What is the 'purpose' and 'nature' of Bitcoin? Some questions.

[kiklo]

Coherent conversation with you has proven to be impossible,
Only option left is to borrow a line from Spoetnik.

@HS

You're a Retard.

 

[Shenzou]

The actual purpose of bitcoin was to make an alternative way for people  to trade and  exchange money on the internet , a safer way to shop online without having to use your credit card that is linked to your bank account which will compromise it,but from that idea it created the best way for hackers and bad people to use money without being tracked down, that is why governments can't control it and that is why they made it illegal in some areas, that is why it didn't become an international currency

[jonahmarieaton101]

Actually i don't know what's the real purpose of bitcoin. Why they develop this? But one for sure, it is meant to be used in place of money to transfers which are based on account information rather an exchange of something, so bitcoin work more like cash that other digital money exchange systems.

[HugoStone]

The actual purpose of bitcoin was to make an alternative way for people  to trade and  exchange money on the internet , a safer way to shop online without having to use your credit card that is linked to your bank account which will compromise it,but from that idea it created the best way for hackers and bad people to use money without being tracked down, that is why governments can't control it and that is why they made it illegal in some areas, that is why it didn't become an international currency

Totally agree that it's an alternative medium of exchange and that some governments are very scared about the loss of control it represents. As for the reason Bitcoin hasn't taken off, I think the answer can be found in what people talk about when they talk about money. I mean, when people talk about the stuff they usually talk about how much everything costs and not having enough of it. They worry about being able to pay off the mortgage, car, taxes, put food on the table, and still have enough to save for the future. Millions of people are in this situation. Billions more are just worrying about being able to eat.

I think Bitcoin has shown us that money is a technology - and that's exactly what Bitcoin is, isn't it? Like any technology, it has to be assessed on how useful it is and what problems it solves. If a technology doesn't solve problems (or only solves problems for a minority) then what use is it? I mean, if the problem is that a minority have more money than they know what to do with (while everyone else worries about not having enough) then does decentralising money or making money more secure solve that problem?

HS

[Luke2939]

I believe bitcoin helps people to fall back on an alternative way of payment that is free from manipulation. It can save them from inflation eating into their savings. Yes bitcoin burns lots of energy just keep the block chain running and it is a price that someone has to pay for trust and security. Trust comes from believe the idea or concept. It takes time to build and It is a part of human emotion. People trust in US dollar because they believe in the US Government. In the same way people who believe in block chain and the bitcoin algorithm will use bitcoin.

[HugoStone]

Take a look at this: http://www.thedrum.com/news/2016/11/22/self-driving-car-test-its-skills-boston-fleet-cars-slated-grow-beyond-singapore

And this: http://www.pymnts.com/chatbot-tracker/2016/chatbot-tracker-shipping-gifts-and-customer-return-rate/

Imagine the above applied to the millions of driving and customer service jobs out there. It's coming, isn't it? It's going to happen. Technology reduces the need for human labour, and therein lies the problem. The way we look at money amounts to "It has to be earned because it represents a 'debt' you have to 'pay off' and if you want to live then you have to work", but the logic of technological development reduces the availability of work. There are already millions of people having to work two or even three part-time jobs just to make ends meet. Millions more are under-employed and rely on state handouts.

What is the purpose and nature of Bitcoin in relation to this? We're in the early stages of a technological revolution and we're still trying to address the problems it is creating by using technologies and methods from an earlier era. This is why I suggested elsewhere that Bitcoin has reinvented the wheel, i.e. it has reinvented the coin in digital form. But has reinventing the coin actually solved anything?

HS

[jbreher]

Like any technology, it has to be assessed on how useful it is and what problems it solves. If a technology doesn't solve problems (or only solves problems for a minority) then what use is it?

But Bitcoin does solve problems. Just because the masses are not yet aware of these solutions, does not invalidate them. The masses are ignorant of orbital spin angular momentum, but application of this subatomic phenomenon is already solving a myriad of everyday problems for everyday people.

