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World's First Bitcoin ATM
bill_mcgonigle writes "I just bought bitcoins from the World's first Bitcoin ATM at Liberty Forum. I created an account using an Android Bitcoin client and held up its QR code to the Raspberry Pi-based device's optical scanner. After I fed in a $20 Federal Reserve Note, I got back a confirmation QR code on its display, which I then scanned and checked the third-party confirmation URL. The machine can function on any wireless network and will soon be available for purchase by merchants, who can make a commission on customers' Bitcoin purchases."
Actually the bitcoin is worth more because it's very difficult to expand the bitcoin supply while expanding the currency supply is trivial.
that's my thought.
The only thing holding value in the US dollar is ignorance. One of these days people will slowly realize that the USA has no money and can't pay it's debts as the USA like most of the western world don't know anything about virtual money.
You can't spend more than you take in, but we let governments guess at how much they are taking in and spend 10-20% more than that because they like thinking the GDP has some relevance to the government income of tax revenue.
One simple law could solve the long term finical issues. The base amount the government can spend is equal to the previous years tax revenue. Anything beyond that must be in the form of a loan, war bond etc, that needs to be paid back.
i thought once I was found, but it was only a dream.
Whats ironic about this is that the bank note is now just as worthless as a bitcoin.
Incorrect troll is incorrect.
Congratulations.
#DeleteChrome
Incidentally, this whole article is rather meta, due to the whole "first" aspect of it.
Speaking of ignorance... the only reason ANY currency is worth ANYTHING is that people are willing to exchange it for something else.
Perhaps you could start by learning to spell "financial"?
A lot of people use US dollars without concern. Ignorance is bliss
to drop... I am waiting for some kind of bad security hole. How many bitcoin sites have been laughably insecure?
You just gave them real money and got nothing back in exchange. Stupid beyond belief.
-1 overrated isn't the same thing as "I disagree".
Pretty darn safe?
It will be a far more useful offering when I can both give it currency to be credited bitcoins, and transfer bitcoins to it to receive currency.
I thought gambling was illegal most other places.
Which part of "primarily" is giving you problems there, sparky?
You put primarily in the wrong place.
The currency primarily used by terrorists, druggies, and child pornographers is the US Dollar.
You may have intended to say the currency used primarily by those groups.
I love Jesus, except for his foreign policy.
"I just bought bitcoins from the World's first Bitcoin ATM at Liberty Forum. I created an account using an Android Bitcoin client and held up its QR code to the Raspberry Pi-based device's optical scanner. After I fed in a $20 Federal Reserve Note, I got back a confirmation QR code on its display, which I then scanned and checked the third-party confirmation URL. The machine can function on any wireless network and will soon be available for purchase by merchants, who can make a commission on customers' Bitcoin purchases."
Most of those words mean nothing to the vast majority of the worlds population.
I'll say this right now and you can quote me. Bitcoin is going to CHANGE THE WORLD!
.. Genius.
An ATM in shopping centres which allows people to exchange actual paper money for digital currency? What vendor wouldn't jump at an opportunity to operate such a machine? And once the machines are in every bar and shopping centre, the vendors will naturally all fall into line and allow people to spend bitcoins. This is a WHOLE new way of exchanging money.
What's next? The Silk Road machine?
..to troll yet another new way of Bitcoin scamming gullible fooks on /.
Don't let the Log out button hit you on the way out.
One of the main problems Bitcoin has at the moment is the difficulty involved with trading it for fiat currencies. I hope some adventurous merchants in the Bitcoin hotspots take advantage of this!
Android, Raspberry Pi, and Bitcoin in a single summary? Just needs an Apple or 3D printing angle and it'll be slashdot buzzword bingo.
..yup, monotonous does, as monotony is.
Seriously, WTF is this constant Bitcoin trolling nonsense at all?
Android, Raspberry Pi, and Bitcoin in a single summary? Just needs an Apple or 3D printing angle and it'll be slashdot buzzword bingo.
Nevermind - the article mentions an iPhone app, too. Bingo!
Why is every bitcoin article start with the talking points about bitcoins? The only issue with bitcoins is their volatility. Its the same issue gold has. Someone has to decide to buy into it with the plan of selling it latter for you yourself to be able to sell it.
I disagree. Ever try to give a stripper or hooker bitcoins? Bad idea...trust me.
Isn't this more of a "deposit box" machine seeing as an ATM (automated teller machine) allows withdrawal of money, checking account balances, transferring funds from one account to another etc? (And technically shouldn't the machines that only dispense be MAC (money access center) machines?
Sir, you deserve more modpoints.
That won't work, because the US government would just take out a shit pile of loans pro-actively instead of retro-actively.
It is actually quite hard to obtain bitcoins anonymously.
The days of CPU-based mining are long over, and even the current "economy" of multi-GPU-based mining rigs is about to be eclipsed by the ASIC-based devices coming online this year.
There are effectively no services that will take anonymous payment for bitcoins. Paying via bank account ACH or check is certainly not anonymous, and the same goes for credit/debit card payment. Furthermore, any credit/debit based payment is potentially reversible via chargebacks, etc, so most places don't take that kind of payment due to the fact that bitcoin transfers are irreversible.
Services like Bitinstant claim to take cash for bitcoins, but what that really means is that they require payment via MoneyGram, which requires you to present government-issued ID when sending payment. This is linked to the Bitinstant anti-money laundering policy, which requires your real name, etc. Dwolla wants a name, SSN, government ID, etc, to setup an account. As for Mt. Gox? Heh, they require everything but a DNA sample in order to use the exchange. Any service registered as a "money services business" in FinCEN will have these kinds of restrictions.
Obtaining bitcoins locally requires finding someone offering them for sale, negotiating price each time, and likely a face-to-face meeting to hand over cash. If one is really patient and trusting, a deal might be able to be struck for sending cash in an envelope. However, the bitcoin market is extremely volatile, which tends to undermine these types of deals.
Anyway, this ATM seems very convenient and anonymous; ergo, it likely will fall afoul of the anti-money laundering laws in one way or another.
Little fascist twerps are hell bent on tearing apart the social contract. To hell with them, and OP.
Android, Raspberry Pi, and Bitcoin in a single summary? Just needs an Apple or 3D printing angle and it'll be slashdot buzzword bingo.
Nevermind - the article mentions an iPhone app, too. Googloo!
Let me fix that for you.
Well, a dye-sublimation printer works pretty well but I can never find paper that looks quite right.
Or did you mean something else?
If this works as an ATM only, it will have limited usefulness. OTOH if it can work as a POS system it definitely has possibilities. At least until the Feds find out and crush it like they did with the Liberty dollar (http://en.wikipedia.org/wiki/Liberty_dollar).
Hey, come on. TFA says after 4 years Bitcoin is being used by a "handful of businesses," including a sweets bakery in San Francisco. At that rate Henry Ford would have had about 105 cars in circulation by now! Look out for that Bitcoin juggernaut!
Why does artificial scarcity create value? Only if the items are "positional goods"; if they derive value from others not having it. But money should be a tool to help raise standard of living and improve conditions for everyone.
Now that money can be transferred anonymously among members of the Republican party, it's only a matter of time before he is defeated.
Baquack Obamailure, you will NOT win the next election! Thank God for Bitcoin!
You will never take away our guns and our freedom of speech! We will fight any attempt to have our rights taken away, and if that fails, we will inject ourselves with an experimental serum and turn ourselves into zombies, so we can continue to fight, even in death. We will end the tyranny of the majority of the minority through all means possible!
Thank God for Bitcoin.
Yeah, well... I still use the US dollar despite that.
Kidding aside, I have to wonder why people such as yourself like to sling mud at the idea? If I didn't know better I'd suspect jealousy.
The real litigious bastards...
Why can't you spend more money than you take it? In fact the US has done this since its inception, and predictions about its demise have gone unfulfilled. Grandchildren have continued to be better off than their grandparents, despite the hyperbolic paranoia of deficit hawks screaming that the sky is falling since Alexander Hamilton's doctrine of assumption created the first national debt.
Grandparent post demonstrates that ignorance is not in danger of running out any time soon.
Grammar, how does it work?
No, the thing holding together the US dollar is common acceptance. It has value because I can go to the store and be assured the man behind the counter will take it. We do that because it's better than a barter system, and we've all mutually agreed to use dollars. The only thing that could harm that would be a large number of people suddenly deciding not to accept it. The amount of debt the US government issues has no bearing on it, unless they decide to massively print money to pay off that debt. Nobody accepts dollars because of the amount of US debt, they accept it because they know they can trade it again.
I still have more fans than freaks. WTF is wrong with you people?
It seems like there is a lot that can make this fail.
Can it refund your cash if there is any fault?
Can it run out of bit coins to pay out? and you end up losing cash?
How fast can it update the exchange rate?
What happens with a network lost midway though an transfer?
Can it store and transfer at a later time?
What about an power loss?
Hacking? and will be even be crime to hack it? and what will happen in a court if some one sues or they try to change some with breaking a law dealing with any to do with this?
The only thing holding value in the US dollar is ignorance.
No, it's the $15 trillion in economic output.
