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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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I pity the holders of such a fatalistic world view

I'm personally much more optimistic.

I've worked my way through many different career fields proving people wrong who say 'you can't do that'. What I've found is that those people simply can't see many of the 'out of the box' possibilities. I remember one applicable story where I was trying to automate the payroll and timekeeping processes for a global charity. "They" said it couldn't be done because the government required 3 hard copies in paper for each timesheet and it's charges (since they crossed so many national boundries). I wrote the app anyway and incorporated 3 geographically separate backup systems with extra detail on each stage. When I presented it to them, they loved it but still shied away from pitching the regulators. I offered to present it for them and found it actually very easy to change their minds. The regs were changed and payroll/timekeeping saved 11 positions worth of salaries. The other international charities even followed suit. So, those people who thought the government wouldn't go for it, just didn't ask the right way.

"...cannot be solved..." Really? Did you read paragraph 7? That's a free market solution that adds benefits to both the company, the service provider and the government.

And lastly, you seem to forget how capitalism is supposed to work. The ultimate 'in charge' group is the customer. If the big companies fail to take advantage of some chunk of savings that's to be had, someone else will and they will steal their customers. That's how it works. Right?

How are the exchanges going to be controlled by the government? From Tor to Bittorrent to mesh networking to silk road and on to bitcoin, the solutions have all been migrating to less government control and more anonymity. Where do you think that's headed, given 2 billion new internet members in the next 5 years? Sorry, I don't see more control any more than I see the government switching their digits for ours. The people aren't that dumb anymore.

And lastly, how about a contribution in line with the OP. You did read the first paragraph, right? The point was to get people to think past the crash and in light of what is possible afterward.

Pleas explain something. You

Pleas explain something. You state:

"...cannot be solved..." Really? Did you read paragraph 7? That's a free market solution that adds benefits to both the company, the service provider and the government.

I'm trying to reconcile reality with your logic; here is what I've got so far: the government which makes tons of money by inflating our currency is going to accept Bitcoin -which they cannot control in the normal sense- as payment for taxes and fines, for absolutely no reason at all. The government is also not going to threaten large corporations if they(the large corporations) accept Bitcoin as payment for goods or services. Could you please explain why the government would do that when it is clear that they would lose power, control, and influence by doing so.

And lastly, you seem to forget how capitalism is supposed to work. The ultimate 'in charge' group is the customer. If the big companies fail to take advantage of some chunk of savings that's to be had, someone else will and they will steal their customers. That's how it works. Right?

What you are describing is a 'Free Market;' do we have a 'Free Market?' That was a rhetorical question, but I will answer it anyway; No. So, since we don't have a 'Free Market' then what you are saying will happen with Bitcoin is highly unlikely to happen, because the US government -by one way or another- controls -to some extent- the economy; mainly via the tax system.

How are the exchanges going to be controlled by the government? From Tor to Bittorrent to mesh networking to silk road and on to bitcoin, the solutions have all been migrating to less government control and more anonymity. Where do you think that's headed, given 2 billion new internet members in the next 5 years? Sorry, I don't see more control any more than I see the government switching their digits for ours. The people aren't that dumb anymore.

The exchanges take one currency and convert it into another currency. When Magic The Gathering Online eXchange -aka Mt Gox- signed a deal with Silicone Valley bank, Mt Gox now has to follow Banking laws, which is why they require a photocopy of a person's ID to open an account. Also, a month or so ago congress already ruled that exchanges have to follow conventional finance laws, just like other non-banking financial institutions. That is how they will control the exchanges. If one of those exchanges was to get caught, then I would seriously pity that person or group of people. This will not effect person to person transactions; however, it will seriously hinder the convertibility of Bitcoin.

Also, since it would only be person to person transactions which were not effected, then it is safe to say that the majority of people would not go out of their way to use Bitcoin; because they would rather shop at the Big Box stores.

TOR, and all of that other stuff cannot help you, when money has to move from one account to another, and Names -and ID's- are required to have accounts and the companies which have the accounts are required to follow Federal Laws. Sure, if you want to only use Bicoin -even though you can only trade with individuals- then you will not be effected. However, you will find it difficult and expensive to convert Bitcoin to dollars for use in the meat space.

