Posted on 11/03/2015 8:27:03 AM PST by Another Post-American
Those 21 million bitcoins are divisible down to eight decimal places. We call .00000001 bitcoin a “satoshi” in the creators’ honor. That can be changed if necessary. The entire world economy can be run on one bitcoin if necessary.
“having some of the properties of precious metals”
I’ve invented something called Invisible Goldâ„¢ and it too has SOME of the properties of precious metals (and SOME of the properties of BitCoin for that matter), so I’m nominating Invisible Goldâ„¢ for our new reserve “currency”.
Personally, I think Invisible Goldâ„¢ is far superior to BitCoin because Invisible Goldâ„¢ has the world “gold” in its name.
Bitcoins are actually entries on a cryptographically secured ledger, updated every few minutes in a way that can never be altered (the blockchain). As such, data in the blockchain is incorruptible. That means that you can put transaction data such as the purchase of a house or car in the blockchain and use it to prove title in the future, without the cost and burden of existing title recording. This alone gives bitcoin a potential value of billions of dollars.
Honduras has announced it will be moving its land registry to such a blockchain, and companies are springing up that offer to record data on the blockchain for a small fee.
For example, let's say you have a great photograph and want to sell it. To prove ownership down the line, you should first generate a hash of the digital recording of the photo, encrypt it and have it recorded in the blockchain. That will establish that at a particular point in time you had access to the photo and were claiming ownership of it. This sort of thing will become a big deal in years to come.
“The entire world economy can be run on one bitcoin if necessary.”
The entire world economy can be run on one pound of gold if necessary.
In any case, I was responding to a skeptical claim that there are enough bitcoins around to be a reserve currency. That's a non-issue, that was my point.
I think a far more likely scenario, that will not be made public, is for “private currencies” to be created, that skirt all the banking and national laws and taxes. Its drawback is that it is much slower than virtual transactions.
It follows many of the rules of money laundering, except that no money is involved in crossing borders. A courier arriving in a country presents a code to a given person, then later, they receive a delivery of the money they have requested.
“You think you can run a modern economy on physical gold? There would be practical problem with the divisibility of one pound of gold for the whole world.”
Not at all. A pound of gold could be assigned a worth of a thousand trillion dollars, and subdivided accordingly. Or if it makes you feel any better, then we could use a thousand pounds of gold instead of one.
“And gold can’t be used for digital transactions.”
It already is. Almost gold transactions are already traded digitally without any physical gold actually changing hands.”
It is not so much what can bitcoin do but what can the blockchain do. One fascinating application is called Namecoin and is still under development. Namecoin will use the bitcoin blockchain as a DNS server.
There will eventually be 21000000.00000000 of them. More than it seams.
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