How To Use Bitcoin – The Most Important Creation In The History Of Man

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michaelsuede

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michaelsuede
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Libertarian News reports:

Recently I wrote an article entitled The Most Dangerous Creation In The History Of Man. The article covered the emergence of Bitcoin; an electronic peer-to-peer currency that has no central banking server, is untraceable, and essentially can not be taxed through coercive measures. The article makes the point that if a currency can not be taxed and controlled, eventually it will topple the coercively funded fascist control grid you call the modern State. Read more about it in this Bitcoin forum post that explains it in more detail.

I’ve received several requests for more information about how people can put Bitcoin to work for them. Most articles on Bitcoin, and even the Bitcoin site itself, don’t give a clear top to bottom description of how common users of Bitcoin can put the currency to use.
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The article goes on to explain how to use the new currency and why it is superior to all other currencies in existence.

This will change the face of the planet.
 
Ah geez. Of everyone who might have introduced bitcoins, did it have to be you?

Bitcoin is a good contender for internet cash. Tokens are limited and hard to forge, and the system of trading them is user-friendly, decentralized and (can be) anonymous. There's any number of digital money systems which sacrifice one of the three, but Bitcoin's the first implemented scheme which does a pretty good job of all three at once. It's easy enough to use, it's not likely to fold overnight (decentralization means no single point of failure), and the difficulty in tracking it means it's difficult to stop at the ISP level as well.

The result can be, imo, used to power an economy on the far side of the internet - where resides darknets and anonymous networks like Freenet, tor and i2p. Currently the only real economic activity going on there heavily involves drugs and stolen credit card info. Bitcoins might give it some legitimacy.

In practical usage, that means using bitcoins for the purchase of money/goods/services will be made illegal as soon as drugs dealers and money launderers find enough bitcoin users to run their respective operations at a noticeable rate. Which I think is fine - for reasons I won't bother to elucidate here, the introduction of an internet-only currency scheme would come at a net benefit.
 
Moar like facepalm. The problem with liking fringe ideas is that there's often some nutjob who likes it even more, and is very vocal about how it will, well, "topple the coercively funded fascist control grid you call the modern State."

It won't.

It's a neat concept with an interesting economic niche already waiting for it. That's all. No revolution today, move along.

The most important creation in the history of man, by the way, was probably domestication. Hard to find time to implement cryptographic currency systems when you've got all that hunting and gathering to do.
 
michaelsuede said:
Libertarian News reports:




The article goes on to explain how to use the new currency and why it is superior to all other currencies in existence.

This will change the face of the planet.
Click to expand...

Soo.. It just a kind of online money like the online money on the Playstation network? And like these form of money you have to buy it with real money and thus it is backed with real money. (or can you get bitcoins without using money?).
Only because it is not on a secured server it is very fraud sensitive. Are the bitcoins on the others computer bought with money or did he hack his file to up his amount?
 
michaelsuede said:
Libertarian News reports:




The article goes on to explain how to use the new currency and why it is superior to all other currencies in existence.

This will change the face of the planet.
Click to expand...
I see a number of problems with the implementation of this system, notably it isn't credit card friendly, mac, android or iphone friendly, let alone all the other phones that do banking now-friendly.

I've posted at various times about these types of possibilities arising, and knocking state sponsered currencies out of the ball park. It's really a matter of when, and how, the consumers of the world decide to take this matter into their own hands.

More importantly, from that article I don't see it forming a true trans national currency. Is that correct? So if you buy bitcoins in USD, you have bitcoins with a floating future value relative to USD as well as other currencies and commodities?
 
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Just give us your real money and you can be part of the toppling of those evil economies.

Yeah, i won't be turning in my Canadian dollars just yet.
 
The money is "manufactured" on the computers themselves, in exchange for donating processing power to the validation of transactions (as I understand it). The group network validates each other, so if someone hacked the bitcoin count on their own machine, others would immediately catch it.

My problem with it is as the money supply increases towards the hard limit, the value of each new bitcoin diminishes. This gives most of the wealth in the system to early adopters, which says to me that even if it becomes popular it's primary purpose will be to enrich its founders.

ETA: Not to mention those accumulating bitcoin have not created any wealth for it to represent.
 
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Bitcoin: The fiat currency for those who cry out for a return to the gold standard!
 
michaelsuede said:
Libertarian News reports:




The article goes on to explain how to use the new currency and why it is superior to all other currencies in existence.

