Bitcoin pros and cons, and about it replacing the bank credit system...

[markhansaven]

Hello there,

I've been studying and reading up on bitcoin since 2011. I personally think that it's a really ingenious idea.

There are many positive points about the currency that I've found online. Some key ones that I've stumbled upon are:

+ It is better than fiat money printed by the federal reserve private bank.
+ Transactions are instantaneous.
+ It can be used as a global currency.

Although I've seen a lot of overwhelming support about bitcoin, I would love to hear and have a fair debate on what people think might be some of the cons, pertaining to the prospect or possibility of bitcoin or cryptocurrencies replacing debt-based currencies that are currently in place right now.

I would like to, here, respond to the pro points made above. Before you respond, please, hear my points out that I'm about to make. I know that I'm coming into a community that is extremely pro-bitcoin, and I do not mean to oppose it or bash it. I should say first that I am personally very excited to use the currency myself, and am pretty confident in it.

- Fiat currency is in and of itself not inherently evil. The currency that we use right now, Bank Credit, is already digital. When too much money is printed without it being accountable to goods and services, to be used for hording, and when credit is given out without it being able to be paid back, the currency ends up getting tainted.
- Government control is not in and of itself inherently evil. There are distorted, evil and corrupt governments in this world causing great suffering and pain, though there are also governments in this world that do not operate in such a way.
- Is it not possible for "a power" to hijack and take hold of Bitcoin and perhaps other cryptocurrencies that exist and use it for their own personal gain?
- Any currency, including Bitcoin, will inevitably be pegged to natural resources, as in the mining, distribution and piecing together of these resources into tangible goods, along with essential resources like food and water (basically things that we find valuable), which makes the idea of Bitcoin not much different than our current currencies. In fact, if you have Bitcoin ATMs, then you have to have Bitcoin numbers or perhaps even in the future Bitcoin cards. Furthermore, if Bitcoin is to replace our current currencies, who is to say that loans will not be re-invented and issued out? Banks could reform themselves through cryptocurrencies, and issue out their loans through cryptocurrencies. You may say that the benefit you get from this is much lower fees and instantaneous transfers, but then what is to stop there from being climbing fees? The currency would become less and less different or unique from the current Bank Credit system used today.
- Lastly, pertaining to the idea of Bitcoin taking the seat as a global currency, what about the people that don't have access to the internet, or live in extremely rural areas, or choose a lifestyle devoid of computers?

Thanks for your time and I hope that these points will raise some debate,
Mark

[franky1]

when a government creates a bond, nothing backs it
they give it to the fed/mint. and the mint prints bank notes.

at this point this means bank notes are indeed worthless. the only thing that makes bank notes have a value is because people are given them in exchange for labour. in short, the only thing fiat is backed by is minimum wage laws which are tied to cost of living.

basically 2 weeks of minimum wage bank notes equates to 2 weeks of paying bills and feeding yourself. and that is where FIAT has value. the trust that a bank note roughly equates to affording your living costs.

with the whole debt/inflation/cost of living increases, yet lack of rises in minimum wage, the trust/promise is starting to break apart. so FIAT(bank notes) are losing their value.

4 years ago 1 hour 30 minutes of minimum wage labour gave you 1 bank note. which can buy you 10 cartons of milk, today it only gets you 7. meaning you have to work 2 hours to get 10 cartons of milk

supply and demand
the whole demand/supply concept means that with a an unlimited supply (fiat) it will forever increasingly lose value the only controllable thing is the rate at which it happens. which is controlled by the cost of living/minimum wage balance to keep value inline.. with a fixed supply (bitcoins) as demand increases the value (what you can get for them) increases. bitcoin will/should not ever come into the same problems as FIAT.

4 years ago 3 days of mining at 50% of the network bought you only 2 pizza. now 3 days of 50% of network mining can buy you 300,000+ pizza's

as for global debt in a bitcoin scenario. if someone wants 1000 bitcoins to purchase a house and agrees to repay 1100 over 10-15 years, there would never be any global debt. but be careful, this is only true if actual bitcoins are handed between the parties involved. there are already cases of 'off chain' transactions happening where peoples exchange accounts are credited with a balance, but this is not a blockchain. it is just a sql database. and in times of hacks or thefts from the server, real bitcoins disappear leaving victims without their real bitcoins.

no one should ever do offline transactions unless its through a reputable source and only short term to ensure the balance of real bitcoins vs sql database debt is covered.(avoid fractional reserves)

remember bitcoins are only real on the blockchain, so as long as we stick to blockchain transactions and not move to third party transactions (offchain) then the theory is that bitcoins will never become a problem of global debt.
of course people will try to not repay mortgages, will try to borrow coins to spend and then run off. so there is no way to fix human immorals and personal debt. but bitcoins if used properly using the blockchain can avoid global debt and inflation issues that fiat has. FIATs lack of value at its creation will always have inevitably lead to debt and inflation as thats its feature. we just need to keep bitcoin away from offchain fractional reserving(as a practice or result from greed/thefts) to ensure bitcoin doesnt follow the same path

[zimmah]

In my opinion fiat money is evil/scam because it gives certain people the power to create wealth out of nothing. Which is evil in itself as noone should have this power. And I'm not even talking about governments or presidents, but banks and financial institutions.

On top of their already absurd privileges most banks and financial institutes commit fraud on a large scale. You wouldn't even believe how corrupt and fraudulent they are until you have seen it with your own eyes.

It's only natural though. People says power corrupts and more power corrupts more, this is close to the truth but the truth is power attracts corrupted minds and more power attracts even more corrupted minds. Therefore sooner or later any position of power will be filled with corrupted persons who will even want more power (which in turn will attract even more corrupt people).

Bitcoin can not be hacked or corrupted because there's nothing to hack or corrupt. No one is in any position of power as bitcoin is peer to peer and open source. Therefore everyone controls it but no one has more power than anyone else.

This is how money should work. Well as long as we need money anyway.

[Beliathon]

- Fiat currency is in and of itself not inherently evil.

Of course it's not. No tool is good or evil, they are all neutral. Value judgements, whether negative or positive always come AFTER we see how humans use these tools.
If the government wanted to, they could divide evenly all printed fiat each day to every person in the nation. They choose not to do that. They choose to instead provide that money to the oligarchs exclusively.

Fiat currency has been used to enslave the world to debt, and therefore we say it is evil. It is not, however, inherently evil.

[franky1]

- Fiat currency is in and of itself not inherently evil.

Of course it's not. No tool is good or evil, they are all neutral. Value judgements, whether negative or positive always come AFTER we see how humans use these tools.
If the government wanted to, they could divide evenly all printed fiat each day to every person in the nation. They choose not to do that. They choose to instead provide that money to the oligarchs exclusively.

Fiat currency has been used to enslave the world to debt, and therefore we say it is evil. It is not, however, inherently evil.

+1

fiat is not evil, guns are not evil, drugs are not evil.

the root of all evil is in the beholder

governments can be evil, gun holders can be evil, drug users can be evil.

people giving away money can be good, guns can save your life which is good, drugs can be used in hospitals which is good

[brian_23452]

I guess I don't know what your point is?  You made a list of pros and then argued against them but no one said them in the first place.  Typically in a debate one lets the other person speak, and then attempts to refute what they say.  Not invent the other person's argument for them and then refute the imaginary argument. 

With that said, replacing fiat "bank credit system" with bitcoin will never happen, and one only has to look at your first point to see why.  Your first made up argument is that bitcoin is better than fiat printed by the bank.  This may be true for you or me, but is obviously not true for the bank doing the printing! 

[jonald_fyookball]

If the government wanted to, they could divide evenly all printed fiat each day to every person in the nation.

That would of course be unfair to the people that work hard and contribute value to society while rewarding the lazy and stupid and incentivizing more of the same.  Basically that's communism and it had disastrous results in places like Russia and China.