Post crash, what would be more realistic would be a local currency; because after a crash, there wont be Fed Ex, or UPS, or DHL running until there is a acceptable way of payment, so everything purchase will be local. As I've been stating 'Bitcoin' could not fill the need for the shipping companies because of the government intervention. However, the Feds have been useless to eliminate local currencies; and they would only be more useless with millions of communities doing it.

I honestly don't get your thinking

and I mean that seriously. I'm not trying to be mean and in fact, I'm trying actively to not be mean but you simply don't make any sense. Your individual statements do make sense but putting them together in a big picture, they counter each other dramatically.

Your entire first half opines that the people won't do something because the government won't allow it. Somehow, the people will get caught, the companies will get caught or the process will be overtaken. Correct?

Your second half suggests that local currencies will thrive because the government can't control what the people do. The government can't control what the people do nor can catch them. Correct also?

"If you speed on an empty highway and there's no cop to catch you, do you get a ticket?"

Do you see the irony of those two lines of thinking? They say the exact opposite. If you read close (maybe a little between the lines), you'll see that what I'm suggesting in the OP is that BC takes over at the grass roots at the grass roots level and slowly spreads to larger levels as people desire it.

I'm not sure you realize exactly what level of profit there is in using BC or S in financial transactions as compared to government and banking controlled dollars. I'm guessing you think there's even an overhead margin for exchanging it. In reality, by using this private currency, when you add it all up, there's so much more to profit by. In some businesses, I would put it north of 20% savings.

Do you think any business can survive leaving that much on the table for their competition to snatch up? Ain't happenin'.

You also state that we have no free market. Sure we do. Part of it even has a name. It's called Silk Road. It also goes by the black market. It's free and open. It's uncontrolled and unregulated and there's no one pulling it's strings to push a price up or down. I'm guessing you dismissed it because today, it's name in synonymous with bad things but it actually works very well for good just the same. What happens when regular people see that they can buy ammo, silver or heirloom seeds at greatly discounted costs via this channel? What happens when that expands into the cigarette market and the 'backyard biodiesel equipment' market? Both of those are highly regulated and closely watched so they are great candidates. Thinking along this line, we just go down the list. As government loses control in one area and forces the people's hand in another, that just drives another into the black / free market. Tell me you don't see how advancing technology in one of these markets won't accelerate the speed the next market gets popular approval. Any roadblock you can envision to this happening, I can envision a technological free market solution to circumvent it which also gives speed and other benefits to the customer. And if I can envision it, a smart app or other internet solution can be offered where a profit can be made. Hopefully you can see where this is going.

I'm pretty sure you agree this is all possible but perhaps you just see it happening at a much slower pace. Maybe that pace is even so slow that the government can / will keep ahead of it. Well, let me dispel that myth here also. For the two decades I've been watching them, internet related predictions have been increasingly over-estimating the time things take to happen. In the 90's, predictions of something happening by 2010 ended up happening by 2002. In 2000, ten year predictions took only 4 years. I even started making predictions in 2005 for 7-8 years and they only took 3. Many of last year's "5 year" predictions have now come online. And lastly, things that were as much as ten years off LAST FALL, in both net stuff and physical science stuff is already showing up proven to work.

This is the paradigm shift that happens when you bring new minds into the mix. We currently have about 2 billion people on the net. The predictions of just a couple years ago were that 2 billion more people would be online in 5 years. With crowd-funded internet and cell phone setups, even remote villages in third world countries are getting online before they even get usable toilets. USAID calls this a tragedy but I say it's just a natural progression of information first and self-doing second. (They are designing new sewage systems that don't require tons of water because they're educated now. Maybe we'll incorporate those designs into our infrastructure!?) With all those minds, don't you think there's enough big picture people who will solve this little tech problem or that one? How long after they release it to google apps do you think it will take for the rest of the world to download it? Yeah. About 3 days.

And lastly - government. You say that government this or government that. Well, that's so 90's. Hypothetically, let's assume some little app shows up for people to download that allows instant access to online petitions. Let's assume it is easy to use and just pops up a statement and waits for a sign / no-sign button press. Let's assume that this, coupled with newly released dis-approval ratings and it gets a couple million downloads. Let's also assume they make the process rather inviting in a 'political news spotlight' way. What are individual politicians going to do if they see an action of theirs get petitioned by 300k people while their still sitting in chambers? Sure that's optimistic for response times, but is it impossible? Not at all. Is it empowering for the people? Absolutely. Would it make a major difference in our government's operation? I say, hell yesss.

