply will stop growing if the price dips. As long as the relative desire to use stone money does not shrink faster than per-capita income on Yap plus the population of Yap grows, the value of stone money on Yap will be determined by its cost of production–that is, the cost of catamaraning it over to Palau, carving the limestone disk, and bringing it back… We can see this at work come the late 19th century. Europeans show up with steel tools that make it a lot easier to carve limestone disks on Palau. Thus there is a huge boom in the limestone disk-carving stone money-mining industry. And the value of stone money on Yap Falls as the money supply grows… Now suppose that you were on the Internet and it is the early 21st century… You want to get richer. You can either work doing something useful, or you can set up a botnet to mine BitCoins, or you can fork the code behind BitCoin and set up your own slightly-tweaked virtual cryptographic money network. Setting up a new, alternative network is really cheap. Thus unless BitCoin going can somehow successfully differentiate itself from the latecomers who are about to emerge, the money supply of BitCoin-like things is infinite because the cost of production of them is infinitesimal. How can BitCoin successfully keep itself differentiated from the latecomer copiers? By asserting, over and over again, simply that it was first. And this might work. But I am skeptical. By stressing that it has a trustworthy track record of being a safe store of value–and thus appealing to a history that the latecomers do not have. This works until someday, for some reason, demand for BitCoins falls. Then supply and demand drives the value down. BitCoin is then no longer differentiated as a safe store of value. Then the people who were holding BitCoin because they thought it was a safe store of value dump it, its price falls even more, and so it becomes even more questionable as safe store of value. And the downward spiral continues. Note that in these respects–unless it can successfully and permanently differentiate itself from other virtual cryptographic money networks–BitCoin is like fiat money, and unlike 18th and 19th century Yap stone money, in that its cost of production is zero. So how do actual fiat moneys maintain their value? Well, they don’t always do so–cough Zimbabwe, cough Weimar Germany. When they do so, it is because a government (a) accepts its money in payment of taxes, thus giving people a reason to hold it, ( doesn’t want the financial chaos that hyperinflation would generate, and so © sets its central bank the mission of being a currency sink–of maintaining the value of the currency by buying it back and burning it up if necessary. Thus I tend to be a “chartalist”: commodity moneys can maintain their value via their cost of production, but fiat moneys maintain their value when some very large too-big-to-fail entity backs them. In my view, BitCoin’s chances would be a lot better if there were some large and durable entity that promised to be a BitCoin sink if necessary. If, say, Google Cayman Islands were to start GoogleCoin, and announce that it would always stand ready to buy back GoogleCoins at a fixed real value, it could make a (small) fortune and, I think, eliminate BitCoin’s business in a month… http://equitablegrowth.org/2013/12/28/1466/watching-bitcoin-dogecoin-etc Why does it have to differentiate itself? Also I realize you probably don't code, but there are a lot of reasons why Bitcoin is going to be loved by coders (think Zynga and Overstock, ATM's) over other Cryptos, but I'm not saying that other Cryptos won't make it.. I'm just asking why you think it's necessary for Bitcoin to do so for it to become successful. I believe there will likely be a few Cryptos that have significant value. Granted Bitcoin is a lot like Facebook or even Google in that it gains it's strength from the community that uses it. I don't see this community getting smaller, and I believe in the code, I believe the code has been out this long and it's pretty damn good. Is it perfect, who knows? That would be my argument if I was a non believer, that maybe someday the code can get cracked making it all useless. All the other arguments about comparing it to other Fiats, backed by this and that, makes no sense at all to me. I think anyone that argues that point just doesn't get it, and probably never will. Bitcoin already has value and it's not backed by a government, so this argument is already lost. The possibilities that Bitcoin can unlock in the future are truly amazing, and IMO it will happen. And as far as cost of production being zero, I don't think you are understand how miners like myself allow for Bitcoin to operate. We assist transactions, and there is also only 21 Million Bitcoins that can ever be mined. Link to comment Share on other sites More sharing options...