Actually I recently read a paper from Tim Morgan, a researcher at Tullett Prebon, that claims that the economy is basically just a dynamic balance between produced energy and consumed energy, and currency is just an intermediary state that loses meaning if there's no energy to buy with it (every product is as valuable as the energy used to craft it). This basically associated the economy to physics, and not to finance, and defines debt as a bet on future energy.
You can read the full paper here http://www.tullettprebon.com/strategyinsights/media_resources.aspx
Repying to myself just to add the full link to the paper: http://www.tullettprebon.com/Documents/strategyinsights/TPSI_009_Perfect_Storm_009.pdf
The first IRS. Bitcoin takedown. Should make for some interesting, er, bits....
Seems like payday loan and those "cash quick" places would be logical businesses to start offering bitcoin sales, assuming they could get enough inventory. Since not all users of the currency will care about anonymity, simply buying them for speculation or online use would be worth a 5-10% transaction fee. There's been a lot of press lately in magazines like Forbes which will catch the attention of Joe Public (and further fueling the BTC-USD bubble).
Brilliant! An ATM that I put cash *into* to get magic numbers out --- for all those times when I've been standing in a market thinking "gee, it would be handy to have a bit less spending cash in my wallet right now."
Slashdot is losing an Anonymous Coward?
Oh the humanity!
http://www.kritterbox.com/
Remain anon and post as much as you like. Second best to Tor hidden services forums.
Translation: you're super pissed that the dollar is holding its value regardless of the US debt.
Want a tissue?
p.s. You have no idea how currency works.
Are agnostics skeptical of unicorns too?
Businesses take it because when the IRS knocks, the only payment that will be accepted is in USD.
How will those people pay the IRS if that happened?
southworth cv 100% cotton paper
I said - don't look Ethel!..., but it was too late..., she'd already looked.
I posit that artifical scarcity alone does not create value. However, with no artificial scarcity a money cannot hope to maintain value.
History teaches us that successful currencies have a number of properties including:
- scarcity
- divisibility
- durability
- value as something other than a money (let's say "intrinsic value")
Gold has been the most successful money and has all of these properties but is costly to send and costly to store.
Bitcoin is an experiment where intrinsic value is sacrificed for highly efficient transfer and storage. Clearly, Bitcoin is succeeding in the medium term but the long term effects of having no intrinsic value are truly open to speculation.
Aside: Fiat can be thought of as an experiment in replacing essentially physically enforced scarcity for a legal one; this experiment is ongoing and while there are certainly economic advantages, there is no denying the obvious, expected disadvantage that fiat is a poor storage of wealth.
Yes, there's a lot of people who are in Bitcoin because of become-a-billionaire-overnight fantasies. But you remove all that and you're left with a really fascinating system that should appeal to everyone on Slashdot. It's a mix of cryptography, freedom of speech, computing, networking, finance, economics, and even politics -- most of us here dig that stuff.
Get over the hype and take Bitcoin for what it really is: a fascinating experiment that has, so far, withstood the amazing barrage of publicity, hacking attempts, legal uncertainties, and remains valuable for reasons completely contrary to everyone that says it's worthless. It may become worthless one day, but consider the possibility that Bitcoin is disproving all your wildly oversimplified assumptions about what makes something valuable. It is completely different, and there's plenty of reasons to believe that it could succeed as much as it could fail.
Why does gold have value? Nothing is backing gold. Yet it has value, mainly because of its properties: scarcity, fungibility, density, beauty, etc. Bitcoin is really quite similar but with some different properties. Ease of transfer over the internet, fungibility, scarcity, storage efficiency, near-anonymity and built-in escrow.
I don't think it's any more ludicrous for Bitcoin to have value than it is for gold to have value. And in the end, when I want to sell WoW weapons, buy webserver space, or play a few games of poker online, why would I use gold, credit card or paypal, which all require me to remember log-in creditials, give away information and/or pay a bunch of third party fees. There's plenty of value in being able to pay people across the world, instantaneously, without sacrificing your privacy, and without paying any fees. Why is that not valuable? Seriously... quit focusing on the get-rich-quick kids, and start appreciating Bitcoin for it's unique properties and philosophy.
...but it's so much more fun to rant about the Big Bad Government doing everything wrong, and how one simple change can fix everything...
You do not have a moral or legal right to do absolutely anything you want.
One of these days people will slowly realize that the USA has no money and can't pay it's debts as the USA like most of the western world don't know anything about virtual money.
Well, you still can't change the fact that the USD is the world's reserve currency and the de facto universal currency for measuring the value of "stuff". Wanna buy some BitCoins? Browse to Mt.Gox and the BitCoins' exchange rate is expressed in USD for exactly this reason.
If a distributed virtual currency is to replace the fiat currencies, the process is going to be slow and manageable, and will take decades. It will also require the co-operation of those in control of the present-day fiat currencies. I don't have any hard figures, but I bet even though gold has been around much longer than distributed virtual currencies, only a fraction of world's wealth is in gold; much more is in government bonds and foreign cash reserves. So even if one currency has immediate value, it obviously does not lead to the collapse of other currencies that have only fiat value. Fiat currencies are backed by governments, which are very powerful.
Fiat currency, contrary to what they say, has value for a very particular reason: the government gives it value. It does this by demanding payment of taxes in the fiat currency. The failure to pay your taxes results in losing your very real assets, like your business, your home and in the worst case, your freedom. It also mandates that the currency is "legal tender" meaning it can't be refused as discharge of debts.
Every other thing it can buy is in relation to how much you want to keep the things the government can take from you. (Or private parties can take from you because you have collateralized debts.) It is this coercion that gives it power to pay for everything else.
The freestaters know this. If they can get you and the government to the point where the government has to accept something other than the government's own money to pay taxes, they know it will then take just a little nudge to push the whole thing over. And they figure that somehow they will come out on top when that happens. Ever the optimists, these guys.
Of course, a government can spend more than you take in, but only if it is supported by an eternally growing economy and the total amount borrowed is a linear function of the economy. This, unfortunately, is a weak position to be in should you face a recession/depression.
If a government tried instead to maintain savings proportional to the GDP (maintained a treasury) it would not have this weakness and arguably much more power and flexibility when it came to recessions in applying Keynesian strategies to promote economic health.
He seemed to spell most everything else correctly.
A sea change will occur.
I was wondering what you all thought about the energy theory of value, contrasted with labor or subjective theory of value, and the concept of having a currency based on the "joule standard". I feel as if it could more accurately describe both labor costs, scarcity in commodities, and environmental externalities. Additionally It would be possible to use this as the basis of agent based economic modeling, including a full economic analysis of labor, commodities, and natural capital, or at least a beginning framework for which to define object relations.
Subjective value theory tries to place "worth" on an item, and the corresponding labor that goes with it, can reduces the price through variable labor costs. What Marxists say is that labor is traded for other labor, and you shouldn't get to dictate what labor is worth, but how much labor a particular item costs. In terms of labor theory of value labor is not a "worth" it is a cost, and your products have to meet the socially necessary labor time, the average amount of time it takes to produce a good, in order to cost the average amount in society.
In this view all capital is the product of labor, and the use of capital in labor increases its value, so that the doctor does get paid more than the farmer. However a doctors amortized fixed capital costs (in labor time) aren't nearly as high as the incremental costs of labor, but by using subjective value theory you can distort them.
This distortion essentially creates labor inefficiencies when making costs artificially low, It reduces the incentive of a higher capital intensive (fixed cost) to lower labor intensive (incremental cost) operation. Conversely in artificially high values by spending time automating things, which take less comparably less labor time. Thus reducing the incentives for less skilled people to become more skilled, and in effect disproportionally rewarding the persons with access to capital, who have automated more 'valuable' tasks.
This does not mean that subjective value theory is useless, labor value theory doesn't do a good job of valuing scarce commodities, but its not like either of them value natural capital or natural labor. Which is why I believe in energy value theory, and think that currency should be based on the "joule standard", as its the only one that can describe all three.
I foresee the economy transitioning to democratized capital and distributed production which will end the temporary and artificial scarcity. However real scarcity of real estate, ecological resources, energy, and minerals will be a increasingly big problem, and all of this can be thought of as a function of energy, including the energy inputs that produce labor. Energy theory of value can be used to measure all the inputs required for a given set of outputs, and can allow us to measure the externalized costs not otherwise accounted for.
The software to accept bitcoins, the machinery, etc is still a work in progress. My company is going to be accepting it shortly. It is the next project on our list to get to. One of the reasons we have not done so already is the shopping cart lacks the facilities. There are companies making integration easier though and we will work with one of them to add the support/module needed so that other businesses like ours can easily support the acceptance of bitcoins.
Has anyone actually laid their hands on one of these purported ASIC miners? I see a lot of hyperbole, pictures and hand waving on videos - but to me they appear to be vapourware with nothing other than pre-order status.
Ok, so we are drowning. And what do all land walking mammals do in their final moments before they drown? They go flailing about expending lots of energy for that last little gasp of oxygen. But, they do drown.
Once we reach hyperinflation, America effectively drowns shortly thereafter.
Life is not for the lazy.