Two specific attributes that Bitcoin possesses, which our fiat money system does not include:

1) Known low rate of inflation (money creation)

Bitcoin's inflation rate ratchets downward every ~4 years, with smaller exponential decreases throughout the intervening years. This is a fixed known attribute of the system, encoded within its protocol. Less than a decade into the project, this inflation rate at less than 6% (https://bitcointalk.org/index.php?topic=51882.0), is already lower than the rate that central banks such as FED are foisting upon us (https://fred.stlouisfed.org/series/M2) (13161-1224)/12244 = ~7.4%.

You might reply 'so what'. What the masses largely don't recognize (as of yet) is that every new unit of currency created obtains its value by stealing it from the value of every unit of currency already in circulation. As such, this inflation is a hidden tax that continually and inevitably steals wealth from the populace at large. Worse yet, the beneficiaries of this wealth-stealing are the insiders to the system, who obtain the value at the front end.

You might want to find a member of Occupy Wall Street who understands this partial reserve scam, and ask him if a money free from these ravages (OK, actually with an algorithmic shrinking of these ravages) might be something he/she might be interested in.

Further, given sufficient time, all fiat monies tend toward inflationary collapse due to this disbasement.

You may want to ask a Zimbabwean or a Venezuelan if a money with a low fixed algorithmic inflation rate might be something he/she might be interested in.

2) No central party of control.

I've said this above, and you seem to acknowledge the point. Unlike fiat money, your bitcoin is yours to use as you wish. There is no other party in control of how you may spend it. Or even if you have access to it at all. This means that you can send value to unfavored groups (e.g., Wikileaks). This also means that it cannot be confiscated by the violence of the state.

While you may have been looking in another direction, 'Bail Ins' is now the default plan for central banks for dealing with member bank collapse. In a Bail In, losses incurred by a banking institution deemed 'too big (i.e., connected) to fail' will be made up by stealing the account balances of depositors, converting them by decree to shares of the banking company. So far, this has been applied sparingly (Cyprus, anyone?). However, it appears that the world's oldest bank (Monte dei Paschi di Siena of Italy) is nearing collapse, and Deutsche Bank is looking as if it may trend to the same fate. Net: millions of depositors could have 'their' money stolen to make up losses. (Actually, ugly fact: money on deposit with a bank does not legally belong to the depositor - it belongs to the bank, and the depositor just owns a liability of the bank).

You might want to ask a Cypriot if an unconfiscatable money might be of some interest. Or, for a more recent example, an Indian, who in a land where cash transactions are the overwhelming majority of commerce, has just had its two most prominent monetary notes decreed to be no longer valid.

I mean, if the problem is that a minority have more money than they know what to do with (while everyone else worries about not having enough) then does decentralising money or making money more secure solve that problem?

You seem to be laboring under the misconception that any given thing must slice, dice, and even make julienne fries in order to be successful. No technology needs to be everything to everybody in order to take off. Especially at start.

Frankly, it seems obvious to me that Bitcoin solves the specific above named problems - for essentially everybody that uses it. The fact that the masses are absolutely ignorant of the underlying nature of the partial reserve fiat money system (probably at least partially due to indoctrination (purposeful miseducation) in schools run by the very benefactors of this insidious system) just makes it take longer before the inevitable mass adoption. These attributes are obvious benefits to anyone who thinks about them. Or do you not see that?

[streazight]

It was purposely developed by Satoshi for online transaction which had eradicated boring and long process of banking system and had made ease for online transaction. And for nature of bitcoin I would say that it is completely deficient form of money and it's probably first of its kind.

Yes I also agree with you, bitcoin is mainly created for online transaction trading and investment purposes, it is not created to demolish fiat, fiat is the basic currency of every country, and bitcoin is not going to disturb their status.

[HugoStone]

But Bitcoin does solve problems. Just because the masses are not yet aware of these solutions, does not invalidate them. The masses are ignorant of orbital spin angular momentum, but application of this subatomic phenomenon is already solving a myriad of everyday problems for everyday people.

First of all - thanks for your reply and for taking the time and trouble to go into detail. I'm not saying that Bitcoin doesn't solve problems, only that the problems it does solve are not necessarily the same problems that people see in money.

1) Known low rate of inflation (money creation)

Yeah, and I don't disagree with you. I know how inflation works, and with respect to you I wasn't asking for an explanation of how it works. Not having a dig, just saying.

You may want to ask a Zimbabwean or a Venezuelan if a money with a low fixed algorithmic inflation rate might be something he/she might be interested in.

