(It’s not just me, is it?)
I think I’m starting to understand why you are so angry.
It’s not that you think it’s impossible to create an electronic currency that ends up being useful (you stated the 3 options, one included success), you’re angry that some people have overhyped it’s potential.
What you are missing is that your emotional issue with overhyping doesn’t alter whether people find value in the currency or not.
Actually I would say that out of Amateur Barbarian’s three options, the first one is a milestone that has already been passed. Overstock.com famously started accepting Bitcoin a while ago. Takeaway.com, which offers on-line food delivery service from thousands of different restaurants in 10 European countries, has been offering Bitcoin as a payment option for quite a long time already. Starbucks has been experimenting with it.
So even if the whole thing collapses tomorrow, which might well happen, we can already say that for at least a brief time, a grassroots virtual currency based on a fully de-centralized open-source protocol managed to become sufficiently mainstream that it was accepted as a payment option by several major retailers. That’s pretty damn cool all by itself.
It reminds me of the early days of Linux, when it was obviously not yet a viable competitor to mainstream OS’s. The naysayers were pointing out all of its glaring flaws and all of the things which it was not (yet!) able to do, while us geeks who were having a blast playing with it, were going “yes, we know all that, but isn’t it cool!”
And of course, Linux eventually became a major player. Not saying that the same level of success will happen to Bitcoin, but clearly there’s plenty of people who do see the point, so if not Bitcoin then perhaps some future offspring of it? Personally I am more worried by its technical limitations, especially its ability to scale to a much larger transaction volume than it supports today, than by the question of where it derives its value from. That question seems to be sorting itself out pretty nicely so far.
But yeah, looks like we already turned Amateur Barbarian around from “it’s a cargo cult” to “well OK, so perhaps it will become a viable economic option, but then it will accrue all the baggage of a regular currency so it will be a hollow victory.” Since it’s well past bedtime here in my timezone, I’ll consider that a good result for today. 
I know the discussion has moved on, but I think they are.
If all the accountants in central banks stopped doing any work, would the dollar continue to have value? Part of the reason I believe a dollar has value is that I can get one from someone today from my employer and give it to my bank, and know that next month when I write a rent check the bank will honor it. That doesn’t work without banks and accountants.
How fast does the value of the dollar plummet if none of the banks’ accountants show up for work (ever)?
Who in the hell said I’m angry? (You might want to Google “projection” in a good psych dictionary.)
I am somewhere between amused to the point of giggles and exasperated that yet another potentially promising set of minds has fallen for the revolutionary fallacy.
Do you have any idea - *any *- how many discussions of exactly this progression (and the outcome I predict) I’ve had with intelligent-to-brilliant, utterly sincere, completely committed ‘revolutionaries’ who could not be made to see the fundamental - juvenile - childish - kindergarten flaws in their master plan? In every political, social and economic stripe and stratum? Who were convinced that extremely elaborate theories (or mathematics) ‘proved’ they were right, and would argue them 24/7 with those who did not ‘understand’ - but could *not *be made to see that their construct stood on something between loose sand and vacuum?
No, you don’t. But with Bitcoiners, it’s n+1. And amusement is very much in the lead.
BTW - the economic precepts and theories I work with make Bitcoiners look like Ben Bernanke’s office staff; they’re so radical from scratch that the notion of a common medium of exchange is almost irrelevant. So you can come back from the idea that I’m just too dull and ordinary to see Bitcoin’s brilliance and promise.
Normally people in a discussion don’t call other people “dimwits”.
Maybe you’re not angry, but something is up, just not sure what.
What does “revolutionary” have to do with bitcoins?
Either it’s a mechanism people end up using or it isn’t.
Dude, I have absolutely no idea what you are talking about.
Still no idea.
Amateur Barbarian I don’t know jack shit about this topic but I know a fair bit about debate. You are throwing around authority, hyperbole, insults, snide remarks, strawmen, and poisoned wells. Your opponents are instead seem to be putting together fact and logic based rational arguments that seem to hang together to this layman.
You might want to come up with a bit more substance and a whole hellava lot less hysteria if you want to come even close to sounding convincing on this topic.
I think one of the points where you are mistaken is thinking that there is a group behind bitcoin that established value. Sure there is a group that created the system, but that doesn’t establish value.
Value is established by the people using the currency. As trades are made for real goods using the currency, then there is a connection to the rest of our economic system. The more value people have locked up in the currency, the less likely it would just disappear tomorrow for some newer fashion in digital currency.
The other thing that would continue the life-span of bitcoin is if it offers some feature(s) that other currencies don’t. Currently it offers a decentralized, difficult to trace, digital currency which some people consider valuable for their needs.
But “is necessary for” is not the same thing as “creates the value of”. It may be true that the value of the dollar would plummet if those accountants did not show up for work, but that doesn’t mean, by itself, that the work of those accountants is what imbues the dollar with value.
If you couldn’t purchase anything with dollars, then dollars would not have value to you, no matter how many accountants were eagerly offering to help you keep track of them. Likewise, if there weren’t any stores accepting Bitcoins as payment for goods and services, then Bitcoin would not have value**()** no matter how diligently the miners were burning electricity on crypto computations. AB is right in that regard.
**()** except to people buying them and holding on to them in the hope that such stores will appear in the future, thereby increasing the value of their speculative investment
The only way I would agree with that analogy is to say that both are examples of excercises in programming. I dont think promoting Bitcoin to the masses by saying “ITS BIGGER THAN LINUX!” is really saying much in the grand scheme of things.
Bitcoin would probably get more traction if, 1.) It was backed by governments the way non-monopoly money is, and 2.) It wasn’t irrevocably associated with the Libertarian lunatic fringe convinced it is the wave of the future.
