Bitcoin… discuss.
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https://en.bitcoin.it/wiki/Main_Page
“Bitcoin is an experimental, decentralized digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network.
The original Bitcoin software by Satoshi Nakamoto was released under the MIT license. Most client software, derived or “from scratch”, also use open source licensing.
Bitcoin is one of the first implementations of a concept called crypto-currency which was first described in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities.”
From an interview on FoxNews I gleaned the following: Bitcoin is decentralized, unregulated and untraceable. It can be used for legitimate (gambling) and illegitimate transactions (pornography).
I was unclear on whether it was only for legal transactions. You can buy guns (legal) but can you buy child pornography also? Guns came up in the interview as a purchase that you want to be untraceable- you don’t want the govt. to have a record. Why you don’t want the govt. to know is another issue.
I understand from the interview that Rep. Charles Schumer (D-NY) is upset that bitcoin is unregulated (can’ t stand the idea of no govt. control, I guess). It is expected that bitcoin will go the way of PayPal and eBay which are regulated by the players not the govt.
That’s all I have at the moment.
Seems like a very risky proposition.
Based on what, Paul?
Father, perhaps a bit of context. Are you looking to produce them? Use them as currency? Accept them from benefactors?
Sounds like PayPal on speed!
Think I’ll wait awhile before I put my two bits in on this subject.
What or who controls the supply of bitcoin? What is its stability compared to the Federal Reserve Note? What or who enforces contracts in bitcoin?
I think this is a possible example of a coming paradigm shift (though that term has suffered from overuse). As a student of history, I look forward to seeing if it lives up to its potential of taking power from central governments and further democratizing the financial world, or if it ends up as another cog in the wheel. As a citizen, I worry that it might lead to some destabilization (not that everything’s wrong with that, but it’s still a worry).
At this point I’m not interested enough to start using it, but I’m watching how things develop with some degree of interest.
what is your esteemed reflection on the “motto” that seems to be imprinted on some of the physical bitcoins that have been produced “vires in numeris”? I would have argued for “vis” rather than the plural, but I’d be interested in knowing your thoughts, Fr. Z.
“If I had a bitcoin for every time someone asked me what a bitcoin was really worth, I have no idea how much money I’d have.” — Josh Greenman, via Twitter
Bitcoin?
Isn’t this what pirates use to do to see if thier gold doubloons were real?
Reading “Tale of Two Cities” right now with the kids. Some commentary on people spending their time in imaginary and dull endeavors while closing themselves off from the world. Don’t know a thing about bitcoin, but I’m Luddite enough that I’d rather as a society we put our effort into legalizing trade in milk and eggs (yes, it’s legal in my state to smoke pot but not to trade your chickens eggs for anything) than legitimizing a form of currency not overly far removed from trading points in video game world.
Sadly, this sounds like the geeks version of Matthew 6:20:
“But store up for yourselves treasures in The Cloud, where neither moth nor rust destroys, and where thieves do not break in or steal;
The Chicken
What is the purpose of a 12.5 cent coin?
Never heard of this before. My first thought was of a rather nice German beer. It does sound interesting (the bitcoin), but I agree with those suspicious of something that seems rather ephemeral.
Currency is issued in most circumstance by a national government or national bank. Bitcoin is a threat to this, being fiat, anonymous, limited, controlled by nobody, and easily transacted. Bitcoins may be a good fall-back currency during deep persecution. As the Romans required false worship of a idol for economic activity, our government may eventually find ways to try to break Christians. Bitcoin is a great way to get around that. The FBI tried to destroy it but failed. It cannot be hacked, inflated away, etc. Bitcoins can be exchanged for Dollars, Euros, Yen, etc. I recommend you start accepting them!
Bitcoin is very useful for purchasing items that I do not want the government to know about. Why don’t I want the gov’t to know about it? Simple.
It… is…. none… of… their… bloody… business.
Period.
