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Hypothetical Group Thought Exercise - What If Bitcoin/Satoshi Does Take Over Currency's Main Role?

We've been through all the discussions on will it or won't it. Since no one really knows for sure, let's skip past that part. I'd like to jump into the discussion of what will transpire on the global to local scales if Bitcoins and their 100,000,000th sized partner the Satoshi did become widely used enough to cause major disruptions.

My thoughts wander into the pretty far fetched grandiose areas because I personally feel that our current monetary system IS ONLY PROPPED UP BY THE CORRUPTIBILITY of fiat, paper/digital currencies.

I'll start us off and everyone can join in and while purely hypothetical conjecture at this point, the best tone would probably be one of past tense. Please no arguments pro or con on it's viability. Let's keep this thread to simply explaining to those who can't see past the fiat for the trees, exactly what life could be like if the people took this or a similar mass plunge.

As I remember, it would really started in a big way when major job markets successfully transitioned to paying wages in Satoshi. The dollar exchange rate put a bitcoin at $1500 each, or 100 Satoshi (S100) cost one penny. Of course, this is skewed because by then, the dollar was only worth 1/2300th of an ounce of gold or 1/80th of an ounce of silver.

The average wage hadn't grown much in dollars for quite a while but when converted over to S, people quickly found

that their non-inflating S wages were continually worth more goods as the exchange rate rose. This caused a slow, at first, increase in wages being demanded in S which quickly caught on. I don't think it took more than 2 years for most major transactions to get switched over.

The only thing not easily switched over was taxes and fines by the government. Not surprisingly, seemingly overnight, there sprang up hundreds of online 'tax paying' services that would hold your S until the last second before your taxes were due and then pay them for you.

Money seemed to be being made everywhere. It was incredible. New services popped up from lemonade stands to back yard mechanics and pool cleaners. Even kids mowing lawns always had a cell phone that was a click away from displaying their QR code for you to send a thousand Satoshi to ($10 in 2013 money).

The first major social change didn't take long after that. The government went on a major campaign to save the banks from total demise. Fortunately, this didn't go unnoticed. Since people had this new form of financial connectivity, it quickly spread to action movements. There for a while, it seemed like every transaction we made, our phones or computers were asking us if we wanted our government to kill some bank-bail out or subsidy. In retrospect, it was kind of awe-inspiring to see so many people get so involved, even if all they did was click off an ad by the yes or no.

The news roiled heavily that failing banks would be the end of civilization. At first, people believed this but it didn't take long (that seemed to be a major trend) for yet another social solution to come about. Enter the new era of crowd finance. We had seen crowd-funding even in the old days of the *cough cough* dollar, but not like this. People were investing, lending, borrowing, ranking, rating, complaining, praising and even donating S to and from every provider of a good or service... at any level. This was the death knell for banks. Oh, there was a big movement to save the credit unions until people learned that even their interest rates were in no way competitive to what people could get with their automatically investing BC wallets. I do have to say, it was a great pleasure for so many to watch the media switch gears and start finally talking about values in terms of a stable currency. Those were the days!

I guess, if I had to place an event as the straw that broke the dollar's back, it would have to be when BitSurance branched out. These guys had a small BitCoin insurance company. They initially accepted 1 BC for joining and then would insure against BC theft. As BC and S acceptance grew, it was just accepted as well that one tosses in a full BC for insurance. Seemed fair at the time. However, when the dollar fell faster and faster, that price seemed rather high to those still valuing things in $. BitSurance's answer was that they replaced their rate with a formula that dropped the price over time. This worked somewhat but it also brought the price to the kitchen table discussions.

That's when it happened. They announced that the formula was again to be changed, raised in fact, but the insured 'goods' would include everything. Effectively, they had taken over all insurance companies overnight. They had a pretty extensive, but easily transitioned process for filing a claim. It relied on crowd-verifying of data and was overseen by a roving 'jury duty' call on it's members to review and pay out claims. What is most amazing is that there was hardly a whimper from politicians or the media that it wouldn't work. It was just too simple to understand. In exchange for about 3 BC from each member one time only, you could put a claim on a TV or a terrier, a malignant tumor or a Mercedes. Sure, you wouldn't always get a full pay-out and some didn't get anything but everyone knew someone who got 'fair' treatment in a claim.