beb Posted January 7, 2014 Share Posted January 7, 2014 Okay. Suppose that you’re on the island of Yap and it is the late 18th century… You want to get richer. You can either work on Yap doing something useful, or catamaran over to Palau where the limestone is, carve a big piece of limestone into a disk, catamaran it back, and use it as money. If the value of stone money is too low, it won’t be worth anyone’s while to catamaran over to Palau. Thus the stone money supply will stop growing if the price dips. As long as the relative desire to use stone money does not shrink faster than per-capita income on Yap plus the population of Yap grows, the value of stone money on Yap will be determined by its cost of production–that is, the cost of catamaraning it over to Palau, carving the limestone disk, and bringing it back… We can see this at work come the late 19th century. Europeans show up with steel tools that make it a lot easier to carve limestone disks on Palau. Thus there is a huge boom in the limestone disk-carving stone money-mining industry. And the value of stone money on Yap Falls as the money supply grows… Now suppose that you were on the Internet and it is the early 21st century… You want to get richer. You can either work doing something useful, or you can set up a botnet to mine BitCoins, or you can fork the code behind BitCoin and set up your own slightly-tweaked virtual cryptographic money network. Setting up a new, alternative network is really cheap. Thus unless BitCoin going can somehow successfully differentiate itself from the latecomers who are about to emerge, the money supply of BitCoin-like things is infinite because the cost of production of them is infinitesimal. How can BitCoin successfully keep itself differentiated from the latecomer copiers? By asserting, over and over again, simply that it was first. And this might work. But I am skeptical. By stressing that it has a trustworthy track record of being a safe store of value–and thus appealing to a history that the latecomers do not have. This works until someday, for some reason, demand for BitCoins falls. Then supply and demand drives the value down. BitCoin is then no longer differentiated as a safe store of value. Then the people who were holding BitCoin because they thought it was a safe store of value dump it, its price falls even more, and so it becomes even more questionable as safe store of value. And the downward spiral continues. Note that in these respects–unless it can successfully and permanently differentiate itself from other virtual cryptographic money networks–BitCoin is like fiat money, and unlike 18th and 19th century Yap stone money, in that its cost of production is zero. So how do actual fiat moneys maintain their value? Well, they don’t always do so–cough Zimbabwe, cough Weimar Germany. When they do so, it is because a government (a) accepts its money in payment of taxes, thus giving people a reason to hold it, ( doesn’t want the financial chaos that hyperinflation would generate, and so © sets its central bank the mission of being a currency sink–of maintaining the value of the currency by buying it back and burning it up if necessary. Thus I tend to be a “chartalist”: commodity moneys can maintain their value via their cost of production, but fiat moneys maintain their value when some very large too-big-to-fail entity backs them. In my view, BitCoin’s chances would be a lot better if there were some large and durable entity that promised to be a BitCoin sink if necessary. If, say, Google Cayman Islands were to start GoogleCoin, and announce that it would always stand ready to buy back GoogleCoins at a fixed real value, it could make a (small) fortune and, I think, eliminate BitCoin’s business in a month… http://equitablegrowth.org/2013/12/28/1466/watching-bitcoin-dogecoin-etc Sorry but I'm not going to read your manifesto or whatever the latest 10,000 word screed you've posted above. But let me just say that you're amazingly ignorant of bitcoin and your constant attacks simply make that more clear. You've never talked about the protocol. You've never talked about the many, many uses beyond payments that the blockchain makes possible. Basically you've going on and on and on and on and on about things that I've never or very rarely heard anybody mention when it comes to bitcoin as if that identifies the technology. I'm amused by your willful ignorance at times and that's why I bother to respond but I still wonder why, and you still will not answer why, you keep obsessively coming here to throw out what you apparently think are devastating attack (they're not, they really only show your ignorance and anybody who's familiar with bitcoin does not take any of them seriously) day after day after week after month etc. And now you're calling names? Sheesh. Link to comment Share on other sites More sharing options...
pancakeman Posted January 8, 2014 Share Posted January 8, 2014 (edited) 1. I'm not a gold guy. 2. e-gold was shuttered because management did a bad job and did not do enough to stop money laundering not because of your conspiracy theories or because the government felt the concept itself was illegal. you might want to actually turn off Alex Jones and Max Keiser once in a while and try to figure what is happening in the real world... Bitcoin requires no "good management" it requires no management at all. Bitcoin doesn't need to do anything to stop money laundering. It cannot shut down for lack of money laundering prevention. For liberty dollar the government did in fact think the concept itself was illegal. They even went so far as to call making your own money as "a unique form of domestic terrorism" that is trying "to undermine the legitimate currency of this country" Also while we're quoting Krugman let's throw in his 1998 quote about the internet: The growth of the Internet will slow drastically, as the flaw in "Metcalfe's law"–which states that the number of potential connections in a network is proportional to the square of the number of participants–becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's Edited January 8, 2014 by pancakeman Link to comment Share on other sites More sharing options...
