Can Bitcoin Survive? Is It Legal? - Forbes

[BitcoinPorn]

From http://blogs.forbes.com/petercohan/2011/06/28/can-bitcoin-survive-is-it-legal/

...Mann pointed out that there have been many attempts at creating online currencies — including Digicash, Flooz, and Beenz. But they never caught on because their marginal costs to consumers and merchants exceeded their marginal benefits. Simply put, there was no compelling reason for the key participants to adopt these new currencies.

A historical look at currencies over the last 500 years reveals an interesting insight — a key limiting factor to adopting currencies has been the ability to make small change. Without small change, merchants could not use currencies to set precise prices. And until relatively recently over that 500 year sweep, governments did not produce enough small change to make currencies useful.

Bitcoin might survive as a currency if it can find a way to make consumers and merchants better off.

Mann notes that Bitcoin’s ultimate ambition well might be illegal in any event. After all, he points out, there are federal statutes that make it illegal to produce a separate currency. Whether Bitcoin violates those statutes depends on how far it can go along the lines of becoming a true medium for exchange.

But unless it can find a way to get consumers and merchants to adopt it, Bitcoin is more likely to go the way of Flooz (bankrupt in August 2001) than to challenge the dollar as a means of payment.

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[cunicula]

From http://blogs.forbes.com/petercohan/2011/06/28/can-bitcoin-survive-is-it-legal/

But they never caught on because their marginal costs to consumers and merchants exceeded their marginal benefits. Simply put, there was no compelling reason for the key participants to adopt these new currencies.

Article is very good. Why is interest in addressing this issue so limited?

http://forum.bitcoin.org/index.php?topic=19130.0

[cmh]

It's definitely going to be a war to try and stop it.

[BitcoinPorn]

It's definitely going to be a war to try and stop it.

It is one of those things that I wonder how they could try and contain things with how far stretched Bitcoins are networked wise, is there a global power switch?

[cmh]

It's definitely going to be a war to try and stop it.

It is one of those things that I wonder how they could try and contain things with how far stretched Bitcoins are networked wise, is there a global power switch?

That's what is exciting... there is no way to stop it, but they have to try. Government has to because of taxes, finance has to try because of fees. It's on. It's going to make napster v. music look like a thumb wrestling match. IMHO

[BitcoinPorn]

That's what is exciting... there is no way to stop it, but they have to try. Government has to because of taxes, finance has to try because of fees. It's on. It's going to make napster v. music look like a thumb wrestling match. IMHO

Realistically, nerds better get on telling their parents and grandparents about this funny money sooner than later, because once government informs an older person on how to think, it's pretty much done.

[MoonShadow]

That's what is exciting... there is no way to stop it, but they have to try. Government has to because of taxes, finance has to try because of fees. It's on. It's going to make napster v. music look like a thumb wrestling match. IMHO

Realistically, nerds better get on telling their parents and grandparents about this funny money sooner than later, because once government informs an older person on how to think, it's pretty much done.

Till they die.

[Klestin]

After all, he points out, there are federal statutes that make it illegal to produce a separate currency.

I've seen this stated a few times, but never with a citation. I've read the statute that says the USD is currency and legal tender for all debts, public and private.  That means that if you owe someone money and offer to pay USD, they must accept it.  It does not say that they can't also choose to accept Monopoly money, for instance.

Would love to see a source for this apparently common knowledge that it is illegal to produce a separate currency.

[chuckypalumbo]

There are so many great potential opportunities with Bitcoin that it would be shame for them to step in and shut it down, and with the stability in prices it's a great time to buy in.

[billyjoeallen]

Liberty Dollar got raided because their silver coins had the word "dollar" on them. Barter is legal, and Bitcoin is not even legally a security, much less a currency. http://www.lextechnologiae.com/2011/06/26/why-bitcoin-isnt-a-security-under-federal-securities-law/

[PatrickHarnett]

Interesting they refer to Flooz going bust.  That case looks like it was supported by one central company.

for BTC there is no central entity acting as clearing-house  and balance keeper for all users - the point of it being distributed is there isn't a single point of failure
(example, if the US federal reserve vanished - borrowed by aliens or whatever - people would still have dollars to go buy a beer or pay for their taxi because the FED isn't a fail point (well it might be, but that's another discussion))

[casascius]

This article says I made $3 million....Hahahah very funny.