This, like I said, seemed to be the turning point. When doctors and hospitals stopped basing their fees on what they could earn and started competing on price, we all got better care for much less. I think most people didn't even bother with BitSurance, or their later copy-cats, if the loss was less than around S100,000 ($1000 in 2013 $). It just seemed like everyone was employed and people could so easily pay their expenses from wages. Wall displays and pocket display magically stopped going out after two years. I think it was because people started demanding long-lasting products because even house cooking appliance quality rose all of a sudden when they had only lasted 20 years before. Either way, that was the beginning of the end of living for the weekend where your highlight was going back to the store to replace or upgrade things you already owned. I say good riddance. :)

This prosperity eventually turned the job market on it's head. Gone were the days where an employer made all the rules and set the wage. Under this new paradigm, employers simply stated the work they needed done and what time constraints were required. Workers had gained the power to come in, offer to do the job for x price on y time-frame and do it with z work environment. They knew that if their requirements weren't met, they would be successful at another company... and they were. As you might guess, that's when wages started rising.

It took quite a while but after almost a decade, people were retiring with no bills in a 8-10 years. Entrepreneurs had given us unending energy for a flat up front cost. We had food and water from new technology that alleviated the previous problems of wasting or polluting it. Even the "internet" itself became a free service as we all learned to connect through each others' devices at no charge. I have to laugh that we had a name for the action of connecting to someone else, as though it required some underlying infrastructure (which, I guess it originally did) that could have been controlled or controlling. It just seems silly now because everything we want to say, do are see is always 'just there' these days. We even called talking to some "talking on the telephone" just because they weren't sitting right next to us. Ok, I'm dating myself here. Moving on...

What else can I say about how we got our money and how it is different from the previous way? Well, there's so many forks in this discussion I don't know where to take it. We could talk about how welfare used to be ran by the government and it wasn't even called charity back then and people actually hated donating because it was mandatory and they couldn't decide what their money went to. We could talk about health, wars (oh, don't get me started on how bad those were!), or even dumb things like planned obsolescence and in-your-face marketing. We could talk about how education was centralized and didn't even take into account the actual student's aptitudes or interests. Or we could talk about how crimes used to be manufactured with dumb laws to put innocent people in jail just to make some people richer than others because for some reason a person's self worth was somehow tied to their financial balance.

Yeah, it was a pretty crazy world. But I'm sure glad that part is over with. Now if we could just find a way to get travel times to the French Guiana Beach Islands to less than 3 hours, all our problems would be solved. I bet I waste 20 hours a month in travel times just to go every other week!

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You're going to have to convince farmers more than doctors

The BitSurance concept cuts to the heart of an interesting scam: When I was young I could not afford insurance, but I could afford to pay a doctor. Now doctors base their fees on what the insurance will pay.
Car insurance is borderline un-Constitutional in my opinion. You cannot require a person to pay to be able to exercise a right, and SCOTUS has defined a "right to travel." Inquiring insurance is no more lawful than requiring a license.
But in the actual collapse that I think is headed our way, I am betting it will be the ability to buy food that will pick the currency.

Love or fear? Chose again with every breath.

Cyril's picture

I wholeheartedly agree.

I wholeheartedly agree. Markets, suppliers and consumers should always decide.

The law should be justice and only justice. If one is taking the risk to not take an insurance, be it auto, they only ought to remain accountable and pay the price they get sued for by the people they have hurt, when they do.

Ron Paul has analyzed and shown all the unintended and consequential moral hazards created when the law makers force on everybody a shift of responsibility.

