Bitcoin for Iceland

[cartman]

Maybe some speaker of the bitcoin community wants to propose iceland to introduce bitcoin as a new currency. iceland experienced a lot of inflation and price volatility in history and might be quite open to those ideas, remembering the problems they had in the financial crisis. iceland does not have too much "users" and i think they anyway do not rely on one single currency. iceland adopting bitcoin might lead to more stable exchange rates as well.
still there are some practical issues. i suggest, they give out paper money which is 100% backed by bitcoin.
in times where bitcoin is still too volatile, they could try to control the amount of bitcoins they use for backing up, to keep prices constant or moderately deflating.
what do you think?

[carlerha]

I think it's a good idea, Iceland has like 300k inhabitants, so building a national economy on top of Bitcoin should be feasible in the short term?

I'm also curious what will emerge to be the currency of choice if/when The Free State Initiative manages to establish it's proposed trade zone. Bitcoin could be very much applicable to that potential economy.

[Dobrodav]

There is a problem of using some global currency as national and otherwise.

[lizzyREGIE]

I really did not have any idea about this. You really have something going here.

[Astro]

Iceland also has one of the highest rates of Internet penetration (percentage of the population having an Internet connection), possibly even the highest.  So there would be no technical barrier.

[FatherMcGruder]

Bitcoin is still too young for any government to trust it enough to accept it as legal tender, unless you meant that Icelanders should adopt it unofficially.

[generalunited]

this is a great idea.

iceland is trying to position itself as a safe haven for internet freedom with the Icelandic Modern Media Initiative/Institute @ http://immi.is --- additionally they are trying to market themselves as the greenest place to host data because servers run on thermal generated power and can be cooled from the cold climate --- plus they have lots of legal protections in place. plus their top level domain is '.is' which is declarative and helpful for providing a definitive resource locator / URL for bitcoin address hashes.

I have the domain http://coin.is which i had some plans to use for something else before i found out about bitcoin ---- it could be used as the best way to market bitcoin to the public as well as a server in the protected 'cloud' of iceland for APIs and other technologies client applications could use to make a better user experience w/o desktop software.

http://coin.is/1Gy8cVUKykZqQ5MmCyKMCi7ExwY8NvgeLA could be the simplest usage

for referencing to entities:
http://name.coin.is/generalunited

for sending messages encrypted to that key to a coin holder:
http://mail.coin.is/1Gy8cVUKykZqQ5MmCyKMCi7ExwY8NvgeLA

for returning a value of a coin:
http://value.coin.is/1Gy8cVUKykZqQ5MmCyKMCi7ExwY8NvgeLA

for providing services on top of coins, :
http://clear.coin.is/1Gy8cVUKykZqQ5MmCyKMCi7ExwY8NvgeLA

[shady financier]

It's actually not good for a country to have a global currency, at least not for its industry (or in Islands case, it's tourism/geothermal-energy/aluminium-processing exports). Demand for the global currency is high as it is globally demanded (USD for oil and commodities for instance).

In normal cases high world-wide demand for a currency pushes up the price of the money, which is bad for exports. US low interest rates mean the FED can spew out dollars while everyone else still needs to buy em up, so the US is shielded from a lot of the price inflation of such cheap money (not people in India looking to buy rice though 'trickle-down effect' I guess).

If a nation like Island adopted bitcoin as it's currency, it would be pretty tough going for its exports, although good for it's finance sector... except bitcoin makes much of the financial sector redundant in my opinion.

[evoorhees]

In normal cases high world-wide demand for a currency pushes up the price of the money, which is bad for exports.

...but proportionally good for both commercial and consumptive imports. The average icelander would be wealthier in terms of foreign products she could buy, though the Iceland exporter would be angry. Markets can be chaotic, but it's foolish mercantilism to deny/prevent the economic values which Bitcoin could bestow upon Iceland merely in order to protect a certain set of interests (the exporters in this case).

