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A Survey Regarding Bitcoin
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Yes everyone can buy me coffee. 
(I'm an coffee addict) 
Vicomte13
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Our currency has not been backed by gold for nearly 50 years.
Gold has no intrinsic value at all. It isn't useful for anything. It just looks pretty. People have always liked gold for the same reason that crows like shiny things.
The entire financial system of the world today is based on the value of the dollar, not gold. Oil is sold in dollars, not gold.
Gold is now purely a commodity, an old form of money, as it were, but not the definitive one.
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I don't know where you live but I live in Australia. I'm only 47 and in the late 1990s early 2000s the Australian Treasurer sold off Australian Gold reserves, took Australian dollars out of circulation (because if he didn't the AU$ value would have been excessively low on the global exchange compared to the price of gold and other currencies, think about what happens when you print money to get out of debt the value drops and you then have to print higher denominations just like Zimbabwe did in 2009 and Germany did before WW2), and he paid off alot of Australia's foreign debt.
Then why does the USA keep most of the planets gold reserves locked up tight?
Oil can be sold in peanuts but the currency used by nation states is gold.
I never said it was the definitive one, I said it was the currency of nation states. The US has gold reserves for most nations locked up and when gold is traded it goes from 1 vault to another in the same building and the electronic ledger transfers ownership of that gold from one nation to another.
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ADMIN HAT ON
I did a small clean up. Please stay on topic and don't flame.
ADMIN HAT OFF
I did a small clean up. Please stay on topic and don't flame.
ADMIN HAT OFF
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Hi Fish; for a good explanation of bitcoins and their mining; I found this article and links from CNBC fairly clear:
http://www.cnbc.com/2014/01/23/cnbc-explains-how-to-mine-bitcoins-on-your-own.html
But where they came from and where there going is anybodies guess; and what stops some hacker disguised as a large internet bank/consortium from making more then the 21 million that is supposed to be the future limit; who is running the bitcoin production?
At least with US currency; there is a Federal reserve that we know about. I looked into bit coins back when they first came out; it didn't seem to make sense then and makes less sense now.
Most bit coins are not circulated (78%) the transactions are anonymous; and seems like a big con on people looking for financial security; but as the hacking of April, 2013, of Instawallet, which branded itself as an "anonymous" bitcoin "bank", was forced to suspend operations indefinitely after hackers stole nearly $4.6 million in the currency; showed; they are not secure or backed by a large bank or superpower.
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afishamongmany
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Hey thanks Keltoi, I was beginning to feel like an optical illusion. That information about bitcoin mining - solid gold and it's gone into my information vaults.
You say, "The world financial system depends on growth, prices, wages, values, are required to go up for growth to occur. If these things go down for to long recession then depression occur."
Sure this is how it is presented and this is what we have grown up with but is it because there are some immutable laws of nature that make it inevitable that 'the system' and its outcome are thus? Have you ever thought about what financial systems there are going to be in the Kingdom of God here on earth when The Lord returns?
"Who is running the organisation, that I do not know." And that goes for the whole financial system - we don't know, though there are some theories going around.
"There has to be something tangible for the currency to be based on." Does there? I don't get that impression. I do carry around a few coins and paper promises and still occasionally use them but even for those I have to have a magnetic strip, a magic number and a magic machine. In reality my 'wealth' consists of binary numbers on a server some where, over which I have little (if any) control.
"Things like gold, property, etc are the basis for capitalism." Sure, the diagrams in the text books look so neat but ... Where does it come from? Where does it go to? Who does it serve?
The more I think about it the more it seems to me that what underpins and keep most financial systems on the rails is confidence and trust by a required critical mass of individuals. If not confidence and trust then probably it has to be fear and coercion. Of course you'd not get that in capitalism would you?
Please (anyone) any more concrete factual details about the bitcoin 'system' would be gratefully received. At least central banks and the IMF have known head offices, Bitcoin, the Internet?
Go well
Invest wisely
><>
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afishamongmany
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Hey Mnorian, how you doin?
Thanks for the link. I'll get to it soon. It takes me time to process and absorb (or discard) new knowledge. It's an interesting piece in a strange jigsaw.
Go well (and thanks for all you do around here man)
><>
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Hey Mnorian, how you doin?
Thanks for the link. I'll get to it soon. It takes me time to process and absorb (or discard) new knowledge. It's an interesting piece in a strange jigsaw.