We end up where we are today where people pay for the risks taken by others, or even worse, pay for an abstraction of risk untraceable to anyone but the state and its protected cronies (who make sure the same corrupt and wasteful state get voted back in charge).

By then, we've gone full loop and are still stuck in it.

Now try to explain that to the fraction of the people who hates taking responsibilities in life...

Our only way out is to find means to stop feeding the beast.

Trying to work on it.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Food, energy and information

That's the baskets my eggs are in. ;)

In the absence of an

In the absence of an enforcing authority, loans would become a thing of the past. Investment would not come in for new businesses.

Rich would get richer, the poor poorer with no way out.

Due to diminishing tax returns govt services would suffer. Roads and bridges would fall into disrepair. Anarchy of a sort would ensue with govt. controls curtailed by lack of revenue.

What happens next depends on human nature. Utopia and nightmares are both in our minds, which one makes it out into the world it is hard to guess.

Fundamental error in your thinking

if you're not being ironic here.

Your argument is essentially Marxist....Everyone is seeking unearned profit and will prey on the weak and destroy everything without a government parent to threaten them with spankings and groundings.

PEOPLE organized our all-powerful state to protect their property. You have no idea, whatsoever, what PEOPLE would organize to protect their property in the absence of an all-powerful state.

The first thing to understand is that only the tiniest percentage of people want to do harm to others, and that percentage is largely a by-product of government policy....Public school morons, businesses connected to government, politicians, indoctrinated fools.

Without an all-powerful state distorting behaviors what you would have, in all likelihood, is people organizing to protect their property by creating systems and alliances under which everyone's property is protected....this is the only sure way to protect your property: make property protection the standard.

Contracts such as loans would be honored due to the obvious situation that both parties in almost all instances want the benefit of what is outlined in the contract, and want to be able to contract for other things in the future.

Your thinking assumes the opposite of sane human behavior, which is cooperation and good will for the sake of social acceptance and advancement.

You're assuming insane behavior, because you're only imagining the behaviors of a population made insane by state authority.

Withdrawal symptoms. Read the

Withdrawal symptoms.

Read the last paragraph for the answer to the OP.

Anyway since there is no way of knowing, we are all just offering opinions, I offered mine.

I don't think wars over resources will stop with or without govt. Might be less one sided though.

Your concept of war also

Your concept of war also assumes an all-powerful state, both in the definition of war, and in the idea that the goal is to win a state-enforced grant of rights to whatever is in question.

This illustrates, once again, that without this all-powerful state, cooperation becomes more advantageous than the dog-eat-dog approach.

If you can't kill and terrorize your way to a final guarantee of ownership, you had better look at other options.

Without the state, violence would be employed much less recklessly because without the state it is EXTREMELY costly and invites totally unpredictable retribution....it would probably be used primarily against egregious violators of common decency, and only as a last resort.

Those two don't have equal odds at all.

I doubt that loans would go away. I think bank managed loans would fade and maybe completely go but personal loans would soar. There's a whole new industry springing to life these days where people either lend, invest or simply donate to worthy causes by others they know nothing about.

Without the banker influence via government or the direct influence by interest, stock games and more, there is a potential of multiples of wealth available for each person. (Compare the finance and insurance industry to the M3 number.) If this translated to wages, not lottery style gifts, even at a slow pace, those people would place that money in their 'discretionary' budget, not their hard, mandatory expenses. In other words, they're not going to keep working just as hard just to waste it. After buying a few new toys, they'll opt to work less while earning a little more. This curbs inflation somewhat while reducing their loan interest (because they'll pay off the house, car and CCs). After that's done (causing further bank decline), it will go to savings for earlier retirement. With that new nest egg, friends, family and 'worthy causes' will have the opportunity to borrow it for uses they need to get a leg up. Thus, the circle of prosperity multiplies, not diminishes. My vote is for Utopia.

I think it will become much

I think it will become much harder for people with ideas for new businesses. In investors will strike harder deals probably amounting to the original innovator working for them with a small salary and little to no equity.

