TWO FRIENDS MEET :

-DID YOU COME WITH YOUR MOTORBIKE ?

-NO ASSHOLE, I AM WEARING A CRASH HELMET SINCE I AM A POWER RANGER !!

This idea that governments "can't tax Bitcoins" keeps coming up again and again, and I find it quite strange.  Taxes are owed regardless of the payment mechanism used.  If I work for income, I owe taxes on that income, whether it comes via a direct deposit, a check, cash or shavings of gold.  If I don't pay those taxes, I'm breaking the law: the end.  It might be easier with some mechanisms than with others for someone else to find out I'm being paid, but ultimately, it's my own personal responsibility to report and pay the taxes due on the income I've received.  And it's not like underreporting the taxes you owe doesn't lead to large inconsistencies that others can plainly see.  What's that?  You earn $1000 / year and you've just bought a million-BTC yacht?

This fantasy that Bitcoins will bring governments' to their knees as they find themselves unable to tax people is just that: a fantasy.  The following xckd (it keeps appearing in these forums) sums the essence of the flaw in this kind of thinking quite nicely: http://xkcd.com/538/.
[/quote]

Agree on this.

TAKEN FROM ANOTHER DISCUSSION ON THIS FORUM. NONE OF THE CONTENT IS MINE. BUT I LIKE IT

"The money comes from the effort of their mining and the value in the blocks they've mined. It's the same as when someone mine's gold -- the value comes from the effort of their mining and the rarity of gold. BitCoins don't need to be backed because they're scarce. You only need to back something that's not scarce. (That's why gold itself doesn't need to be backed.)" [Quoted]


My poo is scarce.  There is a limited supply of it produced over time.  Therefore my poo is a valuable currency that need not be backed by anything. 

Realistically, Bitcoins have value not because they are scarce, but because there is demand for them. 

This demand is created because Bitcoins are cool, and you can have fun buying things with them, and playing with all the Bitcoin-related Web charts and the open source software and the crypto.

You could fork Bitcoin right now, and have your own identical system, and the coins in it would be just as rare and difficult to produce as Bitcoins are.  They would also be worthless, unless you could make them cool, and make it possible for people to have fun doing things with them.

Bitcoins, like stocks, are a "psychological market."  When stock is issued, the company gets its money from the initial sale, and no matter what happens to the stock value, the company never has to give the money back.

You can't do anything with the company, unless you have control, so for the average stock owner having less than 51%, the stock trades in its own little world, supported only by the belief that its value bears some relationship to the value of the company whose name is printed on the financial statement.

Bitcoins are like that.  Should people ever become bored with Bitcoins, or not be able to do things with them they find satisfying, like thumb their nose at the government while buying Alpaca Socks, they will quickly become worthless.

No need to apologise ) But again I have to say that I am speaking of something else. I am not assuming BTC would become a treat either for governments at all.

I am not assuming that at all. I am saying that there is no need for governments to go mining; they just need to outlaw BTC.

Beside this, I am speaking of something else...

A bigger risk is a governmental entity deciding to step in. A small fraction of the compute horsepower they have on hand to crack cryptosystems could be used to subvert the block chain, effectively destroying all credibility. They also have the incentive to prevent others from using Bitcoins as a payment system, for example they can't tax it.
[/quote]

Government and any other big organization, will never go mining BTC.
BTC have NO value except for the speculative markets that have been created. The merchants that accept BTC as a form of payment, they do it for speculative purposes only. Cancel the speculative markets and BTC have no actual value. They would dye.

 Satoshi Nakamoto,  presenting the project, writes:


Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network.



So BTC is a solution to a specific problem i.e. " .....a solution to the double-spending problem ....."

If you read my posts with ONLY this goal in mind, surely we will never understand each others. Ok, my wrong choice to post into this blog, probably. I might agree on that, or at least on what it appears to be.

In my post Bitcoin Paradigm, I stated that BTC is merely a tool that might be useful to implement the " Paradigm shift".

Obviously the Paradigm Shift to which I refer to in that post is much wider that a solution to double-spending problems that occurs in transactions. What I am suggesting is that the economy as it is today (taken in its widest meaning ) is obsolete and that we are all understanding this by noticing those that I have described as "anomalies " in the current system.
This is probably the main reason why so many people are investing so much intellectual's capital into BTC, I guess. Again, double-spending problem on transactions is just a specific anomaly of the whole system that is now being analyzed by many, thanks to BTC' s inventor. But this is only one of the many anomalies that are inherent in the present economic system.