Go well (and thanks for all you do around here man)
><>
Hi Fish;doing perrrty good; how about yourself? Ya, sometimes I have to read things twice to understand them once. Bit coins were started by; supposedly; a Japanese man called; Satoshi Nakamoto who invented the bitcoin protocol, publishing a paper via the Cryptography Mailing List in November 2008. But that name is like somebody named Bill Smith in the US; it could be anybody; and there are no less then 17 people that have been thought to be him; according to this article by Coindesk:
http://www.coindesk.com/information/who-is-satoshi-nakamoto/ And if you really want to know about the 'coin of no realm' here is their "beginner's guide" for more information then you ever wanted.
http://www.coindesk.com/information/
Thanks for the thanks; and I didn't think anybody really notice! Peace in Jesus
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And in the "information overload" department; here is the original web site created by Satoshi Nakamoto; now run by others:
https://bitcoin.org/en/faq#why-do-people-trust-bitcoin
Here is a paragraph in the Faq that tries to explain why people trust bitcoins; and if doesn't make you leery of them; nothing will; "cryptographic algorithms" isn't that what kept Snowden from leaking classified data? "cryptography is only as good as he who holds the keys" Scheneier on security
"Why do people trust Bitcoin?
Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted."
https://bitcoin.org/en/faq#why-do-people-trust-bitcoin
Here is a paragraph in the Faq that tries to explain why people trust bitcoins; and if doesn't make you leery of them; nothing will; "cryptographic algorithms" isn't that what kept Snowden from leaking classified data? "cryptography is only as good as he who holds the keys" Scheneier on security
"Why do people trust Bitcoin?
Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted."
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StanJ
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There's a show I watch regularly called The Blacklist, and in last night's episode I saw a scene where a kidnapper gave his Bit-Wallet information to an intermediary so she could transfer the ransom money to him. I won't go into a lot of detail but the scene quickly turns on the kidnapper and the intermediary gives him her Bit-Wallet information so that he can transfer money to her account. I took note I guess because of this thread but I found it interesting that it is quite mainstream these days.
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The BBC news had an article the other day about Satoshi, apparently he is an Australian guy. I'll see if I can find the article and post the link.
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With man made constructs there are no "immutable laws of nature".
Nope,
Actually we do know who is running the "normal" financial system. Banks, stock exchanges, big multinational corporations, some governments.
What you carry around and what it is based on are two different things. The binary numbers on a server somewhere used to be sheets of paper stored in a safe because the you and the bank staff filled out pieces of paper so you could out money in or take money out of the bank. Remember bank books? The only difference between now and then is the storage medium.
Gold comes out of the ground, property is the ground level. What's the price of a bare piece of land in the capital city in your country?
You're getting it. When the Spanish decided to support the exploration of the world, which led to the Spanish "discovery" (was it ever lost?) of the Americas they raised funds to support the venture by giving shares in what was found. Of course the monarchy was the largest benefactor but the shares gave other individuals the right to claim on the loot that was brought back. That is the point that capitalism started. Some people had to trust something would come of it, others died and were treated terribly so the share holders could get a return on their investment.
I would purchase land, everything else is to easy to loose.
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Vicomte13
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Ok, it's important to get this right on the first pass. The issue here is factual. Once upon a time, the wealth of nations was measured in silver and gold bullion. Silver and gold were viewed as having intrinsic value, and coins were effectively stores of that value. A "pound" of silver was literally a troy pound of silver, 22 troy ounces to the troy pound. The Italian currency, the "lira" and the French currency, the "livre", were both based on the same system, and those words, "lira" and "livre" are the Italian and French words for the word "pound". In that time, an Italian lira and a French livre and a British pound were of the same value, and one ounce of silver was a convenient unit - thus all of the nations of Europe as well as the United States had currency of roughly the same size. A day's wages of silver were the size of a dime. Whether one called that dime a dime, a denarius or a dinar didn't make a difference.
Thus was the traditional monetary system of Eurasia, dating back to the Middle Ages.
When the Spanish began to bring home tons of silver and gold, inflation hit Europe in earnest, and the value of both gold and silver, relative to what they had been, were less, as there was more of it.
As governments became larger and more complex, debt instruments were issued, and the debt instruments themselves became paper currency. It was all denominated in gold or in silver. Once the really big wars hit - the wars of Napoleon, the US Civil War, the Franco-Prussian Wars, governments became larger and debt increased. With World War I, the debt loads to fight the war vastly exceeded the reserves of any nation, and so fractional reserving began in earnest. No longer did countries even attempt to back their currency fully with gold. Rather, with only a portion. When the Central Powers and Russia all collapsed at the end of the war, massive war debts went unpaid. Germany was forced to pay reparations, but the Germans had nothing like the reserves necessary to do so, so they simply printed money to pay their war debt, sparking runaway inflation.