This will change the face of the planet.
Click to expand...
Wouldn't it be more transparent to say "I wrote an article on my personal web page" and "I go on to explain..."?
 
Yeah, right now the "value" is based entirely on market speculation, with all the nuttery that libertarian greed can impart.

I had a small bitcoin service running for a while, but postponed it when the worth of a bitcoin increased 10x overnight. We won't see any real use of bitcoins until the bubble bursts and the perceived value stabilizes. This may need to happen multiple times.
 
mhaze said:
I see a number of problems with the implementation of this system, notably it isn't credit card friendly, mac, android or iphone friendly, let alone all the other phones that do banking now-friendly.

I've posted at various times about these types of possibilities arising, and knocking state sponsered currencies out of the ball park. It's really a matter of when, and how, the consumers of the world decide to take this matter into their own hands.

More importantly, from that article I don't see it forming a true trans national currency. Is that correct? So if you buy bitcoins in USD, you have bitcoins with a floating future value relative to USD as well as other currencies and commodities?
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It's iPhone friendly.

I can stand at a checkout counter, open up a browser on my iPhone, and send payment from my browser in less time than it takes to swipe and sign a credit card.

But that aside, there is no reason why devices can not be manufactured to make transactions even faster than that.

Credit cards were invented to access bank accounts.

Other cards will be invented to access Bitcoin wallets.

Private exchanges can be setup by anyone in any country to exchange any currency for Bitcoins.
 
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uk_dave said:
Absolutely! The irony is deep with these liberterian types.
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I think they only want to avoid taxes, which this will not achieve. If the currency has value and you are exchanging it, then that exchange is taxable, whether the currency is gold, USD, chickens, or rice. The misconception that bartering avoid taxes is just one Wesley Snipes away from costing someone a lot of money. Real money, not chickens.
 
michaelsuede said:
It's iPhone friendly.

I can stand at a checkout counter, open up a browser on my iPhone, and send payment from my browser in less time than it takes to swipe and sign a credit card.

But that aside, there is no reason why devices can not be manufactured to make transactions even faster than that.

Credit cards were invented to access bank accounts.

Other cards will be invented to access Bitcoin wallets.

Private exchanges can be setup by anyone in any country to exchange any currency for Bitcoins.
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You are correct, I would take exception to the comment about opening a browser. That is slow and a bit iffy depending on reception where you are standing or where you are geographically. For example I've seen truly terrible Iphone reception at many places between San Francisco and Los Angeles.

Also, there are obvious security issues with iphones and androids.

So the credit card-->bitcoin is basically the fix, or some native phone app like the people in Korea has that lets the directly access banks.
 
michaelsuede said:
It's iPhone friendly.

I can stand at a checkout counter, open up a browser on my iPhone, and send payment from my browser in less time than it takes to swipe and sign a credit card.

But that aside, there is no reason why devices can not be manufactured to make transactions even faster than that.

Credit cards were invented to access bank accounts.

Other cards will be invented to access Bitcoin wallets.

Private exchanges can be setup by anyone in any country to exchange any currency for Bitcoins.
Click to expand...

So you can get all the convince of money, and all you have to do is take your real money, turn it into fake money, learn to use the fake money system, have one of those devices handy, and hope that the place your going to does too.

Where do i sign up? www.reinventthewheel.com i assume?
 
Dr. Keith said:
Bitcoin: The fiat currency for those who cry out for a return to the gold standard!
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A fiat currency is one that is enforced by government decree and backed by nothing.

A market currency is one that people voluntarily chose to use.

Historically market currencies have been commodities based because this means they can not be infinitely reproduced.

Bitcoins meet all the qualifications of a gold standard and then some.
 
sadhatter said:
So you can get all the convince of money, and all you have to do is take your real money, turn it into fake money, learn to use the fake money system, have one of those devices handy, and hope that the place your going to does too.

Where do i sign up? www.reinventthewheel.com i assume?
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You act as if the dollar is "real" money, when in fact bitcoins are more "real" than dollars.

The Fed has a printing press.

Bitcoin production will top out and no more coins will be able to be produced.

Bitcoins take real energy and time to produce.

Dollars do not.
 
Bitcoins meet all the qualifications of a gold standard and then some.
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Well, except the "gold" part.