Andy Lucy,
Eggs could be useful for that, also.
I’m not sure, if we are feeling vulnerable and out of control because our money supply is in the hands of distant powers we have no influence over, why we would move to use something as currency that is or could easily soon be in the same place.
Not bloody likely with bitcoin. That is why TPTB are trying to stop their use… they have no control over them, and it drives them crazy. And that is a very good thing. The less control the gov’t has over me and mine, the better I like it. If you want to use eggs, more power to you… of course, you also take the risk of the gov’t seizing your eggs and charging you as a domestic terrorist for using eggs as a possible bioweapon because of you disseminating them. Bitcoin, not so much.
It’s ingenious for what it is, however, the main problem I see is that when the power goes out, or the internet fails, it disintegrates. Therefore, it fails as a “crisis currency” for the most likely scenario in which you’d need it: a total economic collapse and failure of the dollar. I just can’t see how it beats gold or silver as a currency. Those metals have the same benefits without the dependency.
Andy Lucy,
You suggestion of eggs being considered a bioweapon is not as far off as you might think. A gallon of milk spilled at Wal Mart has to be cleaned up as if it were hazardous material. The justification for this is that milk is a “bodily fluid”
joeclark77, bitcoin is an excellent hedge against governmental intrusion, provided one uses adequate encryption. But it is only one part of a wise based plan for keeping fluid. Gold and silver have the handicap of actually having to store the bullion. That makes it liable to governmental confiscation. But only a fool wouldn’t put some of their capital into precious metals… same with bitcoin. It spreads the risk around, and allows for more flexible response to differing situations.
MichaelJ- Oh, yes. I know exactly how likely that scenario could be, having taken many fire service seminars over the years. If there is a way to make that type of charge stick, hey, presto… if you are a “terrorist,” they can ship you to Gitmo, never to be heard from again. Bada-boom-bada-bing.
How about beads?
I’ve got some pretty beads, anyone want to exchange for a gold piece?
I just heard about bitcoins this past weekend. Fox News ran a story about it. It sounded interesting, but my concern is in not knowing who controls it. Who holds your money and where? I don’t understand that part of it.
Also, I have held off on investing in gold or silver because I don’t know how to tell the difference between a legitimate precious metals dealer and a scammer. Do any of you who have invested in precious metals already have some links you can provide for articles to educate the ignorant (like me) about this type of investment?
In researching a different topic recently (textiles in the 1800’s) I was sidetracked to a different article regarding currency and tariffs and the invention of paper money. I thought I read that one country’s government (I think it might have been France, if my memory serves) made using gold as currency/legal tender illegal at one point. Can that still happen today? If someone puts all of their investments in precious metals to avoid a global economic collapse, can the U.S., E.U. or other nations outlaw preicous metals as legal tender? I mean, if eggs can be outlawed, is there really any safe place to put your money?
Sorry to be so ignorant about this. I’m willing to do my own homework if someone will be kind enough to point me in the right direction toward accurate, reliable information.
Steve Gibson’s Security Now! podcast covered bitcoins in great detail. (Video here, text transcript here.
I came away from it thinking that it was a complicated and speculative investment. It went from a couple of bucks per coin to over $30, and now down to $13.50. And it’s not a very liquid market. I don’t have to explain to anybody how a dollar bill, a share of stock, or a chunk of gold is a store of value, but I have to do a lot of explaining for bitcoins. I can find many people that will trade for that dollar bill, share, or chunk of gold, but it is hard to find someone willing to trade for a bitcoin.
Finally, if the EMP that Fr. Z is always banging on about comes to pass, bitcoins will be less than useless. They’ll be non-existent. If you’re really paranoid about financial collapse, I’d advise sticking to guns, bullets and canned goods.
OrthodoxChick,
I think one thought on a safe place to put your money is “into skills”. If you are really looking at a worst case scenario, the only thing of value that will not be easily removed from your possession is your abilities (well, and I guess your tattoos. . . ).
