What would happen to Bitcoin if the World Echnomy went over to Bitcoins

[joulesbeef]

What is the basis for your claim? The whole world is hearing that the US debt ceiling must be raised in order to prevent a default.

Because I know it will be raised.

Even if it wasnt raised Obama could invoke the 14th and ignore it, the debt ceiling is unconstitutional just no one challenges it.

Even if he choose not to challenge congress he can order the fed to destroy it's 1.6 trillion in bonds which would give us quite some more time.

Also there is a lot of hyper ventilating over the dollar, everyone is leaving the dollar.. blah blah blah blah


when in reality we are still more of a reserve currency than we were in 1995

the dollar is a little  low today but that is partially due to standards of living rising world wide and partially on purpose to increase exports and most countries are doing the same.

Beefy here has smelled of 'shill' since I saw their first post. The avatar doesn't help either.

shill for whom? the dollar? it is the same avatar i use at newsvine. though i dont post there anymore, you are welcome to read my old posts and see if there is any pattern besides that I am mostly a progressive.

Sorry if I dont jump on the "OMG THE SKY IS FALLING BUY GOLD BUY GOLD BUY GOLD!!!"

when I can look at the data for my self (and link above with the reserve status and  see how chinas money supply is growing faster, or how our money supply grew faster in 2001 or the fact that several countries have a higher debt to gdp ration and havent turned into zimbagwae or how we are still the worlds largest single nation economy. I'm not a shill just a well informed realist who doesnt get his economic info from blogs or people with lights and sound machines.

This boggles my mind. How screwy is a world in which one's creditworthiness is maintained to the extent that one continues accumulating debt!!! The US must assume further debt to be considered more creditworthy? WTF?

Thats cause that is not an accurate description of what is about to happen. You know we have a trillion dollar plus deficit? WE are going into more debt whether we like it or not. IF we dont raise the debt ceiling and sell more tbills, we wont have money to pay off the debt we are going to incur. OUR LONG TERM rating is actually on shaking footing due to our debt to gdp ratio. THE WORLD DOES NOT WANT US TO ADD MORE DEBT, they do want us to pay our bills for the debt we have.

[KenJackson]

The US Dollar is in serious trouble

You're right.  The dollar is in serious trouble.

But the problem isn't the spending limit.  It's the spending.  It's the rate of debt increase.  It's the rate of debt acceleration.  It's the attitude in Congress that we can keep on spending like drunks forever and if China won't lend us some more, we'll just take it all from the people, as long as Congress gets to do the spending.

Switching to a currency that Congress doesn't control and the Fed can't devalue would indeed throw an interesting wrench into the monkey works.  But that just means Congress would fight back and tear apart anything and everything and anyone necessary to get bitcoin out of the way so they can keep up their spending addiction.

This boggles my mind.  ...  The US must assume further debt to be considered more creditworthy? WTF?

Amen.

[Possum]

Virginia USA is exploring an Alternative to American Currency.

http://www.theconservativeshepherd.com/east-coast-state-explores-alternative-to-american-currency/

Could bitcoin find strength is such a situation.

[martin]

What would happen if the Worlds economies all decided to use Bitcoins in place of the USD?

Bitcoin would collapse under the load far before the entire US economy changed over to bitcoin, let alone the entire world economy.

https://en.bitcoin.it/wiki/Scalability

And, assuming we did somehow make bitcoin about 100x more scalable than it is, sometime before the entire US economy transferred over to it we'd have bitcoin heists which made the recent mtgox hack look like pocket change.

Honestly, I have never seen any place anywhere on the Internet where the term "troll" is abused so much. It has become synonymous here with "BTC skeptic", and that is not what it means. It means someone making false comments with the intention to deceive. To disagree with the majority is not trolling. It is discussion.

Skeptic: I'm not convinced BTC is the best new thing.

Troll: Bitcoin is shit. Why are you using it?

Quoted for truth

[MrGaSp]

So thats each coin worth $2300,000.

So the miners will be mining $690,000,000 per hour, and spending a good proportion of that on power.

Also keep in mind that if people get word that the world is going to bitcoin, quite a few people will hoard their bitcoins, making less in circulation for buy in, so the price would likely be far above that, a few years after the conversion people probably wont see 0.001 btc.

Just a thought i had =P

[nmat]

Bitcoin would collapse under the load far before the entire US economy changed over to bitcoin, let alone the entire world economy.

https://en.bitcoin.it/wiki/Scalability

And, assuming we did somehow make bitcoin about 100x more scalable than it is, sometime before the entire US economy transferred over to it we'd have bitcoin heists which made the recent mtgox hack look like pocket change.

