"Without depositors Banks will be having no funds to lend to the needy entrepreneurs. "

It doesn't work like that, it works the other way round. That is, loans create deposits - not deposits create loans.  Otherwise, where do you think the money comes from in the first place to create those deposits (a bit like the chicken and the egg)? At least that's how it works in the UK[1], and pretty much all other major countries, including the EU, AIUI.

Anyway, it's not a war, fiat vs bitcoin. I think we'll end up with both fiat and crypto. Which is a good thing, IMO, as each will help keep the other honest. It gives us choice.

[1] http://www.monetary.org/wp-content/uploads/2016/03/money-creation-in-the-modern-economy.pdf
"In the modern economy, most money takes the form of bank deposits.  But how those bank deposits are created is often misunderstood:  the principal way is through commercial banks making loans.  Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money"

"And let's not forget that Bitcoin is terrible for the environment."

Yes, but what's the cost to the environment of the alternatives?  With out knowing that I don't see that the above statement tells us much.

The first shot in the war on bitcoin was just fired by the banks. The bullet ended up in LLoyds' foot.

If you want to ask a question you've until 12 noon CET Tuesday[1].

Here's a link[2] to how they view bitcoin (it's a link I got from [1]). In it they argue deflationary money causes people not to spend, which I think is false besides being a rather stupid argument, especially we combined with the argument that inflationary money encourages people to spend, as if that's a good thing!

It seems to me they're treating the youth like children, I think that's unwise of them. Most of today's youth will see through it, they are pretty aware of the state of economies world wide, IMO.

[1] http://www.ecb.europa.eu/ecb/educational/youth-engagement/ecb-youth-dialogue/html/index.en.html

[2] https://www.youtube.com/watch?v=OPXenixmxj4

Zero. I don't see how it can go lower that that.

Floppy disc or better, maybe, punched paper tape.

I think this is the best analogy I've seen [1] (sorry if it's already been posted in this thread).

[1] http://www.ybrikman.com/writing/2014/04/24/bitcoin-by-analogy/

Isn't all that matters is if coins in Satoshi's wallets begin to move? That'd be a bit of a shock to the bitcoin market but would it be fatal?

There already exists some P2P mesh phone networks TerraNet[1], serval[2] and FireChat are a few. None of them involve payment to phones you use as relays. Still,  that doesn't mean the idea of paying is dead.

My latest thinking is to have wallet numbers as phone numbers. That way you can be sure who is calling you and that you have got through to the number you dialed (various ways of doing that). Still not sure if relay phones can check in real time if they will get paid (by looking on the blockchain to see if the wallet has enough coins in it) but I don't think being cheated would be a big problem in general. Sure, someone could write an app to cheat the system by generating wallet numbers that it uses one time (or a few times)  with no coin in it but they'd lose the ability to identify them selves to the callee, hardly seems worth the effort, if fees are reasonable. I'm not into hardware of phones so don't know how many models have wi-fi (which seems a good way to form the mesh). If wi-fi is common (and accessible from an app) then if apps are written for a few platforms perhaps the system might boot it self and grow slowly, in different geographical areas to start with. The phone can use the conventional centralised system if no mesh phones are near by. If I knew much about writing such apps I might of had a go. As it  I write C++ CAD/CAM code and am getting on a bit, so am not sure if I could make a decent job or even get the job done before I snuff it. So I'll leave it at that for now.

[1] http://www.terra.net.lb/
[2] http://www.servalproject.org/

Perhaps if we had a mesh network of wireless P2P phones (and computers, I suppose) it might keep going?

AIUI, bluetooth is too short range, but what's the range of a mobile itself? They all, at present, have to connect with an antenna. The range seems to be highly variable but with a well sited mast it's about 35km[1]. Phone to phone is a lot less, about 2km according to this blog[2]. TerraNet[3] is a firm working on P2P, or mesh, networks, but it's unlikely we'll see such a system kick off in developed countries first. I mean, what would be the business model? That's one of the downsides of capitalism, if there's no profit then who's going to invest time and effort to kick off a P2P phone network, even if it would result in a system that would compete with the status quo and so likely drive down prices and/or improve the current private phone services[4]? A P2P network will more likely start in undeveloped countries, but will they be crushed by private firms as the country develops?

Seems to me, besides the lack of a business model, the only problems preventing a P2P network from coming about are technical (1) algorithms to route and  link distant phones (2) how to pay phones to relay calls on. It's perfectly possible to connect over short ranges (I think TerraNet is limited to 7 hops/relays). But as anyone can connect to the system it'd be possible for anyone to set up an antenna to relay calls on - the cost of entering the market is very low. If you live in a high rise flat, or on top of a hill, just get yourself a few cheap phones and the electronics to boost the signal and you're earning bitcoins (assuming that's the currency used in the system). So I don't see the range cannot match what private system do now, people are very innovative - especially if they stand to gain and cost of entry to the market is low. Also, I see no reason why phones cannot link to a local Wi-Fi point, maybe in a private house (which gets paid) and thus can go via the internet to make the call.

But I come back to my original question about bitcion being suitable as a currency for such a system, that is "can a phone acting as a relay be sure it will get paid?" It cannot wait for confirmations. Can it rely on a (crypotgraphically) signed transaction? I guess to be sure it'd have to check the wallet is not empty, but even then it'd be in danger of losing out to a double spend! Still, I doubt many would go to the trouble of cheating the system if it were cheap enough. I don't know enough about the mechanics of bitcoin to answer the question myself, that's why I'm asking here.


