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Author Topic: Vow not to exchange bitcoin for fiat  (Read 3252 times)
netrin
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October 23, 2011, 03:17:01 AM
 #21

I can see the words 'pledge' and 'vow' are rubbing everyone the wrong way. I've been fortunate (g*d bless my parents) not to have ever been indoctrinated in any cult during childhood, saluted a flag, or any such ceremonies that I remember. These words may have different power to some of you. Anyone who gets my drift want to re-word my OP proposal? To me it's more like a bumper sticker that says "Honk if you love bitcoin" rather than a secret blood pact.

I just want to know who's in it for the technology and potential and who's in it for the 'musical chairs'. I don't hugely care and will happily trade with everyone. I'd just like to know from what perspective the people I'm dealing with are operating. I want us to mutually scratch each other's back. It's the same reason I support and lend money to my family and friends.

I have to say one point regarding fiat vs bitcoin and the exchanges. I fear that the exchanges will get shutdown with my FIAT money. Bitcoin in my hand is SECURE. Dollars in an account somewhere is NOT MINE. I absolutely disagree with elggawf's notion of fiat accounts and credit security. If you don't hold it, you don't own it.

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Xenland
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October 23, 2011, 03:21:50 AM
 #22

I like how you wrote "TLDR" then almost wrote as much as I did. Wink

You're wrong on a few points though, and I'll tell you why. Yes, you have to keep an eye on your accounts with "fiat" dollars, but at least you have some recourse. If someone makes off with your BTC, you're fucked. Our economy still hasn't evolved any sort of market for insuring them (which is probably what's going to have to happen for it to be safe, but people will resist that because it's a peer2peer system, and history has shown us that trusting some centralized service with your Bitcoins is akin to grabbing your ankles in a communal shower).

As far as overdraft fees: learn how to manage your money. You don't look at your balance and think "this is how much money I have to spend" unless you're a teenager. That's true no matter what currency you work in, and it'll likely be true in BTC eventually.

For the record: I haven't cashed out any BTC to USD in (almost to the day) three months. It hasn't been worth it. Instead, I spend whatever I earn or mine. I'm literally already doing everything this pledge is talking about, and I still think the pledge is a dumb idea. Bitcoin's just imaginary play money to me, I don't notice the minimal impact on our electric bill (I'm only running one very modest GPU without any overclock/overvolt) and I get some goofy shit like games or whatever without "spending any money" (it's purely psychological).

My point was that the economic activity is so low at the moment that if everyone pledges to only spend their BTC and some of us pledge to only spend BTC with people who pledge to only spend that BTC, then sooner or later there's going to be people who wind up just holding that BTC. There aren't any businesses yet who only have expenses in BTC, so there aren't many businesses who can afford to not cash out their BTC. So we again arrive back at the situation with people resisting the urge to cash out, and the person who profits most is the first person to break that pledge.

Spending BTC is always good, but realize sooner or later someone has to cash out. It's just better to let people do what they wish with it, let the market do as it pleases and avoid any meddling.

I agree with alot of what your saying,  I was just kind of adding on to what you were saying earlier(and I did actually read most of it btw Smiley).

The way I thinking about it is if even if everyone stopped cashing out to fiat it shouldn't hurt the BTC economy as far as value because the idea is to spend Bitcoins for how much you think they are worth. Of course this isn't true since we are tide to fiat wholesalers and suppliers. So the fiat issue will only be a short-term blow to the BTC economy if we all pushed to spend Bitcoins as if we use them to buy gas or groceries then they will be "worth" something just for the act of spending them. Of course this is just the idea
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October 23, 2011, 03:30:21 AM
 #23

I can see the words 'pledge' and 'vow' are rubbing everyone the wrong way.

There have been other threads about "who's spending instead of selling" and so on, if you take away the hard-language of "pledge" this idea is no longer silly, but it is a little bit redundant. Wink

Quote
I have to say one point regarding fiat vs bitcoin and the exchanges. I fear that the exchanges will get shutdown with my FIAT money. Bitcoin in my hand is SECURE. Dollars in an account somewhere is NOT MINE. I absolutely disagree with elggawf's notion of fiat accounts and credit security. If you don't hold it, you don't own it.

