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I don't think it matters (or should matter) to regulators what Satoshi intended, or what one person does, or what a few hundred people do. I agree paying with Bitcoin is a good option and I hope it becomes more accessible (and that the price stabilizes).

That doesn't mean regulators should treat it like currency when, practically, the real world doesn't use it that way.

> I've read the early mailing list archives for Bitcoin to see if I could understand Satoshi's intent in creating Bitcoin.

The answer could be here:

Thus, bit gold will not be fungible based on a simple function of, for example, the length of the string. Instead, to create fungible units dealers will have to combine different-valued pieces of bit gold into larger units of approximately equal value. This is analogous to what many commodity dealers do today to make commodity markets possible. Trust is still distributed because the estimated values of such bundles can be independently verified by many other parties in a largely or entirely automated fashion.

In summary, all money mankind has ever used has been insecure in one way or another. This insecurity has been manifested in a wide variety of ways, from counterfeiting to theft, but the most pernicious of which has probably been inflation. Bit gold may provide us with a money of unprecedented security from these dangers.

That quote is from Nick Szabo. Here's a Satoshi quote:

The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.

Also the text in the Genesis block suggests bitcoin was a response to the failure of banks in the GFC:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

> She's a remote contractor who lives in a country where the banking industry imposes really unreasonable fees on international transfers.

And she most likely converts her bitcoins into whatever local currency she needs to pay for her goods.

I'm not sure if this is supposed to be a criticism of bitcoin's utility or not, but if it is I think you missed the point. The point is she has more currency units now than before, because she didn't have to pay the bid bad bank, even if she had to use local fiat to buy bananas.

No, I think the point is that her method of receiving payment is functionally no different than if they drop shipped gold bullion to her. She must convert it into a usable currency in most cases.

Gold bullion is rather expensive to ship and insure.

Bitcoin seems quite promising for foreign currency transactions.

Only if someone in the destination currency is willing to trade that currency for Bitcoin.

Isn't that true for all (or at least most major) currencies at the moment?

It's certainly easier to sell Bitcoin locally than gold bullion.

I'm not convinced that's true in very many countries.

You probably won't be getting too good prices for gold in such countries either.

Yes, so it's an unprecedentedly easy to transport commodity, but that doesn't mean it's not a commodity.

If that's your mindset, then look at it like this: Bitcoin is a technology for shipping gold buillion equivalents to any remote location in the world in under the hour, for the price of a tenth of a cent. Pretty nifty, is it not?

Nifty? Sure. Deserving different tax treatment from gold bullion? Nope.

Mindset? I was simply providing a different, I think more accurate, interpretation of the anecdote presented upthread. The person was paid in bitcoin, but in this specific case, because of the circumstances, I think it's no different than if they were paid in some other easily fungible commodity, such as gold. I interpreted the usefulness in getting paid in bitcoin not that the worker now had an easily used currency, but that the worker now had a commodity that could be exchanged for a local currency to actually buy most things needed, and it was cheaper than dealing with the local currency exchange fees.

Yes, it also points to the utility of bitcoin, but this specific example also points to it's use as a commodity, IMO. As it gains in popularity, I think it will gain more utility as a currency, but until then it's a currency of limited use (limited in that there are limited venues that accept it) except as a commodity.

So when I was getting paid in dollars, and converted it to my local currency right away, I was proving that USD is a commodity? I could not get anything with USD, so it is not a currency? Interesting.

What people miss is that commodity and currency are not exclusive. And the difference between them does not really matter all that much.

> So when I was getting paid in dollars, and converted it to my local currency right away, I was proving that USD is a commodity?

Yes. It is a commodity. People trade in it every day.

> I could not get anything with USD, so it is not a currency?

For your use at that location, apparently not.

> What people miss is that commodity and currency are not exclusive.

Yes, and I said as much in a separate reply.

> And the difference between them does not really matter all that much.

Except for when they are classified as one and not the other and taxed differently.

I'm curious how she does use it though. Is there a local exchange willing to trade bitcoin for the local currency? Because she can't exactly do it through Coinbase, or she's right back where she started...

Coinbase is available is 28 countries: https://www.coinbase.com/global

(I work for Coinbase)

Did not realize that.

You might want to update your FAQ: https://support.coinbase.com/customer/en/portal/articles/182...

It only lists 4 countries.

According to our lawyers we're not allowed to advertise exchange services in certain jurisdictions but if users happen to stumble upon it we're allowed to offer them the service ;)

Not necessarily. Coinbase's fees are probably far less than it costs to wire money or PayPal's 3-4%.

But not less than Transferwise at 0.85%

Coinbase has an exchange (https://exchange.coinbase.com) that supports several currencies and is accessible from many countries.

(I also work at Coinbase)

North-African countries have better exchange rates for BTCs in the local market than the USD one. (because of capital flow controls). I suspect the same for other third-world countries.

