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Marc Andreessen On Why Bitcoin Matters (And A Critique)
New submitter Ramtek writes "Marc Andreessen writes an interesting editorial on how he how he believes Bitcoin is the first practical solution to the Byzantine Generals Problem and why that is important. He also addresses many of arguments against its future by its critics such as its current limited use by ordinary consumers, its current volatility, its potential lack of acceptance by merchants, and many other issues. While politically agnostic the piece is squarely in support of Bitcoin but presents a more mature perspective than many current Bitcoin editorials."
eggboard wrote in with a rebuttal: "Marc Andreessen wrote an essay in the New York Times in which he tried to make the case for Bitcoin going mainstream for payments, if not as a currency. After comparing Bitcoin to the rise of personal computers and the Internet, he tries to explain how it eliminates fraud and will solve global money transfers and the plight of the unbanked. I wrote a critique of these and other points in his essay."
The problem with Bitcoin is once a Bitcoin is lost, it's gone forever and can never be replaced. There's no provision in the system to void a coin and then mine a new one.
Therefore if bitcoins are lost at a rate > 0 the probability there will be zero bitcoins is 100% over time.
Bitcoin is the first practical solution to the Byzantine Generals Problem
Why is this the first we're hearing about this? These Byzantine Generals must be stopped at all costs! Inform the TSA! Harvest the metadata! And will someone please get me a burger!
systemd is Roko's Basilisk.
"Critics of Bitcoin point to limited usage by ordinary consumers and merchants, but that same criticism was leveled against PCs and the Internet at the same stage."
Sure, but "at this stage" people who owned PCs weren't mostly buying them to hoard them for their future value.
Hello, I'm a nerd, and thoughtful analysis of bitcoin (cryptocurrencies being inherently nerdy) matters to me.
my, your, his/her/its, our, your, their
I'm, you're, he's/she's/it's, we're, you're, they're
I just hope enough people keep this potential scam in perspective enough not to overextend themselves to the point that they're jumping out of windows when it collapses. I have to get to work and I don't need too many dead bodies in the street blocking traffic.
The cow says "Moo." The dog says "Woof." The Timothy says "Thanks, valued customer. We appreciate your input."
The "criticisms" leveled by OP are largely moot:
A) "Fees" are generally not charged... most transactions have essentially zero cost.
B) The criticism that development of the Internet was "open" but Bitcoin was not is also moot: Bitcoin is open-source, and anybody can examine the code for secrets or flaws.
There are other subtleties as well which I will not get into.
You're conveniently forgetting all the untraceable cash transactions that happen daily, by the billion, worldwide. By your logic, that means every single currency in circulation needs to be shut down.
No colour or religion ever stopped the bullet from a gun
Please, stfu already. What I'm tired of is reading these complaints. Bitcoin is an interesting technology, with huge potential (regardless of the drawbacks). If you don't like it, just skip over, you don't have to spend the time complaining.
`echo $[0x853204FA81]|tr 0-9 ionbsdeaml`@gmail.com
I'm still concerned with the verification time required to show that double spending hasn't happened. It's simple to double spend bitcoins, though within 20 minutes or so the blockchain will show which transaction went through. This means bitcoins can be used for online orders (as long as the seller is trusted because no chargebacks), but waiting around at the Target checkout for 20 minutes can't happen, at least with only direct bitcoin transfers. You could have a processor guarantee with more information to save time, but that's more like an already existing debit account and less like the bitcoin transfers people are excited about.
//TODO: signature
Bitcoin is pretty much the opposite of untraceable. For a bitcoin transaction to be valid it has to be reported in a giant public ledger where everyone agrees on it. If you send bitcoins to someone there is a permanent record of you doing so. Sure the ledger might not associate a wallet address with a particular person, it doesn't for example record 'John Q. sent Bill W.' 100 BTC, but it does record that wallet '1785' sent 100 btc to wallet '1863'. There are a variety of ways to link a particular wallet address to a physical person, especially if that person is attempting to cash out to any Fiat currency (either the transaction has to be done 'in person' or virtually every exchange that allows deposit or withdrawal of fiat currency requires some sort of identity verification, not to mention it's likely being withdrawn to a bank account, which also likely has a name associated with it). The long and short of it is, that if you want to transact business without a paper trail, cold hard, unmarked cash is still the best way to do it.
