The most important creation in the history of man. Honest.

[UndercoverElephant]

http://www.libertariannews.org/2011/05/ ... ry-of-man/

Recently I wrote an article entitled The Most Dangerous Creation In The History Of Man. The article covered the emergence of Bitcoin; an electronic open source peer-to-peer currency that has no central banking server, is untraceable (when proper steps are taken), and essentially can not be taxed through coercive measures. The article makes the point that if a currency can not be taxed and controlled, eventually it will topple the coercively funded fascist control grid you call the modern State. Read more about it in this Bitcoin forum post that explains it in more detail.

I’ve received several requests for more information about how people can put Bitcoin to work for them. Most articles on Bitcoin, and even the Bitcoin site itself, don’t give a clear top to bottom description of how common users of Bitcoin can put the currency to use.

It is a tad confusing if you are not familiar with how currency markets work, but not to worry, it is not as intimidating as it sounds. Bitcoins are generated on a logarithmic scale by dedicated “miners” who run software that generate the complex hash codes which make up a Bitcoin. Bitcoins can not be artificially inflated and require real resources (electricity and time) to produce.

Here are a few reasons why I think Bitcoins are superior to gold as medium of exchange..

Ha.

HAHA.

WOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOHAHAHAHAHHHAHAHAHAHAHAHQAAAAAAAAAAAAAAAAAAAAAAAA!!!!!

Hmm.



Hmm.

So, what do you fancy, folks? Bitcoin? Or gold?

[the_lyniezian]

And it requires the existence of a functioning internet, no doubt- which at least in the event of a fast crash we know is useless.

[UndercoverElephant]

And it requires the existence of a functioning internet, no doubt- which at least in the event of a fast crash we know is useless.

It's actually very clever, in its own way. The analogy with "mining for gold" is justified. It depends on complex mathematics. You not only need a functioning computer to deal in this "currency", but you also need a very high-power computer to "mine" more bitcoins. It very effectively bypasses things like banks and politicians, but when the shit really hits the fan....

It is great, apart from the fact that when things get really nasty the bitcoin/gold exchange rate won't look pretty to "holders" of bitcoins.

ETA: Bitcoins are to mathematics what gold is to elemental physics. It is the best choice of a mathematical currency in the same way gold is the best choice of physical currency.

[biffvernon]

Article in today's New Scientist about this subject.
And an editorial:

The internet is changing our relationship with money for the better

WHEN Isaac Newton became warden of the Royal Mint in 1696, he swore an oath not to reveal details of the markings designed to give the game away if miscreants clipped silver from coins. Even today, the UK pound bears the words decus et tutamen - meaning "an ornament and a safeguard".

Money has come a long way from the days when coins had intrinsic worth. Now currency has gone digital, and we have seen an explosion in the ways that we can buy. Among the latest is Google's attempt to position itself as a major financial player with an app that lets users pay with a swipe of their smartphone.

Concerns about the integrity of money have also seen a fundamental shift since the days of Newton. While fraud is still a concern, the financial collapse of 2008 has called into question the competence of the central banks that are supposed to manage national currencies. In this week's technology special (see "Future of money: Virtual cash gets real") we examine how the internet is allowing groups of people to set up means of exchange that are independent of both the banks and the state.

Private currencies are nothing new but novel possibilities such as Bitcoin now beckon. Though bitcoins are magicked out of nothing, money is what money does, and many people are happy to accept bitcoins as payment for real goods and services. The bitcoins in circulation are now worth around $50 million in conventional currency.

A digital currency like the bitcoin is favoured by libertarians and privacy advocates for its ability to facilitate anonymous online transactions. The value of the currency is protected from inflation by using computational complexity to keep it artificially scarce. Nevertheless, it may not appeal to ordinary consumers, who will have no one to complain to if the value does collapse.

Governments may want to clamp down on what they see as a way to evade taxes, and some nations have already taken action. Two years ago China banned the use of virtual currencies to purchase real-world items.

But the future of money, as so much else, may be shaped by the internet's ability to bring interested parties together outside the ambit of governments or big companies. Under a scheme operating in the city of Macon, Georgia, for example, special bonds are issued to residents - but each person receives only half a bond, and can only redeem it by locating the person with the matching half. Participants must seek each other out through online social networks such as Twitter, then decide together how to spend the cash. Attempts to set up such "local currencies" have been tried many times before, but have usually proven too difficult to co-ordinate and organise. Social media offer such schemes a new lease of life.

