Bitcoin Forum

I would be interested to hear of practical advantages to end users of using Bitcoin over conventional digital banking (i.e. not just buying and holding in the hope that it makes u fiat rich)?

I can think of:

Off radar transactions (Drugs and other illegal transactions, tax evasion, money laundering).
Capital Flight.

All the other 'touted' examples such as ease and speed of moving capital around just don't add up. If I wanted to move 10K GBP into any other currency of any other developed economy in the world, I could do it far cheaper, and faster, and more secure using conventional banking methods. I know this for a fact as I do it everytime I move GBP to EUR in order to fund my fkn Bitstamp account in the first place. Any legal transaction involving Bitcoin is more efficiently made using fiat currency since the Bitcoin is simply a means of transferring a certain value in a specific fiat currency, which is readily available to 99.9% of the population, whereas for all but 0.1% of the population, obtaining Bitcoin involves several time hurdles and extra expense.

Like I thought.

Outwith shady transactions which will over the course of time be forced to become more and more transparent, it offers fuck all advantages over current digital banking....

...except of course for one thing........

......capital flight into the USD!

3 cheers for Bitcoin and the NSA and three cheers to feasting on the blood of 3rd world peasants as all the wealth in their land is funneled out their countries through Bitcoin. HURRAH! HURRAH! HURRAH!

Brainwallets  :D

Hey it lowers the risk of scammers trying to steal back the funds they sent like they do in paypal.  And you don't have to worry about all the identity fraud issues these days if you play it safe and keep your information private.

Good Point.

But this only applies to individuals engaging in occasional private sales. Established businesses will be set up to take payment by bank transfer and/or credit card. On the same token, this then leaves the sender of the Bitcoins at the mercy of the recipient of the Bitcoins. I have been scammed via PayPal before but I complained and PayPal forced the scammer to repay me. Had I paid in Bitcoin I would have remained scammed. Not an an attractive proposition.

BTC is mostly a digital cash.  Banking is such a huge industry.  Only a small part of it is storing your money.

You can't compare BTC to Paypal.  Paypal is a type of clearing house.  Paypal is a middleman that takes the risk of the transaction until it clears.  Paypal takes a cut of the transaction for providing this service.  

I agree w the OP.  BTC is superior to cash where cash can't go.  Online black markets, etc..

Valid argument but I've read many times that Paypal sides with the scammers so I tend to lean towards they're system being severely flawed.
 I do agree the Bitcoin option is also flawed in regards to this situation but nothing is perfect.  The point I feel needs to be recognized is the need for a better options and the ability for individuals to have a choice.  I think your overlooking the amount of control an individual has using Bitcoin compared to the control of there funds in the current conventional banking system.  You do bring up some valid points but many of the things you mentioned can be improved upon as time goes on.

I also see the value of

I'm not so sure it only applies to indivuduals in engaging in occasional private sales as you suggest.  I think it's has more to do with

Bitcoin = anonymity, low fees, world wide use, highly secure so you don't need to worry about scammers and you could keep saying positive stuff about bitcoin...

Swapping Sterling IOUs to Euro IOUs is indeed fast-ish but anything else takes ages. Try swapping Euro IOUs for Brazilian Real IOUs and you could be waiting for up to ten days. Bitcoin can speed it up. SEPA to Bitstamp takes a day, buy coins and send them to the person in Brazil, they sell them on Localbitcoins and have the bank IOUs the next day. As market depth increases the spreads should get better making the whole process very cheap. 

Think of Bitcoin being the hub and international currencies being the spokes in an international transfer model.

I'm pretty certain that bitcoin is cheaper than a wiretransfer to send money.
besides that the banking system is subject to regulation.
if for some reason tomorrow your government decides they don't want you sending money you are royally fucked.
if tomorrow the government decides they will steal your money to cover the bank's debt Cyprus style once again you are royally fucked.
bitcoin is the only financial asset you completely control and cannot be taken away from you with a flick of a government's pen.

Good point but large premiums to be paid on LocalBitcoin. Especially outwith 1st world economies.