pancakeman Posted January 8, 2014 Share Posted January 8, 2014 (edited) Now suppose that you were on the Internet and it is the early 21st century…You want to get richer. You can either work doing something useful, or you can set up a botnet to mine BitCoins, or you can fork the code behind BitCoin and set up your own slightly-tweaked virtual cryptographic money network. Setting up a new, alternative network is really cheap. Thus unless BitCoin going can somehow successfully differentiate itself from the latecomers who are about to emerge, the money supply of BitCoin-like things is infinite because the cost of production of them is infinitesimal. How can BitCoin successfully keep itself differentiated from the latecomer copiers? By asserting, over and over again, simply that it was first. And this might work. But I am skeptical. By stressing that it has a trustworthy track record of being a safe store of value–and thus appealing to a history that the latecomers do not have. This works until someday, for some reason, demand for BitCoins falls. Then supply and demand drives the value down. BitCoin is then no longer differentiated as a safe store of value. Then the people who were holding BitCoin because they thought it was a safe store of value dump it, its price falls even more, and so it becomes even more questionable as safe store of value. And the downward spiral continues. Note that in these respects–unless it can successfully and permanently differentiate itself from other virtual cryptographic money networks–BitCoin is like fiat money, and unlike 18th and 19th century Yap stone money, in that its cost of production is zero. So how do actual fiat moneys maintain their value? Well, they don’t always do so–cough Zimbabwe, cough Weimar Germany. When they do so, it is because a government (a) accepts its money in payment of taxes, thus giving people a reason to hold it, ( doesn’t want the financial chaos that hyperinflation would generate, and so © sets its central bank the mission of being a currency sink–of maintaining the value of the currency by buying it back and burning it up if necessary. Thus I tend to be a “chartalist”: commodity moneys can maintain their value via their cost of production, but fiat moneys maintain their value when some very large too-big-to-fail entity backs them. In my view, BitCoin’s chances would be a lot better if there were some large and durable entity that promised to be a BitCoin sink if necessary. If, say, Google Cayman Islands were to start GoogleCoin, and announce that it would always stand ready to buy back GoogleCoins at a fixed real value, it could make a (small) fortune and, I think, eliminate BitCoin’s business in a month… A) It's not possible to mine bitcoin using a botnet, as it would be incredibility inefficient. For example it would take a botnet of 12,000 average hacked computers to equal 1 single KNC Jupter ASIC miner. B ) You have your logic backwards, why would bitcoin need to differentiate itself for latercomes....that's like saying "there are lots of new company making similar sodas to coke; what is Coca-Cola going to do to differentiate itself?" It works the other way around, the newcomes need to differentiate themselves from the incumbent. Coke will continue to do what they've been doing, they won't start changing their recipe so they "don't taste like Big Cola anymore" C) "GoogleCoin"...people are not gullable enough to believe that an entity is always going to have enough money to magically buy back the currency at a fixed rate if shit goes bad. Individuals, companies, counties, states, countries have all gone bankrupt; what makes Google (or any other entity) immune to this? Also if it's very cheap and easy to setup a new copycat virtual currency, and that currency will inevitability be worth lots of money, and probably take over bitcoin in the future; why have you not done this yet? Edited January 8, 2014 by pancakeman Link to comment Share on other sites More sharing options...
Big Pinkie Posted January 8, 2014 Share Posted January 8, 2014 (edited) For example it would take a botnet of 12,000 average hacked computers to equal 1 single KNC Jupter ASIC miner. searching gives http://www.gigahashwholesale.com/100ghs_04btc/?gclid=CP-Rk5i77bsCFUUF4godkjMAZQ one wonders why they would bother to sell any of them when the can be used to print money in excess of their value. like the guy who makes/configures that linux miner i posted earlier asking for donations at his site err... but arent you printing you're own money also got http://www.bitcominers.com/ Edited January 8, 2014 by Big Pinkie Link to comment Share on other sites More sharing options...
