A solution exactly like what you've just described is in the works. Zyocoin is a P2P Bitcoin exchange utilizing multi-signature issued "debt", where debt can be BTC, USD, EUR, or bananas.
Real contracts are created with verifiable blockchain-based timestamping.
Debt is issued with colored coins.
Ripple attempts to do something like this but I feel it must be done natively on the blockchain to see widespread acceptance.
Python programmers wanted. Send a BitMessage to BM-oq7iLGGH7e7JJaqiTcUj1qGQYxeZVo65b; IM zyocoin@jabber.org or join #zyocoin on Freenode.
Are you using Entangled? I've looked at doing the same thing, also using colored coins. But it's going to take a lot of work + luck to go up against someone as well-monetized as Ripple.
Plus, the technical issues are not even the biggest challenge, it's forming and managing a clearing house in a decentralized manner. I'm not sure it's possible. But someone has to physically conduct the exchange of dollars, euros, or bananas. Otherwise, you've just developed a p2p version of localcoins.
Billions of dollars are wasted to fight against a analgesic and therapeutic drug that could help millions; this world haves very dumb and/or corrupted people in charge.
Really? Have you had extensive, first-hand experience with Rick Simpson oil? Are you prepared to tell me there's zero medicinal benefits to it?
Listen, there's just not going to be scientific proof behind a mostly illegal substance with legions of powerful people incentivized to stop it from growing in popularity. Feel free to evaluate the video testimonials though: https://www.youtube.com/playlist?list=PLwBs_ihArc1lCYDym-DH4...
Bitcoin shares many similarities with hemp oil, you can always tell the armchair opinions from the guys who actually use it.
I'm saying that there aren't cancer cure-all properties, which is not "zero medicinal benefits". I think medical marijuana has objective benefits. "Big pharm"/"Big cancer" conspiracy theories and the DEA's influence are irrelevant.
I'm sorry, but your comment seems blinded a bit by ... I'm not sure what the right word is? angst, self-hatred, jealousy? There's a lot of negativity in general coming from the HN crowd towards BTC, I'm guessing because everyone here was more than capable of installing the original Satoshi client and mining early on, but chose not to or didn't hear about it. With BTC now on the rise, of course it all seems so obvious, and oh so unfair.
Everyone had the chance to mine in the earliest of days, that's certainly true for me and I sometimes kick myself about it. Hindsight is 20/20.
Well, rather than armchair psychology, you could consider the points I made themselves. Do you think there is a good reason for the world to transfer massive wealth to those who currently own bitcoins, rather than setting up an alternative (assuming that the fascinating technology of Bitcoin solves a problem that anyone except ideologues have in the first place)?
I considered your points. You pretend as if the claims of early adopters are to blame for fueling the recent "frenzy". Really? Are you really saying a group of early adopters are entirely to blame for a market appraising a formerly unknown asset?
If you lacked the vision, the luck, the timeliness, etc. of an early adopter, fair's fair. Pay them their respects. I still kick myself for not having my wits about me when I first heard about Bitcoin.
As for your alternative, I don't see why not. You could create a clone of Bitcoin today, why not do it yourself? They did that with Litecoin, too. In fact the author of Litecoin created it because he felt "wronged" the same way you do now. He felt as if too many people missed the boat with Bitcoin, and clearly people should have a second chance of early adopting such a revolutionary concept.
As you'll see from my comment history, I was playing with significant money in Bitcoin early on. I have at least paper gains that are quite satisfying. Nothing I'm saying is personal or is based on any kind of jealousy. It's weird of you to assume that it is.
I call BS here absent a Bitcoin signature proving your supposed ownership of "significant" Bitcoins. If anything is weird, it's that someone who was supposedly interested enough in Bitcoin to buy or mine a significant amount "early on" has spent the vast majority of your past umpteen comments bashing Bitcoin. I think it's sour grapes, and it surprises me that so many on HN, who cheer on every Instagram knock-off that's sold for millions of dollars, are so bitter toward the person or persons who invented and built a truly revolutionary technology that has the potential to vastly change the way we do business.