Needless to say that it is the technology progress that allows all of us to see this specific anomaly and many others. With technology, we have reached a point where people can actually become Prime Actors in the economic system rather than being just passive. See Mr Google interview :

http://www.mckinseyquarterly.com/Googles_view_on_the_future_of_business_An_interview_with_CEO_Eric_Schmidt_2229


I am not suggesting that Mr Schmidt has in mind what I have in mind, but clearly he is drawing a pattern where the main focus is on people using the internet ( which is nothing new to Google ). Only this time there is a difference. They want you to let them know what you want. And I am not talking about what kind of app would be most useful or staff like this. They want to know from us what we would like to buy and possibly when we would by what we want. Google, in my opinion, has simply found another anomaly in the economic system. And this one has nothing to do with transactions at all.

Not so much with offers like this - Now tell me BTC won't buy you something.
http://forum.bitcoin.org/index.php?topic=22870.0;topicseen
[/quote]

This is a clever one. Thanks for posting it !!

New World Economy !!: BASIC STUFF - PART THREE http://t.co/nNUiwTz Please Retweet this

I can see that most of the discussing is on technical issue whether it is possible for the big guys to mine and how much might cost them to do so. I am surprised only a few of the answers on this discussing are addressed to what the my initial provocation was all about !!

Let's try again : HOW COME THE BIG GUYS SEAMS TO HAVE NO INTEREST AT ALL IN BTC

It has been suggested in one of the answers that if they would find BTC economy interesting, rather than mining they would start accepting BTC as a new form of payment.

Again : why this is not happening ?? And please do not answer me that may be they are not aware of BTC yet.......

Thanks.

Well, I have started this discussion and I am happy to see that it is taken into consideration.

I fully agree with Missy's answers given in the discussion. Always remember that the big guys, not only have the hardware resources and the money to mine but also they have a lot of intellectual's added value of so many smart guys working for them. This means to me they are fully aware of BTC and they might even have taken it into consideration for a sort of brain storming section on the subject.

To me, BTC has a value only in the terms presented by its inventor. Quoting from the original document of Mr.Satoshi Nakamoto:

"Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network."

Therefore BTC, is merely a way to avoid double spending transactions on Internet Commerce.

I would address you to read my post about a Paradigm Shift @ http://pointapp.blogspot.com/2011/06/comment-to-bitcoin-uncensored-blog.html

Than, let's continue the discussion.

Yes, see my posts on pointapp.blogspot.com

new post @ pointapp.blogspot.com

 Try to sum up the answer as you want 

On a Global Trade scale, I would not compare BTC with any other currency.  BTC was invented to solve a particular problem and to overcome double spending on relatively SMALL transaction made on the web. Here is an abstract form the inventor Mr Satoshi Nakamoto

"Commerce on the Internet has come to rely almost exclusively on financial institutions serving as
trusted third parties to process electronic payments. While the system works well enough for
most transactions, it still suffers from the inherent weaknesses of the trust based model.
Completely non-reversible transactions are not really possible, since financial institutions cannot
avoid mediating disputes. The cost of mediation increases transaction costs, limiting the
minimum practical transaction size and cutting off the possibility for small casual transactions,
and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible
services. With the possibility of reversal, the need for trust spreads. Merchants must
be wary of their customers, hassling them for more information than they would otherwise need.
A certain percentage of fraud is accepted as unavoidable. These costs and payment uncertainties
can be avoided in person by using physical currency, but no mechanism exists to make payments
over a communications channel without a trusted party."

Have more to say but I need to sum up )

A comment to Bitcoin Uncensored Blog.
" A Paradigm Shift ". This is the most suitable definition for what is actually going on in the "global village".

But I have something to say about the fact that Bitcoin is a paradigm itself.

For those who are not familiar with the word Paradigm:

A Paradigm is a pattern or model, and if it is later discarded and a different pattern or
model replaces it, we call this process a “paradigm shift.” An example of this is
the Ptolemaic system of the universe in which the earth is at the center of the solar
system, which was replaced by the heliocentric system of Copernicus.

Let's make it more simple.

There is something established that we take for granted. We keep on using it every day. By time we realize that there are some anomalies. If we stop thinking and we analyze these anomalies, we would eventually come to the conclusion that what was taken for granted is wrong and that there is a different way of doing.

The actual "shift" happens when the majority of the people agrees on the new way of doing which of course needs to be demonstrated to be true and workable.

It is worth noticing that The Ptolemaic paradigm of the universe was not replaced so much
by the fact that it was wrong but by the fact that anomalies observed eventually caused the entire paradigm to shift to a new one. A new pattern or model.

