Congressman Accepts BitCoin For His US Senate Run

SonicSpike writes "U.S. Representative Steve Stockman, a vocal opponent of Federal Reserve policy, told reporters that he wants to promote Bitcoin, whose most fervent evangelists tout as an alternative to fiat currency. To do so, he is now accepting Bitcoin for his Senate campaign against incumbent John Cornyn of Texas. The announcement was made last night at the launch event for the NYC Bitcoin Center, located just up the street from the New York Stock Exchange. Center founder Nick Spanos a real estate developer and Bitcoin enthusiast says the Center itself is still in something of a planning stage, existing more as a statement about Bitcoin itself, though he plans on hosting a hackathon later this month."

Comments

I like the idea

[wbr1]

I like the idea of crypto currencies, but many of these news articles seem made to fuel further speculation in the market. It needs to become less speculative and more stable to be a true alternative.

Re:I like the idea

[tftp]

It needs to become less speculative and more stable to be a true alternative.

It cannot become more stable. The supplies of BTC are limited by design. As BTC is used more and more in the world trade, each BTC keeps increasing in price. This is on top of the built-in deflation in a market of fixed size. This is why it cannot be used as money. Nobody wants to part with something that becomes more expensive as you hold it. There is an awful amount of USD in circulation, and only 21 million BTC. If you replace all USD with BTC, each BTC would cost a million dollars, and you'd run out of divisibility of BTC, and the "small" payment fee would be unaffordable. Also, BTW, early adopters would own half of he planet's wealth.

Re:I like the idea

[Bramlet Abercrombie]

That's the idea. I know I'm late to the party but I'm getting on board so I can get in line to owning all you suckers that were too oblivious to buy in. Crypto favors the early adoptor. Just because you didn't want to pay off the 2009 guys, you will be paying me off in 2015 when you finally figure out what is going on. If you don't, somebody else will. Some African with an internet connection will buy my fractions of a bitcoin and other coins, and I'll be one of the richest in the world, only behind those that got in before me.

Re:I like the idea

[jeffmeden]

It needs to become less speculative and more stable to be a true alternative.

It cannot become more stable. The supplies of BTC are limited by design. As BTC is used more and more in the world trade, each BTC keeps increasing in price. This is on top of the built-in deflation in a market of fixed size. This is why it cannot be used as money. Nobody wants to part with something that becomes more expensive as you hold it. There is an awful amount of USD in circulation, and only 21 million BTC. If you replace all USD with BTC, each BTC would cost a million dollars, and you'd run out of divisibility of BTC, and the "small" payment fee would be unaffordable. Also, BTW, early adopters would own half of he planet's wealth.

The reason it can't become more stable (with a click of a button) is that not enough people use it. Deflationary and supply issues aside, there just isnt enough capitalization (with respect to other currencies) to prevent huge swings due to speculation. But contrary to the original assertion about "too much speculation", if enough _more_ people were speculating (raising the value and volume of daily trades), you would see it stabilize compared to the current roller coaster. Bitcoin is like a micro crude oil market; big speculators can drive it any way they want, and since the total capital (relative to USD) in bitcoin is so low, a single heavyweight speculator can run the show.

Re:I like the idea

[TheSpoom]

Ah, the pyramid scheme delusion. Good luck with that, sucker.

Re:I like the idea

[squiggleslash]

You're describing the theory. You'd be better off investigating why the theory is wrong than repeating it blindly, pretending it's right.

FWIW, the GP actually gave an answer, essentially the unconstrained speculation that you're seeing. It's probably not the only reason Bitcoin's far from stable, but it's certainly likely to be a major contributing factor.

Re:I like the idea

[higuita]

the divisibility of bitcoins is set on the current version of the protocol and can be increased any time with a update version. the protocol already had several updates, one of then a mandatory update to solve a large block fork issue

Re:I like the idea

[jythie]

Well, stability is relative. Something can have built-in deflation (or inflation) and still be stable enough for use as a currency. Right now BTC is not, but it is quite possible that even with a steady increase in value it could be stable enough to plan with. In a way that is, in theory, one of its advantages. Since the rate of increase of supply is known ahead of time it should be possible to plan accordingly just like today long term contracts take USD's estimated rate of inflation into account.

However, the ecosystem around BTC is way too unstable for that kind of planning.

Re:I like the idea

[letherial]

Each bit coin can be divided down to 100,000,000 satoshis. the whole transfer process is based on 100,000,000 satoshis, so when you get one bitcoin you, the backend process it as 100 million satoshis.

Payment fee can also scale, and can even be put manually in the miner i believe, or its capable of doing so and hasnt been implemented yet (bitcoin protocol is full of shit you can do)

From your two very wrong remarks, i would presume that you have little knowledge of bitcoin, and unfortunately your spreading misinformation that people are catching up on (this is the top post from my settings)

To redeem yourself to the mighty bitcoin god, you must first say 'praise bitcoin' 100 times (for brownie points, say it in public outloud), then type in bitcoin into google and read 5 articles relating to how bitcoin works. If you dont care about the god, then just read one good article on how bitcoin works or watch a podcast, shit its the internet, facts are there...find them before you join in a discussion

Re:I like the idea

[alexander_686]

The problem with inflation / deflation is not with the units of currency – That the value of coins becomes too large under deflation and that you need wheelbarrows to cart around cash under inflation. If that were the issue government currency would be more effective because they can redecimalized.

The problem with inflation /deflation is the change of value of a unit of currency. i.e., it does not matter if your 1 BitCoin changes to 1.0 BitCoins, it that what it can buy is different.

Re:I like the idea

[Anonymous Coward]

That's the idea. I know I'm late to the party but I'm getting on board so I can get in line to owning all you suckers that were too oblivious to buy in. Crypto favors the early adoptor. Just because you didn't want to pay off the 2009 guys, you will be paying me off in 2015 when you finally figure out what is going on. If you don't, somebody else will. Some African with an internet connection will buy my fractions of a bitcoin and other coins, and I'll be one of the richest in the world, only behind those that got in before me.

A prefect example of the greater fool theory.

Re:I like the idea

[alexander_686]

Upward movement of price may not get you stability. The stock market has been trending upwards for over a 100 years and it is still not stable. Heck, I would argue that gold is currently too unstable to serer as a currency – though I know people will disagree.

BitCoin will remand unstable until it is much larger (i.e. more transactions) and more interconnected (for example, somebody takes out a year mortgage on their house denominated in BitCoins) with the real economy.

Re:I like the idea

[Anonymous Coward]

Bitcoin only exists because it's allowed to exist. The governments of the world would start attacking (read: taking down) bitcoin exchanges if it seemed like it was an actual threat to replace their currencies. Your best hope is for it to stay on the fringes, and accept much smaller returns. If it becomes too big, it will be killed.

Re:I like the idea

[alexander_686]

And I have another thought. Inflation is the change of aggregate supply of money against the aggregated demand for money.

Frist, yes, the aggregated supply of currency can be estimated in advance. However, currency (M1) and money (M2) are not the same thing. The supply of money is something different. See this graph:

http://en.wikipedia.org/wiki/Money_supply

Second, you also need to estimate the aggregated demand for money. Partly this means estimating GNP but it also means estimating how much money, a riskless (more or less) asset will be demanded. For example, after the latest financial crisis the demand for money has greatly increased.

Personally, I feel the ability of a central bank to adjust the money supply under this much uncertainty outweighs the disadvantages.

Re:I like the idea

[synaptik]

There is an awful amount of USD in circulation, and only 21 million BTC.

Actually, there are (or, will be) 2100 million million Satoshis. The market is currently focused on the wrong unit of measurement.

Re:I like the idea

[Bramlet Abercrombie]

Or they could just buy all the bitcoins.

Re:I like the idea

[Bramlet Abercrombie]

I bought in 2 weeks ago and I'm already up. I'm getting in line before the: big banks, the billionaires, wall street, and finally main street catches on. Once the madness starts I will be well positioned to get rich. And quick!

Re:I like the idea

[bill_mcgonigle]

Nobody wants to part with something that becomes more expensive as you hold it

Which is why real estate and precious metals are never bought and sold.

each BTC would cost a million dollars

At least.

and you'd run out of divisibility of BTC

Correct, the clients would need to agree to a protocol revision (probably 64 bits) to make it a true worldwide currency

and the "small" payment fee would be unaffordable.

There's nothing fixing the price of a transactions, so market forces apply.

Also, BTW, early adopters would own half of he planet's wealth.

Given the choice between cypherpunks and central bankers - well, we gave the central bankers a chance and look what they've done. I'll take the loons who are always going on about freedom and privacy over the Jamie Diamonds any day.

Re:I like the idea

[jeffmeden]

I bought in 2 weeks ago and I'm already up. I'm getting in line before the: big banks, the billionaires, wall street, and finally main street catches on. Once the madness starts I will be well positioned to get rich. And quick!

Do you like tulips? I have some real pretty ones. One BTC per bulb, get in while you can. Historically, prices have never been better!