By the way: I happen to know there are people already working on that exact app so all this could be as little as days or weeks away.

Do you see now how the people can utilize this technology to transform the world we live in? Do you see how every form of top-down control is headed for an inevitable system-wide fall? All it takes is an undetermined amount of time.

So, once again... I ask "Can we get past the 'will it or won't it' argument and try to focus this thread on what changes will result after it takes place? Surely, you can add some creativity to help others see just how dramatically something like this will affect our world. After all, by enabling their vision, we're enabling them to help make the transition smoother and faster. Agreed?

Somehow, the people will get

Somehow, the people will get caught, the companies will get caught or the process will be overtaken. Correct?

The reason they will get caught, is because in the transferring of Bitcoin to US dollars -do you understand how this works? To transfer Bitcoin to US dollars -in a substantial amount- one must use an exchange; does that make sense? If the US government has laws in place -and thereby are monitoring the exchanges- how do you suppose people and businesses would convert Bitcoin to US dollars for the use of paying taxes?

Your second half suggests that local currencies will thrive because the government can't control what the people do. The government can't control what the people do nor can catch them.

The Federal government cannot -on and individual basis- control what people do; however, your idea for Bitcoin is not one individual trading with another individual; your idea of Bitcoin is everybody including large corporations using Bitcoin. Large corporations can be controlled, and therefore, the mass of the people will not use Bitcoin if their favourite Big Box store doesn't accept Bitcoin; do you understand that?

If they -the large corporations- lose all, or most of, the tax loopholes/write-offs because of using Bitcoin but save 20% does that balance out? The answer is no. If Apple had to pay the full 38% federal corporate tax, but then saved 20% because of Bitcoin, they(Apple) would be paying 18% federal taxes. Considering that -as of 2011- they were down to paying only 1.46%; I can't see why they would want to do that - can you, really? Just think, most of those other large corporations like GE pay 0% taxes; I'm sure they are going to rush to utilize Bitcoin, when the government could just end their tax breaks. You don't make sense; you are supposing that corporations will risk tax freedom, just to use Bitcoin -this will not happen. Why would it?

You suppose that people will be utilizing the Silk Road and Bitcoin for Heirloom seeds; why would they? First thing is that to have something shipped to ones home no longer makes the purchase anonymous. Secondly, the people in meat space won't be able to use Bitcoin to purchase anything other than stuff via the internet. Also, people in meat space will need FRNs to pay taxes (Property, School, local, State, Federal) and any fines they may have incurred; how are they to do that when the government is monitoring the exchanges?

As far as what a given politician will do given that 300k people signed a petition; for one they would only worry if all of those 300k people were in their voting district -but by the number of signers of the petition, I would say that they are not. Afterwards, no matter how many of the petition signers were from the politicians voting district, the politician would set-up a job for himself with a major company -if he/she were to lose an election or were to be recalled- and then he or she would continue doing what they were doing -especially things in favour of the corporation which they will be working for afterwards. Then, if they do get voted out of office the politician has job making 2 or 3 times as much money and they also have their government pension(s) and lifetime healthcare and they are set for life; and that little petition with 300k signers did absolutely nothing. To see that this truly is how this works, one need only look at Rick Santorum as an example.

No, seriously your idea of Freedom is to be so heavily dependant on technology, which is heavily dependant on centralized Networks, and centralized power distribution, that it makes absolutely no sense what-so-ever. Are you Daniel Suarez, by any chance?

You keep trying to say that there is a chance that I'm wrong about my predictions, but people said that two years ago when I said -on another forum- that the US government would be latching onto the exchanges. I believe I even said it here on Daily Paul last year before the government started forcing the exchanges to abide by laws.

The whole point is: as long as government require FRNs to be used for taxes, then Bitcoin will -at best- continue to be a second-rate currency. Because everybody -in the US, at least- will need a certain amount of FRNs, then the use of Bitcoin loses most of its lustre; unless- that is- most of the popular corporations start to accept Bitcoin. However, that would be highly unlikely since it would potentially cost them all of their tax advantages. So, if the major corporations don't accept Bitcoin, then the vast majority of people will not either.

