Apparently they have internet coverage in 53% of the country.
http://www.balancingact-africa.com/news/en/issue-no-345/top-story/somalia-s-civil-war/en

And about 1% of the population is connected to internet according to wikipedia (in 2009 that is).
https://en.wikipedia.org/wiki/Communications_in_Somalia#Internet


Besides, everyone doesn't need direct internet access. If an equivalent to M-Pesa using bitcoin started, cell phone access would be enough.

Seems like a lot of people let their prejudices come in the way of actual analysis of the situation here. They may not be there quite yet, but considering their growth it doesn't seem like that bad of an idea for an entrepreneurial somali to start a bitcoin company that makes transactions easy for people there.

Interesting read:
Better off stateless

Edit: Another point. While internet and cell phone access is still a lot better in Kenya, there are other things that speak in favour of Somalia for Bitcoin adaption. First, the competition is far from as established as in Kenya, and second Somalis do suffer heavily from inflation. These two factors together speaks heavily in Bitcoins favour. As internet and cell phone coverage continue to increase at the rapid pace it is currently doing, a bitcoin company could be a force to reckon with offering a low cost, inflation proof and international payment method.

I think you miss my point. I'm sure his heart is in the right place, and my issue has nothing to do with US regulations.

The problem here is that remittance markets are to a large extent one-directional. This means that unless you have a steady outflow of bitcoins in the recieving country, sooner or later you will have an over-supply of bitcoins which will be reflected in its price. This is a market phonomena, not caused by US regulations. It's what happens when a good flows in one direction only.

So even if you can undercut all the competition in fees, what are you supposed to do once the exchange rate of bitcoins in the recieving country is 10% lower than in the US, essentially adding a 10% fee from the perspective of the customers?

A functioning market would arbitrage away the difference in the exchange rate, but often, the very reason remittance is so expensive is because the recieving country doesn't have good banking infrastructure in place, meaning arbitragers will have a hard time to do this. The only way to avoid this is if the recieving country has a domestic market for bitcoins that makes them flow out of the country to the same extent they are flowing into it. This is out of the remittance company's control.

I would really like to see something like this take off. There is a hidden but very real problem with this though.

Who is going to buy the bitcoins in the recieving country? If there is a heavy inflow of bitcoins from one geographic area to another it will start to cause a difference in the price between the two areas. In functioning markets, some people will see this opportunity to make a profit through arbitrage, however the very reason that remittance is so expensive to some countries is that their markets aren't functioning properly. So unless there is a steady outflow of bitcoins in the recieving country I'm afraid remittance actually won't get much cheaper with bitcoins, only that the fee will become hidden in the exchange rate.

The article adresses that though (and it seems like they changed the headline).


So they still pay a mark-up of about 10 USD.

I've been waiting for this, and this site looks great.

However:

No shit. I've been looking everywhere to try and find how big the fee is without success. Could you clarify this?

Secondly, I'm interested in market data for your bets. Mostly I'm just missing the market depth, but trading history and such would be really nice to have as well.

Excellent.

I've pretty much had thoughts about this exact product, only lacking the technical know-how to actually create it.

First thought, how secure is the key generation in this? I'm thinking partly about the generation algorithm (deterministic? random?), but also on what kind of guarantees customers have that you aren't saving all your keys somewhere.

Second thought, you could make these cards even more trust-free by using 2-of-2 transactions, where one key is generated by the card and the other is generated by the customer's own device. Thus, when I recieve a card I generate a key by myself and give it to the card and therefore know that you can't steal my funds. If I give the card to someone else as payment he knows I can't steal the funds since I don't have access to the key generated by the card.

Is there any clever protection against fooling the card making it think it has funds when it doesn't? The card would have to rely on data from your own device, so how come you can't just create a new key and tell the card it's funded?

Edit: All the bolded was answered to satisfaction by simply reading your FAQ.  

Only one of my questions remains then. What is the life expectancy of these cards and how durable are they?

This is where bitcoin can come in. Smuggling bitcoins is really low risk compared to USD. Of course, the hassles, fees and travel costs are still an issue. But if someone is traveling from the US to Argentine anyway for whatever reason, buying some BTC beforehand could be a really good deal. If you ever visit the states you could look at BTC as an alternative to USD without the big risks of getting caught.

Interest is the price of time. Time is a scarce valuable resource, thus it will have a price as all scarce valuable resources do. You can have interest rates on the lending of any good. I can lend you a hammer, and demand 2 hammers in return, the second hammer being the interest. What that says is simply that the time I won't be able to use my hammer is worth an extra hammer, and it's up to you to either accept or refuse this offer.

It's simply more effective to lend money in most cases, and the same principle applies. If I lend you one bitcoin I will require more than 1 bitcoin in return. The time where I won't be able to use my bitcoin has value. That value is priced as the interest rate. In a market for lending I will look for those who give me the best offer.

Besides we already have interest in the bitcoin economy, see BitFinex. Explain why that would just dissappear if the supply got capped right now.

