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Comment by awt | Hacker News Reader

Let's be more general. Set A = stuff you can buy with USD. Set B = stuff you can buy with BTC. Set W = all stuff. Set A will always be a subset of set W, and is getting to be a smaller subset every day. Set B will in the future be an exact match for Set W. Which unit of account would you choose? A or B?

edited: typo (C instead of B)

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Assuming you meant set B with set C - what makes you believe set B will match set W one day? Especially right now set B is incredible tiny compared to set A and there is not much incentive to switch to B which in turn makes it unlikely that set B will quickly converge to set W.

Most people don't yet understand how infungible the USD is becoming. Argentenians and Venezuelans understand the infungibility of their national currencies much better than Americans do theirs. Wealthy Americans and the wealthy of other nationalities who travel understand it better than those with little savings who are largely bound to their own states. Only big players and those on the fringes of society notice the problems with the USD right now.

As more people leave the official economy every day, the fringes grow larger. The more the US clamps down on foreign banks holding USD, the less attractive the USD will be as a store of wealth.

Isn't a currency fungible by definition - a dollar is a dollar is a dollar? And we are getting away from the question I asked - what are the advantages of using Bitcoins, advantages that average people actually care about today and that are not offset by disadvantages of using Bitcoins.

Iran Sanctions: http://www.treasury.gov/resource-center/sanctions/Programs/p...

Russia Sanctions: http://www.cnn.com/2014/07/16/politics/ukraine-russia-sancti...

Also, USD cash is more fungible than electronic USD.

Again, why the focus on the average person? Does the average person actively, directly participate in space industry? No. Has the average person been profoundly affected by the technologies developed by space programs? Undeniably.

Isn't this the whole goal of Bitcoin? Mass adoption so that you can use Bitcoin at least as easily as your credit card? You can obviously not have mass adoption without the average person. If, on the other hand, you only want Bitcoin as a curiosity used by a hand full of people, accepted by a hand full of business, well, this goal has already been reached.

Funnily enough the Venezuelans and Argentinians solve the infungibility of their national currencies with US dollar-denominated offshore accounts. The US dollar is also the national currency of two other Latin American countries. Call me an extremist if you like, but I think the US is more likely to regulate Bitcoin into near irrelevance (guess what, AML laws can be applied to exchanges and Silicon Valley companies accepting BTC too!) than they are to make it difficult for Banco Central del Ecuador to replenish its dollar reserves. And Russian oligarchs facing sanctions are more likely to keep their money in Russian banks than in the crypocurrency their own government intends to ban http://rt.com/business/187440-bitcoin-ban-russia-cryptocurre...

How many people have left the informal economy to transact exclusively in Bitcoins?

> US dollar-denominated ...

Right because the USD is relatively more fungible for the time being.

> regulate Bitcoin into near irrlevance

That will just make dollars less fungible.

The Russian oligarchs go to Bitcoin coferences. It's on their radar.

A, until B has FDIC protections.

You don't have to hold bitcoins to spend bitcoins and take advantage of the network's properties.

Why would FDIC insurance make me feel safer than elliptic curve cryptography?

Because people who sell you food believe in FDIC

Slightly snarky but true retort: Soylent takes Bitcoin.

Cool, that only leaves people who provide supplies to Soylent, people who ship the Soylent to you, and your water utility :)

Would you make fun of the Burundian Franc because I'd have to convert them into USD to pay my US suppliers? Not everyone has to directly accept Bitcoin for it to be a real currency and generally useful.

The only difference with Bitcoin versus a small fiat currency is the people who are using it are distributed geographically worldwide instead of clumped together in one area. As long as they continue to prefer it to other currencies for some proportion of their transactions it will be successful and have value.

> Would you make fun of the Burundian Franc because I'd have to convert them into USD to pay my US suppliers?

No, if it's a bona fide currency, if you can walk around in Burundi and buy bread or a goat or a gun with it, then of course having to convert it to buy a Macbook isn't a dealbreaker. But Bitcoin is in the opposite situation.

> The only difference with Bitcoin versus a small fiat currency is the people who are using it are distributed geographically worldwide instead of clumped together in one area.

So with a currency you can buy life essentials, with Bitcoin you can buy virtual things or things that are feasible to send through the post. I wonder what is going to be more valuable overall?

Because someone can point a gun at your head to defeat ECC. They can't do that with banks. That's why people keep their life savings in a bank, and why you'll need a bank even with Bitcoin.

> Because someone can point a gun at your head to defeat ECC.

You can store an encrypted paper wallet in a safety deposit box at the bank if you're worried about that threat. You don't, however, need to hand it over to the bank to lend it out to bad debtors if you don't want to, which is the threat FDIC protects against.

There are at least two problems with this approach. First, this just makes you a target when you go and retrieve your paper wallet. Secondly, even if you never actually leave the bank with your paper wallet, this means you need to physically go to the bank every time you want to transfer money. But people need to transfer money on a daily basis in order to pay bills, meaning any access to a bitcoin wallet needs to be highly available. A paper wallet stored in a vault isn't.

The counterargument to this is to store a portion of your savings in a paper wallet. That's fine, but it's not what's going to make Bitcoin mainstream, which is what the conversation is about. It needs to become consumer-friendly.

I'm merely responding to your argument that people will be unwilling to carry the equivalent of their checking account balance (~$1000?) with them because they'll fear for their physical safety. People carry laptops and credit cards despite the fact it's not any harder to point a gun at me and take me to an ATM in a shady part of town or steal my laptop.

I always felt bitcoin was more about replacing paper money than replacing banks. Banks give you interests, Bitcoin just sits there and the amount (in bitcoins) never changes.

The interest you get rarely beats the cost of the dilution of your currencies value through printing of new money.

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