In a bit of shameless internet panhandling, I accept Litecoin Donations at Lbd2oH9QsthD1GfuUXPyka12YxvWJYnBVf
Oblig: http://xkcd.com/927/
All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
Bitcoin shows it can. But bitcoin itself is probably not the best implementation of this concept due to its flaws like currency lost and glacial trading times.
With BitCoin, the wealth of the entire system has already been largely distributed to a handful of early adopters. For a global currency, BitCoin is hoarded by a large, mostly geek community. The government doesn't have any, which is why the government will do its best to take it down.. and its easy to "take it down" by auditing any company that advertises on the web that they accept bitcoin. (Accepting BitCoin for merchandise has pretty much meant that the transaction(s) will go unreported, including taxes.)
The criticism that merchants will not accept Bitcoin because of its volatility is also incorrect. Bitcoin can be used entirely as a payment system; merchants do not need to hold any Bitcoin currency or be exposed to Bitcoin volatility at any time. Any consumer or merchant can trade in and out of Bitcoin and other currencies any time they want.
So merchants will accept bitcoin by not accepting any bitcoin. Sounds like a circular, contradictory, argument.
How is said company supposed to pay it's employees in bitcoin if it doesn't hold any bitcoin? If said company doesn't pay it's employees in bitcoin, why does it expect common people to be able to pay in bitcoin? Ether you have to be naive enough to think that the Volatility will go away and will be viable to hold, or you have to be stupid enough to think that you can do business in a currency and never "hold" it. Daily stability is what makes currencies work, and volatility has always made them worthless. Why is Bitcoin different then any other currency that the price of the same good Hour to Hour changes in. A deliberate deflationary spiral, a la the Great Depression, doesn't make it any better than the hyperinflation of Brazil in the 90's. Constantly changing prices make it not worth using outside of fanatics.
The problem with Bitcoin is once a Bitcoin is lost, it's gone forever and can never be replaced. There's no provision in the system to void a coin and then mine a new one.
Therefore if bitcoins are lost at a rate > 0 the probability there will be zero bitcoins is 100% over time.
Is that the problem?
I thought it was volatility. No, wait... it was a pyramid scheme. Or rather, because the US won't accept it for taxes. Or was it because it's deflationary? Heck, I just don't know any more.
Economists will demonstrate something by telling stories, let's demonstrate something by showing value.
1) BitCoin has very small per-transaction fees. There are a whopping-big number of credit card transactions each day, each with fees of about 5%. Bitcoin will eliminate most of these, for a whopping-big cost savings.
2) BitCoin increases the market to people who don't have a bank account. That essentially doubles the potential customer base.
3) BitCoin allows for micro-payments. This increases the number and type of sales possible.
4) BitCoin almost eliminates counter-party risk. No authority in the financial chain (PayPal, payment clearing center, credit card company, bank, US government) can affect the transfer. No one can be "banned" (like Wikileaks), no one can be threatened with bad credit.
Assign value to each of these points and total them up (there's some subjectivity), then compare that value with the negative utility from losing coins over time.
Which is worth more?
All the other potential problems are just that - potential problems, and appeals to these problems are merely guesswork and rhetoric.
BitCoin will bring enormous cost savings, and that's why people will use it.,
"Marc Andreessen’s venture capital firm, Andreessen Horowitz, has invested just under $50 million in Bitcoin-related start-ups."
i.e. Even if he doesn't believe a damn word he's saying - he's heavily invested enough to need to make it work.
The wealthy elite don't need another currency.
Those of us living paycheck-to-paycheck need a currency whose value doesn't decay while stored in cash/checking (or the modern equivalent).
Those of us in the middle class need something that won't fall victim to another anti-Wikileaks financial blockade.
So when you say "we", it goes to show which group you identify most with, and how unaware you are of people's needs outside that space.