I'm not "bitter" at Satoshi Nakamoto, or really at anyone. I'm trying to do what I can, as I have from the beginning, to prevent people from falling for a scam. I'm not alone in doing this, and many other good analysts are doing the same thing. Is it worthwhile to try to apply arbitrary, amateur, and frankly embarrassingly bad psychology to all of them?
It is unfair of jnbiche to close discussion by simply saying sour grape, but you seem to be too determined - maybe even evangelical looking at your nick - perhaps its something to do with leftist ideology?
In any event, the article raises two points.
1 - the currency is deflationary.
I'd argue that it is an inherently stable currency no different than gold. Many economists may say that a hard currency is not a good basis for an economy, but many economists say it is. That includes Hayek who won a Nobel for his theory of how best to allocate resources.
So to say that bitcoin will fail because it is deflationary is at best an opinion. You're free to hold it but that hardly makes bitcoins a scam.
2. Something better may come along.
That is basically saying bitcoins may fail, therefore it is a scam. In that case, most of the companies YC funds are a scam. They too disproportionately reward the founder and the first employees. You may say but they create a hard product of value or offer a service. Firstly, I'd say bitcoins is a product. It is not tangible, it is only 0s and 1s, but it is a product created out of applied mathematical theories and formulas and computational power. I'd also say it is a service for obvious reasons.
Even assuming you disagree with the latter points, lets go back to the YC funded company. Lets say they create something like google - a service - facebook - a service - wordpress - a product. Lots of people invest in these - making the founder and first employees rich beyond means - then something better comes along. Are you suggesting google is a scam? Oh but google has value. Say who? It provides a service - so does bitcoin.
The world already has done so. And of course there is a good reason. Like with every creation, they made this possible, they took the risk, maybe even high risk since the government could have gotten involved, and now they are rightly being rewarded for it.
What do you suggest, we tax them 90% so that we can all be equal?
My dislike of BTC is if it prevents an anonymous cryptocurrency from being deployed -- either by displacing it (like craigslist displaces better alternatives), or by collapsing and scaring everyone away.
If it's just a proof of concept of cryptocurrency in general, it's cool. It might remain a decent currency for certain uses in addition to other more transactional currencies, though.
Yeah, some guy recommended I mine back in the earliest of days. "If only I knew then what I know now" ... hahah. So sick to think that my old Core 2 Duo could've made me a millionaire. I was turned off by the ugliness of the bitcointalk forum, and decided it wasn't worth the time to understand the Satoshi client.
I don't think it's right to get on the case of the earliest bunch though for not being more egalitarian. How could Satoshi have been more fair to you? After all, nearly everybody had the short-lived opportunity to mine 50 BTC blocks with ease. Clearly Satoshi believed in his concept more than most of us did, and deemed it worthy of putting in lots of effort into mining. He did his part to warn the world of his invention. Fair's fair.
Bitcoins have at least some value on the Deep Web, the stock market is the ultimate castle in the air investment. That doesn't mean people shouldn't use it, but it's a pretty poor investment.
I continue to watch the Wall Street bubble unfold, fascinated, popcorn at the ready. In the end it'll be like sending herds of cattle through a cheese grater.
Facebook's market cap is $63,000,000,000. If the market cap of Bitcoin were just 10% of Facebook, each Bitcoin would be worth about $500. 1% and it's about $50.
Can a global financial system conceivably give the world just 10% of the value of Facebook? Because just ten percent ... and one BTC is $500.
Oh, but clearly society demands Farmville, you say? Clearly we don't need a new financial system ... more than we need to know who Joe Bob hooked up with this weekend.
As if there's no pain being solved here by Bitcoin. As if there are no problems with USD or the EUR. As if Cypriots are just pissed off over spilled milk right now. After all it's only a "haircut".
