Bitcoin Forum

If nations like Greece, Spain, Italy start mining bitcoins quietly and then at some point make it public rising both the interest in this technology and the exchange rate, then as all the fiat currencies devalue so will their debt!
At some point they should be able to sell some fraction of their bitcoins and repay all their debt in EUR, USD or any other fiat.

Just noticed this post here: https://bitcointalk.org/index.php?topic=40264.msg697324#msg697324
which says that largest share of "unknown" blocks comes from an IP address in Spain.
So maybe this is already happening... :)

wrong scale

worth of all bitcoins in existane = 6*8M=48 million
Greece debt:
Public debt   €329.351 billion (144.9% of GDP; 2010 est.)[12]
Budget deficit   €24.125 billion (10.6% of GDP; 2010 est.)[12]

the exchange rate will have to go up by ~x10,000

 ;D

Not a problem.  Also, you're math is off... these are circles of debt, so as one pays done their debt, the creditor uses that to pay another debt, and so on.

I dont think circles of debt will account for a x1K difference

And why isnt it a problem? they will have to replace the euro with BTC or something like that to make the exchange rate jump like that.

I believe that's the exact hypothetical that was proposed by the OP.

Also, it doesn't have to all be a chain of debt.... you pay the creditor who spends it and that guy pays down some debt.  You have to also consider the velocity of the money.

This would require the cooperation of all the European countries, otherwise Greece can print whatever new currency they like and give it to the other country as payment.
And they wont support it if  they will see that Greece got a huge piece of the cake in advance

I don't see how the velocity affects it. it will just affect how fast the debts are resolved. the total amount of money actually owed to others is pre-determined. if you knew what the circles are - you could know exactly how big the debt is - even without knowing the velocity

While I agree with the OP, he forgets one thing. Not only will debts based on worthless fiat money be paid off, but no central bank will ever again be able to enslave countries by printing money. Banks (yes there will still be a need for banks of a sort) will have to earn their money by wisely investing in profitable ventures, not printing huge amounts and bribing or warring.

Yes, it would be politically impossible... that's why it's called a hypothetical.

If you can't see the effect of the velocity of money I'm not sure I can help you.  If BTC are transferred twice as often, they can support an economy of the same size (measured in $) with half the $/BTC price.

i get that, but what does it have to do with a pre-accumulated debt?

You probably mean that debts will NOT be paid off. Who would want to pay them off anyway?  ;)

And about enslaving, I wouldn't bet that it won't happen again in the future, maybe not in 10 years time, but in 20-30 years. Politicians who promise more (which they can't deliver without getting into debt) will always be elected over their opponents, unless there is a major shift in human perception and character worldwide, which I do not see to be happening.

I don't think it is such a good idea at the moment

IMO, BTC's bright future is in pension fund: The price will increase overtime and have high liquidity, one can save in BTC and when he/she retired, he will have a fortune to spend

It's more like a lotto ticket, but with a much better chance of winning. That's why I like that one line from "The Good Wife" about going online and buying one Bitcoin.

Current governments would die using Bitcoin. They would literally destroy themselves.

Even if they start after price is stable, no deflation, the current methods would only bring disaster. They would produce debt again, and at some point start walking the edge as before. Then, something bad happens. An accident, an earthquake, a depression, a war. And they can't pay, and can't inflate, and lose control rapidly.

There is no headroom in the way governments handle money. When something goes wrong, they use inflation, bending rules and damaging the economy to get by. If they lose control of that, they will not be able to pay those millions of people they employ, and things break down. I'm not saying this would be a bad thing. But they probably like things a lot better the way they are now, and I don't get to decide.

If debt financing government is so great then bitcoin will fail miserably. Why worry?

If I were a failed western gov't, I would play some taxpayer's money to manipulate the sh*t out of the bitcoin market, reaping phat profits up and down. Being not contabilized anywhere (ideally under some classified "national security" chapter of the budget), the stash could be then just distributed among the crooks involved in the black op.
But they are probably busy scheming much bigger and more evil plots with banksterz pulling more funny money/public debt out of their asses.