Major Pincer Movement: Exchange Controls-->CASH<--Bitcoin

[indigopete]

Hi

I've been reading some of the financial threads lately and watching all the mayhem with Bitcoin (I even tried a bit of mining :) just to familiarise myself with the process).

At the moment I live in Spain which of course is one of the PIGS and I've become acutely aware of a potential scenario where Bitcoin can be driven into use simply by massive brute force.

The way I see it is:

[1] - the Cyprus business was a major blunder by the PTB by bursting the bubble of the idea that cash is "safe" in banks. People are now on "amber alert" all over Europe - at least subconsciously

[2] - people now also know what "Exchange Controls" are. They know that it's something that appears like a tsunami over the horizon that gives them about 10 seconds to get their cash out the banks before it's locked down

I think this has created a new, very volatile environment -a kind of "mutually assured destruction" cold war scenario between bank depositors and national governments.

i.e. if there's the SLIGHTEST HINT of there being a bank problem people will get edgy and governments will get edgy. At the hint of a bank run, governments will want to impose exchange controls, but at the hint of exchange controls people will start the surest, fastest bank run you ever saw.

This would all be potentially manageable by the banking industry if it wasn't for the appearance of Bitcoin on the scene. The thing about Bitcoin that is absolutely unique in that it has 2 properties in 1:

PROPERTY 1 - it is a storage of value in its own right (unlike money which has to be "backed" by something)
PROPERTY 2 - it functions superbly as a currency

Don't believe any nonsense about it being "virtual", "hackable" or privately managed etc. It's not and is not. There are issues, such as securely storing your bitcoins or robbing the exchanges, but those are not problems with the currency itself - just with the way it's managed. (Its beyond the scope of this post to clarify those statements because it gets technical but I'd be happy to do so in another post).

Anyway, the way I see Bitcoin "sparking" something major is this: (This could happen both slowly and quickly)

[1] - another 'confidence crisis accident' happens like Cyprus (possibly Luxembourg)

[2] - one or the other of the two parties to the financial cold war (governments or depositors) blink and either exchange controls are implemented or a minor bank run starts at the mere fear of exchange controls

[3] - massive amounts of cash flow into Bitcoin (as is happing at the moment) as people realise the buying power of cash is tanking against the buying power of bitcoin (It has lost about 400-500% against Bitcoin in the last few months)

[4] - that's not a problem in itself necessarily - the cash doesn't go "out of the system" because it goes into the bank accounts of the Bitcoin sellers, however (and this is where PROPERTY 2, above, kicks in), it's NOT the same as people piling their cash into gold or oil for safety, because...

[5] ...traders start accepting Bitcoin (possibly even for a discount) in payment for goods and services, since at this point there's likely to be substantial inflation, at least when measured against the value of Bitcoin

It's that last step [5] which can drive Bitcoin into the mainstream as a fully fledged currency as well as just an investment vehicle - the fact that it's inflation proof. Think about it - no website links to bank clearing systems needed, no credit checks, no currency exchange issues - the currency is native. It's value and currency in one. (If you've wondering how it's "gets its value" - don't. Its already been endowed with value by virtue of it's scarcity, exactly the same as gold).

It's also a potential nightmare for TPTB because there are a limited supply of Bitcoins - they can't just buy them all up because most of them haven't yet been minted. They are yet to be minted (and by the public at that - not by central banks).

Also, they can't get up to all their old scams of money printing etc.

All this has been ingeniously thought out in the design of the Bitcoin currency (b.t.w. - it's not even controlled by its designers - they have no more control over it than you or I. Again, its technical).

What I like about all this is that David Icke always has always remarked that, although the PTB have the 'power', they are massively outnumbered by regular folks. (And we give them that power anyway). Until now, though, I've never actually seen a mechanism by which those numbers can actually wrest power away from its central controllers.

For me, Bitcoin is not the whole answer, but its a massive new tool - probably the biggest thing that's ever come along since the internet itself.

[mosquito]

Some interesting observations there.

A thread on how bitcoin works and how one gets involved would be very useful, if you or anyone else feels up to it.

[jackovesk]

Great Post indigopete...:thumb:

I had heard the word 'Bitcoin' before but never took the time understand the Process.