But of course the smartest minds will adapt and get rich, as they would do in any system and perhaps they would come up with solutions to many current problems.

What I worry most about is the failure of the court systems. That will make contract enforcement very difficult as the current system depends on govt as the sole legal initiator of force.

For example if a car owner is not able to pay his monthly installment the agency he borrowed from will have to forcibly take his car. A way around it is to have a killswitch installed on the car but there would be ways around that. That is why I say loans would be scarce, recovery would be a big big problem.

You have to, in your mind,

You have to, in your mind, rebuild the system from the ground up without monopoly authority in the equation.

You're taking elements of a system based largely on totally arbitrary government rules, backed by the threat of violance, and trying to introduce those elements into a hypothetical situation where unearned authority isn't present.

There is absolutely no way to predict what systems would be created and how people would act if they weren't made into retarded children waiting for government to take care of them.

No one gets a fresh start.

No one gets a fresh start. Society will remain a slave to its past to some degree.

'We are all victims of causality.'

The free market/classical

The free market/classical liberal mentality of the 19th century US was eradicated in a generation. No reason to assume the reverse could not take place as far as ending state-created insanity.

Humans' most pronounced feature is mental adaptation for survival. We change our behaviors and attitudes overnight when we feel the need.

Many industries are going to private arbitrators

Even major contract and minor 'terms of use' often bind the decision of a dispute to the private arbitrator. Evidently, they lost faith in the court system long ago.

As with most all problems, the private, free-market solution saves the day. Some just wait for the problem to get big while others pre-circumvent them beforehand.

Yes, but just suppose I make

Yes, but just suppose I make a deal that 'x' amount of money can be taken from my wallet at the beginning of every month as payment for a house. But one month I do not have that amount.

Under the terms of the agreement they can reclaim the house and dutifully they turn up only to find me sitting on the roof with my gun. Would there be a shoot out or would they go back quietly? Would they hire armed thugs to come get me? I could very well hire my own thugs.

The way govt. enforcement works is that it is far too powerful to be opposed and hence is so effective as an arbiter of contracts. I don't know if any private entity could match the functions of govt. without becoming even more corrupt and evil than the organization it replaced.

Once again

You're overlaying a state-created scenario on a hypothetically no-arbitrary-authority situation.

The case would actually be that all possible eventualities would be worked out beforehand and addressed in the contract and in the lenders' business model.

How many times would a lender encounter a belligerent armed home buyer before they adapted to the possibility?

Maybe once, and then they and all other lenders would learn from their mistake.

How many times would home buyers try to use force instead of planning and cultivating good will? What's this guy's prospects for future contracting with anyone, anywhere, if he's publicly known as the idiot sitting on his roof with a gun?

There would be no advantage to asinine behaviors without the all-powerful state coming in to kill the guy, or to put him on meds and pay his bills for the rest of his life.

People would have to act like adults.

Others would see his example

Others would see his example and some would follow. If they are kept from food or basic services they would use violence to make ends meet. They would spin conspiracies about how evil the loan agency is and encourage people to default on their loans etc etc

There are two sides to every coin. If your coin just has once, someone has probably cheated you. Interesting conversation but hypotheticals bore me after a point. That point is now.

Being bored by hypotheticals

Being bored by hypotheticals depends on whether you're trying to be right or trying to understand.

The thing to understand is that you're repeatedly describing situations where people undermine their long-term best interests.

That's completely illogical.

Without having a state to come in and settle everything and name winners and losers, people who are able to cooperate and gain good will have infinite advantages over people who invite "negative energy."

Only ultimate state authority makes it possible to cheat and steal and be sure you won't be ostracized or killed in your sleep.

Just too many variables to

Just too many variables to come to any kind of conclusion backed by facts.

People jeopardising long term interests for short term gain. Yeah, that never happens =D

Trust me, I would love a world without any governmental control, I could thrive in such a world. I don't see such a world in the near future so I focus on thriving in this one. If you consider that negativity, so be it, its just my version of pragmatism.

