Yeah, Bitcoin is really just a point system. When you have trustless, distributed, perfect memory of who has how many points, you don't actually need "money." And of course the point unit doesn't actually matter. What matters is what percentage of the total amount in circulation you control, but it's just easier for our brains to work with "coins."

Why should all highly wealthy people be excited about Bitcoin? It offers several "superhero" attributes that make it the ultimate store of wealth for people who are rich enough that the possibility of confiscation or even public knowledge of their wealth becomes a major issue eclipsing whatever volatility and other risks Bitcoin may have.



Note 1: I consider the superhero attributes for high net-worth individuals to be:

• Complete immunity to confiscation (capital controls, border seizures, account freezes upon arrest, etc.)
• The possibility of complete secrecy of the size of your holdings (the Rothschilds will like this )
• The unprecedented combination of teleportability and lack of counterparty risk ("all gold's freedom from counterparty risk, but instantly transferable anywhere in the world" - teleportable gold).

Note 2: Chart made in 5 minutes at Compare Ninja. Feel free to copy/modify at will.

My impression is that both Bitcoin and Litecoin are set up so as for the mining power to always be well ahead of the amount necessary to make a 51% attack unprofitable. A bit more worrisome is some kind of catastrophic technical failure in Litecoin, which is more likely than with Bitcoin since LTC has much less dev support.

But hopefully MtGox will limit LTC trading volume to a sensible level to allow for such risks.

The most painless way to learn basic economics is still Irwin Schiff's original comic book, How an Economy Grows and Why it Doesn't:

http://freedom-school.com/money/how-an-economy-grows.pdf (PDF)

http://home.earthlink.net/~schiffeconomics/01.htm (HTML)

Is this behind a paywall? It's asking for a username and password.

Good discussion of "capitalism" from a libertarian/anarchist point of view: http://mises.org/community/forums/t/22196.aspx

Never ask what a word "is" - this is one of the worst intellectual habits you can possibly cultivate - because words aren't anything. They are merely communication tools that can refer to things. Asking what some controversial word "is" is a recipe for a protracted (sometimes centuries-long), hopelessly confused debate.

The question to ask is what each person is trying to get at when they use the word. This is the ONLY way to ever reach clear thinking about a term or (verbalized) concept.

Minarchists define capitalism as free trade, voluntarists define it as a condition of inviolable property rights or lack of central authority, and leftists define it as what libertarians would call corporatism (if they define it at all). These meanings are obviously incompatible; these people speak different languages, so it is a complete mistake and wild-goose chase to ask what the word "really means." It means different things to different people, as different as the word "Gift" means to an American and a German (Gift means poison in German).

Figure out what each person you talk to means by the term before engaging in a debate with them, or else it will just devolve into semantics. And if you are just thinking in your own mind, be sure to figure out what you are trying to get at when you use a key term, rather than pondering about what it "is" like some muddle-headed Platonist. Doing this with everything (even the word "Bitcoin") is one of the best habits you can cultivate for lucid understanding of things.

Anyone who's worried about altcoins messing things up for Bitcoin, read this:

http://www.reddit.com/r/Bitcoin/comments/1bxrrw/playing_devils_advocate_why_bitcoin_will_crash_to/c9bhvme

By all means, reference away. All ideas here are for spreading. Each of those links I included have had a big effect on how I see Bitcoin and its significance, but they do take a while to read.

This is a huge possibility space ripe for brainstorming. I suggest everyone take some time out, go for a walk, and consider the possibilities of how Bitcoin could be used to revolutionize aspects of how social and business rules are enforced. You just might come up with an idea that will change the world.

If it's a soundbyte you have to use the common definition, but if you have more time I'd say it's definitely worth it to alert people to the doublespeak in their definitions. People will eventually catch on that every key word needs to be investigated and used carefully.

This is true in every field, even investing and Bitcoin generally.

