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Comment: More than a currency, though

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More than a currency, though

The discussion ignores one of the other functions of Bitcoin - namely, as an autonomous payment processing system. The developers have pointed out elsewhere that it's entirely possible for Bitcoin to become a component of new or existing payment processing systems, with the conversion between BTCs and local currencies taking place automatically and invisibly.

It's also a bit surprising that so far no one has mentioned Bitcoin's vulnerability to network outages (whether technical or "official"). Fortunately, the current interest in community wireless mesh networking parallels the interest in currency decentralization. WMN is fault tolerant, doesn't require a physical infrastructure like cable or telco, can be mobile (rapid recovery from outages) and readily handles VoIP. These characteristics are entirely consistent with the concept of survivable communities, without the shrink wrap of government "social management." It is also potentially a technological end run around entrenched telecommunications monopolies.

The FCC and commercial interests hijacked U-NII (the originally planned wireless extension of the Internet), but wireless technology is inexpensive and widely available. Tests with simple 802.11 devices have demonstrated reliable broadband communications over remarkably long distances, so as time passes it could become decreasingly necessary to depend entirely on centrally controlled Internet providers.

However desirable precious metals may be, the number of venues for sending or receiving them in commercial transactions is still quite limited. Bitcoin will never replace PMs in physical possession, but it could serve as a proxy or venue for transacting in PMs. Moreover, even if Bitcoin doesn't provide complete anonymity, it does impair routine government monitoring of what should be private transactions anyway.

The emergent wisdom is to use PMs in physical possession to preserve wealth, and use digital currency for commercial transactions over distance.