Indeed.  One of the very first use-cases I saw for Bitcoin, probably within minutes of grasping what it was, was associated with providing a solution to the vexing issue of exchanging PM value across geography with some modicum of privacy and without paying high fees to third parties.  In this way, one would use Bitcoin itself as a type of 'digital gold'...for a few fleeting moments at least.

To my knowledge nobody has yet done a geographical exchange of PM's using Bitcoin as an intermediary.  I thought once about setting up a tool which would help with the planning and mechanics of doing such transactions.  I'm glad I didn't bother as it seems that the demand is low.

Don't rightly know.  There have been a variety of crises under fiat regimes.  The nature of the crisis and other aspects of the state under observation limit the usefulness of comparisons.  Looking around a bit, I don't see this exact detail in most of the more trivial descriptions of one crisis or another.

Here's something of interest (no pun intended) that I just dug up concerning Argentina.  It seems to be a policy such as I anticipated would likely play out here in the US...at least in the fat middle of the potential failure scenarios.

------------
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&ved=0CEcQFjAC&url=http%3A%2F%2Fwww.areuea.org%2Fconferences%2Fpdf%2Fpapers%2Fareuea%2520website%2FSumit%2520Agarwal.pdf&ei=-mDqULWbILHyigLHhYD4Bw&usg=AFQjCNGDChwojdYlo1CWHjxM7LyihTtDlQ&bvm=bv.1355534169,d.cGE
-----------
...
As a result, the pesofication was applied asymmetrically at parity for loans to the private
sector, but at the official exchange rate –although already out of touch with the market
rate- for the other contracts, in particular for deposits. Furthermore, outstanding bonds of
public or private Argentinean entities issued under Argentine law were also pesofied.8

To alleviate the impact of the pesofication on the financial assets of creditors,
indexation was introduced. Initially, the “Coeficiente de Estabilización Financiera”
(CER) index used was based on the Consumer Price Index, and in the case of consumer
loans (including mortgages) included a 3.5% per annum (in real terms) cap on the interest
rate to be applied. This index severely impaired debtors because of the price surge
following the devaluation of the Peso. Subsequently, it was replaced in October 2002, for
...
--------

I am projecting that in all but the most devastating of collapse environments, Joe Sixpack will find that any documentable debts (to well connected parties) left over from the dollar days will be rolled into a similar debt valued whatever becomes the new legal tender, and normalized against some basket of tangibles.  In other words, unless you are a multinational with derivatives losses and that sort of thing, you probably should not expect a free ride complements of a monetary re-set.

As always, just my guess on how things would likely evolve.

I don't play around with penny-ante games of chance.  I normally target large long term trends.  Generally speaking winning such a bet would be a hollow victory and losing one would utterly suck.  One way or another, I'm don't trust anyone to sit on my BTC, and in particular not some scungy betting parlor operator (who will want a cut.)

BTW, I never mentioned BFL by name, but I can see why that might match the pattern I am drawing as they have more than their fair share of red flags.  And since they have the record of the longest failure-to-deliver (and had the most aggressive rope-a-dope sales campaign) they are a prime candidate to do the type of analysis that I'm interested in on.

I was engaging in a bit of hyperbole (aka, trolling mildly) in my OP on this subject.  Your adjustment captures my true feeling better.

In actual fact, I have described the system to certain of my highly technically inclined friends and suggested that a modest (pocket change) speculative move into it has some logic.  For people I truly care about (i.e., family) I have suggested they NOT play with it, but some of the BTC I hold is earmarked for them in the event that it continues it's trajectory which over the last year I view as reasonably healthy.

To my surprise, nobody I know personally has been fascination by Bitcoin from a philosophical level.  I'm surprised mostly because I have friends from all over the spectrum in terms of their interests, abilities, etc.  Most people do seem to have a sub-conscious trust in our state sanctioned monetary regimes.  I'm pretty sure that at some point this trust will prove to have been mis-placed.

I mean simply that if there are a sudden slew of defaults effecting a lot of things (physical PM's, pension funds, etc, etc) it will become a lot more clear to people that things without counter-party risk are worth a huge premium (or conversely, those which do have this risk deserve a giant discount.)  Physical gold in hand and Bitcoin with secure secret keys are two items which simply lack this risk.



