It's arguable that fiat power for each state similarly reflects preferences of banks, merchants and users. However, some of us doubt that money policy typically favors users.
With government fiat, forking isn't really possible, without a revolution, no matter how unhappy users are. But with Bitcoin etc, that is possible.
It's a common misconception that miners drive Bitcoin policy. In my opinion, miners are parasitic. When I first started using Bitcoin, there were virtually no professional miners. Users did all of the mining, locally. So difficulty was very low. Now, with so many professional miners, difficulty is very high. However, blocks get solved in 10 minutes on average, just as they did in the beginning.
Anyway, it's true that Bitcoin is a fiat currency. But governments aren't in control, and that's a good thing.
Contrary to all the noise, Bitcoin does not need commercial miners. They are parasites. Allowing them to dominate mining was a serious bug. It's users who should be mining.
This will seem pointlessly ideological to most people, but I'm struck by the fact that the bitcoin blockchain is held up as 'proof of work.' There's no work involved besides that to understand the system initially and any code contributions made to the source tree. The actual calculation is carried out by machine. So mining is basically a game for capitalists to invest in industrial hash table production. People who learn about it later and comprehend it in full but don't have any large sums of capital to invest in mining equipment or as a speculative investment don't really derive much benefit from it.
Don't get the idea that I consider it a bad thing because of this - its mere existence speaks to the fact that we've run out of accessible natural frontiers where the curious might stumble upon a fortune, and so we are forced to invent them.
What would be the downside?
This is supposed to be a distributed system.
The Tor Network, for example, has mechanisms for excluding bad participants. There's the bad exit flag, for relays that snoop traffic. Relays that harvest onion hostnames get banned. So do relays that attempt traffic analysis.
There's even a policy of discouraging new relays in commonly-used AS. There's no exclusion mechanism. But I don't see why there couldn't be, if there were too much concentration.
Edit: See https://trac.torproject.org/projects/tor/wiki/doc/ReportingB...
But even then, I prefer it, because with enough interest, it can always be forked. And that's much easier than changing governmental monitary policy. That is clearly dominated by the wealthy.
But it's not your one vote that makes any difference, It's how many votes you can influence. And that's all about privilege and money. Campaign funding. Lobbying.
You clearly have no idea how money is "created" or how the Federal Reserve works.
In order to be bailed out, which is a necessity, they even need contacts as high up as the president.
And even that is ignoring the long history of the government making specific laws specifically to benefit or destroy a single bank.
Nope, no government role here at all. This division simply results in privatizing the profits, nationalizing the losses in trade for having politicians name the owners.
it is if you want to be a reserve bank of course, which is why anyone wants to have a bank in the first place.
Not true. Literally by design actually. This is a common misconception about Central Banks and it's one the US system makes worse by being explicitly public but functioning extraordinarily similarly to a private company.
This particular structure was actually a compromise between various other possible implementations.
But seriously, it's not a private bank. Repeating that just makes you looking like you get your information from websites that put their titles in all-caps and have dodgy grammar.
Gold is still the closest thing to a true non-fiat money but even gold has a value based on a consensus and any monetary form of gold will typically come as some kind of coinage for convenience and quick assessment. You can't eat gold.
Money is a social construct.
You could argue that crypto currency promises a form of fiat that is more transparent, auditable, accurate, and open in general but IMHO that remains to be seen in practice. The shitshow that is most exchanges and the majority of flimsy ICOs is not encouraging. All economic systems have corruption and dumb sheep like speculation but this is ridiculous.
The truth is that the everyday user gets full control over the law of their currency simply by running a full node. Your node will reject any transactions that do not comply with the rules of your node.
The soveirgnty of bitcoin comes from knowing that the devs can't force an update upon you or the network, if you do not consent you can always reject the change.
This is exactly their point. This applies to everyone and all organizational entities.
Think some underestimate firstmover advantage and end-user inertia.
This is a common misconception about bitcoin. Every single node on the network validates every single block, not just miners.
Being able to fake blocks isn't significantly more useful than being able to double spend. I don't see why that would be the tipping point.
The reason you don't see these attacks is that they are difficult and very expensive and they would ruin the value of the coin so you can't even profit off it.
You still have freedom to pick the rules to a small degree though - you choose which blockchain to use. Don't like bitcoin? Try bitcoin cash/ethereum/ethereum classic/litecoin/dogecoin/Monero/siacoin/decred/etc etc.
A common misconception is that miners can pick the rules, but they can't. They can only choose to enforce additional rules (which is powerful), they can't ever violate the original rules.
No man is an island, unless he wants to completely devalue his bitcoin.
It is really no different than the government fining you for disobedience.
There are philosophical theoretical arguments against this, not pragmatic ones.
Bitcoin was made with the idea that a 51% attack would be unlikely and unfeasible; as long as that holds, I'm not sure what value your comparison has. You might as well make a comparison to any other possible disaster. ("A solar flare is a form of state governance that will destroy the value of your coins...")
Not exactly end of Bitcoin danger, is it?
That already has happened which is why people forked. You can live in denial of that fact if you wish but a minority "lost" the "vote" and forked Bitcoin.
http://fortune.com/2017/08/07/bitcoin-cash-bch-hard-fork-blo...
