Bitcoin as a currency [split from: Interest Banking]

[Hello=)]

Topic split from http://forums.themanaworld.org/viewtopi ... 12&t=17733

One drain which would remain would be players who quit. The money still stored on their accounts would be unreachable and thus effectively removed from the economy.

And the first attempt to test it in large scale is a Bitcoin. This system haves inherently limited total amount of "coins", though they could be splitted, somewhat mitigating issue. Though price of coin would increase as coints are lost in dead wallets. But its probably 1st large-scale money system of such kind and nobody knows how it would actually perform. We'll see it ourself. Somewhere in future.

But do we want this? I think we don't. A more realistic game is not necessarily one which is more fun to play.

Would be a real nightmare for newbies since they dont know anyone when just entered the game. Not to mention it screws up half of quests. IMO source/sink balancing approach works okay. Why there is need to fix what is not broken?

[Crush]

And the first attempt to test it in large scale is a Bitcoin. This system haves inherently limited total amount of "coins", though they could be splitted, somewhat mitigating issue. Though price of coin would increase as coints are lost in dead wallets. But its probably 1st large-scale money system of such kind and nobody knows how it would actually perform. We'll see it ourself. Somewhere in future.

The problem with BitCoin is that it is much more successful with the investors than the consumers. As a result it is used mostly as a speculative commodity, not as a currency.

[Hello=)]

The problem with BitCoin is that it is much more successful with the investors than the consumers. As a result it is used mostly as a speculative commodity, not as a currency.

Perfectly valid use of currency. Currency is generally some tool to have universal measure of value rather than use some goods exchange directly. Bitcoin happens to be one of such tools, nothing more, nothing less. With some specific properties but working anyway. It do not have to be "successful with consumers" on it's own. Gold is "not successful with consumers" either. In sense that its not like if someone uses gold to conduct day to day operations.

[Crush]

It do not have to be "successful with consumers" on it's own. Gold is "not successful with consumers" either. In sense that its not like if someone uses gold to conduct day to day operations.

But that's what BitCoin was meant to be: A non-commercial payment system. Some kind of decentralized Paypal independent of large companies. But because of the high value fluctuations it has due to the speculators, it can't fulfill this role. When you buy something with BitCoins, you buy the coins with your local currency from a trader, transfer them immediately and the receiver also gets them back into their own currency as quickly as possible. That's necessary because it's too dangerous to hold on to them for too long - the market could crash any day. As a result you still need a company to make a money transfer. Just now it's Mt.Gox and not Paypal.

[Hello=)]

But that's what BitCoin was meant to be: A non-commercial payment system. Some kind of decentralized Paypal independent of large companies. But because of the high value fluctuations it has due to the speculators, it can't fulfill this role.

True to some degree. However:
1) Any currency is just a tool to measure value of things/jobs in more or less universal way and simplify transactions (ecxchanging apples to new aircraft engine directly could be hard task, etc). Scope may wary. Say, Japanese currency is not as widely used as USDs. Does it makes it anyhow bad? Any goals failed? Huh?
2) "usual" currencies do not really have any fixed value either. These are essentilly some parts of papers and nubers on bank accounts. These items have no inherent values on their own. Even gold on its own is far more cheap than it costs as value measurement item. Should it be only used for industry, etc - it price would be much lower than current one. Because industry does not really needs much gold and it extraction rate exceeds demand of industry quite a lot.
3) I guess strong fluctuations are results of relatively small scale and overall its qute new thing which is not fully stabilized yet. With more time passing and usage increasing, it would become more stable I guess. Yet you can face severe fluctuations with usual currencies as well and in fact most of speculators are rather using "usual" currencies and differencet in exchange rates. Do not see how it fundamentally different.

When you buy something with BitCoins, you buy the coins with your local currency from a trader, transfer them immediately and the receiver also gets them back into their own currency as quickly as possible.

Could be not wisest idea ever since I expect bitcoins would increase price over time due to overall mechanics design(lost coins, etc). I do not see reasons to be in hurry to exchange BTC -> USD or so unless you can get good exchange rate and believe it would be worse in future (so far it has been not a case and rather opposite).

That's necessary because it's too dangerous to hold on to them for too long - the market could crash any day.

Then it would also recover and increase price again. Sure, there're both going up and going down. And they're larger than it happens to be with common currencies, making it more attractive for speculators. Though, say, in Russua people once faced "default" procedure where RUR value has been cut by about 3 times in a matter of 2-3 days. Then, Cyprus put restrictions on getting cash from bank accounts, also shown it's not really "safe" either. So even "real" currencies can have severe issues. Central regulators can crash them in arbitrary ways at their will. And nearly all of currencies suffer from (relatively slow) inflation which ensures you lose value if you "just store" currency rather than "doing something profitable" with it. I would not call this scheme "safe" and really doubt bitcoins are more dangerous. Lack of central authority makes some nasty tricks deployed in well-controlled way impossible or hard, to begin with.

As a result you still need a company to make a money transfer. Just now it's Mt.Gox and not Paypal.

Not really. BTCs have some value on their own, just like gold or these pieces of papers or numbers on bank account. So its completely valid to just exchange BTCs between entities. Then there is also way to mine them (not really cheap and somewhat tricky. I think SHA256 has been not the best choice). Even if mtgox ceases operations, it would not stop BTCs anyhow. On other hand if some national bank would regulate certain currency - you can easily discover you now have just a mere pieces of paper not attached any value at all. What is value of piece of paper? Close to zero. What is value of number in computer system? Zero. So attached value is a virtual abstraction, actually. Like it happens to BTCs.