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npcompletion

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  • Bitcoin Bubble 2.0 [View instapost]
    "From an economic standpoint, there is no doubt that the various merchants who accept them treat them as such. In other words, there is no doubt that they take bitcoins solely because they know they can get dollars (fiat) for them. "

    How is this any different from gold today? Even though I think of gold as money, the fact remains you cannot actually treat is as pure money i.e. cash, due to legal tender laws.

    "With bitcoins, on the other hand, I first have to exchange actual money in order to acquire them, which entails a transaction cost, and then I have a limited choice of qualitatively and quantitatively inferior products to choose from."
    - You can mine bitcoins yourself
    - You can exchange them freely with fiat currencies with anyone; unlike cash, or gold (see below)
    - "qualitatively and quantitatively inferior products to choose from."
    I will avoid spamming this blog with links to all sorts of things you can buy with bitcoin, but that's a wrong assumption. Sheer quantity? Yes, there's less selection, but it's constantly growing. In fact, the amount has taken a huge leap recently with Bitpay's service for Amazon.

    Qualitatively? Quite the opposite. First, the quality of goods for the same types of items in fiat money markets remains the same. There are the same commercial, if not mundane, items: from food ( http://bit.ly/YBLdHA ), to electronics ( http://bit.ly/16DROZq )

    But there are certain goods and services available through bitcoin are qualitatively superior, when it takes advantage of bitcoins unique attributes. Online and electronic services where privacy matters e.g. secure web hosting and VPN. In addition, there are those whose point is moot, when payment processors decide to interfere. Erotic art or services? Controversial items? "Hate" speech? Guns? Drugs? Political leaks (e.g. wikileaks)? Online hosting/storage services? All have been and are *increasingly* subject to censorship by Papal, MC/Visa.

    " No one values bitcoins for their content as a commodity, which boils down to binary digits."

    This is not true at all. In fact, it's the opposite of why and how bitcoin became popular. Bitcoin IS commodity money AND fits into the regression theorem precisely because of its unique properties.

    A fitting commodity analogy of bitcoin are hammers--hammers of disintermediation i.e. special hammers used to break virtual barriers. Or more generally, commodity tools of crypto-anarchic utility. People trade these virtual hammers, using them as a medium of exchange in certain instances, precisely because of barriers that keep popping up.

    Paypal can come up with their own inelastic, scarce eCash equivalent, but it won't have the same commodity factor as bitcoin due to availability and utility: monopoly control of the paypal media and the media being highly vulnerable to interference by the state.

    I buy gold and silver. But gold and PMs are even much more problematic, as they've lost their "commodity" properties due to state interference in mining, state interference in exchanges. Don't like how the exchange rate/price of gold is determined on the futures market? Think the rules are unfair? Yeah, well too bad, you are at the complete mercy of COMEX/LBMA and their manipulators, you CANNOT set up your own exchange, else the CFTC will come shut you down.

    The more the state interferes, the people want to disintermediate, the more privacy people want, the more bitcoin or cryptocurrencies gains status as money.

    A study last year:
    http://onforb.es/YBLdaK
    "Black Market Drug Site 'Silk Road' Booming: $22 Million In Annual Sales"


    And more recently:
    http://bit.ly/16DRN7P
    "Mega Sidesteps US State Censorship With Bitcoin"


    http://bit.ly/YBLg68
    "Bank of America Holding AR-15 Manufacturer's Deposits"
    -- this is why Cody Wilson, in setting up http://www.defcad.com accepts bitcoins and encourages people to use bitcoins, after he was also the subject of various censorship/private sanctions.


    http://bit.ly/16DRN7R
    "Dragon's Tale is the first massively multiplayer role-playing casino."
    -- and all other pure bitcoin based gambling sites e.g. Satoshidice and Bitzino


    http://stripcoin.com
    Self explanatory ;)


    http://ars.to/YBLg6e
    "WordPress now accepting payment in Bitcoin"
    " .... “PayPal alone blocks access from over 60 countries, and many credit card companies have similar restrictions,” wrote Andy Skelton, a WordPress developer, in a blog post. “Some are blocked for political reasons, some because of higher fraud rates, and some for other financial reasons. Whatever the reason, we don’t think an individual blogger from Haiti, Ethiopia, or Kenya should have diminished access to the blogosphere because of payment issues they can’t control. Our goal is to enable people, not block them.”


    http://bit.ly/16DROZs
    "Argentines escaping currency controls with Bitcoins"
    " .... My friend Sir Charles at PricedinGold.com wrote me this morning from Argentina’s Salta province (near Doug Casey’s lovely property in Cafayate) and told me that TEA Turismo, a local tour operator and rental car agency there has started accepting BITCOINS. "


    What other non-crypto, non-political medium of exchange could be used to accomplish the above without interference?
    The more people see value in this, the more bitcoin and crypto-currencies in general become money
    Mar 18 05:50 AM | Likes Like |Link to Comment
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