If a company accepted Bitcoin as payment, then they would have to convert some of that to FRNs -for tax purposes- while risking loosing their tax advantage. This is an unnecessary step and an unnecessary risk which the large corporations will not take. If you got paid in Bitcoin, then you would still need FRNs for -at least- to pay rent, gas, insurance, and several other items which are centralized; but if you owned your own home then you would need FRNs for taxes also.

There is no escaping the need for FRNs if the governments would continue to only accept FRNs as payment of taxes and fines.

So, I'm sorry; but the reality of the situation is that Bitcoin will not become what you and others think it will. The only thing it will most-likely do is take enough people away from using physical currency to enable the governments to quit creating physical currency. This will kill the black market, because the prices to convert the Bitcoin to some-other currency -if it would even be possible- would increase dramatically, the price of everything would increase dramatically, and it would be a death spiral for the black/grey markets.

**Edit**

You state that how can people get caught because it would be like a speeder on a un-monitored highway. First of all, the Feds don't have to watch the individual people, they only have to watch the exchanges. This will give them enough people to make examples of which would therefore drive more people away from Bitcoin.

Also, if I was to buy something which was illegal, I would much rather do it face to face, or via proxy, with a truly untraceable currency -like cash, then to use Bitcoin over the internet and then have the item shipped to my home; that is not anonymous, it is not secure, and it is highly unwise.

I do think you get the prize

for being the single most negative, closed minded, no-vision person I've ever met. Seriously, you couldn't innovate your way out of a paper bag! Damn. I really can't believe there are people who know so little about technology and about how the free market works as this.

As one tiny example (because I have multiple paragraphs to say to teach you how wrong everything you just said is), if I had $1000 in cash and a couple bitcoins I could exchange with you for either one you wanted to convert of yours, right? Did I have to register as an exchange with the government? No? So how will they know we exchanged? If you say they wouldn't but you say this can't scale larger, geographically over more area or spread across town/city/international lines, you're a damn fool. Good luck predicting anything but your next meal.

I'll let you stew on your own words to see just how hypocritical they are. I'm honestly not going to spend the time required to teach someone how the world works.

Just wow.

Just wow; you are

Just wow; you are hysterical.

If people want to pay 2 to 3 times more to exchange Bitcoin for dollars, then it would be possible. On Bitmit, there was a $20 bill which would cost the equivalent to $25 in Bitcoin plus shipping. I cannot imagine how much someone would charge if you needed $3000 for property taxes; plus would you really want someone shipping physical money through the mail anyway.

Bitcoin proponents, take the cake for the most illogical people around -especially the Bitcoin proponents who happen to be Constitutionalists, Libertarian, or Voluntaryists, because to know the evils which government has done, and knowing that government acquires more control -over time- and not less, and yet to suppose that government is going to somehow turn a blind eye to that which would end their power base is completely and undeniable the most illogical thing to ever be uttered.

You really shouldn't be trying to teach anybody, since you clearly don't even know that the US doesn't currently enjoy a 'Free Market' other than the limited Black Market which the vast majority of people do not use. So, if the White Market is not a 'Free Market' then the reason by which you suppose corporations would use Bitcoin disappear; now don't they? Since the White Market is controlled by the government -to some extent- then it is fact that if the government doesn't want Bitcoin to be accepted by corporations, then Bitcoin will not be accepted by the corporations.

Also, you have never actually made a logical argument to defeat any of my logical arguments against Bitcoin. All you have use was ad hominem attacks and conjecture; not very intellectually honest. You have also, never answered a single question I've posed, with any great thought -if you even bothered to try and answer at all. Typical behaviour from Bitcoin proponents; too emotionally charged to even think clearly, consistently, and logically.

As far as technology goes, all one would have to do is detonate a nuke in the upper atmosphere -it wont hurt anybody- and it will take out the entire electrical grid the world over, and Bitcoin would be done. Government around the world would far rather do this and then blame it on some "terrorist" so they could maintain power and control rather than let it slip through their fingers. However, in reality the government wouldn't have to go so far; I've explained several time all that the government would have to do -which they are already starting to do- to end any potential threat which Bitcoin could ever possibly pose.