[1] https://en.wikipedia.org/wiki/Cell_site
[2] http://agonist.org/p2p_style_mobile_phones/
[3] http://terranet.se/?option=com_content&task=category&sectionid=8&id=17&Itemid=62
[4] But then again, who would spend time and effort kicking off a virtual currency which is controlled by its users instead of a central body?

I like the idea of P2P mobile phones, no service provider required. Phones connect directly if in range otherwise they hop via other phones to reach their target. Phones that are hopped through get paid a fee for acting as a relay. So you earn while acting as a relay and spend when making calls that need to go through other phones. I'm not sure if this could work with bitcoin, the main question is "can a phone acting as a relay be sure it will get paid?" It can't wait for confirmations, that'd not work. So can it work with bitcoin?

Thanks to knightdk for putting it clearly and without bias.
Seems to me the exponential time to verify blocks needs to be solved in the long run for bitcoin to be of any real use.

Reading the BoE's speech[1] they seem quite open about what they're up to. The speech hints at the possibility of taking away the FSCS[2] and that it's possible for the man in the street to bypass the banks and bank directly with the BoE. It talks of how much more efficient the system will be, that's not surprising given the system now is only really fit for the age on the quill pen. They know this will shake up banks and there will be job losses, lots. All they can do is spell out what's possible with the technology, politicians will likely be making the decision regards things like the FSCS. I believe central banks want a better system, it's not in their interest to maintain the status quo - they know it's not fit for purpose and that there's a better way. YMMV.

As regards bitcoin vs rscoin. Competition is good, I'm sure free marketers and libertarians will agree. So we should now, hopefully, see bitcoin up its game.

[1] http://www.bankofengland.co.uk/publications/Pages/speeches/2016/886.aspx
[2] https://en.wikipedia.org/wiki/Financial_Services_Compensation_Scheme

The link to the BoE speech[1] is worth reading. If they use a common ledger to enable other firms (like P2P lenders) to move reserves between each other and banks then that's a game changer (well, so long as they get rid of the FSCS[2]) as banks will be in fear of losing reserves - so they'll have to be nicer to their depositors. It doesn't matter that the ledger's under control of the central bank, at least not to the man in the street.

Is it a threat to bitcoin? They are making disparaging remarks about bitcoin but that's to be expected and a good sign as it means they are taking it seriously. Competition is good, isn't it? Thus RSCoin's good for bitcoin and bitcoin for RSCoin. So maybe bitcoin now needs to up its game if it wishes to survive, not bury its head in the sand.

[1] http://www.bankofengland.co.uk/publications/Pages/speeches/2016/886.aspx
[2] http://fscs.org.uk/

At a guess, I think the BoE wants, in part,  a more efficient way for the banks to transfer reserve currency between themselves. At the moment it's likely pretty inefficient and done at the end of each day, AIUI, They likely want a system that updates throughout the day, a system that's fit for the internet age, not the legacy system they have now, that's fit only for the age of the quill pen. Seems reasonable to me. I don't see it as a competitor to bitcoin. It'll not make much difference to bank customers other than large transactions might be verified more rapidly. It ought reduce costs to banks and BoE but whether customers will benefit remains to be seen.

An organisation called PositiveMoney.org has put forward a proposal for digital cash in the UK[1]. I'll not go into the details, you can get those here[2]. Suffice to say it's a centralised system which cuts out the banks by giving citizens direct access to the central bank's reserve currency. These accounts are called Digital Cash Accounts (DCA). Of course your dosh can still suffer from the effects of inflation (due to government 'priniting' dosh) but, other than that, it is 100% safe, not like it is now with only £75k being safe (in each *different* bank where you haver an account) via the Finacial Services Compensation Scheme (FSCS)[3]. DCA's will likely not pay interest, in fact will more than likely charge for their services.  AIUI, ordinary bank accounts will still be available and will pay interest.

AISI, UK citizens are unlikely to take up bitcoin any time soon. If DCAs are introduced, UK citizens are likely to take them up as they feel more secure using government dosh (yes, I know, but they do). So are DCAs a barrier to bitcoin ever taking hold in 1st world countries like the UK?


[1] http://positivemoney.org/2016/02/how-would-you-be-affected-if-the-bank-of-england-starts-issuing-digital-cash/.
[2] http://positivemoney.org/wp-content/uploads/2016/01/Digital_Cash_WebPrintReady_20160113.pdf
[3] The FSCS is a bit of a con in that it's backed up by tax payers and is one reason (excuse) for bailing out the banks.

It's got quite a bounce for a dead cat.

Didn't think I'd get another chance to buy bitcoin below £250 but seems I can this morning. Hmm, might it go lower, less that £200? Perhaps best wait and see.

This guy's worth hearing[1], imo. He seems to concur with George Soros, to some extent. AISI, in the UK we have near record high private debt of £1.5 trillion. Don't know the ratio to GDP, it's likely not good, and if we have a slow down it can only get worse. It's pretty much the same for the US, I think. I don't think the world economy is going to recover any time soon. It's probably best to get used to it flat lining.  Spend more time relaxing with a pint of real ale or whatever it is you enjoy doing.

[1] http://www.bbc.co.uk/news/business-35259184