If you’re content to say, “This is a fun little obscure programming excercise in how to try to make a digital currency” then I would agree with you. But to imply, “They all laughed about Linux and now look how ubiquitous it is” I would snicker as I type this on my Andoid phone.
Mostly the former, indeed. I think that’s where a large part of the disconnect in this thread is coming from: Amateur Barbarian is saying “you guys are deluding yourself, it’s not even close to being a real currency like the dollar or the euro” and the rest of us are saying “well duh, but just look at what you can already do with it – isn’t that pretty cool in itself?”
And just to re-iterate this: while it is probably not ever going to become a serious competitor to Paypal or Visa, you really can buy actual real-world goods at actual stores with Bitcoin, today. I can go to thuisbezorgd.nl right now, select any of the 19 take-out restaurants listed for my small hometown, place an order, select Bitcoin as the payment method, confirm the payment with a few mouse clicks or by scanning a QR-code with my phone, and have a box of food delivered on my doorstep 30 minutes later. This has been possible for the past half year, and it works, I’ve done it quite a few times already. And the same thing is possible in nine other countries in Europe. Of course, this is just one webshop (albeit a large one), but even so, calling it merely an obscure little programming exercise is understating the case a bit.
Well, given that one of the main goals of the Bitcoin experiment is to demonstrate that it is in fact possible to create a functioning virtual currency in a fully open-source, decentralized manner, without needing government backing, that would be kind of missing the point. Might as well use Paypal then. Of course there are serious extra challenges involved in trying to get a currency off the ground without such backing – but that’s the whole point of the experiment, to see if those challenges can be overcome.
So far the preliminary conclusion appears to be cautiously positive – it’s been a rough ride, but I really can buy spareribs with Bitcoins, which means that somehow me and the people running that website seem to have managed to agree on a value for them, despite the fact that no Dutch government official has ever assigned it any.
Well yeah, but tainting a community via its most extremist members is a trick you can use to discredit anything. That’s the problem I have with AB’s behaviour in this thread: he is arguing vehemently against a standpoint which nobody in this thread is actually defending. Until one of those lunatic fringe fanatics, who believe that Bitcoin is going to replace the dollar and the euro before the end of this year and herald the coming of the glorious Libertarian paradise, actually shows up in this thread, how about we address the things which people on this message board are actually saying?
And so far, I seem to be the most “fanatical” pro-Bitcoin voice in the thread, and my standpoint is basically: yeah, it’s a nice proof-of-concept, it’s not going to replace the dollar anytime soon and it probably won’t last forever, but you have to admit the idea is pretty cool. And hey, I can actually use it to order spareribs! I like spareribs.
You know what the best part of fiat currency is? I can use it to buy a pizza from the place down the street! 
Yeah, they don’t take Bitcoin, unfortunately. Nor does PG&E, or my landlord, or the 99% of people that never heard of or care about Bitcoin.
But feel free to hang on to your Proof of Concept of Buying Child Porn and Heroin!
If mining is necessary for the health of system and to prevent fraud, what will happen once all the coins are mined or the cost of mining is not worth the reward? Won’t someone basically have to step up and do it to prevent fraud, and if so, what would be their incentive?
Bitcoin miners accept tips! The bitcoin system provides for transaction fees to be paid to miners. We’ll see if users will be willing to tip well enough to make it worth the miners’ while. Gee, it’s kind of like paying bank fees, eh?
How are taxes paid when using bit coins?
I disagree.
If there were no central banks with fancy accounting departments, I could still use dollars by carrying around cash and exchanging them by hand.
But part of the utility of the USD, part of the value of it as a currency, is that my employer can send my paycheck direct deposit to my bank, that I can pull out my credit card a week later and pay for dinner, that I can get a loan and buy a house with with them, etc. None of that works without central banks and accountants.
So, the dollar would have value without a banking system, but it has more value with it. And to that extent, the accountants create that value.
Same way taxes are paid when you’re selling crack.
Same as now. Looking at your incoming and outgoing bank transfers is hardly the only way in which the IRS can figure out what you owe them.
Let’s look at the realistic scenario first: the majority of people are still getting their salary paid in their national currency and making most of their large payments (houses, cars) in that currency, but they convert a small part of their money to Bitcoins for making on-line payments. No tax problem here, it works the same as with cash. Companies receive payments, report them to the government and pay taxes over them. It isn’t necessary for the tax authority to know who the customer was.
Now for the unrealistic scenario, which nobody in this thread has actually claimed to advocate or to seriously expect to happen: Bitcoin takes over the world, everybody gets paid their salary in Bitcoins and makes all of their payments with it. Even in that hypothetical world, there would still be plenty of ways for the IRS to get their due. The Dutch tax authority knows exactly what I make, not because they looked at my bank account but because they got that information directly from my employer; there’s no reason why this would be different in a Bitcoin world.
Of course, when you’re dealing with businesses which do a lot of untraceable dealings, there’s opportunity for fraud. E.g. a plumber saying “hey, I’ll give you a 20% discount if you don’t ask for a receipt” and then forgetting to tell the IRS about that income. Such things are possible today and they would still be possible if that plumber got paid with Bitcoin. But if the plumber tried to hide all of his income from the IRS, or even a too-large portion of it, he wouldn’t get away with it very long.
Yes, it’s great isn’t it? In fact I bought something with fiat currency just yesterday, and it worked perfectly! Isn’t it fun to have multiple options available, and be able to choose between them on a case-by-case basis?
Thanks! Have fun committing murder or rape or whatever else you are planning to do today!
Discussing bitcoin on the SDMB is hopeless, as any thread is invariably invaded by a platoon of jackasses that become strangely irate at the concept. I have no interest in using the currency, but the idea is pretty revolutionary and incredibly interesting, as are its derivatives that have tried to fix some of the flaws in the original design.