Regarding the time issue, transactions (in my experience) usually take about fifteen minutes to complete. They appear almost immediately, but it takes a bit of time for other machines to process and confirm the transfer, which you need for it to be valid. So it's currently not really debit-card-swipeable at this point in time, though with a large enough number of clients, maybe one day. For buying **** on the internet it's fine though, and for face to face purchases actual money works better anyway.
 
michaelsuede said:
You act as if the dollar is "real" money, when in fact bitcoins are more "real" than dollars.

The Fed has a printing press.

Bitcoin production will top out and no more coins will be able to be produced.

Bitcoins take real energy and time to produce.

Dollars do not.
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This has nothing to do with the point mentioned in my post, which is that your reinvented wheel is a pain in the *** compared to normal money.

When giving an option, an expecting people to pick it, it must be a better option.

And as a side note, regurgitating a point you do feel comfortable with, because you don't have one that fit what i said , makes you seem really dim.
 
sadhatter said:
This has nothing to do with the point mentioned in my post, which is that your reinvented wheel is a pain in the *** compared to normal money.

When giving an option, an expecting people to pick it, it must be a better option.

And as a side note, regurgitating a point you do feel comfortable with, because you don't have one that fit what i said , makes you seem really dim.
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I wouldn't call a new 256 bit cyphered peer-to-peer currency "reinventing the wheel"

I would call our current dollar a reinvention of fractional reserve banking, which has been around since bankers learned they could issue more paper than they actually had gold in reserves.
 
Beelzebuddy said:
Moar like facepalm. The problem with liking fringe ideas is that there's often some nutjob who likes it even more, and is very vocal about how it will, well, "topple the coercively funded fascist control grid you call the modern State."

It won't.
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And the reason it won't is because the modern State is neither "coercively funded" NOR "fascist", at least no free society (US, Europe, etc) is.

Nonsense like those two phrases is why no one takes Libertarians seriously on the few issues they are good on.

Not that michaelsuede will admit it, but for the benefit of someone new to the forum who might otherwise buy into his BS, I'll explain:

All modern, western societies exist by the mutual consent of the persons governed by them. No one is putting a gun to any citizen's head and saying "you will be American/British/French/etc". People choose to be members of their society on an ongoing basis by continuing to live in and receive the benefits of that society.

Now, under the social contract (acceptance of which is implicit in any society), you get the goodies, you shoulder the responsibilities as well. That includes obeying laws (insofar as they are just laws), paying taxes, etc.

And it's a comprehensive contract (all or nothing), not a cafeteria plan.
 
Beelzebuddy said:
Yeah, right now the "value" is based entirely on market speculation, with all the nuttery that libertarian greed can impart.
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A lot of things "value" is based on market speculation. World currencies, oil, gold, housing, to name a few.

sadhatter said:
This has nothing to do with the point mentioned in my post, which is that your reinvented wheel is a pain in the *** compared to normal money.

When giving an option, an expecting people to pick it, it must be a better option.

And as a side note, regurgitating a point you do feel comfortable with, because you don't have one that fit what i said , makes you seem really dim.
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It's only a pain in the ass because it is new and the infrastructure to use it isn't widely distributed yet. Did you complain about credit cards when they first became available? How about blue ray video format? Cell phones before they actually had good signal strength in most areas?

All modern, western societies exist by the mutual consent of the persons governed by them. No one is putting a gun to any citizen's head and saying "you will be American/British/French/etc". People choose to be members of their society on an ongoing basis by continuing to live in and receive the benefits of that society.
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Minus the first 18 years of your life of course. And after that point you're probably poor and your only option is to go to college or get a job. Pretty hard to leave the country and go somewhere else when you have no money. Also most western societies are basically the same when it comes to daily living. Whether I live in the US, or Britain, or Germany, my daily life will be practically the same. But please go tell some 16-18+ year old working at Mcdonalds that they have complete control over their life and do everything they've done because they want to and they love their society. Enjoy your spit burger.
 
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Animus said:
A lot of things "value" is based on market speculation. World currencies, oil, gold, housing, to name a few.
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Key word there was "entirely," actually. Right now Bitcoin doesn't have much of a use beyond speculation, whereas oil can be burned, housing can be lived in, gold can be hocked to crazy paramilitary survivalists to sit on. Furthermore Bitcoin won't have much of a market until its price stabilizes, and its price won't stabilize until the bubble pops. Then, maybe, we can start putting it to good use.
 
