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Author Topic: If bitcoin succeeds....so what?  (Read 3507 times)
philipp
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June 25, 2011, 06:11:18 PM
 #41

I believe they mean that, if bitcoin strongly succeeds somewhere, the current currency in use there would be replaced, and as consequence it would lose value, making all prices quoted on it to go up.
It would only cause hyperinflation like that if bitcoins adoption grows really fast in that nation, what I find very unlikely.

IMO if bitcoin succeeds bitcoin adaption will grow very fast. Once bitcoin becomes something acceptable to the general public there will be a breakthrough. When people see bitcoin gainign value versus fiat currencies, and there's no trust problems holding them back, they will sell fiat currencies. Which will accelerate the inflation of fiat currencies, which will provide a stronger incentive to keep your saving in bitcoins instead of fiat currencies, in turn accelerate fiat currency inflation. This is a positive feedback loop. Self-reinforcing. Self-accelerating. I wouldn't give the fiat currencies more than a few days once it starts.

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June 25, 2011, 06:49:57 PM
 #42

I believe they mean that, if bitcoin strongly succeeds somewhere, the current currency in use there would be replaced, and as consequence it would lose value, making all prices quoted on it to go up.
It would only cause hyperinflation like that if bitcoins adoption grows really fast in that nation, what I find very unlikely.

IMO if bitcoin succeeds bitcoin adaption will grow very fast. Once bitcoin becomes something acceptable to the general public there will be a breakthrough. When people see bitcoin gainign value versus fiat currencies, and there's no trust problems holding them back, they will sell fiat currencies. Which will accelerate the inflation of fiat currencies, which will provide a stronger incentive to keep your saving in bitcoins instead of fiat currencies, in turn accelerate fiat currency inflation. This is a positive feedback loop. Self-reinforcing. Self-accelerating. I wouldn't give the fiat currencies more than a few days once it starts.

Philipp


A maximum of 21 million bitcoins minus the estimated 500,000 to 750,000 stolen. That 21 million has to cover an expansive population of 300 million in just the United States alone. Good luck with that.
ectoendomezo
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June 26, 2011, 12:37:28 AM
 #43

Well..okay..

I agree 100% with Vector76 re. "Rational Value" or perhaps "Intrinsic Value"..but "Rational Value" works so..okeedoke.

I dunno if it's a "Typo" or an intended Description to refer to the (Paraphrased) 'Perceived Value Of Escaping The System'.

For me..as far as I can tell..and frankly BTC is still absolutely "Overly Complicated" for about 99% of the "GenPop" (but this is Evolution we're witnessing so..'Say-La-Vee')..however that being said 'Near As I Can Tell' the Aspect of "Escaping The System" is...Completely Realistic and Genuine.

I am not 'trying' to sound confrontational etc..

I mean we all know that 'PayPal' is now literally..engaging in Censorship and Other Forms of "Political Control".

But As A Person who is..I admit here and now..Deeply Depressed..Anxious..and as a Country Boy Who's..Not..Afraid of the Dark..Frankly--Terrified--of what is Daily Occurring in this now Overt Push to Corporate Security State..with an Undeniable..and blatant destruction of all Civil Liberties..well?

Well? In this Situation..I find the "Possibilities" of even a Remote Chance At Enhanced Privacy..and More Importantly..I mean for me its "The Whole Deal And Why I'm Here On A 'Forum' Which For Me Is Like Hwy 5 At Rush Hour And Why I Live In Remote Woods Of NorCal To Begin With.."..well..more importantly.."AUTONOMY"..to be "Worth The Cost Of Much Hassle".

And I do believe it's this very real "Autonomy" and the Promise of a "Chance" at Autonomy that:

1) Offers People Like Myself The "Rational Value" you speak of. Because "Autonomy"..tragically..has Become..a Straight-Up Precious "Commodity".

2) Is the "Why" In "Why The Rage Of Government And Chuck Schumer(sic?) Et Al Is Very Real And Has Already Been Unleashed."

I don't know if you've seen this "Moment" of which I speak..but it happens pretty often..so a "Facsimile" I'm confident has been witnessed by some of you:

A "Security Professional" who is part and parcel of the "Destruction Of Liberty Industry" (There is no "Threat From Without" that is "Greater" than the Current Threat From "Within"..sorry.) stating as he "Justifies" the latest intrusion and destruction of Liberty:

"Autonomy and Privacy Aren't Really 'Rights'!"

For me? That "Attitude" is Defeated to a large Degree by the very "nature" of this Particular "Digital Currency". Thus it's Worth the Hassles because that Rational Value of Autonomy has become a Precious Commodity to..well..more of us than the State would..nay..'Will'..Ever..Acknowledge.

Hey Folks..this is very real. I have..and you have as well..Heard the Various Adjectives and Slanders being Tossed about regarding "Bitcoin" and amongst those We have all heard the word "Terrorism"...more than a few times..and worst of all? From "Senators" and "Officials" and Agents of the state.

To Me? That's The Gist Of It. To many People at the "Top".."Autonomy" is now an Overt "Threat". The sad and Inevitable Mindset of "Consolidation".

Perhaps that's it in a nutshell? "Consolidation" is to a large degree defeated by this Equation. Independent..Individual..'Banks' at the actual 'Citizen Level'? C'mon. The State has been Openly Trying to make That Impossible for Decades.