You lost a $100 bill, but another one can be printed. In fact a lot of bill can be printed. A bitcoin is lost forever, and the number of bitcoin is not infinitely extensible. A better analogy would be that you lost (dropped in maria trench) a pound of gold. There is a reason we went away from metal based currency like gold, and as long as we are in an inflationary economy, fiat currency is much more useful than gold coin, sorry i meant bitcoin. *if* we ever switched to a a stable economy in the future, something like bitcoin would make sense. And only if it was not first-comer get all, otherwise there is noway you would get widespread adoption. Why would anybody use your currency if you hoarded it all ?
C. Sagan : A demon haunted world:
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visit randi.org
Okay, I'll admit regional political constraints may end up affecting Bitcoin - Glenda may ban the usage of Bitcoin in Oz for example.
However, it is pretty universal - anyone, anywhere who has access to the internet can get in on the game, local laws aside. And there's lots of places in the world where Bitcoin, even with all its problems, is considerably superior to any other non-cash alternatives. Just try sending money internationally to your dirt-poor relative in an unstable African nation any other way.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
Sadly, Glenn Fleishman suggests to resort to the use of violence (recourse in a court system, based on government theft and coercion) in order to seek a "remedy" to these problems, whereas many would rather see people be more careful with their transactions and keeping the government out of them (wherever possible).
You are naive. Without government "violence" , "theft" and "coercion", there is nothing stopping someone bigger and stronger using violence, theft and coercion to take all of your stuff. And no, you cannot defend yourself, since you're not the most powerful person. There will always be someone bigger and stronger.
SJW n. One who posts facts.
We don't need another currency.
The target after which bitcoin system is going, aren't the other *currencies*.
The point is not to replace USD or EUR with BTC.
Bitcoin is going after system which transfer money. They point of the bitcoin system is to displace/replace PayPal or Western Union.
The closest thing which ressembles to what bitcoin brings to the table are SEPA payment.
Bitcoin (like SEPA) brings :
- Direct end-to-end payment without any intermediate (as long as both banks support SEPA you can send money accors. As long as both end-points support bitcoin protocol, you can send BTC accross). No need to get anyone else involved (you don't need MasterCard to come in do some shit).
- Complete freedom of choice regarding what you use (The choice of the SEPA-compatible bank that the merchant use, doesn't force me to use a specific bank. The merchant might be using some banks in Germany, and I might be at Raiffeisen in Switzerland. Similarily the bitcoin merchant can be using bitpay for seamless BTC-to-EUR payment processing and conversion, whereas I might be sending my coins from my localbitcoin account). (Compare the situation when paying USD online: both end of the transaction are required to by client at PayPal, for exemple). It goes even further in that SEPA can't directly send EUR from the wallet in your pocket, you need to have an account in a bank. Whereas you can send bitcoins from your own copy of bitcoin-qt client, from an offline armory, etc.
- High speed (SEPA payment take a couple of days, a week in worst case scenario) (bitcoin are even faster payments take minutes, a couple of hours in worst case)
- Low fee (SEPA payment between two compliant bank is a couple of EUR, bitcoin payment are the equivalent of a fraction of cents).
- No charge back. SEPA transfers, money hand exchanges, and bitcoin transfers: when it's done, it's done.
- No payment or account freezing. (All the complains against paypal are gone !)
In addition bitcoin goes a bit further:
- As mentionned above: bit faster, cheaper, than SEPA and you can even be your own bank account.
- bitcoin aren't geographically restricted (SEPA is Europe only. Bitcoins are internet-wide and even a bit more).
- bitcoin aren't fixed to a specific currency like EUR (you could have obtain your bitcoin using CHF, and the merchant you're buying goods from could be converting them to USD).
- a bank account could still be seized by government or law enforcement, whereas, depending on how you setup your stuff, you can be 100% in charge of your account. (possibility for 0% risk of seizing/freezing). That's negligible in the (somewhat) stable environment where SEPA is used, but that a very useful property for people living in unstable regions.
