So now you can cconvert normal currencies from your bank account to Bitcoin in US through Coinbase, and in Europe through Bitcoin-Central. Are there similar services for Latin America, Australia, Asia, Africa and Middle East?
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.
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.
> 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.
Bitcoin needs to interface with the legacy banking system, so that people can easily exchange bitcoins with EUR, USD, etc. (Don't you, critics, always complain it is complex/shady to buy bitcoins?)
Well, bitcoin-central is precisely that, an interface to the decentralized Bitcoin system.
Bitcoin doesn't care about the "whole point of decentralization". It's like saying that the purpose of the personal computer and smartphone is to democratize computing.
The designer may intended that bitcoin to combat governments and banks, but anybody can use bitcoins, including the governments and banks, agorists, drug cartels, heroes and villians alike.
Frankly, if bitcoin wants to dominate the world, it must be as useful as possible and non-discriminatory in who use it.
I don't see this as a bad thing, quite the opposite. This will make it an order of magnitude easier for people to buy Bitcoins in Europe, simply by using their bank accounts. Once everyone uses Bitcoin as the preferred currency to buy stuff, it won't matter if the governments shut down this specific bank. People will continue to use their Bitcoin addresses through other services or tools.
The most important goal right now is to get people to use Bitcoin, and for services to adopt Bitcoin as well, so it can have a real economy behind it. Once it has a large enough global economy behind it, it should be unstoppable.
Those may be reasons for the development of Bitcoin, but Bitcoin itself is simply a technology. Any number of use cases may emerge from it, even ones we can't foresee. It's entirely possible that Bitcoin transactions will largely occur between big "banks" and behind-the-scenes, and people will simply use their bank accounts.
How do you define "currency"? Really anything could be a currency. If my friends (who are they? :) and I wanted to trade with cocoa beans today we could. Would it then be a crime for us to buy cocoa beans from each other using our country's fiat money? One possible way of defining "currency" would involve fiatness, but Bitcoin doesn't have fiatness. It would at least be debatable if such a law would apply to trading back and forth between bitcoins and local fiat money if "currency" isn't nailed down well for the purposes of that law.
You're looking for an debate in the wrong place. I'm just speculating that the parent was referring to some law that pertains to something generic like 'currency exchanges.' I don't think that anyone has been to court over such a thing (yet) so it could mean that the parent doesn't know what they are talking about too (e.g. said law doesn't apply to bitcoin).
"The whole point of linux is being able to not needing to use other operating system or propiertary software".
This is clearly bollocks. Bitcoin is just a tool, like linux, and can be used for numerous different purposes in numerous different ways. There is no "point" in Bitcoin, it is open source software that everyone can use as they will.
Some people clearly seem to think that bitcoin is meant for something special, in bitcoin community and outside of it. The funny thing is that even they can't have any control over how bitcoin is used, except for their own usage of course.
In all the universes in which bitcoin succeeds, it first succeeds as a protocol for which traditional currencies circumvent their own limitations, as this value is immediate, palpable, and unaffected by bitcoin's scarce use. Only then, once this niche is established, will bitcoin succeed as a widespread end-user currency on its own right.
This paradigm is present in so many innovations. It's simply tapping more readily accessible value as a way to construct a launching pad for further growth.
Sure - the oft cited strength of bitcoin is the ability to send value instantly (if you trust the party, 10 minutes otherwise) and with near zero fees. As a currency, bitcoin is limited in using this advantage because so few businesses accept them, but as strictly a protocol it can enhance dollars (for example) by being the currency of currencies, so to speak. So instead of using Moneygram to send dollars half a world away, I just exchange for bitcoins, send, and exchange out into dollars (or pesos, euros, etc). Further, since it is has such low fees, microtransactions are possible (web content monetization?), since storage requires no 3rd parties, people (worldwide) can avoid bank runs, and since it is mathematically scarce, they can also avoid (hyper)inflation. All with trivial and possibly automated currency conversions. For bitcoin to become a worldwide currency, it must first become a currency of currencies.
lol - take a moment to look at https://en.bitcoin.it/wiki/Trade - there's rather a substantial list.