Never thought of this. I guess that bitcoin was designed to be a small currency and can not grow that much. I don't think that is bad... I would call it realistic.

[piramida]

Never thought of this. I guess that bitcoin was designed to be a small currency and can not grow that much. I don't think that is bad... I would call it realistic.

No, this is untrue. You don't have to do all transactions in bitcoins - if it is accepted as world's monetary backing, you can still use paper money or electronic transfer inside one bank, the actual bitcoin transfers would be happening on an inter-bank trading. You won't be buying in-store using bitcoin directly - there will be an intermediate processor, just like Visa, which would aggregate thousands of micro-payments and send one BTC transfer.

If the transfer costs rise significantly, and blockchain grows, only big institutions with their own servers would continue digging blocks, and only large transfers would be financially viable.

However, that is perfectly fine, because no matter how many banks participate or how many different currencies are created, the backbone of it would still be valued in BTC.

[Melbustus]

Never thought of this. I guess that bitcoin was designed to be a small currency and can not grow that much. I don't think that is bad... I would call it realistic.

No, this is untrue. You don't have to do all transactions in bitcoins - if it is accepted as world's monetary backing, you can still use paper money or electronic transfer inside one bank, the actual bitcoin transfers would be happening on an inter-bank trading. You won't be buying in-store using bitcoin directly - there will be an intermediate processor, just like Visa, which would aggregate thousands of micro-payments and send one BTC transfer.

If the transfer costs rise significantly, and blockchain grows, only big institutions with their own servers would continue digging blocks, and only large transfers would be financially viable.

However, that is perfectly fine, because no matter how many banks participate or how many different currencies are created, the backbone of it would still be valued in BTC.

Except that if you're relying on financial intermediarys (eg, like Visa, as you note), they're going to charge non-trivial fees on top of the core BTC transaction fees that will still have to go on, and that eliminates one of bitcoin's big benefits. We're back to electronic transaction means that skim at least 1-3% of each transaction.

[myrkul]

Except that if you're relying on financial intermediarys (eg, like Visa, as you note), they're going to charge non-trivial fees on top of the core BTC transaction fees that will still have to go on, and that eliminates one of bitcoin's big benefits. We're back to electronic transaction means that skim at least 1-3% of each transaction.

Nobody ever said Bitcoin was going to be the ONLY currency on the planet... nobody thinking it through, anyway.

Bring on the competitors!

[cypherdoc]

skeptics always claim that there won't be enough bitcoins or it won't "scale".  they also say we need a little bit of inflation to keep wages increasing.  BS.

the only ppl that benefit from inflation, mild, medium or large, is the financial industry who has first access to the free money and who controls the printing press.

i say we need a stable currency amount like bitcoin will be in 2030 or whenever its fully issued at 21M.  as the economy becomes more productive (we don't need inflation to innovate) general prices will come down which helps the people.  btc's purchasing power will increase and everything else will be cheaper.  this is a good thing and will occur gradually.  no one special interest group will get preferential treatment.

the economy won't be on steroids like it is now with unlimited credit issuance.  we won't be raping the environment and population growth will be more sustainable.

inflationists are usually financial players who just want to grab what they can now and dump the consequences onto everyone else including our children.

[tvbcof]

Bitcoin would collapse under the load far before the entire US economy changed over to bitcoin, let alone the entire world economy.

https://en.bitcoin.it/wiki/Scalability

And, assuming we did somehow make bitcoin about 100x more scalable than it is, sometime before the entire US economy transferred over to it we'd have bitcoin heists which made the recent mtgox hack look like pocket change.

Never thought of this. I guess that bitcoin was designed to be a small currency and can not grow that much. I don't think that is bad... I would call it realistic.

Without really understanding or having thought through things fully...and if the basic premise of the system stands the test of time...

I kind of envision a situation where the coins in the first chain becomes backing for further chains.  Those who hold coins from the first chain would then be able to back a given branch which is managed to their liking, and people could choose which branch to use for similar reasons.  I theorize that if both the 'funders' and the 'users' of a currency need to arrive at a mutually agreeable management strategy, more equitable end results will fall out.

[tvbcof]

The whole world is hearing that the US debt ceiling must be raised in order to prevent a default.

This boggles my mind. How screwy is a world in which one's creditworthiness is maintained to the extent that one continues accumulating debt!!! The US must assume further debt to be considered more creditworthy? WTF?

If you adhere to the philosophy that 'money is debt'  (as I, Ben Bernanke, and I believe pretty much all modern bankers do) then it starts to make a whole lot more sense.

