My money's on, he hasn't reviewed all the lines of code in the Bitcoin client (or operating system, even!) he's running, either, so...trust comes back in a different form.

In a way, it reminds me of the ol' Reflections on trusting trust (https://www.ece.cmu.edu/~ganger/712.fall02/papers/p761-thomp...), but in a somewhat broader sense.

For my part, really, at the end of the day, I'd sooner trust institutions that have been around for a long, long time (far longer than I've been alive so far) than a coding project that's been around for less time than most of the popular websites I read.

But it'd be a funny old world if we were all alike, of course.

> The solution has always been to keep your money locked up in a safe. Pay for things in cash or cashiers check.

You are never safe against the risk of fiat money devaluation, though (or even folks breaking into your home and stealing your safe). Of course, the devaluation risk exists with BTC as well, but at least it does not depend on a central government.

No, it depends on a central cabal of Chinese miners. So much better!

Call me crazy but I'm betting that the USG is going to provide me more stability than Bitcoin...

The United States Government is extremely likely to provide more stability.

The same cannot be said for every government, in fact the number of people that are under a government that forces them to use a currency that is more unstable than bitcoin is already in the 10s of millions.

There's also the risk of a redenomination. Bank accounts and other monetary instruments are automatically converted in that case; physical cash has to be brought to a bank to be exchanged, and there's often a time limit.

And there's also the risk that, as newer notes and coins come with stronger anti-counterfeiting measures, older notes and coins aren't accepted anymore, or accepted only with a discount over their nominal value. (I've seen it happen with older USA dollar bills left over from a trip to the USA a couple of decades before.)

BTC is almost worse - it depends on the whims of a totally unaccountable and often drama-filled group of developers who make decisions (or don't, in the case of the block size debacle) that impact the product as a whole. And if not them, the large mining cartels.

At least the fed has the bureaucracy and some manner of legal system keeping them in check!

Don't say "forks" either - we may or may not be at the point of maximum entrenchment yet, but requiring literally every BTC user in the world to update their software for their money to work is unrealistic.

I'm quickly coming to the conclusion that bitcoin is about as perfect a medium of exchange as you will ever get (immune to censorship, immune to legislation), but is comparatively awful as a store of value.

If fiat money gets significantly devalued, you're going to have big problems no matter what you invest in or how much BTC you hold. Remember, deflation was one of the factors that made the Great Depression so hard to recover from.

>For trust you can walk right in and speak to the manager.

His point with BTC was that you didn't even have to trust some manager.

>However there's nothing really new in these fears (especially after 1929). The solution has always been to keep your money locked up in a safe. Pay for things in cash or cashiers check.

How do you pay with cash online?

I think he means to store the bulk of the cash on your own, and it wouldn't be inconsistent to store a couple thousand in a bank to access the usual banking infrastructure.

If you wanted to avoid even that amount of storage, you can also use them primarily for borrow money(credit cards, loans, mortgages, etc.) and pay the debts back with cash. I can access borrowed money through my bank's online interface.

> For trust you can walk right in and speak to the manager. Some of them are older than dirt.

Bitcoin eliminates the need to trust some 3rd party human beings with your money.

BTW what does being "older than dirt" have to do with being worthy of trust?

Bitcoin involves trust in the mining community: human beings whose identities you almost certainly don't know.

Unless you are also auditing all the code you use for software that objects with Bitcoin yourself, it also requires trust in either the software developers or other people who purport to be auditing the code.

The idea that Bitcoin eliminates the need for trust is a dangerous delusion.

> Unless you are also auditing all the code you use for software that objects with Bitcoin yourself

As I mentioned in another reply, compared to existing electronic monetary systems, an open source one will always be more trustworthy than a closed source one.

>Bitcoin involves trust in the mining community

To be a part of Bitcoin, miners need to follow a publicly known protocol that is easily verifiable by anyone using math. Additionally, miners never have direct control of your money: they can't spend it on your behalf.

I think the only point you have there is that you must trust someone somewhere to mine Bitcoin. And as long as there's a profit to be made, someone probably will.

All you are doing is arguing reasons why the people you need to trust to use bitcoin deserve that trust, in your opinion, which is very different than the idea that bitcoin eliminates the need for trust.

The more reputation they have, the more that reputation is worth in business and the smaller chance they have of it being worth it to steal your money. older would typically mean more reputation.

unfortunately, at least for me, keeping everything in cash is not a viable solution

Why?

You haven't really thought your own question through very far, have you? You pay your internet and utility bills with cash? That's a problem in the U.S. In other countries many businesses are cashless, often even public transit is increasingly cashless.

