On Tue, 2011-06-21 at 16:43 +0100, Michael Watterson wrote:
> The creators are too naive:

Maybe, or perhaps revolutionary, time will tell.

> In creating a virtual currency  that's not backed by a sovereign state=20
> you need:

First off, let's correct a few misconceptions. bitcoins are SUPPOSED to
be "different" from "regular" currency, that was the point.

Second, bitcoins should not be treated as traceable. They are SUPPOSED
to basically be the same as cash, untraceable. So, with that said, I'll
provide counterpoints:

> 1) Design methods to exchange to other currencies from the start.

Why? There was a time when most currencies had ZERO government backed
methods of exchange. There are STILL currencies that cannot be exchanged
through official means (try walking into a US bank with cash from Cuba
to see what I mean). A currency is more useful if it can be freely
exchanged, but that is by no means a necessity.

> 2) Assume people are more ingenious and more totally evil than you can=20
> imagine

Hence the "everybody sees everything" model, it's only when everybody
has seen and basically approved of the transaction that things go
through.

> 3) Assume exchanges will be hacked

Every heard of bank heists? It's basically the same thing. The presence
of bank heists surely hasn't effectively the legitimacy of the USD, or
any other currency.

> 4) Assume it will be forged

Cash is forged ALL that time. Last stat in canada was something like
every 30 of 1,000,000 notes in circulation in Canada are forged (down
from something like 400 a decade ago).

> 5) Assume it will be "stolen" from people via social engineering,=20
> trojans or other black hat stuff.

Umm, that happens ALL THE TIME with "normal" currency. Scam artists have
been convincing people to let go of their money for as long as money has
existed.


Will bitcoin survive? I have my doubts. It has a few features that are
REALLY cool. It has many features that "the man" REALLY hates. It has
some features that completely go contrary to monetary theory. None of
that guarantees success or failure IMHO.


I for one hope it, or something like it survives and flourishes. Our
society tends to believe in competition, why should currency have a
competitor?

TTYL

--=20
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