Tim Ferguson, a fairly common legal expression is “ultra vires.” This means “beyond one’s powers, outside the scope of one’s authority,” etc. “Vires in numeris” seems possibly consistent with this usage, although “vis” also makes good sense. I am well trained in Latin, but I do not now have easy access to lexicons to be able to say anything beyond this vague and impressionistic response. But I hope it may be of some value.
When I was a lad, I was a paid barker and I had to sing out : “shave and a haircut, two bitcoin”. I didn’t last long because a competitor sang the same but he cut off the coin.
Jerry – My reaction exactly. :)
It’s not a real currency, much like the dollar. Real currencies come from the mutual transactions of people as a preferred medium of exchange. Historically, this has been gold and silver. This provides a solid store of value that is not subject to the whims of kings and princes.
What’s the problem with the dollar? The Fed can change its value however it wishes. The same problem is inherent with Bitcoin. It’s not backed up by anything, and thus is not stable. I will not use it. I am forced into using the dollar, but I will stay away from Bitcoin.
@jmvbxx:
Risky in that it is very close in concept, theory and usage as ecash, a similar decentralized, non-state electronic cypher currency. I knew Ryan Lackey who was one of the originators of ecash and of whom Wikipedia states (in part): “While a student at MIT (he later dropped out due to financial constraints) Lackey became interested in electronic cash and distributed systems, originally for massively multiplayer online gaming. This interest led to attending several conferences (Financial Cryptography 98, various MIT presentations), participating on mailing lists such as “cypherpunks” and “dbs”, and eventually implementing patented Chaumian digital cash in an underground library, HINDE, with Ian Goldberg, named after Hinde ten Berge, a Dutch cypherpunk also present at FC98. In part, he contributed to the cypherpunks movement as one of the longest Anonymous remailer operators.”
Most of those who are at the core of “Anonymous” are barely able to be charitably classed as nominal christians. In fact a great majority are avowed athiests and operate against everything the Church recognizes as good.
I hardly want to throw my support behind such and many of the promoters and developers are drawn from this very segment of society.
There are two main questions about Bitcoin:
Q: Should I set up my computer as a “farm” to generate Bitcoin when I’m not using it?
A: It’s not worthwhile because of the cost of electricity.
Q: Is it safe to use Bitcoin?
A: There have been security problems in the past at some Bitcoin “exchanges” that allowed perpetrators to give themselves Bitcoin balances. This would automatically have an inflationary effect harming the value of others’ Bitcoin holdings.
“There have been security problems in the past at some Bitcoin “exchanges” that allowed perpetrators to give themselves Bitcoin balances. This would automatically have an inflationary effect harming the value of others’ Bitcoin holdings.”
How is that qualtiatively any different from the Federal Reserve diluting the US monetary supply, thereby causing inflation and devaluation of the fiat currency in use by the United States?
“How is that qualtiatively any different from the Federal Reserve diluting the US monetary supply, thereby causing inflation and devaluation of the fiat currency in use by the United States?”
It’s not. That was my objection. Why replace an unreliable and imagination-based form of exchange controlled by a system populated with self-interested individuals we have no influence over with another unreliable and imagination-based form of exchange controlled by a system populated with self-interested individuals we have no influence over?
Particularly when, in doing so, we do actually undermine the legitimate interest of a free state to control its currency, an interest we would defend if we approved of the state and that we will miss should the state ever return to a condition we approve of?
If the state were to actually control its own currency, I would heartily approve. However, they allow a private bank to set US monetary policy.
Using Bitcoin is one way of keeping the gov’t out of my personal business. Should they return to the gov’t setting monetary policy, I likely would continue to use Bitcoin, as I do not ever see the gov’t taking any LESS of an interest in minutely controlling our lives.
How ’bout using bitcoins to purchase gold and guns? ;D
After all, they can’t confiscate what they don’t know you have! ;D