It's so funny to see how most people on HN are here to make businesses that scale infinitely. What could possibly, POSSIBLY, scale faster and more widely than an open source global currency? The price increase in the last month represents a trickle of people around the globe exchanging fiat for BTC. Just a trickle. Whereas most people are obviously hesitant to invest. That would include most people on HN.
The supply of Bitcoin is ridiculously tiny. Only 11,000,000 in total are in circulation today, let alone available for purchase on the market.
Sellers wanted. I acquired enough BTC to make me happy without being over the top - and I'm not ever exchanging it back into any other ass backwards asset class, gold and silver (and USD) included. Early adopters of BTC are from what I can tell mostly the same way, if crazier than I am.
Bitcoin is valuable because the world desperately needs to escape the current financial system. Individual sovereignty and financial privacy are the most scarce resources on the planet, bar none. It's not too late to acquire BTC, put it in a brainwallet and carry around $10k at all times. Now let's all go back to flinging monkey poop at consumers over the Internet.
A global financial currency can surely give the world many times the value of Facebook. But the price increase does not represent interest in Bitcoin as a currency, but instead as a speculative investment vehicle and/or store of value. You yourself talked about not exchanging your bitcoins: it sounds like you wish to own bitcoins, but not circulate or spend them. They are not a currency for you.
This is as predicted by those who say that Bitcoin is a deflationary currency.
Let's assume that the fundamental value of 1 BTC is over $1,000 as in your scenario. That still doesn't necessarily explain rapid increase in the exchange rate. Are people suddenly discovering these fundamentals? Why? (In which case the exchange rate will continue to climb.) Or are we witnessing another speculative mini-bubble? (In which case the price will drop temporarily before resuming a generally upward trend.)
> Bitcoin is valuable because the world desperately needs to escape the current financial system. Individual sovereignty and financial privacy are the most scarce resources on the planet, bar none.
Someone needs a way to sell firearms, ammo, and canned goods for BTC. That sounds funny, but I'm dead serious. Local laws against shipping arms can often be worked around.
The armory used to exist; basically silk road for guns. I am not aware of any other tor hidden services offering a market, but it is doubtless that these transactions are actually taking place (maybe not for canned goods).
There's also no way to recover your Bitcoins if they get stolen (as many, many people have discovered already). My credit card on the other hand, can be made whole again with a simple phone call to my bank (YMMV, please no stories about banks being big meanies).
Firstly, USD, being the world reserve currency, has value because of its current ubiquity in international trade, NOT because of its legal tender status in America.
FYI: "Legal tender is currency that cannot legally be refused in payment of debt. Private businesses may adopt their own policies on whether or not to accept cash as long it doesn't violate state law."
So when you say this: "all governments and businesses can not refuse to be paid in dollars"
You've misinterpretted the law.
And when you say this: "Thus, if you try to pay me in Bitcoins in return for mowing your lawn, I can laugh in your face, but I can't refuse your dollars and demand that you pay me in Bitcoin."
head asplode!
This is just utterly mind boggling. In what world does a service provider HAVE to accept whatever payment terms the customer demands of him, even if the customer demands something the service provider never agreed to in the first place? If I'm a business, and I tell you I'll provide X service for you, but only if you agree to pay me in BTC, and then you turn around after I'm done and say "HAHA J/K LOL here's some USD", I have every right to tell YOU to fuck right off.
"as long as it remains illegal to pay salaries in Bitcoin"
Talk about painful levels of ignorance. I would love to see you try to substantiate this utter falsehood.
"because I can be 100% certain that I can buy the things that I want in dollars"
in addition, he might be able to buy the things he wants in dollars but they may cost more dollars than he has. i.e. inflation is a bigger factor for $ than it is for BTC.
"as long as it remains illegal to pay salaries in Bitcoin"
Talk about painful levels of ignorance. I would love to see you try to substantiate this utter falsehood.
Sure, glad to elaborate.
