Bitcoin cannot function in its current version as a currency

[cbeast]

Since my thread https://bitcointalk.org/index.php?topic=189062.0 has been moved to economics, I will put this in terms of Bitcoin's functionality flaw. I have talked about this for years. Currency is a psychological phenomenon. There is no psychological functionality built into the Bitcoin protocol.

by cbeast November 22, 2011, 12:30:04 PM

It's a psychological thing. Having a price set by mathematics gives people a sense of stability. It's like why people don't wildly speculate on fiat money. Math can give bitcoin the sense of fiat (law), only it's the laws of mathematics. Of course there will be fluctuation just as there is with all fiat currencies, but it will be mitigated. This whole Bitcoin phenomena is an experiment, I just think this may be a helpful tool. I just don't trust centralized exchanges because HSTs and bots can have such profound psychological effects on people that cause them to panic buy and sell.

[MikeyVeez]

Since my thread https://bitcointalk.org/index.php?topic=189062.0 has been moved to economics, I will put this in terms of Bitcoin's functionality flaw. I have talked about this for years. Currency is a psychological phenomenon. There is no psychological functionality built into the Bitcoin protocol.

by cbeast November 22, 2011, 12:30:04 PM

It's a psychological thing. Having a price set by mathematics gives people a sense of stability. It's like why people don't wildly speculate on fiat money. Math can give bitcoin the sense of fiat (law), only it's the laws of mathematics. Of course there will be fluctuation just as there is with all fiat currencies, but it will be mitigated. This whole Bitcoin phenomena is an experiment, I just think this may be a helpful tool. I just don't trust centralized exchanges because HSTs and bots can have such profound psychological effects on people that cause them to panic buy and sell.

Ohh no beast you are a hero super member and speaking the truth, commence you are discraceful comments in 3 2 1

[cbeast]

Ohh no beast you are a hero super member and speaking the truth, commence you are discraceful comments in 3 2 1

The only response I ever get is "But the base will grow and margin orders will level off the volatility." Those arguments don't address my concern that a currency needs to have some psychological element built in like fiat does.

[btcusury]

Is your main contention that Bitcoin "will never stabilize"? I think that's very short-sighted.

In your older thread you write: "There is no plan to create any stabilizing factor. Simply expanding the user base will not stop people from pumping and dumping and causing panics."

I don't disagree with that, but I think in the bigger picture, cryptocurrencies are intended/destined to replace the concept of centrally-controlled currencies. Volatility is not an inherent quality, it's just a transitory thing. I don't think speculation/investment/hedging can be prevented during the transition, nor is it necessarily desirable. The profit potential (not to mention the news this generates) is a very useful, arguably critical, motivator for adoption.

Notice the BTC/LTC volatility isn't nearly as bad as BTC/fiat volatility. As BTC gains further market share as a currency, the old control system will fall under its own dead weight. When 1 BTC is worth 1 BTC and no longer commonly priced as a ratio of a fiat currency, the controlled inflation mechanism (and hoarding and private key losses, etc) will be the factors that determine volatility.

[augustocroppo]

I don't disagree with that, but I think in the bigger picture, cryptocurrencies are intended/destined to replace the concept of centrally-controlled currencies.

Nope, they are not destined to replace one of the oldest concept in human history.

Volatility is not an inherent quality, it's just a transitory thing. I don't think speculation/investment/hedging can be prevented during the transition, nor is it necessarily desirable.

Nope, volatility in this case is the result of a financial instrument being traded in unregulated exchanges.

The profit potential (not to mention the news this generates) is a very useful, arguably critical, motivator for adoption.

Nope, the losses that volatility causes to the average consumer/business undermines the public confidence in the utilization of BTC as medium of exchange.

Notice the BTC/LTC volatility isn't nearly as bad as BTC/fiat volatility.

Nope, the BTC / Fiat volatility in the exchange markets are far worse than "bad".

E.g.





GBP / USD chage: +0.01300%

BTC / USD change: +15.36000%

Ooops!

As BTC gains further market share as a currency, the old control system will fall under its own dead weight.

Nope, the "old control system" will not "fall under its own dead weight" and BTC is not a currency.

When 1 BTC is worth 1 BTC and no longer commonly priced as a ratio of a fiat currency, the controlled inflation mechanism (and hoarding and private key losses, etc) will be the factors that determine volatility.

Wow, really? So 1 BTC do not worth 1 BTC? So how much worth?

The quote above is literally nonsense.

[justusranvier]

We can observe people today using Bitcoin as a currency, therefore it is functional as a currency.

