What if Anonymous had its own bank? That’s the tagline of the open source project Bitcoin. Virtual money? A peer-to-peer electronic currency system? I don’t quite understand it, but a lot of geeks are really, really excited about this:
We are 100% certain that governments will start banning bitcoins in the next 12 to 18 months. Additionally, we’re certain bitcoins will soar in value and a crush of folks will flood the system and start using them.
Currently there are 6M coins at $6.70 each for a total economy of about $40M. Bitcoin speculation and hoarding will also cause a massive spike in bitcoin value. For example, if 10M people find out about bitcoins in the next year and want to buy $100 worth, $1B will be infused into the bitcoin economy.
Finally, there will be massive breakage in bitcoins. If your laptop crashes and you didn’t back up your bitcoins, well, you’re SOL. If someone steals your laptop that has 10,000 bitcoins on it you won on Bitcoin Poker, you’re SOL. Lost your USB drive with 500 bitcoins on it after a night out on the town? You’re SOL.
Sites like 99designs, eLance and oDesk will start accepting bitcoins for payment. If they don’t, they will face competition from folks who do.
Bottom line: The world is going to be turned over by bitcoins unless governments step in and ban them by prosecuting individuals.
This is about to get really interesting, everyone.
Well, one bit coin and a five dollar bill will get you a ham sandwich. If there is no bitcoin exchange where you can transfer bitcoins into, well, “Currency,” that can be used in a conventional sense, they’re really no better than the cash value of coupons. Also, who sets the exchange rate of bitcoins to dollars? Bitcoins to Euros? If a bitcoin is pegged to one or the other, it’s really a permutation of the dollar, like the Yuan has been, in which case, why not just use dollars? Another problem is: if someone set themselves up as the setter of the value of the bitcoin, and it’s a totally black market type currency, how would anybody be able to no make sure no one on Wall Street manipulated that currency just as they do the currencies of small countries? Another problem: what would be easier to counterfeit than a bitcoin? Also, how would bitcoins get generated? Conventional currency is conjured out of thin air by banks. Also, dollar-denominated or not, the Treasury would recognize that as commerce and seek to tax it. You can’t say “this is valuable currency pegged to the dollar and instantly transferrable from computer to computer across state lines and internationally” on the one hand, and say “this is an imaginary transaction denominated in worthless currency and therefore not taxable.”
What would be easier to counterfeit that a bitcoin?
How about a dollar?