You know that Wordpress now accepts btc as payment for addons for their blog hosted service?
please explain how a truly fiat currency without a national bank defending it against wild speculation is better than the currently existing alternatives? i understand the desire of creator and all miners to be able to easily liquidate their bitcoins, but i don't understand why other people would want something like this. could somebody point out what i'm missing?
I know that for some, bitcoin seems to be a solution looking for a problem. But there are those for whom the idea of a currency that is disconnected from a national bank is very attractive. The idea of a "free money" (free as in freedom) has long been a dream of many anarchists/libertarians. This is not to suggest that Bitcoin is a final answer to that issue, but it has proven that the concept has a chance to succeed in the real world, and not just in the writings of idealists.
Anarchists such as Benjamin Tucker were advocates of "free money" at least as far back as the 19th century. Of course there was no way for them to have imagined an implementation like Bitcoin.
When someone sends bitcoins and is provided with a product or service they cannot ask for more of that product or service unless they have provided a product or service that some other member of the bitcoin community deems worthy of their bitcoins. This is not the case with fiat money where governments can print money and demand you take it in exchange for products and services.
In high inflation economies like Argentina for example where foreign currency is strictly controlled, people are starting to save in bitcoin to preserve their wealth. I've heard that one can get a very good exchange rate for bitcoins in Argentina.
If the government is forcing you to hand over your possessions (or provide services) it does not matter what currencies they can or cannot print. There is no limit to the strategies available to them...
Example 1
"We're buying your house (whether you like it or not), how many Bitcoins do you want for it?"
"10,000"
"Great. By the way, we just made a new law that says we can pay you in peanut shells as a substitute for Bitcoin, at the same rate."
Example 2
"We're buying your house (whether you like it or not), how many Bitcoins do you want for it?"
"10,000"
"Ok here's your 10,000 Bitcoins"
(10 minutes later...)
"By the way, under the PATRIOT act, we're ordering you to hand over all your encryption keys. Including the private key of your Bitcoin wallet. If you don't make a fuss, we'll be nice and let you keep 1%, and not throw you in jail."
Of course it matters, because decisions like these don't exist in a vacuum. The rest of the world has an effect on what decisions get made, (well, in the countries we're talking about anyway), so if if a government has to resort to much more drastic measures to take your money, these measures are less likely to happen.
This doesn't mean that something like this will never happen, but I don't think anyone's expecting a perfect solution.
I think the gist of it is that the things you're being "protected" against with Bitcoin are, effectively, drastic measures.
Of course, there are people who believe that the existence of legal-tender laws is equivalent to jackbooted thugs breaking down their doors and holding guns to their heads. But those people probably aren't worth paying much attention to.
I..what? Nobody can demand you take anything in exchange for products and services. The meaning of legal tender is that you have to take it for debt, but nothing forces you to be a debtor, or to do business with anyone at all. The only way the government can hurt you with money is to devalue it by printing too much.
The value of Bitcoin is also rising much faster than its tiny "inflation" that comes from mining more Bitcoins right now, therefore, even though Bitcoin hasn't reached its maximum number, it still doesn't have inflation right now.
Speaking purely from a business perspective, if I implemented support for accepting BitCoin in my subscription service, it would be for two reasons: lower transaction costs and potential publicity with my target audience.
I can't speak for others, but both of those (particularly the former) make /accepting/ BC interesting to me. Although, admittedly, not so interesting that I'm seriously pursuing it yet.
The more traction BC gets, the higher it goes on my priority list.
This. As a non-US entity, we pay a substantial tax to PayPal/Visa/Mastercard for US-denominated payments. I don't mind paying taxes to the government for civilisation, but I do object paying large corporates for what is in essence toggling two numbers in the bank's database. Bitcoin could potentially increase efficiency of almost every business by up to 5%.
From my (admittedly naive) viewpoint, the elephant in the room is the anonymity. Governments won't like this because it makes it harder for them to monitor and catch bad people, and to ensure I'm paying my taxes. So when governments become aware of bitcoin there is going to be huge pressure to shut it down. And they could do it, no matter how decentralised and trans-national bitcoin is. Imagine MAFIAA tactics but ten times worse, with constant media reports of how bitcoin is the currency of the terrorists and child pornographers.
But that's where this announcement is exciting. By tying your bitcoin address to a bank account, you lose anonymity but gain legitimacy. And governments then have the option to selectively legislate, instead of simply killing bitcoin completely.