Yes it is an 'IMPORTANT' topic that needs further understanding, discussion and analysis, so much so that I will try and send some traffic your way...

Jackovesk

See this 'Excellent Thread' from 'indigopete'

Major Pincer Movement: Exchange Controls-->CASH<--Bitcoin
http://projectavalon.net/forum4/showthread.php?57504-Major-Pincer-Movement-Exchange-Controls-CASH&p=655194#post655194

PS - Please go to the above thread to join in the discussion, don't thank me, thank indigopete for his execellent summary of how 'Bitcoin' works and how it may just turn the Banking Industry on its head...

[jackovesk]

Great Post indigopete...:thumb:

I had heard the word 'Bitcoin' before but never took the time understand the Process.

Yes it is an 'IMPORTANT' topic that needs further understanding, discussion and analysis, so much so that I will try and send some traffic your way...

Jackovesk

"Bitcoin" open for discussion...
http://projectavalon.net/forum4/showthread.php?57509-Bitcoin-open-for-discussion...&p=655230#post655230

[mgray]

Bitcoin interests me for its dual purpose. It has a digital payment side as well as a digital currency side.
Those are two different mechanisms, one of which concerns me to the point where I have real doubts about its long-term future.
As a currency, Bitcoin has a very frothy -- almost Ponzi scheme -- buzz. The value of Bitcoin has soared in the last month on the back of EU woes.
Bitcoin is being pumped as an investment, more than a currency, much like the fiat currencies it is meant to replace.
Last year Bitcoin was trading at $5 a Bit, today around $90 with appreciable run ups in other currencies.
Now by definition a Ponzi is run by bringing in a steady stream of new buyers to cash out the older ones, which could be happening here as news of Bitcoin is ramping up and finding a broader market of potential buyers.
Understanding of course that the supply is limited by someone -- Bitcoins pedigree is somewhat masked in shroud wrapped in fog -- to combat inflation it is said, but the run up in price could be seen as inflationary.
It appears to me that Bitcoin -- which is being touted by similar group that pushes precious metals and canned food for dooms day -- has taken the worst of fiat currencies attributes and made it its own.

Below I have placed a link to Bitcoin against the US dollar. No chart ever goes straight up forever, and over the last year there has nary been a pullback in its value, which says to me tread lightly.
http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgCzm1g10zm2g25zv

Don't get me wrong, I like the idea of having an alternate currency -- but it must be a viable currency -- readily exchangeable -- with an ability to hold its value. It should not be susceptible to dramatic whims of a less than robust marketplace.

[Cidersomerset]

Hi Jack theres a current thread with some good info on...Steve

Will Bitcoin Kill the Federal Reserve
http://projectavalon.net/forum4/showthread.php?57516-Will-Bitcoin-Kill-the-Federal-Reserve

[indigopete]

but the run up in price could be seen as inflationary

Hi mgray

Your appraisal's got validity in some respects, however I think you've mis-interpreted what I meant by anti-inflationary.

The fact that its exchange value has soared recently doesn't reflect on Bitcoin's inflationary properties - rather it reflects on classic currency inflationary properties.

Look at it the other way around - classic money's value is plummeting against that of Bitcoin (by several hundred percent).

EXAMPLE:
If a new oven costs $200 dollars one year and $300 the next, it doesn't reflect on the inflationary properties of ovens, it reflects on the inflationary properties of dollars - the dollar could not hold it's value from one year to the next. In this case, people would be wise to use ovens instead of dollars as a currency - but for obvious reasons, this is impractical.

Now think of Bitcoins as the "oven": Yay - suddenly it IS practical to use the oven as a trading currency. Not only do they hold their value better than dollars, they are also far easier to operate as a currency than dollars (no intermediaries needed).



Understanding of course that the supply is limited by someone

The supply is not limited by "someone". It's the general public who generate the supply against a self adjusting algorithm that is in the public domain. It's not possible to generate them at a faster rate than that which is built into the algorithm. No amount of computing power in the world can churn them out at faster than 25 coins every 10 minutes (or whatever the current rate is). The only thing that's "shrouded" are the technicalities of mathematics surrounding the block solving to generate the coins - nothing else. Compared to the mist that "shrouds" the current derivatives market, the Bitcoin world looks crystal clear.

