Bitcoin Forum

It's often said bitcoin attacks the states monopoly on printing money.
Assuming there would be a point in the future, where in a country bitcoin got more important than the regular currency that country used. So the regular currency would suffer immense inflation and all the people decided to only accept bitcoin, thus taking the state the ability to print new money. How do you think this would affect that states social systems. What if the state would not be able anymore to pay for its citizens needs? What if this led to a system where the old and the sick would not have any support by the state?

"What if the state would not be able anymore to pay for its citizens needs?"

The state doesn't pay for anyone, because it makes no money.  Since the state gets all its cash (hypothetically, without referring to secret taxation or bonds) from people, what you're asking is, "What if we can't force people to pay for other people?"  My answer is, "Finally we're making some progress."

"What if this led to a system where the old and the sick would not have any support by the state?"

People would have to learn how to take care of themselves and another.  People who cannot find anyone to take care of them will get worse and likely die; if one doesn't want this to happen, one should take care of people, instead of worrying about whether or not we can force other people to pay for other people.  Fair enough, yes?

Anyway, what would happen when a nation could no longer have its own currency, I theorize, that nation would have to resort to a flat rate tax and give you a bill at the end of the year of everything you owe.  The state cannot sell bonds (i.e. your children's futures) without its own currency, nor can it inflate its own currency to death (that secret tax), thus forcing the state to remain small and focused primarily on serving its people, as opposed to empire building, i.e. war, fancy construction and turning independent people into dependents through welfare.

The power taken from the people through fiat currencies would then return to the people.  I can't tell you exactly what will happen, but I find this a step in the right direction.  There will likely be a short-term period of intense pain as the wealth is redistributed, but remember what I said: "As opposed to empire building."  If Bitcoin, or other currencies that cannot be printed to death, were the primary usage of the planet's economy, empires could no longer form.  War would be far more costly, impossible to sustain for long periods of time.  People would be far more independent and freedom-oriented; they would no longer have any need to wish for the state to be their nanny.  The general wealth of each person would be far superior.

With China's call for a new world reserve currency and with Saudi Arabia contemplating moving away from USD in its oil trade, the more interesting question to me is "What do you think would happen if BTC replaces USD as a world reserve currency?" I know the idea is far-fetched and very unlikely to happen, hey, can't blame a guy for dreaming!!

it wouldn't. no sovereign government will give up their right to print money. no way.

Then I guess the people would have to do it behind their government's back.  Now we see a clear distinction between a plot of land with people living on it, and a state.

exactly! need some real cultural changes though before such a movement could start

I really dont think that bitcoin will not be an official currency for a country! Mainly because of the fact that the government has no control, and bitcoin is very anonymous!

It would be great for zimbabwe to replace its currency to Bitcoin, since their currency is like toilet paper with inks..

hahaha, if I bought toilet paper in America and went to Zimbabwe, will I be rich? ;)  :P

EDIT: I forgot about the ink...  Would a color printer work? :P

Except the Zimbabwean dollar was abandoned in 2009, so they aren't worth anything anymore.

Really? What is their currency then?

I think it's an open market. Most are using USD if I remember correctly.

Then there is a very high potential for bitcoin to be the currency of zimbabwe! All someone needs to do is introduce everyone to Bitcoin!

That would be a very good idea, considering they don't have much time before the USD goes splat. (https://www.youtube.com/watch?v=iFDe5kUUyT0)

Electronical money only is not possible even in USA today. It will take time and when there will be no paper money all will use just credit cards  :P

The zimbabwe dollar is cheaper then toilet paper. So everyone used that instead. Right now they are only using USD as a currency :)

No, bitcoin in current implementation can not process so many transactions daily that would be necessary. Current limit is about 7 transactions per second

But keep dreaming...

What is the reason for the 7 transactions per second limitation?  Does it have to do with the maximum block size, which will on average cover only 10 minutes of time (which during that time is a maximum of 4200 transactions)?

we are expecting that to be done in near future.
BTC will only have the value if the ppl interest goes up

Yes typical transaction size is about 250 bytes, so about 4000 transactions can be used in 1 MB block every 10 minutes

No sovereign government would do this?  Well, the members of the European Union ceded their right to print their own sovereign currency in favor of the currency issued by a multi-government centralized authority.  They bought in to the idea of not printing their own currency en masse, in fact.  At the time it looked like it made sense.  Presently, bad monetary policy and other political bunglings have nearly ruined the idea of the Euro. 

I think it is very plausible that a nation--a small struggling nation to be sure--might give it a real shot.  But not until after the bitcoin community solves some infrastructural problems. Bitcoin acts more like a commodity than a currency right now.  It isn't really *monetized* yet.  Too much friction, too much inefficiency.  It's still too early.  But some day, I think this will definitely happen.