Bitcoin has no inherent worth; neither does "real" currency. The value comes from the promise that others will accept it in exchange for the things you want to get. For traditional money, this guarantee is practically given, but because money can be minted or multiplied in questionable ways, the system is prone to, ahem, "incidents".
For Bitcoins, speculative devaluation is not a significant risk thanks to the design of the system; but all the parties getting bored of running an informal, distributed economy is. We have some examples of such p2p systems working OK, but also many examples where some form of institutional oversight and coordination is necessary. So, it's complicated...
Damnit, where's Whoopi Goldberg when you need her! Or P.T. Barnum, anyway.
Cantankerous old coot since 1957.
You can read the full tullett paper here ...
This is what I read initially, for some reason.
Slashdot, fix the reply notifications... You won't get away with it...
Counterfeiting money is really hard, even with paper notes such as you use there. Southworth is well known though as *the* paper to print resumés on because the paper feels like money and people like it without even knowing why. Its success in getting jobs has even been measured in a psychological test as I recall.
This is quite common knowledge and can be found in 2 seconds by searching for "paper feels like money". You Sir, need to relax a little and appreciate the humour. No knowledge has been passed on that will result in any conterfeit notes being put into circulation that wouldn't have anyway. Put a bit RX into your TX.
I said - don't look Ethel!..., but it was too late..., she'd already looked.
The question remains, wtf is a bitcoin?
every product is as valuable as the energy used to craft it
Maybe in the world where humans are perfectly rational and communism works.
In this world however, cognitive biases like endowment effect, hyperbolic discounting, loss aversion and money illusion don't allow such simplistic definition of value.
As such, grafting a human-invented concept like economy onto basic laws that run the universe is about as arrogant and fallacious as assuming that the entire universe was made just so the humans would have a place to stay - cause they are made in the image of the creator of the said universe.
And he was a white man.
Who died on a cross.
For our sins.
Cause a woman eat an apple.
A snake made her do that.
Long story.
Mit der Dummheit kämpfen Götter selbst vergebens
True, but ASIC mining rigs are being built by relatively small outfits, not by the likes of Intel or AMD. The work is tricky, involves a lot of different suppliers, and isn't anything like grabbing a bunch of off-the-shelf components. The vaporware aspect arises from overly optimistic expectations, but mere GPU miners are really beginning to hurt badly against the ever-increasing difficulty, which is driving up the price of BTCs because there is a clear demand for them, and that makes ASIC delivery ever more important and lucrative. ASICs a matter of time, not a matter of "ifs".
--Udo.
It will never work as a currency because it has built in deflation, which if you've taken ECON 200 you'll know is a really, really bad thing for an economy.
Nor is it being used as a currency right now. A currency is something people hold, spend, get paid in, etc. Bitcoin is basically used only for three things:
1) Money laundering. Sites that do illegal things, like the Silk Road, use Bitcoin to launder money. They take payment in it but immediately convert that in to an actual currency. They are just using the payment system to launder the money from the client to them.
2) Speculation. Traders play the Bitcoin market to try and make a quick buck. Hence one of the reasons for the extreme volatility in price. If any actual currency had that kind of daily volatility it would be said to be in crisis, yet somehow the BTCtards want to act like it is perfectly ok for Bitcoins to fluctuate like that. It also, of course, makes it even less suitable as a currency for people to hang on to.
3) "Mining." People literally wasting CPU cycles and electricity to generate new Bitcoins. Most because they are bad at math and don't count the total cost of all their stuff and realize that they aren't actually making any money on it.
The inherent deflationary property of it makes it a failure as a currency out of the gate. There may be many other problems it would face on a large scale of usage, nobody has yet to convince me it has a good solution to timing attacks, but it doesn't matter because it fails as a currency.
The people who think deflation is good are people with no understanding of economics past their wallet. They think "Deflation means the money in my wallet is worth more so it is a good thing!" That is not the case, you have to look at the larger economic consequences, and then you discover deflation is very, very bad.
How is gold costly to store? Its no more costly than paper money.
There's no reason why gold has to be different than cash in how you store it. Assuming you don't have fractional-reserve banking (which is by definition fraudulent) you could have a gold-based debit card, gold-based ATMs, heck, you could even have gold-based paper money (like the US had in the form of gold certificates).
Taxation is legalized theft, no more, no less.
Or there's another way: accept it as payment for a good or service. As (or "if", I suppose) Bitcoin grows and becomes a more legitimate currency, I expect that that will become a more common, or even primary way of obtaining them. (It wouldn't always be anonymously, but it would be possible to do it that way).
I mean, how do most people get Euros, or Dollars - by converting some other currency, or by working for them?
(It's gotta be annoying that year after year the constant prediction of US hyperinflation stubbornly refuses to come true. But look on the bright side: if time is infinite, you'll be right eventually.)
While it's tempting to recast the economy (something we cannot predict well) as energy (which we understand well these days), I'm dubious that the predictive abilities will be recast as well.
Can anyone explain why ASIC is supposed to be way better than the current FPGA chips?
Only the State obtains its revenue by coercion. - Murray Rothbard
At this point in its evolution, Bitcoin is a transaction currency, not an investment currency. For the purpose of making transactions (buying and selling within a short span of time) their volatility matters little to nothing.
Things might change, but for now, the volatility means that holding onto bitcoin as a form of investment doesn't make a lot of sense unless you enjoy the fun of the gamble. In contrast, transacting with bitcoin makes a lot of sense as it has numerous advantages, exactly as designed.
http://www.btcguild.com/halloffame.php
User 67117 is ASICMINER
"One simple law could solve the long term finical issues. The base amount the government can spend is equal to the previous years tax revenue. Anything beyond that must be in the *form of a loan*, war bond etc, that needs to be paid back"
You mean like a Treasury note?
Let's think about this a little. If the US Dollar goes into hyperinflation, people won't be able to afford their recreational drugs and GPU electric bills, and the value of Bitcoin will "drown" right along with it.
Bitcoin is far too dependent on the regular economy to be useful in such a scenario.
US Businesses take it because it's the law. They must accept payment in dollars.
Bitcoins don't have that power. No one has to accept them.
It's also comically incorrect since the correct linen paper is only 25% cotton.
Resume paper is inappropriate for other reasons as it contains both watermarks, fluorescent dyes, and starch to improve absorption of ink. The dyes make it fail a black light test, and the starch makes it fail an iodine pen examination.
Speaking of irony, the treasury is too cheap to dispose of their toxic waste properly so they package it as a novelty and sell money paper at a 99.55% discount:
http://www.moneyfactorystore.gov/5lbbagofshreddeduscurrency.aspx
Entertaining movie on the subject:
http://www.imdb.com/title/tt0813547/
Which is why scalability issues would** eventually render Bitcoin useless as a currency. Metallic standards had the virtue that mining extraction rates reflect economic expansion of the general economy (up to the point that increasing economic complexity eventually requires abandonment of metallic standards.) Bitcoin supply reflects nothing more than the lack of understanding its creators had of what money is.
[** were it generally to be adopted]
You are stupid.
It will never work as a currency because it has built in deflation, which if you've taken ECON 200 you'll know is a really, really bad thing for an economy.
The funny thing about economics is that it's not scientific.
Sure, it uses math and all, in the manner that astrology uses math, but it's nothing more than feel-good storytelling.
In the case of inflation/deflation, there is no analytic theory which describes the situation - nothing based on conclusions from testable assumptions. It's all guesswork from historical evidence.
Don't believe me? Can you tell me the best value for inflation? If the answer is "it depends", then what does it depend on? Is the function strongly peaked or relatively flat? (IOW, is it important to hit the "best" value exactly, or can it be off by a little?) How much is too much?
Or how about the elephant in the room: how is inflation measured? (Does it include luxuries? Should it include gas prices?)
Here's the scoop, the part that your ECON 200 professor didn't teach you.
The economy is healthiest when people have the most choice. Not the greatest "number of choices" - that's different - but the most "choice" of what to do with their money.
Negative inflation encourages people to forego spending, because saving money gives you more spending power in the future. Positive inflation encourages people to spend, since their money will be worth less in the future. Both situations reduce choice by encouraging one action over another without regard to the merits.
Zero inflation is the point at which people will consider a purchase entirely on its merits, which is the point of maximum choice.
This thing about "a little positive inflation is good" is a fallacy. It encourages people to invest when they really don't want to. It forces people into financial markets which are, at their core, corrupt and unfair to the small investor.
The other thing about positive inflation is that it causes bubbles. Inflation is essentially the amount of money more than the total value of goods and services. The extra money goes somewhere, and because money tends to earn more money it forms "pools" in the economy. These pools are areas where the monetary value is greater than the actual value. The very definition of "bubble".
Positive inflation causes bubbles which eventually burst, positive inflation forces people to gamble with their money, and positive inflation is a hidden tax on the population.
Rather than parrot your religious teachings, take some time to think things through logically, as a scientist would.
You've been fed a load of crap. Stop repeating it.
This is not an ATM. It's a vending machine. It's like one of those machines that adds value to a transit card, or a gift card vending machine. If you could show it a QR code representing a Bitcoin on your cell phone screen, and it then dispensed currency, it would be an ATM. If people could do transactions in both directions, it would be taken more seriously. That would demonstrate that Bitcoins are worth something. As a one-way device, it's just another money-sucker.