Already, gold and silver had ceased to really be currency. Pounds Sterling and Dollars and French and Swiss Francs were really the medium of exchange, variously backed by reserves, but only fractionally. Then came World War II, with even greater debt and the death of empires - the French, the British, the Dutch, the Belgian, the Italian, the neo-German, the Japanese - winner or loser of the war, all were hopelessly overstretched and bankrupted by the exercise, and soon the colonies all had their independence on account of it.
And standing above all of it was the undisputable new world hegemon. World War II began with a world divided into 6 active great powers (Germany, Italy, the USSR, the British Empire, the French Empire and the Japanese Empire) and one faraway passive great power (the United States). It ended with three of those empires (Germany, Italy and Japan) incinerated, two "victorious" but bankrupt (the British and French Empires), and all five of them dependent upon the new hegemon - the USA. The USSR stood aloof, but could not match the USA in either econonic strength (the Soviet economy was a fifth the size of the American - the American economy in 1945 was 60% of the world's GDP), or in military strength (the USA had the monopoly on the atomic bomb from 1945 until 1949, and had nuclear supremacy until the 1960s).
Even before the war ended, it was clear that the postwar world would be one dominated by the United States. The Axis powers were going to be destroyed, that was clear enough. The Soviet Union never had been very rich, and it was ravaged. Militarily strong, but with little else. China was a basket case engaged in a civil war even as both sides of that civil war fought the Japanese. France was still largely under German occupation. The British Empire was going to survive the war unconquered, but utterly broke and exhausted - bombed out. Nationalist pride would not necessarily let the Brit on the street see that Old Blighty had been kept alive by American aid, but everybody in leadership knew it. Churchill was happy that the Americans were English speaking kin, in his view, which would allow for a very special relationship that would keep the British Empire in place, but in this he was only very partially correct. The Americans certainly propped up Britain in the war, much as the British themselves had propped up the Prussians in the old continental wars of Louis XIV and Napoleon, but the Americans had no interest at all in seeing the British or the French successfully maintain their chasse-gardee markets in their empire. When the time came, the Americans aided Britain and France to rebuild their homeland, but the cut both the British and the French off at the knees when either tried to preserve their colonial empires. It was in America's interest that the British and French Empire fall, and that those lands all be open to American trade and influence. When the British and French attempted their own foreign policy in the Suez in 1956, the Americans refused to provide or enable any logistical support. The British and French, attempting to act alone, discovered that were quite literally dependent on the Americans for logistical support to operate abroad. The Suez operation collapsed and turned into a fiasco, and the British and French never again attempted a joint military policy in defiance of American wishes. The French, for their part, fought to retain parts of their Empire, but even as the French army was surrounded at Dien Bien Phu in Vietnam and at risk of being captured, the Americans refused to provide any bomber support or any other military aid. The French were allowed to be crushed and their army lost. It was not in American interests for France or Britain to retain their overseas empires, and both countries were too broke to do it alone.
It is in the context of the bankruptcy of the world, to fight the World Wars, except for the United States, that then post-war economic framework was established by the United States. In 1944, even before the war had ended, the Americans called a conference in New Hampshire, at BretTon Woods, attended by 44 allied countries including the Soviet Union. At that conference a system was laid out that lasted for the next 27 years. The international monetary system was set upon gold, but each of the currencies of the various countries was given a fixed value relative to gold. For example: the American dollar was fixed at $32 US dollars per ounce of gold.
Some of Europe's gold reserves were already in America or Britain - having been moved there to prevent it from falling into Nazi hands. Once the war was over, the gold of the conquered axis powers was of course transferred to US control, "for safekeeping". France, having been physically liberated by the USA, had its gold in the US as well. Europe was precarious and unstable, and facing Communist and Fascist insurgencies in the aftermath of war. America, by contrast, was the hegemonic rock of security. It made sense for most of the countries to keep their gold safe in America. It also made sense, from the hegemonic perspective, for America to sit firmly atop the gold of its former enemies. Yes, they could redevelop. No, they would never again have the FULL sovereign flexibility of having all of their wealth at home anymore. Should Germany get out of hand, her currency was backed by gold, and the Americans had their gold "for safekeeping". This was all designed to ensure post-war stability, and it did, in spite of the Soviet challenge.