Case closed - your premise is trivially disprovable therefore requires no further addressing.

[augustocroppo]

We can observe people today using Bitcoin as a currency, therefore it is functional as a currency.

Case closed - your premise is trivially disprovable therefore requires no further addressing.

I can observe people using BTC to obtain fiat currency as much as possible. So BTC is not functional as "currency", but as medium of exchange to obtain fiat currency. Moreover, BTC is not used by the first and second sector of any economy, so is far away to be a functional "currency".

[BitcoinBarrel]

But Bitcoin IS functioning is a tool for bartering products and services. Pink slips and Title deeds serve a similar purpose. With Bitcoin, the value is in the infrastructure and the computer hardware required for running it. With it's open source nature, all of the users know that the game is FAIR.

With fiat... our own government can't even regulate the FED.

[franky1]

a few people here think currency must be legal tender. it must be a fixed price and never change more then a smal amount.

you are all wrong.

currency is simply an item used in trade at an agreed value.

EG
vodka in russia can be used as currency, it can be valued as worth just a smile on the recipients face, as payment in thanks for doing someone a favour, to pay a garage owner for repairing your car, or as something worth $3 a shot in a bar.

cigarettes can be currency, during high school years it can be used to get a bit of action from a girl behind the bike-shed, it can prevent a bit of action in prison, it can be used to pay off a friend who bought you pizza the night before. or it can be used to earn government alot of tax.

clothing can be used to impress a girl to get a bit of action that night, to repay a homeless guy for allowing you to share his dry sleeping slot for the night.

anything that has value that someone else wants. and between 2 people they agree on the terms of value. that is currency. it does not matter if 2 people in india value it at $1 and 2 people in africa value it at $20. as long as those doing the exchange of value agree on the value. then that is it...

as for those saying the price is too volatile. i would make a lengthy explanation as to the fact that although its the hoarders fault for selling too low and not refusing to sell below $1000. volatility is a good thing when it comes to currency. LEARN the word "bartering"..

for too long people have been reared up like sheep to follow the one path of fixed prices, centralised controls and false sense of security.

welcome to bitcoin.. its a whole new world

[btcusury]

I don't disagree with that, but I think in the bigger picture, cryptocurrencies are intended/destined to replace the concept of centrally-controlled currencies.

Nope, they are not destined to replace one of the oldest concept in human history.

Centrally-controlled (fractional-reserve debt-based) currency is "one of the oldest concepts in human history"? If you are thinking of a few thousand years out of the 7000 years of recorded history, I think you'd still be more wrong than right. And of course, we are at least 200,000 (arguably 2 million) years old. But more importantly, this is an irrelevant point. Slavery is also "one of the oldest concepts in human history" -- does that mean we should not even try to move beyond such primitive behavior?

Volatility is not an inherent quality, it's just a transitory thing. I don't think speculation/investment/hedging can be prevented during the transition, nor is it necessarily desirable.

Nope, volatility in this case is the result of a financial instrument being traded in unregulated exchanges.

Yes, that's what I said. The volatility will exist during the transition period. When we eventually ditch the obsolete type of medium of exchange that enables the central banking cartel to play their nasty game of black magic, then the volatility we see today no longer applies (because you're no longer trading BTC for fiat, you're using BTC just like you use USD today).

The profit potential (not to mention the news this generates) is a very useful, arguably critical, motivator for adoption.

Nope, the losses that volatility causes to the average consumer/business undermines the public confidence in the utilization of BTC as medium of exchange.

Yes, you're right, it also has that effect. Both are true. The first effect is needed (or at least very useful) to facilitate adoption. The second effect is unavoidable (right?), and will be meaningless when centrally-controlled currencies are abandoned as the primitive system of debt-slavery that they represent.

Notice the BTC/LTC volatility isn't nearly as bad as BTC/fiat volatility.

Nope, the BTC / Fiat volatility in the exchange markets are far worse than "bad".

GBP / USD chage: +0.01300%

BTC / USD change: +15.36000%

Ooops!

You must've misread my sentence. I said that crypto/crypto volatility (BTC/LTC) is lower than crypto/fiat (BTC/USD) volatility.

As BTC gains further market share as a currency, the old control system will fall under its own dead weight.

Nope, the "old control system" will not "fall under its own dead weight" and BTC is not a currency.

Like others pointed out, BTC is being used as a currency, therefore it is a currency. Old definitions of currency that do not take into account the fact of the Internet are obsolete.