Your statement here only holds true because you're ignoring a few key points: You're ignoring the possibility of Bitcoin being stolen from you via malware or whatever.

You're ignoring the possibility of Bitcoin being lost when an exchange* gets shutdown. At least with that dirty FIAT money you've got an opportunity to use the system that already exists to attempt to get some of that money back - as yet, Bitcoin has grown no such system.

Finally, you and Xenland both are ignoring the fact that sending someone BTC for a product/service relies on you trusting that someone to actually deliver the product/service - there is absolutely zero recourse to get it back if they fail to deliver (again, Bitcoin will likely grow something of this nature eventually).

I'm not saying Bitcoin sucks and fiat money rocks, I'm simply saying that Bitcoin only looks 100% rosey if you're wearing rose colored glasses when you look at it.

Edit: * To clarify this point, I didn't literally mean "exchange" in all cases, but I'll leave the language here in case someone quotes it. Anyway, most of us who are merchants will likely use some form of a payment processor at some point (some of which are exchanges). There's a chance any of them could shut down at any point, and if you have "fiat dollars" with them, you stand a small chance at getting it back. With Bitcoin, by design, there is no way to compel them to hand it over.

Consider even if you run your own bitcoind with scripts to handle the payment processing, if it gets hacked then any BTC on there is gone, even though the coins are technically under your control.

^_^
netrin
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October 23, 2011, 04:11:03 AM
 #24

So are you saying it comes down to weighted trust?

I may trust that...

 * my bitcoins will not be stolen from my computer by any method.

 * my financial institutions won't freeze my accounts or reverse charges.

 * cash will not be stolen or lost from my home or pocket.

 * a merchant will send goods that I purchase.

 * a customer won't reverse charges for goods I've sent.

>> You're ignoring the possibility of Bitcoin being lost when an exchange*
>> gets shutdown. At least with that dirty FIAT money you've got an
>> opportunity to use the system that already exists to attempt to get
>> some of that money back - as yet, Bitcoin has grown no such system.

This highlights the concern I tried to express earlier. I perceive the bitcoin ecosystem to be under attack and thus risky. Mt. Gox might get shut down because it facilitates the exchange of bitcoin, or withdrawls may be blocked, confidence may diminish, etc. The environment is hostile. I do not deny that. But given that I am engaged in this risky environment, I trust bitcoins in my hand over fiat in an account sans lunettes roses.

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October 23, 2011, 06:55:39 AM
 #25

in regards to netrin's post... My thoughts are closely related to yours as well.
We need a FDIC insurer but for Bitcoin is really what we need.
netrin
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October 23, 2011, 07:02:30 AM
 #26

in regards to netrin's post... My thoughts are closely related to yours as well.
We need a FDIC insurer but for Bitcoin is really what we need.
Let's pretend you don't actually mean FDIC, but just reputable auditing and insurance services.

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Xenland
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October 23, 2011, 07:18:44 AM
 #27

in regards to netrin's post... My thoughts are closely related to yours as well.
We need a FDIC insurer but for Bitcoin is really what we need.
Let's pretend you don't actually mean FDIC, but just reputable auditing and insurance services.

Yeah you are correct of course I don't mean the federal government should insure bitcoin. I think indeed that some entity should invest in protecting Bitcoin companies. But how?
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October 23, 2011, 07:40:41 AM
 #28

Excellent post. And it illustrates just the type of MLMers who latch on ro these things.

By the way, I've always loved your avatar. A perfect flip of that stupid intro!
What is this bullshit?

No offense, but this idea is stupid as hell. That bubble to $30 was nothing but an elaborate game of musical chairs caused by rampant speculation. But who cares about fixing that, and encouraging an actual, stable, and sustainable economy. No, let's just repeat the thing by having everyone pledge to hold coins and artificially inflate the price again! \o/

Again, we'll be starting a brand new game of musical chairs, only this time people are "pledging" not to sit down when the music stops. Do you not see how completely fuckin' retarded such an idea is? If I had to put my finger on the pulse of the one chief issue that's plaguing Bitcoin, it's that it rewards people who are dishonest at the expense of those who aren't. This idea of yours will do exactly the same thing, those who break their pledge first when the price gets too delicious will benefit at the expense of those who hold to the pledge.