The instability came from a different source, the United States itself, with the racial and anti-war turbulence of the 1960s and the endless expensive commitment in Vietnam.
The system of currency being backed by gold you described WAS true, under Bretton Woods, but it ceased to be true after 1971, when President Nixon took the US off the gold standard. From that time forward, the US dollar became a fiat currency. Because the US was still the world's economic titan, and militarily tied with Russia, the dollar, no longer backed by gold, became the world's reserve currency.
Thus, to this day every other currency is priced in dollars, as is oil, and gold itself. The dollar is the standard, gold is a metal whose world market value is pegged in dollars.
The transformation is fundamental. Before 1971, the dollar and every other currency in the world was all valued relative to gold, and the value of gold was fixed in terms of dollars per ounce. That was the system you described. But since 1971, the dollar stands alone, and gold itself, and oil, and other currencies, are priced in terms of dollars. The dollar's value is set by what it can actually buy, and by the prestige and activity of the US government. Gold's value is set by the dollars it can buy - the exact opposite of the old system.
That has been the way of things for the past 45 years, and it does not seem likely to end anytime soon, because dollars are more fungible, transportable, and usable than gold.
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You are correct with some comments but very mistaken in others.
Anyway, this is all so far off the OPs question it isn't funny. You tried to prove me wrong yet all that happened is you opened up the US for criticism of the way it has handled various foriegn policy matters. Lets just say the world doesn't really trust the US in the way the US thinks it does. Now that the history lesson is out of the way can we get back to bitcoins and tithing?
Are you saying the pound and the US$ were equal in value?
Not in Britain it wasn't.
Correct.
A problem here is Britain was using paper money before all this occurred.
In 1943-45 Germany offered to send Jews to Israel for a price. The price was to be paid in..... not any currency but in gold and trucks. Why? because US dollars, British pounds, etc etc etc. were of no use in war ravaged Germany. The black market in Europe was working on Gold. Why? because money, dollars etc, can be tracked and the payment could be traced to individuals or governments. The allies never entertained the notion, why? because they knew Germany would use the gold to rebuild its war machine thus prolonging the war.
WW2 didn't start with anything like 6 active powers. The British Empire was already collapsing, Australia, New Zealand, Canada, South Africa, had all become nations in their own right. All Britain had left of its Empire was 3rd world backwaters and India which they were struggling to keep control of. Similarly France was struggling to maintain its foreign possessions. Indochina was already a difficult situation and Africa was also tense. America wasn't all that passive either, they made a fortune out of supplying arms to the allies and possibly anyone who cared to pay high prices for it.
Some huge factual errors in this section. Britain was not all that supported by anyone during WW2. Britain was under siege from the air and sea. Ireland let Nazi ships go where they please so the British Isles were surrounded by subs and ships sinking whoever they pleased in order to stop Britain getting any supplies. The German intent was to starve the Brits into submission. The Brits were forced, in a someone communistic fashion, to farm every bit of available land they could. Food and other supplies were in very low supply right through to the end of the war. As for Vietnam Uncle Ho wrote to the then president of the US of A and asked for help. The letter was ignored so Uncle Ho did the same to Russia and China, guess who jumped right in to help Vietnam kick French rear ends out of Vietnam. All the Viets wanted was to have Independence from France but to stay part of the French Union.
No argument from me with this.
France wasn't "physically liberated by the USA" it was physically liberated by the allies. My grandfather was part of it and he wasn't from the USA. America was more responsible for post war disability than post war stability. Vietnam could have been stopped by America before it even started and America eventually took over from where France left off even though they told France they would not support the French reestablishing control of IndoChina and the they completely lost it so Vietnam wasn't really of any benefit to the USA, Korea was a draw that is till a powderkeg so the USA really didn't do a great job there either. The Soviet Union was always destined to fail, no "closed economy" lasts and Gorby knew and understood that but the old Soviets, some of whom were children when the October Revolution occured didn't understand such a basic concept. If anything was a challenge to post war stability it was the USA.
Yep see what happens when you ignore people who you believe are beneath you?.
You forget that under the Bretton Woods agreement anyone with US currency in reserves could seel that currency back to the USA for gold at an agreed price. Also you forget that the US curency being the main reserve currency quite litterally made it difficult for American exports to compete with foriegn made products. In effect the Bretton WOods agreement made America depend on everyone elses goodwill. The end result was the Japanese, the Chinese, and other East Asian nations have outdone the US and most manufacturing is done in East Asia. You also forget that under the IMF there were 5 currencies kept in reserve, the Franc, the Germam Mark, the Pound, the US$, and the Yen. With the advent of the Euro teh Franc and Mark were replaced by the Euro, and other currencies (including eh Swiss Franc and the AU$) have been included in global reserves, but, and this is as much a fact today as it was back in the rebuilding after WW2, all currencies can be sold for gold which remains the international standard by agreement at Bretton Woods.