The principal is simple: A bitcoin is an extremely rare, electronic token. The analogue with gold is very appropriate because it's difficult to create (or mine) and there will only ever be a limited amount. In addition they can be traded. There's nothing Ponzi about it - it does not remotely resemble any of the characteristics of a ponzi scheme (unless you consider oil and the like to be Ponzi because of the fact that people buy it and sell it again to find new buyers).


No chart ever goes straight up forever

Don't be so sure. I estimate the "natural value" for a bitcoin, if it makes it into widespread use (say at only 1 or 2% or world trade) to be in the 10's of thousands of dollars. i.e. 1 Bitcoin - several $10,000s. It's simple arithmetic, based on the number available and that will be available over the next 10 years.

At the moment you can get them for 90$ but I doubt that will be for long. Sure they might go down again for a while but money is heading for zero. The "legacy" financial system is atrophying in front of our eyes. The amount of debt (which backs traditional currencies) lying around is monumental and can never be repaid. It's only a question of time before those hard facts seep into worldwide consciousness.

[indigopete]

It appears some others share the perspective I outlined above :) ...

"Betray Your Bank Before Your Bank Betrays You"...

http://www.zerohedge.com/news/2013-03-30/betray-your-bank-your-bank-betrays-you

[mgray]

but the run up in price could be seen as inflationary

Hi mgray

Your appraisal has validity in some respects, however I think you've mis-interpreted what I meant by anti-inflationary.

The fact that its exchange value has soared recently doesn't reflect on Bitcoin's inflationary properties - rather it reflects on classic currency inflationary properties.

Look at it the other way around - classic money's value is plummeting against that of Bitcoin (by several hundred percent).

EXAMPLE:
If a new oven costs $200 dollars one year and $300 the next, it doesn't reflect on the inflationary properties of ovens, it reflects on the inflationary properties of dollars - the dollar could not hold it's value from one year to the next. In this case, people would be wise to use ovens instead of dollars as a currency - but for obvious reasons, this is impractical.

Now think of Bitcoins as the "oven": Yay - suddenly it IS practical to use the oven as a trading currency. Not only do they hold their value better than dollars, they are also far easier to operate as a currency than dollars (no intermediaries needed).



Understanding of course that the supply is limited by someone

The supply is not limited by "someone". It's the general public who generate the supply against a self adjusting algorithm that is in the public domain. It's not possible to generate them at a faster rate than that which is built into the algorithm. No amount of computing power in the world can churn them out at faster than 25 coins every 10 minutes (or whatever the current rate is). The only thing that's "shrouded" are the technicalities of mathematics surrounding the block solving to generate the coins - nothing else. Compared to the mist that "shrouds" the current derivatives market, the Bitcoin world looks crystal clear.

The principal is simple: A bitcoin is an extremely rare, electronic token. The analogue with gold is very appropriate because it's difficult to create (or mine) and there will only ever be a limited amount. In addition they can be traded. There's nothing Ponzi about it - it does not remotely resemble any of the characteristics of a ponzi scheme (unless you consider oil and the like to be Ponzi because of the fact that people buy it and sell it again to find new buyers).


No chart ever goes straight up forever

Don't be so sure. I estimate the "natural value" for a bitcoin, if it makes it into widespread use (say at only 1 or 2% or world trade) to be in the 10's of thousands of dollars. i.e. 1 Bitcoin - several $10,000s. It's simple arithmetic, based on the number available and that will be available over the next 10 years.

At the moment you can get them for 90$ but I doubt that will be for long. Sure they might go down again for a while but money is heading for zero. The "legacy" financial system is atrophying in front of our eyes. The amount of debt (which backs traditional currencies) lying around is monumental and can never be repaid. It's only a question of time before those hard facts seep into worldwide consciousness.

I would agree with your statement on inflation to a point, but if Bitcoin is priced against fiat currency then inflation is baked into Bitcoin. As fiat currencies lose value through monetary policy, bit coins value rises on its perceived strength. If goods and services on Bitcoin are priced on a fiat price discovery basis, then price inflation will leak into bitcoin.