Re:I like the idea

[alexander_686]

The problem with that line of though is there is a wealth of empirical data to back up the theory. I can’t think of a case where it leads to a death spiral, but there are many examples where deflation has skewed the economy to the hoarding of cash, a reduction in investment, which is followed by a recession. These range from the financial crash of the 1870s to Japan of today.

Re:I like the idea

[lgw]

Speculation in BTC is trivially small in absolute amounts compared to speculation in other currencies. The problem is the ratio of speculative trading to normal use - most BTC activity is speculation, not "paying for stuff". That's the balance that would need to shift to dampen the swings in BTC value.

Re:I like the idea

[tftp]

Given the choice between cypherpunks and central bankers - well, we gave the central bankers a chance and look what they've done. I'll take the loons who are always going on about freedom and privacy over the Jamie Diamonds any day.

Nobody knows who Satoshi Nakamoto is - a real person, or an alias of a person, or a large group. It would be very reckless to give "them" keys to the kingdom without checking.

Besides, central bankers are not that personally rich. The list of richest people on the planet is regularly published, but on top of it are people like Bill Gates and Arab sheiks - not the bankers. Central banks are usually owned by the state. The share of BTC that is owned by early adopters (or founders?) is considerable; and it was mined nearly for free. Those guys are smart and all, sure, but I don't think they deserve even 1% of the planet's wealth for their little project. IMO, nobody deserves such extraordinary payment for inventing a new way to exchange goods.

Re:I like the idea

[pla]

It cannot become more stable. The supplies of BTC are limited by design.

Those have nothing to do with each other, and the first doesn't even hold true. Bitcoin needs nothing except more "normal" ways to use it for the value to stabilize. If someone like Amazon started taking BTC, you'd see the exchange rate nailed down to a tolerable level of variability in short order.


Nobody wants to part with something that becomes more expensive as you hold it.

I hear that a lot from people who oppose deflationary economies. Except, it only holds true for deflation rates in excess of what a reasonably safe investment will yield. If you had the same rate of deflation as the USD has for inflation (2-3% over time), only an idiot would hold it rather than invest at a higher yield.

Also, keep in mind that the vast majority of people don't view currency as an "investment", whichever way it moves year to year... They view it as a short-term way to convert time spent at a job into rent and food. If not for that, if most people actually realized the exponential power of inflation to chip away at their liquid assets over time, you'd see a whole lot of central bank chairs' heads mounted on poles.


If you replace all USD with BTC, each BTC would cost a million dollars, and you'd run out of divisibility of BTC

12.5 million BTC exist. The US economy has an MB of 3.7 trillion and an M2 of 11 trillion. Using M2, that gives a USD-to-BTC rate of $880k, so you have it close to say each BTC would cost a million dollars. You have it absolutely wrong to say you can't divide BTC that finely, however - Currently, Bitcoin clients use a base unit of one Satoshi as one-hundred-millionth of a BTC. You could effectively map 1.14x the size of the US economy to Bitcoins, at penny-level granularity.

And that, even without any major updates to allow more divisibility. And without taking into consideration that the number of BTC in circulation will roughly double over the next 126 years.

Bitcoin has its flaws, but stick to the real ones, not the bogey-men.

Re:I like the idea

[Pentium100]

and you'd run out of divisibility of BTC, and the "small" payment fee would be unaffordable.

Divisibility can be changed - 1e-8 is good for now and the near future, but if it is needed, the protocol can be updated to divide into as many decimal places as you want.
The "small" transaction fee can be changed. Besides, you can send transactions without the fee, they will just take a bit longer to first confirmation. Though some sort of minimum fee will probably be imposed - 0.1% of the transaction value for example.

Re:I like the idea

[Kjella]

The reason it can't become more stable (with a click of a button) is that not enough people use it. Deflationary and supply issues aside, there just isnt enough capitalization (with respect to other currencies) to prevent huge swings due to speculation.

This is a nice theory but was fairly thoroughly proven false during the 2008 financial crisis, it doesn't help how many investors you have when all of them stampede away from a rotten apple. Call it systemic failure, call it a house of cards, call it a domino effect but I don't see adding more speculators having much stabilizing effect because their market behavior is very, very similar.

Re:I like the idea

[Anonymous Coward]

What currency collapsed during the 2008 financial crisis? Sure, no one could get a loan worth shit, but the dollar was still secure.

Re:I like the idea

[bill_mcgonigle]

Nobody knows who Satoshi Nakamoto is - a real person, or an alias of a person, or a large group. It would be very reckless to give "them" keys to the kingdom without checking.

Right , but what do you think "his" keys allow him to do to the bitcoin network?

IMO, nobody deserves such extraordinary payment for inventing a new way to exchange goods.

Then you wouldn't use it. The nice thing about a free cryptocurrency is that there's no gun pointed at you saying you have to use it.

Personally, I trust the likes of bitcoin entrepreneurs more than I trust The Ben Bernank or the US Congress, but everybody gets to make their own decision in that regard. Heck, if you like the protocol and don't like the players, you can start your own blockchain, with a nonprofit of your choosing owning the early blocks and disbursing them according to their by-laws. Markets can decide what the proper exchange rate is between the Satoshi blockchain and yours; if your idea is popular enough, your nonprofit can become the dominant blockchain and its mission can engage in whatever sort of social activism it's set up to provide.

Re:I like the idea

[ultranova]

This is why it cannot be used as money. Nobody wants to part with something that becomes more expensive as you hold it.

And yet the Bitcoin blockchain keeps getting transactions.

Re:I like the idea

[ultranova]

The problem with that line of though is there is a wealth of empirical data to back up the theory.

There's a wealth of empirical data to back almost any economic theory. When you have the entire history of the world to draw from, you will find examples of "condition A is true, then B happens" for almost all values of A and B. On the other hand, every situation is unique, so you can't really isolate the causal relationship between A and B. And on the third tentacle, people have money riding on convincing others (and often themselves) that such causal relationships exist or don't exist. The end result is that economics is a hopeless, confused mess with zero predictive power.

Re:I like the idea

[alexander_686]

You are right that some aspects of economics have very crappy data, but it is important to distinguish between what we know, what we suspect, and what we can’t know. The parameters change over time. If you focus on one variable its predictive power drops as everybody else focuses on that variable and their behavior changes.

In the cases that I am suggesting, the link between money supply, deflation, and investment is clear – it swamps the other variables. This is something that we know.It has strong predictive powers.

Is it valid to argue the magnitude (either modest or strong) or the stickiness – yes.

About the only argument you can find against it is not that it is invalid, but that the pain caused by the dead hand of hard currency causes less damage then the central banks fooling around with the money supply.

Re:I like the idea

[Anonymous Coward]

The reason it can't become more stable (with a click of a button) is that not enough people use it. Deflationary and supply issues aside, there just isnt enough capitalization (with respect to other currencies) to prevent huge swings due to speculation. But contrary to the original assertion about "too much speculation", if enough _more_ people were speculating (raising the value and volume of daily trades), you would see it stabilize compared to the current roller coaster. Bitcoin is like a micro crude oil market; big speculators can drive it any way they want, and since the total capital (relative to USD) in bitcoin is so low, a single heavyweight speculator can run the show.

More people are using bitcoin than ever before and I see the volatility getting worse if anything. In mid to late 2012, it was pretty darn stable compared to now. Your argument that "not enough people use it" is completely wrong.

Re:I like the idea

[Anonymous Coward]

It will never be stable because it's like saying "if you can break in to my computer you can have all my money". Someone, somewhere, will figure out an exploit and exploit it if money is involved.

Frankly, Bitcoin and other cryptocurrencies have a finite shelf life. Once someone figures out an exploit or insanely better hardware comes along (eg. quantum computing) then the currency is worth nothing. This is most unlike a government issued currently.

Anything that thinks no one can break in to their system is an idiot.

Re:I like the idea

[rtb61]

Hmm, a get rich quick scheme. Now how could a con artist/politician manipulate campaign donations in bitcoins. Let's see, perhaps claim them as campaign donations at the lowest value during the period they are held while actually selling them at higher exchange rates. So basically treating the bitcoins as free loans for currency speculation. Now would a right wing politician do that, let me guess ;D.

Re:I like the idea

[TranquilVoid]

They couldn't buy all as there would always be holdouts, but they could certainly buy enough to get it below the critical mass level and make it unusable. At that point all the BTC believers would move on to LiteCoin or create a new one. The only thing that will kill cryptocurrencies is when/if people collectively realise they are not useful. Currently they are buoyed by the excitement of getting in at the start of a new thing.

By all means

[i kan reed]

Let's make it so it's even harder to tell who's bribing their way into power in Washington.

Re:By all means

[Ralph Wiggam]

Campaign donations are subject to federal reporting regulations regardless of what currency they use.

Re:By all means

[Anonymous Coward]

Huh, for some reason it turns out that blowjobs and lucrative business contracts with loosely associated family members isn't recorded

Well now that can't be right

Re:By all means

[travdaddy]

Campaign donations are subject to federal reporting regulations regardless of what currency they use.

Which raises a question. So if someone anonymously dumps 1000 bitcoins on him, then what happens?

