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Tom,
First off, I am not advising anyone to get involved with bitcoin or other cryptos through either purchase or mining it is all quite risky and may go to zero and I don't fully understand it myself. I just thought it was a very interesting financial development that people on this board might enjoy hearing about despite being off-topic. A book I read in the area of finance that really changed my thinking was Ellen Brown's "Web of Debt". The more commonly cited one that covers a lot of the same area is Edward Griffin's "Creature From Jekyl Island", it's one my to-do list but the topic can make for some really dyspeptic reading.
Sure if by fiat you mean the value is given by the community of users there is no difference between bitcoin and other forms of currency or for that matter gold or silver. If you mean supply is constrained with gold and silver, eventually in 20 or so years there would be no new bitcoin coming into existence, assuming gold is still physically mined out of the ground it would then be more inflationary then bitcoin. The difference is that with central bank "paper" fiat currencies there are nausea inducing onion like layers of fraud and deception added to the system. So let's take the function of a currency as an exchange for goods/services. First there is something like gold, then standardized into coins and inscribed with an image of central authority. Its value rises and falls to the point where it is most efficient at allowing commerce. Next paper notes concerning the gold to make it more easily divisible and transportable. Then the gold is held not personally but with a "banker". The banker when the owner is away starts lending out a portion of the gold in his safekeeping and charging interest to make money. Then he says, "aha" I'll lend out paper certificates representing gold". Soon he is lying about how much gold he has, lending out ten times as much in paper certificates as gold he has, charging say 5 percent interest on each and making 50 percent on every ounce of gold given him to safeguard. When caught lying, he says "oh no, that's just fractional reserve lending". Try that with tractors. Hence all the senseless bank panics and finances destroyed because the bankers lied about what they were holding to make money by charging interest on loans. The Old Testament had it right, no usury and all debts are forgiven the seventh (Jubilee) year, that or just lend without expecting anything in return. Then you have the electronic representation of paper, then finally, the representation of the representation of gold is not just fractional, it is not tied to it gold or anything at all. So now you have loans that come into existence from nothing, without even the need for a rock of gold, on which interest is owed, infinite COP of usury, and as the "money" to pay the interest is never brought into existence the debt can never be fully repaid requiring larger interest bearing loans (federal reserve notes) to come into being the next year increasing the debt ... the only way out, aside from default, as is often seen from large wars, being to aggressively attack one's neighbor to get funds to extricate oneself from debt. Central Bank of England -> sun never sets on the English Empire. This debt ridden money supply doesn't come into being from representative governments but from private bank monopolies. The debt is an invalid lie, through and through, there is no national debt, there is just a scam. The only politician I heard touch this was Ron Paul when he suggested we balance our budget by declaring the 4 trillion we owed to the (private) federal reserve void. From memory Benjamin Franklin stated, we would have gladly paid a little tax on tea, it was the inability to coin our own (debt-free) money which led to war". Andrew Jackson, when asked, after surviving multiple assassination attempts, what should be his epitaph, "I killed the bank".
How does bitcoin address these failings. 1) It is not a debt, there is no interest charged for using it when it comes into being, just like mined gold. 2) There is no fractional reserve. In retrospect this may be partly why people didn't abandon it when Gox failed. Yes a lot ideologically supported it, but there was no panic that get out now or it's all lost, and other's probably just said, "sucks to be you, you know I can get some cheap coin". No snowballing fractional reserve panic. 3) When not held on exchanges each person can be his own bank and 4) To your point, each miner is their own tiny little Federal Reserve as opposed to a single monopoly "governing" money supply for whole nations.
If no one believes it to be worth using bitcoin fails, and that is the great effort being put forth by bankers now, to destroy its reputation and attack its security. I have to realistically think it is a long shot, however, it has an advantage in that even in transferring back and forth to conventional fiat, it is cheaper for merchants to use then credit cards, this will be even more so if people just start directly accepting bitcoin. That is why the most important metric to my mind is the rate of adoption by merchants, that makes it a true currency, not an arbitrage play. I was also wondering when there might be a geographical focal point of activity, I was thinking maybe Cyprus. Well again, one month after coming into its existence a community has valued Auroracoin's monetary policy enough such that the March 25th distribution to all citizens of Iceland will possibly be in excess of $2500. I find it astonishing, not a darn thing for the most part in the MSM, and I should shut up about it myself because I've already thought how I'd attack it. If it works people may just start asking why the heck are we still being played by the Royal Scam.
Finally, there is the technical end of can bitcoin really be secure, I don't know, I don't know much about cryptography, but after avoiding it for a year, I'm darn sure now that technically it is no joke and almost certainly has some banker type people sweating over it. Here's hoping their concerns are justified.
Long Live Bitcoin!
First off, I am not advising anyone to get involved with bitcoin or other cryptos through either purchase or mining it is all quite risky and may go to zero and I don't fully understand it myself. I just thought it was a very interesting financial development that people on this board might enjoy hearing about despite being off-topic. A book I read in the area of finance that really changed my thinking was Ellen Brown's "Web of Debt". The more commonly cited one that covers a lot of the same area is Edward Griffin's "Creature From Jekyl Island", it's one my to-do list but the topic can make for some really dyspeptic reading.