Your gold analogy works in regards to scarcity, but Bitcoins do not have the history of gold and Bitcoins does not have the acceptance as a form of value of gold. Two key components of gold.

As I said in earlier post the concept of digital currency for buying and selling goods is great. Having Bitcoins mirror the Wall St. currency trading model may lead to its downside.

[indigopete]

If goods and services on Bitcoin are priced on a fiat price discovery basis, then price inflation will leak into bitcoin

I suppose that's true. But it's not really a problem of Bitcoin's is it ? The key words are.."If goods and services on Bitcoin are priced on a fiat price discovery basis".

Also, lets clarify another misunderstanding. There are 2 types of inflation:

[1] - inflation caused by a genuine increase in value of the good

[2] - inflation caused by central banks printing more money and prices rising "take up the slack"

There's nothing wrong with type [1] inflation. In fact, if a currency is functioning correctly, it *should* reflect changes in value to goods and services as a price increase or decrease.

It's type [2] thats the problem - and this is the type that Bitcoin is "inflation proof" against whereas Fiat definitely is not. Its not a matter of opinion - its academic by virtue of there being a finite amount of the currency.

Of course, there is a transition phase (which we are in) where Bitcoin itself is the subject of speculation and where it's value goes up and down when measured in legacy currencies. But this is irrelevant, what matters is:

[1] - the nature of the new currency and how well it can function as a currency / store of value
[2] - how the world looks from the perspective of the new currency (as opposed to how the new currency looks from the perspective of the old)

[mgray]

OK speaking of [2] if I buy or acquire a BitCoin at $100 and th following week it is trading at $90 i have experienced a 10% inflation rate. With limited liquidity, this is far more of a possibility. If Each Central Bank is printing their hearts content right now we all go down the same slippery slope with little inflation baked in (beggar thy neighbor can't happen if the neighbor has a printing press too).

Wage inflation is a non-starter in our current environment, so the [2] inflation is a product of trading on fiat currency against another, which is the bone of contention with Bitcoin. Be a digital currency for goods and services without the trading against fiat. Why would this community adapt the lethal weapon of Wall St.? Why not have a new paradigm and a reliance on the old trading scheme?

[indigopete]

OK speaking of [2] if I buy or acquire a BitCoin at $100 and th following week it is trading at $90 i have experienced a 10% inflation rate. With limited liquidity, this is far more of a possibility. If Each Central Bank is printing their hearts content right now we all go down the same slippery slope with little inflation baked in (beggar thy neighbor can't happen if the neighbor has a printing press too

What you have experienced in that example is the effects of speculation in a commodity (in this case Bitcoin) using fiat currency.

This has nothing to do with the debate about whether Bitcoin is a healthy form of currency or not - because your measuring the effects in dollars. You're observing all the properties of dollars and none of the properties of Bitcoin.

A more instructive example would be:

[1] - I am an IT consulant and I ask my customers to pay me in Bitcoin. My friend continues to bill in Euros. (I fix my rate in Bitcoin)
[2] - I buy bread, petrol and electricity from suppliers who also bill in Bitcoin
[3] - the bottom falls out of the banking system and central banks print like mad to try to re-inflate the economies. he can no longer afford bread, petrol and electricity.

RESULT

[1] - I continue to by bread, electricity and petrol at the usual rate
[2] - my friend is broke because wage inflation didn't keep up with price inflation and his savings are destroyed

In that example we are comparing like with like: The same scenario in two different types of economy, 1 Fiat based and one non-Fiat. Thats why I say that the exchange rate between Fiat and Bitcoin doesn't matter when we're considering it's viability. (It matters in the transition period when people want to swap their currency for Bitcoin - the higher BCT goes in dollar price, the more of a measure of confidence it will have and the more the dollar economy will tank against it. But thats not "Wall Street speculation" - thats switching operational currencies).

[ThePythonicCow]

I would agree with your statement on inflation to a point, but if Bitcoin is priced against fiat currency then inflation is baked into Bitcoin. As fiat currencies lose value through monetary policy, bit coins value rises on its perceived strength. If goods and services on Bitcoin are priced on a fiat price discovery basis, then price inflation will leak into bitcoin.
That's not bitcoin inflation, that's dollar inflation (dollars becoming worth less and less until they are worthless.)