@Robert Paulson
'outwith the banking system' leads once again to Capital Flight. But be clear about one thing. Bitcoin is valued in relation to its interchangeability with the USD and always will be. Bitcoin is not for people fleeing the USD, but fleeing other currencies into the US dollar.

Always is a long time.   Dollar has gigantic problems from its debt obligations, the most likely solution is not default, an honest repudiation of excess debt and restoration of currency but endless QE as we are seeing.
  The value of dollar is falling with good reason and its likely even with all its instability that bitcoin will continue to outrank dollar as it falls, which means you gain from avoiding dollar on average when you can.

BTC does transfer too slowly for very small transactions, so some other crypto will deal with cups of coffee,  Theres competition from other global currencies, not all must be tied to dollar and it is certain it will not always be this way.   I know the present situation has been here all our lives but thats just the limits of our vision, it'll evolve

And what if Bitcoin's main purpose in the world is to assist capital flight from those other currencies which may threaten to displace the dollar hegemony?

I believe that the old Japanese guy, described as a multi-talented genius by his family, who lives in the very same area from where the first Bitcoin transaction took place, whose health deteriorated around the same time that Satoshi Nakamoto withdrew from the Bitcoin project, is the real Satoshi Nakamoto. Bitcoin is the fruit of years of intelligence agency research and development. I believe that the US government ultimately hold 'Satoshi's 10% Bitcoin reserve' thus giving them the ultimate market hold on the crypto-currency. A 'Kill Switch' that they can hit whenever it suits them to.

Somebody posted a thread somewhere on this forum stating that Bitcoin was a financial weapon. Turns out he was just another kool-aid head that thought Bitcoin was set to displace the dollar. I reckon that Bitcoin is a financial weapon alright, but a financial weapon against those economies who are non-compliant with the USD hegemony. Some geo-politically important, resource rich or resource hogging nation doesn't toe the line, the US leans upon it with its vast political might and wealthy citizens within the economy start panicking to get their assets out of the countries crumbling banking system with Bitcoin representing a fantastic means of doing so, thus helping the crisis hit economy to crumble even faster. As indicated by the attitudes of US hegemony non-compliant nations such as Russia and China, Bitcoin would probably be banned in any non-compliant USD hegemony nation, but some kind of black market charging huge premiums will definitely exist and so long as their is a large liquid market in the West, Bitcoin would be a go-to method of capital flight for wealthly people in ring-fenced economies.

bitcoin can be valued in relation to anything.
fleeing into the USD is shear madness considering it is being printed by the trillions for the last 6 years.
bitcoin is designed to flee from fiat currencies before hyperinflation kicks in, anyone who stays in fiat and especially in the USD or renminbi is a fool and will be wiped out.

I also thought it was worth a mention that Bitcoin does a fair job at keeping ones identity private or anonymous.  I know this isn't perfect with BTC but it is a valuable edge of the digital banking system IMO.

If bitcoin falls, there are plenty other crypto currencies that could do as well.   A 10% hold or whatever key is not relevant as a flaw to the whole genre.  If it was meant to be some kind of master double bluff, they failed as they handed out an open source self reinforcing and easily duplicated idea, more then anything this is now a pervasive phenomena not a one off to 'switch off'



Bitcoin is not set to replace the dollar, thats not the point.   The main point is dollar will not survive as it is continuing now, there is no downfall bought about by some mighty nerd revolution.    Dollar is off kilter and it will not exist if they dont drastically reform current policy and use, thats nobody elses fault.  If bitcoin benefits from its failure, thats secondary but I suppose many other mediums might also gain some of the fallout from the worlds reserve currency declining.
    Bankruptcy, default, can produce positive results if it ceases unproductive behaviour so business in dollar can go elsewhere, that transition I do not see as being caused by bitcoin