Re:By all means

[TheCarp]

Wait, you mean the people who write the laws leave themselves major loopholes? I never would have guessed that.

Re: By all means

[Anonymous Coward]

You mean like someone from outside the US?!

Re:By all means

[jeffmeden]

Campaign donations are subject to federal reporting regulations regardless of what currency they use.

Which raises a question. So if someone anonymously dumps 1000 bitcoins on him, then what happens?

He has to not spend it, or run afoul of the FEC for not having his campaign funding papered up nicely. Now if they give it to a superpac, and that superpac goes and gets him elected with a billion dollar campaign, no one could care less.

Re:By all means

[Anonymous Coward]

SCOTUS says it is legal, regardless of the origin of the currency. The US is the only country that officially and legally allows foreign influence on elections by allowing unlimited campaign donations from anonymous offshore entities.

Try that in any other country, and someone would be winding up a "guest" in their jails for a very long time.

Re:By all means

[Ralph Wiggam]

You're wrong. Campaign donations have to be documented as coming from a US citizen. Citizens United was about independent PAC organizations, not campaigns.

Re:By all means

[Ralph Wiggam]

What does that have to do with bitcoin based campaign donations?

Re:By all means

[Ralph Wiggam]

Plus the limit per candidate per election cycle is $5,200. So any donation over about 6 bitcoins would be rejected immediately.

Re:By all means

[xxxJonBoyxxx]

>> someone anonymously dumps 1000 bitcoins on him,

Same thing as what happens if someone leaves an envelope filled with 500 crisp $100 bills at the office.

Re:By all means

[letherial]

he thinks bitcoins are more anonymous then dollars, its a common misunderstanding, infact bitcoin is completely traceable. Every transaction that has ever happened, has been recorded and can be audited. Unlike dollars....

However, bitcoins can be tumbled and they lose track of who owned what coins because all the coins are spread among a bunch of people.

Re:By all means

[Anonymous Coward]

There was a ruling late last year from SCOTUS that expanded the CU decision. This widened the scope to to any entity, be it a US PAC, a Chinese funder, or just any anonymous contributor who feels like it.

Re:By all means

[i kan reed]

Traceable only as far as a .wallet file. Not necessarily traceable to an address, phone number, person like a check is.

Re: By all means

[Anonymous Coward]

Obama doesn't care about that, considering how many foreign donors he had to his campaign...

Re:By all means

[Ralph Wiggam]

Still wrong.

"The Federal Election Campaign Act (FECA) prohibits any foreign national from contributing, donating or spending funds in connection with any federal, state, or local election in the United States, either directly or indirectly. It is also unlawful to help foreign nationals violate that ban or to solicit, receive or accept contributions or donations from them. Persons who knowingly and willfully engage in these activities may be subject to fines and/or imprisonment. "

http://www.fec.gov/pages/brochures/foreign.shtml

Colour me confused

[dmatos]

Bitcoin is an _alternative_ to fiat currencies? Citation needed, mostly because I can't believe anyone would be that delusional.

Re:Colour me confused

[randomErr]

Here's a two sided argument on the subject:

http://www.zerohedge.com/news/2013-12-30/bitcoin-alternative-currency-libertarian-vs-pragmatist

Re:Colour me confused

[jeffmeden]

Bitcoin is an _alternative_ to fiat currencies? Citation needed, mostly because I can't believe anyone would be that delusional.

Apparently he likes the thought of not knowing how many TV ads and rally signs his campaign can afford 12 hours from now...

Re:Colour me confused

[BringsApples]

That's a 2-sided argument to bitcoins as an alternative currency. But what the OP is saying is that it's laughable that it's an alternative to fiat currencies. Fiat means that it has value because we all say it does. To my mind, there could never be a good fiat alternative to anything that's fiat. Fiat itself is the problem, because it relies on mankind to regulate it (haha on that), rather than Nature regulating it with a fixed amount of, say, gold, or any other naturally occurring element that has it's own value (gold is a super-conductor).

I think one day water will be a good currency.

Re:Colour me confused

[Anonymous Coward]

We are talking about Steve Stockman. Even most of the Republican crazes think he is out in lala land.

Re:Colour me confused

[jeffmeden]

rather than Nature regulating it with a fixed amount of, say, gold, or any other naturally occurring element that has it's own value (gold is a super-conductor).

I know you meant "gold is a super good conductor" (gold has not been demonstrated to be a superconductor under any condition) but either way that raises one pointed problem; what happens to semiconductor manufacturing if the value as a currency (in other words the need to store value in it) gets too great? Are we supposed to just stop making CPUs (or make CPUs that are 5x or 10x more expensive) just because someone decided that gold was pretty enough to base an economy off of? Or do we just give up having fast CPUs and go back to (shudder) copper?? It is this very property (its central place as a commodity) that would give me the strong opinion that it should not be used as a currency at all.

Serious answers only, please.

Re:Colour me confused

[Trepidity]

His main argument seems to be that John Cornyn (R-TX) is too liberal, so he's challenging him in the primary.

Also, the U.S. Constitution is too liberal for Stockman, so he wants to amend it in like five different ways. Oddly, given his claim to be some kind of individual-liberty crusader, the ways he wants to amend the Constitution are mostly in the direction of removing individual rights, in favor of giving the government the power to enforce his own particular ideas of collective morality and cultural norms. For example, the Constitution currently guarantees that all native-born Americans are U.S. citizens. Automatically, by right: no federal-government bureaucrat had to confirm my right to be an American, after I was born in Indiana. Stockman doesn't like this. What if some of these Americans aren't enough like him? Shouldn't they have to take a test devised by federal bureaucrats showing their cultural conformity before they're allowed citizenship? Stockman says yes!

Oh, and that First Amendment is a big problem for him. Protects too much liberal nonsense in his opinion. I mean freedom is one thing, but isn't there such a thing as too much freedom? When people do things that offend Steve Stockman, like burn the American flag, well that's just a step too far. Better amend the Constitution again to remove those rights.

Re:Colour me confused

[Anonymous Coward]

Confused article... I'm not a huge Bitcoin whiz but these obvious errors really stood out:

The libertarian streak in me likes the anonymity of Bitcoin transactions

Bitcoin is not anonymous, repeat after me 100 times...

mining Bitcoin is waste of resources from a social perspective. The amount of CPU and electricity needed to mine Bitcoin is high, and from a social viewpoint about as valuable as building defenses against attacks from Mars. What the mining does is decide the allocation of the limited amount of Bitcoin produced each period and encourage the ledger to be kept

No, the mining is keeping the ledger.

Re:Colour me confused

[Anonymous Coward]

This guy was a pro-Choice Republican, and defeated years ago by the Buchanan/Keyes part of the party. You'd do well to be informed about such details, rather than just a knee jerk dismissal of him simply because he's a Republican.

Re:Colour me confused

[Trepidity]

Was Stockman really a pro-choice Republican in the past? He certainly isn't now.

His campaign website includes this section:

PROTECTING THE INALIENABLE RIGHT TO LIFE

Congressman Steve Stockman sponsored the ban on Partial Birth Abortions

Congressman Steve Stockman sponsored a bill making it federal law that life begins at conception

Re:Colour me confused

[BringsApples]

Regardless whatever the currency is, The People will verify it's actual worth (how much is money worth to you?). In my mind, computer technology hasn't proven itself. All it's done is improve things that will increase the population, and all that does is decrease the value of whatever currency is in place.

The only real currency on the planet is our time itself. You should always value that over anything else, no matter what. Coming after that is food and water. So if you spend your time growing food, you can pick and choose what you'd like to trade for it. If you don't want to trade things for your food, then all you have to do is protect what you have. All the rest is fiat as far as I'm concerned. But then again, I'm old and don't care about the things that so many other do.

Re:Colour me confused

[Anonymous Coward]

what happens to semiconductor manufacturing if the value as a currency (in other words the need to store value in it) gets too great?

The industrial use of gold is miniscule compared to the economic use. Only a tiny fraction of the world's supply is used in manufacturing.

Also, it's a self-balancing situation. If the cost of the raw material gets too high, that produces a recycling economy. Compare it to the platinum and palladium used in catalytic converters; it is nearly 100% recycled. Gold also happens to be extremely cheap and easy to isolate and recycle, which is why it was one of the first elements discovered and partly why it was useful as a currency.

The combination of the above is why manufacturing and industrial use of gold is fairly insulated from price volatility.

Re:Colour me confused

[Anonymous Coward]

...just because someone decided that gold was pretty enough to base an economy off of

You say that as if gold isn't the longest-standing store of value this world has ever seen (we're talking thousands of years, under all types of economic and political climate). Fiat currency is the johnny-come-lately, not gold. Fiat has only been in widespread use for a piddly century at best, and the proof is in the pudding: the fact that nearly every fiat government in the world holds tons of gold themselves in case the fiat system fails.

Re:Colour me confused

[Anonymous Coward]

I know you meant "gold is a super good conductor"

Gold is a poorer electrical conductor than copper or silver. A thin patina is used in electrical connectors because it doesn't corrode, but the amount used is so small its cost is dwarfed by the other materials.

