Have to disagree with you tabs - most dollar transactions these days are ones and zeroes themselves - electronic transfers. Paper currency is becoming very passé and is very inefficient. Furthermore regulators hate it (harder to track, tax and seize). Gold is nice as a convention but if the SHTF you'll find that gold is every bit as worthless as paper dollars unless you can perform dentistry with it or perhaps do a bit of electronic circuitry work with it - and both dentistry and electronics circuiting would be dubious trades in a dystopian, post-apocalyptic society of the sort you love to perpetually cheerlead for. Metals like brass and lead (in the proper portable, "rapid distribution" format) would be a lot more valuable. Ditto commodities like fresh water, agricultural products, fuel, generators, medicines, etc.

ALL currencies (including gold, barter goods or bitcoins) only have value if two or more people agree they do. Dollars have value as a matter of convention - as you point out they're accepted globally as the world's standard reserve currency - but that's only a convention (but important enough to go to war over a la Gulf War I - the real reason we had for shutting down Saddam Hussein - he was threatening to replace the USD for petrol transactions). Gold similarly has value only by convention - it has little practical use. As long as the world looks at the USD as better (or perhaps "less bad") than anything else we have little to fear. What's out there to challenge it and knock it off its perch right now? The euro? The yen? The yuan? I'd think we're pretty safe for the time being despite the idiocy of our elected officials and the fact that this dynamic precisely enables a lot of their reckless thinking ("we're America - we can get away with it!"). Even if the dollars-for-petrol system started to unravel tomorrow I suspect it would be quite a while before another currency really began to seriously threaten the USD's status. I suspect something like this might be Putin's long-term plan but he's got problems of his own right now (as does China) ironically due to their exposure to global petroleum market dynamics

I'm with Wayne - I like the idea of Bitcoin and I've almost pulled the trigger a few times myself but I've always ultimately chickened out at the last moment because I don't fully understand it (and like Wayne I'm a person of above-average intelligence with a high-quality technical education!)

I like the idea of a decentralized currency that is not subject to the wiles of greedy private bankers or unpredictable central bank policy shenanigans but it's just too geeky and hard to really understand - I can't help but think "what's the catch to all this?" or "what is everyone not seeing here?"

Wayne and POP,

I'm no MIT grad or expert on Bitcoin. Only read a few articles, blogs and watched a documentary. But I believe the term "mining" means husing your computing power (home PC) aka "mining rig" to help process bitcoin based transactions and update the general ledger (block chain).Miners are then paid in Bitcoin for helping process transactions. In the early days, there was not a lot of miners assisting, so they were paid more. Now each transaction pays less.

I believe there are 21 million bitcoins that can eventually be issued, don't now how many have been yet. Last quote I saw was $385 per 1 USD. And No, I don't own any.

Interesting. As long as I've been reading about Bitcoin (when announced) I've been hearing it's dead or dying. Take it with a grain of salt.

The core of the transaction technology and blockchain is already being integrated into financial systems. So much that financial institutions are patenting crypto-currency algorithms.

Dead? No.
Evolving? Yes.

Oh sure, blame it all on PARF.

;)

I guess for me and my way of life Bitcoins do not offer me anything. It is a product I just don't need, like illicit drugs, Rupees or Amway. I can't see any need to need them. I am not saying there is any implicit wrong with Bitcoins, I just don't see what they would offer me.

I have never had need to move currency or goods and keep that transaction hidden from the legal system. I don't live in that world.

Until someone can clearly explain a need for them I just don't see it.

Much like someone trading baseball cards, I just am not going to participate.

It always felt just as smart as playing FarmVille to me. The blog post Wayne posted in his OP is scary. It claims that a hand full of people manage the system. Sounds like a great way to fill your coffers if you are one of the people controlling it. I am not sure I fully trust a government backed currency, but at least you don't have some keyboard nerd in China taking you to the cleaners.

G

Nuh Uuh!


You poopy head!