Oops!
smoothie
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June 26, 2011, 12:54:48 AM
 #44

Right now the Federal Reserve and the banks of the world have a monopoly on the commodity known as money/currency.

They can print as much of it as they want.

There needs to be an alternative to the fiat monopoly money system. Bitcoin gives us some hope for that to take place...

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Wayen
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June 26, 2011, 02:33:20 AM
 #45


Well, how virtual money might work if the world run in a worldwide bankrupt? Without real money i can't imagine companies still running power, computers, networks and without them how the virtual money might work? Outside such scenario governement are probably not liking such virtual money because it's propably easy to hide revenues from tax or to use it for controversial purpose... i suspect they might control or ban such virtual money in the futur because they might lose some control on people if they don't do it... ? i recently heard about qiwi money that is banned mostly everywhere but russia...
helmetedwarrior
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June 26, 2011, 03:53:12 AM
 #46

The only thing that would change is that people would no longer need to rely on their goverment to provide confidence in the currency.

Currency is nothing more than a confidence game.

Hedghog
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June 26, 2011, 11:24:35 AM
 #47

You would have to make the world belive that virtual bitcoins are better then fiat money.

Doubt it will ever surpass gold or silver.
Quix
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June 26, 2011, 03:00:54 PM
 #48

This is all assuming the bottom never falls out of the bitcoin market, which is not a sure thing. I will tell you one thing. If I had been in this from the start I would have cashed out about half my holdings when the Bitcoin hit $30, a couple hundred thousand now sure beats the possibility of nothing in the future. But that's what we get for trading in a speculative market.
philipp
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June 26, 2011, 03:17:14 PM
 #49

This is all assuming the bottom never falls out of the bitcoin market, which is not a sure thing. I will tell you one thing. If I had been in this from the start I would have cashed out about half my holdings when the Bitcoin hit $30, a couple hundred thousand now sure beats the possibility of nothing in the future. But that's what we get for trading in a speculative market.

The titel is "If bitcoin succeeds....so what?". In that case holding a bitcoin sure beats the possibility of nothing in the future.

Philipp
SlimNm
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June 26, 2011, 04:22:36 PM
 #50


Well, how virtual money might work if the world run in a worldwide bankrupt? Without real money i can't imagine companies still running power, computers, networks and without them how the virtual money might work? Outside such scenario governement are probably not liking such virtual money because it's propably easy to hide revenues from tax or to use it for controversial purpose... i suspect they might control or ban such virtual money in the futur because they might lose some control on people if they don't do it... ? i recently heard about qiwi money that is banned mostly everywhere but russia...

So what if the government bans bitcoins?  It isn't like they can actually enforce it.
philipp
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June 26, 2011, 04:42:20 PM
 #51

So what if the government bans bitcoins?  It isn't like they can actually enforce it.

Well, to me it isn't that clear. Let's say the government (defined as the first government to ban Bitcoin) bans bitcoin. Such a ban probably would take the form of not allowing exchanging that country's fiat currency for bitcoin. It is likely to come under the guise of consumer protection and accompagnied by denouncing of bitcoin as a pyramid scheme, money landering system or whatever.
Let's assume that other governments follow. Sure they can't ban some geeks from exchanging some €, $ or whatever bills for bitcoins in unviersity hallways, they can't stop currency trades via Silkroad or BlackMarket. But they can shut down the major exchanges like MtGox or TradeHill and the OTC markets like bitmarket.eu and destroy any alternative coming up.
The bitcoin system will still be operating, but it would just be some niche thing. It won't gain mainstream adoption.

Yes, the governments have failed against P2P filesharing. But that was not only a new thread, they were also unprepared for any attack on IP in general (and governments had to be convinced first to fight P2P at all).

With bitcoin the situation is a bit different: Governments are used to defending their currencies. The defenses are in place just waiting to become active, they are tried and well-trained. There's efficeint international cooperation of lw enforcement in such areas, and they're not afraid to put political pressure on countries for being too lax when in comes to money laundering or tax evasion.

The war machine is there, and at least somewhat ready. I'm sure some governments will decide to put it in motion against bitcoins some day. I hope it is too late by then.

Philipp
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June 26, 2011, 04:52:05 PM
 #52

Well, then no country will be able to inflationate the currency by printing loads of money like they do now...

That is true.  However, the USA sets a target of a little inflation for the reason that they want to encourage spending and keep the economy moving.
That's correct. But they set a target of little inflation by sucking up much of the increased value in the economy by printing money.

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With a deflationary currency, as you know, people are more inclined to save since their savings are growing in value.
No, that's false. A deflationary currency does not cause your savings to grow in value. A bitcoin today includes the right to hold onto that bitcoin and watch it appreciate in value. Thus the value of a bitcoin today includes the value of that right.

If you don't see why that is, consider a simple thought experiment. Neutronium sells for $1,000/oz today. And we all know it is going to deflate and will sell for $5,000/oz in a year. Does that seem possible to you? Wouldn't people who don't need their money for a while buy up lots of Neutronium today, knowing they could sell it for $5,000/oz in a year? So wouldn't the price today be really close to $5,000/oz?

If Neutronium will be worth $5,000/oz in a year, then its value per ounce today is the sum of the present value of $5,000 in a year plus any additional value from being able to sell it in less than a year should one wish to. The value of something today must include the present value of its future appreciation.

I am an employee of Ripple.
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helmetedwarrior
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June 26, 2011, 09:34:25 PM
 #53

http://en.wikipedia.org/wiki/Currency_war
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