What problem does bitcoin solve? I've tried to understand the need for it, but just don't get it.
(1) Fixed total supply, so it can't be manipulated by central banks.
(2) Fast online transactions (e.g. Paypal, without the problems of Paypal); ease of developing all kind of Web services around this.
(3) Anonymous transactions are possible, which can be beneficial in many ways (for example, not getting taxed...)
(2) meanwhile I can buy things with one click using dollars.
(3) tax evasion, drug dealing and money laundering are not things that society generally wants to facilitate
Yes, the handful of people who understand how our banking and currency system works but aren't in a position to suckle at its teat.
(2) meanwhile I can buy things with one click using dollars.
But try transferring dollars electronically, or even just from one of your own accounts to another in a different bank.
(3) tax evasion, drug dealing and money laundering are not things that society generally wants to facilitate
Neither does society generally want to facilitate government's abuse and debasement of its currency in attempt to cover up its willful blindness to widespread financial fraud and malfeasance. Pick your poison.
In my Wells Fargo account, I can transfer to another bank's account in three clicks and about two minutes. All I had to do was set it up and prove that I own the other end. Deposits usually clear that day.
With bitcoin, you can also do all this at anytime, not just within the 9-5 Mon-Friday, no holiday bank schedules.
> The fees are dramatically cheaper (domestic wire transfers are at least $10, international are more like $30)
I pay no fee for the service I described. Not a penny.
> and there's no need to 'prove' anything.
This took a few hours, and was quite low-effort. Not a problem I'm looking to solve in my life, since I only did it once.
> With bitcoin, you can also do all this at anytime, not just within the 9-5 Mon-Friday, no holiday bank schedules.
As can I.
You can design bitcoin with a slowly increasing bounty each year, as long as the protocol is there, no central institution can control it.
(as a matter a fact, if the 50 BTC bounty were to continue indefinitely, the rate of money expansion would decrease over time)
Anyway, as you said, someone certainly could fork bitcoin to make a system where the money supply is expanded indefinitely. I don't think it would catch on, though... at least unless bitcoin has already become "accepted."
Certainly where I am you'd still be taxed you're just avoiding paying the tax by hiding your identity. Tax here (UK) is still due if you choose to barter for goods/services so I can't imagine using an unofficial currency would make the slightest difference.
However, if my clients used Bitcoins, I would receive the money in an hour or less, and pay like a $0.10 charge. Any no one would have the power to suddenly say, "oh wait, we're going to have to raise our fees".
Thousands of freelance writers, translators, programmers do a significant portion of their work with international clients. But the banking system rules out doing any job worth less than several hundred dollars, unless you want to lose 1/4 or 1/5 of your income to fees. I routinely turn down jobs that I could do in 30 minutes and make $150 because it's not worth the hassle of arranging an international wire transfer.
Do you understand now the legitimate need for this kind of currency?
Seriously, if you hate modern currencies, buy gold or silver or 20 year old scotch, hide it away...problem solved. Bitcoin was nonsense from conception.
100% legitimate uses? Well you could use it instead of Paypal and save a couple of bucks in fees but it's a lot harder than just using Paypal and there's no recourse if something goes wrong.
You don't have to create an account, add credit/debit cards and bank accounts, get verified, etc.
Definitely no recourse if things go wrong, but also no way for black hats to game direct P2P BTC payments either, like they can with PayPal's resolution and chargeback system.