Posted on 01/15/2014 8:01:05 AM PST by SeekAndFind
The big online retailer Overstock.com now accepts payment in Bitcoin. That's good news for lovers of liberty because Bitcoins give us an alternative to government-controlled money. Bitcoins are a currency created by anonymous, private tech nerds, not by government.
Governments don't like competition, and our government sometimes bans competing currencies. But as more of us use Bitcoins, and more businesses accept payment in Bitcoin, it becomes harder for government to dismiss the currency as illegitimate, or ban it.
There are two advantages to Bitcoin.
First, it's harder to trace transactions back to people who make trades. I don't particularly care about that, because at the moment, I don't hide anything from my government.
But I do fear government destroying the value of my dollars by printing more of them, the way governments in Germany before World War II and in Zimbabwe in recent decades did, forcing people to make trades using wheelbarrows of nearly worthless bills. Given how my government spends money, and the way the Fed enables this by buying trillions in government bonds, I fear my dollars may someday be worth pennies. So I bought Bitcoins.
Bitcoins are digitally created -- or "mined" -- at a slow, fairly predictable rate. An incomprehensible (incomprehensible to me, anyway) computer algorithm limits their number.
"Bitcoins are not controlled by anybody," explained Mercatus Center senior research fellow Jerry Brito on my TV show. "It's a new Internet protocol, like email or the Web ... a digital, decentralized currency that allows you to exchange money with anybody in the world fast and cheaply without the use of a third party like PayPal or Visa or MasterCard."
I bought Bitcoins even though I don't understand how Bitcoin mining works. I also worry that someone will hack into my Bitcoin account and steal my money, or maybe hack into the whole system and devalue Bitcoins by creating millions of new ones.
But risky as this new currency may be, I still trust it more than I trust politicians. When my fellow baby boomers demand our promised Medicare payments and discover that government promised trillions more in benefits than it can ever pay for, I assume politicians will print dollars until they are nearly worthless.
So, I put my savings into Bitcoins when they sold for $140 each. I was late to buy -- smarter people bought for much less. But today each Bitcoin is worth more than $800. So, yippee for me! I'm so glad I put all my savings into Bitcoins.
OK, I didn't really. It's just (SET ITAL) part (END ITAL) of my savings -- but it's good to hedge against political venality!
The biggest risk to private currencies may be that governments will become jealous of how well these upstart forms of money work. If people all over the world decide to trade in digital currencies, it will become more obvious than ever that government isn't what makes economic activity happen.
It will also be harder to trace -- and tax -- people's economic activity. Government doesn't like to get sidelined. To its credit, the German government announced that it recognizes Bitcoin as a legal alternate currency.
The U.S. government flexed its muscles by warning that it has the right to regulate Bitcoin transactions. The FBI already shut down a website called Silk Road that accepted Bitcoins as pay for services both legal and illegal (like drugs). Sen. Chuck Schumer, D-N.Y., called Bitcoin "money laundering" and demanded a crackdown. That's not surprising, since Schumer wants to ban lots of useful things, like energy drinks, high-frequency stock trading, free-market wages and 3-D printers that can make guns.
So I'm glad Overstock.com and other businesses are out there, reminding people that law-abiding citizens use Bitcoins to buy legal things. Last month, I used them to buy Christmas gifts.
But Bitcoin's legitimacy shouldn't depend on whether people do things with it that politicians consider wholesome. When government restricts drugs, online gambling and other popular activities, it just makes anonymous, hard-to-trace currencies more popular.
Anything that diminishes the power and control of the big-government/big-corporate criminal monopoly is good.
But I do fear government destroying the value of my dollars by printing more of them,
Hey, I am not afraid to use Bitcoin. I use it, the retailer accepts it, I get the goods I want from the retailer. I get what I want.
I’ll take the risk as long as I can use money I can afford to lose.
Sure, it may be good for a few people buying stuff online, but for the billions of daily transactions that occur worldwide?
RE: So with the BitCoin system of competing “miners” trying to be the first to reconcile a long chain of transactions, how many transactions per second can the BitCoin system sustain?
THAT my friend is the potential problem with Bitcoin. As the number of users JUMP exponentially, so will the need for computing power to VALIDATE the transaction.
Who has that kind of computing power eventually?
Perhaps there is now with the invention of cryptocurrency?
We have that computing power. It has exploded in capacity in just 7 months. 1000 times the calculating power today then in June 2013. Makes for a good heater too !
Running about 1.5 terrahash/second now
Only if the Interwebs are still alive.
Uh oh....a realtively positive bitcoin headline.
Surely this is a sign of the apocalypse.
Curious...why don't you just use barter to conduct all business then? Bitcoin is simply another venue for barter and you don't have to have an invasive computer download.
14,765.18 Terra Hashes / second, with more being added by the minute.
Curious... why do you care what I do?
If they're not, we'll have a lot more to worry about than just our money.
As a great man once said, “On a long enough timeline, the survival rate for everyone drops to zero.”
Yep, I've using a miner now to keep a little grow room for vegetables seedlings warm.
I always carry a few Bitcoins in my pocket just in case.
;o)
“I fear my dollars may someday be worth pennies.”
Compared to the date upon which the first income tax was signed into law, your dollar is already worth less than two cents.
Money and credit is a matter of trust. It is your choice to trust Bitcoin but there is nothing of value to back it up except trust, which is fine and again your choice.
I don’t trust the govt anymore than I trust Bitcoin. There is nothing to back up the govt either
History tells me not to trust Bit coin or govt.
So that leaves the question of what or who I should trust..............
Down off the courthouse roof, my FRiend. Just asking to find out the attraction to bitcoin, itself. Bartering has been around for a hundred years.
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