Re:Colour me confused

[Anonymous Coward]

Gold is a good conductor at room temperature, but calling it superconductive is wrong.

http://en.wikipedia.org/wiki/Superconductivity

It's really valuable property is its resistance to tarnish and corrosion contributing to its ability to conduct after years of neglect, especially in metal contact-to-contact designs. Other than that, it is a metal like most other metals, a fiat currency, in that we only value it highly because we value it highly.

Re:Colour me confused

[JoshWurzel]

First, copper is a better conductor than gold (~16 nOhms/m vs. ~24nOhms/m, lower is better). Gold is primarily used as plating because it doesn't corrode. But that doesn't really impact the value of your question.

When a core material like gold changes price, the impact to the consumer depends on the rate and absolute value of the price changes.

If the total impact to the product's price is small or sudden, then it is either passed on to the customer or absorbed by the manufacturer. There isn't a lot of gold in a typical consumer product, for example, but there is enough to make a wild swing in gold prices noticeable to the supply/operations groups.

If the price increase is really large or forecast to take place over an entire product development cycle, then the designers will take a long look at the tradeoffs and decide if they want to make a cheaper product or a more expensive product.

Re:Colour me confused

[Anonymous Coward]

You are the first person I've seen that realizes even "precious" metals are fiat currencies as well. I was trying to explain this to a Randtard recently and he just couldn't grasp how his go-to argument against fiat currencies was fallacious.

Re:Colour me confused

[TJ_Phazerhacki]

This is the guy who thinks that John Cornyn (R-TX) is too liberal and not a True Texan. You know, that John Cornyn who compared Homosexual Marriage to marrying a box turtle, or who voted in favor of notifying parents of minors who get out-of-state abortions, or who mocked Democratic objections to Alito's confirmation and then made (effectively) the same accusations against Sotomayor.

This is the guy who ran a Dodge meme against Cornryn on his Twitter feed last week.

This is the guy who wanted to remove the 'gun-free' zones around schools to keep children 'safer', a month after Sandy Hook.

Actually, the more traction these fringe idiots get, the more fragmented the far right looks. VOTE STOCKMAN 2014!

Re:Colour me confused

[Cl1mh4224rd]

Or do we just give up having fast CPUs and go back to (shudder) copper?? It is this very property (its central place as a commodity) that would give me the strong opinion that it should not be used as a currency at all.

Yep. It's amusing to me when gold bugs claim that gold's usefulness as a conductive material gives it an "inherent value" that also makes it a good choice as a currency (or as a backing for currency).

If we were to switch back to gold and keep using it in various manufacturing, that's a drain on the limited supply of gold available for use as currency. That's bad.* As you pointed out, cost could increase to balance that out, and that's bad, too.

If we were to stop using gold in manufacturing, product quality potentially suffers. Also, gold loses this "inherent value" that gold bugs love to push as a selling point.

* Also, it further undermines the GP's point about gold not being "regulated" by humans, which already ignores the fact that individuals can still hoard the gold, thus artificially limiting the supply available for circulation. Sorry, gold bugs, but there's no form of currency free from human tampering of one sort or another.

Re:Colour me confused

[TheRaven64]

Yes, Bitcoin is an alternative to fiat currencies. A fiat currency, by definition, has a fiat enforcing its value. Bitcoin, in contrast, derives its value from unregulated speculation. It's not a good alternative, but it is an alternative.

Re:Colour me confused

[MozeeToby]

I hope we move back to the gold standard and someday soon the asteroid mining companies start flooding the markets with more gold than has been mined in the entirety of human existence. Or a bunch of special new uses for gold are discovered and drive the demand up 10x what it is today. This illusion that gold has an inherently fixed value is just ludicrous.

Re:Colour me confused

[BringsApples]

Well, the planet has a limited amount of these metals. The things have their own use, no doubt. Gold (as mentioned by jeffmeden) is not a superconductor (as I had previously thought), but is a really good conductor at room temp (as is silver and copper but gold doesn't form an oxide layer or tarnish), so it has an actual real-world use. Diamonds have a real-world use, as they're so hard, they can be used to break other stones that are difficult to break up.

It's this real-world use that defines things to not be fiat. Food and water are only another example of these, as they sustain our life (time). The real question is, what is the value of our time here? If you're not asking that question of yourself, then you're supporting some version of a fiat currency. If you're supporting a fiat currency, make sure that it's because you have a lot of it, otherwise someone else is more than likely using your time for their gain.

Re:Colour me confused

[jeffmeden]

You are the first person I've seen that realizes even "precious" metals are fiat currencies as well. I was trying to explain this to a Randtard recently and he just couldn't grasp how his go-to argument against fiat currencies was fallacious.

Yes and no. "Fiat" currency is commonly used to describe a currency that is 100% made up (a piece of paper with some dead guys pic on it being worth a week's hard labor), as opposed to one that is only partly made up (a piece of shiny, relatively hefty metal worth one week's hard labor). Your argument is more in line with the definition of "currency" which is anything that has some stored (agreed/decreed) value beyond just the intrinsic one (intrinsic like your ability to make wedding rings out of it and sell it at the local bazaar to wide-eyed bridegrooms in exchange for a day of hard labor, but i digress).

Yes, time is the most stable currency (at least until FTL travel is perfected) but second to that a "precious material" currency that is stable (gold resists corrosion nicely) is as stable as the population (and the population's ability to generate value to store in said currency).

If you want to get out of talking economics with a gold nut, ask them how much lead will be worth after "the collapse". Most will immediately digress into their gun/ammo collection, their "god bag" or some other prepper talk. Then you can just nod and sneak away.

Re:Colour me confused

[jeffmeden]

I hope we move back to the gold standard and someday soon the asteroid mining companies start flooding the markets with more gold than has been mined in the entirety of human existence. Or a bunch of special new uses for gold are discovered and drive the demand up 10x what it is today. This illusion that gold has an inherently fixed value is just ludicrous.

No gold advocate suggests it is a fixed value, only that it is a fixed _supply_ which is good (the argument goes) because it stabilizes the value and prevents inflation by meddling governments.

Now, whether or not single-digit inflation (that happens with prudent monetary policy) is a good thing is an exercise left up to the reader.

Re:Colour me confused

[hey!]

By your definition, the *dollar* isn't fiat currency.

Re:Colour me confused

[Anonymous Coward]

Well, it's the only way to stop nationalist groups. German Nationalists in Italy need to speak Italian so that they stop trying to secede. It's not the end of the world if a person of a different color assimilates into American society.

Re:Colour me confused

[triclipse]

The properties of gold make it valuable for several different purposes. One of those purposes is its value as a conductor in electronic components. It's rarity, malleability, and resistance to corrosion make it valuable as a medium of exchange. The fact that one of these purposes is use as a "money" isn't any different than another type of purpose.

Supply and demand for gold for for these purposes (e.g., dentistry, jewelry, money, electronics) dictate the price of gold. The supply is relatively stable, inflating slowly as more gold is mined. Demand is more volatile and is what accounts for most of the fluctuation in the price of gold.

Bitcoin has properties which make it suitable only as a medium of exchange; it fulfills that role quite well, if not perfectly. Just like gold, supply and demand dictate the price of Bitcoin. Bitcoin's primary deficiency at this point is it's price fluctuation in price vs. major fiat currencies, which make it inconvenient to use as a medium of exchange.

Re:Colour me confused

[Charliemopps]

Exactly. A Fiat currency is a currency that has no intrinsic value itself. Bitcoin has no other use than as currency, so it's just about as "FIAT" as you can get. At least with US dollars, if they become worthless you can still burn them for heat. Granted, Bitcoin does solve a lot of the problems people who dislike fiat currencies are concerned about. Namely government manipulation, inflation, the wholesale printing of money, etc... So perhaps Bitcoin is a type of Fiat currency that avoids many but not all the problems Fiat currencies have. The primary failing it has that it still relies on human faith in its value which could literally collapse in hours given the right conditions.

Re:Colour me confused

[Anonymous Coward]

You're right -- water will be a decent currency in the very near future.

Ammo will be an even better currency in the very near future.

The End Is Near

Re:Colour me confused

[hey!]

Citation needed, mostly because I can't believe anyone would be that delusional.

I find it quite easy to believe. There are people out there who think they can evade responsibility for debts by signing their name on contracts with an irregular capitlization and can escape taxes simply by claiming to be a non-resident alien on their tax forms. These are the far right-wing lunatic fringe of the people who see something sinister in the Fed manipulating the money supply.

Re:Colour me confused

[MozeeToby]

My point is that making the entire monetary system susceptible to a single black swan is much more dangerous than the gold standard people seem to believe. And I disagree with the statement that gold standard advocates don't think gold has a nearly fixed value, in fact you do as well when you say "a fixed _supply_ which is good (the argument goes) because it stabilizes the value". It's true that you largely, baring unforeseen and unforeseeable events, insulate the monetary supply from meddling governments, but you expose it to other random events that are potentially much more destabilizing.

Re:Colour me confused

[Hillgiant]

Just need to figure out how to burn the flag with a gun. Then it will be okay.