It isn't even a deployable vending machine. It's a wooden prototype of one. Anything that takes $20 to $100 bills needs to be built up to money safe level.
By my understanding, the current generation is not falling under the better off trend for the vast majority of its members.
Freud might say that Intelligent Design is religion's ID.
Scalar theories of value all break down in the end. I identify four fundamental quantities that aren't generally interchangeable: energy, mass, information, and computation power.
You may think that, for example, computation power is a function of energy, but instead it's a function of energy, resources arranged so as to do computation with that energy, and time to do the computation. If tomorrow you gave me enough energy to power all of the world's computers for a year, I still wouldn't be able to do two day's worth of computation in one day, but if instead you gave me two days I could do two days worth of computation.
Gathering information requires energy. If you spend one joule gathering information, are you sure you're one joule wiser, or might there be some information that might save less energy than the cost of collecting it? The existence of r-strategist species in nature seems to indicate there are times when that is the case.
Computer programs are resources. Institutional policies are resources. Networks of relationships are resources. All of these things take energy to build and maintain, but there is never a guarantee that they can be built for a fixed quantity of energy. How do you plan to account for happy accidents where a good solution was happened upon quickly with little energy investment, or for situations where a great deal of energy was wasted pursuing an unworkable idea? I don't think you can analyze away the underlying stochastic nature of information when analyzing the value of these kinds of resources.
My only political goal is to see to it that no political party achieves its goals.
How is gold costly to store? Its no more costly than paper money.
"Paper" money (in any decent quantity) isn't made of paper any more, it's data. It's stored on spreadsheets and in databases. Any decent quantity of gold needs to be stored in high security vaults. You understand that when the Fed does quantitative easing, it is literally done with a swipe of the mouse, yeah?
Assuming you don't have fractional-reserve banking (which is by definition fraudulent)
Show me the statute which makes fractional reserve banking (by a licensed financial institution) fraudulent anywhere in the word. Far from being fraudulent, it is a necessary requirement for the creation of the kind of wealth required to put the hardware you need to read this post in front of you. By all means, go and live in a cave if you like. The rest of us will partake of the wonders of modern capitalism which could not have come into being but for fractional reserves banking. Nor is fractional reserve banking incompatible with a gold based money system, it is a creature of the gold based money system.
Yes we tried it. It worked really well for a long time. A lot better in fact than the direct use of gold (or silver; or cowry shells) as an exchange technology. But we have this bizarre tendency to advanced to newer and better technologies all the time and not want to go backwards again. Humans!
the economy is basically just a dynamic balance between produced energy and consumed energy
It is a really good perspective to consider for the way it makes you think about production, but it is not broadly generalizable. It is very true for commodities -- particularly if they are energy intensive goods, like rubber, copper, or meat -- but not for goods and services which are differentiated by skill or creativity. It takes the same amount of energy to write a bestseller as to write a book noone buys. It takes far more energy to shingle a roof than to transplant a kidney (even if you amortize the energy consumed in med school).
Stop-Prism.org: Opt Out of Surveillance
and some of the handful of businesses take in millions in bitcoins a year..
this is no more an atm than the pepsi machine in the student lounge...
What size are they...
Oh, what's that ?
You can't ?
Surely they are accepted anywhere cash is accepted ?
Oh..
Well then, nevermind.
It doesn't always, if there is low demand for something, it doesn't matter if it is scarce or plentifull. For a currency, the amount of currency should track the amount of value reasonably closely to avoid undesirable effects like inflation and deflation. When a currency is deflating it is a sign that there is insufficient amount of curency in circulation, basically the money is too valuable to spend; the money is both scarce and in high demand. When the currency is inflating it's a sign that there is too much in circulation, basically the money is too worthless to bother to save; the money is plentyfull and in low demand.
Apocalypse Cancelled, Sorry, No Ticket Refunds
Well he's wrong. Since it's not just energy we depend on and it's not just energy we _want_.
every product is as valuable as the energy used to craft it
Tell that to stamp collectors. Tell that to art collectors. Tell that to the buyers of luxury goods.
There are lots of scarcities in this world that are not determined by energy unless you really stretch things to the point that they are useless in predicting or understanding stuff.
As for the US currency, it's not actually holding value - it is actually depreciating because of inflation. But that's not necessarily a problem for the USA (see below).
Why some economists recommendation of "printing money" to solve financial problems works at least for the USA is because the US dollar is used by the majority of countries in the world to buy and sell petroleum, wheat, CPUs, edible oils, milk, manufacturing equipment, toys, etc from each other.
Because of that when the USA prints money, the USA is actually transferring wealth from the rest of the world that holds positive amounts of US dollars (whether as assets, cash, goods or loans to others).
Basically when the USA prints money it taxes the rest of the world. If the US Gov gives enough of the printed money to the US citizens the US citizens will benefit overall. And hence the US financial problems are solved at the expense of the rest of the world.
In contrast if you are Zimbabwe you can do as much Quantitative Easing as you want and the rest of the world will just laugh at you. BUT IF the Zimbabwe government printed money and invested it into projects that benefit Zimbabwe with good ROI then yes printing money would have helped Zimbabwe. It would just be like another tax on the Zimbabwe residents but used productively. The big problem is getting good ROI or at least better ROI than not taxing the residents. And that's not always easy.
So it should now be obvious that it is much easier to make your country wealthier if you can tax the whole world rather than just the residents of your country. Then you don't even need projects with good ROI. Just take wealth from the rest of the world and hand it to yourself and your people.
And that should help explain why printing money works in some cases and not others.
I see lots of clueless US people (not just economists ;) ) talking about going to the gold standard, the USA not being able to pay back debts, stupid stuff like China owns the USA, etc.
The USA owes most of its debts in US dollars. Not gold. It can create as much US dollars as it needs! The Federal Reserve loaned out trillions from
"thin air" in 2008+. But note that strangely some of the trillions went into bailing out foreign banks! The US people should realize that it only works for them if enough of the printed money goes to them...
You should now see why going to the gold standard or the other alternatives would hurt the USA a lot.
Bitcoin has no inherent worth; neither does "real" currency. The value comes from the promise that others will accept it in exchange for the things you want to get.
What you are describing is simply is a contract mediated by a mutually acceptable exchange medium. What distinguishes ""real" currency" (that is legal tender; aka money) is that mutually acceptability is not required for its use.
For traditional money, this guarantee is practically given ...
It's just a tad stronger than that. Money has (at least) two distinct characteristics not shared by other exchange media (such as Bitcoin): a) The government will accepted it in satisfaction of your tax liability; AND (more to the point here), you can compel a creditor to accept it in satisfaction of a debt.
Better to be despised for too anxious apprehensions, than ruined by too confident a security. --Edmund Burke
-- Professor Bill Mitchell - Deficit Spending 101
One simple law could solve the long term finical issues. The base amount the government can spend is equal to the previous years tax revenue. Anything beyond that must be in the form of a loan, war bond etc, that needs to be paid back.
Then they sell more bonds to pay the bonds that are coming due ad infintum; in short that's what we are doing now. Something like 47% of what are being paid in Federal taxes is going toward interest on those bonds right now.
Apocalypse Cancelled, Sorry, No Ticket Refunds
Wrong. Volatility affects only one specific role of currency, namely its direct use as savings, Outside of that role, neither inflation nor deflation matter one iota.
In many ways, hoarding of currency is a perversion of the concept of currency as a token of exchange, because a hoarded token is no longer current in the sense of flowing through the economy. We've got used to that misuse of currency, but that doesn't make it right nor necessary. It doesn't work well even with "real" money, which isn't actually any more "real" than Bitcoin anyway.
ECON 200 carries a lot of historical baggage and presents many things as if they were fixed in stone, but they're not.
As coins sold by this machine are instantly available on the public key it provides as a QR code, It would by loaded up with private keys preloaded with certain amounts. In this case, stealing this device would be lust like stealing a normal ATM - you could demolish it at your leisure and extract the cash.
There are, however, ways to secure digital devices against this type of attack - Eftpos machines have their keys stored in a memory chip that is erased if the chip detects interference. Externally, they have normally closed switches that open if the case is disturbed, forcing the chip to erase itself. Some of these switches are blind keys on the keypad, held down by the case. They also surround the chip with very fine, fragile conductors potted into the epoxy surrounding the chip. Any attempt to gain physical access to this chip will break these conductors and, again, erase the security keys.
This sort of setup could erase the private keys held inside the device if it is tampered with. This would, of course, require an off site copy of the keys, which would itself be a security target.
Of course, this device just a Raspberry Pi with a bit of hardware, so this sort of thing hasn't been done, However, it certainly is on option for future devices.
Prediction for end of Universe #42: Fencepost error in Quantum_bogosort.cpp
How will those people pay the IRS if that happened?
Something drastic would have to have happened for a large number of people to stop accepting the currency.
In such a case, I think a better question would be: How would the IRS deal with a large number of people refusing to pay in USD? Lets say it's 60% of the population. What is the IRS going to do? Jail everyone? Shoot everyone?
In fact, how would the IRS even suppose to pay its employees, if its employees know that the currency is largely not accepted anymore? Do you think people will accept value-less paper for payment? What happens if they don't? Who is going to "come knocking"?