- possible implementation of security at the payment procotol-level. using 2-out-of-3 signature scheme you can implement trusted escrow-like system, except that the escrow CAN'T run away with the money by design.
(The security model is rather different than charge-backs, where the credit-card company or paypal function as jury/judge/executionner at the same time. The model is that in case of dispute, a trusted 3rd party can be asked to arbitrate how should get the money. That trusted party by design has nothing to do with the payment processor or wallet used by the merchant and client, and is agreed upon before hand. With credit cards, the merchant just has to accept that charge-back will happen).
bitcoin has some peculiar quircks:
- banking is about trust (your bank should be trusty) and secrecy (some countries like Switzerland are very paranoid about banking secrecy).
- bitcoin is about handling payment between untrusted partners, and the security comes by the fact that anybody can check the transaction, meaning that absolutely everything is broadcast to everyone else for verification purpose. Bye-bye secrecy and privacy, only pseudonymity is possible. (you can follow all transaction by account numbers, but you won't necessarily be able to stick an exact identity to each number).
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Even if no bitcoins are lost, there are still problems. Whenever you have a fixed quantity of something, there's a real danger of deflation; if more and more people start using bitcoin, the demand for bitcoins will go up and up, the price of bitcoins will go up and up, and this provides a strong incentive for current bitcoin holders to simply hoard their bitcoins rather than use them -- further reducing supply and jacking up the price. This is all econ 101 stuff.
Deflation isn't a problem per se, as long as the rate of deflation is (roughly) constant. However, there is no guarantee of a constant rate of deflation with bitcoins; I doubt it would happen.
Deflation may sound like a good thing (yay, my money is getting more valuable!), but try holding a debt with non-constant deflation; the value of that debt will unpredictably go up and up... Uncontrolled deflation has problems just like uncontrolled inflation.
Say what you will about the Federal Reserve, but at least in principle, it's nice having someone trying to keep inflation/deflation in check (or at least at a constant rate).
Andreessen's valuation of bitcoin doesn't rest solely on bitcoin's value as a currency. From the DealB%k article:
"...Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user...What kinds of digital property might be transferred in this way? Think about digital signatures, digital contracts, digital keys (to physical locks, or to online lockers), digital ownership of physical assets such as cars and houses, digital stocks and bonds and digital money."
So it looks to me like he believes the technology underlying bitcoin as a currency can be leveraged to enable all kinds of transactions - not just purchases of goods and services.
While I tend to agree with the points made by Glenn Fleishman where he challenges bitcoin's utility as a currency, I think Andreessen's broader vision of the utility of bitcoin still stands.
You support monopolies on violence and I do not. I'd like competition on price for whoever would be needed to defend me, and not have to pay twice (or more times) for the same level of service.
You can already pay plenty to have a private security firm defend you.
The government is there to stop you employing your firm to steal stuff from me merely because I can't afford to spend as much on security.
The thing is you ultra-libertarians suffer exactly the same flaws as really staunch communists. Both of you believe that people are better than they are. Communists believe everyone is good enough to contribule properly andnot leech. You believe that everyone is good enough that the most evil+powerful person will not rise to the top and form a dictatorship.
Well maybe you believe that that won't happen because people will band together to stop him. Once you have people grouping together to form a security service, you have de-facto government. And you won't be able to opt out of that either because they can pay their goons enough to force you to have no choice and you are not rich enough to stop them.
SJW n. One who posts facts.
From TFA
"Bitcoin is the first Internetwide payment system where transactions either happen with no fees or very low fees (down to fractions of pennies)."
There may not be large third party fees but that does not mean the transactions are low cost. There are opportunity costs, exchange rate costs, liquidity costs, accounting costs, and more. I keep seeing people fixate on transaction costs as if those are the only costs in play. They are not. Any sane merchant is going to charge for the added cost of handling bitcoins. Even if you can eliminate any middle men from the transaction (unlikely with any meaningful transaction volume), you have plenty of costs to account for.
