On the Practicalities of Counterfeit-Proof Physical Bitcoins 121
fsterman writes "What do you get when you cross physical one-way-functions, a distributed and secure datastore, with physical Bitcoins? A viable alternative currency for micro-nations and dictatorships with hyper-inflation." Whatever your thoughts on bitcoin, it's interesting to think about the infrastructure and production cost of the tokens we use as money more generally.
Re:Production cost (Score:4, Insightful)
Good, good, thinking beyond just the material value vs face value issue - very good.
Now calculate the costs involved with issuing them, recycling them, transporting them, handling them, the cost per transaction in using them because cashiers have to dig them out of the drawers, the value of time wasted by people waiting in line as somebody in front of them who has received those pennies and goshdarnit will spend four them again to make exact change for that $9.99 item (convenience, you say...), cleanup from pennies wasting away into the environment, and material loss that could otherwise have been used for more appropriate purposes.
And then of course counter that with the reduced happiness in some people's lives as they can no longer fill entire jars with pennies and reduced income from places that run 'wishing wells' which tend to be another dumping ground for pennies.
Maybe then we can actually start looking at the cost of a penny in an all-encompassing manner. Or we can just accept that the penny in general is a dumb idea at this - time no matter how much any associated costs are stretched out over the lifetime of a single penny.
Bullshit... (Score:5, Insightful)
Even if you think bitcoin is a reasonable path (I personally don't), this concept is pretty bonkers.
It goes on and on about how the there is no number that can be easily faked. Fiat currency counterfeiters with plain old serial numbers can copy a valid serial number and someone bothering to lookup the serial number could be fooled, not so with Bitcoin. Point taken, but the thing is before that has any value, the recipient of the currency must actually verify that data. There is no point in conveying that info in an expensive physical coin, because such infrastructure could just as easily be fed the data by electronic means or even a printed slip of paper. The physical coin aspect of it becomes the tail wagging the dog, an overpriced way of conveying the counterfeit resistant data. If the data is not actually envisioned to be verified at time of transaction, then it's as useless as the serial number on a dollar.
The only thing holding Bitcoin from exploding in many markets is a lack of a physical incarnation.
Incredibly wishful thinking there. Bitcoin has a lot more problems than lack of a physical incarnation. Being outlawed by major governments, at the mercy of speculators without any regulation, and downright vulnerable to an attack by a critical mass of mining resources working together.
rural farmers in 3rd world countries are not going to get a smartphone and a $100/month data plan just so they can accept Bitcoin.
Exactly! But just a few sentences above it says:
anyone with an NFC equipped cellphone can check if a coin is counterfeit.
You've come round full circle to the problem in the first place: You need functioning internet infrastructure (and a long time) to validate a transaction in the secure way. Without that, you could counterfeit any 'bitcoin' based currency just as easily as any other currency.
A viable alternative currency for micro-nations and dictatorships with hyper-inflation."
Another foolish statement. Again, people are incorrectly assuming there is a technological solution to a socioeconomic problem. The failure of such currencies are a symptom, not a root cause. If it were as simple as all that, the citizens could just as easily move around some stable foreign currency. You can't do a safe, 'sneaky' end run around the force that governs a citizenry. So long as they are empowered to prosecute, shut down internet infrastructure, or just send soldiers into the street, no currency trick is going to work in the face of the fundamental problem.
Meh (Score:4, Insightful)
I don't see an incentive for them to use Bitcoin over US dollars or some other established currency.
Re:Why do dictactorships have hyperinflation? (Score:4, Insightful)
"Even if we could stop inflationary policies, I'm not sure most of us would want to, since it would mean a protracted worldwide economic downturn."
If I may say: I think you've been listening to too many Keynesian economists. The idea that inflation is good is just so much snake oil. The people it benefits are government, banks, and Wall Street. It harms just about everyone else.
HEALTHY markets are zero or negative inflation. Take computer-related equipment: every year, you get more bang for the buck (even when you consider they're inflated bucks). That's called deflation.
For nearly 300 years, inflation was essentially zero in North America, and we had a healthy economy (arguably the healthiest in the world). That changed when the government started meddling. It is ridiculously easy to demonstrate this.
I don't share your stance, which seems overly pessimistic to me. We need to end the Fed, and re-instate a hard money standard. Just those two things would fix many of our ills.
(Re, the Fed: why should we pay interest on every dollar printed? That's just one of the ills it introduced.)