I prefer my positivity in the real world rather than the hypothetical one, but that's just my preference. Even Marxists dreamed of Utopia. Didn't do them much good when it came to the real world. I was just trying to bring healthy cynicism to a question that on the DP is sure to descend into odes to liberty and anarchy.

Again

"People jeopardising long term interests for short term gain. Yeah, that never happens =D"

Again, you're citing state-created mass insanity. People presently can't identify what their long-term best interests are, and their long term best interests are shaped by pleasing state authority, not by pleasing others in society.

It's not dreaming of a utopia to say economic or other catastrophes probably wouldn't be the norm if the state wasn't perverting people's incentives....it's just saying that economic or other catastrophes probably wouldn't be the norm if the state wasn't perverting people's incentives.

And, the catastrophes you bring up are purely hypothetical...more even than my belief catastrophes would be minimized...because you're assuming current insane behaviors would persist in a pure market situation, which is false.

Never doubt

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it's the only thing that ever has.

Margaret Mead 1984

It all depends on how many characters you want on your epitaph.

Exactly. Some people only see how the negative

in today's world will squash the good forever. I'm saddened by those people for they will never create anything new for others.

I've lived my life proving the nay-sayers wrong. I've done it in mechanical, computers, social and even regulatory areas and the entire time prior to finishing, I had to deal with people calling names (like dreamer below) and saying 'this is just how it is'. Fortunately, I never let them stop me and I've been very successful at creating new products and processes.

Like you are doing here, I will spend some amount of time showing people how creativity will always prosper but like below, at some point I find it just not worth my time. Those endless 'what-ifs' simply drain the life out of a conversation.

Returning to the original OP question, what other changes do you see taking place if all this began to take place?

I'll be honest

I didn't read the original post! There's a lot to read there. I just took issue with the points made by the commenter.

I'm not much for speculating on specifics...just identifying and applying principles.....For all I know, Bitcoin could be a CIA project aimed at luring people into a cashless society. Not that I think that, I'm just not at all knowledgeable on the topic.

I have faith in the idea that people become productive adults when other options are removed. We instinctively seek maximum payoff for minimum effort, so you have to remove government handouts/protections of all kinds in order for people to grow up and take responsibility for themselves.

I commend your productivity. I too do my own thing and focus on being an example by being an independent, competent adult.

Why wouldn't you read it?

It's nothing if not specific principles being identified and then applied to the human psyche to see how they all interact.

And the Bitcoin itself doesn't matter at all. It's just a placeholder for whatever it takes to replace their money with ours. That may be BC in 2013 or it may be Star Trek "credits" in 2200. That wasn't the point. The point was to show non-visionaries how differently things COULD be if we weren't under the tyranny of debt based currencies. Then hopefully, if that one person capable of making it happen suddenly has a light bulb turn on, he/she may clearly see a smooth path to make the transition happen.

I'm fully convinced that just the news that, e.g. "an airplane was built that can fly" is enough to clear the minds of those wanting to build many new plane designs. Prior to hearing it was possible, many of them couldn't even imagine it as possible so they stopped short of envisioning HOW to make it happen. That's what this post was intended for. A purpose no one has caught yet.

Implanted RFID chip

Would be a great way to have your bitwallet to carry your bitcoins, for transactions and deposits.

not sure if your serious or sarcastic

Either way, while this is possible (even considering privacy and libertarian standpoints), I don't see it being accepted until the "government" problem and even the big corporate spying problem are solved. And by solved, I mean really solved. The people are going to have to be fully confident at all levels before they will ever go that route. All one ever has to do is think of all the horrible ways for it to be abused and just a hint of fear will kill it hard and fast.

However, if we assume that's behind us, can we find benefits to what you suggest? Of the top of my head, the only one I can find is 'maybe' for people who don't want to carry any physical wallet around (dance clubbers come to mind), maybe those people could benefit. Other than that, I really don't see much hard benefit. Enlighten us though? What are your thoughts?