Update: I'm even thinking of landlords of multitenant buildings, there's just no way they're going to take e.g. $100,000 in cash from everyone each month. It's really not workable. The apartment I had in NYC a few years ago was conventional check only. No cash possible, no credit card, no EFT.

Here in Brazil, ISP and other bills usually come in the form of a Boleto Bancário (https://en.wikipedia.org/wiki/Boleto_Banc%C3%A1rio), which you can pay with cash at the bank (or at lottery stores). Utility bills use a similar system. From the point of view of the bill issuer, it's cashless.

I don't know how it works on other countries, but I'd expect similar systems.

Similar in most of Europe as far as I know, though many use online banking now. Haven't seen a check in 20 years.

I thought you lived in a country with high inflation, like Argentina.

No, I'm thinking of the landlord making that size deposit. I know of no one walking around with $3000 cash to go pay rent let alone the landlord walking even two blocks to a bank to deposit that from everyone in the building.

It's not really a viable option for anyone. You're exposing yourself to huge risk of theft/destruction/confiscation, and you're losing out to inflation every year. Much safer to keep your money in an FDIC-insured bank account. If you have more than the maximum, then open up several bank accounts.

Any event catastrophic enough to wipe out money in FDIC-insured bank accounts would also affect your paper currency. If you're really worried about that eventuality, best to hoard gold.

EDIT: Let me clarify, I suppose it is a viable option if you are living paycheck to paycheck, but if you have accumulated wealth of any significance, it is not.

Losing money in bank is not theoretical. I have to pay income tax, just because I receive money through bank account.

Using bank means paying

- income tax and insurance

- debt collectors

- fines

Any mistake can result in astronomical fines and wipe all savings.

If I earn less than minimum wage, I have to pay 100% tax or more. That's because there is minimum monthly social benefits contribution.

With cash and bitcoin they never know if I have money.

Maybe foreign bonds and offshore accounts are good solution for storing money.

>I have to pay income tax, just because I receive money through bank account.

No, you have to pay income tax regardless of how you receive money. Bitcoin just makes it easier for you to avoid the law and be a leech on society by not paying taxes.

Ah, got it, so you're one of those people, one who heard the news about the Panama Papers, and rather than being outraged, thought "Oh that's a good idea!"

I don't know where you live, but here in the US the IRS simply has to ask you if you have a foreign (or crypto) bank account and you'd smart not to lie to them.

If they can't get the money because they don't have he private key they can simply put you in prison.

So you're trying to evade taxes and not pay for your share of social benefits? You will feel at home in the Bitcoin community.

Any recent event which wipes out FDIC accounts is going to devalue all that gold a surprising amount too.

This is true, but you still have something you can trade for bread.

So what's better in that case -- ammo?

i pay my rent and bills with wire transfer, same goes for 99% of my purchases ( mostly on amazon ) ... my paycheck is sent me as wire transfer as well ... how am I supposed to live just on cash? :) I only use cash to buy cigarettes basically ... using only cash would make my life very, VERY, hard.

Aren't wire transfers incredibly expensive? (Something like upwards of $20 for the sender and the recipient?)

That may just be an American thing though, countries with first world banking systems may have that sorted :)

Here in Switzerland the entire financial system is arranged via wire transfers.

I get a bill. At the bottom of the bill is a red pay-in slip with a magic number on it. I log in to my bank, enter the number, tell it how much I want to transfer, done.

There's a not-used-enough automatic system where one of my creditors can send their bills directly to my bank. Now, I log into my bank, get told there's a pending e-bill, at which point I select it, press 'pay', done.

No fees anywhere.

I'm from the UK, which is just starting to do this, but it's nothing like as polished; small traders and tradesmen still prefer cheques, and regular payments are typically done via direct debit, where you authorise them to debit money directly out of your bank account (with a whole pile of banking guarantees). Switzerland seems to do this much less frequently; most people just pay the invoices monthly.

Wow, I would love it if things worked that way in the US. Even without the "automatic system," that's pretty awesome.

This is identical to how's it done in Sweden

And Australia.

Plus transfers are free... and appear same day in the other account.

The US is a different kettle of fish.

With wire-transfers you mean international wire-transfers? I think it might be just an american thing, mexican banks usually don't charge you anything for wire-transfers inside the country (in their "use your credit/debit card at least once each month plans") and well, it's Mexico. Though I think "first world"-something is quite the phrase just to describe consumer comfort: not advanced, not better (or worse), just "it's ok, I don't mind".

---EDIT---

Wire-transfers between national banks are free if you wait a day; there's a small fixed fee if you want them immediately. Transfers between different clients in the same bank are free and immediate. And it's becoming very common to be able to pay a quite assorted list of services through your e-bank account (from utilities to departmental store accounts) without fees.

Transfers in the UK are free and instant.

not where I live