The IRS is not immune from the effects of loss of faith in the currency, hyperinflation, and so forth. It is not some demigod.
Your view is far too simplistic. A loss of belief in the value of a currency is symptomatic of much larger problems within an economy which will not be fixed by hand waving and making vague IRS threats. The notion that "the IRS comes knocking" automagically gives currency value is absurd.
This is a common misconception.
"Legal tender is currency that cannot legally be refused in payment of debt. Private businesses may adopt their own policies on whether or not to accept cash as long it doesn't violate state law."
Legal tender doesn't *have* to be accepted (unless it's debt payment). You're right in that Bitcoin can't be used to pay your taxes - gosh darnit! - for now you'll just have to pay your taxes in USD, and if you want to have the court system to fall back on, you must settle trades in USD. Yes, regrettably, private businesses don't *have* to serve every customer. Shoving USD at people doesn't compel them to service your needs.
You might be getting confusing by the fact that it's illegal to circulate currency that *resembles* USD, e.g. Liberty Dollars. Well, Bitcoin's digital 1s and 0s hardly resemble green paper rectangles with pictures of dead people on them.
I understand that money is just a theoretical construct, something that facilitates trade. Trade, people doing things, making things, that is what the economy actually is. Money is just what we use to make that efficient by allowing an arbitrary level of indirection in both time and space for trades. You don't have to barter anymore, you accept money for what you do, and so does everyone else.
This is also why it doesn't matter what money is, it can be anything, gold, salt, teeth, rocks, paper, bits in a computer, whatever (all these have actually been used). It just has to be something everyone agrees on to use.
However that then implies something: Money is only money if you can spend it. If very few people, or nobody, will take your "money" then it isn't. Doesn't matter what claims you make of it, doesn't matter what its value is supposed to be. If you can't spend it, if people won't take it in trade for goods and services, it isn't money.
There's another side to that though: Money is only money if people DO spend it. Since the whole purpose is to facilitate trade, to act as grease for the economy if you like, it only works if people do actually go out and spend it. If people just hoard it, then it is useless. Doesn't matter if it is something that everyone would accept as payment, if it isn't used as payment, if nobody spends it, then it doesn't act as money.
Well now this starts to bring us back to the problem with deflation. It encourages hoarding, the higher the deflation the worse it is. It makes borrowing and lending hard to impossible. It freezes things up because it makes the money stop acting like money. People want to just hold as much as possible for as long as possible.
Now while it might simplistically sound like that's a good thing, more savings right? It isn't when you evaluate it. Again, the only thing real in the economy is trade, people actually doing things. All this higher level theoretical stuff is just to make that work. So if people don't spend money, it means that people are sitting idle, not doing work, it means that the economy does poorly.
Money is not some magical force or substance. It is just a convenient theoretical construct to solve the problems of a barter system. Money that does that well is useful. Something that does not doesn't work as money.
What I find amusing about your carriage-return filled rant is that you love the idea of no inflation it would seem but you seem to then be ok with deflation. No inflation is a good goal, Bitcoins cannot have that by design. They will have deflation, period, because there are a fixed number and the economy is not a fixed size. You either misunderstand how deflation works, how Bitcoin works, or you are smoke screening and really do think deflation is a good thing.
The amusing thing is if you are big on the idea of zero inflation, then fiat currency is currently the best answer. It can have zero inflation. It doesn't, in any actual implementation I am aware of, but it can. The controlling group could carefully balance the supply to make sure that it maps the changes in the overall economy so that there is no inflation. However something with a limited supply? Nope, it'll deflate so long as the economy grows. The economy will get larger, the currency supply will remain fixed, deflation is the inevitable result.
So I reiterate: Go take ECON 200. Stop with the Smartest Motherfucker in the Universe Syndrome(tm) that so many geeks seem to have, thinking you know all the answers. Go learn about some basics of how the economy actually works.
Businesses must accept dollars for settlement of debts. For services not yet provided or goods not yet sold, there is no requirement to accept dollars as payment whatsoever.
This is the concept of legal tender. It's a small but important distinction. If you offer me US dollars for a good I am selling, I am not required to accept them. I can demand a donkey and 5 virgin pigs. If you don't have a donkey and 5 virgin pigs, you're going without. Otherwise, you could simply force me to accept a price I feel is unfair by doing your own conversion of donkeys and pigs to dollars or forcing me to do one.
"Can it refund your cash if there is any fault?"
Yes, or rather the bank can (and must under the law). I've had an ATM eat a check. You just call the bank and have them deal with it.
"Can it run out of bit coins to pay out? and you end up losing cash?"
If an ATM runs out of cash, it refuses to process your transaction. No money is debited from your account. Likewise if its in hopper is full it will refuse to accept your deposit.
"How fast can it update the exchange rate?"
Instantly. The ATM itself doesn't store any of that, the bank does. It just communicates with the bank. So it is always current to the rate the bank offers you. Also, this is not an issue with normal ATM operations since you access the same currency your account is denominated in. This only applies internationally, and then the rates shift slowly. BTC shift multiple dollars in a day.
"What happens with a network lost midway though an transfer?"
The transaction doesn't happen. The ATM only does things if the bank says it is ok. So if it loses connectivity before it is complete, the transaction is stopped. You either don't get your money in the case of a withdrawal, or it hands you back your deposit in that case.
"Can it store and transfer at a later time?"
No, ATMs are dumb terminals, after a fashion. While they run all their interface locally, they don't have any account data. They just contact the bank and say "This account number wants to do this, is this ok?" The bank then says yes or no, the transaction happens, everything is updated on the bank's computers.
"What about an power loss?"
Same deal as anything else, you call the bank. They'll have to come and get your card out, also if you had a deposit in the hopper but not processed they'll have to get that out too.
"Hacking? and will be even be crime to hack it? and what will happen in a court if some one sues or they try to change some with breaking a law dealing with any to do with this?"
It is a crime to hack an ATM though it is nearly impossible, since again they are dumb terminals. The crypto between them and the bank is top notch (IBM makes these real cool crypto cards for them). In the event the ATM is attacked and the money stolen, it is an issue for the bank, not you. The risk to the end user is skimming, someone capturing your account information and then using it, same basic deal as credit card fraud and the like.
That the same questions apply doesn't mean the same answers do. Really, there has been a lot of time to think about and work on answers with ATMs. The big reason they work well is that they are just terminals for the bank. They don't store anything, other than the physical cash they dispense. They just transact back to the bank. Also, there's rather a lot of tracking that goes on with regards to bank transactions at many levels. If something happens, there's logging, there's a record, it can almost always be undone.
I agree, and I've wondered about how the various monetary systems keep nefarious actors from expanding the money supply with shall we say, informal means.
If I were to set up a bank in (pick your favorite loosely-regulated island banking haven), wouldn't I control the bits that represent the bank's account balances? Couldn't I just load in whatever initial account balances I wanted to? Within reason, of course - I imagine if I put a few trillion in my bank, it might call attention, but why couldn't I just load 20 accounts with $500K each when I set up the account? Who would know that I didn't receive cash for those starting balances? When a check came in for payment against an account, couldn't I simply pay the demanded funds by a few keystrokes? I run the bank, after all.
I have no idea about how the banking world operates (probably obvious from the simplistic nature of the questions I pose), but I do know that banking regulations are quite "relaxed" in some nations and that corruption that employs digital systems can be executed rapidly and in high volume.
So in general, how does the world financial system keep bank owners from printing their own digital money? I'm just curious how that works. Or if it actually does.
That's not totally true. Using something like chickens as currency would mean earning interest in the form of eggs and if nothing else, Sunday dinner, even if no-one wants to use it in an exchange.
Of course it has its own problems like needing to be fed chicken scratch and tending to inflate the money supply in the presence of roosters, but the value of a chicken is pretty obvious.
https://en.wikipedia.org/wiki/Inverted_totalitarianism
Translation: you're super pissed that the dollar is holding its value regardless of the US debt.
Want a tissue?
p.s. You have no idea how currency works.
The US dollar has been declining in value compared to foreign currency for a very long time. http://en.wikipedia.org/wiki/U.S._Dollar_Index
Not sure if your post was in response to TheLink, but he/she certainly seems to understand how the Fed and Treasury are devaluing the US dollar by "printing money".
The only thing holding value in the US dollar is ignorance
Palm trees and 8
My company is located outside the USA and until a few years ago we would quote projects in USD and absorbed the diminished value of the USD over the term of the project. That changed a few years back because of the 2008 crash. We simply don't do business in USD. This means clients in the US are required to buy foreign currency and on a year by year basis drastically see our perceived cost go up in terms of funny money (USD)
The software to accept bitcoins, the machinery, etc is still a work in progress. My company is going to be accepting it shortly. It is the next project on our list to get to. One of the reasons we have not done so already is the shopping cart lacks the facilities. There are companies making integration easier though and we will work with one of them to add the support/module needed so that other businesses like ours can easily support the acceptance of bitcoins.