While reading or commenting on this thread...

listen to this:

www.listentobitcoin.com

"Damn the pandas, full steam ahead"

-Admiral David Farragut

That's awesome

As I said below, there doesn't seem to be any limits to people's creativity when it comes to something they have an interest in!

Thnx

Since the government will

Since the government will never accept Bitcoin to pay taxes or fines, then the likely-hood that Bitcoin will be anything more than a secondary novelty currency is highly unlikely. Companies aren't going to want to have to deal with two currencies, and neither will people. Also, those national and global corporations will never accept Bitcoin as payment -due to their ties to the government- and since the vast majority of people utilize those big-box stores, the majority of the people will have no reason to use Bitcoin.

This completely overlooks the federal control of the exchanges.

I don't see it that way

Sure the government will push back hard but what happens when the people find it has more benefits and ease of use than other currencies. Oh, and btw, we do too have numerous currencies. We just name them all the same. We have coin, cash, debit, checks, money orders, and arguably, one could say we should include lay away from each company. As far as the consumer 'hassle' is concerned, they all act as a separate currency. They each have a different set of transactions times, fees, downsides, benefits and risks. So the 'different currencies is a hassle' argument isn't that strong.

If you noticed, I didn't even mention the lack of fees for BC. Because it's cheaper, I'm convinced that this will be the candy that lures some of the first larger corporations into BC. And once the damn is broken, well... How would you like to do payroll instantly and securely from an excel spreadsheet? I'm thinking there will be lots of job insecurity in those departments if that happens.

I'm not saying it won't be tough. I'm just looking at this like any other technology. When it's ten years out, it seems like forever. When it gets here, we look for a new version in 5 years. Inevitably however, those upgrades come in 2 years, 1 year and even less. This is the power of networking connections. Putting that many minds together on one problem yields exponentially more results in exponentially less time.

Might want to prepare for it instead of laugh it off.

The big corporations would

The big corporations would lose far more than they would ever gain by accepting Bitcoin. The government via the tax schemes is what enables those large corporations to pay zero or near zero tax. If the government didn't want people using Bitcoin, then all they would have to do is to threaten those big corporations with closing some of those tax loopholes for those who use Bitcoin. How many of those corporations do you think would want to have to pay 4, 6, 10% or more in taxes when they currently enjoy paying 1.46% like Apple, or 0% like GE?

Also, how many businesses do you think are seriously going to want to have to deal with using two different currencies just for payroll? Like I stated earlier, the government isn't going to accept Bitcoin for taxes, therefore your employer will have to use FRN's -digital or otherwise- for taxes -yours and theirs- and Bitcoin for your pay. I seriously don't see that happening any time soon -if ever. There would have to be some damn good incentives and the potential to pay more in taxes because of using Bitcoin isn't one of those incentives.

There is only one problem; and it cannot be solved, no matter how many minds you put on it. The problem is that FRNs will be government currency, and as such, all transactions with the government will have to be in FRNs.

As the government exerts more and more control over the exchanges, Bitcoin loses the anonymity feature, and taxes and fees will be many and will be large; thereby ending Bitcoin for all but the very small minority. However, what Bitcoin would have done, would be to get most of the digital holdouts to turnover their physical currency -actual FRNs- in favour of digital currency; the Governments of the world have been trying to do this for quite a while now. Then, once they incorporate near total control over the exchanges, people would have no other recourse but to use the government's 'New' global digital currency. Gold and Silver sold by the major dealers is already monitored and that information is held. If people were to start using gold or silver, then the government would just confiscate it like they did to gold in 1933.

You cannot seriously think that if the government wanted Bitcoin ended that they wouldn't do everything in their power to end it. Hell, they outlawed Milk -of the RAW variety- and they put the guy in jail for making Liberty Dollars. The only reason Bitcoin is allowed to continue for as long as it has, is to get the black market to move to digital currency so the world governments could end the physical currency. Once the physical currency is done, then the rest will be -as they say- a piece of cake.