Shane wrote:
I don't like the idea of a currency controlled by the internet. Nation states have their own currencies that are regulated by their own monetary agencies. A currency controlled by the internet is the complete opposite of what the world knows of financial stability. Today the BitCoin market has been fine with regards to regulating itself but who knows what may happen in the future.
Let's also remember that the internet is generally regarded with anonymity and a currency that is based on this very premise is untraceable. BitCoins could eventually become the currencies of cyber terrorists, child pornographers, and other evil doers. I don't exactly know what good is being done aside from personal profit with BitCoin.
I also wouldn't want to have a large number of BitCoins sitting around and then the government decides to tax them heavily. I'd end up having these BitCoins in their cryptographic form without being able to convert them to real fiat money. I'd either need to find something to dump them into or just hoard them indefinitely.
It's mainly these reasons that I've stayed away from the whole idea of BitCoin. I heard about it relatively early on and as with most internet things it took about two years for it to gain real traction
. I think an economic paper on the subject would be a novel idea, will I do that right now? No, but it's something that someone out there should do.
Edit: An easier way to sum up how I feel; how an agnostic feels about the belief of God. I don't know whether this will turn out to be good or bad, if it will stick around, or if it even needs to exist.
National currencies are not dependable either. They are regulated, sure. But this regulation is dependent on a small group of people who have little to nothing to lose from the decisions they make. They can choose to increase the amount of currency in circulation leading to inflation. This is not possible with BitCoins as it's not a just an agency composed of a few people who determine the amount of currency in circulation, but users themselves. National currencies can also be unstable in given times, or decline based on outside circumstances just like BitCoins, so they are even in that regard. So national currencies are not necessarily better or more stable than BitCoins in theory. Regulation is only as good as the regulators make it.
As to anonymity, national currencies are just as anonymous as BitCoins. The only way money is truly traceable is if an electronic transaction is made. And even then, you can't know for certain who makes the transaction or to whom it goes. Cash transactions are always untraceable. Frankly, it doesn't matter what currency bad groups use to move around money. They'll find one they like, use it, and likely not get caught.
As to taxation, this is just like how the government taxes money from companies and people in offshore accounts. They won't bring money back unless it's at a reduced rate or during a tax holiday. You might as well hoard BitCoins is that were the case. And how could you tax BitCoins if they are untraceable? You'll never know who has them, who is selling or buying, or where the money goes. So I doubt there will be an attempt to tax them any time soon.
There's already plenty of info out there on BitCoins right now. Really, they are just like any commodity, except their value is entirely user based, meaning the value of a BitCoin is not tied to anything solid like precious metals or a nation's economy, but rather only in what the user's themselves determine the value to be.
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