Until people learn to think about what a word is trying to convey rather than what a word "really means," they'll never have any chance of thinking clearly. Ayn Rand was wrong: the most important question we can ask about something (X) isn't, "What is X?" But rather, "What are we trying to get at by saying 'X'?" Instead of treating words as communication tools, people tend to fetishize them, getting stuck on the "actual meaning" of a word as if such a thing existed.

Governments take advantage of this tendency in order to conflate "criminals" (those who break legislated law) with bad people, "crimes" (breaking their laws) with breaking the very rules that allow society to function, their legislated "law" with natural customary law (http://mises.org/journals/scholar/hasnas.pdf). This semantic obfuscation is as insidious as it is powerful and should be confronted whenever possible, in all fields.

Some big confusions in this thread:

• Governance needn't imply a government. Society can operate peacefully being governed by a structure of laws and norms without any central power structure creating or enforcing those laws.
• Democracy in the mainstream sense is not only literally "rule by the people" but a centralized form of that rule. Bitcoin and its potential uses allow for a true democracy ("rule" by the people, but not by any specific people; law that is the product of human action but not of human design) that is decentralized - basically anarcho-capitalism, though without any Rothbardian or Friedmanite ethical flavorings.

By printing trillions of dollars and giving it to banks, but giving them incentive not to use it by paying interest on it from the Fed to the banks, thereby causing deflation (or just no inflation despite QE-infinity) first, it seems like a gigantic bailout/superbonus to banks, because when deflation hits those trillions will have even more purchasing power (or when inflation doesn't hit those trillions will be worth just as much), which the bankers will get to fully enjoy as they spend the money at full value buy up everything. Since it takes time for the newly issued bank money to ripple through the econoky amd drive prices up, the inflation will only hit like a year or two afterward, when the banks will already own "everything." Jefferson was right? Classic bankster playbook material straight out of the Great Depression (except more ambitious because they now have no gold standard so they can possibly forego deflation entirely in exchange for hyperinflation and bankers owning everything).

The classical strategy would then be to buy gold at the peak of the deflation (or just before the inflation starts - maybe now or soon?) when it'll be cheapest.

However, anticipating this, they might be planning do another gold confiscation as inflation hits. But here Bitcoin comes out of left field... (Not to mention that internationalization and the Internet are big potential monkey wrenches this time; this ain't 1930 anymore, and rehashing the old central banker strategies may not work.)

This is the way Bitcoin should be explained. It seems so easy and obvious just to tell people, "Bitcoins are money," but many skeptics* start to poke holes in this, leaving too many doubts for them to invest, or too many question marks in their mind to invest serious dough. As we all know, the percentage of our portfolio we are comfortable allocating to BTC is in direct proportion to the degree of our understanding of Bitcoin and its implications.

This makes lucid communication of the deeper, more accurate conception of Bitcoin a matter of practical importance.

Although it seems harder at first to go through the trouble of explaining this "Bitcoin as memory (not money)" concept, I think it could be explained fairly effortlessly with the right materials and phrasing, and it would allow people to really grasp why Bitcoin is revolutionary and why people pay money BTC. Otherwise they end up thinking people are "buying it to hand off to the next sucker" or "bitcoins aren't backed by anything" or some such nonsense based on the easy but ultimately unsatisfying explanation of Bitcoin as money rather than the more all-encompassing explanation of Bitcoin as memory, which avoids all these misunderstandings.

*Who isn't a skeptic about their own money and novel monetary schemes?

This isn't about semiotics directly, but as an overall start for serious consideration of Bitcoin with an eye toward deep insights that have practical utility (what else is philosophy, if not this?), I'd start with:

• Bitcoin, the protocol, is - like customary law - the product of human design, yet not controllable by any person or group (the dev team has limited, tenuous influence but their updates are only accepted at the pleasure of the community, even if the more established players like MtGox currently have disproportionate sway in such matters).
• Bitcoin, the protocol, sets the parameters for Bitcoin, the ecosystem, to develop as a (Hayekian) natural order of individual humans.
• Bitcoin, the network, constitutes a public memory system that eliminates the need to use money (or trust) for transactions. It can do so much more as well.

