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Comment by eduardordm | Hacker News Reader

In many countries, this is the current legal situation:

You can't buy or sell bitcoins because it's not a recognized currency by the central bank. In fact, selling any foreign currency here (brazil) can be a crime under certain circumstances. You need to be a bank or a currency exchange backed by a national bank to do that. You are not allowed to buy more than 3000 dollars of foreign currency easily.

Bitcoins, unlike common currency, carry value and can be used by general public. It's like having gold coins. I'm not a complete believer in legal tenders being the future of payments. I see bitcoins as the storage of value, but not method of payment.

Bitcoins could replace gold.

But this matter is way too complex for my limited forex experience, take this as my 2 cents.

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>>Bitcoins could replace gold.

umm. no. central banks hold gold as a reserve asset. all other reserve assets are liabilities of foreign govt's. eg: USG. Central banks aren't about to replace the only unencumbered physical asset they have with a digital algorithm.

>> I see bitcoins as the storage of value, but not method of payment

I think you have it the wrong way around. Bitcoin could be a medium of exchange but not a store of value. It's too small isn't liquid enough to be credible as a SOV. If it got big enough to do so then govt would crush it.

It's a little slippery IRL - blocks in bitcoin are mined and the mined blocks are representations of value - at least within the blockchain itself. You could argue that the blockchain itself does represent value. The value of the mined blocks now is 25btc since the reward was halved.

Blocks can't be made outside the process of mining and any btc you hold come from a block that's been mined.

How that's represented in fiat is another problem :)

> I see bitcoins as the storage of value, but not method of payment.

If they are a storage of value, you have to be able to buy and sell them. Therefore exchanging them has to be possible. I don't see big step from this to actually using them as a payment. Instead of exchanging traditional money with them, you just exchange the goods and services directly.

My point is based on what is happening with all current legal tenders. They are being replaced by methods and promesses. Example: checks, debit and credit transactions, et al. They represent a value, but are not the value. Most of the time, we buy things with a promess of payment, not with value itself.

So I came to the idea that bitcoins are actually more useful as a way to store value (bank notes, bank money) than currency (dollars).

So, your bank would store your bitcoins for you and you will still using the miriad of payment methods. Example: you use your current visa debit card, pay with the promess that your bank will transfer the bitcoins to the merchant.

That way we could be using bitcoins today instead of next decade.

That said, I see bitcoins becoming the value (think of bills) but the current payment methods will remain the same, except that cashiers will type X bitcoins instead of X dollars.

(Sorry about typos, tablet..)

> I see bitcoins as the storage of value, but not method of payment.

If this comes true, the bitcoin system is in trouble. Block reward is down to 25 bitcoins a block. It will half one more time then no more money for mining, it'll all be through transaction fees.

If people are just storing bitcoins and not using them, there wont be enough transaction fees and lots of miners will drop out, making the system more vulnerable to takeover by government or malicious miners.

> It will half one more time then no more money for mining, it'll all be through transaction fees.

Wrong, it will halve 31 more times until the reward is 0.00000001 (i.e. the smallest bitcoin fraction that you can currently have) around the year 2136. Only after that will it "halve" to nothing.

See https://en.bitcoin.it/wiki/Controlled_Currency_Supply

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