I've referred to both countries on another thread and I'm still scratching my head. Under the circumstances, you would think that citizens of these countries would be desperately searching for alternatives - anything to avoid the need to exchange a wheelbarrow full of worthless fiat in return for a loaf of bread. It's not happening though, is it?

2) No central party of control. I've said this above, and you seem to acknowledge the point. Unlike fiat money, your bitcoin is yours to use as you wish. There is no other party in control of how you may spend it. Or even if you have access to it at all. This means that you can send value to unfavored groups (e.g., Wikileaks). This also means that it cannot be confiscated by the violence of the state.

I've never disagreed with this. However, people will not see this as a 'benefit' per se unless they have already experienced this violence first hand. In other words, I don't think this is right at the top of people's priority list when they think about money. To offer an analogy, it's a bit like asking people if preparing for the possibility of inter-racial violence is top of their list of concerns in relation to how they interact with people. If you're Jewish or a citizen of Rwanda then you might conceivably answer 'yes' to this, but it falls outside the boundaries of most people's experience - and therefore their concerns. To be absolutely clear - I'm not saying you're wrong. I'm just trying to look at it from the perspective of the man or woman on the street with no personal experience of state confiscation.

You might want to ask a Cypriot if an unconfiscatable money might be of some interest. Or, for a more recent example, an Indian, who in a land where cash transactions are the overwhelming majority of commerce, has just had its two most prominent monetary notes decreed to be no longer valid.

Again, I don't disagree with you. People need an alternative. Let me put it this way though. Say you're a middle-aged Cypriot taxi driver and the entire nation suddenly switches to Bitcoin. Now imagine you're the same Cypriot taxi driver and, six months later, Uber suddenly introduces a fleet of driver-less taxis and you're suddenly in the impossible position of competing with a machine. You find yourself unemployed. Maybe you can drive a bus instead? Except they've gone driver-less too. Maybe you can work in one of the Bitcoin-related financial services organisations that will have sprung up to replace the banking industry? Chances are they'll be online/virtual too so probably not. You're just an 'ordinary' bloke so what do you do?

I mentioned a technological revolution. Just what do we do in the light of this? Create a bunch of fictional jobs out of thin air and have them suck resources out of businesses? Maybe the state can invent these jobs and suck resources out of taxpayers instead? What exactly do we do and how does Bitcoin address these kind of issues? To repeat - I'm not saying that Bitcoin has no benefits, only that it doesn't tackle the issues I'm talking about. Specifically:

1. More and more people fighting for fewer and fewer full-time and/or permanent jobs
2. More and more people working two or three low paid jobs just to make ends meet
2. Better standards of healthcare and greater longevity
3. A massive pensions and savings hole with nothing to fill the gap

You seem to be laboring under the misconception that any given thing must slice, dice, and even make julienne fries in order to be successful. No technology needs to be everything to everybody in order to take off. Especially at start.

No, I'm just asking the questions that everyone else seems to be avoiding.

HS

[jak3]

the main porpose is not changed it is also a mode of payments and people can only transfer their money from one place to another its just same in all those other money system too but i chose bitcoin because it do it in very very djffrent way than those. bitcoin has its own network of payment and anyone can see anyone's transaction. anyone is free to participate in the network and send/recive money to anyone with the maximum security

[groll]

It was purposely developed by Satoshi for online transaction which had eradicated boring and long process of banking system and had made ease for online transaction. And for nature of bitcoin I would say that it is completely deficient form of money and it's probably first of its kind.

Yes I also agree with you, bitcoin is mainly created for online transaction trading and investment purposes, it is not created to demolish fiat, fiat is the basic currency of every country, and bitcoin is not going to disturb their status.

Yes! I agree with them! It was a digital currency that use by most of the peoole who's dealing with the virtual world, the nature of bitcoins was also like a real money although in digital form, bitcoins are created to use for online investment, online transactions. Bitcoins are chosen to be use by many people on thier online transaction because it was really fast and secure.

[jbreher]

Again, I don't disagree with you.

Great. You asked 'What does Bitcoin provide that fiat does not?', I answered several aspects where Bitcoin has unique benefits over fiat, and you agree. So we can put that aside, right? You concede that Bitcoin provides at least some concrete benefits over fiat?