Therefore, the way financial transactions are carried out today is our Pattern and observations shows that there are anomalies. But this does not means that the old pattern is wrong at all!! It simply means that nowadays (and only nowadays ), transactions can be done in a different and more efficient way. Thus, we have the paradigm shift.

Bitcoin being merely a tool that might implement the shift.

It is my opinion that the shift might occur but not in the near future and that Bitcoin "economy" needs several adjustments before it could become a catalyst in this contest.

An answer given to bitcoingdude.blogspot.com

You are absolutely right when you say

"We must increase the 'efficiency' of the key systems enabling "civilization"".

And surely the system would gain efficiency from replacing conventional banking.

But can Bitcoin actually achieve this goal ?

I have nothing against BTC but I see it has serious limitations to perform its function(i.e. a p2p version of electronic cash able to allow online transactions without going through a
financial institution)on a GLOBAL TRADE scale.

The philosophy that lays be
hind Bitcoin, it is addressed to find an alternative way of payment for COMMERCE ON THE INTERNET that would cut off double-spending on transactions. Therefore BTC is just a mechanism "to make payments over a communications channel without a trusted party".

This sound very nice but to me looks applicable only to certain kind of trades. I cannot possibly see this mechanism being applied and a global trade scale.

One limitation of course is a good escrow for buyers. Once the BTC transaction is made, it is irreversible. The higher is the amount of the transaction, the more you as a buyer need a good escrow in case the goods or service you receive is not up to what it was supposed.


For example, in my business we use mostly Letter of Credits (LC) to buy goods from Far East suppliers.


An LC is basically a contract that is made between to buyer and the seller with the banks acting as a third party providing an excellent escrow for both buyer and seller.

The LC amounts are usually in the order of USD 50,000 to USD 250,000 with bank fees being around USD 300 for the LC opening.

So you understand that USD 300 on amounts worth several thousands of USD, is something you might be willing to spend in order to have your escrow.
It is just like paying an Insurance Company : if you have a Life Insurance, you have it to protect your family IN CASE something would happen to you. You do not get it because you know that you will have to pass away sooner or later ( sorry for the macabre example ).


Increasing efficiency in the economic system, in my opinion, goes far behind limiting double spending on transactions. Transactions are just one element of the economic system.

It is my opinion that to make it all more efficient, as an example, we need to work on how goods or services could be sold at cheaper prices seeing how goods are being sold and cutting off the Advertisement cost that are than marked up on the products' retail prices.

Involving the final buyers in the whole process is part of the solution. The www and its users are part of this solution.

If I can a a product at 50% off, why should I care about spending money on the transaction ??

yes sorry about that.....thanks for letting me know.

I apologise if my English sometimes cannot be up to the level it should be to discuss things of this kind but I am sure I will manage to get to the point (somehow).

First of all , I would like to address you guys to my previous posts NEW WORLD ECONOMY - PART ONE & Bitcoin Paradigm.

Now, what is the main purpose of BTC ? Satoshi Nakamoto,  presenting the project, writes as follows:


Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network.


So BTC is a solution to a specific problem i.e. " .....a solution to the double-spending problem ....."

If you read my posts with ONLY this goal in mind, surely we will never understand each others. Ok, my wrong choice to post into this blog, probably. I might agree on that, or at least on what it appears to be.

In my post Bitcoin Paradigm, I stated that BTC is merely a tool that might be useful to implement the " Paradigm shift".

Obviously the Paradigm Shift to which I refer to in that post is much wider that a solution to double-spending problems that occurs in transactions. What I am suggesting is that the economy as it is today (taken in its widest meaning ) is obsolete and that we are all understanding this by noticing those that I have described as "anomalies " in the current system.
This is probably the main reason why so many people are investing so much intellectual's capital into BTC, I guess. Again, double-spending problem on transactions is just a specific anomaly of the whole system that is now being analyzed by many, thanks to BTC' s inventor. But this is only one of the many anomalies that are inherent in the present economic system.

Needless to say that it is the technology progress that allows all of us to see this specific anomaly and many others. With technology, we have reached a point where people can actually become Prime Actors in the economic system rather than being just passive. See Mr Google interview : 

http://www.mckinseyquarterly.com/Googles_view_on_the_future_of_business_An_interview_with_CEO_Eric_Schmidt_2229


I am not suggesting that Mr Schmidt has in mind what I have in mind, but clearly he is drawing a pattern where the main focus is on people using the internet ( which is nothing new to Google ). Only this time there is a difference. They want you to let them know what you want. And I am not talking about what kind of app would be most useful or staff like this. They want to know from us what we would like to buy and possibly when we would by what we want. Google, in my opinion, has simply found another anomaly in the economic system. And this one has nothing to do with transactions at all.

