The future of money in a webbed-up world

[dreamdancer 0]

interesting...

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PEER-TO-PEER networks like Napster and Skype have already disrupted the music and telephone industries. Now a bunch of libertarians and internet geeks are hoping to do the same for cash with an online currency called Bitcoin.

The currency is created and distributed over a P2P network, and the developers hope to attract users by exploiting some people's disaffection with the government-controlled central banks that control conventional money. This virtual cash is already being accepted by some online businesses in exchange for goods and services - and some users claim to be making a living from it.

Here's how it works. As with Skype, each Bitcoin user downloads and runs a P2P client program on their PC that communicates with similar programs being run by other users. Then a lottery ensues: the software on each P2P client runs a mathematical routine that attempts to generate a number lower than a constantly changing target figure. Every 10 minutes, one client succeeds and is rewarded with a certain amount of virtual money - currently 50 bitcoins (BTC). Because striking lucky this way is seen as akin to prospecting for gold, users have been dubbed "miners".

The bitcoins can then be used to buy services such as web design or various types of goods that include T-shirts and ground coffee. Miners pay by sending bitcoins to a receiver's P2P network address - a sequence of alphanumeric characters - which serves as the public key in a cryptography system. The sender transmits coins to the receiver's address by combining them into a message with a private key known only to the sender. There are other ways to earn bitcoins: miners can charge transaction fees if buyers want payments processed faster than the average, which also happens to be around 10 minutes.

http://www.newscientist.com/article/mg21028155.600-future-of-money-virtual-cash-gets-real.html

stay away from moving propellers - they bite
blue skies from thai sky adventures
good solid response-provoking keyboarding

[doi 0]

http://www.youtube.com/watch?v=Um63OQz3bjo&feature=player_embedded

http://www.weusecoins.com/

[kelpdiver 2]

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Here's how it works. As with Skype, each Bitcoin user downloads and runs a P2P client program on their PC that communicates with similar programs being run by other users. Then a lottery ensues: the software on each P2P client runs a mathematical routine that attempts to generate a number lower than a constantly changing target figure. Every 10 minutes, one client succeeds and is rewarded with a certain amount of virtual money - currently 50 bitcoins (BTC). Because striking lucky this way is seen as akin to prospecting for gold, users have been dubbed "miners".

money being made up out of thin air. Sounds no different from conventional money.

[kelpdiver 2]

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money being made up out of thin air. Sounds no different from conventional money.

even funnier:
http://www.dailytech.com/article.aspx?newsid=21877

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But as bad a day as Friday was for NYSE traders, it was far worse for those who invested in an increasingly popular digital currency -- Bitcoins (BTC). At the opening bell at Mt. Gox, the world's largest Bitcoin exchange, a single BTC cost $28.919 USD. By mid-day that total had plunged to $20.01 USD -- a drop of 30.8 percent.

[dreamdancer 0]

i can see thousands and thousands of these little virtual currencies popping up, inflating and then bursting. would this be better than one big currency inflating and bursting...

stay away from moving propellers - they bite
blue skies from thai sky adventures
good solid response-provoking keyboarding

[dreamdancer 0]

if it's worth something it's worth stealing...

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It's less than a fortnight since we first wrote about Bitcoin, the online peer-to-peer currency, but things move fast in the world of digital cash. In that time Bitcoin's value quickly ballooned to over $30 before crashing back down, though the currency still remains valuable at around $17 per Bitcoin. Now, it seems the high prices are drawing the attention of criminals.

Computer security firm Symantec reports that malware authors are targeting Bitcoin users with a Trojan called Infostealer.Coinbit. Once installed on a user's computer, the Trojan searches for their wallet.dat, the file where information about your Bitcoin balance is stored, and uploads it to the attacker.

Anyone who loses their wallet.dat file has no way of recovering the Bitcoins it contains, since the currency has no central authority to appeal to. One Bitcoin early-adopter discovered just how painful this can be when they lost 25,000 Bitcoins to a hacking attack - worth around $500,000 at the time of the theft.

http://www.newscientist.com/blogs/onepercent/2011/06/bitcoin-theft-attempts-are-on.html

stay away from moving propellers - they bite
blue skies from thai sky adventures
good solid response-provoking keyboarding

[doi 0]

Not that anybody here would have been bothered learning about it, but the future of money is quite simply in tangible commodities.

The Gold Dinar and silver Dirham are fast overtaking paper money in many places around the world and they seem to be resisting the inflation of the paper money in those same places.

Gaddafi announced he wanted to trade his oil in Dinar, he made the same fatal mistake that Saddam did (Saddam wanted to trade in Euro).