You are also confusing price with value. 1 Bitcoin today is always worth more than 1 Bitcoin tomorrow. 1 bitcoin today could actually be saved and used tomorrow, but the opposite is not true, so 1 bitcoin today gives you more options. 1 bitcoin tomorrow likely has a higher price though, but that is a different thing.

This is wrong. Firms will invest to the point where their revenue equals the natural rate of interest, which is determined by peoples time preferences.

That is, firms do not only require that R>I to invest. They require that R>k*I where k would be the natural rate of interest. Money today is worth more than money tomorrow. Interest rates are the market price for time, and that price is not 0 as you assume.

Yes, but only to the degree where the discounted price gives you the natural rate of interest as a return on your bitcoin investment.

If the expected return on the average investment is 7% yearly, and the expected price of bitcoin is 260 USD in one year, then a bitcoin today should be valued at ~242 USD (242*1.07=~260). Buying a bitcoin for more than that means you will lose out since there are better investment options availible. By extension the 260 USD price needs to be calculated by discounting the expected price 2 years from now.

You are completely right about your next point that the rationale behind hoarding and buying is basically the same, and that if no one uses bitcoin the price will simply rise until they are inclined to do so.


OnT, a deflationary currency promotes savings in another way than an inflationary one. As the purchasing power of bitcoin increases people get wealthier. This means that their marginal utility of money is reduced and thus are more inclined to spend. Bitcoin promotes a get rich first, spend later philosophy rather than a spend now, never get rich one.

The thing people often forgets is that saving does not mean you refrain from spending, it means you postpone spending. Reduced spending in the present means increased spending in the future. A Bitcoin economy means more total spending, just not now.

They are expensive. Though their long life time and low wattage saves you some of that money back in time.

So no takers on this? I thought the bitcoin community would be a good community for high tech lighting. This offer is basically the starter pack + 1 extra light bulb for free.

The lights have an open API which provides som interesting uses. They are cool for parties as well. 
https://www.youtube.com/watch?v=vsb7CnrBg74

Not compared to the average gain in value bitcoin has had in the past years.

During a spending spree in the states I recently managed to aquire, among other things, some Philips Hue lightbulbs. However, for reasons I'd rather not state (I'm simply stupid), I didn't really think about the fact that they won't work back here in Europe with our 220V jacks. So I have no choice but to sell them back to the states.

For those who don't know what Philips Hue is it's light bulbs that you can dim and change colors that are controlled via wifi.

See this video:
http://www.youtube.com/watch?v=qvbAoELl7XU&t=1m45s

They are currently only sold at Apple:
http://store.apple.com/us/product/HA779VC/A/philips-hue-connected-bulb-starter-pack

So what I'm selling is the starter pack with the control unit and 3 lightbulbs + 1 extra bulb for a total of 4 bulbs. The packages are opened but never used.

They are yours for a bitcoin amount corresponding to 200 USD at the time of purchase (costs ~260 USD in store). Shipping is on me. I can ship first to a trusted user, otherwise I'll require escrow.

First come, first served.

Whenever someon mentions the deal with deflation, people should just start linking this study from the Minneapolis Fed:

http://www.minneapolisfed.org/research/sr/sr331.pdf

The inflation argument is dead, both logically and empirically.

Just program a Sim City World like interface for your ruling. That way it will just seem like a video game rather than world ruling.

There is nothing wrong with the name really. I'm just worried from a security standpoint that someone with bad intent could get a hold of the peoplemoney.com domain, which would be somewhat worse than a regular phishing attempt since someone without good knowledge of your site could think that you are the fake. I still love the initiative since more exchanges are badly needed.

I mean no offence but this sounds kind of ironic.  

Anyway, it might be worth it to reconsider the name. What if someone makes a phishing site with the "normal" spelling?

So? You place bets on wether the price will go up or down. What's the problem? Are you against gambling?

This seems like the way speculation should be done in a free market. It's actually a more effective way of speculating since you remove the overhead of dealing with physical products. CFD trading still has an indirect effect on the bitcoin price the same way actual trading of bitcoins would. If there is a lot of buying pressure on the CFD it will drive the price up making it diverge from the real bitcoin price. This would create an arbitrage opportunity, meaning you could short the CFD and buy bitcoins and gain regardless of where the price goes, giving you a riskless* return. Doing this would drive both prices towards eachother again.

So again, what is the problem with this? The only effect of people trading these instruments will be increased volume on regular exchanges from people arbitraging. More people having a say on the price is good since it reduces the power any single individual have.

*There is still the third party risk of a company with your money going bust etc.

I tried to add a tag for donations to http://www.gimp.org/

However, blockchain said that it can't find the adress in question at the website. You are not looking hard enough. It's in the bitcoin: URI format. Blockchain.info should preferably notice this.

My big question is if that is even possible in a backward compatible way. If not a majority vote fork could possibly be quite disruptive as all their fork-transactions would likely find their way into bitcoin somehow as well. I'm really not sure of the consequences here but think it could need some thought.