So you're both ignorant and arrogant about it

Great combination. You must have tons of entrepreneur friends. I'm just glad you weren't close friends of the Wright brothers or others like that because you certainly would have put a damper on their potential.

To be clear, this is my last comment attempt to explain the most basic of functions to you. I'll try to keep it simple enough for you to understand, since you're so immersed and invested in your Keynesian coursework.

We have a market. It's not a free market. It's facilitated by our central bank via their monopoly over currency in conjunction with our government and hiding behind a veil of government facade. They mandate that government related transactions are done in fiat dollars (FRNs) and through regulation, they can force companies who report where and how they spend money, to do so also in FRNs. They also manipulate virtually every single market via subsidies and tax rates and favoritism via lobbying and other such means. Both these entities wield great power over all our economy. This skews things tremendously and causes vast increases in costs because it completely shuts out the little start-up companies from competing with the entrenched multi-national conglomerates. The resulting cost to the consumer is rather hard to calculate accurately but could be estimated to range from an extra 10% to north of 50%. This is current and hopefully, we're still on the same page. If you don't understand that much or can't agree with the level of overhead, then stop reading now because the following hinges on this.

Given that 30% (mean number for brevity) is wasted on all products, this leaves lots of room for competition. The reason is simple but often missed by 'big picture' people such as yourself. Profit margins are rather small, percentage-wise, compared to the total retail price of a product. Knocking 30% off the retail price and not altering anything else means that all can go to the profit category. Magically, a company's profit just went from 3% to 33% (or so). This is a tenfold (back to brevity) increase in profits.

Corporations pay taxes on profit, not any other part of their revenue stream. If they keep those profits and don't offset them with additional expenses, their tax rate skyrockets. If they drop their price (e.g. pass the savings on to the consumer), the rate doesn't go up. Still with me? Good.

So if a BC payment option opens up which allows a start-up to cut expenses and operate without banking costs, they can pass along this savings and draw in customers from the bigger companies. Since they are not large enough to effectively play in the lobbying game, they don't have that cost but they do have the tax cost. But that tax cost is dependent on their profit. But that profit is not there because they didn't charge it. So the tax cost isn't any higher. Does this make sense?

How BC aids this process is that it allows a business to start as small as they want and keep operation under the radar, if they choose, until they get going. I can't explain this generically in layman's terms so I'll give an example. It' not specific to this industry but it is an actual working example with accurate real numbers for actual start-ups today.

Solar installation companies have tremendous up front costs to start a new company. One wouldn't think so but the subsidies are skewed horribly. They are competing with existing companies that receive 30% of the retail, installed cost directly back from the federal government. There is seemingly no way they can undercut the competition to begin in an existing market. In order to qualify for those rebates, they must install only government certified panels with certifies practices and by certified solar installers who are also electrically certified as well. These certifications test not only functionally safe practices but monopoly supporting ones as well. Deviation from them results in a loss of license. Still with me?

If a company wants to bring a game changing new solar system to the market, there are many costs to just doing that. The obvious ones are R&D, testing, quality and manufacturing rampup, etc. This is all funded from self, friends, family or by giving away ownership to investors. However, since the subsidies mentioned above increased the requirements, they now must fund a certification of the product. This regularly takes more than two years and nearly a million dollars and certification is dependent on who you know, not what the performance is. This is proven. The result of this process is that the 'little' start-up now must give away around 80% of his company to investors to fund an average $3 million start-up. He must also adhere to his new board of directors (the investor's people) who mandate that he go after those subsidies with a vengeance. (the "every last penny of profit" mantra) So in a nutshell, he now owns nothing new and can't compete like he originally planned (because he would never have gotten certified) and he's no different from the rest.

With bitcoin, he can keep large (over that pesky $5k transaction limit) transfers completely private. He can design and build his system FOR HIS FIRST CUSTOMER and test it in place (with some creative warranties for their risk). He can follow nothing more than the local electrical code (more than safe enough for solar). This can generate revenue early enough for him to begin on a shoestring. Sure his system won't qualify for those subsidies but there is at least that much waste in the big players' business model anyway, so he's still under them. As he gets going a little, he's essentially tax free (if he chooses) so he can buy factory equipment much cheaper (because it's not financed with stocks) and things take off from there. I'm not making any judgement calls on tax evasion but I am showing how the big corporations can be undercut.

