Bitcoin vs. Tally Stick system

[||bit]

Seeing that the social agreement system and issuance process of what is accepted as money has varied & endured centuries or millennia. How is bitcoin worse than any other form of money?
How is it better? Just some thoughts....

The idea of fiat (inherently worthless) money isn't terrible (e.g. bitcoin is just digital information and dollars/pounds/euros/yen are just pieces of worthless paper with numbers)... IF.... the agreement of it's usage can be widely accepted, well secured and made easy to exchange. Fiat money isn't bad because it's just a way of measuring & proving labour performed that can be exchanged for some item or service that is also fairly quantifiable in terms of labor. A kind of proof of work. One might say gold or precious metals are considered worth money but show no labor value, but that is not correct because of the time it takes a person to search [read: labor] for such things.
If any of you have not seen the documentary "Money Masters: How International Bankers Took Control of America", then find time to watch it. It's three and half hours, and is FAR more interesting than the title leads. It describes the history of money and the problems with our current system since the central banks (i.e. Federal Reserve) have taken control of the issuance of our money supply. It also provides a practical solution to the problems with it to include ending 'fractional reserve' lending. BTW: Few presidential candidates understand these problems with our monetary policies. However, there are those like Ron Paul that carry hope that we can perhaps unshackle the people from these banking cartels.

In the above named documentary, the speaker claims that perhaps the most successful form of money was called the "tally stick" system in England. Lasting, I believe, about four hundred years. The basic way it worked was like so: The king of the land had sticks from tree's that were like rods & cut with notches in the stick to denominate it's value. The sticks were then split down the center. One half of the stick was stored in a vault, and the other was spent into the economy. It was acceptable because the king deemed it so, secure because forgery was impossible (i.e. no two sticks have the same growth patterns when you split them..and the notches could not be changed..unless there was an insider) and it was easy to exchange between people (perhaps in some cases lighter than carrying it's value in gold around). Sadly, if I am not mistaken, it was a new central banking system in England that did away with that most successful tally stick system - go figure.

After looking over the bitcoin system, and as far as I can see..so far.. the bitcoin concept seems very similar to tally sticks. This is interesting to me since the tally stick system was considered the most successful form of currency in history. There is the distinction that there is no king or leader that deems it as good for exchanges. However, the collective of people can perhaps deem it so for themselves.
Despite that nuance.... the similarities are striking.....

Secure. As far as I can see, the security of the system is practically the same. The impossibility of forging a sticks ring patterns is replaced with it seems something as strong as a 32 character strings. Like I said, that is far as I can see. I'm a newbie here after all

With a 32 character string, you have a 42^32 number of combinatorial possibilities. The 42 coming from all characters {a...z} + {A...Z} + the digits {0...9}. These are the kinds of numbers that it seems are used to determine the unique accounts when you are assigned on by bitcoin.exe, but I suspect at least as much is required for securing the coins (preventing a type of forgery). So, not knowing the details yet, it seems to be at least as improbable of forging a coin as 1 out of 42^32...or 1 chance in 8.79 x 10^51. Which does not include any other securing layers that may exist to secure coin transactions. How big is that? Well, one estimate regarding the observable part of the universe suggest that on the order of 10^40 nuclei of an atoms would be needed to fill it. The number 8.79E10^51 is a 100 Billion times larger in magnitude. I think it's fair to say the bitcoins are secure...unless one thinks it likely to pick a single point in the observable universe within the radius of one atoms nucleus.

As for ease of exchange. I think that is quite obvious in this day with the internet. Though, a solution may eventually be needed to make bitcoin transactions in the physical world. And this seems quite possible as people carry around mobile devices like iPods or mobile phones capable connecting into the the Internet.

So, I think bitocins are perhaps the closest we can find to the tally stick system. In fact, it is far better in ways, such as ease of exchange. After all, carrying around a bunch of sticks isn't nearly as easy as point and click.
I don't know all the intricacies of how bitcoin works..so, I will leave it with that caveat. Some skepticism, but also very exicted about the possibilities of eliminating a central  banking system that can profit enormously from maipulating the value of money through the cycles of easy and hard money or inflation and deflation.

The international banking cartels will probably vehemently oppose this currency. That is my main concern. Perhpas, moreso than governments. Since they have immense financial resources to influence politics & media, and are apparently driven by an evil love of money - a greed that destroys and cares nothing about the well being of mankind.

[detroit]

Wow, dude, that's an awesome post for the newbie section.  I hope you stole that rather than going to all the effort to think that up & type it all in for a bunch of nobodies like us to say "tl;dr" to.

[sirj]

That's all good, but to consider it currency isn't popular around these parts. It's a digital good, used for bartering in the online multinational community aware of it.

[fcmatt]

interesting post. i will have to read up on this tally stick system's history.

[||bit]

Wow, dude, that's an awesome post for the newbie section.  I hope you stole that rather than going to all the effort to think that up & type it all in for a bunch of nobodies like us to say "tl;dr" to.