Also accept payments from any where in the world, lower fees, financial privacy, open protocol allowing open competition. Many, many positives, not just illicit reasons.
I agree with you on simplifying payment processing, but what exactly is financial privacy good for except tax evasion? Is there an epidemic of Visa/Mastercard/AMEX selling purchase histories to advertisers or something? Isn't that illegal?
Privacy is privacy - you don't know how important it is until you don't have it.
The main payment processors operate a mafia of sorts - it's a closed shop - tx fees are fixed and determined by them. One aspect of bitcoin is that is allows the person sending a payment & the person processing that payment (the mining pools) to negotiate the price.
The theory being that transactions with a better tx fee will be included in blocks quicker than those that don't.
By freeing up these aspects of the systems we use to send & receive payment - you allow other forces to come into play.
What good is it to not let people know how much you make, how much is in your bank account or not wear a rolex in a ghetto? Tax evasion is not the only reason why you want your finances private.
If you want to launder money, it's extremely stupid to use a form of digital cash in which all transactions are public and any amateur data miner can have a go at tracing the transactions.
To add to this point, bitcoin transactions are not just public, they're permanently verifiable.
By making a transaction with an address you're not just telling anybody who knows you own that address that you've made a transaction; you've allowed anyone who later discovers you owned that address to prove you made that transaction, for the rest of history.
Couldn't you launder them through places like Silk Road? Set up a number of fake buyer/seller accounts and complete fake trades. I think the transactions go through a centralized escrow account which means they'd get mixed up with other people's? If you made your transactions equal in price to those of other users, it would make it pretty difficult to tell how the coins moved in and out.
It's called bitcoin tumbling. There a quite a few services that obscure the transfer of bitcoins by trasnfering randomized amounts to hundreds of different wallets before sending it to a central account.
But as someone pointed out in another HN thread, there is always a risk the tumbling service could be a legal risk if it's even taken over by a state entity, because they could technically know which wallets are being used.
Bitcoin is slow - the accepted "confirmation" for a payment is 6 confirmations - best case (a tx just before a block is formed and it's included in the block) it'll take an hour. Worst case it's a couple of hours.
If you're sane and keep backups then your wallet is safe..
Your HD crashes and you don't have backup.. bye bye funds.
Bitcoin in many ways is equiv to cash - just electronic - it's an anon as cash is, as mutable as cash and prone to loss if you don't take care of it.
I like it - as a concept it has some nice attributes.
Can someone explain what the use of being a certified bank is? I know it's easier to do bank transfers then, but Mt. Gox allows this already, also in Euro. And I thought Mt. Gox was a certified bank actually, especially considering the legal documents they require for Euro transfers.
TL;DR: Bitcoin-Central.net, a French Bitcoin exchange gets many needed protections and features: (1) FDIC-esque insurance to fraud/etc., 100kEUR and 0BTC; (2) Personalized bank account numbers, making transfers easy (IBAN); (3) Segregation of client and company money; (4) Very easy and secure way to transfer money; (5) An ID is the only thing needed to sign up
Hmm could you elaborate on point 4? I didn't think of that, but yeah I guess with regulations, that adds another layer of security. Just how much exactly? If it gets hacked, I guess this still doesn't mean we can get our eur/btc back?
Your EUR will be fully insured (upto 100kEUR. Protip: Don't put 100kEUR into BTC).
Point 4 is you will have a unique IBAN address to wire money too. Instead of wiring to Bitcoin-Central's bank account number, you will wire money to YOUR account (at Bitcoin-Central). IBAN wires are free when using SEPA.
Ultra-concise summary: Instead of an exchange having 1 eur account and 1 BTC, each customer has an individual account. This provides ease, security, and EUR insurance.
Mtgox wishes it was a bank :)
They ask for the docco for AML (trading) requirements - so they're not shifting the 5M btc that they've processed to dodgy criminal types - like lawyers & politicos :)
In the UK Mt. Gox have had issues with several banks who've basically disavowed them and all but refuse to do service with them. Having a certified payment processor means banks can't do that.
If bitcoin-central.net wants to buy bitcoincentral.com then they can get in touch with me. I've had a few offers but I'd like to see it go to the right company.