The BTH/SegWit2X fiasco shows Bitcoin isn't "more" decentralized than an oligopoly, an oligarchy, or a plutocracy.
> Bitcoin was made with the idea that a 51% attack would be unlikely and unfeasible; as long as that holds, I'm not sure what value your comparison has. You might as well make a comparison to any other possible disaster. ("A solar flare is a form of state governance that will destroy the value of your coins...")
The fact pro-bitcoin people swear up and down that isn't the case doesn't change the fact that they are effectively the Bitcoin state and that 2-3 of them + a number of smaller people can effectively "vote" to pass "laws" that are enforced against your BTC regardless of your wishes.
Simply because they don't outright steal your BTC doesn't change the fact you have to comply to retain the value of your BTC.
Sure a government might do that, but they could point a gun to every full node owners head and tell them to stop it just like China did. It would also be much cheaper.
Step 2: use this power to force enough transactions to make yourself rich enough to keep 51% power indefinitely
Step 3: profit
There used to be 100+ years ago such as gold and silver coins where if you were able to remove them from Country A to Country B, then Country A could no longer enforce such financial penalties against you. This is what many of the cryptocoins _wanted_ to be.
It needs to be a hard currency that leaves you immune to monetary policy and fines unless you are physically within the jurisdiction of the country.
That statements not a given. If it were so, people would not use credit cards.
In the scenario where you believe bitcoin will be worth $100,000 and you have $7,000 or 2BTC, you decide to buy a computer for $3,500. If the remainder of your value is in dollars, you will have $3,500 in value. If the remainder of your value is in bitcoin, you will have $100,000.
The depreciating asset you've invested in here is the macbook, not bitcoins.
I have a 1.4 bitcoin T-shirt. I don't regret it one bit.
Is that you?
http://i.dailymail.co.uk/i/pix/2013/01/04/article-2257209-16...
Gold is hoarded and traded much like bitcoin, from what I've seen.
Au is indeed useful, but not so much as nearly indicated by its current pricing. There's a _long_ history of human predilection for gold-as-a-magical-substance versus gold-as-an-industrially-useful-element.
Not exclusively, but for the large part.
If you look at historical English prices, prior to the 19th century, the penny was 1/240 a pound, and the farthing ("four-thing" -- one fourth a penny) was 1/960 a pound. Call it 1/1000th.
A labourer's wage might be 20 pound/yr. It's more useful to think of the farthing as roughly equivalent, at least in work-time, to a dollar, and 20 pound as $20,000.
A pound, then, was a lot of money. And even it was (in English currency) silver. Gold were guineas: 1 pound 10 shilling.
It could even be expanded to include inflationary currency in a country where hyperinflation is occurring. People will hold on to USD or some other currency as an investment because it'll be worth significantly more tomorrow than whatever currency the supermarket down the street accepts.
I do think there are some aspects of bitcoin that limit its use as a medium of exchange (transaction times, current lack of stability), but I don't think its the deflationary part.
This doesn't really feel the same. You might use USD to store value because you know that it's value isn't going to fluctuate like crazy from month to month or year to year. So if you can afford to feed yourself today, you can still feed yourself tomorrow. You're still spending your money.
No one I know with Bitcoin spends it, with the exception of a novelty purchase of beer. And why would you, in 4 years the value of bitcoin increased over 10 fold. You'd be stupid to ever spend it while this trend continues.
Noted, and I tend to agree with you on that point.
> You'd be stupid to ever spend it while this trend continues.
For sake of argument, assuming you know this trend will continue you'd be stupid to not put all of your money into it. At which point, you'll ultimately need to spend it to get things you need (whether you're spending it on purchasing other currencies, or spending on the actual goods). Unfortunately, we don't know the trend will continue or if it'll reverse or if it'll level off.
My bet is that it hasn't caught on as a medium of exchange simply because that's not really a major pain point. Cryptocurrency's competition as payment isn't $USD; it's Visa, Mastercard, Discover, Stripe, Square, and other payment processors. People bitch about these companies, but they usually bitch about them from a concentration-of-power-and-fees standpoint (which Bitcoin doesn't actually solve, once you consider the costs of the commercial Bitcoin exchanges), not a convenience one. When it comes to convenience, whipping out a wallet-sized piece of plastic or your cell phone is a lot better than waiting 12 minutes for a transaction to settle on the blockchain.
It died off because _some people_ tried to turn it into a real thing for micro transactions, etc.
Certainly made it hard for me to take it seriously as a semi-layman at the time.
> So that made you less likely to trust the code/governance?
Well... yeah! What's your point? That projects deserve trust based on their branding? I'm not convinced until there's peer approval, especially not if it's piggybacking on something "trendy".
I do agree though it's a shame it got subverted from the ultra low value p2p tipping platform it was becoming. Feels like it's just litecoin left as credible alternative in that area.
That's a wildly inaccurate statement. A fixed exchange rate, such as that imposed on the Chinese Yuan is a complete refutation of your claim.
Go find someone who's willing to take whatever you're trying to use instead, why should other people have to take your form of payment against their will?