The risk factors that I fear most for Bitcoin involve supplantation by a superior system or control of the internet by a coordination of network carries (directed by governments and the force of law that they command) such that traffic associated with the solution is disrupted enough to cause problems for the system as currently envisioned.

I don't really see much risk for PM's in this timeframe.

I don't think that either PM's or Bitcoin will do much except drift upward in a steady-state such as we have today.  And it is very possibly that a string of monetary and regulatory inventions can string things along through the next few years.

I've always theorized that should the current western monetary systems fail, it may well be sudden and catastrophic (mostly since that failure mode would be the most advantageous to the well connected.)  If that happens in the next few years, PM's could do well, but Bitcoin could do amazing things.  Even if the upheavals of a monetary system collapse disrupted availability of the internet as we currently know it, Bitcoin could still operate on a side-band network and provide one of the only ways to make large transfers across geography.  This capability would be of immense value and Bitcoin valuations would rise accordingly.

I mean 'Swindled' as in flat out swindled.  By people who noticed that with a little effort and some industry-specific lingo they could get a lot of people to send them money.  And never did have any plan or make any steps toward actually producing an ASIC Bitcoin mining chip.

I also have not seen a lot of any customers express the belief that they'll never receive their ASICS in spite of the now 4 month delays.  What I am musing about is how many months (or years) without delivery would the condition exist.  And what would be the shape of the slope formed by 'marks' losing hope.

The point you make about inappropriately co-mingling the technical and social aspects is a good one.  Although there is probably a correlation between technically savvy persons and those who can recognize a social engineering scam, it is small enough such that I should not have done this to the extent that I did.

I think that it has done Bitcoin no small amount of damage to have had to many people who can be suckered into one scam or another, and this has naturally brought the scammers out in force.  Leveraging what slight correlation there might be between technically savvy people and those who have the mental equipment to avoid scams is worth something.

Bitcoin is, I believe, well enough established at this point that it's not going anywhere.  Thus, there should not need to be a strong incentive to 'recruit' and/or 'evangelize' without discrimination.  That is the main point I would like to make, and something I imagine that most of the community will disagree with.

I do applaud the efforts you yourself any anyone else who takes the time help those who are legitimately interested in Bitcoin.  For every technically skilled person who would fall for a scam there is a non-technically skilled person who would not, and a certain number of these will likely have a keen understanding of economics and monetary science (and/or strong feelings about liberty-ish stuff.)  These (rare) people are who I'd like to see diving in to Bitcoin at this juncture and are the one's to focus on helping.

The BFL pre-mature ejaculation image which you saw fit to edit out was one of the more amusing (and 'apropos') ones to have graced bitcointalk.org in a while.  And the production quality exceeded that of many.

---

On roughly the same topic, it would be interesting to see a plot of the months past initial ASIC delivery estimates vs. the number of pre-order 'customers' who sense they have likely been swindled.

Newbies who don't have the technical skills to understand the reference client (or better yet, plain old bitcoind) and why it acts as it does should not be encouraged to do anything with Bitcoin period.

For a vast majority of people in this world, Bitcoin is not good for them and they are not good for Bitcoin at this time.

Hopefully over time the system will mature and become more solid, and there will be more means by which good/bad actors in the community can be identified.   Then Bitcoin will be more appropriate for more people.

Ya, sorta.  As I've said before, I don't have much use for combining Bitcoin and PM's as Casascius does other than for one-off conversation pieces.  But I do highly appreciate and respect his efforts.

I might have mentioned that my prediction, should it come to light, will give the concept of 'counter-party risk' a significant impulse which will implant it into the consciousness of many market participants.  This will likely have every bit as much effect on Bitcoin as it would on PM's, and with luck will catapult the valuations of BTC into the orbit that the solution deserves.  That is, OMHO, in the $1000's/BTC range.

Of course in order to 'pay off',  Bitcoin needs to survive and adapt to attacks not yet seen.  I've balanced my holdings of BTC and PMs to the ratio which I am comfortable with given my interpretation of the various risks of each vehicle.  And, of course, the potential reward as well.

For the record, here's a prediction.

I predict that at some point there will be a quite massive tank in the price of gold/silver.  This will be the point when it is known (to some) there there will be something like a comex default and a generalized massive failure to deliver physical with much turmoil in which to exit the industry (in default.)  Should this happen it will be my signal that the next phase has begun, and in the next phase physical will be king.