That's why the impact of the internet on money is to be welcomed: it has the potential to return money to its roots, which predate Newton by millennia. Rather than being held in thrall by aloof and often unaccountable institutions, it might once again become anything two parties can agree on as a medium for the exchange of goods and services. Our words will once again be our bonds. Because, ultimately, money is about relationships.

http://www.newscientist.com/article/mg2 ... uture.html

[DominicJ]

can bitcoins be turned back into electricity and time?
Can i pay my taxes with them?
Then they are worthless...

[biffvernon]

Some folk would say that not being able to pay taxes with them is an advantage. Oils the wheels of the black economy.

[featherstick]

can bitcoins be turned back into electricity and time?
Can i pay my taxes with them?
Then they are worthless...

unusual position for a self-professed libertarian to take. Surely you should welcome anything that constrains government's ambit?

[Keela]

So if government ceases to get paid through one cheat or another, who will pay teachers, police officers, nurses, doctors and so on? Or would you really rather pay for them yourselves through: private tuition; protection rackets; and private medicine. & If you can't afford these things then society will forget you....

People in general are quick to complain about government, but most take the benefits when they are there. Sorry I know there are imperfections in the system, but it does work mostly quite well..... At least the alternative is too rotten to seriously wish the system's demise. IMO.

[Ludwig]

So if government ceases to get paid through one cheat or another, who will pay teachers, police officers, nurses, doctors and so on? Or would you really rather pay for them yourselves through: private tuition; protection rackets; and private medicine. & If you can't afford these things then society will forget you....

People in general are quick to complain about government, but most take the benefits when they are there. Sorry I know there are imperfections in the system, but it does work mostly quite well..... At least the alternative is too rotten to seriously wish the system's demise. IMO.

+1!

I was reading Jared Diamond's book "Collapse" about the people in modern Montana. It is a mostly very poor state, but the people are ultra-libertarians who are unshakably anti-Government, despite the fact that for every dollar they pay in tax, their state gets 1.5 dollars back from Washington

I've heard people from other countries, like eastern Europe and Pakistan, saying that they can't understand why British people complain so much about their government, which runs like a machine compared to their own totally corrupt and incompetent systems.

Admittedly, I doubt if that will be the case for much longer...

[goslow]

so, is this just a fancy version of LETS/TT currencies?

[UndercoverElephant]

so, is this just a fancy version of LETS/TT currencies?

Not really, no. It is a peer-to-peer mathematical currency. From what I can tell, its main use at the moment is for making untraceable online transactions. Very attractive to criminals, therefore.

[Snail]

I researched Bitcoins after reading Neil Stephenson's Cryptomicon a couple of years back. I think virtual currencies have a lot of potential as a currency if BAU continues. However, Bitcoin is flawed. Its not backed by anything physical, unlike the crypto currency described in Cryptomicon. It relies on PayPal or similar businesses to convert the bitcoins back to real world currencies, something which is needed as hardly any e-stores use bitcoins. It can be compromised if a group controls more than 50% of the mining process. Something that's happening now as miners are pooling their computing resources. It also relies on the internet, which used to be considered a strength before various dictators demonstrated how easy it was to shut down/disrupt. It needs to be backed first by a physical commodity before it's accepted, just like paper money was at the start.

I can see why criminal gangs are using it though, and why it might make a good local/off-grid currency. Governments are definitely moving towards e-money, albeit with none of bitcoins anonymous advantages.

[UndercoverElephant]

I have also researched Bitcoins, and I keep finding references to a website called "Silk Road" which posts drugs to people who pay in bitcoins.

But, strangely, I can't actually find said website.

???????

???????????????????????

ETA: I'm not interested in buying drugs with bitcoins, but I am very interested indeed if "somebody" is censoring my internet connection...

[Snail]

I have also researched Bitcoins, and I keep finding references to a website called "Silk Road" which posts drugs to people who pay in bitcoins.

But, strangely, I can't actually find said website.

???????

???????????????????????

ETA: I'm not interested in buying drugs with bitcoins, but I am very interested indeed if "somebody" is censoring my internet connection...

Silk Road is part of the TOR network which uses encryption to provide anonymity. To access it you have to install a tor client first.

[adam2]

Not doing so well at the moment.
http://www.bbc.co.uk/news/technology-13857192