An answer given to bitcoingdude.blogspot.com

You are absolutely right when you say

"We must increase the 'efficiency' of the key systems enabling "civilization"".

And surely the system would gain efficiency from replacing conventional banking.

But can Bitcoin actually achieve this goal ?
d.


For example, in my business we use mostly Letter of Credits (LC) to buy goods from Far East suppliers.
An LC is basically a contract that is made between to buyer and the seller with the banks acting as a third party providing an excellent escrow for both buyer and seller.

The LC amounts are usually in the order of USD 50,000 to USD 250,000 with bank fees being around USD 300 for the LC opening.

So you understand that USD 300 on amounts worth several thousands of USD, is something you might be willing to spend in order to have your escrow.
It is just like paying an Insurance Company : if you have a Life Insurance, you have it to protect your family IN CASE something would happen to you. You do not get it because you know that you will have to pass away sooner or later ( sorry for the macabre example ).


Increasing efficiency in the economic system, in my opinion, goes far behind limiting double spending on transactions. Transactions are just one element of the economic system.

It is my opinion that to make it all more efficient, as an example, we need to work on how goods or services could be sold at cheaper prices seeing how goods are being sold and cutting off the Advertisement cost that are than marked up on the products' retail prices.

Involving the final buyers in the whole process is part of the solution. The www and its users are part of this solution.

If I can a a product at 50% off, why should I care about spending money on the transaction ??
I have nothing against BTC but I see it has serious limitations to perform its function(i.e. a p2p version of electronic cash able to allow online transactions without going through a
financial institution)on a GLOBAL TRADE scale.

The philosophy that lays be
hind Bitcoin, it is addressed to find an alternative way of payment for COMMERCE ON THE INTERNET that would cut off double-spending on transactions. Therefore BTC is just a mechanism "to make payments over a communications channel without a trusted party".

This sound very nice but to me looks applicable only to certain kind of trades. I cannot possibly see this mechanism being applied and a global trade scale.

One limitation of course is a good escrow for buyers. Once the BTC transaction is made, it is irreversible. The higher is the amount of the transaction, the more you as a buyer need a good escrow in case the goods or service you receive is not up to what it was supposeAn answer given to bitcoingdude.blogspot.com

You are absolutely right when you say

"We must increase the 'efficiency' of the key systems enabling "civilization"".

And surely the system would gain efficiency from replacing conventional banking.

But can Bitcoin actually achieve this goal ?

I have nothing against BTC but I see it has serious limitations to perform its function(i.e. a p2p version of electronic cash able to allow online transactions without going through a
financial institution)on a GLOBAL TRADE scale.

The philosophy
I have nothing against BTC but I see it has serious limitations to perform its function(i.e. a p2p version of electronic cash able to allow online transactions without going through a
financial institution)on a GLOBAL TRADE scale.

The philosophy that lays be
hind Bitcoin, it is addressed to find an alternative way of payment for COMMERCE ON THE INTERNET that would cut off double-spending on transactions. Therefore BTC is just a mechanism "to make payments over a communications channel without a trusted party".

This sound very nice but to me looks applicable only to certain kind of trades. I cannot possibly see this mechanism being applied and a global trade scale.

One limitation of course is a good escrow for buyers. Once the BTC transaction is made, it is irreversible. The higher is the amount of the transaction, the more you as a buyer need a good escrow in case the goods or service you receive is not up to what it was supposeAn answer given to bitcoingdude.blogspot.com

You are absolutely right when you say

"We must increase the 'efficiency' of the key systems enabling "civilization"".

And surely the system would gain efficiency from replacing conventional banking.

But can Bitcoin actually achieve this goal ?

I have nothing against BTC but I see it has serious limitations to perform its function(i.e. a p2p version of electronic cash able to allow online transactions without going through a
financial institution)on a GLOBAL TRADE scale.

The philosophy that lays be
hind Bitcoin, it is addressed to find an alternative way of payment for COMMERCE ON THE INTERNET that would cut off double-spending on transactions. Therefore BTC is just a mechanism "to make payments over a communications channel without a trusted party".

This sound very nice but to me looks applicable only to certain kind of trades. I cannot possibly see this mechanism being applied and a global trade scale.

One limitation of course is a good escrow for buyers. Once the BTC transaction is made, it is irreversible. The higher is the amount of the transaction, the more you as a buyer need a good escrow in case the goods or service you receive is not up to what it was supposed.


