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Author Topic: Can Bitcoin Survive? Is It Legal? - Forbes  (Read 2795 times)
Confucius
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Confucius says... Our Bitcoin movement is historic


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June 29, 2011, 03:39:34 AM
 #21

I can see subtle bias in this article. I liked it apart from the fact he tried to present it as objective, but it ultimately had negative connotations associated to it.

Quote from: Peter Cohan
Although the sudden drop was caused by a hacker breaking into Bitcoin’s currency changer
That is explicitly saying that Bitcoin is the owner of the currency changer (Mt Gox.). That doesn't even makes sense because Bitcoins cant own anything because noone owns Bitcoins.  Huh
People will read that and believe it was a security fault on Bitcoins behalf.

Quote from: Mann
Mann notes that Bitcoin’s ultimate ambition well might be illegal in any event
Bitcoins ultimate ambition well might be written in the published whitepaper, which it is. That is

Quote from: Bitcoin Whitepaper
These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.

What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers.
I do not believe the publishers cared about if governments think they are an imposter currency. Their goal is not to enrage governments and people, but to solve the specific problem of how to make virtual transactions have similar properties to cash.

It will be a long an tedious argument between the people and their governments debating if Bitcoins is a fraudulent currency (or some other disagreement).

Also, instead of being original, Peter uses the typical Drugs-Bitcoins association, which I'm sure hes aware is simply enforcing unlearned peoples doubts. Anyone that mentions you can buy drugs with Bitcoins, should also mention that you can buy drugs with federal monies, from far more people just as easily, and usually as securely (well for me anyway...).

Quote from: Peter Cohan
Bitcoin – the online currency used to buy Alpaca wool socks and illegal drugs
Angry

~ Conf

Bitcoin - the easiest way to give babes monetary compliments from across the globe
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Alex Beckenham
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June 29, 2011, 03:40:23 AM
 #22

I would go so far as to say Bitcoins would need to be pegged to USD (or some other currency) at a certain value.

Pegging could never be enforced.

Say you try to peg 1 BTC = 10 USD... What stops me from buying a coin for $11 if I really really want a coin? Or selling one for $9 if I desperately need some fiat cash?

Nothing.

Suddenly it's floating again.

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June 29, 2011, 04:21:56 AM
 #23

Pegging could never be enforced.

I agree.  And that I think is a big problem.  If Bitcoin is going to be a medium for exchange, there needs to be some sort of stability.

If I buy a sandwich from Subway tomorrow, I and the merchant, know exactly what the price will be no matter what medium of exchange (cash, credit card, check, etc.) I use.  If Subway were to accept Bitcoin, no one would know what to charge until the moment I got there.  And instantly afterward, the merchant is at risk due to volatility.  In this respect, Bitcoin is similar to Gold. I can't take my gold to Subway and use it as a medium of exchange.  The price fluctuation is too volatile.  Of course, gold is at least a commodity and has inherent usefulness so it trumps BTC's in that respect.

It's a problem I don't know how to solve, but I think it needs to if Bitcoin wants to have a sustainable future.  Otherwise the only value is speculation and that will turn once people realize it cannot ever be an acceptable form of currency for the very reasons you mention. 

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Alex Beckenham
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June 29, 2011, 04:46:12 AM
 #24

If Subway were to accept Bitcoin, no one would know what to charge until the moment I got there.  And instantly afterward, the merchant is at risk due to volatility.

It's a problem I don't know how to solve,

It solves itself gradually as the Subway manager starts being able to buy his ingredients with bitcoin, then his rent, then his electricity, his staff's wages, etc.


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June 29, 2011, 05:10:09 AM
 #25

If Subway were to accept Bitcoin, no one would know what to charge until the moment I got there.  And instantly afterward, the merchant is at risk due to volatility.

It's a problem I don't know how to solve,

It solves itself gradually as the Subway manager starts being able to buy his ingredients with bitcoin, then his rent, then his electricity, his staff's wages, etc.

Even if that were true, would the owner (I seriously doubt it's up to the manager) be willing to take those risks in the interim?  Right now you have a concept that could essentially be worthless or perhaps in time have value (as an exchange medium).  What sort of incentive would entice the owner to convert now?  The problem is the smarter business choice is to play the "wait and see" game because right now you can't pay your salary, utilities, rent or inventory with bitcoins.  You can speculate that BTC's will increase in value but a merchant is not a speculator.  A merchant needs cash flow NOW.

Everyone likes to compare Bitcoin to Napster, Facebook, etc. but it's a poor comparison.  Those sites offer a service.  Bitcoin is meant to be an alternative payment/barter system. 

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Alex Beckenham
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June 29, 2011, 05:23:49 AM
 #26

It seems like you're expecting the Subway owner to wait (do NO bitcoin transactions) until everyone else is using bitcoin and then suddenly run their whole operation with it (do ONLY bitcoin transactions).

I'm saying it'll happen far more gradually. Accept bitcoin now and then. Pay wages in bitcoin now and then to the tech-savvy teens that work for you. Strike up a conversation with your landlord one day and maybe he'll get excited by the idea.

Forgetting about stockholders for a second, let's just say the owner is a person, like you and me. It's obvious that people ARE willing to take risks with bitcoin in the interim. In their own interests and in the interests of the whole bitcoin movement.

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June 29, 2011, 05:49:52 AM
 #27

People are also willing to risk buying powerball lottery tickets even though their chances of winning are almost infinitesimal.  I do get what you're saying, a slow evolution towards acceptance.  I just question how many people are truly supportive of Bitcoin for the movement as a whole and how many are here to buy lottery tickets.  Perhaps in the end it doesn't really matter what the motive, the participation may be enough.

It's still a rather giant leap of faith at this point, however.  I'm curious to see how this all plays out. 

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