It wasn't a real problem to type out. It's just some of my thoughts. However, I wouldn't want to type it again 

Newbies need to make 50 comments and/or original posts in order to interact with the more meaty parts of the forum. I'd like to do that, and figured it would be best to at least contribute some comment or a new post that I felt was relevant and thought provoking.

Also, I really am passionate that we need a kind of escape from the internationalist banking cartels stealing the people's money by manipulating the worlds credit. Why not bypass that whole shceme with the option of something free and transparent? Afterall, why do we pay interest to these banking systems that make money out of thin air? http://www.themoneymasters.com/

The Federal Reserve, may be the most powerful, but it isn't the only central banking scheme or cartel to maliciously infect a government & society.
Banking schemes of the world:  http://centralbank.monnaie.me/

[||bit]

That's all good, but to consider it currency isn't popular around these parts. It's a digital good, used for bartering in the online multinational community aware of it.

Seeing that it has no inherent value, is called a coin and facilitates [acts as a medium] for an exchange of valued goods.... it might as well be called a currency. It might be best to call it that in order to show confidence in it as an effective means for carrying value.

I think the general fear of calling it a "currency" is a subtle skepticism that there is something illegal wiht it. That perhaps, the government(s) might not like it. I think the truth is that international banking systems (the central banks) are it's real haters. It could threaten their profits. As for governments, as long as you report any profits, I think that is what they want to know so they can tax you for your labor (another topic).

So, answer this, can you or anyone in this forum say from what country bitcoins are denominated or generated? Which nation regulates it? I doubt that the origin of the idea matters considering it's current condition. And if you consider that it is international, then how would it be much different than trading in Euro's by Americans...or trading with the Yen by Brits... sending money to a bank in Kuiwait and converting it into Dinars?? An example with my brokerage account, I can convert my dollars to euros...and spend them on European goods(stocks)...which become my property. Did I commit a crime? Even more, I've read of American businesses that take Euro's... What punishment shall be given to them? Assuming they convert them to dollars after a purchase and report any profits to the government.

http://www.reuters.com/article/2008/02/06/us-newyork-euros-idUSN0655798320080206

http://www.ksl.com/?nid=148&sid=2760227

Call it an asset for bartering is fine...like bsaeball cards... But I think to garner more widespread acceptance or credibility, it needs to be treated more like a currency. It has a long ways to go, but going by the trading levels and increasing hashing... seems like the sails are opening up and catching some wind. I'm not going to throw all the eggs in the basket. It's probably best to stay cautiously optimistic, as seems like something that's good that can come out of the Internet.

[monkeymagic]

Tallysticks were a purely virtual money with no relation to any commodity supply with a legal and certification framework backing them up in case of dispute which helps promotes trust which in turn enhances their success. There were also very hard to forge which helped a lot (due to the uniqueness of wood grain when split in 2, the sides could be matched up again later).

In fact tally sticks are pretty much the same as the modern commercial credit circuit mechanism used by small businesses in countries such as Uruguay where the currency had become limited in supply under economic collapse situations. In simple terms someone certifies invoices that the transaction and work was real and these then turn into effective money and can be exchanged as such. This requires support of some trusted agent to do the certification so it relates to real work (otherwise you could just print invoices and screw the system up). Government support massively helps in that they can enforce that large businesses also accept these as valid payment. However, without government support an NGO could also do this but the circulation would be smaller.
http://www.worldacademy.org/forum/commercial-credit-circuit-c3

Bitcoins seem more based on a finite commodity system to me, although it does have one improvement over metal based ones as it solves the supply manipulation problem better as no humans are involved (merchants can't rig the supply for their own manipulations as happened with gold and silver etc at various times in history). However, physical has one advantage in that mining real stuff does represent some actual human work at its initial point (that unfortunately later gets distorted though by 'market forces'). I am not sure how well CPU mining work really relates to this part of the equation of relating to some tangible human activity.

History has swung back and forth between these two popular forms because there are pros and cons to both methods but neither have solved the entire problem of fair exchange and representing production. People lose trust in one and the grass then seems greener on the other side of the fence, but later same problems occur as it hits its natural limitation and so history repeats. This is why you are seeing a massive rise in 'gold bugs' etc as the trust wanes in the national virtual currencies. To me it looks like Venezuela is about to revert to metal backed currency soon as they have nationalised their precious metal industries (i.e. the only way of stopping private merchants cartels rigging the supply) and now recalling all their gold from US and UK etc.

I can think of a few ways to destroy and/or control either type of economy if you are so inclined (often even both due to short sighted selfish nature of greed!). I am not letting on yet the exact mechanisms as I will cover those later in a series I am writing. One of the weakness of purely virtual money such a tally sticks (or current digital money) also happens to apply to commodity based currencies, even if those avoid the other weaknesses. Bitcoin seems to avoid one more common weakness to me but not all.