Here's an idea, let the market do what it wants... isn't that, you know, the whole economic reasoning behind Bitcoin after all? Exactly how full of shit are the libertard ideals that make up much of this community if it's "laissez faire" until the market does something we don't like, then we conspire to "fix" it? Oh, let me guess - it's only market manipulation when the government does it? If it's private people it's just the invisible hand, right?

This is just wrong, wrong, wrong. If I send you Bitcoins, do whatever the fuck you want with them. With any luck and some really well funded market makers, we'll end up at a stable price (whatever that may be, it really doesn't matter) and we can go back to encouraging more merchants to use it.

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October 23, 2011, 07:55:42 AM
 #29

Why vowing not to exchange Bitcoin for fiat? Who is going to enforce that vow? Are you advocating for binding contracts on this subject?

If people trust Bitcoin, people will stay. Otherwise, they will leave. As simple as that.

Once Bitcoin is understood, the consequences of a bank-only system are evident: your wallet is your national identity card and all private keys are handed to the government
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October 23, 2011, 08:08:44 AM
 #30

Bitcoin is not built on VOW. 

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October 23, 2011, 08:17:08 AM
 #31

Bitcoin must be attractive to normal people,
not scared to normal people by "vow" or "pledge".

I think Green Address tech is a good step.

Scalability and FastDownload is other problems.

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October 23, 2011, 08:17:45 AM
 #32

Netrin, I think I understand where you are coming from, but your "solution" isnt one, for reasons others have explained. You are basically asking merchants to hoard bitcoins, thats not a solution to anything, its more of a problem, reinflating the bubble.

A more useful vow would be one to vow not to speculate on bitcoin exchange rates, ie not buying them with fiat currency with the sole intent of selling them for fiat currency again. A pledge to only buy BTC you intend to spend as bitcoins, and only sell BTCs you acquired through trade or mining.

Such a vow is still pointless and wont change anything, but if people would actually behave like that, we would get a much more viable bitcoin economy.

wareen
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October 23, 2011, 10:09:21 AM
 #33

As soon as somebody does not plan on converting Bitcoins to fiat, the current exchange rate becomes less important. I think it would be very important to slowly decouple the value of a Bitcoin from the current Mt.Gox exchange rate. This is what we would expect to see anyway once the Bitcoin economy is big enough.

A possible way to support such a development, would be to switch to some moving average when pricing products and services.
This would be some kind of a middle ground between a "I sell for fiat immediately" and "I hereby solemnly swear not to exchange Bitcoins to fiat ever". Everybody could sell Bitcoins whenever they like, but the prices would be much less volatile and with longer averaging windows, the value of Bitcoin would become more independent.

A downside of course is, that falling exchange rates would make spending Bitcoins even less favorable and that it could be used by merchants to justify overpriced offers (if they used longer averaging windows in a downturn and shorter during an upturn).

What do you think?
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October 23, 2011, 01:11:52 PM
 #34

As a seller of goods I would be willing to make this pledge, however as a miner doing 9+ Ghash/S I can't. My electric costs are way too high.

This pledge clearly is optional and the people who want to make it can make it. I will pledge right here and right now that all goods and services I trade for bitcoin I will not convert into any fiat currency. I am doing this to help build the bitcoin economy. If some people think I amsilly for doing this then fine, let them think.

Clearly part of what I mine needs to be sold to pay for my electric.

Peace

Your position is understandable but, assuming you purchase Christmas presents, could you not buy gifts for your loved ones with Bitcoin? If you were planning on spending fiat for gifts, use that for paying the electric bill, and Bitcoin for gift buying.
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October 23, 2011, 01:22:18 PM
 #35

I can see the words 'pledge' and 'vow' are rubbing everyone the wrong way. I've been fortunate (g*d bless my parents) not to have ever been indoctrinated in any cult during childhood, saluted a flag, or any such ceremonies that I remember. These words may have different power to some of you. Anyone who gets my drift want to re-word my OP proposal? To me it's more like a bumper sticker that says "Honk if you love bitcoin" rather than a secret blood pact.