The push to stop such from happening by the banking elite is in vein. The Dollars collapse and the countries defending it are becoming more and more in debt to the Federal Reserve.

These bullion currencies remove the dependance on the federal reserve banking system.

The transition is not going to be pretty but it is going to happen sooner than many will be willing to acknowledge.

I am not stating only Dinar and Dirham will be the future of money but more so the use of gold and silver instead of a worthless pieces of paper issued by despicable criminals.

Bitcoins are a novel idea but they are not tangible so IMHO they will never be a mainstream currency.

We all know gold and silver and we trust them.

[nanook 1]

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Not that anybody here would have been bothered learning about it, but the future of money is quite simply in tangible commodities.

That was the way it was in the past. It didn't work out. It definitely won't work now.

_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

[dreamdancer 0]

the future of money is in bits
from a different angle - these virtual currencies will remove the anonymity of money which will further change its nature...

stay away from moving propellers - they bite
blue skies from thai sky adventures
good solid response-provoking keyboarding

[DrewEckhardt 0]

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Here's how it works. As with Skype, each Bitcoin user downloads and runs a P2P client program on their PC that communicates with similar programs being run by other users. Then a lottery ensues: the software on each P2P client runs a mathematical routine that attempts to generate a number lower than a constantly changing target figure. Every 10 minutes, one client succeeds and is rewarded with a certain amount of virtual money - currently 50 bitcoins (BTC). Because striking lucky this way is seen as akin to prospecting for gold, users have been dubbed "miners".

money being made up out of thin air. Sounds no different from conventional money.

It's radically different from conventional money.

Governments only require a pen stroke to create currency in a fiat monetary system like we supposedly have in the US (one can argue we've transitioned to a credit monetary system) so the money supply has no upper limit (although when they print too much it's value drops compared to commodities and other currencies, like the Canadian dollar trading at close to parity versus $.60 Canadian per US dollar a decade ago and the Euro which now costs $1.40 instead of $1 at its origination).

The number of Bitcoins in existence is limited to about 21 million, with the rate of production unlikely to deviate from predicted values unless there's a radical change in computing technology (Moore's law stating that the number of transistors on a chip doubles every two years has held for the last 50 years and is expected to continue for the next few years followed by a slowing which stops as we're placing individual molecules on chips around 2020. This is also what limits speed, with less size allowing for higher clock speeds at the same thermal dissipation and light speed ultimately determining how fast electrons and holes move).

Gold held as a commodity is similar (you don't take delivery of actual gold; although it's technically impossible with the Bitcoin. OTOH, you need to trade gold through an exchange which is subject to government monitoring in taxation although bitcoins don't need that). Physical gold is more similar (you can trade it without government intervention. Although the government could interfere with the internet, you can hide data in pictures via steganography or do your peer to peer transfers with avian transport).

[dreamdancer 0]

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American politicians, and especially their more net-savvy aides, are growing interested in bitcoin's potential. Lead bitcoin developer Gavin Andresen recently met with political staffers who encouraged the bitcoin community to contact the offices of their local representatives and evangelize the digital currency's cultural promise. In our continually depressed economy, they seem not less but more interested in extraordinary solutions. You just have to know who to talk to.

"I wouldn't bother talking to the representative," Andresen wrote in June on his blog. "They're probably too old to really understand bitcoin. Talk to a twenty-something staffer who grew up with the Internet and is likely to be a lot more sympathetic to the idea of a peer-to-peer Internet money."

But whether it's bitcoin or another digital currency such as Facebook credits and the myriad others that are emerging in what futurist Venessa Miemis calls the "superfluid economy," it is clear that the economy as we knew it is on its last legs. The Internet's creative hive mind is charting the future of commerce, and chances are, given Washington's debt ceiling charades and the politically and economically compromised Federal Reserve, that its currency will be a digital one. Digitalism has already overtaken the market, with over 95 percent of stock transactions firing algorithms at the speed of light through the internet. Virtual currencies like bitcoin seem interested in leveling the playing field for the rest of us, provided we can handle the code.

"Bitcoin transactions are more secure, and cost far less, than existing bank-to-bank transactions, making bitcoins very attractive," Garzik concluded. "In an imaginary future, bitcoins will exist alongside fiat currencies, giving people more choice and more control over their wealth."

http://www.alternet.org/news/151822/bitcoin%3A_a_new_kind_of_money_that%27s_beyond_the_reach_of_bankers%2C_wall_st._and_regulators/?page=entire

stay away from moving propellers - they bite
blue skies from thai sky adventures
good solid response-provoking keyboarding