Bitcoin: Better than Gold

Many proponents of bitcoin come to the technology with the belief that the ultimate currency is gold, or some other commodity with intrinsic value.  This is usually because they correctly realize that the centralized control of the supply of money is too dangerous a power to bestow on anyone.

However, currencies which are based upon an item of intrinsic value have an inherent problem. This problem stems from the same feature that gives it the benefits that they seek. Items or rather commodities, with an intrinsic value cannot be transmitted over distances easily. Whether gold, or silver, or gemstones, or cigarettes or wheat, these must be first converted into a form suitable for transmission over distances if one wants to efficiently do so.

The Hoarding Myth

Many times we hear the modern academic economist lament about the detriments of sound currency concepts. This often occurs when discussing the topic of bitcoin with the uninitiated. Their disdain usually stems from two commonly held misconceptions regarding sound currencies and their effects.

The first misconception is that people will hoard an appreciating currency, and the second is that sound currencies have no elasticity. Normally the method attempted to eradicate these misconceptions is to explain the fallacy of both points of view individually by using evidence in the argument from effect, often with futility. However this is not as easy as exposing the the truth sitting in plain sight, as I learned while contemplating my failure to be convincing in a debate with an economist.

Are bitcoins taxless?

A recent posting on the turbo tax blog seems to give tax advice regarding bitcoins while trying to educate its readers on the the basic concepts of the digital currency.

Calling bitcoins “the taxless currency” and stating that “Bitcoins are produced without the involvement of governments or banks, thus avoiding taxes.”  turbo tax seems quite sure of themselves despite the fact many so-called bitcoin experts and the community at large cannot reach consensus on the taxable status of bitcoins or bitcoin transactions.

While the growing awareness for the fledgling currency is always a welcome sign, a conspicuous disregard for the basic facts at the turbotax blog should call into question their statements regarding the tax status of bitcoin.

Corporate News Cover Bitcoin

Quite a fair piece produced by CNN espousing several benefits of using bitcoin along with profiling a merchant in NYC who accepts bitcoin.

Link

Great Episode on TWIS

This is not a new episode, but rather just an enjoyable exchange regarding the ideas of bitcoin.  Also compared to many spots on bitcoin, it is of decent depth thanks to the length and format of the show.

No such thing as bad publicity

Hit piece or ignorance?

Timothy B Lee writes a myopic critique of a single feature of bitcoin while conspiciously ignoring the much more important and blatant features of the virtual currency.  Namely decentralization and controlled inflation.

http://blogs.forbes.com/timothylee/2011/07/14/how-private-are-bitcoin-transactions/ 

Hello bitcoin!

Bitcoins are quite amazing when you realize both what they are and what they are capable of. This technology or some similar decentralized currency has the possibility to even the playing field for all humanity. The widespread adoption of this currency as a means for transacting in goods and services will have a deep economic impact and major political ramifications.

There is a possibility for a true paradigm shift in the dogmatic world of economics and politics.

Here’s hoping…….