She probably takes 10-20% more with BTC than with bank wire.

So it's a criticism of the bank's fees, not of Bitcoin's utility. How does she get her local currency? Volatility has to be factored in to determine the price savings. (I personally think the level of control is a much stronger argument than the cost, since savings can be wiped out by the market or the banks updating fee structures)

Nobody can force anyone to adopt bitcoin. I regularly buy Subway with bitcoin at a local store that accepts it.

The benefits of bitcoin are out there, its up to stores to offer it as an option. There should be a strong pressure to eliminate credit card processing fees though, since most companies are paying ~10% of revenue just to credit card companies, sometimes worse.

10%?

Perhaps a small Mom & Pop store that has tiny volume.

Any company of decent size would be paying significantly less than that in practically all circumstances

The main point I was trying to make is that Bitcoin opened up the transfers of money to operators other than banks. Of course this is both useful and scary :-). For my friend, she has to hope that the service she uses isn't going to turn into another MTGOX. Regulation of financial services == good. Monopolies on financial services == bad. ;-)

I'm not privy to her financial transactions, but I believe she holds some BTC for online purchases and transferring money between her and her husband. Clearly the bulk of her money is converted to a fiat currency because that is the most useful at the moment (though I'm willing to bet dollars to doughnuts that the fiat currency she most often chooses is not that of her home country).

Which would likely convert at close to the same rate as USD -> local currency if BTC -> local currency is a liquid market. If it's not liquid, then Bitcoin is essentially unspendable locally -- she would have similar results if she opened up a US bank account and had her fees paid into that.

Surely her contract specifies she will receive $X,000 worth of BTC rather than a fixed amount of BTC each month?

Sure, but what's your point? My contract states the same and my national currency is the Euro.

You have your salary denominated in dollars even though your national currency is Euro?

Yes. It's not unusual for contractors to choose to fix their rate in any currency. Sometimes I denominate it in GBP, even if neither of the two parties is in the UK.

Perhaps she and her company should take another look at what remittance companies are out there: the 'fact' that Bit-coin is a cheap way to transfer money (and that 'traditional' money transfer is expensive) is mostly wrong:

https://www.saveonsend.com/blog/bitcoin-money-transfer

TL/DR: shop around the money transfer companies and you can save a fortune, their fees vary wildly. Online companies can be very cheap indeed. Comparisons with bit-coin mostly cherry-pick the expensive companies to make themselves look competitive.

> I've read the early mailing list archives for Bitcoin to see if I could understand Saotoshi's intent in creating Bitcoin. Interestingly, he doesn't seem to discuss it much at all. It seems to be all about the tech.

http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour...

Personally I wouldn't want to receive my salary in a currency whose value, relative to the money I have to use everywhere, fluctuates wildly all the time.

I think the intent was to show how easily one can transfer Bitcoin as a means of payment, then transfer the amount into a more preferred currency, which presumably, in a country with poor financial institutions/regulation, is easier than directly wiring USD

Somewhat similarly, many Dutch people don't use credit cards (which is very wise IMO hehe), and over here we have something called "iDeal" that's really only supported by Dutch webshops. Bitcoin can be a handy alternative to cc/paypal for us.

As a Dutch person who does hold a credit card, i am always baffled by the near-taboo reaction when it comes up in conversation (noticed this in both France and the Netherlands). People seem to take pride in an almost pious/religious way in the fact that they want nothing to do with credit cards. I just don't get it. I know what the downsides of using a credit card can be (e.g., high interest rates) but they certainly have advantages, too (they work everywhere i travel, there are neat insurance policies). I use mine as a debit card for online and foreign purchases: there's an automatic payment at the end of the month from my current account into the credit card account, so i end up never ever paying interest, it only costs me the €x per year in card fees.

Credit card is more difficult to keep track of your finances. You don't notice your balance changing until the end of the month. Further, you're doing things on credit, where most Dutch mentality is to save, then spend.

The insurance policy is there because of a lack of security. Plus you pay it back anyways. E.g. if you pay with your credit card abroad they make money on the currency conversion plus they charge the merchant significantly more. Hidden costs that you don't notice. The bank cards / Meastro system is way cheaper.

If you stay within the EU you can just pay with your bank/debit card. Only if you travel outside of the EU you'd really need a credit card. Not too many people need that, so someone having a credit card is not that common (though IIRC Rabobank automatically gives you one).

Plus the whole confusing difference between credit card and the bank cards. I'd highly prefer things to go out of my bank account immediately. My bank card doesn't have the credit card number and isn't accepted. I'd wish my bank provided a better (integrated) overview.

The public attitude in Colombia towards credit cards is very similar.

So what happens when Bitcoin crashes? Does she just not make as much money that year?

She probably quickly exchanges it for local currency

She very likely receives payment in "dollars worth of bitcoin" and not a fixed bitcoin amount.