ukrules Posted January 8, 2014 Share Posted January 8, 2014 C) "GoogleCoin"...people are not gullable enough to believe that an entity is always going to have enough money to magically buy back the currency at a fixed rate if shit goes bad. Individuals, companies, counties, states, countries have all gone bankrupt; what makes Google (or any other entity) immune to this? Any 'coin' like the above mentioned GoogleCoin could work. It would be a digital representation of fiat issued by a trusted central authority. This kind of system could work well alongside the likes of Bitcoin and could even be used as a way to buy into the crypto currency ecosystem. This would just make it a digital token and the value would be fixed. It would be like a bank issuing digital dollars, if they keep selling them for the same amount and make their money off the transaction fees I suspect it would be viable. I'm pretty sure banks will start doing this, if they tie it into a p2p system which is the transaction network and the issuer co-signs each transaction it could be p2p, centralised and a cash equivalent. My bet is there are a few banks working on such systems right now. A Bitcoin methodology of relaying transactions via a peer 2 peer network could be used so people can transact with each other, central approval of each transaction would then follow after the issuer has verified the transaction against its records so it would be like Bitcoin but not need any 'miners'. This could be side stepped and completely centralised removing the need for a p2p network completely. Anyone who does this should really operate on a full reserve basis so any money going in stays put in an account to cover the value of all the coins issued. I think the banks themselves only have issues as they get greedy and issue toxic debt using the fractional reserve system, this is where a lot of the problems in the current system appear to originate from. There would never be an issue with a 'bank run' on a properly managed full reserve bank. I wonder if we will we see a re-emergence of full reserve banking for transaction based digital curencies in the future... Link to comment Share on other sites More sharing options...
pancakeman Posted January 8, 2014 Share Posted January 8, 2014 (edited) C) "GoogleCoin"...people are not gullable enough to believe that an entity is always going to have enough money to magically buy back the currency at a fixed rate if shit goes bad. Individuals, companies, counties, states, countries have all gone bankrupt; what makes Google (or any other entity) immune to this? Any 'coin' like the above mentioned GoogleCoin could work. It would be a digital representation of fiat issued by a trusted central authority. This kind of system could work well alongside the likes of Bitcoin and could even be used as a way to buy into the crypto currency ecosystem. This would just make it a digital token and the value would be fixed. It would be like a bank issuing digital dollars, if they keep selling them for the same amount and make their money off the transaction fees I suspect it would be viable. I'm pretty sure banks will start doing this, if they tie it into a p2p system which is the transaction network and the issuer co-signs each transaction it could be p2p, centralised and a cash equivalent. My bet is there are a few banks working on such systems right now. A Bitcoin methodology of relaying transactions via a peer 2 peer network could be used so people can transact with each other, central approval of each transaction would then follow after the issuer has verified the transaction against its records so it would be like Bitcoin but not need any 'miners'. This could be side stepped and completely centralised removing the need for a p2p network completely. Anyone who does this should really operate on a full reserve basis so any money going in stays put in an account to cover the value of all the coins issued. I think the banks themselves only have issues as they get greedy and issue toxic debt using the fractional reserve system, this is where a lot of the problems in the current system appear to originate from. There would never be an issue with a 'bank run' on a properly managed full reserve bank. I wonder if we will we see a re-emergence of full reserve banking for transaction based digital curencies in the future... There are a number of problems with this concept. 1) As you mentioned it only works if the bank is full reserve, meaning that there is exact number of dollars or gold etc...held in a vault somewhere to "back" each digital token. That itself has a lot of problems: a) Who is going to guarantee that the full reserve is actually there? b ) What happens if the reserve is not actually there through any of the following possibilities: - Theft / Embezzlement - Natural Disaster (ie a big fire burns up all the money) - Government seize (if government decides the reserve holder was going something wrong) 2) If the reserve is fiat, then it's can be debased/devalued by the fiat issuer (ie central bank) by printing more. So your reserve is becoming worth less over time at an unknown and unpredictable rate; so is your digital tokens. 3) Government will want full control over the entire process. And they have laws on the books to prevent it if they wish. For example in the US has laws to prevent anyone issuing there own money; 18 U.S.C. § 485 18 U.S.C. § 2, 18 U.S.C. § 486 18 U.S.C. § 2, 18 U.S.C. § 371 and these have been previously used to convict people who tried to issue their own money. So at any point the issuer of your digital currency could be charged and all reserves seized and all of a sudden your digital currency is worth nothing. Edited January 8, 2014 by pancakeman Link to comment Share on other sites More sharing options...