[NO_SLAVE]

Sorry but Forbes is for cunts by cunts.

Forbes is obviously biased towards a statist world.

look at these article titles....

More on Forbes Right Now
          o How to Purchase Guns and Drugs Anonymously
          o Are Bitcoins Worth Their Weight in Gold?
          o So, That's the End of Bitcoin Then
          o Bitcoin: the First $500,000 Theft
          o PayPal Gets Pep In Its Step, Puts eBay On The March

Love the that last one "PayPal Gets Pep In Its Step"

right after the 4 articles about : "bitcoin buys guns and drugs" "Theft! "  etc.

 give me a break

[TraderTimm]

My response:

Mr. Cohan tried his best, but this article is a far cry from excellent piece done by The Economist. Pay grades aside, it doesn't surprise me that the older generation can't quite wrap their heads around bitcoin.

After all, they've been brought up to believe fancy green pieces of paper are valuable, and banks do everything in their customers best interests. We're starting to see the fruits of those efforts, namely in the massive Federal Debt, and the increasingly ineffectual Federal Reserve monetary policies.

However, they stay true to the 'system' because it is all they know. All of their savings is committed to it, every possible investment expressed in green paper, whether it be bits on a hard drive or physical notes in their hands.

Bitcoin is the first iteration of many online currencies that will spring up, and I dare say, the beginning of the end for many of the useless intermediaries that siphon off their 'cut'.

Of course a Forbes writer doesn't like it. Even if he understood it properly, he'd realize that it is the unrelenting flow that erodes large ponderous organizations, much like the one he works for.

Keep deriding bitcoin, it is okay, we'll be here when your next job demands you get paid with it.

[cbeast]

Keep deriding bitcoin, it is okay, we'll be here when your next job demands you get paid with it.

It's more likely that 'jobs' will not pay you at all. I expect that jobs will pay in food and clothing credits at Walmart so you slaves won't go out and blow your paycheck on booze while your babies starve. First class citizens will trade in bitcoin.

[wumpus]

Realistically, nerds better get on telling their parents and grandparents about this funny money sooner than later, because once government informs an older person on how to think, it's pretty much done.

Till they die.

Yes, even if it stays restricted to nerds and finance types with an anarchistic streak (of which there exist a lot these days), it might succeed in the same way Linux succeeded. In the background. Unlike the mentioned alternatives, bitcoin is not a company so it can afford to stay a niche a long time.

I think it will slowly be adapted, a lot of support infrastructure for merchants still has to be made but on the other hand there is a lot of international momentum going. More than for any alternative currency, ever, I think.

[julz]

This article says I made $3 million....Hahahah very funny.

This tale of someone buying 20,000 low and making about $3 million has popped up in a couple of places..
Is it really referring to you - and if so - are you able to share the real story?

[Serge]

forbees out of calculators and out of touch with reality
BTC peaked at around $32

if anyone got 3 million out of 20k bitcoins, it means someone paid $150/BTC for those

their blog journalism  just got down to the level of  National Enquirer or w/e their name is

the article reminded me that post by the guy who runs downside.com site

[CurbsideProphet]

I think in order for Bitcoin to survive the volatility needs to disappear.  In fact, I would go so far as to say Bitcoins would need to be pegged to USD (or some other currency) at a certain value.  Otherwise it will be very difficult to entice merchants because they simply cannot price their goods accordingly.  

Even at these supposed "stable" prices we're seeing, it's not stable enough for a currency.  Even a change from $16 to $17 is a 6.3% change and we're seeing larger intra-day fluctuations than that.  To put it in perspective, the USD moved against the Euro by 0.265% today.  Over the last 3 months, it has moved 1.4%.  You'd have to go out SIX MONTHS to see a percentage change greater than what Bitcoin is witnessing in a matter of hours.

But no one wants to peg BTC's because speculation is the only place where the money making is at and probably the only place it will stay.  Sadly, I believe the long-term success of BTC is tied to it's acceptance in daily transactions.  It will never happen under the current conditions.

[bitcon]

let the people decide what they want to use as currency....   o wait i forgot a democracy plutocracy doesn't work that way.....