If one has run out of the ability to take on debt then they have by definition, run out of the ability to produce money.  And who wants to have dealings with an entity who is in that situation?

Dig up the 'Money as Debt' vid by Paul Grignon on Youtube if you have not already.  I have come to accept most of his assurtions simply because they are so good at explaining so many otherwise baffleing things.  My favorite quote from it is as follows:

  “The process by which money is created is so simple that the mind is repelled.”
        -John Kenneth Galbraith

[Possum]

Dig up the 'Money as Debt' vid by Paul Grignon

I did.. wow...

http://video.google.com/videoplay?docid=-2550156453790090544

I must say the Bitcoins Forums are the best forums I have ever been on.. You guys are great  ..

Cheers

[MatthewLM]

There are solutions to the physical currency problem already -> http://bitbills.com/

But would you use bitcoins for physical cash or would you rather use metals?

[myrkul]

There are solutions to the physical currency problem already -> http://bitbills.com/

But would you use bitcoins for physical cash or would you rather use metals?

For physical transactions, I'd really prefer metals. http://shiresilver.com/ has a pretty good solution to this.

[julz]

...the financial industry who has first access to the free money and who controls the printing press.

Is it really reasonable to think of it this way?
Sure - the financial institutions lend out 'money' which has just been created - but they have to pay it back to the reserve system. (effectively destroying it)
They get to charge a higher interest rate than the reserve in order to fund their operations - but the principal (the money that was just 'created' by entering it into the system at loan-initiation) has to be repaid.

So.. they make money (interest difference) on lending out money that wasn't theirs - but this because they are entrusted with the job of ensuring that the new 'debt money' is going to an entity who will do work in the economy to produce that value (plus some).

They take a risk and have costs in doing their checks on the entity taking out the loan. Seems fair enough no?

As much as I think the financial industry is a flawed and dangerous beast at the moment..  I still don't see how this is 'free money' or 'controlling the printing press'.

[MatthewLM]

There are solutions to the physical currency problem already -> http://bitbills.com/

But would you use bitcoins for physical cash or would you rather use metals?

For physical transactions, I'd really prefer metals. http://shiresilver.com/ has a pretty good solution to this.

What about the pennies? I believe a gram of copper is close to 1¢ Though copper would be much harder to use a money, wouldn't it?

Paper certificates may work (And could also be used for bitcoin), if the banks which offered them were transparent enough.

Also that money as debt thing says that commercial banks create money which is not true. They lend out deposited money. The central banks create the money supply.

[mc_lovin]

Bitcoin would collapse under the load far before the entire US economy changed over to bitcoin, let alone the entire world economy.

https://en.bitcoin.it/wiki/Scalability

And, assuming we did somehow make bitcoin about 100x more scalable than it is, sometime before the entire US economy transferred over to it we'd have bitcoin heists which made the recent mtgox hack look like pocket change.

Never thought of this. I guess that bitcoin was designed to be a small currency and can not grow that much. I don't think that is bad... I would call it realistic.

It hardly needs to be more scalable, it's never going to be the new way of small purchase transactions like VISA, but I think the larger investors will trade the big dollar amounts more frequently than the average McDonald's purchase.  There is just too many people using the US dollar to make a serious dent, but you could probably pay off your VISA with bitcoin money.  I think people will be using bitcoin as a tax-free bank more than a means of payment.

[myrkul]

There are solutions to the physical currency problem already -> http://bitbills.com/

But would you use bitcoins for physical cash or would you rather use metals?

For physical transactions, I'd really prefer metals. http://shiresilver.com/ has a pretty good solution to this.

What about the pennies? I believe a gram of copper is close to 1¢ Though copper would be much harder to use a money, wouldn't it?

Paper certificates may work (And could also be used for bitcoin), if the banks which offered them were transparent enough.

Also that money as debt thing says that commercial banks create money which is not true. They lend out deposited money. The central banks create the money supply.

For Pennies /other small change, yes, Copper would work well, and actually, at this year's porcfest, a guy was selling copper for bitcoins or 'worthless paper'

I'd stay away from paper, save for large transfers (checks).

That's not quite true. Due to the fractional reserve system, Banks only need to have 10% of their loans in deposits, so they create a lot of 'spreadsheet' money when they loan. Technically, this money disappears when the loan is paid off, and the bank keeps the interest.

[MatthewLM]

I don't know much about this. Is it money created from central bank deposits or is it really banks creating money out of thin air? So the money don't not exist in the bank system at all until they create it and this is deemed as legal?