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No Intrinsic Value? What Is The Value Of Ability To Sidestep The Money Center Banks, The Federal Reserve & The ECB?
My Twitter followers know that I attended the North American Bitcoin Conference in S. Beach Miami last weekend. Here are some keepsakes from the visit as well as a video answer to the new media pop financial pundit, Peter Schiff's assetion that Bitcoin has no intrinsic value.
The proprietors of a Bitcoin ATM, due to appear in the states next month.
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I did see you using internet technology to transfer an electronic signal using a third party's infrastructure.
And it is here where your argument falls on its face. The electronic signal belongs to no "third party" either you or I know of. The Internet technology and infrastructure - contrary to your assertion, belongs to know single or individual "party" third or otherwise just as the open source nature of the Bitcoin protocol belongs to no third party.
What you did see was the Bitcoin protocol being used as a layer on top of the world wide web which is based on the IP (Internet protocol).
It's best to admit when you're wrong instead trying to pile one hole-ridden argument on top of another.
Just my humble opinion.
Keep in mind that Net Nuetrality may be coming to an end.
I see more and more evidence of Google filtering search results.
While TCP/IP may be available to anyone, your packets still have to travel through physical infrastructure that is controlled by third parties.
Unless you design a way to control which physical infrastructure your packets route through ...
It's laughable you think of yourself as a humble person. And its beyond naive to suggest unfettered access to the internet will always be available.
Isn't this the part where you're supposed to say, "OK Reggie, you're right and I was wrong. I learned something, and I thank you for that"???
Thank you for blindly assuming the internet is free.
The fact that, in Reggie's opinion, no third parties own the internet's infrastructure and no third parties maintain control of the internet are absolutely screaming red flags.
invective yes, suppied facts no.
But the distribution network is not the currency, the currency are the 1's and 0's. While the network itself is utilitarian, the currency is not. Just like all the other 1's and 0's on bank computers or the pieces of green paper, or whatever color paper, depending on the country. While you can say the bank buildings and clearing networks are utilitarian, the exchange of the bits of data are pretty close to useless as you can get. And it fluctuates in value, sometimes violently, like any other currency.
look at history at what has been used as currency in non-barter systems, ie. sea shells, beads, etc.
I'm not saying bitcoin doesn't work or won't work, just trying to clarify that it's not utilitarian as a currency, in and of itself. It's more akin to cash, but with limits on printing, but still subject to an overbearing government that doesn't like competition and will likely look to crush anything it can't control.
The protocol is the 1s and 0s as well. It takes a rather intense technical mind to be able to separate the two.
Bitcoin does not have much you can compare it to for it is a new creature. This is not to extol, cult-like, upon its virtues - after all, it has its problems as well. The gist of my message is that comparisons to fiat and historical means of measures of value are for the purposes of attempting to simplify an explanation, but in reality Bitcoin is an animal all to itself and has no historial comparison.
Think of a nuclear bomb compared to dynamite, yes, they both go boom, but....
I won't claim to have a technical understanding of the protocol behind the cryptocurrencies, because I don't. The complexity of the cryptographic algorithms, mechanism of transfer, the hoped for anonyminity, etc. seems to be another level of complexity on the relatively simple task of exchanging a currency for a good or service to help facilitate commerce. If the bits of data exchange represent information about a bitcoin wallet or information about your checking account, the basics seem to be the same. Exchange of bits of data. Just like checks began to supplant cash and credit cards supplanted checks, the goal is the same, even if the species used was somewhat different.
The "newness" of it is that it is outside of TPTB grasp...for right now. Considering how quickly people started getting arrested once the "value" of a bitcoin (in dollar fiat currency terms) started going parabolic, it seems to me that there is a risk in playing with these new "currencies". If it plays out like copyright infringement and downloading and distributing bootleg material where there are a few high profile cases, but people continue to do it, then it could get somewhere, but if .gov feels overly threatened by it, well who knows. It's probably a bit early to tell.
Who was that guy that got arrested for minting silver coins? These people just don't like the competition.
At least you are starting to comprehend the limitations of your argument against bitcoin. That's good and I commend you for that, seriously! Now, if we can just get Krugman, et. al. to do the same...
To answer a few of your questions...
"The complexity of the cryptographic algorithms, mechanism of transfer, the hoped for anonyminity, etc. seems to be another level of complexity on the relatively simple task of exchanging a currency for a good or service to help facilitate commerce. If the bits of data exchange represent information about a bitcoin wallet or information about your checking account, the basics seem to be the same. Exchange of bits of data. Just like checks began to supplant cash and credit cards supplanted checks, the goal is the same, even if the species used was somewhat different."
The easy way to get an answer to this question is to ask the depositors in Cyprus the difference between Bitcoin and the 1s and 0s in their checking account, at least the part of the checking account which TPTB allowed them to get access to. This would have been likely impossible to do with Bitcoin.
If it plays out like copyright infringement and downloading and distributing bootleg material where there are a few high profile cases, but people continue to do it..
The reason why the copyright infringement cases went differentely with bit torrent, as opposed to Napster, is because the action against bit torrent cannot practically be enforced while Napster was centralized around a server thus an easy point of attack. Which model do you think the cryptocurrencies resemble?
Who was that guy that got arrested for minting silver coins? These people just don't like the competition.
That guy just happened to speak right after I did at the event. We had a long and informative chat afterward regarding what happened to him and how best to avoid it. You see, nobody wants to get into a fight with the government because practically nobogy wins it.
Speak of the devil...
I wasn't actually making any arguments "against" bitcoin, as it were, just pointing out, that like anything else, there are positives and negatives.
Yes, you can easily get up and leave the country and have access to your bitcoin anywhere in the world. But, for the most part, as of today, you still need to exchange it for some sort of more widely distributed currency. So, you leave the US and get to venezuela, what do you do? Exchange it for dollars? How do you get it into your bank account, get the dollars, or get the pesos? How do you buy toilet paper?
Cypress is a good example. What happens when all the banks are closed? How do go to the grocery store and buy food with bitcoins if the merchant doesn't accept it? Who will buy and sell merchandise in bitcoin if .gov says it is illegal, like they did with gold? They don't have to go after torrents or servers to get to the bitcoin, they just have to go after the merchants.
While bitcoin definitely has it's strengths, it also has it's weaknesses and having a realistic view of both it's positives and shortcomings I think is important. If I had a lot of extra money sitting around, I probably would put some into bitcoin, but I don't, so I have to recognize the reality of system I live in and interact with and determine what best suits my situation. And right now, the system I live in makes me use their 1's and 0's, and if I want to use a different 1 or 0, then they get peeved.
Stay thirsty my friend.
Keep up the good work Reggie. You are making the future happen.
Ahh yes, the network cuts out many fat cats, which in itself should be note worthy.