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Bitcoin theft causes Bitfloor exchange to go offline

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Paul Keith:
Not necessarily. We have to also accommodate the fact that bitcoin to non-economic people sound like digital storage of currency so while it may have some value, it is not a true competing currency and will never be.

With the right concept, that definitely opens up the possibility for bitcoin to turn small shops into banks much as prepaid cards are used in some poorer countries when it comes to cellphone text currency. An idea that won't impede the grander idea of Bitcoin as a hoarding material but would promote some movement in the actual currency.

As a concept, it actually has more long term business value to a mom and pop shop than say being promoted and advertised on a bunch of GroupOn clones to garner customer loyalty. Another way to look at it is that it's a Frequent Flyer-program without requiring the recipients to be frequent or discount/sales seekers. Such a concept will always have the potential of targeting a group of credit card addicts who are used to paying through handing a card.

Renegade:
I see no reason why Bitcoin could not become widely accepted. If solving math problems is worth money, then it's actually got more real value than most currencies out there.

Australia, Canada, New Zealand and Sweden all have a zero (0) percent reserve requirement, which effectively enables their private banks to issue unlimited amounts of currency at any time. They simply create an entry in a database and *poof* -- the money magically appears. (The US reserve requirement is about 10%.)

However, in the case of Bitcoin, real work is done in order to create the currency. It actually has some kind of a backing other than "faith". It does not require black magic to create - it requires real work. A "bit" of difference there. ;)

Deflation is a good thing. It increases the value of savings without resorting to usury - keep in mind that usury has been punishable by death in many places and at many times. (Usually by people who understood what it actually does.) Inflation destroys people's savings. The value of the US dollar is about 4% of what it was 100 years ago, thanks to inflation.

The only thing Bitcoin needs is wider adoption my more merchants. If everywhere you went, you could use Bitcoins... would you use them? I sure as heck would.

Just think about it for a moment... Now when you buy your pron subscription, nobody ever sees "XXX Juicy Fleshfest" on a credit card bill. Eh? See just how useful Bitcoin really is? ;D

It's anonymous like cash, but convenient as it is digital.

If money becomes digital and linked to your ID, then someone can simply turn you "off" and remove you from the economy. Say goodbye to buying things like, oh, maybe, bread? Milk? Food? Gas? Pron? :D

Bitcoin solves that problem.

Incidentally, the problem was outlined quite some time ago, and well before modern computers:

16 It also forced all people, great and small, rich and poor, free and slave, to receive a mark on their right hands or on their foreheads,

17 so that they could not buy or sell unless they had the mark, which is the name of the beast or the number of its name.

18 This calls for wisdom. Let the person who has insight calculate the number of the beast, for it is the number of a man. That number is 666.
--- End quote ---

Cue some Iron Maiden at this point! :P

664!
The neighbour of the Beast!
665!
The one across the street!

;D

f0dder:
Hm, I wonder if one can procure some scopolamine on The Silk Road? If so, perhaps BitCoins would be worth something :-)

vlastimil:
Deflation is a horrible thing. It sounds great when you first hear about it, but think about it: Deflation means that by simply sitting on a bitcoin doing NOTHING, the value of your savings increases. What if everybody did this? Believing that a deflationary economy could work is similar as believing in perpetual motion. Though, I admit that it is very intriguing to dream about outwitting nature or math.

A functional economy must favor those that take action more than those, who don't. That is why a mild, predictable inflation is necessary. Deflationary economy favors hoarders instead of producers of goods and services. In time, deflation drives active entities out of market and therefore the bitcoins in their current form cannot become widespread. They would kill every industry segment that would depend on them.

It may not sound that way, but I am a big fan of decentralized digital currencies for all the reasons mentioned by Renegade. I just don't believe in the current Bitcoin system.

Paul Keith:
Deflation is a good thing. It increases the value of savings without resorting to usury - keep in mind that usury has been punishable by death in many places and at many times. (Usually by people who understood what it actually does.) Inflation destroys people's savings. The value of the US dollar is about 4% of what it was 100 years ago, thanks to inflation.-Renegade
--- End quote ---

The problem here I think is that there's a difference between deflation and devalued currency that no one is willing to use and of those who plan to use them would find more value in immediately hoarding them as unlike gold mining, the real work being stated for Bitcoin is only as real as digital is real which it isn't really that real at all and only exists as real so long as everyone is digitally informed. (Like pc viruses aren't real to many people so many don't update their AV despite real objects being shut down.)

Which in turn busts the myth of:

The only thing Bitcoin needs is wider adoption my more merchants. If everywhere you went, you could use Bitcoins... would you use them? I sure as heck would.
--- End quote ---

Humans IMO really really need a huge major crisis to adapt. In fact this is history repeating itself. If everywhere you went you could barter, why would you use currency that has been hijacked by the concept of private banks? Right now why haven't people jumped on the idea of timebanking even?

Buying porn collection is one thing. Being removed from the economy is one thing.

...but how many are actually staking their priorities based on buying porn and how many are being blacklisted from the economy? There are probably more cancelled and banned private torrent accounts than e-commerce accounts and many people would still strive to return to those private torrent sites if that means exclusive access to a commodity at a lower price.

IMO at a beginning of a currency's life, inflation is more important than deflation because the idea is you want people to quickly adopt/quickly desire/quickly trade their own selfishness at the thought that the supply is of such value that it would be less desirable to save up for it. A bubble or gold rush if you may.

It also belies the fact that cash may be anonymous but salaries are not which all major currency needs to have: poor people who are much more willing to view them as money than as currency.

Cash anonymity is of low value to people who have to worry about gaining income in an economic crisis or a person worrying about actual privacy intrusion not just being blacklisted in a club or people who really need true anonymous transactions being done in anonymous settings and anonymous cash is the least of their worries.

Plus what about the other unknown factors anonymous cash brings? Some have even gone so far as calling Bitcoin illiquid. What does that really mean for people who want to utilize cash? Emphasis on the utilize. Not the hoarding, stocks world playing, off-shore money bank transferring sport that rich people play in?

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