I've just begun to look into BitCoin as I'm interested in seeing a change to our current management of our medium of exchange, the dollar.

I didn't have to look very far to sense that BitCoin does not understand the management of an exchange medium.

First: You need to know what the media represents. In a medium of exchange, the media is "promises to complete trades". Thus, new media is created when someone makes a promise and media is extinguished when that promise is kept and the trade is complete. BitCoin seems to have no knowledge of trading.

Second: The manager of the exchange medium is ultimately responsible for broken promises. This is necessary to preserve the integrity of the exchange medium. The manager must observe the relation:

DEFAULT = INTEREST + INFLATION

When someone DEFAULTS on a trading promise, the medium manager must absorb that DEFAULT to maintain INFLATION at zero. From the relation we can see that the manager does this by collecting INTEREST equal to DEFAULTS.

Observation: The failure of BitCoin was obvious when the master of ceremonies of Gavin's presentation commented that he himself had "bought some BitCoins and they had already trippled in value". The media in a properly managed medium of exchange never changes value.

Todd Marshall
Plantersville, TX; USA