ukrules Posted January 8, 2014 Share Posted January 8, 2014 (edited) C) "GoogleCoin"...people are not gullable enough to believe that an entity is always going to have enough money to magically buy back the currency at a fixed rate if shit goes bad. Individuals, companies, counties, states, countries have all gone bankrupt; what makes Google (or any other entity) immune to this? Any 'coin' like the above mentioned GoogleCoin could work. It would be a digital representation of fiat issued by a trusted central authority. This kind of system could work well alongside the likes of Bitcoin and could even be used as a way to buy into the crypto currency ecosystem. This would just make it a digital token and the value would be fixed. It would be like a bank issuing digital dollars, if they keep selling them for the same amount and make their money off the transaction fees I suspect it would be viable. I'm pretty sure banks will start doing this, if they tie it into a p2p system which is the transaction network and the issuer co-signs each transaction it could be p2p, centralised and a cash equivalent. My bet is there are a few banks working on such systems right now. A Bitcoin methodology of relaying transactions via a peer 2 peer network could be used so people can transact with each other, central approval of each transaction would then follow after the issuer has verified the transaction against its records so it would be like Bitcoin but not need any 'miners'. This could be side stepped and completely centralised removing the need for a p2p network completely. Anyone who does this should really operate on a full reserve basis so any money going in stays put in an account to cover the value of all the coins issued. I think the banks themselves only have issues as they get greedy and issue toxic debt using the fractional reserve system, this is where a lot of the problems in the current system appear to originate from. There would never be an issue with a 'bank run' on a properly managed full reserve bank. I wonder if we will we see a re-emergence of full reserve banking for transaction based digital curencies in the future... There are a number of problems with this concept. 1) As you mentioned it only works if the bank is full reserve, meaning that there is exact number of dollars or gold etc...held in a vault somewhere to "back" each digital token. That itself has a lot of problems: a) Who is going to guarantee that the full reserve is actually there? b ) What happens if the reserve is not actually there through any of the following possibilities: - Theft / Embezzlement - Natural Disaster (ie a big fire burns up all the money) - Government seize (if government decides the reserve holder was going something wrong) 2) If the reserve is fiat, then it's can be debased/devalued by the fiat issuer (ie central bank) by printing more. So your reserve is becoming worth less over time at an unknown and unpredictable rate; so is your digital tokens. 3) Government will want full control over the entire process. And they have laws on the books to prevent it if they wish. For example in the US has laws to prevent anyone issuing there own money; 18 U.S.C. § 485 18 U.S.C. § 2, 18 U.S.C. § 486 18 U.S.C. § 2, 18 U.S.C. § 371 and these have been previously used to convict people who tried to issue their own money. So at any point the issuer of your digital currency could be charged and all reserves seized and all of a sudden your digital currency is worth nothing. Well it's a trusted third party for a reason, they need to be trusted and there are no guarantees in life. Any existing bank could in theory go bust at any time. As these systems are cashless I really doubt it would burn in a fire. The kind of organisation which would issue these digital tokens would ideally be a fully regulated bank working under full reserve in a friendly environment. Of course this could not be done in the US, it would need to be done in a country with more reasonable laws. I agree there are issues but they are not insurmountable. If any large existing bank operated a system like this people would use it regardless of the risks. Full reserve would be optional but in my opinion preferred. There are also many schemes out there already which closely resemble centralised digital token systems. Loyalty points, airmiles, etc. In addition to the reward style systems there are already 'digital credit' schemes which operate on mobile phone networks in different countries around the world, the Barclays Pingit system in the UK and closer to home the Rabbit card system in Thailand. This kind of thing is coming. It's just a way of storing and moving digital cash in an easy to use manner utilising existing technology and I think it will become much more prevelant in the coming years. Edited January 8, 2014 by ukrules Link to comment Share on other sites More sharing options...
pancakeman Posted January 8, 2014 Share Posted January 8, 2014 You seem to think that there is a possibility that, for example, HSBC could start issuing Hcoin and people could send these anywhere in the world instantly for almost free without any limitations and no HSBC account require to receive them; and governments will be "ok" with this. Dead wrong; they will put the kibosh on that real quick. Link to comment Share on other sites More sharing options...
farang000999 Posted January 8, 2014 Share Posted January 8, 2014 B ) You have your logic backwards, why would bitcoin need to differentiate itself for latercomes....that's like saying "there are lots of new company making similar sodas to coke; what is Coca-Cola going to do to differentiate itself?" It works the other way around, the newcomes need to differentiate themselves from the incumbent. Coke will continue to do what they've been doing, they won't start changing their recipe so they "don't taste like Big Cola anymore" this is very simplistic. cokes advantage is its massive capital investment. new coins can just piggyback bitcoins evolutions and blueprint. new sodas can't just magically build distribution factories all over the world. what you are also saying is essentially that there is no reason to own two coins. you are saying why should anyone buy any coin other than bitcoin, with this logic, if something better does come along, bitcoin, should by your logic, quickly head to zero. your argument is also flawed because while coke has a larger market share, a can of coke is not worth significantly more than a can of cola. Link to comment Share on other sites More sharing options...