Absolutely incorrect. I can by British Pounds without having touched a US$ and the exchange price is based on how people perceieve the stability of the currency being purchased or sold.
No it wasn't the system I described. I described a system, and it started with the Spanish explorations of the Atlantic, where commodities needed to go up in value. Gold was and is a commodity and its value could go up or down, you even said so yourself.
Again this is incorrect. The value of commodities is bsaed on the exchange rate between currencies The AU$ can gain against the US$ but drop against the Yen or Pound while the Pound could go up against the Yen but not the US$. The system isn't static like you are suggesting if it was the US$ would remain more valuable than any other currency.
Money is printed on paper or plastic and minted in coins that are rarely made out of the emtals they are supposed to be. Money can easily be destroyed, gold can't. If money is destroyed the system you describe would collapse within ours due to the fact that all of a sudden there is no way to purchase anything. Gold was, is, and will remain, the standard of nation states. They trade in it, they purchase US$ in it, and they can sell US$, by the Bretton Woods agreement, to gain more gold. Not only that there are at least 9 currencies held in global reserve, this is because teh US is not stable. Nation states can sell US for Gold and keep currencies of other nation states without hindering their economy at all.
Anyway, this is all so far off the OPs question it isn't funny. You tried to prove me wrong yet all that happened is you opened up the US for criticism of the way it has handled various foriegn policy matters. Lets just say the world doesn't really trust the US in the way the US thinks it does. Now that the history lesson is out of the way can we get back to bitcoins and tithing?
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afishamongmany
Oldbie
Oh dear I'm starting to think of this as the 'prickly thread' Lighten up guys, life is short.
Personally I found both Vicompte's and keltoi's presentations above interesting and helpful. As someone who knows something about everything and not much about anything I need all the input I can get.
So for me the mists and shadows surrounding bitcoin have lifted (but certainly not disappeared) thanks to reading here, to Mnorian's link and these -
from rationalwiki, "Bitcoin has no intrinsic value (i.e., has no use-value), similar to the US dollar,[28] and could be a general currency if 300 million people similarly behaved as though it was one, i.e., would do work in exchange for it.[29] Its biggest problem as an exchange medium is that it is not widely accepted, and that trading is thus very thin indeed."
http://www.economicpolicyjournal.com/2013/10/is-bitcoin-money-what-economists-have.html
David Yermack http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2361599
What it is and how it functions, ok sort of got it, but still, the where does it come from, where is it going to? remains in shadowland.
@ keltoi
Go well
><>
Lighten up guys, life is short.Personally I found both Vicompte's and keltoi's presentations above interesting and helpful. As someone who knows something about everything and not much about anything I need all the input I can get
.So for me the mists and shadows surrounding bitcoin have lifted (but certainly not disappeared) thanks to reading here, to Mnorian's link and these -
from rationalwiki, "Bitcoin has no intrinsic value (i.e., has no use-value), similar to the US dollar,[28] and could be a general currency if 300 million people similarly behaved as though it was one, i.e., would do work in exchange for it.[29] Its biggest problem as an exchange medium is that it is not widely accepted, and that trading is thus very thin indeed."
http://www.economicpolicyjournal.com/2013/10/is-bitcoin-money-what-economists-have.html
David Yermack http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2361599
What it is and how it functions, ok sort of got it, but still, the where does it come from, where is it going to? remains in shadowland.
@ keltoi
Sure but banks, stock exchanges, etc aren't really 'whos' are they? Yes there are faces and name's that come and go. But the world keeps sailing on into the night.
Go well
><>
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Vicomte13
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Keltoi,
It appears we disagree on basic facts - about what money is, about the international money order, and about what happened in World War II. There is no bridging a factual gap. So I will leave it here without further reply.
It appears we disagree on basic facts - about what money is, about the international money order, and about what happened in World War II. There is no bridging a factual gap. So I will leave it here without further reply.
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I'm sorry, I have this thing about discussions where one single thing is presented as the be all and end all. I'm of the opinion there is nothing greater than sliced breadOh dear I'm starting to think of this as the 'prickly thread'
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