As a currency, bitcoins are inherently deflationary. There are only 10 million in circulation, and there will never be more than 20 million in circulation. Currencies with ultimately fixed maximum quantities in circulation tend to become more valuable over time, so long as they are in use, given various irreversible losses, especially if the economic activity in the community using them is growing.

[mgray]

If as you are say it's not Bitcoin that's the problem; its the fiat money, then why tie Bitcoin to fiat? No one is answering this question! If you truly want a free and open currency then tie its value to a basket of commodities or other tangible assets. Don't link its value to a fiat currency. That is what I have been saying all along.

[PathWalker]

Nice observation.

Put this into the variables.

No one really know who control the code in the "Open Sources" Bitcoin community. The Bitcoin community is obscure and amorphous.
It might be new Power To Be. Control and greed driven.

The Bitcoin has no accountability (no one to blame), and no governing body (no committed strategy, no policy to change strategy).
What you see in the open source code, is not guaranty it will be the same code in few months from now.
You trust it as an investment, with a grain of risk.

[indigopete]

If as you are say it's not Bitcoin that's the problem; its the fiat money, then why tie Bitcoin to fiat? No one is answering this question! If you truly want a free and open currency then tie its value to a basket of commodities or other tangible assets.

I think you've possibly missed something completely fundamental regarding the nature of Bitcoin.

Bitcoin is not tied to Fiat money. It is not related to Fiat money in any way shape or form. It is not "backed" by it, does not represent it, or anything. The entire stock of Fiat money could disappear over night and Bitcoin would not be affected.

Maybe what's confusing you is that people quote values for Bitcoin in Fiat money. Just forget that - it's got nothing to do with the Bitcoin system.

Volkswagen Golf's are in no way related to Umbrellas, but there's nothing stopping someone offering to swap 1000 umbrellas for a Volkwagen Golf if they want to. That's all thats happening when you see that Bitcoin is said to be "worth" $90. Someone with dollars has offered to swap 90 of them for a Bitcoin.

But a BCT market can function perfectly well on it's own without Fiat currency or Gold or Silver or oil. Again - the difference is that Bitcoin is not "backed" by anything. Instead it IS the item of value itself thats being exchanged. It doesn't represent anything (in the way a Fiat currency is a proxy for debt or Gold).

[indigopete]

No one really know who control the code in the "Open Sources" Bitcoin community

There's no actual "source code" as such.

Anyone can "make" a bitcoin - it involves solving a computation problem, the result of which is the bitcoin.


The Bitcoin has no accountability

I'm not sure what kind of accountability you have in mind. The most important kind of accountability a currency can have I suppose is that its integrity can be tested.

In this respect, Bitcoin is about the most accountable currency ever created. It's integrity is tested every time a transaction is made, and all bitcoin clients in the world receive a copy (something called the "blockchain").

If you can imagine being in a supermarket and handing over a £20 note while having the entire chain of custody of that note (every person who had ever handled it including the actual person who printed it) looking over your shoulder to check it, that's the kind of accountability that exists with bitcoin. (As I understand it at least).

[scanner]

Just be weary of what you're getting in to with Bitcoin .

[mgray]

Ok so its not backed on anything. It's value is derived by what its worth to the two people in the trade.

But then why is there a price discovery mechanism and exchanges against other currencies? And please don't say its a reference point.
I can't go to on the Web and trade umbrellas, but I can get dynamic pricing on Bitcoins in many other currencies.
So clearly despite what your Utopian thoughts are on Bitcoin and its fundamental nature of not needing fiat, has been corrupted by the marketplace.

I'll have to resort to a amended version of the classic Abbott & Costello routine.

Costello: I have a Bitcoin. What's it worth?
Abbott: Depends
Costello: Depends on what?
Abbott:Who you ask.
Costello:Who is who?
Abbott:Who is on first
etc.

[ThePythonicCow]

I've been reading some of the financial threads lately and watching all the mayhem with Bitcoin (I even tried a bit of mining :) just to familiarise myself with the process).