Beelzebuddy said:
Key word there was "entirely," actually. Right now Bitcoin doesn't have much of a use beyond speculation, whereas oil can be burned, housing can be lived in, gold can be hocked to crazy paramilitary survivalists to sit on. Furthermore Bitcoin won't have much of a market until its price stabilizes, and its price won't stabilize until the bubble pops. Then, maybe, we can start putting it to good use.
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I doubt it is in a bubble.

You are confused.

The US treasury markets are what is in a bubble.
 
Beelzebuddy said:
Key word there was "entirely," actually. Right now Bitcoin doesn't have much of a use beyond speculation, whereas oil can be burned, housing can be lived in, gold can be hocked to crazy paramilitary survivalists to sit on. Furthermore Bitcoin won't have much of a market until its price stabilizes, and its price won't stabilize until the bubble pops. Then, maybe, we can start putting it to good use.
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I'll take your word for it that the value is inflated by speculation and there is a bubble. I just meant that no currency has any use beyond its transferability into other currencies or goods. Their value is entirely based off what people believe it to be worth, the security with which they feel it will continue to function as a means of exchange. In this regard bitcoins are no different than any other form of currency.
 
The_Animus said:
I'll take your word for it that the value is inflated by speculation and there is a bubble. I just meant that no currency has any use beyond its transferability into other currencies or goods. Their value is entirely based off what people believe it to be worth, the security with which they feel it will continue to function as a means of exchange. In this regard bitcoins are no different than any other form of currency.
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In some ways, their value is WORSE, as they are NOT currency. Only government has the right and power to issue currency, and enforce its acceptance as legal tender.
 
Muldur said:
In some ways, their value is WORSE, as they are NOT currency. Only government has the right and power to issue currency, and enforce its acceptance as legal tender.
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Only because that is the agreed upon social norm. There is no law written in the universe concerning economics, or that only government has certain powers. Regardless of where the money comes from, it only works because of a collective agreement that it works. In that regard, the more people who decide to trust and use bitcoin, the more "real" it becomes as a currency.

You mentioned enforcing its acceptance as legal tender. If I own a business and decide I only want to accept bitcoins and refuse to accept dollars, are you saying the government has the ability to force me to accept dollars?
 
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michaelsuede said:
I doubt it is in a bubble.

You are confused.

The US treasury markets are what is in a bubble.
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You should be buying bitcoins yourself then instead of encouraging us to do so; they'll only be worth more in the future.

I shall, for my part, quietly attempt to give them real worth instead, by using them to do things aside from speculating about their value.

Animus said:
I'll take your word for it that the value is inflated by speculation and there is a bubble. I just meant that no currency has any use beyond its transferability into other currencies or goods. Their value is entirely based off what people believe it to be worth, the security with which they feel it will continue to function as a means of exchange. In this regard bitcoins are no different than any other form of currency.
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Quite true, I agree. Sorry for the confusion, I'm no economist so I don't speaka the lingo, you jive?

The problem is right now, bitcoin's real value can't be estimated in any reliable fashion, the way real-world currencies can be compared against the GDP of the issuing nation or whatever. No one is using bitcoins to conduct trade except as a novelty and, unsurprisingly, a handful of gambling sites. It has no use except to be converted back into other currencies. If there's ever been a more suitable comparison to dutch tulip bulbs, I'm not aware of it. Even those could be planted to make pretty flowers.
 
Beelzebuddy said:
The problem is right now, bitcoin's real value can't be estimated in any reliable fashion, the way real-world currencies can be compared against the GDP of the issuing nation or whatever. No one is using bitcoins to conduct trade except as a novelty and, unsurprisingly, a handful of gambling sites. It has no use except to be converted back into other currencies. If there's ever been a more suitable comparison to dutch tulip bulbs, I'm not aware of it. Even those could be planted to make pretty flowers.
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I see. Currency has no use except to be converted back into goods or services. Bitcoin has no use to except to be converted back into currency.

So it's like a one step removed currency. That second cousin who's name you can't remember.

ETA: I was reading more info on the bitcoin wiki. So it seems that the people who use this early on, will end up with more bitcoins simply because of the system they use for creating it. Also the static number of overall bitcoins means that people are encouraged not to spend them because as people spend them, there are less total, and the value rises. I will say it is interesting though.
 
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The_Animus said:
Only because that is the agreed upon social norm. There is no law written in the universe concerning economics, or that only government has certain powers. Regardless of where the money comes from, it only works because of a collective agreement that it works. In that regard, the more people who decide to trust and use bitcoin, the more "real" it becomes as a currency.