While the volatility and patterns/timings of the ups and downs have been extra-ordinary of late, I don't think that this is the signal I'm looking for.  I'd be more impressed to see a massive drop down to the $1200/Au-oz range to throw a number out.

As far as I know, I'm the only person who's made such a prediction.  None of the perma-bulls that frequent KWN, Zerohedge, Sinclair, etc have stated such a thing that I recall.  OTOH, most of these folks are a lot more familiar with the mechanics of markets and what-not so I'll have to give them the deference they deserve.

I also wondered which 'DMZ' he served at.  I hope it was not Rassah's dining room.

What made it funny (to me) was the over-the-top absurdity of the joke in the first place given the context, but much more than that, the absolutely child-like rendering is what really gave me a chuckle.

Thanks Mem!

What a great idea, Josh!  Seems that you are experiencing a little dead time down there at BFL and have nothing better to do, so why not?

I actually usually enjoy PuertoLibre's (and Mucus's, smoothie's and Phin's) posts, but I doubt that they would compare in amusement value to that generated by a restraining order effort.

A better question is: how can one not be?

Relative to most other instruments, Bitcoin and gold are more-or-less the same thing to me.  They do have fairly different risk/reward profiles at this time however.

I actually don't care much about IP one way or another from a 'morality' point of view.  Again, my personal experience with software is that it works significantly better for me as a user when things are open-source, and that's where my money would go.  This is especially true for systems which I want to rely on for critical duties over a long period of time, and ones where I want problems addressed in a hurry (even if I need to do it myself.)  Operating systems are a great example of this.

In terms of the software (or gate design) for ASIC, I don't really see what point you are making, possibly in part because you are not prone to provide context.  Your comment was sort of out-of-the-blue and while you didn't really try to describe what ill effects a use of Avalon gear (assuming they come up with any gear) would face if they play fast-n-loose with IP.

Every effort I've been involved with (including ones with both an American and Chinese wing) has leveraged the hell out of whatever is available to solve their problems.  Most of the time this is open-source, and in the instances when we've tried to integrate closed source solutions it typically results in an expensive and time-sucking disaster.  Nobody tries to cheat, per-se, but there have been a lot of legitimate questions about what it means to comply.  Happily it is becoming more clear as the decades fly by.

Further, as you may (or may not) be aware lots of stuff needs to be done in a hurry in start-up environments.  Cleaning up the loose ends involving use of IP often has a lower priority than other things.

Your statement lacks some degree of context and thus it is difficult to see what exactly you are driving at.  It almost looks like kind of a random flailing against an 'adversary' (I have not yet determined if BFL and Avalon are 'competitors'.)  But anyway...

One dis-advantage of their not adhering to open-source principles to a realistic degree would be loss of sales and support by at least a segment of the community.

My observation is that the 'problem' of intellectual property theft in many areas is diminishing.  I believe that a primary reason for this is that the open-source world offers superior solutions in many cases.  Much of the closed-source world is actually a lot of hot air and/or deeply troubled code which would be dis-advantageous to employ for long-term value projects.

Anyway, I'm not buying shit from anyone until they can demonstrate a working solution, and then I'll determine whether what they are selling is worth having.  And open-source will be a HUGE part of who I send my BTC/USD to.

I think that you guys have bad taste in cookies, but that's probably just because I'm not a fan of ginger.

I've not paid a huge amount of attention or put much research into things, but I think I recall you folks having some interest in open-source, at least relative to your 'competition'(*).  If so, and if you live up to the opens-source principle to reasonable degree, I'll either make a donation (and I'm sure you can find some oven-hot chocolate-chip cookies which you are welcome to use the BTC for), or potentially even buy some of your wares.

* I am currently of the opinion that most probably pretty much every one of the more widely advertised ASIC efforts is a straight-up scam except, potentially, Avalon.  But this is no more than a gut feeling from someone who pays relatively little attention except to read some of the posts on this board...and has only the most rudimentary and dated experience with hardware.  Anyway, if my gut sense turns out to be correct, it is not really fair to classify BFL (for instance) and Avalon as 'competition'.

Read the OP for christsake

Really, if you are all that interested, there are a fair number of threads you can track down.  The guy was actually labeled a scammer twice, though under the name 'bitmole' the first time.  My own personal view is that in both cases while he was misguided, he was never what I would consider a 'scammer' in the true sense of the term.  He, like a lot of us, is/was 'off the deep end' from somewhere in the first trimester of gestation.