Sure if by fiat you mean the value is given by the community of users there is no difference between bitcoin and other forms of currency or for that matter gold or silver. If you mean supply is constrained with gold and silver, eventually in 20 or so years there would be no new bitcoin coming into existence, assuming gold is still physically mined out of the ground it would then be more inflationary then bitcoin. The difference is that with central bank "paper" fiat currencies there are nausea inducing onion like layers of fraud and deception added to the system. So let's take the function of a currency as an exchange for goods/services. First there is something like gold, then standardized into coins and inscribed with an image of central authority. Its value rises and falls to the point where it is most efficient at allowing commerce. Next paper notes concerning the gold to make it more easily divisible and transportable. Then the gold is held not personally but with a "banker". The banker when the owner is away starts lending out a portion of the gold in his safekeeping and charging interest to make money. Then he says, "aha" I'll lend out paper certificates representing gold". Soon he is lying about how much gold he has, lending out ten times as much in paper certificates as gold he has, charging say 5 percent interest on each and making 50 percent on every ounce of gold given him to safeguard. When caught lying, he says "oh no, that's just fractional reserve lending". Try that with tractors. Hence all the senseless bank panics and finances destroyed because the bankers lied about what they were holding to make money by charging interest on loans. The Old Testament had it right, no usury and all debts are forgiven the seventh (Jubilee) year, that or just lend without expecting anything in return. Then you have the electronic representation of paper, then finally, the representation of the representation of gold is not just fractional, it is not tied to it gold or anything at all. So now you have loans that come into existence from nothing, without even the need for a rock of gold, on which interest is owed, infinite COP of usury, and as the "money" to pay the interest is never brought into existence the debt can never be fully repaid requiring larger interest bearing loans (federal reserve notes) to come into being the next year increasing the debt ... the only way out, aside from default, as is often seen from large wars, being to aggressively attack one's neighbor to get funds to extricate oneself from debt. Central Bank of England -> sun never sets on the English Empire. This debt ridden money supply doesn't come into being from representative governments but from private bank monopolies. The debt is an invalid lie, through and through, there is no national debt, there is just a scam. The only politician I heard touch this was Ron Paul when he suggested we balance our budget by declaring the 4 trillion we owed to the (private) federal reserve void. From memory Benjamin Franklin stated, we would have gladly paid a little tax on tea, it was the inability to coin our own (debt-free) money which led to war". Andrew Jackson, when asked, after surviving multiple assassination attempts, what should be his epitaph, "I killed the bank".
How does bitcoin address these failings. 1) It is not a debt, there is no interest charged for using it when it comes into being, just like mined gold. 2) There is no fractional reserve. In retrospect this may be partly why people didn't abandon it when Gox failed. Yes a lot ideologically supported it, but there was no panic that get out now or it's all lost, and other's probably just said, "sucks to be you, you know I can get some cheap coin". No snowballing fractional reserve panic. 3) When not held on exchanges each person can be his own bank and 4) To your point, each miner is their own tiny little Federal Reserve as opposed to a single monopoly "governing" money supply for whole nations.
If no one believes it to be worth using bitcoin fails, and that is the great effort being put forth by bankers now, to destroy its reputation and attack its security. I have to realistically think it is a long shot, however, it has an advantage in that even in transferring back and forth to conventional fiat, it is cheaper for merchants to use then credit cards, this will be even more so if people just start directly accepting bitcoin. That is why the most important metric to my mind is the rate of adoption by merchants, that makes it a true currency, not an arbitrage play. I was also wondering when there might be a geographical focal point of activity, I was thinking maybe Cyprus. Well again, one month after coming into its existence a community has valued Auroracoin's monetary policy enough such that the March 25th distribution to all citizens of Iceland will possibly be in excess of $2500. I find it astonishing, not a darn thing for the most part in the MSM, and I should shut up about it myself because I've already thought how I'd attack it. If it works people may just start asking why the heck are we still being played by the Royal Scam.
Finally, there is the technical end of can bitcoin really be secure, I don't know, I don't know much about cryptography, but after avoiding it for a year, I'm darn sure now that technically it is no joke and almost certainly has some banker type people sweating over it. Here's hoping their concerns are justified.
Long Live Bitcoin!
the problem was he was also knowledgeable and his objections made sense. I'm not a software programmer and I only half understand bitcoin but I have no response to this objection. What he said was, to paraphrase from memory, "well it will be inexpensive to take down bitcoin, all you will need is to have someone send say 50,000 valid one dollar transactions to someone else who as soon as they get them sends them back and it continues back and forth." This ties up the block chain and so any valid merchant transactions might now take a day to go through instead of 10 minutes. For every valid merchant transaction there would be a hundred one dollar "nonsense" transactions that would need to be processed and this could be kept up indefinitely at little cost. If bitcoin can't function as a means of exchange between customer and merchant it can't function as a currency. As the commenter noted the Peer-to-Peer part now becomes the weakness, i.e there is no central authority to say, "block those transactions". Even if a group came together to say block transactions from a particular wallet, I imagine they could put it in a "tumbler" and easily have the transactions come from 50,000 different wallets. Block the IP? Well they could use TOR or something like it to spoof thousands of different IP addresses. Again I'm not a programmer and may be missing something but that sure sounds like it would work to me, and it would work for Litecoin, Teslacoin etc. To be rather weird, I thought I heard way, way, way in the back of my mind concerning bitcoin 2-3 weeks ago, "We got'em". This may just be cowardly doubt as I don't claim to be a seer, or hearer for that matter, but it looks just to be a little cat and mouse game for awhile with cryptos going forward, and whatever the outcome, I think this objection is what I heard. I hope bitcoin prospers, a non fractional reserve non interest charging currency available to much of the world would likely do astonishing good, but when I look at this objection it looks like they got'em. 
Problem is I have like 50 I want to do, but this time I am going to go slow, maybe even map things out on CAD, first. Right now I am thinking about that, ah I'm blanking on the name, ***anese name for a magnetic motor that Tom Bearden almost got to market. Many many thanks to Bedini, Bearden and many many others for helping me with looking at nature.
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