Great Post indigopete...:thumb:

I just merged these two threads :0.

[indigopete]

has been corrupted by the marketplace

I think I see what you mean now.

Your saying that the fact that Bitcoin is the subject of speculation in the currency marketplace, affects it's purchasing power in the "product" marketplace ? (i.e. if currency speculators suddenly "dumped" Bitcoin, I'd be able to buy less loafs of bread with it).

Thats true. And there's not much anyone can do about it, however, I would make 2 observations about that"

[1] - Bitcoin as a currency is not "corrupted" as you suggest by this phenomenon. It's simply having to live in a turbulent market alongside other currencies

[2] - the question is which "type" of currency is going to come off worst from the turbulence in the long run

To answer [2], you have to look at the nature of each currency and thats where the difference becomes apparent because Fiat currency is mostly underwritten by massive (and I mean gargantuan) amounts of DEBT. Nothing more. In addition to that, it's a fractional reserve system which means that you need the economy to keep growing and growing so that new debt can be issued to "feed" the money supply.

If some of that debt starts to be defaulted on in any significant way (e.g. sovereign defaults or banks collapsing due to falling below their minimum reserve requirements and shareholders selling) then it can implode in a very big way because the leverage on the underlying debt is so high now.

On the other hand, this scenario is not possible in Bitcoin. It is resistant to a "puff" type currency implosion, not being underwritten by debt and not being a levered currency. There is no way that "Fiat price discovery" or any other interaction with the Bitcoin market can dilute or "corrupt" these qualities.

I can think of something that * would * corrupt the Bitcoin world though, and that would be if banks or other types of lenders started issuing contracts (or derivatives) based on Bitcoin reserves - thereby turning it into a an effective fractional reserve system. Then we would have come the full circle from when gold was used as the basis for issuing money.

[mgray]

Thank you indigopete I enjoyed this discussion and hope others derived some information from it. I know I did.
I only just realized you are writing from Spain and I now better understand your opinion on currencies.
My general take on the euro is that it may accomplish one thing. What Germany could not do in 500 years through warfare, she has accomplished in 12 years through the euro experiment. Control Europe.
Good luck going forward.

[PathWalker]

No one really know who control the code in the "Open Sources" Bitcoin community

There's no actual "source code" as such.

Anyone can "make" a bitcoin - it involves solving a computation problem, the result of which is the bitcoin.


The Bitcoin has no accountability

I'm not sure what kind of accountability you have in mind. The most important kind of accountability a currency can have I suppose is that its integrity can be tested.

In this respect, Bitcoin is about the most accountable currency ever created. It's integrity is tested every time a transaction is made, and all bitcoin clients in the world receive a copy (something called the "blockchain").

If you can imagine being in a supermarket and handing over a £20 note while having the entire chain of custody of that note (every person who had ever handled it including the actual person who printed it) looking over your shoulder to check it, that's the kind of accountability that exists with bitcoin. (As I understand it at least).

Accountability in the sense that you trust the current rules (algorithms you praise) will stay unchanged in the coming months.
Accountability in the sense the current business plan will be the same in the coming months.
If the "community" make change (for instance increase the transaction commission), there is no one responsible.

[indigopete]

Accountability in the sense that you trust the current rules (algorithms you praise) will stay unchanged in the coming months

Yes indeed, that is important.

But I think it's that kind of accountability can only be garnered over time.

With Fiat currencies, the rules get changed at the drop of a hat:

- central banks print too much money which devalues the currency
- they go bankrupt and the currency "disappears'
- they 'steal' money directly by making depositors take enforced haircuts
- they play around with minimum reserve requirements

Where's the accountability in that ? There is none because there's been no alternative except for trading commodities which is a bit impractical for most people.

On the other hand, Bitcoin's accountability arises from the fact that it has a declared production rate which can be observed. No-one can "change" that rule because the currency is de-centralised. It would be akin to a newspaper changing the rules for it's daily Sudoko puzzle. The puzzle would cease to be a "Sudoku" puzzle and would therefore be something else.

Similarly, to change the rules for Bitcoin, you'd have to re-programe the Miner's to generate something other than Bitcoin. These would simply then not "fit" on the end of the block chain and their worth would be zero.