US Code 29 CFR 531.34 lays out the requirement for minimum wage, and spefically calls out that minimum wage must be "payable in cash or negotiable instrument payable at par". Cash is pretty clear -- it means dollar notes and coins. The definition of a negotiable instrument is that it must be exchangeable for a fixed amount of money, specifically money that is the fiat currency. (http://business.olivet.edu/classes/bsns3511f/pdf/bltch19.pdf)
I think my "utter falsehood" is relatively well-supported by the law and administrative precedent of the US government, at least as it pertains to payment of the minimum wage.
Taking your first point second:
Firstly, USD, being the world reserve currency, has value because of its current ubiquity in international trade, NOT because of its legal tender status in America.
FYI: "Legal tender is currency that cannot legally be refused in payment of debt. Private businesses may adopt their own policies on whether or not to accept cash as long it doesn't violate state law."
So when you say this: "all governments and businesses can not refuse to be paid in dollars"
You've misinterpretted the law.
And when you say this: "Thus, if you try to pay me in Bitcoins in return for mowing your lawn, I can laugh in your face, but I can't refuse your dollars and demand that you pay me in Bitcoin."
head asplode!
I apologize, I overreached.
You are completely right, two entities can pre-negotiate a contract for any kind of exchange of payment and good/services in advance.
However, barring any such advance negotiations, you can't refuse my payment in dollars for a debt incurred by delivery of a good or service, and I can't force you to take any other form of payment.
This doesn't pertain to a retail purchase, since there is no debt until the item is delivered -- if you want me to pay you in BTC, or jellybeans, or rubles for that candy bar, that's fine.
But, if you mow my lawn for $25 and I don't specify how I'm going to pay you, then you are within your rights to demand that I pay you in dollars, and not $25 worth of BTC.
Surely the BTC price couldn't have anything to do with factors external to the market participants themselves ... ?
Whenever the BTC price moves up or down, do you honestly believe "It's those blasted early adopters, at it again I tell you"
You also appear to assume, incorrectly, that early adopters are just itching to exchange out into fiat currencies, as if their eyes are glued to their computer monitors, just waiting for their lucky day to "cash out BIG" ... into fiat currency. Hmmmm
This goes without saying. As with PM investors, many Bitcoin holders see real issues with fiat currency, specifically that banks are a terrible place to put your life savings.
>Whenever the BTC price moves up or down, do you honestly believe "It's those blasted early adopters, at it again I tell you"
Because of bitcoin's ludicrous generation curve the early adopters own what, 3/4 of all the bitcoins, guaranteed to be at least half of all those there will ever be? So yeah, price movements are likely to be their influence because they're the biggest owners.
>You also appear to assume, incorrectly, that early adopters are just itching to exchange out into fiat currencies, as if their eyes are glued to their computer monitors, just waiting for their lucky day to "cash out BIG" ... into fiat currency. Hmmmm
It only takes a few. They're sitting on these bitcoins that have shown themselves to be highly volatile, and at the moment their value is increasing by the day. Sooner or later many of these people are going to be in a position where they could get several hundred thousand dollars by selling up, if they're not there already. Is a crash certain? No, but it's wise to plan for that contingency.
It's a double edged sword. The unique point of difference benefits of BTC itself remain unchanged regardless of current market price, and furthermore, should early adopters dump all old coins onto the markets all at once, the lower price would only make it more affordable for newcomers to buy at discounted rates.
Recall that early adopters of questionable loyalty to BTC already had a chance, or two or three, to cash out at very favorable rates. Many did. The result is Bitcoins continue to drift into stronger and more loyal hands. Meaning, as time passes it grows less and less likely for there to be ANY event capable of destroying confidence in the markets. If you get into BTC at this point, you should know fully well what the risks are.
Real contracts are created with verifiable blockchain-based timestamping.
Debt is issued with colored coins.
Ripple attempts to do something like this but I feel it must be done natively on the blockchain to see widespread acceptance.
Python programmers wanted. Send a BitMessage to BM-oq7iLGGH7e7JJaqiTcUj1qGQYxeZVo65b; IM zyocoin@jabber.org or join #zyocoin on Freenode.