I just want to know who's in it for the technology and potential and who's in it for the 'musical chairs'. I don't hugely care and will happily trade with everyone. I'd just like to know from what perspective the people I'm dealing with are operating. I want us to mutually scratch each other's back. It's the same reason I support and lend money to my family and friends.

I have to say one point regarding fiat vs bitcoin and the exchanges. I fear that the exchanges will get shutdown with my FIAT money. Bitcoin in my hand is SECURE. Dollars in an account somewhere is NOT MINE. I absolutely disagree with elggawf's notion of fiat accounts and credit security. If you don't hold it, you don't own it.

Are you, by chance, a JW? You can PM me with your answer. I'm guessing after reading the first paragraph of the quoted post above.

To date, I've yet to cash out Bitcoin.
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October 23, 2011, 04:27:41 PM
 #36

I just want to know who's in it for the technology and potential.

Me is!   Smiley


I like the idea of taking a personal vow.  For many reasons. Not the least of which is reflecting on what one really wants to accomplish.
'The unexamined life is not worth living' as Socrates supposedly said ( a kinda personal vow of his perhaps )... but I won't get into a
philosophical essay.

And taking a vow, or making a similar public announcement, of what one holds dear ( the image of Arlo Guthrie and Pete Seeger singing
"This Little Light of Mine" at the Occupy protests just now comes to mind ) often can have a magnetizing effect to spark up another's
passions.    

But I emphasized personal because I feel it is best to let others, look within ( or not ), and find their own relationship and way with
the changing world and the novel things it provides.  


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October 23, 2011, 04:29:35 PM
 #37

Yeah you are correct of course I don't mean the federal government should insure bitcoin. I think indeed that some entity should invest in protecting Bitcoin companies. But how?

The problem with this is that most Bitcoiners would view the only workable solution as counter-productive.

No one, no one is going to insure Bitcoins that you hold "in your hand". The only plausible solution is a "bank" style service where they hold your Bitcoins, they invest in security that's measurable and displayable to the underwriter. Even that's fraught with pitfalls though: how does this entity make money? I can see only two ways: 1) Charging fees to hold your Bitcoins (pretty unpalatable, really) or 2) Loaning them to short sellers at interest.

Even if you figure out how to pay for it, the underwriting process is not particularly attractive to any insurer as well - the actual value of the underwriting would need to be recalculated almost daily, can swing wildly, and how much it would cost to buy X more Bitcoins at some point in the future is tough to forecast. Heck, I think about the only person able to insure such a company would be someone who already has a fuckton of Bitcoins (either an early adopter or a heavily invested speculator), as I don't think throwing USD at this problem will fix anything.

I'm sure someone, somewhere will solve this problem eventually. There's almost certainly money to be made for anyone who does. But until that happens, any comparison between Bitcoin and fiat money is mostly apples to oranges, as they're both insecure in their own respective ways.

^_^
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October 23, 2011, 06:18:08 PM
 #38

I think OP has a very strong point.

However a "vow" is not really the way the direction I think this is aimed at would be accomplished. Reducing the amount of bitcoins exchanged for fiat is a good thing, if those bitcoins remain in the business volume of the economy.

Simply saving them will not accomplish anything.

What we would need is some sort of 'Bitcoin supply and demand network' were Individuals and Companies can list their demands for raw materials, goods, services, etc.. and the things they are able to supply.
This could be a simple website like little than online bitcoin yellow pages or something more sophisticated where available volumes and locations are indexed and mechanisms provided to find the best matching business partners depending on requirement. The thing could even be decentralized in a separate p2p network or, most fancy integrated into the blockchain mechanism.

Independently what solution will emerge we are at the point where we need something like it, no way around that, unless we wait till the storm is over, people have left and there is only a core group left and start the effort in a calmer environment. (But don't complain about selloffs then....)