People need an alternative. Let me put it this way though. Say you're a middle-aged Cypriot taxi driver and the entire nation suddenly switches to Bitcoin. Now imagine you're the same Cypriot taxi driver and, six months later, Uber suddenly introduces a fleet of driver-less taxis and you're suddenly in the impossible position of competing with a machine. You find yourself unemployed. Maybe you can drive a bus instead? Except they've gone driver-less too.

Bitcoin has no impact upon this example job displacement one way or the other. At least I don't see how it does.

We should not be conflating general Luddite concerns (in the original sense: https://en.wikipedia.org/wiki/Luddite) with Bitcoin. The overarching question of whether or not increasing technology will render some job loss is not Bitcoin's to solve.

If you wanted to conflate the two completely dissociated issues, you might have done well to use the exemplar of a banker or other pinstriped bandit from the financial services industry. At least these jobs might be directly affected by Bitcoin. Here is an industry that is completely parasitical in nature, that has through covert capture, come to control about 8% of the resources of modern economies (https://en.wikipedia.org/wiki/Financialization), with a coalescence of wealth far exceeding that operational share. If Cryptocurrencies truly disintermidiate finance, that would lead to one in twelve jobs being at risk.

But so what? Good riddance to bad rubbish. Maybe they can find more honorable employment as a street sweeper (OK, bad analogy given the obvious technological applications here), or mentoring underachieving youth.

Maybe you can work in one of the Bitcoin-related financial services organisations that will have sprung up to replace the banking industry? Chances are they'll be online/virtual too so probably not. You're just an 'ordinary' bloke so what do you do?

Why would the Cypriot ex-taxi driver be barred from an online job? To the contrary, online jobs open up employment to anyone anywhere in the world. One no longer needs to have the accident of geography of birth in order to work in the affected industries.

I mentioned a technological revolution. Just what do we do in the light of this? Create a bunch of fictional jobs out of thin air and have them suck resources out of businesses?

In a central planning sense? We do nothing. The Luddites had well-reasoned arguments as to why the industrial revolution would lead to widescale poverty. Looking back, we can see that all their reasoning amounted to nothing, as instead of widespread despair, the industrial revolution brought previously-unimaginable improvements in the standard of living across the entire world.

Turning the question around, if production is at a high enough level to meet the needs of the populace, then freeing up excess labor is a net benefit. If it does not take 2000 hours per year out of the life of each fit adult to sustain a good standard of living for all, why is this a bad thing?

[jbreher]

Rereading your response, I see I missed this point. Sorry.

I'm not saying that Bitcoin doesn't solve problems, only that the problems it does solve are not necessarily the same problems that people see in money.

I guess I have not discerned what you believe are 'the problems that people see in money'. Can you elucidate?

[Omegasun]

the main porpose is not changed it is also a mode of payments and people can only transfer their money from one place to another its just same in all those other money system too but i chose bitcoin because it do it in very very djffrent way than those. bitcoin has its own network of payment and anyone can see anyone's transaction. anyone is free to participate in the network and send/recive money to anyone with the maximum security

Yeah. It is hard to be hacked because it has a strong connection. Transaction fee as well is small compared to other way on transferring money. The one thing i hate bitcoin, it is not reversible even if it is atill unconfirmed.

[Harlot]

Bitcoin just like any other kinds of currency is used to buy stuff, the only thing different is that Bitcoin adapted to our generation of tech people. Compared to any Fiat money it doesn't have any features unique to Bitcoin which is security and portability. But for me Bitcoin also has a down side and the biggest down side I see is that it is a limited currency in which it will not be enough to become the global currency.

[HugoStone]

Rereading your response, I see I missed this point. Sorry.

No worries. Just to note, I'm definitely pro-technology.

I'm not saying that Bitcoin doesn't solve problems, only that the problems it does solve are not necessarily the same problems that people see in money.

I guess I have not discerned what you believe are 'the problems that people see in money'. Can you elucidate?

The short version is that the average person's problem with money is not having enough of it. That's their primary concern. They don't really care whether their money is held by a central source or in a decentralised ledger, because they're too busy struggling to pay bills and worrying about the future. Not just the immediate future but whether they'll have enough to retire on, or even if they'll ever be able to retire. That's the point we're at right now.