Re:Colour me confused

[Anonymous Coward]

Right, because the gun free zone did a fuck-ton for those kids in Sandy Hook.
 
Barring law abiding citizens from possessing/owning firearms may stop a few accidents and some cases of 2nd/3rd degree murder but it isn't going to do shit as far as stopping a psycho from killing people.

Re:Colour me confused

[tftp]

John Cornyn who [...] voted in favor of notifying parents of minors who get out-of-state abortions

Aren't parents of minors somehow responsible for said minors? If they are, they should know what's happening.

Re:Colour me confused

[TheRaven64]

Yes it is. The value of the dollar is established by the US law stating that it the US government must accept it in payment for taxes and that US citizens must accept it in restitution for debts. In contrast, Bitcoin has its value established by the belief among speculators that they can sell it for more than they paid.

Re:Colour me confused

[jeffmeden]

The thing about a currency is that, as a store of value, it's overall value has to go up if people want to store more in it (ipso facto, right). So, as the world economy produces more output, and hence there is more value "out there" to store, if your currency is in fixed supply (much like Bitcoin, kind of like gold since its only slightly hard to recycle/mine) then as more people pour value into it, it's price needs to go up. So the tighter the supply the faster the value goes up and it deflates. [begin rant] Now to people who live in bunkers waiting for The Collapse, this is a good thing since they don't see a need to ever spend any money on anything but food, guns/ammo, and the occasional repair to their bunker so if the value goes up they are happy. To the rest of us who like participating in a global economy, a skyrocketing value (deflating it) is a bad thing.[end rant]

Hackathon?

[KBehemoth]

No respectable hackerdojo would touch that hackathon with a ten-foot kickstarter.

Liberal tears make the best lube

[schneidafunk]

Is this the same Steve Stockman who has this gem?

Re:Liberal tears make the best lube

[Mononoke]

Yup. I'm on his mailing list. I didn't win the AR-15 he allegedly gave away, but the emails are often humorous:

Dear patriot,
Well, I did it again.
Every gun grabber called my office yesterday screaming and crying because I posted this to our website.
Yes, I find liberal tears to be the best gun cleaner.
Now that's funny.
But you know what would really have gun grabbers dabbing their eyes with their petticoats?
If I were to run this campaign for U.S. Senate.
So let's give them something to cry about.
Today is the last day to accept donations for this period, so I need you to act NOW...

Re:Liberal tears make the best lube

[Anonymous Coward]

Tears of joy! A primary runoff between Stockman and Cornyn. Thank you, Santa! This is a liberal's dream come true.

Re:Liberal tears make the best lube

[Anonymous Coward]

Why would one want to clean a firearm with that? Tears don't degrease that well, and leave salt and other corrosive stuff behind.

If he stated "hippie/hipster beard grease", now that might be a useful product.

Re:Liberal tears make the best lube

[tobiasly]

Is this the same Steve Stockman who has this gem?

I didn't follow your link but if he accepts Bitcoin and he's a Ruby coder then maybe we finally have a chance at a tech-savvy congressman!

Speculation will never go down

[sjbe]

I like the idea of crypto currencies...

Why? Bitcoin has many of the worst aspects of a gold standard. It is useless for transactions that don't involve a computer to facilitate trade - i.e. cash transactions. Bitcoin has very high levels of exchange rate risk due to volatility, speculation and lack of liquidity. Few people really know what it is and even fewer accept it for payment. For most merchants it costs extra resources and adds risk to handle and exchange since they will have to convert it back to dollars anyway - the same problem with them accepting foreign currencies which is why most don't. It's very expensive to use once you account for the full cost of the risk factors. Basically it scratches some ideological itches but as currencies go it doesn't have a lot to recommend it.

It needs to become less speculative and more stable to be a true alternative.

It will NEVER become less speculative. It might become less volatile (though I doubt it) but every single currency gets heavily speculated against. The Dollar, the Euro, etc. Every one. Bitcoin is more vulnerable to fluctuations from speculation for the same reason any thinly traded asset or currency is. If there is a perceived opportunity to make money speculating on bitcoin then the speculation will occur.

Re:Speculation will never go down

[TheCarp]

Sure it has issues, even compared to cash but... cash can't be used for online purchases either. I don't think it is a problem if one currency isn't the perfect solution for all problems. Is it really a failure of one currency if it only fills in a niche? Do you really think the niche of providing online transactions to people who are distrustful of other currencies is a failing?

As a niche market, I think bitcoin works pretty well overall and fills in a real gap between cash and traditional bank mediated transactions.

Re:Speculation will never go down

[tftp]

Is it really a failure of one currency if it only fills in a niche?

BTC does not fill any niche. What is it that BTC allows me to do that I cannot do through the bank, using any currency of my choice?

On the other hand, the bank offers me features that BTC does not have. I do not need to worry about the mechanics of inter-bank transfer. I do not need to carry a computer and a BTC wallet with me; a simple number on a plastic card will do. If I lose that number, I am insured against the loss. If a merchant lies to me I can have the payment reversed. If I use the card I get some money back (as opposed to paying for BTC transactions.) There is no reason at all to own BTC - not even a weak one. There is absolutely no upside.

But what about TEOTWAWKI, you say? Well, the USD and many other paper currencies will likely crash. Or not. But BTC will certainly be of no use because BTC requires Internet, stable power, miners - all those are attributes of a wealthy, stable and safe society. So after TEOTWAWKI you can't use BTC either.

I think bitcoin works pretty well overall and fills in a real gap between cash and traditional bank mediated transactions.

I am not sure what gap is that.

Re:Speculation will never go down

[sjbe]

Sure it has issues, even compared to cash but... cash can't be used for online purchases either.

A dollar is still a dollar whether it is in cash or an electronic ledger and you can easily and cheaply exchange cash in and out of a bank. You can't take a crypto currency offline at all.

Do you really think the niche of providing online transactions to people who are distrustful of other currencies is a failing?

I think the failing is the financial illiteracy of those same distrustful people. There is nothing magical about a fiat currency - it is just an asset. It carries some amount of liquidity, inflationary and exchange rate risk. Only an idiot completely trusts any asset as a store of value including fiat currencies. But only a bigger idiot would trust bitcoin more than the dollar or the euro. Bitcoin is VERY volatile, thinly traded, and there is no guarantee that the cryptography will remain secure. A rational analysis of the advantages of bitcoin versus the drawbacks comes up pretty light on the advantages side of the ledger.

I think bitcoin works pretty well overall and fills in a real gap between cash and traditional bank mediated transactions.

For who? Drug dealers? Money launderers? Libertarians with a hate-boner for fiat currencies and the Fed?

Re:Speculation will never go down

[jythie]

Or at minimal it could potentially work really well. Right now, while the mechanics indeed can fill that gap, pragmatically the ecosystem is just too unstable, resulting in BTC not actually being able to fill that role all that well.

Re:Speculation will never go down

[Anonymous Coward]

Bitcoin has very high levels of exchange rate risk due to volatility, speculation and lack of liquidity. Few people really know what it is and even fewer accept it for payment. For most merchants it costs extra resources and adds risk to handle and exchange since they will have to convert it back to dollars anyway - the same problem with them accepting foreign currencies which is why most don't. It's very expensive to use once you account for the full cost of the risk factors. Basically it scratches some ideological itches but as currencies go it doesn't have a lot to recommend it.

Every currency starts out that way. Even the US Dollar had a rough start. Where do you think the phrase "not worth a Continental" came from? Currency crises and hyperinflation are much more common than Americans understand. Two billion people have had to survive one at some point in their life.

Bitcoin has all the traits that made gold a useful currency: decentralized, easy to verify, difficult to forge. It has the added benefit of being easy to store and move. It's the equivalent of discovering an isotope of gold that can be transported over the internet. If you run around saying that makes it a poor choice for a currency, people are going to look at you like you are an idiot.

Re:Speculation will never go down

[E-Rock]

For me, BitCoin doesn't fill a void in my banking life. It's interesting and kinda fun to mess around with.

For people who don't have access to trustworthy financial institutions (or governments), I think it does fill a void. Their biggest hurdle would be getting BTC from their local currency (like China blocking BTC last month).

I think that it would be better if BTC traded in a narrower band, but I think that as it picks up in use, liquidity will help with that.

Re:Speculation will never go down

[IamTheRealMike]

It is useless for transactions that don't involve a computer to facilitate trade - i.e. cash transactions.

It's 2014. People carry computers around in their pockets these days, heck even my mother does. Even when you pay with cash, very likely that cash is placed immediately inside a computer controlled cash register. Of all the criticisms of Bitcoin I've seen over the years, this one has to be the strangest.

By the way, perhaps you aren't aware of how horrifically broken existing payment systems are. I've talked with all kinds of people at software companies both huge and tiny over the past few years. Ex PayPal executives to startup founders. Every single one has said the same thing: "payments is broken". The fact that money moves electronically at all never ceases to amaze me given the huge fraud levels, woeful lack of security (see: Target), huge fees, general dysfunctionality of the banks (wire transfers can "go missing" because someone has to sit in an office at each bank in the chain retyping details from one system into another). It's just amazing. Yes, Bitcoin is very young and has all kinds of issues. But the existing payment networks are all very old and have all kinds of other issues.