You may not have discovered all there is to discover yet... The current system cannot survive much longer, nor should it. Killing people by the millions, consuming the planet's resources with no regard for sustainability, corruption at every level (not just politics but media, banking, medical, scientific, etc)... May I suggest watching a few documentaries? Money as Debt, Zeitgeist Addendum, The Money Masters are 3 good ones to help understand how money and banking (currently) works. Cryptocurrencies are their worst nightmare, though generally speaking they don't know it yet.

When 1 BTC is worth 1 BTC and no longer commonly priced as a ratio of a fiat currency, the controlled inflation mechanism (and hoarding and private key losses, etc) will be the factors that determine volatility.

Wow, really? So 1 BTC do not worth 1 BTC? So how much worth?

The quote above is literally nonsense.

Notice the second part of the sentence ("and no longer commonly priced as a ratio of a fiat currency"). The point I was making is that we will no longer see BTC's worth in terms of its exchange rate(s). 1 BTC will only be seen as 1 BTC, not as X USD or X EUR.

[btcusury]

Some definitions:

com·mod·i·ty (noun):
1. a raw material or primary agricultural product that can be bought and sold, such as copper or coffee. (synonyms:   item, material, product, article, object)
2. an article of trade or commerce, especially a product as distinguished from a service.
3. something of use, advantage, or value.


Bitcoin fits #3, but it certainly also fits the definition of currency:

cur·ren·cy (noun):
1. something that is used as a medium of exchange; money.
2. general acceptance; prevalence; vogue.
3. a time or period during which something is widely accepted and circulated.
4. the fact or quality of being widely accepted and circulated from person to person.
5. circulation, as of coin.

So why can't Bitcoin be both a currency and a commodity, just like PMs? There's no contradiction. (Love your handle, btw, QuestionAuthority... have you heard of Larken Rose?)

[QuestionAuthority]

Some definitions:

com·mod·i·ty (noun):
1. a raw material or primary agricultural product that can be bought and sold, such as copper or coffee. (synonyms:   item, material, product, article, object)
2. an article of trade or commerce, especially a product as distinguished from a service.
3. something of use, advantage, or value.


Bitcoin fits #3, but it certainly also fits the definition of currency:

cur·ren·cy (noun):
1. something that is used as a medium of exchange; money.
2. general acceptance; prevalence; vogue.
3. a time or period during which something is widely accepted and circulated.
4. the fact or quality of being widely accepted and circulated from person to person.
5. circulation, as of coin.

So why can't Bitcoin be both a currency and a commodity, just like PMs? There's no contradiction. (Love your handle, btw, QuestionAuthority... have you heard of Larken Rose?)

It can be both. This debate is as old as the crust on Ron Paul's underwear and I lost interest in it. I only want him to change the header because it will bounce around at the top for weeks and I'll have to keep seeing it.

Thanks and yes, I have.  My favorite is: When should you shoot a cop?

[justusranvier]

My favorite is: When should you shoot a cop?

The right answer is "never" because anyone who asks you that is an FBI agent.

[QuestionAuthority]

My favorite is: When should you shoot a cop?

The right answer is "never" because anyone who asks you that is an FBI agent.

http://www.copblock.org/5475/when-should-you-shoot-a-cop/

[cbeast]

I think the answer is colored coin. In the original thread I proposed a layer over Bitcoin such as Stratum. Colored coin should be able to support APIs like bitcoinaverage.com that statistically analyze various exchanges. It's only a temporary solution,  but will offer some emotional support for those not able to do the rolling average forecasting themselves.

[subcoin]

There is no psychological functionality built into the Bitcoin protocol.

I didn't get that part even after reading your previous threads.
What exact "psychological functionality" does Bitcoin need?

[cbeast]

There is no psychological functionality built into the Bitcoin protocol.

I didn't get that part even after reading your previous threads.
What exact "psychological functionality" does Bitcoin need?

That's a complex subject, but lets start with faith in the money. They put shit like all-seeing-eyes and eagles with olive branches to make it feel magically endowed with purchasing power. They also set government fees and taxes as a base for "backing" the currency as relative to those taxes. They create tax brackets based on what they want the currency to be worth. Most of this is unintended consequences, but very effective. They use math to determine these factors.  Bitcoin needs to be psychologically backed by the faith of its users to have some assurances that the value is relevant to something even it's only the rolling average.  Markets can still trade freely, but people will be less inclined to believe that Bitcoin is less stable than fiat money.

[augustocroppo]

Centrally-controlled (fractional-reserve debt-based) currency is "one of the oldest concepts in human history"? If you are thinking of a few thousand years out of the 7000 years of recorded history, I think you'd still be more wrong than right. And of course, we are at least 200,000 (arguably 2 million) years old. But more importantly, this is an irrelevant point. Slavery is also "one of the oldest concepts in human history" -- does that mean we should not even try to move beyond such primitive behavior?