US is weaker then it was from ww2.   All the money, power and influence its gained and somehow its become weaker with more people and more technology.     This is no benefit to me, Im an english speaker and I'd rather they stay at the top and I wont be much good at learning chinese or whatever.      The main strength US has is from its backers, even now while Russia is breaking treaty agreements they still every day sell their oil in dollars and so support the US dollar system.    
The Japanese keep 1 trillion of treasury debt even while their gov requires this money themselves.  Saudis back dollar with their oil.  China buys dollars, and many others follow the herd to back dollar.   The actual strength of the dollar by itself without all this help is poor and I do believe the US will find themselves in far weaker position then ww2 or the years after despite appearances now.   The vast might is hollow, presuming the weapons go unused which of course would be a loss for all

 If bitcoin is anything, its a tool to transition from bretton woods failure to the many and I dont believe it is linked to dollar.  Your point might be correct if Chinese believe bitcoin equates to dollar but thats their bias not the coin itself.  

I like your thinking but consider this again.

The dollar is ill and dying, yet the USofA is without a doubt the only Super Power on the face of the planet. They know that the dollar is in danger of being toppled from it's perch yet they will do everything in their power to prevent this from happening, even start wars. Even start wars? They have already started wars to protect the petro-dollar hegemony. Looking on to the Brics nations, and especially China and Russia, out and out wars with these power might not be such an attractive proposition. But they can wage proxy wars and use deploy other geo-political means in order to keep these countries in line. If the countries refuse or out of self interest cannot tow the USA dollar hegemony line, then the US can use it's weight to lean on these countries and hurt them economically. They can cause the wealth in these countries to panic and seek flight into 'save haven' of USD. This is where Bitcoin can come in. The Chinese know it and the Russians know it and that is why they are strangling and stifling it's use within their economies. Any government can restrict capital flow in and out of its banking system. They can't stop Bitcoin.

Bitcoin could never turn around and bite it's master, Uncle Sam, either. Cos Uncle Sam has a kill switch. Do you really think that the strategic dumping of 1.5 million BTC couldn't destroy Bitcoin forever? Right now, it would take a tenth of that to send Bitcoin right down into single digits across all exchanges.

it will cause the price to drop until they are out of bitcoins to sell, at which point the old equilibrium between supply and demand will restore the previous price.

There are tremendous transactional and psychic costs to pull out over fear of the dollar and those most concerned.

I count china if only because they are nuclear but obviously they have far more people if needed.  I believe they have greater production capability, if not a superpower now then they could be one.

war is destructive in victory or failure so it falls to a countries productive capability.  Right now 70% of USA GDP is consumerism, what use is that.
Percentage of New Mortgages Backed By US Government = 90% , again its not valid production just more debt.    There is not enough valid productive capability to rank US far ahead in its might, not any more so bullying I dont buy.  US itself is influenced and most likely compromised by its creditors

Chinas strange system is what supports dollar, but not for the benefit of its people but its government.  So the Communist party likes the dollar system but it is not beneficial to the country to carry on.
   I agree that this is the reason they restrict bitcoin to continue their own control of capital but bitcoin is not tied to the dollar though it is the most liquid market to transfer into.   It really is all about all those who use dollar as a proxy for their own purposes.   I dont think US is the strength behind dollar or that dollar is stronger then bitcoin

and its still usable in single digits and then we carry on
If they sell alot of bitcoins, it drops the price as demand is saturated but since its most often used to transmit value they'll be no difference in its use.   If you hoped to just hold and get rich, you wait longer but I dont see it destroys anything as these coins are all on the itinerary.

  We dont have any written agenda for dollar, its total can go to any number.    The FED keeps on going on about 2% inflation, when they speak its about stability and there is something in that regularity that is valued.  Except  the future of dollar is stupidly unstable by actions largely enabled by the FED.  The FED itself is insolvent, of course they can just create more money but this is not stability.  Its an unequal and I think uncontrolled situation, there is an illusion of who holds the reins and its not the government from what I see.   Poor production and massive debt has been seen before in economies and it doesn't end without some event


http://money.cnn.com/2014/04/17/news/companies/walmart-money-transfers/index.html?hpt=hp_t3 (http://money.cnn.com/2014/04/17/news/companies/walmart-money-transfers/index.html?hpt=hp_t3)

nice thread and so good to read a civil discussion when there are varied opinions.