May I ask why exactly you want the capability to accept BitCoin? Do you expect increased sales? Losing sales to competition that does accept BitCoin? Just want the novelty? I'm curious as I don't see bitcoin as much more than a geek novelty at this point and at worst potentially disastrous (See the MT Gox hack as an example).
the only reason ANY currency is worth ANYTHING is that people are willing to exchange it for something else.
What this misses is the reason why anyone would be so willing. Why, for example, is everyone willing to take USD from me in the US, but almost nobody will accept USD in Canada?
The answer is staring you in the face, of course: laws. Most adults in the US are required, by law, to give the government some amount of USD every year. Most Canadian adults must give the Canadian government some CAN each year.
In reality, the economic value of all things, currencies included, is determined by supply and demand. Money demand stems from the laws surrounding money: tax laws, debt laws, tort laws, etc.
Palm trees and 8
"If a distributed virtual currency is to replace the fiat currencies, the process is going to be slow and manageable, and will take decades."
No. That's oldthink.
NOTHING takes decades, these days.
How long did it take Skype to reach critical mass?
And really, bitcoin is Skype - for money...
It has value because I can go to the store and be assured the man behind the counter will take it
Unless the store is in Canada. Strangely, they want to deal in CAN and not USD. Hm..
We do that because it's better than a barter system, and we've all mutually agreed to use dollars
You say this as though the agreement process is something magic or instinctive. Again, why don't Canadians accept it? Why don't Europeans? Why is the use of a currency so neatly aligned with national borders, anyway?
Hint:
https://en.wikipedia.org/wiki/Tax_law
Palm trees and 8
another pyramid scheme, it will take a while...
Barter is legal too, but you are required by law to pay taxes on it.
It's not just taxes, of course. Most businesses have debts to repay, of one form or another, and the law makes provisions for debts in USD and not in BTC or cigarettes or livestock. There are also things like child support, various torts, civil fines, fees, and payments for government services of one form or another. All these things are done in dollars because all these things involve the US government.
Palm trees and 8
You need stronger shelves.
Tax law only addresses the convenience aspect of the currency, in that its more convenient to trade in the same currency that is used when trading with the government. It eliminates the overhead of currency exchange, simplifies accounting, etc, when purchasing government services or paying tax.
That does not in any way address the value component of the currency, which is based on the belief of the participants in the system. A hyperinflated currency such as the Zimbabwean dollar is worthless regardless of the fact that the government uses it or requires it for tax. People won't trade things of higher value such as food for it because the food is more important to them.
Value is decided independently by the people using the system. The convenience of using the same currency as the government is one aspect of that value and is why currency use is aligned with national borders. It is not even the major factor in determining which currency is accepted or rejected by the people, as ably demonstrated by German hyperinflation in the '20s and Zimbabwean hyperinflation in recent times.
And really, bitcoin is Skype - for money...
One of the more interesting quotes I've seen recently is:
Bitcoin isn't a currency. It's a Money Over Internet Protocol.
Which is about right.
grnbrg.
Actually in my experience every business in Canada accepts USD. They often skim a few cents from the transaction if it is paper and coins almost always trade at par and are common in change. Even the local government, last time I tried, was willing to accept USD, though at par at a time when the USD was worth quite a bit more. I'd expect that even Revenue Canada would accept payment in USD.
https://en.wikipedia.org/wiki/Inverted_totalitarianism
I'll give you a good one:
I like the option that I can avoid any bank completely. Especially the "bank" PayPal that almost every internet commerce site uses.
http://www.amazon.com/Daemon-Daniel-Suarez/dp/0451228731/ref=sr_1_1?ie=UTF8&qid=1361773310&sr=8-1&keywords=daemon+by+daniel+suarez
Most places along the border will happily take USD. Same for US places near Canada. Its all about the ease of them trading it again to the next person. In places in Europe its easier to use Euros even if it isn't the local currency- because they can trade it easily. Most hotels in Europe quote in euros, and take payment in euros- even in Croatia and Turkey where they use other currencies.
I still have more fans than freaks. WTF is wrong with you people?
I agree it is a matter only a matter of time, but it appears that most people have given up (at least anecdotally) on FPGA systems simply on a rumour and maybe a prohibitively expensive prototype someone once threw together. Or perhaps I just haven't been reading the right scriptures.
Not by as much as would be thought given the debt because there are a wide variety of things that influence it's value. I'm not sure if China even has any debt, but it's currency is not as strong because that's not the only thing considered.
What distinguishes ""real" currency" (that is legal tender; aka money) is that mutually acceptability is not required for its use.
Realy? And how does the transaction between two parties work, when one party refuses to accept your "real" currency?
I've held that very opinion, and have disposed it those around me for the better part of a decade. I guess my lack of PhD and article submissions are holding me back...
I normally refrain from characterising people as stupid, but don't be sheep/cow .. bitcoin is a joke and the jokes on you for pioneering into fantasy with this. There's enough false economy and bloated finincial mal-instruments in the wild - we don't need to invent any more. This ""currency"" needs to die..
Realy? And how does the transaction between two parties work, when one party refuses to accept your "real" currency?
Refusing party goes hungry?
Party must accept legal tender in satisfaction of a debt or accept that the debt is unrecoverable.). Of course it may be in certain cases of contractual breach that a court will order some equitable remedy such as specific performance, but debt judgment will ring only in money.
Better to be despised for too anxious apprehensions, than ruined by too confident a security. --Edmund Burke
But why would I accept BitCoin for my services, when in buying the things I really need (gasoline, rent, utilities, food), only USD is accepted?
Kid-proof tablet..
Since the introduction of the Federal Reserve Bank, has this ever happened on US soil?
Kid-proof tablet..
Make an innumerable amount of nearly duplicate, but non-compatible currencies. Bitcoin', Bitcoin'', Bytecoin, etc. There's nothing stopping you and you would just need some amount of adopters. All you would have to do is wait until the last Bitcoin has been mined and their value has made them too cumbersome. It would be laughably easy to pull this off.
I'm pretty sure there was a story somewhere about an "escort agency" accepting bitcoins, and I find it entirely plausible. They're easy to accept. They can be exchanged for "real" currency.
Because some of your customers prefer to pay in them, and will go to your competition if you don't accept them?
Though that ultimately comes down to "in what ways are they better for anyone than traditional money". I guess I can see four answers to that: (illusion of) anonymity (see: Silk Road), speed of transfer over long distances (physical money beat this, but can't be used over the internet. Banks can take a long time to transfer money, if you count the time they can take them back), lack of censorship (Blocking payments to e.g. Wikileaks would have been much harder with bitcoins than with VISA/Mastercard), and moving money to and from places with little financial infrastructure (they are easier to use than the cell phone credits I hear are used to move money around certain African countries).
Whether this will make up for the downsides of Bitcoin depends on how big these downsides will be in the future, and how the well the banks will respond to the competition.
...nobody is legally obligated to accept 99.99% of the rest of the worlds currencies outside your own, either. Want to pay off US debt, in the US, in Indian rupees then your flat out of luck...
In and by itself, it is quite amazing that we still, all of us, tacitly accept state-issued currencies as the only trustworthy ones, isn't it ?
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
you could have a gold-based debit card, gold-based ATMs, heck, you could even have gold-based paper money
There are already gold based ATMs, started a couple of years ago.
Phillip.
Property for sale in Nice, France
Even just posting that information to encourage others is quite possibly a federal crime.
I think it's unfortunate that someone can't search using the internet to find out if it *is* a federal crime and cite it, but instead just leave a statement lying out there like a young boy showing his parents "Ain't I clever, my first shit not in a diaper, it's nearly in the potty in fact" kind of way.
Is Slashdot just a advertising platform for scams and shitty blog articles now?
Better off really? They earn less money, work more hours, women have entered and doubled the work force, they have less savings, more debt, higher cost of living... medical services and education are at a higher percentage of personal income.
Yes if you look at averages the west is only in decline since the 80s but if you look at the median you'll see a much longer and more depressing trend.
Because you're trying to sell drugs over the Internet and all the systems for transferring USD over the Internet are too traceable.
Or is this Slashdot Doublethink Day again, where I need to pretend that Bitcoin would be anything other than a failed curiosity for retarded internet lolbertarians if it wasn't for Silk Road?
No, the thing holding together the US dollar is common acceptance. It has value because I can go to the store and be assured the man behind the counter will take it. ;D
That is a very simplified view
In fact the USD is the only currency that is backed. I wonder why so many people don't know that.
Since the Nixon aera, the USD is backed by OIL. Nixon convinced, mostly by threat to invade the country, most oil producers to only sell oil on the world market for USD. About 75% of the oil selling countries still stick to that "treaty". The main reason for the Iran debacle is that the Shah bluntly refused to comply. Since the EUR exists more and more countries either also accept EUR or only accept EUR for trading oil. The more USD is declining to be the main currency for oil trade, the less the USD will be relevant. In fact the only country where you can buy stuff and pay stuff with USD will be the USA in the foreseeable future.
Nobody accepts dollars because of the amount of US debt, they accept it because they know they can trade it again. That is, why *I* don't accept USD as payment ... I need nothing I could buy for it ;D
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
AND (more to the point here), you can compel a creditor to accept it in satisfaction of a debt.
Ah, the magic "debt" that gets so frequently misunderstood.