You mentioned enforcing its acceptance as legal tender. If I own a business and decide I only want to accept bitcoins and refuse to accept dollars, are you saying the government has the ability to force me to accept dollars?
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Yes. Dollars are the ONLY legal tender in the US, and their acceptance is enforcable by law.

Now, the tricky part is that the tender laws don't force businesses to accept PHYSICAL cash. They can force you to use a debit/credit card, but they cannot refuse tender denominated in dollars.

A good example of this would be car rental. A car rental company can force you to use a credit/debit card to rent a car, instead of putting cash up front. But they cannot require, for example, that the account that card is linked to be denominated in Loonies, Euros, Pesos, etc. US dollar denominated tender offers are ALWAYS legal in the US (unless they change the law).
 
The_Animus said:
You mentioned enforcing its acceptance as legal tender. If I own a business and decide I only want to accept bitcoins and refuse to accept dollars, are you saying the government has the ability to force me to accept dollars?
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Of course they do. Either you accept the mandated currency of your nation or the government closes your business.
 
Muldur said:
Yes. Dollars are the ONLY legal tender in the US, and their acceptance is enforcable by law.

Now, the tricky part is that the tender laws don't force businesses to accept PHYSICAL cash. They can force you to use a debit/credit card, but they cannot refuse tender denominated in dollars.

A good example of this would be car rental. A car rental company can force you to use a credit/debit card to rent a car, instead of putting cash up front. But they cannot require, for example, that the account that card is linked to be denominated in Loonies, Euros, Pesos, etc. US dollar denominated tender offers are ALWAYS legal in the US (unless they change the law).
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So an institution, the government, has control over the creation, total number, and overall value of the dollar, and forces the entire country to use this as a means of trade. Sounds like there is quite the potential for abuse in such a system.

Okay so they don't have to accept paper dollars, but they do have to accept some form of payment which can be linked to or valued using dollars.

So could I open a store and only accept treasury bonds, or gold, seeing as it can be valued in dollars? What about a mcdonalds big mac?
 
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The_Animus said:
So an institution, the government, has control over the creation, total number, and overall value of the dollar, and forces the entire country to use this as a means of trade.
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No. The government influences all those factors. Private actors (banks, citizens etc) controls most of the creation & total number of dollars, and the value of the dollar is determined by what people are willing to pay for it (just like anything else). What system would you prefer?
 
Sceptic-PK said:
No. The government influences all those factors. Private actors (banks, citizens etc) controls most of the creation & total number of dollars, and the value of the dollar is determined by what people are willing to pay for it (just like anything else). What system would you prefer?
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They determine new creation of money, and since the dollars value is largely influenced by total number of dollars in the system, this gives them very heavy influence.

I don't know what system I'd prefer. Why isn't US currency entirely digital and fixed at a set total at this point? The flexibility to trade into as many decimal places as you want prevents a shortage of money supply regardless of how much population or overall wealth rises.
 
The_Animus said:
They determine new creation of money, and since the dollars value is largely influenced by total number of dollars in the system, this gives them very heavy influence.
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This isn't true in any way. There are no physical dollars associated with the creation of a new bank loan.

I don't know what system I'd prefer. Why isn't US currency entirely digital and fixed at a set total at this point? The flexibility to trade into as many decimal places as you want prevents a shortage of money supply regardless of how much population or overall wealth rises.
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But does not allow for economic growth. At all. Deflation would be the only bizarre way to grow the economy. Kind of. The whole economy is based on not having a fixed number of currency. It's why we got rid of the silly gold standard.
 
michaelsuede said:
Libertarian News reports:




The article goes on to explain how to use the new currency and why it is superior to all other currencies in existence.

This will change the face of the planet.
Click to expand...

I didn't bother to read the article (ts;dr), but I took the liberty of reporting your post as a Rule 6 violation.
 
IMST said:
This isn't true in any way. There are no physical dollars associated with the creation of a new bank loan.



But does not allow for economic growth. At all. Deflation would be the only bizarre way to grow the economy. Kind of. The whole economy is based on not having a fixed number of currency. It's why we got rid of the silly gold standard.
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Well I consider banks loans to be lending money they don't really have, but that's an entirely different topic.

Could you explain in more detail why it would not allow for economic growth?
 
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