For example, in my business we use mostly Letter of Credits (LC) to buy goods from Far East suppliers.
An LC is basically a contract that is made between to buyer and the seller with the banks acting as a third party providing an excellent escrow for both buyer and seller.

The LC amounts are usually in the order of USD 50,000 to USD 250,000 with bank fees being around USD 300 for the LC opening.

So you understand that USD 300 on amounts worth several thousands of USD, is something you might be willing to spend in order to have your escrow.
It is just like paying an Insurance Company : if you have a Life Insurance, you have it to protect your family IN CASE something would happen to you. You do not get it because you know that you will have to pass away sooner or later ( sorry for the macabre example ).


Increasing efficiency in the economic system, in my opinion, goes far behind limiting double spending on transactions. Transactions are just one element of the economic system.

It is my opinion that to make it all more efficient, as an example, we need to work on how goods or services could be sold at cheaper prices seeing how goods are being sold and cutting off the Advertisement cost that are than marked up on the products' retail prices.

Involving the final buyers in the whole process is part of the solution. The www and its users are part of this solution.

If I can a a product at 50% off, why should I care about spending money on the transaction ??d.


For example, in my business we use mostly Letter of Credits (LC) to buy goods from Far East suppliers.
An LC is basically a contract that is made between to buyer and the seller with the banks acting as a third party providing an excellent escrow for both buyer and seller.

The LC amounts are usually in the order of USD 50,000 to USD 250,000 with bank fees being around USD 300 for the LC opening.

So you understand that USD 300 on amounts worth several thousands of USD, is something you might be willing to spend in order to have your escrow.
It is just like paying an Insurance Company : if you have a Life Insurance, you have it to protect your family IN CASE something would happen to you. You do not get it because you know that you will have to pass away sooner or later ( sorry for the macabre example ).


Increasing efficiency in the economic system, in my opinion, goes far behind limiting double spending on transactions. Transactions are just one element of the economic system.

It is my opinion that to make it all more efficient, as an example, we need to work on how goods or services could be sold at cheaper prices seeing how goods are being sold and cutting off the Advertisement cost that are than marked up on the products' retail prices.

Involving the final buyers in the whole process is part of the solution. The www and its users are part of this solution.

If I can a a product at 50% off, why should I care about spending money on the transaction ??

Thanks. Come and visit my blog there is something interesting.

An answer given to bitcoingdude.blogspot.com

You are absolutely right when you say

"We must increase the 'efficiency' of the key systems enabling "civilization"".

And surely the system would gain efficiency from replacing conventional banking.

But can Bitcoin actually achieve this goal ?

I have nothing against BTC but I see it has serious limitations to perform its function(i.e. a p2p version of electronic cash able to allow online transactions without going through a
financial institution)on a GLOBAL TRADE scale.

The philosophy that lays be
hind Bitcoin, it is addressed to find an alternative way of payment for COMMERCE ON THE INTERNET that would cut off double-spending on transactions. Therefore BTC is just a mechanism "to make payments over a communications channel without a trusted party".

This sound very nice but to me looks applicable only to certain kind of trades. I cannot possibly see this mechanism being applied and a global trade scale.

One limitation of course is a good escrow for buyers. Once the BTC transaction is made, it is irreversible. The higher is the amount of the transaction, the more you as a buyer need a good escrow in case the goods or service you receive is not up to what it was supposed.


For example, in my business we use mostly Letter of Credits (LC) to buy goods from Far East suppliers.
An LC is basically a contract that is made between to buyer and the seller with the banks acting as a third party providing an excellent escrow for both buyer and seller.

The LC amounts are usually in the order of USD 50,000 to USD 250,000 with bank fees being around USD 300 for the LC opening.

So you understand that USD 300 on amounts worth several thousands of USD, is something you might be willing to spend in order to have your escrow.
It is just like paying an Insurance Company : if you have a Life Insurance, you have it to protect your family IN CASE something would happen to you. You do not get it because you know that you will have to pass away sooner or later ( sorry for the macabre example ).


Increasing efficiency in the economic system, in my opinion, goes far behind limiting double spending on transactions. Transactions are just one element of the economic system.

It is my opinion that to make it all more efficient, as an example, we need to work on how goods or services could be sold at cheaper prices seeing how goods are being sold and cutting off the Advertisement cost that are than marked up on the products' retail prices.

Involving the final buyers in the whole process is part of the solution. The www and its users are part of this solution.

If I can a a product at 50% off, why should I care about spending money on the transaction ??