Sure you can pay an existing debt in legal tender (that is in fact the definition of legal tender), but you cannot force people to be your creditor.
In hyperinflationary economies, sure, people could legally settle existing debts in Marks (or whatever), but they couldn't buy stuff like food for them since noone would except them even if you could settle a "debt".
So people resorted to barter economy.
Which comes back round to the OP's point: money is only worth something because people believe it is. If people stop believing, then it doesn't matter what the law says about debts and taxes, you still won't be able to exchange food for money. There are several examples of that happning throughout history.
Note also that firstly in such circumstances, the economy is so fucked that people are more concerned with eating that debts and taxes and secondly, the wortless 100e12 Zimbabweian dollar note would legally settle any debts from the previous week many times over.
SJW n. One who posts facts.
That sounds like the almost perfect slashdot story. Your phone, wasn't that a Nokia? Just because that would make it totally perfect.
Bitcoin aims to offer a better way to transfer wealth than we had today.
It may aim to offer a "better" way to transfer wealth but it fails miserably. I can easily exchange dollars for any currency or good available today. I cannot say the same about Bitcoin. Bitcoin carries huge unnecessary risks, is accepted by virtually no one except for drug deals and other illicit transactions, has huge volatility with the attendant exchange rate risk, and has all the trappings of a Ponzi scheme. it doesn't even really avoid transaction costs once you factor in all the externalities. Frankly you'd have to be either a degenerate gambler or a naive fool to put any money into bitcoin. The fact that a few people have used it successfully doesn't make it a good idea.
Although correct, it ignores the gist of the GP. Sure, the money will have worth. But as the perceptive ability to pay off debts becomes less likely, the less value/worth the money has on the international market. So you and government law can assign whatever value they want to currency...but the international exchange rates will dictate its true worth.
It helps when most countries are destroying their currency at a similar rate to the US..for the same reasons.
China controls the value of their currency to specifically devalue it at the US dollar rate. They want to keep their stuff cheap for Americans. They do it by expanding their money supply...like the US. To do that in a country with laws and accounting, you need to go in debt. You need a negative for every positive. I don't know how China terms the negative side of money supply expansion, but it is debt. Maybe they liquidate the debt at the stroke of a pen, but that is just lawlessness and done so at the extreme detriment to their credit rating. Since I think they have a good credit rating, I would assume they administer their debt.
It seems bitcoins would be the easiest (and cheapest) way to transfer money to and from places without much financial infrastructure.
To send dollars via bitcoin the dollars have to already exist on both sides of the transaction. As such the financial infrastructure already exists making your argument moot. Furthermore I defy you to give an example of some place where it would be meaningfully easier to do a bitcoin transaction with dollar conversions on both ends than to use existing infrastructure. I can do a wire transfer pretty much anywhere in the world in a matter of minutes and there are services like Western Union that can turn it into cash if needed. Bitcoins certainly aren't easier and once you factor in all the costs and risks it's very debatable whether bitcoin is cheaper.
Bitcoin adoption is increasing and reaching new businesses every day. This machine will help expand the adoption to those who are in the streets. The more people who get into this virtual currency, the better! For those who haven't joined the revolution yet, check out http://thebitcoinmaster.blogspot.com and get started!
...an episode of "Pawn Stars" in the not too distant future.
Rick: So what have you got there?
Geek: It's a BitCoin ATM
Chumley: Cool! I remember those. They were, like, supposed to replace ATM's for real money with this Internet pretend-money thingy. Bunch of people got totally scammed into buying them, man. Those things are totally collectible now.
There is the other reason Nixon took us off the gold standard in the first place: foreign economies can flood the market, drastically reduce the value of gold and suddenly you can't even afford to buy milk for breakfast.
This isn't true. In 1998-2000 the government ran at a surplus, before that in 1969. Before the New Deal, the government frequently ran at a surplus.
Slashdot: providing anti-social weirdos a soapbox, since 1997.
As long as usury is kept out of the system, this can become a powerful alternative currency.
I'm sure the evil doers of the planet will do their best to prevent it from staying clean, however, should it ever actually become truly a possibility for wide spread change.
The current money system is totally and completely broken.
Existing currencies exist only through the process of lending (from banks of one kind or another), and THAT is the true pyramid scheme, because all money lent must be repaid with interest, which demands that there be more money available than exists.
Bitcoin's mining system is unique because it doesn't automatically create debt simply through the creation of more bitcoins.
People who hate this are not thinking clearly; are probably simply feeling fear at having a comfortable set of chains threatened by something new. People who fear the new without examining it properly are just reaction machine fools.
See "Win8 Hate" and the out of proportion howling madness of complaint which some people are expressing for an example.
Which is why scalability issues would** eventually render Bitcoin useless as a currency. Metallic standards had the virtue that mining extraction rates reflect economic expansion of the general economy (up to the point that increasing economic complexity eventually requires abandonment of metallic standards.) Bitcoin supply reflects nothing more than the lack of understanding its creators had of what money is.
[** were it generally to be adopted]
What scalability issues are there that would be a major issue?
I think the guys who set up Bitcoin understood money very well and likely better than this AC poster. There are some scalability issues with the processing of work units and transmitting work unit information from one node to the next (nothing that hasn't been discussed with any other peer to peer network, but it is a problem). The thought was that there eventually would be a "central core" of "bankers" or at least very interested participants with high speed data lines that would deal with major transactions involving Bitcoins and working with the main work units, and then there would be ancillary tiers for more mundane transactions (like buying a burger at a local restaurant) that would engage in transactions with a "bank" or at least a trusted Bitcoin provider for reduced fees.
Scalability issues with Bitcoins have been discussed since its inception and are well taken care of for anybody who really wants to use it for currency. There are some legitimate gripes about how it is organized and for some of the finer points of the protocol, but the broad issue of scalability is not even remotely an issue.
One thing to note is that Bitcoins are a deflationary currency rather than an inflationary one. As the economy of the Bitcoin users has expanded, the value of an individual bitcoin has continually climbed. The first transaction for Bitcoins was buying a pizza in Florida (it cost about 1000 Bitcoins at the time). Individual Bitcoins are now worth quite a bit more, even though the direct exchange rate between U.S. Dollars and Bitcoins has varied.... generally the trend has been for individual Bitcoins to be worth even more (aka a single Bitcoin buys more Dollars over time). That is why fractional bitcoins are commonly used now instead of full bitcoins or even kilobitcoins. It does take getting used to the idea of a deflationary currency than an inflationary currency like most countries of the world use, and where holding onto some bitcoins actually "earns interest" over time simply because of the deflation. That doesn't stop transactions from happening though.
The value of the U.S. Dollar is at the moment pure faith, as in religious kind of faith, but faith in the federal government and the faith that people have that they can use that dollar to buy something of value in the future. Perhaps you think that is misplaced faith or that it is born of ignorance to reality, but that is the best way I can think of describing what its current real value holds.
BTW, your "technical fix" for what the government can spend is technically what federal law says should be happening for tax revenue and budget planning right now. The only reason why it isn't working is that the loans of money to the government to help balance the federal budget are getting out of control. That and of course the Federal Reserve is literally "printing money out of thin air" by loaning trillions of dollars to banks who are in turn using that money to buy debt. Even that isn't enough so the Federal Reserve is instead buying T-bills directly.
so what happens if i want bitcoins but i don't have smart phone or Android? can i put in US dollars and enter my bitcoin address using keyboard? not everyone has expensive smart phone. can i write down the URL and use an internet cafe to check the confirmation? just asking i already have bitcoin 7 on my windows desktop so i don't really need Android
The problem with Liberty Dollars is that they were pegged at the exchange rate of 1 LD == 1 USD as well as using the term "dollar". The other slightly more minor problem was that the developer of Liberty Dollars could also be prosecuted in federal court.... with the end effect of discontinuing the currency. I disagree that the legal action which took place against the developers of the Liberty Dollar as I find nothing illegal was actually done, but it pissed off the wrong people none the less.
Since Bitcoins are not pegged at any currency of any kind, clearly are not even using the term "dollar", nor is there a central repository which can be shut down through legal action, it makes a much harder target to make the same kind of arguments. That physical bills aren't even needed to keep Bitcoins in circulation, it makes the whole thing moot.
BTW, you can make rectangular pieces of paper that have value in Bitcoins (with pictures of dead people if you really want them on that paper)... and there are several notions on how to accomplish that trick. None the less, it is still a distributed operation if such "printing" of bitcoins happens.
The Raspberry Pi was encased in a 3D printed design created on a Mac?
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Shortly after this all falls apart and some folks become rich and others lose their life savings, I think this will all make for a great movie! "Bitcoin; The Movie" ;)
When America was settled, the Brits and later the US Gov gave land away for free to people who would take it. As more and more people came and wanted that land, it became more valuable. So the people who bought the swampland called Manhattan for a few hundred bucks several hundred years ago benefited immensely, whereas the schmuck who bought a one bedroom apartment in Manhattan for $1M in 2007 didn't do so well.
It's not a ponzi scheme. Just the way things get value in the world.
My God can beat up your God. Just kidding...don't take offense. I know there's no God.
I see value in having something of value off the grid in virtual/digital format. For when the shit hits the fan.