You are comparing the concept of currency with the concept of slavery and arguing that because both are a kind of "primitive behaviour", the whole humanity should just forgot about it and start to use a very complex software to facilitate trade and barter.

Yes, you're right, it also has that effect. Both are true. The first effect is needed (or at least very useful) to facilitate adoption. The second effect is unavoidable (right?), and will be meaningless when centrally-controlled currencies are abandoned as the primitive system of debt-slavery that they represent.

Nope, the vast majority of people are certainly not going to abandon the utilization of fiat currency. It is far more simple to use fiat currency rather than use any complex software which requires a computer and Internet connection to work.

You must've misread my sentence. I said that crypto/crypto volatility (BTC/LTC) is lower than crypto/fiat (BTC/USD) volatility.

True, however my point remains and your comparison is out of context.

Like others pointed out, BTC is being used as a currency, therefore it is a currency. Old definitions of currency that do not take into account the fact of the Internet are obsolete.

People use cigarettes in jail to trade and barter. So in accordance with your logic cigarettes must be a currency...

By the way, "the fact of the Internet are obsolete"? Really?

You may not have discovered all there is to discover yet... The current system cannot survive much longer, nor should it. Killing people by the millions, consuming the planet's resources with no regard for sustainability, corruption at every level (not just politics but media, banking, medical, scientific, etc)... May I suggest watching a few documentaries? Money as Debt, Zeitgeist Addendum, The Money Masters are 3 good ones to help understand how money and banking (currently) works. Cryptocurrencies are their worst nightmare, though generally speaking they don't know it yet.

I really like to observe people like you come here and throw this documentaries as reference to support your pointless arguments. It is really hilarious because people like never notice the contradiction and the hypocrisy of your actions.

http://www.lazeitgeist.com/faqs?fid=15

The Zeitgeist Movement's international website does, indeed, sell some DVDs and merchandise. The reason is because websites cost money to keep. We are still in a monetary system and advocating against money does not mean bill collectors forgive your debts. Any and all procedes coming from website sales go toward the movement's expenses.

It is like to say:

"I am right because a documentary from an organization which is against money (but sells merchandise for money) said that money is the source of all evil. Therefore Bitcoin (which is used to obtain money) will replace all forms of money".

LOL.
 

Notice the second part of the sentence ("and no longer commonly priced as a ratio of a fiat currency"). The point I was making is that we will no longer see BTC's worth in terms of its exchange rate(s). 1 BTC will only be seen as 1 BTC, not as X USD or X EUR.

You are funny.

Thank you for the laugh.

[augustocroppo]

Some definitions:

com·mod·i·ty (noun):
1. a raw material or primary agricultural product that can be bought and sold, such as copper or coffee. (synonyms:   item, material, product, article, object)
2. an article of trade or commerce, especially a product as distinguished from a service.
3. something of use, advantage, or value.

It only fits the description #3. In accordance with other descriptions BTC is not a commodity. Perhaps the Bitcoin software could be defined as commodity, however the unit of the medium of exchange generated by this software (BTC) is certainly not a commodity.

Bitcoin fits #3, but it certainly also fits the definition of currency:

cur·ren·cy (noun):
1. something that is used as a medium of exchange; money.
2. general acceptance; prevalence; vogue.
3. a time or period during which something is widely accepted and circulated.
4. the fact or quality of being widely accepted and circulated from person to person.
5. circulation, as of coin.

So why can't Bitcoin be both a currency and a commodity, just like PMs? There's no contradiction. (Love your handle, btw, QuestionAuthority... have you heard of Larken Rose?)

BTC, the medium of exchange generated by a software, only fit the description #1. BTC do not have general acceptance or is widely accepted and circulated, so it not fits the descriptions #2, #3 and #4. Because BTC is just a entry in a central ledger (know as blockchain), it is not in circulation like real coins, so it not fits the description #5. 

[btcusury]

Centrally-controlled (fractional-reserve debt-based) currency is "one of the oldest concepts in human history"? If you are thinking of a few thousand years out of the 7000 years of recorded history, I think you'd still be more wrong than right. And of course, we are at least 200,000 (arguably 2 million) years old. But more importantly, this is an irrelevant point. Slavery is also "one of the oldest concepts in human history" -- does that mean we should not even try to move beyond such primitive behavior?

