I am tempted to take apart your proposed solution point-by-point but I'll wait. Crypto currency apparently is exactly what you want, so can you explain why you are instead attempting to achieve the same through ISO and a collaborative bank revolt against the "established banks"?
(Collaborative bank revolt: a vastly simplified explanation of your proposed solution.)
The answer to this one is obvious. In order to grow, a replacements need to interoperate, ie. provide an "upgrade path". Instead of holding something up as the one true solution we are betting on the trend, which is certain. Besides, cash will always be around.
Cryptocurrencies, despite their huge number and numerous attractive properties, presently lack market depth, limiting both their stability as value stores and feasibility as trade instruments outside of rapid/realtime/automated exchange. Significant issues with the dominant one (Bitcoin) make it difficult to implement securely, hard for non-technical users to properly understand or trust (there is no benevolent dictatorial regulator, as per their established national currencies/financial service providers), they require connectivity or blockchain storage which is unvailable in much of the world's devices, and so on and so forth.
A parallel to your suggestion is the example of existing community currencies, which are essentially geographically bound equivalents of cryptocurrencies with an often more moralistic focus. I have been in contact with these groups and associations thereof, plus theorists in the area, and my understanding is that many face challenges in the same areas as Bitcoin; ie. new user education, balance of trade and interoperation with conventional established systems. Indeed, they are developing an inter-exchange protocol at present known as CXP.
As for your vast simplification, the best (from a moral standpoint) and hardest kind of change to reverse (from a potential opponent standpoint) is that which is is completely decentralized; an 'opt-in' from the edge nodes. I think this is what people are proposing in many spheres right now.
All roads lead to Rome.
Download and install Electrum [1]. Open Electrum. Write down the 12 words. Done.
There's your 100% non-technical Bitcoin wallet in three easy steps.
Just takes pen and paper. Or, memorize it instead. Instant, secure brainwallet. No electricity, no Internet, no hardware and no software.
Starts in seconds and syncs across Windows, Mac, Linux and Android devices.
[1]: http://electrum.org
If you're worried you might lose your Electrum wallet, write down the 12 words on several sheets of paper. Inscribe them in metal. Put them in a document, and put the document in TrueCrypt. Upload it to Dropbox. It's as easy as managing your digital music collection.
No one will be able to "give your money back", because you didn't give your money to anyone.
If you fear you might lose your password, back it up. Store it in a safe. Send it to someone you trust. Tatoo it on your forearm (although this is not really secretive)
Heck, if you _really_ want to be sure to have someone who could give the money back to you, just give it to someone you trust. Family, friends... or a Bitcoin bank. But if you do that, we're back to square one.
"Why not replace (insert hugely established system) with (completely new system)"?
It's not a total rip-out-and-replace. Bitcoin might be the grease that enables the seriously broken parts of our struggling world economy to slip through the entrenched tax collectors and let the actual consumers reward the actual producers. It fills the niche of Community Currencies without the balkanization.
One thing that the huge, established system misunderstands about the new entrant is where the most effective inroads will happen:
The lower class.
Someone already richly rewarded by the establishment is not going to be very interested in Bitcoin (other than as a toy). But someone in a nation outside the US and Western Europe?
Bitcoin gives them first-world tools that completely bypass their local currency.
It sounds like the classic innovator's dilemma. Suddenly trade barriers are being circumvented. Chinese currency can escape currency controls. Micropayments and small businesses have an option.
I'm not convinced Bitcoin is that thing, but I'm certain the established system will fail to adapt.
Develop a game plan for what that will look like and where you want to be when it happens. In thinking along those lines, I see that you're working with ISO–and in my mind, that's not where you want to be! :)
Bitcoin requires middleman, just like credit card processors. It also is significantly easier to trace than current financial systems, which don't assign digital fingerprints to units of currency. Bitcoin isn't going to let the world economy "slip through the entranched tax collectors." Bitcoin is a tax collector's wet dream.
I've met with quite a few Treasury lawyers who work in their policy office. They're so giddy about the prospects of actually being able to trace income from start to finish, including across borders, that they've formed an internal task force to see what they can do about spurring adoption of Bitcoin or other similar digital currencies.