[PathWalker]

Accountability in the sense that you trust the current rules (algorithms you praise) will stay unchanged in the coming months

Yes indeed, that is important.

But I think it's that kind of accountability can only be garnered over time.

With Fiat currencies, the rules get changed at the drop of a hat:

- central banks print too much money which devalues the currency
- they go bankrupt and the currency "disappears'
- they 'steal' money directly by making depositors take enforced haircuts
- they play around with minimum reserve requirements

Where's the accountability in that ? There is none because there's been no alternative except for trading commodities which is a bit impractical for most people.

On the other hand, Bitcoin's accountability arises from the fact that it has a declared production rate which can be observed. No-one can "change" that rule because the currency is de-centralised. It would be akin to a newspaper changing the rules for it's daily Sudoko puzzle. The puzzle would cease to be a "Sudoku" puzzle and would therefore be something else.

Similarly, to change the rules for Bitcoin, you'd have to re-programe the Miner's to generate something other than Bitcoin. These would simply then not "fit" on the end of the block chain and their worth would be zero.

Very good points, you trust what you believe.
If you believe the power of the community matter, invest in Bitcoin.

Investment in fiat currency is very same, one trust the currency publisher to hold a debt value to the note.

Actually every currency is a trust based system. The negotiating sides agree on the value of the currency for the exchange to take place.
Just 3000 years ago, the most precious currency was salt (not gold). Salt is required to sustain life, and is not existing in the mountains. The value of salt inflated when humans learned to produce salt.

[indigopete]

By the way folks, this thread now ranks variously number 1 or 2 on google for the search terms "exchange controls and bitcoin" (not in inverted commas).

Better be on our best behaviour ;)

[greybeard]

By the way folks, this thread now ranks variously number 1 or 2 on google for the search terms "exchange controls and bitcoin" (not in inverted commas).

Better be on our best behaviour ;)


Totally off topic but your post indigopete led me to do google search for transcending ego/enlightenment and to my surprise the thread linked came up second on that search engine.
Avalon forever!!!
Chris

http://projectavalon.net/forum4/showthread.php?860-Enlightenment-The-Ego-what-is-it-How-to-transcend-it.

[Hervé]

Helsinki Unveils Europe's First Bitcoin ATM (http://www.zerohedge.com/news/2013-12-16/helsinki-unveils-europes-first-bitcoin-atm)
Submitted by Tyler Durden (http://www.zerohedge.com/users/tyler-durden) on 12/16/2013 21:47 -0500

While Canada has had Bitcoin ATMs for over a month (http://www.zerohedge.com/news/2013-11-07/world%E2%80%99s-first-bitcoin-atm-processes-100k-transactions-its-first-8-days), bringing the virtual currency closer to mainstream acceptance; Bittiraha.fi reports (https://bittiraha.fi/content/europes-first-bitcoin-atm-here-0) that at one of the busiest spots in Helsinki, the Finns have opened the first permanent Bitcoin ATM installation in Europe. With the Chinese shunning the crypto-currency for now but the Swiss inching towards a broader acceptance, the appearance of ATMs (like this one at a well-known Finnish record store in the Helsinki railway station) will only serve to stoke the public interest.

Via Bittirahi.fi, (https://bittiraha.fi/content/europes-first-bitcoin-atm-here-0)
We've launched THE FIRST permanent installation of a Bitcoin ATM in Europe. It's right there, ready for use, at one of the busiest spots in Helsinki. Proof is in the pics.
https://bittiraha.fi/sites/default/files/image/Asematunneli.jpg
200 000 people walk through the tunnels of the Helsinki Railway Station each day. It's one of the busiest places in the city.


https://bittiraha.fi/sites/default/files/image/Asematunneli5.jpg
Enter Bitcoin.

https://bittiraha.fi/sites/default/files/image/Asematunneli8.jpg
Ah, there it is.
https://bittiraha.fi/sites/default/files/image/Asematunneli9.jpg
There it is. And it works.
https://bittiraha.fi/sites/default/files/image/Asematunneli10.jpg
BItcoin ATM selfie?