It might become less volatile (though I doubt it) but every single currency gets heavily speculated against. The Dollar, the Euro, etc. Every one.

Bitcoin will get less volatile over time as it becomes boring and mainstream. It's volatile today because lots of people are learning about it for the first time, and governments are still figuring out their initial positions on it. Give it 10 years and everyone will have made up their mind about it, things won't be changing so fast and assuming it's been able to continue growing, it'll probably be fairly stable. Just like it is when out of the public eye (go look at long term price charts and you will see long spans of time where the price was not particularly unstable even with much thinner markets than today, like when it was at $5).

Re:Speculation will never go down

[sjbe]

For people who don't have access to trustworthy financial institutions (or governments), I think it does fill a void.

No it does not, at least not for many people. I've traveled a lot. What happens in countries like Vietnam where the financial/government institutions aren't entirely trusted is that they use alternative currencies and lots of cash. When I was in Vietnam a few years ago most of my purchases were in dollars instead of the local currency, the Dong.. (I kid you not - it really is called that) The merchants I dealt with strongly preferred dollars. Places where the government isn't trusted tend to have cash based economies for which bitcoin simply is not a credible alternative.

I think that it would be better if BTC traded in a narrower band, but I think that as it picks up in use, liquidity will help with that.

Not likely to happen anytime soon. Bitcoin might pick up some tulip-mania craze but that will not reduce the volatility - rather it is likely to increase it and create a bubble that will inevitably pop.

Re:Speculation will never go down

[CanHasDIY]

Is it really a failure of one currency if it only fills in a niche?

BTC does not fill any niche. What is it that BTC allows me to do that I cannot do through the bank, using any currency of my choice?

Buy illegal stuff from certain websites, lose half your wealth in an instant when some random nation decides to ban them, waste metric shit-tonnes of electricity for little to no fiscal gain...

Re:Speculation will never go down

[Anonymous Coward]

No, it's like discovering an isotope of gold that can only be transferred over the internet. If I can't use it on and offline, I'm not bothering.

Re:Speculation will never go down

[tftp]

As it always happens, the only sure winners from a gold rush are sellers of shovels. In this case, plenty of money was made by ASIC miner manufacturers, and by utilities. Everyone else has to fight for survival.

Re:Speculation will never go down

[PRMan]

So much misinformation here.

I like the idea of crypto currencies...

Why? Bitcoin has many of the worst aspects of a gold standard.

What worst aspects? It does everything gold does but can also be used online or moved around the world instantly for pennies (or even free right now if you are willing to wait).

It is useless for transactions that don't involve a computer to facilitate trade - i.e. cash transactions.

Everyone has a cell phone. I borrowed $2 from a guy at work for the vending machines and instantly texted him $2 in bitcoin using the Coinbase texting service.

Bitcoin has very high levels of exchange rate risk due to volatility, speculation and lack of liquidity.

This is true, if by risk you mean that you have a greater than 2/3 chance of your money being worth more.

Few people really know what it is and even fewer accept it for payment. For most merchants it costs extra resources and adds risk to handle and exchange since they will have to convert it back to dollars anyway - the same problem with them accepting foreign currencies which is why most don't. It's very expensive to use once you account for the full cost of the risk factors. Basically it scratches some ideological itches but as currencies go it doesn't have a lot to recommend it.

Actually, services like BitPay and Coinbase will transfer it back to dollars instantly for you or allow you to maintain any percentage you want in bitcoins if you like. So there is zero risk if they use these services. As far as costing more:

1. There are no fees for merchants to take bitcoins if they manage it themselves

2. There are no chargebacks with bitcoin

3. Businesses get their money instantly before shipping, instead of having to wait 30 days

It needs to become less speculative and more stable to be a true alternative.

Bitcoin will become less volatile when more people get involved. At that point, it will become less valuable as a speculative tool and more valuable as a currency.

Re:Speculation will never go down

[CanHasDIY]

As it always happens, the only sure winners from a gold rush are sellers of shovels. In this case, plenty of money was made by ASIC miner manufacturers, and by utilities. Everyone else has to fight for survival.

I considered buying a couple ASIC miners myself, until I did the research and discovered that they can only mine BTC. Then I brought up the calculators, and that's when I figured out that it was far too late to get into the BTC game.

So now, they're talking about ASIC devices that can mine Litecoins instead, but something tells me they'll be too late to that party as well.

Re:Speculation will never go down

[The Mighty Buzzard]

Gold is not succeptible to a typo sending it into a black hole. Gold doesn't require multiple backups to avoid losing everything to a drive crash. Gold is exceedingly resistant to hacking. Gold transfers do not require you to wait for 2-10 verifications. And last but certainly not least gold has intrinsic value since it has uses other than currency.

BTC has its potential uses but as a currency will never be one of them if only because of the extreme slowness of verifiying a transfer compared to say a credit/debit card transfer.

Re:Speculation will never go down

[cusco]

I can take a US twenty dollar bill, travel to Araypalpa, 3000 meters above sea level in the Peruvian Andes, and use that to buy something. If no one knows the current exchange rate they can use the single telephone in town to call Cusco and find out. When I can do that with bitcoin I'll consider it a real currency. Until then it's about as useful to me as Zimbabwean dollars.

Re:Speculation will never go down

[cusco]

Where do you think the phrase "not worth a Continental" came from?

Are you sure that doesn't refer to the inherent worthlessness of anything manufactured by Ford?

Re:Speculation will never go down

[tlhIngan]

BTC does not fill any niche. What is it that BTC allows me to do that I cannot do through the bank, using any currency of my choice?

Semi-anonymous donation.

Think of it now - this guy now has a way to basically fund his campaign without oversight. Sure, he can report all his BTC dealings on his public wallet, but he can always create another wallet for those "special interests" that want to bypass any election fundraising laws. And since BTC's blockchain only tells you which wallets were used, he can probably transfer the money to separate exchanges and no one is the wiser that $BIG_CORP just sent him $100K.

Of course, it could be used for good, but that makes assumptions that BTC doesn't guarantee.

OTOH, use US dollars and things have a way of revealing themselves.

Re:Speculation will never go down

[lgw]

Do you really think the niche of providing online transactions to people who are distrustful of other currencies is a failing?

The only niche BTC fills right now is online transactions for illegal goods. You don't need to "trust" USD in order to buy a pizza on a credit card. Heck, if you expect hyper-inflation, a month's float on the credit card makes it an ideal currency.

The niche BTC can't fill is a stable store of value, mostly because that's not what currencies are for. Nor it particularly important that a currency suffers from inflation, as long as the rate is low enough to not be a hassle day-to-day (once you have to spend your pay at lunch because it's useless by dinner, then inflation's a serious problem). As long as a currency holds it's value well enough a month at a time, it serves the needs of mediating barter.

Re:Speculation will never go down

[Pentium100]

They can mine any crypto that uses SHA256, so, not only BTC.
Also, it still may be possible to earn profit from some devices, it all depends on price/GH/s, power/GH/s and delivery time.

Re:Speculation will never go down

[TheCarp]

> For who? Drug dealers? Money launderers? Libertarians with a hate-boner for fiat currencies and the Fed?

Yes, exactly, are you claiming they don't exist? Because they, in fact do, and some of them have some resources; and there are others more than willing to trade from them.

Re:Speculation will never go down

[Pentium100]

OTOH, Gold is difficult to divide and verify the amount. For example, if would be difficult to pay $1 worth of gold (that amounts to,what, 25mg?) both i actually cutting such a small amount from a larger block and weighing it to see if it's really $1 and not $0.9. Ohand the seller would then need to melt the received gold back into a larger block (because if he had lots of dust each particle weighing 25mg, then one sneeze would result in a huge loss).

OTOH, you can send 1uBTC as well as 1MBTC just as easily.

Re:Speculation will never go down

[CanHasDIY]

They can mine any crypto that uses SHA256, so, not only BTC.
Also, it still may be possible to earn profit from some devices, it all depends on price/GH/s, power/GH/s and delivery time.

Judging from this list of cryptocurrencies, BTC is the only "active" cC that uses SHA256; the other two listed, Peercoin and Namecoin, are apparently 'proof-of-concept' only.

Re:Speculation will never go down

[Pentium100]

www.coinwarz.com - you input your hashrate and it will calculate which crypto is currently the most profitable (of course, as with everything, you have to use caution).

I managed to earn ~1.8BTC by mining Unobtanium right after it was introduced for a few days. I probably would have mined 0.1BTC in that time. So, I mined UNO, then sold some when an exchange started accepting them, sold some more when the price rose and still have about 100 left (the price should rise again after the block reward halves).

Some cryptos have difficulty that fluctuates wildly. You can write a script that switches your miners to it when the difficulty gets low enough, then switch back to BTC once it rises enough to be less profitable than BTC.

Re:Speculation will never go down

[CanHasDIY]

www.coinwarz.com - you input your hashrate and it will calculate which crypto is currently the most profitable (of course, as with everything, you have to use caution).

I managed to earn ~1.8BTC by mining Unobtanium right after it was introduced for a few days. I probably would have mined 0.1BTC in that time. So, I mined UNO, then sold some when an exchange started accepting them, sold some more when the price rose and still have about 100 left (the price should rise again after the block reward halves).

Some cryptos have difficulty that fluctuates wildly. You can write a script that switches your miners to it when the difficulty gets low enough, then switch back to BTC once it rises enough to be less profitable than BTC.

Ah, good, thanks for the resources - I was just thinking the other day, 'You know, I spend entirely too much time with my family..."

Re:Speculation will never go down

[ultranova]

BTC does not fill any niche. What is it that BTC allows me to do that I cannot do through the bank, using any currency of my choice?

Transfer money in a matter of minutes rather than days. Transfer money without having to pay the bank for the privilege. Get notification of incoming transactions in real time without having to pay the bank for the privilege. Be able to transfer money to organizations my bank or government might disagree with, such as Wikileaks. And, as events in Cypros so demonstrated, not have to worry about my account being suddenly frozen because some supernational institution is pondering whether it'll confiscate it for reasons that have nothing to do with me.

Re:Speculation will never go down

[oobayly]

I borrowed $2 from a guy at work for the vending machines and instantly texted him $2 in bitcoin using the Coinbase texting service.

Just out of interest, when did you do this? I'm interested in knowing how much the $2 would have been worth to you 10min, 30min, 1hr, etc later. As you said, it's probably likely you'll do well out of accepting bitcoins, but with that in mind, why would you want to let go of them?

Re:Speculation will never go down

[tftp]

Those are good points... but they are relevant only to a tiny majority of the population. I, personally, don't need any of those advantages. I will even gladly pay for a wire transfer, getting in return the guarantee that the money undisputably ends up where it should.

Which proves, again, that BTC is an excellent currency for very, very few people. Sure, they can print and play with their own money, just as children play with toys, but none of that is of interest to a common man who has job to do and bills to pay and family to feed.

One should not underappreciate the work that bank does for you. It's not complex once you have it all set up; and your own BTC client is easy to use too, on your home desktop PC, once you have it configured and it is synchronized to the blockchain. But how many people on this planet can install a BTC client (correctly)? People are not interested in doing IT research and troubleshooting whenever they need to buy a newspaper. At this point BTC is so complicated that it is available only to geeks. A common man cannot accept anything that is more complex than a piece of paper (cash) or a piece of metal (coin) or a piece of plastic (card.)

And, as events in Cyprus so demonstrated, not have to worry about my account being suddenly frozen because some supernational institution is pondering whether it'll confiscate it for reasons that have nothing to do with me.

This is also a valid concern, but it flies above the heads of most people today. It is awfully difficult to become immune to a massive financial crash. There is no silver bullet. BTC may be one of many possibilities; a far better option would be simply to keep foreign currency that is expected to be more stable; or metals; or goods. It's risky to bet on BTC because it is a very fair weather currency, as of now. It depends on reliable power and Internet, but most importantly it depends on buyers and sellers. You cannot eat fiat money, which BTC is. You always have to exchange it for goods that you need. This means that your reserve currency should be very liquid. BTC is not liquid at all - I cannot go to the corner store and exchange 1 mBTC for a can of Coca-Cola. The largest exchange is in Japan. You can be a millionaire in virtual cash, but still you may be unable to pay your rent.

But if you find a place to exchange BTC for something else, what will the exchange rate be? Note that BTC is not backed by any contracts, loans, futures, etc. - its value is 100% speculative. If Bill sells his 1M BTC to Joe for $1B, that's the price of BTC today. Joe can even do better - he can sell the same 1M BTC back to Bill for the same $1B (so no real USD is required!) - imagine what that will do to the puny BTC market. All this means that when you are in need of selling your BTC, the price, being a lightweight, will become very uninteresting for the seller. This problem is not unique to BTC; however larger, established currencies are better protected from such manipulation. Still, I wouldn't recommend to buy gold as your TEOTWAWKI money. Lead will be far more valuable, followed by brass.

Re:Speculation will never go down

[tftp]

he can probably transfer the money to separate exchanges and no one is the wiser that $BIG_CORP just sent him $100K.

The USD works much better: the $bigCorp simply gives him a briefcase that is full of cash. Here is an example. The advantage is that the cash is untraceable. Say, the politician got 100 BTC. How can he exchange them to USD without going through regular banks? I guess he could go to Japan and bring cash from there... which he can't do without declaring the money. A briefcase fixes this problem easily. A $bigCorp can always obtain cash within the country, and the transfer is not recorded on the Internet.

Re:Speculation will never go down

[Anonymous Coward]

Heck, if you expect hyper-inflation, a month's float on the credit card makes it an ideal currency.

If you are a buyer. If you are a merchant, accepting credit card transactions in a hyper-inflative currency poses additional risks to cash, as the delay from point of sale to receiving payment from the card processor can be 30 days up to 90 days.

Merchants uniformly refusing transactions on credit is a key indicator of the onset of hyper-inflation. I don't think there are many examples from the credit-card era, but this is exactly what happened at the start of the great depression. Merchants began refusing goods on consignment, which dragged the economy into recession. This caused fear of currency inflation, resulting in currency inflation and hoarding. Enter the depression.

Isn't it nice?

[TheloniousToady]

Isn't it nice that Bitcoin can be used to buy both drugs and Senators?

Re:Isn't it nice?

[TeknoHog]

If that's your main problem with Bitcoin, you should be really worried about cash...

Re:Isn't it nice?

[TheloniousToady]

I say...I say...it was just a joke, Son. My main problem is with long-eared varmints like you.

(Sorry for the bad Yosemite Sam impression - just another joke, Son.)

Re:Isn't it nice?

[dyingtolive]

That's a terrible Yosemite Sam impression.

It's a much better Foghorn Leghorn though.

Re:Isn't it nice?

[Anonymous Coward]

Wow, that was a bad Yosemite Sam impression. So bad it looked like Foghorn Leghorn instead.

Re:Isn't it nice?

[CanHasDIY]

Considering that what you wrote looks like something the bastard child of Yosemite Sam and Foghorn Leghorn would say, you should be sorry.

Re:Isn't it nice?

[TheloniousToady]

Oooooo! I hate that rabbit! Smart boy, got a mind like a steel trap – full of mice.

In retrospect, it was a bit of a mashup.

Re:Isn't it nice?

[Wookact]

That is Foghorn Leghorn, not Yosemite Sam.

I'd be more impressed if I saw

[future assassin]

US Representative refuses all donations to his campaign.

Re:I'd be more impressed if I saw

[Ralph Wiggam]

So you only want billionaires to be able to run for office?

Re:I'd be more impressed if I saw

[Overzeetop]

And how is this markedly different from the current situation? How many non-millionaires are there in congress?

Re:I'd be more impressed if I saw

[Ralph Wiggam]

Isn't the point to try and improve the situation?

Re:I'd be more impressed if I saw

[CanHasDIY]

Isn't the point to try and improve the situation?

If we really wanted to improve the situation, we would set the system up so that there is no such thing as buying favors, er, I mean "campaign donations," and instead have all 'bona fide candidates,' i.e. people who get on enough state ballots, get X amount from the Federal Campaign Commission, not a penny less, not a penny more.

Or something to that effect.

Re:I'd be more impressed if I saw

[Anonymous Coward]

And how is this markedly different from the current situation? How many non-millionaires are there in congress?

In the Senate? Not many.

In the House? About 40% of the Representatives have the majority of their wealth held as equity in a primary residence, just like most Americans. About 10% have zero or negative wealth, and another 10% have a net wealth less than one-year's income. Living paycheck-to-paycheck isn't unheard of in Congress.

It is still basically the House of Lords & the House of Commons.

Re:I'd be more impressed if I saw

[westlake]

US Representative refuses all donations to his campaign.

That gives the candidate who is independently wealthy a decided advantage even in the least populated and most compact of districts.

The average congressman represents about 700,000 people.

When labor unions were strong, union workers on the street and canvassing door to door were an enormous resource for the Democratic candidate.

It's naive to assume that financial contributions are the only ones that matters. It's naive to assume that in an era of political action groups that direct financial contributions to the campaign fund are the only ones that matters.

The constitutional guarantees of freedom of speech and freedom of speech imply that even if campaigns were federally funded nothing much would fundamentally change.

Decreasing the size of congressional districts only increases the power of congressional committees --- and committee assignments are prized only when they align with your experience and the interests of your district.

Re:I'd be more impressed if I saw

[OneAhead]

They're all just as corrupt, though.

Image and ideology

[sjbe]

The announcement was made last night at the launch event for the NYC Bitcoin Center, located just up the street from the New York Stock Exchange.

So they are locating this alleged future facility near the NYSE because they hope that will create an illusion of financial credibility.

Center founder Nick Spanos a real estate developer and Bitcoin enthusiast says the Center itself is still in something of a planning stage, existing more as a statement about Bitcoin itself, though he plans on hosting a hackathon later this month."