It's like keeping some gold in a safe in your home. Perhaps less stable/reliable but differently accessible/spendable for increased diversification.
My God can beat up your God. Just kidding...don't take offense. I know there's no God.
I think you've got it backwards. It's the strippers that are asking their customers for bitcoin:
http://www.strip4bit.com/ (NSFW)
Just walk into any store and buy a prepaid visa with cash. Use prepaid visa to buy bitcoins. Done and done.
When the supply of BTCs stops increasing -- assuming demand for BTCs continues to increase -- you're correct, there will be deflation.
And deflation means that all existing BTCs will gain in purchasing power.
How exactly does that constitute the "collapse" of BTC?
That that is is that that that that is not is not.
You can pay your rent in BTC if your landlord chooses to accept them, and you can't if your landlord doesn't.
That that is is that that that that is not is not.
Sadly, it seems like BTC derives value not so much from trust placed in it, but from the way people have lost trust in the traditional alternatives.
That that is is that that that that is not is not.
This forum has not addressed a key benefit to any crypto currency: electronic value transfer with no interchange fee. While these fees are typically hidden in our transactions, they allow the banks to syphon 1%-2% off of the top of our entire retail economy. There is no reason to fork all that money over to the banks for electronic funds settlement when we are all carrying computers in our pockets.
Generalizing, banks are obsolete. There is no need to aggregate money at a middleman when it can move from source to destination freely and instantaneously. There is no need to pay a bank to manage deposits and lending when we all have access to information used to vet a potential borrower. Nothing a commercial bank does cannot be done by people working with each other directly, utilizing today's information and communication systems.
To Slashdot, thank you for the posting identity. Very welcoming.
Yes, someday the supply of BTC will stop increasing. At that time, deflation will happen if demand for BTC continues to increase. If deflation happens, people will tend to hang on to their BTCs instead of spending them.
But you can't say there is increasing demand for a currency that nobody spends. An equilibrium will be reached. And so, this system self-regulates away the problem of deflation, does it not?
That that is is that that that that is not is not.
Why some economists recommendation of "printing money" to solve financial problems works at least for the USA is because the US dollar is used by the majority of countries in the world to buy and sell petroleum, wheat, CPUs, edible oils, milk, manufacturing equipment, toys, etc from each other.
I'm skeptical. If Italy buys a tanker full of oil from Kuwait, and pays in US dollars, how does that transaction transfer wealth to the USA? How would the USA be worse off if Italy had paid with Euros?
If using dollars constitues a tax paid to the U.S., why do other countries voluntarily subject themselves to that tax, when they could easily avoid it by switching to a different currency?
And finally, if the USA is in the sorry state it's in, in spite of having "taxed the rest of the world" for a number of decades, that makes the USA look especially incompetent, economically.
That that is is that that that that is not is not.
Just walk into any store and buy a prepaid visa with cash. Use prepaid visa to buy bitcoins. Done and done.
Have you actually tried to do that? The approach doesn't work.
Yes, you can buy an anonymous prepaid Visa with cash, but it's effectively worthless for purchasing bitcoins. As I said before, services don't take credit/debit card payments for bitcoins because those payments are reversible and bitcoin transfers are irreversible. Furthermore, PayPal will not let you setup a payment using these cards (it's automatically detected based on card number and the payment blocked)—not that many sellers take PayPal for bitcoins anyway because it's likely against the PayPal AUP (cf. "currency exchanges").
I have seen a few individual seller offers to take preloaded value cards such as MoneyPak or Visa gift cards for bitcoins, but they require you to either physically mail the card to the seller and/or wait until the value is drained from the card before they will transfer the bitcoins. Some individual sellers might take MoneyPak with a scanned image of the receipt (which can then be used to immediately load the seller's PayPal account), but sellers get nervous about this due to fraud, chargebacks, etc.
In synopsis, you might find individual sellers who take these kinds of payments, but it's just as slow, inefficient, and insecure as paying with literal cash, except with the added overhead of the prepaid card fees. Furthermore, the approach definitely doesn't work for any bitcoin exchange service (at least not while preserving anonymity).
Take a look at Strip4bit
Hayek, in his book The Fatal Conceit, argues (successfully, IMO) that the rules of a market economy lie between instinct and reason.
Sure you can pay an existing debt in legal tender (that is in fact the definition of legal tender), but you cannot force people to be your creditor.
That really goes without saying. I agree that it is tautological that entering into contract is voluntary and this is of no relevance to the fact that money can be used non-voluntarily to settle any debt that arises from entering a voluntary agreement. So this observation adds nothing.
To give a concrete example (assuming here that we are not criminally in breach of the tax code for bartering), we could enter into a contract where you specify that I must pay you in X ozt of gold because you don't like handling money. However should I refuse to hand over the gold (and since gold is fungible) you will be able to recover only the market value (though at what date that value is to be calculated will depend on the facts of the case) of that gold in actual money. I can, in other words I can compel you to settle the debt in money (of course ultimately you could refuse and be out of pocket).
In hyperinflationary economies ...
We see a collapse of the money system. To argue against a definition of money based on the hyperinflation alone is like arguing against the definition of a bridge as a "something that spans two points a fold" (however inadequate that definition may otherwise be) by looking at the Tacoma Narrows Bridge post collapse and shouting out: "look it doesn't connect two points together at all!" ... or understanding how a car works once the engine is removed.
If you want to understand how something works, look at it when it works. After that you will be in a better position to draw conclusions about the circumstances under which it ceases to work.
Well they would for a time, even as the prices in RM rose as you stood in a queue and if workers demanded to be paid thrice a day and their wives waited for them at the factory gates with wheelbarrows. As it happens I own a fine (and near complete) set of German postage stamps from that period. Interestingly the first 2/3rds of the stamps have higher and higher prices printed on them, but towards the end the stamps were printed without any price at all. That was stamped on at the time of sale. Very interesting stuff hyperinflation, but again, not the first port of call if you wish to understand how money works and what money is.
Indeed and in such circumstances the economy is so fucked that the government can no longer raise taxes. As I explained above, money takes its value not from some mere "promise that others [ie. other private individuals] will accept it in exchange," but from the government's ability to raise taxes (as well as its secondary, state mediated, debt settling function). The fact that the "Zimbabweian dollar" became "worthless" once the economy tanked merely highlights this fact.
Who was it who defined money as "whatever is accepted at government pay offices?" In any cases, I hope we can all agree that Bitcoin is not money.
Better to be despised for too anxious apprehensions, than ruined by too confident a security. --Edmund Burke
every product is as valuable as the energy used to craft it
So what about the value of artwork, then? Have they finally quantified and measured creative energy? Are they able to determine the precise amount of beauty that resides in the eye of a given beholder? No, I didn't read the paper, but the whole thing sounds a bit too simplistic. True value is what people are willing to pay, nothing more, and nothing less.
1) Install an app
2) scan a qr code
3) insert money
4) battery low :)
5) try to get your money back
"Trump!!", the new Godwin.
I'm not sure.
Governments can...
- order ISPs to close bitcoin-specific ports
- close down the exchanges
- make transactions illegal
- insert all kinds of tyrannical measures they can take in order to protect the interests of the private banks (and of their--the private banks', that is--central banks).
- oh, and they (especially US/NATO) can bomb the hell out of countries that continue supporting transactions in bitcoin.
By then the situation will be back to what it was before bitcoins were used.
"Trump!!", the new Godwin.
Seems fine to me. Just make sure to show her that she can buy her coke cleaner and cheaper on the silk road than she otherwise gets it. She'll probably be disappointed if you go to pay her in cash the next time.
It is called the First amendment, and except for certain extremely defined circumstances it held at a near absolute, So I can along with anyone else say what I wish.
Bitcoin adoption is increasing and reaching new businesses every day. This machine will get the people in the streets to adopt it faster. The more people who get into this virtual currency, the better! For those who haven't joined the revolution yet, check out http://thebitcoinmaster.blogspot.com and get started!
the value of any currency (exchange medium, fiat or otherwise) is derived from the trust that currency-exchanging users place in it. [http://www.szwipes.com]
Show me the statute which makes fractional reserve banking (by a licensed financial institution) fraudulent anywhere in the word. Far from being fraudulent, it is a necessary requirement for the creation of the kind of wealth required to put the hardware you need to read this post in front of you.
Just because its not illegal doesn't mean it isn't fraud. It sure as hell isn't a requirement to accomplish anything. Fractional reserve means they loan money they don't ACTUALLY HAVE. That my friend, is fraud is most normal people's heads. Only in a twisted world is that 'ok' and normal. It doesn't take much of an intelligent person to spot the metric fuckton of problems this sort of fraud causes, and if you'd had your eyes open the last couple of years you'd see it first hand.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
After I fed in a $20 Federal Reserve Note
And what you ended up with was no different than giving $20 to Zynga via Farmville.
The only difference is the Zynga isn't hasn't sunk so low as to realize that you are so much of an idiot that you'll by things that aren't even worth anything in farmville.
You have in fact just spent $20 on bits of data that are easy to duplicate, in fact, you got a duplicate, not the original, and that is only 'of value' to people selling them to other morons like yourself.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager