Can bitcoin become the currency of the people and replace money.

[Kazimir]

I don't feel Bitcoins will replace our usual currencies. But more work alongside them.

Well, maybe not in the same way that the Euro didn't replace the US Dollar.

But I expect that Bitcoin's significance will become much, much larger, and become at least one of the major currencies.

I guess every currency will have its own "market" or area of use. US Dollars for example may remain useful for physical (offline, i.e. cash) payments in the U.S. Like when buying fruit on the market or doing groceries and stuff. Same for the Euro in European countries. Bitcoin is typically best suited for any online payments and transactions, and I also easily see credit cards (which are essentially just electronic transactions, currently based on old fashioned currencies) being replaced by Bitcoin alternatives (easier, cheaper, more secure). Mobile phone solutions will also greatly improve practical usability of bitcoins in everyday situations.

Considering that the vast majority of nowadays financial traffic is already happening online / electronically, I see Bitcoin playing a major role in the future, becoming one of the (if not THE) dominant currency world wide.

The only reasons why it may still take a while: (several years at least)

• Bitcoin is still way too complicated for Average Joe, they won't be able to even grasp this whole concept yet, and understand its ingenuity, let alone knowing how to keep their wallet safe and not doing stupid things to get their wallet stolen
   
  
• Banks and governments won't be happy about this, and probably start suggesting laws or launch media offensives against Bitcoin once they realize how big this shit is gonna be (and how much it will take their power, control and monopoly on money away)

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[cyberagorist]

I expect bicoin will be the currency for extralegal payments in the darknet.

In the legal environment it will not play a big role, simply because it will be forbidden once it becomes important. But this will be without influence on extralegal markets. 

One question is, then, how important these extralegal internet markets will be, in comparison with legal markets, in the future. I think, the main problem of these markets is that there is actually no reliable reputational system.  Once such a system will be created and works, extralegal market will become increasingly important.

Bitcoins will be especially important during the development of the extralegal markets, until a reliable reputational system exists. The reason is that it is safe - once you have them on your account, everything is fine. The alternative on the free market are currencies backed by real values, but they have to rely on trust - you have to trust that the obligation to return some real values once you present internet money is reliable.  This is impossible without a reliable reputational system.

On the other hand, bitcoins will simplify the creation of a reputational system. The point is that one way to improve reputation of a pseudonym (pseudonymous reputation is the key for extralegal markets) are guarantees from persons who already have reputation: Somebody with reputation offers some compensation for those cheated by the pseudonym.  It makes the system much easier if there is an established currency to be used in such guarantees.

The very point that the value of a bitcoin itself does not depend on the reputation of somebody who creates bitcoins is the useful point here.

Another, quite different question is if the bitcoin survives once a state-independent reputational system works. Once it works, it would be much more reasonable to own obligations for real values (once these can be trusted) than to use bitcoins which do not have any inherent value.

[Equilux]

A friend of mine told me about the way they started using mobilephone-credit in parts of Afrika;

Some guys who have the only, or one of the few, mobilephone in a certain village will run a telephone service for other people. That's pretty straightforward, you just pay the guy to use his phone, but what als started to happen is that when your brother who lives in the city want to send you some money fast, he buys $20 worth of phonecredit, calls the mobilephone guy in the village, tells him the the credit number (essentially giving him the $20 worth of credit) and he than gives you $20 out of his pocket.

Nearly instant wire-transfers in countries were vast areas don't even have basic needs. I would guess Bitcoin would fullfill a similar role, when enough people know about it.

[lazyxness]

if bitcoins will replace money id be glad to we got a head start lol

[Ineedbtc]

I don't think it can 

[Rugatu]

I don't think it can 

You have to believe...

Until then let's build some services for them 

[Kazimir]

I don't think it can 

Why not?

Because Bitcoin "lacks" something, compared to dollars, euros, or gold?
Or because the general public will never pick this up?
Or because banks and governments will try and suppress it (in favor of their own currency system, which they control and benefit from) ?

[fixxi.net]

I don't think it can  

Why not?

Because Bitcoin "lacks" something, compared to dollars, euros, or gold?
Or because the general public will never pick this up?
Or because banks and governments will try and suppress it (in favor of their own currency system, which they control and benefit from) ?

Having received some answers here https://bitcointalk.org/index.php?topic=84932.msg937152#msg937152 , I still support the development of  bitcoin but it DOES not have the potential to be THE NEW honest money system OF THE PEOPLE.

The problem is bitcoin seems to be tied too deeply with the current model and seems like at the end it will simply make existing bankers maintain status quo while making some early Bitcoin adopters richer in the process.

It is a great way to have the community publicize the Bitcoin currency by giving participants parts of the currency through the mathematical system ( which I don't full understand ) and frankly off top of my head I don't see other way.

However this method of politicization favors those who engaged early and therefore is more likely to result in an exchange system within a certain community. However this community seems like will be a subset of the current monetary system. It will operate within its tentacles.

It is evident that it benefits early adopters and this gives bias to a small group of people. That similarity with the existing money system is what makes Bitcoin just another currency in the current system. A currency mostly addressing the benefit of its early adopters rather than the benefits of the actual value creator at particular time and space. This is a huge similarity with current model and benefits a small group. For that reason I now look at Bitcoin more like another currency in the baksters's world rather than the "real liberal currency" which unfortunately bitcoin is not.

An issue is that bitcoin is being traded for USD meaning that at any time the banksters see Bitcoin has gotten stonger they can simply buy out a large share of Bitcoin and that way getting control of the currency effectively diminishing its liberty prospects. In fact banksters may have done that  already.

In fact banksters ( investors , people with currency )  may be partially behind Bitcoin and probably are.

It is also 100 % certain  that provided Bitcoin success down the road those with Bitcoins will eagerly trade bitcoins to the banksters getting rich in USD and becoming part of the existing power system. So all bitcoin participants participate for personal gain ... which is fine. But an honest alternative would have a common good element that goes to others.

The problem my friends is that banksters enforce the current money system through force: guns , police, jails.  Any system that is so similar to the existing model is bound to integrate in it later on because that would be the clever choice for people ... compared to going to jail or worse.

These are the reasons I now believe Bitcoin is not that "absolute honest alternative" that I thought it was and I think its potential is to eventually integrate with the existing model making banksters richer and bitcoin adopters richer as well. But maintaining the status quo for the rest of people.

So it is business as usual for humanity.

In the mean time I will keep looking for that honest alternative but now I suspect such may not exist at the moment. And maybe will not exist any time soon. Every social structure people have ever created,  few at the top have always concentrated the power, perhaps that is just being human and looking for a "honest alternative" is just stupid. Personal survival and personal being is at the top of the moral value system of all of us and other's wellbeing goes down down the list.

Like I said I welcome bitcoin ,  will use it,  and come back from time to time to see what is new ... but to humanity it is "business as usual"

add me in facebook: facefixxi and fixxi.net

Later

PS: SORRY for all the typos ...

[cyberagorist]

I still support the development of  bitcoin but it DOES not have the potential to be THE NEW honest money system OF THE PEOPLE.

The problem is bitcoin seems to be tied too deeply with the current model and seems like at the end it will simply make existing bankers maintain status quo while making some early Bitcoin adopters richer in the process.

It is a great way to have the community publicize the Bitcoin currency by giving participants parts of the currency through the mathematical system ( which I don't full understand ) and frankly off top of my head I don't see other way.

However this method of politicization favors those who engaged early and therefore is more likely to result in an exchange system within a certain community. However this community seems like will be a subset of the current monetary system. It will operate within its tentacles.

It is evident that it benefits early adopters and this gives bias to a small group of people. That similarity with the existing money system is what makes Bitcoin just another currency in the current system. A currency mostly addressing the benefit of its early adopters rather than the benefits of actual value creator at particular time and space. This is a huge similarity with current model its bias to a small group. For that reason I now look at Bitcoin more like another currency with the  banksters rather than the "real honest liberty" which unfortunately bitcoin is not.

I don't think it matters who are the early winners. The important point is that it cannot be traced.  If the early winners are part of the establishment, that's even good - it makes it less likely that bitcoins become illegal, because there will be an influental lobby behind it.

[stevebc]

To me the big problem is security of the bitcoins.

I would seriously consider putting a fair chunk of change into BTC longterm (basically betting on the currency's long term success) but I am not confident in my abilities not to either have my wallet stolen, or 'lose' it.

[Kazimir]

To me the big problem is security of the bitcoins.

I would seriously consider putting a fair chunk of change into BTC longterm (basically betting on the currency's long term success) but I am not confident in my abilities not to either have my wallet stolen, or 'lose' it.

Yep, you're right, you have to be quite aware of what you're doing in order not to put your bitcoins at stake. And you're not alone, most people are no security experts with dedicated linux machines and whatnot.

The good news is: both the ease of use and the security / safety issues will be greatly improved in due time. This system is still in its infancy. Give it a few more years and Bitcoin (or rather, the client software to process it) will mature and evolve to a level that is easy AND safe to use for the Average Joe. The future is nigh!

[bangzilla]

i think bitcoins have a bunch of issues that can perhaps one day be resolved.

right now i see it as a linux like system, only the tech geeks have the patience and technical aptitude to set it up. even to obtain bitcoins you need a wallet, then you need to go over to an exchange and place a market order or limit order, pretty complicated.

also the price instability from speculators make it risky for a business to start accepting as payment.

and of course security.

[herpaderpa]

I think it's either going to stay a relatively niche thing, albeit much bigger than it is now, or the empty suits in big government will declare them illegal

[cyberagorist]

right now i see it as a linux like system, only the tech geeks have the patience and technical aptitude to set it up. even to obtain bitcoins you need a wallet, then you need to go over to an exchange and place a market order or limit order, pretty complicated.

Hey guys, that's a luxery problem.

I remember the time when I have used one of the first pseudonymous remailers, after penet.fi failed (alpha.c2.org) In comparison, what is available today is easy and straightforward to use.

And I believe that this will simplify in future even more. You install a program and run it.  And you don't have to care much.  Ok, there always remains some danger of installing the wrong program - but this is not a danger for a network.  Those who install the correct software will be part of the network, and will be safe using it.

[thezerg]

Folks bitcoin has no mandate to "replace" the money of today.  It is simply another commodity/currency.  You could use it alongside your country's currency just like you'd use a currency of a foreign country -- that is, rarely to buy a coffee, but often if you are "visiting" that foreign country.  Its a very bad idea for the longevity of BTC for users to position it as a replacement for your country's currency, :-) so let's not do that.

So where is the bitcoin "country"?  Well its not really a physical place but a set of circumstances.  BTC has some properties that make it very useful for certain types of transactions. 

Meta-currency
First off, its good for sending money to someone very far away.  You can do this with bank transfers but that is not economical in small amounts, and is much slower then BTC transfers.  Also it means that both people need bank accounts.  Right now there is some time, difficulty, and expense getting your money into BTC and on the receiver's side getting BTC back into your $.  But these issues will be smoothed out as BTC gains popularity.  But you know within minutes that you've got the BTC and can send out the product -- even if it might take you a few days to convert that BTC to Euros.  In this way it is a meta-currency; it makes conversion between currencies easier and cheaper.

Virtual Products
Second, its good for buying a certain class of product; basically products that the receiver can use without exposing his identity.  The issue is that in today's system, fraud is like a hot-potato.  Its passed via "charge-backs" along the path of the money until it ends up in the merchant's (or the producer of the item) hands.  In the old days, this worked because the town store clerks knew their customers personally.  In the mail-order and early internet days it still worked because the merchant had an address and the cops could just stake out that PO box or knock on that door (in fact this IS why some merchants do not ship to PO boxes... they are very expensive to watch).  However... how does the system work for downloadable music and video?  For virtual items in MMORPGs?  For cloud computing hosting services?  For buying (with your "fiat" currency) bitcoin itself?  The short answer is that its a total fail and so fraud is pretty rampant... costing the merchants of these services a lot of $.

Of course, Bitcoin does not "solve" fraud; in the same manner as cash it mostly puts the financial loss on the person who lost the money, not random merchants.  But it is perhaps more "fair" because it encourages the proper person to be more careful next time.

In practice though it ALLOWS these merchants to sell these products at a low overhead, and keeps fraud prevention where it should be, with law enforcement.

Bad or Unknown Credit
It also allows merchants to sell physical products to people anywhere within the world regardless of their credit.  Most of those of us in the first world don't really understand, but its actually non-trivial to get a paypal account if you are from certain countries, simply because paypal doesn't trust the person due to a lack of credit history, etc.  Or perhaps you DO have a credit history and its not good.  With BTC these people can still partake in the global economy.  They pay BTC (essentially cash) to the merchant and the merchant sends the goods.  The merchant does have the opportunity to rip the customer off by not shipping the item, but that merchant has a reputation to maintain -- and the buyer has the internet to voice his complaints.  The opposite is not really true in our current system -- the merchant's bad review of "Joe" from "some country with no consumer credit ratings" is not going to affect his subsequent purchasing or reputation (especially if "Joe" is not even his real name).

[Kazimir]

Folks bitcoin has no mandate to "replace" the money of today.  It is simply another commodity/currency.  You could use it alongside your country's currency just like you'd use a currency of a foreign country -- that is, rarely to buy a coffee, but often if you are "visiting" that foreign country.  Its a very bad idea for the longevity of BTC for users to position it as a replacement for your country's currency, :-) so let's not do that.

So where is the bitcoin "country"?  Well its not really a physical place but a set of circumstances.  BTC has some properties that make it very useful for certain types of transactions. 

By suggesting that Bitcoin is 'simply' another commodity/currency, you really miss some of the essential attributes of Bitcoin. There is something fundamentally wrong with pretty much any currency in existance. Euros, Dollars, Pounds. Each and every one of them is rotten by nature. Because they are created and controlled by banks who have no interest except their own profits. Slowly destroying our civilization and enslaving 99% of mankind in the process (see Money as Debt if you think this is an exaggeration) is absolutely no issue at all for them. Profit, power, control. That's what these fiat currencies are really about today.

You may have a point in assigning the role of various currencies to their respective 'territories'. Euros are used in Europe. Dollars are used in the US. Yens are used in Japan. Bitcoins are used online. Guess which of these areas is heading for an unprecented boost in the decades to come.

Who benefits from an uprise of Bitcoin? Everybody except banks. Customers, buyers, sellers, traders, service providers, you name it. Obviously Bitcoin still has to mature, and it will take years until the majority will be able to actually understand Bitcoin, and grasp the true nature of this concept. But they will, eventually. Bitcoin is here to stay.

I guess old fashioned money like euros and dollars (I mean actual paper bills and metal coins) will still keep its purpose. When buying fruit at the market, they might come in handy (at least until you can pay with smartphones and QR codes everywhere). But the majority of all financial traffic takes place electronically. Today this is still done by/through banks, but with Bitcoin, we can do just fine without them.

[cyberagorist]

@thezerg:  I agree with much of your posting - bitcoins have a large value in a situation without a reasonable reputational system in the darknet.  They allow for transactions where only one side has to loose a reputation.

But once we succeed to estasblish a reasonable system of trust online, and once I have no longer any problem to trust a bank which works as  a Tor hidden service, this advantage of bitcoins disappears.  And, instead, real values (that means, online promises of trustworthy people to give you these values) will be able to beat bitcoins.

So, bitcoins are an important intermediate thing - they will be helpful to establish online trust. But, once online trust is established, with a lot of trustworthy online banks in the darknet, they will cease.

@Kazimir:

I guess old fashioned money like euros and dollars (I mean actual paper bills and metal coins) will still keep its purpose. When buying fruit at the market, they might come in handy (at least until you can pay with smartphones and QR codes everywhere). But the majority of all financial traffic takes place electronically. Today this is still done by/through banks, but with Bitcoin, we can do just fine without them.

Yes, we can.  But, clearly, we have to make a certain step toward it - to give up legality.

If bitcoins become important enough, states will forbid them.  But who cares - this will be similar to filesharing and copyright - the state cannot enforce it. 

Nonetheless, there is a mental barrier for many people - they want to be law-abiding citizens. 

But, in the long run, it depends on the ability of the law enforcement agencies to enforce such laws.  Once they appear unable to enforce them, people will use them.  Simply because it gives large enough advantages - you don't have to pay taxes for illegal transfers.