Oh, so there is no actual center and this is just a bunch of ideological masturbation. Honestly I cannot think of a single reason other than ideology that a real estate developer would have any use for or interest in bitcoin.

Re:Image and ideology

[Anonymous Coward]

Remember, Bitcoin is a carg cult.

Real money has an exchange in New York, therefore Bitcoin needs to have one too.

Re:Image and ideology

[cusco]

It's kind of inefficient to launder drug money using real estate. While the overhead is less than what CitiCorp or Bank of America would charge, it's really, really slow. The developer is probably just trying to expand his clients' options.

Federal Elections Commission Response?

[Bob9113]

This is interesting in light of the recent story stating that the FEC Will Not Allow Bitcoin Campaign Contributions. Maybe the candidate doesn't read Slashdot. I look forward to hearing the FEC respond, and how much of a fuss this guy is ready to make.

Re:Federal Elections Commission Response?

[niado]

This guy is pretty radical. I would personally consider him a borderline nutjob, though perhaps that's too inflammatory.

He actually is/was under investigation by the FEC for some "large" donations made in response to a Native American casino bill that he introduced...

Re:Federal Elections Commission Response?

[Anonymous Coward]

I suspect it won't really matter since this was probably just a publicity stunt anyway, which seemed to work since we're all sitting here talking about him.

Re:Federal Elections Commission Response?

[Registered Coward v2]

This is interesting in light of the recent story stating that the FEC Will Not Allow Bitcoin Campaign Contributions. Maybe the candidate doesn't read Slashdot. I look forward to hearing the FEC respond, and how much of a fuss this guy is ready to make.

The publicity value of the stunt aside; my guess is ultimately he is "accepting Bitcoin" the same way the car dealer "accepted Bitcoin for a Tesla." In other words, convert Bitcoin to dollars via an exchange and give me the dollars. Saying that is accepting bit coins is a bit disingenuous; it's like saying "I paid for my house with Google stock" because you sold enough to pay for your house.

Re:Federal Elections Commission Response?

[Anonymous Coward]

I think your comments are inflammatory towards nutjobs, who collectively want nothing to do with Steve Stockman.

Re:Federal Elections Commission Response?

[Anonymous Coward]

This guy is pretty radical. I would personally consider him a borderline nutjob, though perhaps that's too inflammatory.

Hey Hey! Stop trying to profile and give the rest of us quite happy borderline nutjob's a bad wrap here! We're not interested in this guy upsetting the current bell curve in our stereotype!

Re:Federal Elections Commission Response?

[sociocapitalist]

This is interesting in light of the recent story stating that the FEC Will Not Allow Bitcoin Campaign Contributions. Maybe the candidate doesn't read Slashdot. I look forward to hearing the FEC respond, and how much of a fuss this guy is ready to make.

What happens to contributions that cannot be used, and cannot be refunded (due to anonymity)? Do they become the property of the candidate?

Most entertainment I've had in a while

[Anonymous Coward]

Can be found at the twitter account Shit /r/Bitcoin says

https://twitter.com/shit_rbtc_says

Explain the roadmap

[sjbe]

Or at minimal it could potentially work really well.

Why? Paint a clear and defensible roadmap by which bitcoin becomes a currency that makes sense for a significant portion of the population. Explain how bitcoin provides any meaningful advantage over existing currencies. Explain how the volatility, liquidity and exchange rate risk problems will be resolved. I've got a masters degree in finance and am a certified accountant and I cannot see any scenario in which bitcoin is anything other than a silly idea. Perhaps you are smarter than I am.

Re:Explain the roadmap

[jythie]

Listing yourself as having a masters in finance and being a certified accountant actually does not lend any additional credibility to you other then having completed a higher degree. While there is some overlap between those skillsets and economics, they are actually pretty divergent. You would be just as qualified if you had a masters of philosophy. But anyway.

First, I will put my cards on the table with regard to BTC in that I am not a supporter, I personally think it will fade into obscurity in a few years. However, part of looking at economic issues involves getting outside one's personal views and looking at something in a larger context.

There is a real chicken and egg problem with BTC. Both utility to average consumers and stability are dependent on having a large and active ecosystem. Right now bitcoin is unstable because the volumes are very low, and it is of little use because not many places work in it natively. However its distributed nature does provide utility in that it is low cost for both sides of a transaction and mechanically behaves much like other electronic payment systems, which gives it an practical advantage over current centralized methods. So if the volume gets large enough to counter the stability and utility issues it does have a meaningful advantage over centralized payment systems.

Of course with any chicken and egg problem, it is a tossup if it can ever see critical mass, and it is questionable if its advantages are advantageous enough to push past existing systems, but there is a big gap between unlikely and no scenario.

Smart move

[js3]

Since nobody wants to part with their bitcoin, he will be funding his campaign with fiat currency while reaping the benefits of being to the first to accept bitcoin. It's a win win

Not surprised

[Anonymous Coward]

US senators will trake almost any currency as bribes. Untraceable "donations" have always been apprciated the most.

Understanding how the Fed works should be a prereq

[Darth Snowshoe]

http://techcrunch.com/2013/08/07/bitcoin-clampdown-continues-as-federal-judge-says-its-a-currency/

Pretty soon the federal government is going to reach out and definitively regulate Bitcoin. That is one of the functions of a central government.
Section 8 of the Constitution enumerates the powers of Congress, among which;

"To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"

Why would you vote into Congress someone who seems not to have read, or seems not to agree with, the founding documents?

Ahhh, bitcoin: the currency of the Silk Roads.

[mmell]

I wonder what Steve Stockman will do with all his money there? :^O

Re:Understanding how the Fed works should be a pre

[the eric conspiracy]

I wished they had fixed the standard weights and measures.

Douchebags didn't act on Jefferson's proposal for a decimal system (before the metric system!).

Now I have to own TWO sets of wrenches.

Why would you vote into Congress someone who seems not to have read, or seems not to agree with, the founding documents?

Not bloody likely. The guy is obviously a nut job. Anyway if recent experience holds true he'll get nominated by the Teapublicans and rejected in the general election in a classic foot shot.

FTFY

[cuncator]

"Congressman Accepts BitCoin For His Bribes"

Dogecoins

[GrBear]

Might as well just donate to them in dogecoins, since they're all just bitches of corporations and special interest groups.

Bank Specie

[plopez]

Bitcoin reminds me of the bank specie circulated in the 1800s. Banks would accept legal tender, i.e. gold and silver, as deposits ad then print up specie redeemable at only that bank to be redeemed. If someone accepted it it could be used as de facto currency. There was nothing preventing it from being rejected for payment or banks printing up much more specie than they had deposits for. It was responsible for several major crashes when there was a run on specie and it was discovered the banks could not cover all of the debts or would only redeem it at a fraction of its supposed value.

Interesting Slashdot response

[Anonymous Coward]

If he'd been a Democrat, I suspect the responses would be about how technically sophisticated and geek-aware and forward-thinking he is.

He is, however, a TEA party (Libertarian-leaning) Republican trying to unseat an establishment Republican, so the consensus appears to be: Ha! he's a politician looking for a way to hide campaign contributions!

Of course, nobody (at the time of my posting) who thinks this guy's trying hide his campaign funding seems to remember that president Obama already pioneered the best one yet and we will NEVER know where much of his money came from - team Obama (in both campaigns) encouraged his supporters to contribute in small amounts, on credit cards; As a result, much of his funding was in amounts the government does not require large-enough to require record keeping and there's therefore no record and no checking to see if any was foreign, if any donor violated the limits, and who was contributing. We will never know if somebody like George Soros or some foreign interest setup a call center and a bunch of credit accounts and had an army of underlings make $24.99 contributions that totalled many millions of dollars (Obama spent over a BILLION, busting all previous records). Given that no records were made or kept on the small transactions, nobody now and no historian in the future will ever know who funded much of Obama's campaigns.

The FEC has simply not yet (even at the start of 2014) learned anything about crowd sourcing.

Ha Ha

[Anonymous Coward]

Bitcoin is UNLIMITED, i.e. unregulated in the amount given, unlike cash or check given to USA political campaigns by Federal rules.

Funny

Would it not be funny if the Bitcoins, which can be tracked unlike cash, came from Pakistan, Somilia and the countries of Africa; I.e. Al Quida and the Taliban!

Ho Ho Ho

"U.S. Representative Steve Stockman" aka Terrorist for Texas better watch which way the wind blows and listen for "sounds" like a propeller blade slicing the air above him.

Ah Ha!

Ho hum

[Anonymous Coward]

What's his take on the NSA? Is he for breaking/weakening BitCoin crypto to fight da terrorists! Sign me up! I ain't no commy!!!

Cool guy!

[Anonymous Coward]

Steve Stockman is a cool guy. He spots a Bitcoin QR-Code to raise funds. hrhr.. http://i.imgur.com/xazTutn.jpg

Policy for tangible goods?

[Bust0ut]

I do not believe that our current laws allow for the trading of goods into election campaigns..