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October 23, 2011, 10:42:19 PM
 #39

The responses have been fascinating. Both positive and negative, the presumptions have generally been unfounded. At no point have I mentioned exchange rates as a motivation. Not once.

"Hi, I want to reduce my dependence upon fiat paper. I want to use and support bitcoin as much as possible. Hey you too? Cool. Let's hang."

"Oh, that guy over there agrees? Cool. Let's work together."


other threads about "who's spending instead of selling" and so on, if you take away the hard-language of "pledge" this idea is no longer silly

Whether it's called a pledge, vow, gentleman's agreement, statement of intent, or preference, I am in fact looking for names. I do intend to contact people and find out what they are up to and how we can achieve our common goals. Feel free to PM me, and send your PGP key if you have one, 'cuz I think that's cool too.


Netrin, I think I (don't) understand where you are coming from, but your "solution" isnt one (to the problem that I have in mind)...Such a vow is still pointless and wont change anything (doesn't fit into my view of the world as an exchange market), but if people would actually behave like that (within a network of trust and mutual benefit), we would get a much more viable bitcoin economy.

I don't mean to single the above poster out; It's the majority world view here.


What we would need is some sort of 'Bitcoin supply and demand network' were Individuals and Companies can list their demands for raw materials, goods, services, etc.. and the things they are able to supply.

Yes, this would be an excellent project. I think it would be best to integrate with the many existing web sites that already try to do this. Your network could also be a platform for encouraging suppliers outside of the bitcoin economy to join.

I am looking for a community whose finances might be better modeled in OT and Ripple. Bitcoin currently enjoys wider appeal and is generic. Perhaps bitcoin best serves the transaction level and balancing accounts, but not collaboration and trust.

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October 25, 2011, 04:40:29 AM
 #40

I'm of and for the 99% as much as the next Occupy Wall Street protester, and my first fiat->bitcoin exchange was at least in part motivated by an anarchist desire to "boycott the federal reserve".  I hopped on the bandwagon and also advocated it as a "people's currency" - decentralized and p2p.  But I was naive.

I don't believe that the founders/early adopters with similar motives were disingenuous.  I think most were genuinely surprised (but perhaps not appalled) to see bitcoin coopted by government fiat - pumped and dumped in a most viciously capitalist manner.  Why would a crypto-anarchist be any more immune to greed than the next guy?

Sure, I want to rage against the machine and I hope I live to see the day that the dominant system is made obsolete by a new paradigm.  I hope I can contribute to that transition myself.  But in the meantime, I'm just another dog in a dog-eat-dog society fighting for survival.

In the current, "real world highly inter-connected economy", "cash moves everything around me".  Everything is for sale, even livelihood has its price and the value of all assets come from speculative powers far outside of my control.  Therefore, I am a gambling man (or dog, so to speak) because I have no other option that I can see (and maybe that's my own failing).

I just want to know who's in it for the technology and potential and who's in it for the 'musical chairs'.

I'm in it for both, though I must admit that thus far, I've done much better with the technology than the 'musical chairs'.

It's clear to me that the technology and potential of bitcoin will only take it so far: a speculative decentralized e-commodity.  Forex for phreaks, gambling for geeks and money laundering/tax evasion for little more than chump change (unless the bubble re-inflates).

Technologically, its a new paradigm.  Socially: more of the same.

I am looking for a community whose finances might be better modeled in OT and Ripple. Bitcoin currently enjoys wider appeal and is generic. Perhaps bitcoin best serves the transaction level and balancing accounts, but not collaboration and trust.

Bitcoin embodies the ideals of pure anarcho-capitalism.  Not surprising, given the capitalist hegemony.  Bitcoin alone is not, IMO, a seed for social progress. 

Bitcoin is set square in the sights of speculators (or vampires if that's how you see them).  The infrastructure seems built primarily for them (as opposed to merchants or craftsmen) and the only way they'll ever go away is if the money goes first.

I think you are right to look elsewhere for something more aligned with socialism, communalism, anarcho-syndicalism or whatever you want to call it.  OpenTransactions, Ripple, the MetaCurrency Project, the P2P Foundation, and community gardens seem like good places to start.

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