Bitcoin News
Daily diary of what's happening with Bitcoin.
Forbes contributor and Bitcoin Foundation (@BTCFoundation) board member Jon Matonis (@JonMatonis) considers the impact a government ban on Bitcoin would have on the fledgling currency. Excerpts:
“The demand for an item, in this case digital cash with user-defined levels of privacy, does not simply evaporate in the face of a jurisdictional ban.”
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“Ironically, the ban would create something like the Streisand effect for Bitcoin generating an awareness for entire new demographic groups and new classes of society.”
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“[Bitcoin is] a bet that career mobility and independent contractor businesses will eventually outstrip the growth of the corporate wage-slave population.”
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“[The government’s] best response to Bitcoin is irrelevancy, or failing that, extreme gold-like market manipulation for as long as possible. The end game for the State is perpetuating the fiat myth — their fiat myth not the populace’s cryptographic Bitcoin myth. They have always known that faith in money is a mass illusion, however they never considered that they wouldn’t be in charge of the illusion.”
- http://onforb.es/112nF0u
- http://bitcointalk.org/index.php?topic=139516.0 (Further discussion of this article)
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Today’s CHART OF THE DAY covers Bitcoin’s increase in the exchange rate. Excerpts from a corresponding article by Max Raskin (@MaxRaskin) on Bloomberg:
“Bitcoin has more than doubled in the past 12 months, strengthening to $16.37 from $5.88.”
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“Greater demand for virtual currencies could have a negative impact on the reputation of central banks, according to a report published by the European Central Bank in October last year.”
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“Steve Hanke, a professor at Johns Hopkins University in Baltimore who helped to establish new currency regimes in countries such as Argentina and Bulgaria [said about Bitcoin] ‘I think it’s a competitive threat. Maybe virtual currencies will be so convenient that they will pose a threat because of their ease of use.’”
- http://bloom.bg/WIzQOZ
- http://i.imgur.com/AMLYAXs.png (CHART OF THE DAY)
- http://bit.ly/VjfyKM (Related post on ZeroHedge about the COTD)
- http://bitcointalk.org/index.php?topic=139515.0 (Further discussion of the Bloomberg article)
- http://bitcointalk.org/index.php?topic=139552.0 (Further discussion of the ZeroHedge post)
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Forbes contributor and Bitcoin Foundation board member Jon Matonis (@JonMatonis) shares the argument by Austrian economists that price deflation is nothing to fear. Excerpts:
“Deflation is not a problem in the traditional monetary system and it will not be a problem in the bitcoin economy.”
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“Although the supply of [bitcoins] will be relatively static with the exception of attrition through permanently lost coins, I will refer to the monetary phenomenon as deflation because as bitcoin’s asset value increases compared to political numéraires, its effect on price expression will be seen as deflationary.”
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“An economy with a monetary unit that increases in value over time provides significant economic benefits such as near zero interest rates and increasing demand through lower prices.”
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“‘During an inflation, you want to get rid of the money. You want to consume. You want to spend. But you don’t become wealthy by spending and consuming; you become wealthy by producing and saving’ [writes Doug Casey, of Casey Research]”.
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“‘Deflation puts a break–at the very least a temporary break–on the further concentration and consolidation of power in the hands of the federal government and in particular in the executive branch.” [writes German economist Jörg Guido Hülsmann]”.
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“Ultimately, the market will reach an equilibrium between investment and savings because in the absence of an equilibrium the benefits of a savings-only strategy would evaporate. Proper economic growth through sound investments will lead to a productivity-driven deflation.”
- http://onforb.es/V03gqW
- http://bitcointalk.org/index.php?topic=133079.0
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There’s been quite a flurry of responses to last week’s policy brief on “Virtual Currency Schemes” published by the ECB. A list of these, compiled by Bitcoin Money, includes posts on ZeroHedge, a post by Jon Matonis on Forbes.com, BitInstant’s Erik Voorhees, and others.
- http://www.bitcoinmoney.com/post/35010292565
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The European Central Bank (@ECB) published a 55 page report on virtual currencies, primarily on Bitcoin and Second Life Lindens (SLL). Excerpts:
[There are a number of articles and blog posts that were written in response.]
- http://bit.ly/XL53Dd (PDF of report)
- http://bit.ly/RjbKGU (in a PDF viewer)
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Nicolas Mendoza (@nicolasmendo) describes the essence of what bitcoin is and what it is not. Excerpts:
“Hacktivism allows dissent to overcome the limitations of protest, actually implementing alternatives and making them widely available without asking for permission from the status quo. It gives wings to the possibility for gradual peaceful revolution: alternatives no longer need to remain dreams, but can become real options for real people.”
“The flaws in the design of modern currency are at the roots of the social and ecological disasters we face today. Alternative currencies in general hold the promise of a way out.”
“The whole world’s ‘formal’ economy is backed by debt, and debt is backed by violence. This can be verified by defaulting, and subsequently resisting eviction: state force will be used sooner rather than later.”
Bitcoin entrepreneurs have already developed an impressive, if experimental and imperfect, ecology of operational support infrastructures. […] These services are autonomous initiatives, driven by no authority other than that which emanates from the needs of Bitcoin users and the nature of the Bitcoin protocol.”
“No part of the Bitcoin economy will last unless it is objectively a better deal for the end user than the flawed-but-known ways of today. In this sense Bitcoin is perhaps one of the hacktivist revolution’s greatest tests: can the network itself actually handle the globe’s finance?”