Bitcoin gives them first-world tools that completely bypass their local currency.
In many nations, you can already do that. In the US, businesses must be willing to accept USD for their services/products but they are free to also accept any other currency they wish. At the end of the day (or more accurately, their fiscal year), their books (and taxes) must be converted to USD for determining their taxes.
No it doesn't? Your address exists as a private key, no external middlemen play a part in the maintenance of that unless you want them to.
> It also is significantly easier to trace than current financial systems
No it isn't. Even if you're talking the base bitcoin without extensions like zerocoin, it is still effectively as hard to trace as it is to decrypt a widely distributed shared encrypted wikileaks file, for example. If someone slips up and a key becomes available to allow decryption, it can be done, otherwise no dice. Compare with OP's statements about full visibility into 100% of SWIFT transfers.
And if you add coming enhancements like Zerocoin? No, it's just nowhere near as easy letalone significantly easier.
> which don't assign digital fingerprints to units of currency
Serial numbers are quite common on physical fiat currency. Electronic transfers are done via SWIFT or interbank transfer networks which have the aforementioned 100% visibility.
> that they've formed an internal task force to see what they can do about spurring adoption of Bitcoin or other similar digital currencies.
The church was one of the foremost patrons of science at its peak, that they didn't understand the final implications of those developments would prove fatal to their foundations doesn't change that fact. So it is with states and bitcoin, although from what I've seen, and I look very closely indeed, the sentiment from the state has primarily been fear and trepidation. And they are right to fear, it could and hopefully will kill them.
> No it isn't.
He's talking about following a bitcoin's life from wallet to wallet, not about impersonating a wallet. The whole bitcoin principle is that exchanges are made in clear between wallets and shared to all peers, so yes, it _is_ traceable, like nothing before.
Now, the game is to know who is behind a wallet. And if you didn't use some anonymity method, your name will not be a secret to anyone looking for it.
Not according to the U.S. Treasury:
There is, however, no Federal statute mandating that a
private business, a person or an organization must accept
currency or coins as for payment for goods and/or
services. Private businesses are free to develop their own
policies on whether or not to accept cash unless there is
a State law which says otherwise. For example, a bus line
may prohibit payment of fares in pennies or dollar bills.
In addition, movie theaters, convenience stores and gas
stations may refuse to accept large denomination currency
(usually notes above $20) as a matter of policy[1].
Well, they're taking a big risk, since Bitcoin can be easily upgraded to fully anonymous with a protocol upgrade using existing technology (Zerocoin) [2]. I think it's wise to wait until Bitcoin is more entrenched before implementing the extension, but there's no huge technological barrier preventing Bitcoin from being fully anonymous.
Besides, it's not like the current system isn't fully tracked by the Treasury department. They already have access to everyone's transactions (via Swift, etc). The hard part is figuring out which transactions to investigate, and Bitcoin won't make that any easier.
1. http://www.treasury.gov/resource-center/faqs/Currency/Pages/... 2. http://zerocoin.org/
Because with an armload of cryptographic currencies, and $5, you can buy a cup of coffee at your local coffee shop?
But decimal placement is irrelevant and cryptocurrencies are intangible, silly.
On a more serious note: Bitcoin has steadily gained acceptance as a form of payment. In 2010, a guy bought a pizza for 10000 BTC. It was a one-off transaction between two Bitcoin enthusiasts, but a milestone: the first purchase of real goods. In 2011 and 2012, Bitcoin matured from enthusiasts to a wider audience, albeit mostly for illegal uses. The biggest was Silk Road.
Now, in 2013, Bitcoin is starting to be accepted by regular, legal businesses. Shopify, Coupa Cafe, WordPress, Reddit, OkCupid, and new merchants joining every week. There are startups like Coinbase devoted to making this as easy as possible. Someone in Vancouver set up an ATM that takes Bitcoin and gives you cash.
Sure, there's a long way to go. But acceptance has been improving rapidly. And Bitcoin has features--very low transaction costs, no "chargebacks", etc--that make it inherently attractive to sellers. Instead of focusing on "where the puck is", we should skate "where the puck is going to be".
http://bitcoinmagazine.com/6939/seans-outpost-announces-sato...