Since bitcoin is not widely accepted, setting up the transaction is ordinarily going to be more time consuming (thus more expensive) and unless you think your time is worth nothing you incur significant opportunity costs. If you employ an accountant like most businesses do these costs are easily quantifiable. Bitcoin is very volatile and any use of it assumes very significant exchange rate risk. This may reduce in time but it cannot go away entirely. If you use a middle man to facilitate the transaction so that you minimize exchange rate risk, congratulations you have just introduced transaction fees to the party and thus eliminated any point in using bitcoin. The currently transaction fees for bitcoin are low because they have to be, not because of any inherent cost advantage. Literally every other cost related to bitcoin is higher than for a widely accepted fiat currency like dollars.
there are no chargebacks – this is the part that is literally like cash – if you have the money or the asset, you can pay with it; if you don’t, you can’t. This is brand new. This has never existed in digital form before.
There are plenty of ways to exchange money digitally with no possibility of a charge back. Good luck doing a charge back on a wire transfer. Furthermore charge backs exist because of inevitable disputes between buyers and sellers, not to enable buyers to screw sellers. Sometimes buyers misrepresent (both intentionally and unintentionally) what they are selling. Sometimes there is genuine disagreement about the terms of the sale. Sellers may hate them but the exist for a very good reason. Charge backs have a cost but it is not a cost without value. There are plenty of transactions that simply will not take place if the buyer has no independent recourse in the event of a dispute.
people can trade with Bitcoin (anywhere, everywhere, with no fraud and no or very low fees)
The notion that fraud can be eliminated is absurd on the face of it. Bitcoin in no way, shape or form will eliminate transaction fraud. At best it might shift around how it occurs a little. The previous argument (bitcoin is like digital cash) directly contradicts this argument. The lack of charge backs merely changes the type of fraud that can occur giving more advantage to sellers over buyers.
And of course people cannot trade bitcoin "anywhere" because it only works if there is a computer involved on both sides of the transaction. That eliminates a HUGE portion of the global population and most transactions that currently are conducted with cash.
So Marc's article is basically cheerleading Bitcoin. I understand that; he's decided it is the future and has tens of millions invested in making it so. Glenn's critique takes issue with Marc's analogies of Bitcoin to the PC and Internet -- whether those analogies are correct or not seems irrelevant to the main issue: is Bitcoin "the answer".
After reading these, two things make me think Bitcoin won't ever be huge:
1. The assertions about no charge or low charges for transactions. Glenn's seems correct when he says this can't continue. Right now, people justify their computing expenses "keeping the books" by mining, but that will end as we approach the end of bitcoins in the mine. For them to continue providing their service, they have to get some value, and that will come from fees. (Did you see what people are paying to set up powerful enough computers these days? http://dealbook.nytimes.com/20... ) So the nirvana of incredibly low transactions fees vanishes (sale ends soon so act fast -- supplies are limited!)
2. The assertion that the network is safe from attack or manipulation. Right now, bitcoin is too small so no one cares. But when governments start caring, does anyone really believe that the NSA will not throw its resources at this problem if needed? Most stories (including these) quote how it's virtually impossible to have enough computing power to destabilize the network. I've heard these claims before -- in the 1980s, the US government would allow us to export software with a 40 bit salt on our pathetic 32 bit encryption because it was "too secure and endangered national security". Yeah, right. Every single claim has been true for a while -- until it wasn't. Everything is eventually cracked. I'm not sure I'm willing to turn over all my assets to the cloud, and I don't think most people will, either. So bitcoin may be a bit player, but I don't expect it to rise to the levels Marc projects.
Because it can't be used universally.
Nor will it ever be free from regional or political constraint.
The same is true of drugs, which is why it's so hard to buy drugs except for the few countries that legalize them.
Oh wait.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
For many transactions, I expect that Bitcoin will be used the same way. You deposit Bitcoins at your bank. When you use a debit card, you aren't transmitting actual Bitcoins, but rather setting up a transaction that will be settled later by the bank and the seller... just like cash today.
Then what is the advantage for bitcoin? You are involving a middle man with the attendant fees AND you are incurring all kinds of other costs and risks as well as transaction infrastructure that I assure you is not free of charge.