I do not think people understand the impact the latest batch of smart technology is about to have. I mentioned the driver-less car above. I was a teenager in the 1980s and used to watch Knight Rider. The idea of a car that could talk and drive itself seemed like science-fiction, yet thirty years later it's about to become reality. I remember watching an episode of The Simpsons about self-driving trucks. That too is about to become a reality. Millions of people are going to lose their livelihoods. OK, we can say that more tech jobs will be created as a result, but nowhere near enough to replace the jobs lost. And people are different, aren't they? Not everyone has the aptitude to become a programmer or an engineer.

The problem as I see it is that technological development eliminates the need for human labour, yet we conceptualise money as a 'debt' and tell people it has to be 'earned' by human labour. What happens when our level of technological development reaches the point where entire sectors of the employment market are made redundant overnight? Will we become Luddites and fight for our right to perform tedious, mind-numbing jobs in order to put food in our belly and a roof over our head?

Bitcoin has made it self-evident that money is a technology. Unlike other technologies, money hasn't adapted to changing circumstances and human needs. What really interests me about Bitcoin is that, in effect, computers are making money. There's nothing particularly new about that (banks and stock markets have been doing it for ages) but Bitcoin demonstrates that, in theory, the process of money creation itself can be decentralised. For me, the obvious question to ask is how far can we take that decentralisation? Personally, not only do I think we have to totally reconceptualise what money is, I think the logic of technological development is going to take us down that road whether we like it or not. I mean, if people don't earn then they don't eat, so what happens when they can't earn because jobs are no longer available?

HS

[jdbtracker]

Bravo... finally getting to the endgame. Bitcoin is accelerating these trends, every industry on the planet can be automated and this is what Bitcoin is showing us.

The way we have been thinking about things may be all wrong; We have been deluding ourselves by simply imitating the generations that came before without thinking clearly about our situation.

What is the Purpose and Nature of Bitcoin you ask?

It is a foundation for change. In simplest of terms it is nothing more than a ledger, a database, synchronized and co-ordinated across all it's users, assembled in such a fashion that it will support and enable it's users to live.

Everything about it is automated, yet designed in such a way that it allows a machine to do all the work, compensating it's users with value.

Hopefully everyone will realize this, that it is a good example for the automation that is yet to come... otherwise... our leaders may let us starve to death as has been the example in so many poor nations. I'm not sure, a slow die off is an adequate endgame.

All of us have been brought together to build upon this foundation of Bitcoin and The Blockchain to synchronize our efforts, to evolve it, for the benefit of ourselves and others.

I hope, we the smartest, can develop the will to build a better future, but we have to act now. It is not necessary that the rest of humanity understand every minutia about the Blockchain or Bitcoin, only that it provides measurable benefits to everyone; It synchronizes our efforts, accelerates our pace, and allows us the opportunity to grow our vision along side it.

Mpesa was only a prototype... a constant with which to measure a system that is chained properly to the old system, Bitcoin is the variable.

[myparentsdisownedme]

I think they initially wanted privacy with their monetary exchanges

Since it started in Darknet stuff thats what I thought

[cjmoles]

I'm not going to tackle the entire rant because I believe the answer to the following will suffice:

"....'Bitcoin merely replicates the defects of existing monetary systems in pseudo-decentralised form'. (sic)Do you agree with this statement? If not, why?"

I don't agree with this statement because existing monetary systems are based upon a fractional reserve banking system which allows some people to profit off of other people's money by encouraging a debt based economy which produces a false sense of ownership.....The block chain ledgers establish "true" ownership....not the contrived ownership which our current banking systems are based upon.  Simply put, fractional reserve banking is the problem, and cryptographically decentralized digital currencies are the solution.

[beerlover]

Bitcoin just like any other kinds of currency is used to buy stuff, the only thing different is that Bitcoin adapted to our generation of tech people. Compared to any Fiat money it doesn't have any features unique to Bitcoin which is security and portability. But for me Bitcoin also has a down side and the biggest down side I see is that it is a limited currency in which it will not be enough to become the global currency.

Actually it is the need of the time, as we can see that the new generation are giving important to online jobs, business even shopping, therefore bitcoin is a good option for them as they do not need to change it  in to any other currency and they can use it for online trading or shopping directly therefore we can say that bitcoin is used for online purpose.