There are thousands of start-ups stuck at this roadblock who would begin doing business asap if they had the opportunity. I know this because I have one and I personally know of nearly two dozen others. Their roadblock is funding and that relies on playing the government's game. However, with anonymous transactions they could start small and eventually self fund.

Was that in-depth enough and simple enough to grasp? I don't mean to talk down to you but I really can't believe you have been here for as long as you have and didn't know how badly subsidies skew every market toward the monopolies. I also can't believe you see things like wikipedia, wikileaks, Tor, Bittorrent, off-shore gambling, mesh networks, bitcoin, thingverse, craigslist, angieslist, etsy, kickstarter, indiegogo, kiva, prosper and still believe government power is increasing. That's so far from the truth, it's a face-palm. The government couldn't shut those things down if they wanted to. They have become entrenched in people's lives so much that if they tried, both defenses would come to their rescue. The people would raise holy heck and the coders would put it on the cloud where no-one, not even the government, could stop it.

Oh, and you can't possibly be so technologically inept to think a nuke in the sky will kill the internet, can you? You do realize that it's made of millions (billions??) of company networks that are just opened up to talk to each other. If you kill their power (because that's all the government could possibly do), you kill everything including food and oil flow and you only stop that piece of 'the internet' until they turn on their emergency generators. All data centers like google and such have spinning generators that wouldn't even see the power go down. And yes, they're EMP tolerant since more than a decade ago. But let's say you were right and they killed the addressing system. Those people with mesh networking software running (over 2-3 million now) would never even notice it because they would simply connect to their nearest cell phone and keep on going. But even if so, just the cell network would keep bitcoin alive so you missed even further than you thought.

Long story short, with what is already available and in use today, people can start and run a cloud based, floating, un-trackable exchange, business or service with their mesh connected laptop or cell phone even if the power and internet backbone is down. How long do you think it will be before this becomes so easy people don't even remember they included this security in their system? How long before someone runs an encrypted, peer-style exchange from uganda to offer instant and free service because they are selling ads on their site to make money? How can you not see this as both inevitable and coming in the very near future? I think you assume that everyone but you is in support of the government and their ways but I'm seeing thousands per day converting to being committed to ending that tyranny. ....at all costs to them personally.

Any more negativity, save it. I won't be defending innovation to you again. But if you want to ANSWER THE ORIGINAL OP QUESTION WHICH YOU WON'T EVEN ACKNOWLEDGE, jump in again. This post was supposed to be a exercise to show those who can't see what changes might take place if BC HYPOTHETICALLY took over just what is possible. By showing what might be different (from many perspectives, I had hoped, not just mine), more people could be inspired to figure out what we need to make the transition go more smoothly. And by showing how extreme we are being robbed by our fiat system, our debt system and our financial systems, I had hoped it would slap a few in the face who thought the world was currently as good as it could ever get. Guess you missed that part.

Oh, the irony of your

Oh, the irony of your comment's title. "So you're both ignorant and arrogant about it."

You must have tons of entrepreneur friends. I'm just glad you weren't close friends of the Wright brothers or others like that because you certainly would have put a damper on their potential.

There is a difference between starting an endeavour which has never been done before ie flying, and trying to take-over something which already exists and the government/corporations/banks already holds a monopoly over ie currency; I certainly hope you can see the difference.

To be clear, this is my last comment attempt to explain the most basic of functions to you.

Actually, you are trying to convince me of something which is blatantly false; there are no basic functions to which stand factual in your argument. I've tried to point that out to you, however, you want to believe in fantasies, and therefore you are lost.

We have a market. It's not a free market. It's facilitated by our central bank via their monopoly over currency in conjunction with our government and hiding behind a veil of government facade. They mandate that government related transactions are done in fiat dollars (FRNs) and through regulation, they can force companies who report where and how they spend money, to do so also in FRNs. They also manipulate virtually every single market via subsidies and tax rates and favoritism via lobbying and other such means. Both these entities wield great power over all our economy. This skews things tremendously and causes vast increases in costs because it completely shuts out the little start-up companies from competing with the entrenched multi-national conglomerates. The resulting cost to the consumer is rather hard to calculate accurately but could be estimated to range from an extra 10% to north of 50%. This is current and hopefully, we're still on the same page. If you don't understand that much or can't agree with the level of overhead, then stop reading now because the following hinges on this.