When you deposit your Bitcoin, that will be a true Bitcoin transaction in which your bank will probably merge that value in with other Bitcoins it has obtained.
Then the bank has exchange rate risks and transaction infrastructure that they will have to charge for. Any time you maintain assets in a separate currency you are exposed to exchange rate volatility which is significant even for stable currencies.
Probably gonna be justly modded down for offtopic, but I'm tired of these speculative bitcoin stories.
Generally speaking, I agree. However, in this case, I read both the Andressen article and the rebuttal from top to bottom and found them both interesting. More so, in fact, than the inevitable rehash of all the old Bitcoin comments above and below.
When a poster posts a comment to get a reaction from the crowd, it's called "Trolling". When Slashdot posts an article to get a reaction from the crowd, it's called "News for Nerds". Now that today's Bitcoin article has been posted, we can look forward to today's "News for Nerds" (euphemistically speaking) about NSA. Or did they already post that earlier today?
>Which means for individuals it must be able to be exchanged for basic goods and services
absolutely
> and pay taxes
This doesn't follow - businesses accepting bitcoin aren't going to care that you can't pay your taxes with them directly, and businesses not accepting bitcoin aren't going to care if you can. Accepting bitcoin will be purely based on the economics of their particular business. Much like credit cards - you can't use credit directly to pay your taxes, and yet most retailers accept credit cards despite the transaction fees that usually don't get passed on directly to the consumer. They are simply a convenient economic tool.
Yes, having the government let you pay your taxes in bitcoin would probably help legitimize them and accelerate adoption, but they're perfectly capable of legitimizing themselves without any government intervention, provided that they prove themselves as a valuable enough economic tool.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
Just try sending money internationally to your dirt-poor relative in an unstable African nation any other way.
You do realize that millions of people manage to do this, and have for centuries before Bitcoin existed? See the Hawala system, for example, as a decentralized "network of trust" system for money transfers outside of centralized governmental and banking institutions. Bitcoin is not the first or only system for "independent" money transfers. Given BTC's current large value fluctuations and difficulty converting to cash/purchases (good luck buying a bag of rice with BTC in dirt-poor Africa), it's not even a particularly reliable or useful method today.
The government doesn't have any, which is why the government will do its best to take it down...
The thing is, there is no single government on this planet, because we're not a single wolrd-wide country.
Whereas some government could go on an anti-BTC cursade (as thailand has done) other government could embrace the opportunities to developing businesses.
There will always be places where crypto currencies can develop.
"take it down" by auditing any company that advertises on the web that they accept bitcoin. (Accepting BitCoin for merchandise has pretty much meant that the transaction(s) will go unreported, including taxes.)
Currently, bitcoin aren't useful for anything more than exchanging value between parties (between merchant and customers, or between donators and foundations).
So at some point of time it needs to be converted from BTCs to a local currency in order to buy food, pay bills, etc.
Thus, currently most of the fortune will transit in a local currency, which will be taxed accordingly by the government.
In fact most of current business opperate through a payment processor that converts currencies on the flight, meaning that currently, most real world transaction happen in classic fiat currencies the only differences being the behind-the-scene details how money got transfered (it could have been handled through a 3rd party like Paypal, it could have directly be transfered with SEPA or it could have been transited through bitcoin).
Accepting BitCoin for merchandise in fact means that the merchant will end up receiving USD or EUR and will handle them just like usual.
By the time BTC become accepted enough and stable enough to be worth keeping long-term under that form (That is going to take some time, trust me), you can be sure that the government will publish guidelines regarding the taxation of business done in that currency.
(Just the way that current governments have clear guideline regarding transactions and business done in foreign currencies)
Note that, due to the intrinsic security model of bitcoins (publishing everything in a public ledger that can be checked by anyone), no actual "audits" will be needed with bitcoins as all the relevant information will be publicly accessible to anyone.
And then it will be just a question of which government does what. Regions with governments going berserk will be at a disadvantage to region where business are let to harness the new opportunities offered by this new payment system.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
What happens to Bitcoin (and other/like virtual currencies based on mining difficulties) when Apple unveils their shiny new iQuantum computer, and mining power of the masses (or those of the privileged few) suddenly increase a hundred-billion fold [or whatever]?