You are comparing the concept of [debt-based] currency with the concept of slavery and arguing that because both are a kind of "primitive behaviour", the whole humanity should just forgot about it and start to use a very complex software to facilitate trade and barter.

Yes, absolutely, you got it, except for that small correction I made. That cryptocurrency software is complex at its core is necessary for technical reasons; it's becoming simpler to use as new software/technologies are built on top of it. Just like with the Internet (e.g. TCP/IP -> HTTP -> HTML -> CSS -> JS).

Nope, the vast majority of people are certainly not going to abandon the utilization of fiat currency. It is far more simple to use fiat currency rather than use any complex software which requires a computer and Internet connection to work.

You're thinking very short-term. Technologies built upon the backbone, such as physical bitcoins, will help make it easier to use. You also don't understand that fiat currencies are mathematically programmed to fail, hence they will fail at some point, whether the end result is deflation or inflation.

You must've misread my sentence. I said that crypto/crypto volatility (BTC/LTC) is lower than crypto/fiat (BTC/USD) volatility.

True, however my point remains and your comparison is out of context.

How so? The fact that crypto/crypto volatility is much lower would suggest that volatility is not a cryptocurrency problem, but a speculation-driven crypto/fiat exchange problem, which is transitory during the cryptocurrency adoption phase.

Like others pointed out, BTC is being used as a currency, therefore it is a currency. Old definitions of currency that do not take into account the fact of the Internet are obsolete.

People use cigarettes in jail to trade and barter. So in accordance with your logic cigarettes must be a currency...

In that context, yes. In jails, cigarettes can sometimes be used as a currency. There's also no reason why they couldn't be used as currency anywhere else. As an example, read about cacao beans. The longest lasting currency? Wooden sticks (used for over 700 years in England!).

By the way, "the fact of the Internet are obsolete"? Really?

If English isn't your first language, don't assume that others are writing nonsense. Rephrased: Old definitions of currency which do not take into account the fact of the Internet, are obsolete. (I.e. the definitions are obsolete, not the Internet.)

You may not have discovered all there is to discover yet... The current system cannot survive much longer, nor should it. Killing people by the millions, consuming the planet's resources with no regard for sustainability, corruption at every level (not just politics but media, banking, medical, scientific, etc)... May I suggest watching a few documentaries? Money as Debt, Zeitgeist Addendum, The Money Masters are 3 good ones to help understand how money and banking (currently) works. Cryptocurrencies are their worst nightmare, though generally speaking they don't know it yet.

I really like to observe people like you come here and throw this documentaries as reference to support your pointless arguments. It is really hilarious because people like never notice the contradiction and the hypocrisy of your actions.

The documentaries were offered for your education, not as references to support my "pointless arguments". There are no contradictions or hypocrisy, otherwise you'd be pointing them out, which you try to do next...

http://www.lazeitgeist.com/faqs?fid=15

The Zeitgeist Movement's international website does, indeed, sell some DVDs and merchandise. The reason is because websites cost money to keep. We are still in a monetary system and advocating against money does not mean bill collectors forgive your debts. Any and all procedes coming from website sales go toward the movement's expenses.

It is like to say:

"I am right because a documentary from an organization which is against money (but sells merchandise for money) said that money is the source of all evil. Therefore Bitcoin (which is used to obtain money) will replace all forms of money".

LOL.

First, I am not right because a documentary says so, I'm right because(/if) it is so. I can think for myself. I haven't watched TV in 6 years. It's a very bad idea to assume that you already know all you need to know. There is nothing more dangerous than a closed mind.

Somehow, the idea that "We are still in a monetary system and advocating against money does not mean bill collectors forgive your debts" seems hypocritical to you, yet it is obviously true. In the all-or-nothing/black-or-white way you are thinking, one would have to completely stop using the system's money if one is to oppose it. That's ridiculous.

Nobody is against money per se. It doesn't make sense to oppose a concept. It's a good idea to get an understanding of how the current monetary system works (which we are not taught in schools/academia/media), and how it evolved, before one embarks onto more advanced ideas, such as cryptocurrencies or the idea of a resource-based economy (RBE). See, that's the problem, that many of us are still willfully ignorant and even instinctively mock people who point you towards the truth.
 

Notice the second part of the sentence ("and no longer commonly priced as a ratio of a fiat currency"). The point I was making is that we will no longer see BTC's worth in terms of its exchange rate(s). 1 BTC will only be seen as 1 BTC, not as X USD or X EUR.

You are funny.

Thank you for the laugh.

Well thank you for acknowledging my point. You are funny too, in a good way. I wouldn't be replying to you if it weren't fun!