This is about the most accurate of things which you have written thus-far. Finally you admit that the Free Market does not exist, and yet in such revelation you refuse to see that Bitcoin will note emerge as you have predicted because of this very fact. You continue on and on and on and you forget one thing, and that is that the cost is directly related to maintaining of the shipping lanes aka not having ones stuff confiscated at the ports or air terminals. Since damn near all of our product are manufactured elsewhere, this means that the products need to be shipped in. Now, the government could easily hold things at a port or air terminal, if a company refused to pay taxes, and then the company would go out of business, because they would have no product to sell.

If you were to say that this wouldn't happen, then maybe you should look into Gibson guitars, and how the US government forced them to halt production and future sales over some wood legally acquired. You should investigate how two fire teams raided the Gibson guitar factory over this wood and scared everybody. While Gibson guitars didn't go out of business, it was due to Gibson being such a huge company with plenty of money on hand and that they were able via a judge to resume operations -without the particular wood- before the trial started. If this was a smaller company or a company whose entire merchandise what seized, then they would have been done.

Given that 30% (mean number for brevity) is wasted on all products, this leaves lots of room for competition. The reason is simple but often missed by 'big picture' people such as yourself. Profit margins are rather small, percentage-wise, compared to the total retail price of a product. Knocking 30% off the retail price and not altering anything else means that all can go to the profit category. Magically, a company's profit just went from 3% to 33% (or so). This is a tenfold (back to brevity) increase in profits.

You do realize that with more competition, the companies make less money right? If I'm one of three companies allowed to sell widgets, then I know that all three companies want to maximize profits, and with zero other competition we could charge more than a market would typically allow, because there is only three companies selling widgets and widgets are needed. If there was the potential for unlimited competition then my company and the other two companies wouldn't be able to maximize our profits as effectively -this would be bad for the three businesses. Do you really think Walmart wants the potential for unlimited competition? How about, Home Depot? What about Best Buy? Also, you are mixing business operations. The Walmarts and Home Depot and such do not pay all of that money, that money is paid for on their behalf by the individual tax payers and small businesses via the tax schemes in-place which only a team of tax accountants and lawyers are able to find -this places it out of the reach of the working class, and the small businesses. You should really learn how the tax system works and how the regulatory system and the IP system work, also there are price controls via the government which makes it illegal for a company to basically undercut the price -usually 200% of the production cost of the item is the lowest the item is allowed to be sold for, there is only a small window in most cases for price competition. This benefits the large companies and none of the major corporations will ever go against the US government because why would they actually want to have to compete for revenue?

You keep bringing-up TOR, Bittorrent, Mesh Networks, and such; I really don't think you know what this stuff is used for, where it came from, or how it works. TOR, which is an acronym for The Onion Router was created by the US Navy. To use it for illegal transactions is about as intelligent as if the US and UK would have started using Enigma Machines for Top Secret Communiques during WWII. It is not only not secure from the US government but Anonymous showed last year that it wasn't that secure from outsiders either -when they exposed Child Porn people. Bittorrent, is a protocol for transferring files/information in definite sizes: like ebooks, movies, songs, etc. Bittorrent is not secure, not even using trackerless torrents and magnetlinks; I'm still not sure what this would have to do with business anyway, other then to sell digital information, and if that is the case then people could just get it for free anyway. So that makes no sense.

Mesh Networks, I seriously don't think you know what these are nor how they work. There are a couple different ways in which a Mesh Network works: one is if everybody in a local area connects to a wireless router either wirelessly or with a ethernet cable or a combination of the two and the second is when on computer connects to another computer using only the wireless antenna on the computer or possibly utilizing many NICs to connect to multiple computers. No matter what is chosen latency occurs as the Network expands outward, even more-so when it is a wireless network without utilizing a wireless router. To connect Uganda to the the US, the Network would have to go from Africa through the Middle East, up through Russia, connect and go through Alaska, travel through Canada and then arrive in the US. To have two-way communication this way would be extremely time consuming. There would be a possible way in the future to improve this without using either the existing internet backbone or satellites, but it does not exist right now.