Smartphone-based internet access is penetrating even the poorest and most remote corners of the world, and at a far faster rate than credit cards or other banking infrastructure. Can you name any other economic tool besides cash that's even half as universal?
And very, very few places have laws against using bitcoin. Besides which legality has only a moderate effect on most people's behavior, nowhere close to what morality has.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
Yes, it's possible. But have you ever looked at the transaction fees typically associated with the Hawala system?
As for your berating of the volatility and lack of bitcoin-accepting merchants, I agree. But that's a transient phenomena - either the Bitcoin economy will expand until the speculation-based volatility and lack of merchants are reduced to manageable levels, or it will collapse and become nothing more than a historical footnote as the first digital currency to see notable adoption. If it offered real anonymity there might be a long-term place for it in the black market, but as it is it's ubiquity or bust.
In the meantime, as far as buying food in dirt-poor regions of Africa with BTC is concerned I'd bet good money that the guy who visits the city periodically to sell his surplus won't have too much trouble finding someone willing to buy BTC with local currency. Given that fact it's probably a fair bet that he will be willing to sell his neighbor goods or services in exchange for BTC, or at least "cash out" their BTC for them for a reasonable fee while he's in the city (trust being a much more valuable commodity in a small community). Not necessarily the most streamlined system, but vastly superior to trying to send money to someone with no official ID through a banking system that doesn't know they exist, and would require them to come to the city personally to collect if it could be done at all.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
2 key points, 1st regarding internet availability, 2nd regarding connectivity requirement.
1.
Web access is surprisingly better than banking in some countries.
It doesn't require that much. Internet in these countries isn't necessarily running on a backend of copper telephone network set up by the government (which requires a big infrastructure working perfectly).
In developing countries you see lots of small companies jumping in and deploying cell phone towers (GSM) - they are much cheaper than a copper network, less likely to be stolen (you can't steal microwaves between tower. but you can steal copper lines between switches and try selling it for the metal's worth), can rely on batteries when power is reliable all the time, are way much more easy to deploy in remote rural areas, etc.
(That's why cellphone are much more popular than landlines in developing countries).
In worse environment, where Telco aren't interested in yet, or haven't invested already, there are people building networks on a shoesting budget with Wifi, mesh networking, etc.
You can actually be online, while at very lost and remote places.
Meanwhile, banking requires an established bank, with good trust, that foreign banks will accept doing business with, and that locals will accept having accounts.
That won't get seized by the local government or by revolutionaries. (Whereas if you telco goes bankrupt, just get a SIM for another one. If a terrorist attacks blows up the AP you usually connect to, you can find another one to use).
There are very remote place, lost small village, where you can still manage to have some form of online connection, while there are no banks in the vicinity worth doing business with.
2.
the bitcoin *network* requires that a big enough number of nodes are connected at the same time for the protocol to work correctly.
but payments don't require constant online presence.
you can actually send money to a public address which is not in a wallet that is currently connected to the network.
in fact, there are some addresses (like brain wallets, like physical coins, like brainwallet, like armory-generated address) that are by design "offline" until actually used. The paying party (the guy sending money) broadcasts the payment to the public address transaction to the whole network. But the receiving party (the guy receiving the money) keeps the private key secret and not connected to the network until needed.
in some case (armory) it's even possible to *spend* bitcoins while staying offline: the software running on the offline machine can sign a transaction and output a message, which can be stored onto a medium (usb stick, scannable QR-code, etc.) and transported via sneaker net to a point where it can be broadcast to the network.
normally, that was designed and is used most of the time for security: to provide an air gap between the web and the private key.
but the same can also be used for cases were immediate online connectivity isn't possible.
That makes bitcoin a potential candidate to help transferring value to the most remote corner of the world.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Oh no, I believe in the worst in people, which we already have.
The why do you fail to understand that you are not rich enough to stop other people stealing your stuff?
SJW n. One who posts facts.