With that said, I don't think Bitcoin is quite ready for national adoption. More incubation is required =)

[Dan The Man]

they also have the cheapest electricity in the world

[Elwar]

I think a local currency such as the Ithica dollar would be good for any small community that wants to encourage local trade.

Sure, it is a global currency but with it being so underutilized it will be practically as if it is a local currency.

It would also benefit the community if mining was encouraged.

It would be like a local community mining gold and using it for all of their transactions.

[bitcoinminer]

I'd advise Iceland build its economy on fish and tourism, as it used to.

They wrecked their economy with financial speculation the first time around.  They're (hopefully) too smart to do it again.

[the founder]

Mechanically how do you think it would work? You realize that there is no process in place to allow this to happen?   How do the bitcoins get to the proper people in Iceland in the first place (IE: do we just send them over to random people in iceland?)

We have no easy method yet of getting them,  no easy method of selling them,  no easy method of transferring them like a debit or credit card.  Something like this would take on the scale of a decade to happen...  because none of the infrastructure is in place,  at least not refined enough to do such.

Then there's the bigger question of why would they adopt a currency that has been devalued 90% in the past 6 months?   What we experienced is far worse than what happened to the Icelandic currency.

I'm not saying this is the worst idea ever,  because I floated the same idea,  abit at a smaller scale half a year ago.
  
http://bitcointalk.org/index.php?topic=21684.0

On that thread I argued that we need more translations into differing languages on the main bitcoin.org site to widen the adoption rate in those countries.   I wasn't proposing they adopt it as a whole because though I would love that I believe that it's infeasible...  but targeting those countries and widening the adoption rate there.. that's very doable.

[LokeRundt]

Having the computing power per capita that they do, Iceland could well fork a blockchain and if a large percentage of the citizens mine for it, it would be secure fairly quick.  All the benefits of the original bitcoin blockchain, but customized for the island population

[cbeast]

I wonder what the Eve Online systems could add to the Bitcoin network?

[ineededausername]

Maybe they should just back their currency with Bitcoins instead of introducing it as the national currency?

[Bitbird]

How do the bitcoins get to the proper people in Iceland in the first place (IE: do we just send them over to random people in iceland?)

Send a delegation to Iceland wouldn't be too hard. If I can live there, will have no problem pay tax by BTC. But before send anyone to Iceland better have some serious thinkable solutions for them (Iceland government and volunteers). Though these could be discuss in details.

[BubbleBoy]

It seems bitcoins emit a powerful reality distortion field, strong enough that those who poses bitcoins become impervious to logic, reason or common sense.

Why would any country adopt a foreign currency, that they must buy with products and services, when they can print their own ? Assuming the government is irresponsible or despotic and can't be trusted to print money (Zimbabwe), why would the people of that country adopt say, linden dollars, an online currency that no exporter will accept, as opposed to real dollars or euros, currencies backed by powerful states , having single digits inflation and good for any foreign trade ?

How do the bitcoins get to the proper people in Iceland in the first place (IE: do we just send them over to random people in iceland?)

Send a delegation to Iceland wouldn't be too hard. If I can live there, will have no problem pay tax by BTC. But before send anyone to Iceland better have some serious thinkable solutions for them (Iceland government and volunteers). Though these could be discuss in details.

It's easy: make every Icelander own 20 bitcoins on average by giving up his entire wealth to those pushing the scheme. Unleash the Apple stock etc. flawed analogies.

[robocop]

What would be with bitcoinIceland?

So the system were the same as bitcoin but the bitcoinIceland would be initiated and published by the iceland government so the early adopter are not less private people but the government which could regulate the bitcoinIceland in the future with their big amount of bitcoins.

[MaxSan]

I think what JackH is considering allowing financial markets to buy and sell using bonds this would be a very feasable idea. Outside countrys would have no problem in liquidating any bitcoins being held then so international trade would be plausable (although im sure 98% of the world would be resistent to the idea even with this financial instrument)