farang000999 Posted January 8, 2014 Share Posted January 8, 2014 You seem to think that there is a possibility that, for example, HSBC could start issuing Hcoin and people could send these anywhere in the world instantly for almost free without any limitations and no HSBC account require to receive them; and governments will be "ok" with this. Dead wrong; they will put the kibosh on that real quick. you seem to think that requiring accounts linked to social security numbers and government reporting is some impossibility. Link to comment Share on other sites More sharing options...
pancakeman Posted January 8, 2014 Share Posted January 8, 2014 (edited) You seem to think that there is a possibility that, for example, HSBC could start issuing Hcoin and people could send these anywhere in the world instantly for almost free without any limitations and no HSBC account require to receive them; and governments will be "ok" with this. Dead wrong; they will put the kibosh on that real quick. you seem to think that requiring accounts linked to social security numbers and government reporting is some impossibility. Ok, so they issue HCoin, but you have to sign up for an account with HSBC, give them your address within a country they operate, SS#, photo ID, they will then consider your application, and approve if they want; they will then send a list of your transactions to the appropriate authorities each month; plus of course if they don't like you did with your HCoins they'll take them away, or reverse the transactions. And you can only send the Hcoins to other people who have been through the same sign up process... In the other hand with bitcoins you download a program and within 2 minutes you're able to receive and send payments to anyone in the world instantly, no approval requirement, no reporting require, no account required, no "signup" requirement. You can't compare the two. Edited January 8, 2014 by pancakeman Link to comment Share on other sites More sharing options...
speedtripler Posted January 9, 2014 Share Posted January 9, 2014 Some really terrible arguments about Bitcoin in the last 17 pages Btc is here to stay, people said email, Google or even the Internet is just a "bubble'' It's going to take time to go mainstream but it will be one of the greatest Revolutionary inventions of our lifetimes Link to comment Share on other sites More sharing options...
Big Pinkie Posted January 9, 2014 Share Posted January 9, 2014 It's going to take time to go mainstream but it will be one of the greatest Revolutionary inventions of our lifetimes it has the potential to stop wars and get rid of oppressive govt. Link to comment Share on other sites More sharing options...
Naam Posted January 9, 2014 Share Posted January 9, 2014 It's going to take time to go mainstream but it will be one of the greatest Revolutionary inventions of our lifetimes it has the potential to stop wars and get rid of oppressive govt. not to forget that it -will stop global warming, -make crude oil redundant, -cause sweaty feet emitting pleasant scents, -cure paranoia, and last not least -make wet dreams come true. 1 Link to comment Share on other sites More sharing options...
Big Pinkie Posted January 9, 2014 Share Posted January 9, 2014 (edited) It's going to take time to go mainstream but it will be one of the greatest Revolutionary inventions of our lifetimes it has the potential to stop wars and get rid of oppressive govt. not to forget that it -will stop global warming, -make crude oil redundant, -cause sweaty feet emitting pleasant scents, -cure paranoia, and last not least -make wet dreams come true. yes those too, how could i have missed those if the gods smile upon us it may even be the long awaited remedy for stinky crotch rot too Edited January 9, 2014 by Big Pinkie Link to comment Share on other sites More sharing options...
davejones23 Posted February 25, 2014 Share Posted February 25, 2014 That also means you can't swap anything. If I offer to by your bike by giving you my camera, then it must be illegal because neither bike nor a camera are a currency. Really stupid to ban bitcoins. Surely it's up to the buyer and seller to decide what they will accept. You could argue that the baht, GBP, USD, etc are not 'real' currencies either. Link to comment Share on other sites More sharing options...
UbonOz Posted February 28, 2014 Share Posted February 28, 2014 Hitler finds out Bitcoin survives Mt Gox crash. http://m.youtube.com/watch?v=6phynr2fdVU&feature=youtu.be Link to comment Share on other sites More sharing options...
ukrules Posted February 28, 2014 Share Posted February 28, 2014 In other news apparently Bitcoin is not banned in Thailand any more. I see that Bitcoin exchange (the one that closed when Bitcoin was apparently banned) at http://www.bitcoin.co.th is now operating again after being given the go ahead by the Thai government. Link to comment Share on other sites More sharing options...
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