Bitcoin = trojan horse
bronco2078
Posts: 9,964 ✭✭✭✭✭
An interesting article over at naked capitalism that suggests bitcoin is just free R & D for bankers looking for a way to eliminate cash totally . Viewed that way it puts it even lower than fiat dollars on the value totem pole.
ranked from oldest to newest
Gold and silver = intrinsic value and untraceable , off the grid zero counterparty risk
Fiat physical dollars in hand = no intrinsic value , but backed by the government , also untraceable and off the grid , 1 counterparty risk inflation
Fiat digital money = no intrinsic value , but backed by the government , stored as 1's and zeros and extinguishable without recourse , mostly traceable , many counterparty risks
Bitcoin = no intrinsic value , not backed by any government , stored as 1's and zeros and extinguishable ? traceability by design , counterparty risk unclear to me at least
Future digital currency = ?????????????????????
bitcoin will facilitate negative interest rates
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Comments
<< <i>cash is traceable. It has serial numbers. Some ATM's can be programmed to read serial numbers when disbursing cash. some POS can be programmed to scan in serial numbers. >>
Cash is traceable but if you cash a paycheck and stuff the bills in your mattress its effectively invisible.
When you use digital dollars , whether debit credit wire transfer whatever every transaction is recorded somewhere.
With bitcoin its the same. the difference is you are giving up the "full faith and credit" aspect of the 2 types of fiat. What do you gain in return?
Beyond bitcoin will we see competeing standards of digital currency? Different brands that may compete with one another? The digital equivalent of paper money issued by certain banks , that may cease to exist if the bank or entity fails?
Banks are expirimenting with negative interest rates and luring people into it with the promise of convenience already.
AKA reloadable debit cards like the green dot moneypak cards. Where you pay them 5$ to load your own money on the card , then you spend it or get it nibbled away in service charges.
I see some level of value to it but I see a downside too. Paper money acted to wean the populace off of gold and silver. Electronic dollars , credit and debit cards etc. , are weaning people off paper money
Bitcoin might wean people off electronic dollars. Every rung down the ladder is another layer of abstraction. Possession is 9/10ths of the law they say , but 9/10's of nothing won't get you very far.
I know people that have bought and sold for Bitcoin , but not in person. Access to it seems dependent on the internet.
Debit and credit cards are more robust , and hard cash is the most useful as long as the full faith and credit of the government that issues it is a given . Gold and silver don't require faith.
Bitcoin or the thing that replaces it may be the last gasp of this system . Each innovation of money comes more quickly , offers less stability and destroys labor more quickly.
I knew it would happen.
<< <i>I thought that one of the unique things about Bitcoin was that it wasn't traceable. >>
It is more traceable than any other money. Using bitcoin is like if every time a person used a 20 dollar bill they had to sign the back of it. Each bitcoin transaction can be traced to an IP address. Each transaction is one snapshot and the series is like an old filmstrip that can be viewed at a later date.
Where did bitcoin come from ?
It's a fact that Governments lose out when people have the ability to make unrecorded , untaxed transactions.
What if a new currency was released into the wild that folks engaged in those types of transactions would naturally adopt?
I knew it would happen.
All encryption is compromised by you know who. Maybe not all but how could a layman know which was safe to use at this point?
The idea of the article I linked in the OP is that Bitcoin is just the latest effort to soften up the 99% . To make negative interests rates more palatable . Right now if your bank imposes a negative rate on you , you can leave and avoid it. Reloadable debit cards are a negative interest rate in action. Banks convert your labor into a time decaying electronic balance when you use participate. Spend it or we will bleed you of it in effect.
Those are still denominated in dollars though. What about a bitcoin based system of reloadable debit cards?