Natural orders are antifragile, become extremely sophisticated but take time to do so, tend toward exponential growth in many aspects, and what they become depends on

1) the nature of the individual "cells" that comprise the natural order (in this case humans)

2) the parameters on the system (the Bitcoin protocol)

3) other environmental factors (in this case the level of related technology, etc.).

1 is generally unchanging because human nature and conventions don't change quickly and 2 changes only with major changes to the Bitcoin protocol, so those may be of little interest.

However, 3 is changing at exhilarating speeds right now, with Internet, the spread of smartphones, and the development of technologies like BMOT. Of course, Bitcoin itself is changing the technological environment, like the Internet did, enabling even faster advancement. The Internet made the cells in this natural order we call global society more apt to collaborate and learn faster from each other, resulting in Bitcoin, which in turn allows the cells (us) to extend our global collaboration into actual economic cooperation in myriad valuable areas through mutually beneficial exchange.

As one major example of the changes, Internet + Bitcoin + Google Glass and other cutting-edge technologies are set to expand the scope of the international division of labor dramatically, both geographically and in terms of fields covered. For example, you could use an app to find and hire a mechanic in India to help you fix your car via Google Glass and pay him in BTC at a price that is both shockingly low for you and wonderfully high for him - trade is made of win, and the bigger the sphere of trading and the more direct it gets from person to person, the higher the standard of living for everyone.

Roger Ver says he's most excited about the changes to society Bitcoin will bring about, but many think Bitcoin's impact on society will be fairly limited. What I think these people don't see is that by changing the technological environment in which society operates on such a fundamental level, the types of structures that develop within the natural order of society will change in a profound way, just like very slightly tweaking the rules in Conway's Game of Life will produce vastly different patterns and structures.

That's the very problem OP's proposal is meant to solve. Besides arbitrage and MtGox's still-dominant market share, another significant part of the reason the other exchanges follow MtGox in a sheeplike fashion is that MtGoxUSD is the price everyone watches, and that's partly because there is no convenient way to see a nice weighted average price for all the exchanges.

You mean the 30%? MtGox still controls ~70% of that pie chart, down from I think 80% in 2011. Progress, but very slow progress. That said, it seems much of the change happened in the past few months, presumably in the wake of the DDoS attacks and thanks to the price appreciation and user adoption. Antifragility is slowly working its magic in the face of inertia and the network effects that tend to centralize exchanges.

Speaking of which, once we get some way for mainstreamers to have exposure to Bitcoin through a more standard investment vehicle (bitcoin ETF, etc.) we should also see gurus pushing bitcoins like they do precious metals, since they can offer services around it.

Sadly much of the reason Bitcoin isn't yet recognized as a mobile (teleportable & hide-able) store of wealth for HNWI is due to misunderstanding within the Bitcoin community itself. People advertize Bitcoin as money and as a medium of exchange and discourage "speculation" without making a distinction between short-term trading for fiat profit and safe-haven wealth protection / long-term investing.

In actual fact, given capital controls and unforseeable events that may force anyone to vacate their country of residence in a hurry (or be wrongfully arrested, etc.), a person of sufficient wealth would have to be a fool not to have a few bitcoins stashed away - assuming the person simply understood Bitcoin. In such circumstances, 5% of your wealth in a brainwallet could mean the difference between a ruined life and a temporary return to a lower standard of living.

Here's the narrative I'd like to be the common Bitcoin community wisdom, because it's true:

"Although at least one solid medium-of-exchange use may have been necessary for bitcoins to become valued when no one knew about or trusted them, with probably over a million users that train has left the station. Bitcoin's functionality as a teleportable and secret store of value is currently its most compelling use for wealthy people, since it is a highly sought-after capability (or would be if people knew such science-fiction-level thing is now possible) provided by no other asset. The consistently extraodinary year-on-year growth is just icing on the cake."

Bitcoin is the ultimate offshore account, and it happens to be experiencing incredible growth as a bonus - more than enough to offset volatility on a yearly timescale.

It certainly has the markings of price manipulation.