Long story short, with what is already available and in use today, people can start and run a cloud based, floating, un-trackable exchange, business or service with their mesh connected laptop or cell phone even if the power and internet backbone is down.

Cloud computing solutions are provided by large companies who benefit greatly from state control; they are hardly going to maintain a service for a company or group of people which government tells them(the corporation) to stop service to. I already explained Mesh Networks, so I don't think I have to explain that again.

How long before someone runs an encrypted, peer-style exchange from uganda to offer instant and free service because they are selling ads on their site to make money?

If you knew how networks and Mesh Networks worked then you would know that what you've just described is impossible without the actual Internet Backbone which is created by companies which depend of government to limit their competition. The companies which basically own the internet backbone would aid the government in ending that type of network. Also, if it was to be a truly Mesh network, then the lag or latency from going from Uganda to wherever would be so great that it would certainly not be instant. Just more evidence that you have no idea what you are talking about.

Any more negativity, save it.

So basically what you are saying is that I should stop making you look foolish; and if people don't agree with you, then they just shouldn't post.

Oh, and you can't possibly be so technologically inept to think a nuke in the sky will kill the internet, can you?

Actually, it would destroy most electronic equipment, including personal computers -there goes the Mesh Network. It would also destroy those big transformers at the power plants and the transformers at the power sub-stations. Without those, you would not have power for a very long time. Some of those transformers are on back order and it takes about three years to make one of the really big transformers. How would the transformers get made without power to operate the machines which make them? You really have limit understanding of technology. You parrot and optimistically inflate the actual capabilities of technology which someone else has told you, and this only makes what you say that much more ridiculous. BTW, those transformers of which I speak are not EMP proof. There were Senate hearings concerning their vulnerabilities last year or the year before; however, it would cost way too much money to insulate those transformers and therefore the government didn't do it.

Furthermore, Angieslist is a paid subscriber service company which pays taxes; if you wanted to know. It therefore relies on IP protection via the government to keep it relevant; it would never risk its protection.

With bitcoin, he can keep large (over that pesky $5k transaction limit) transfers completely private. He can design and build his system FOR HIS FIRST CUSTOMER and test it in place (with some creative warranties for their risk). He can follow nothing more than the local electrical code (more than safe enough for solar). This can generate revenue early enough for him to begin on a shoestring. Sure his system won't qualify for those subsidies but there is at least that much waste in the big players' business model anyway, so he's still under them. As he gets going a little, he's essentially tax free (if he chooses) so he can buy factory equipment much cheaper (because it's not financed with stocks) and things take off from there. I'm not making any judgement calls on tax evasion but I am showing how the big corporations can be undercut.

Why don't you do it? You know damn well, that your government would stormtroop into the place and possibly kill people just because they can. Also, you underestimate the government which will only end badly for you, unless you are intentionally misleading people. If they killed two people and spent millions of dollars just because of a $200 tax stamp (Ruby Ridge), or they killed nearly everybody and spend millions of dollars -first they said because of guns and then they said because of child abuse in reality it was neither- at Waco, then they spend thousand of dollars if not millions over legal wood at Gibson guitars, then spend thousands of dollars and send a twenty member SWAT team to go after a single Amish farmer in PA for selling 'Raw' milk to somebody who transported it over state lines, I could go on and on; I certainly hope you get the point, which is that the government would do whatever it had to so it could keep power, and the majority of people would go along with it anyway even without violence. Continuing, the people which your example rely on are wealthy people, these people are not going to risk everything for you or me by standing-up to the government, so you should really stop dreaming. If you want to work outside of the government and their tax system, then that is up to you, and you should probably start at the local level in meatspace as opposed to cyberspace.

You say you want to start small, but as soon as you enter the internet, then it already becomes a Federal Government issue which has unlimited resources.

Cyril's picture

I hope this thread will see

I hope this thread will see constructive discussions.

"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

Cyril's picture

BUMP for traction.

BUMP for traction.

Because thorough reflections on economic forces and what went wrong and enabled the plunder against peoples is important.

We are in dire need of thinking harder to protect better the free markets next time we get a chance to have those.

Thank you for posting.

"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

Bump for morning crowd

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