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I have a question about bitcoin -- let's assume that it actually starts becoming popular. What stops any country that's adopting it from simply forking their ow

by stch2 14y ago

I have a question about bitcoin -- let's assume that it actually starts becoming popular. What stops any country that's adopting it from simply forking their own version? Specifically, why is everyone investing in this particular instance of bitcoin?

betterunix 14y ago
Why would any country want to adopt Bitcoin? What incentive does any country have to do such a thing? A country would be more likely to introduce a Chaum-style digital cash system, where the government would act as an issuing authority for digital cash tokens.
- adrianbg 14y ago
  They might adopt it if it's more stable than their currency, like how Ecuador uses the US dollar.
  - betterunix 14y ago
    Perhaps, but it would have to be adopted side-by-side with a currency that can be used (securely) for offline transactions. Why do that, when you could just adopt one currency that can be used both offline and online (especially since you can deploy a digital cash protocol for any currency, and thus you only really need one that is useful for offline payments)?
- deleted 14y ago
  [deleted]
- MacsHeadroom 14y ago
  Relevant: The Royal Canadian Mint recently invented MintChip, a fully digital crypto-currency where private keys are stored in integrated circuit chips in micro sd cards (for smartphones/tablets) and USB dongles (for computers). They say it is able to be exchanged online AND offline fully anonymously. The details on that are yet to be released. This makes Canada the first country in the world to explore a fully electronic currency. http://mintchipchallenge.com/ http://mintchipchallenge.com/ http://en.wikipedia.org/wiki/MintChip http://en.wikipedia.org/wiki/MintChip
tytyty 14y ago
Nothing. There is no reason not to fork it. There are papers on using blockchains to pass on titles and ownership of physical goods. It's just one market, that happens to currently be worth over $200,000,000 though.
sliverstorm 14y ago
Nothing stops them from doing that. It's already been done a few times, in fact. What generally prevents tons of fracturing is the same thing that always has for currencies with no backing- perceived value of the currency. Your bitcoins are only worth what other people think they are worth.
- betterunix 14y ago
  "What generally prevents tons of fracturing is the same thing that always has- perceived value of the currency." Except that "perceived value" is not what prevents fiat currencies from fracturing. A government could, at any time, issue a new currency that competes with or replaces its old one. The reason governments almost never do this is that it amounts to defaulting on a loan, at a fundamental level. To put it another way, if a government decides to issue some new, incompatible currency, and whatever currency you had previously lost some or all of its value, would you trust that the new currency would not also be replaced by yet another currency later on? Money does not just magically get its value; the "perception" that money has value is, like the perception that anything else has value, based on supply and demand. We are all familiar with the money supply; money demand is generally driven by the legal structure that surrounds that money. Money demand comes from things like tax codes, debt/bankruptcy laws, torts (which often deal in monetary terms when speaking of damages), civil fines, etc. Another way to look at it is that laws allow you to use money to cancel debts of some kind, and thus the demand for money can be traced to the need people have to cancel various debts (and thus people with no debt can trade money for the goods or services of people who must cancel some debt). Bitcoin is unique in having no legal structure surrounding it, and its demand comes principally from technical features (primarily one feature, which is secure online payments). Unsurprisingly, this demand does little to help Bitcoin survive on its own, hence the overwhelming important of Bitcoin exchanges (were these to vanish, Bitcoin would die overnight; on the other hand, the Ruble had some value in Russia even during the period of time when it lacked easy convertibility with other currencies).
  - dr_doom 14y ago
    I'm interested in your third paragraph, particularly "Money demand comes from things like tax codes, debt/bankruptcy laws, torts, ...civil fines, etc." In prison, packs of cigarettes are money and none of the things you mentioned exist. Yet in a prison I can trade a pack of smokes for a tattoo, drugs, cellphones, etc. It seems like money arises out of the need to have a reliable, constant value for exchanging good and services. Do you differentiate between money and currency(medium of exchange)?
Zigurd 14y ago
"What stops any country that's adopting it from simply forking their own version?" Nothing. Anyone could start their own bitcoin2. But new instances of a digital currency cannot debase other instances. So that isn't a viable way for a government to capture bitcoin, or to debase the value of the original bitcoin. In fact, were I running a banana republic with a worthless currency, I'd be tempted to try using a new "bitcoin-space" as a currency with strong protections against being debased. But that has plusses and minuses if you are a government. The reasons people are using this particular instance of bitcoin is that it was launched successfully enough for people to have sufficient confidence. The mining mechanism is one key element.
jessaustin 14y ago
I expect we'll eventually see a new bitcoin instance for items and gold in an MMORPG. Actually it seems to me that bitcoin could govern more than that: basically any random event ("you made a wooden shield") could go into the blockchain.
weavejester 14y ago
People have mentioned perceived value; i.e. a fork of bitcoin would only be worth something if people generally agreed it was. However, there's also another reason, and that is that the security of bitcoin is directly related to how many people are using it. In order to double-spend, you need 50% of the CPU of the system, so the more CPU power you have on the network, the more secure you are from double-spending.

by stch2 14y ago

betterunix 14y ago

Why would any country want to adopt Bitcoin? What incentive does any country have to do such a thing? A country would be more likely to introduce a Chaum-style digital cash system, where the government would act as an issuing authority for digital cash tokens.

adrianbg 14y ago
They might adopt it if it's more stable than their currency, like how Ecuador uses the US dollar.
- betterunix 14y ago
  Perhaps, but it would have to be adopted side-by-side with a currency that can be used (securely) for offline transactions. Why do that, when you could just adopt one currency that can be used both offline and online (especially since you can deploy a digital cash protocol for any currency, and thus you only really need one that is useful for offline payments)?
deleted 14y ago
[deleted]
MacsHeadroom 14y ago
Relevant: The Royal Canadian Mint recently invented MintChip, a fully digital crypto-currency where private keys are stored in integrated circuit chips in micro sd cards (for smartphones/tablets) and USB dongles (for computers). They say it is able to be exchanged online AND offline fully anonymously. The details on that are yet to be released. This makes Canada the first country in the world to explore a fully electronic currency. http://mintchipchallenge.com/ http://mintchipchallenge.com/ http://en.wikipedia.org/wiki/MintChip http://en.wikipedia.org/wiki/MintChip

tytyty 14y ago

Nothing. There is no reason not to fork it. There are papers on using blockchains to pass on titles and ownership of physical goods. It's just one market, that happens to currently be worth over $200,000,000 though.

sliverstorm 14y ago

Nothing stops them from doing that. It's already been done a few times, in fact. What generally prevents tons of fracturing is the same thing that always has for currencies with no backing- perceived value of the currency. Your bitcoins are only worth what other people think they are worth.

betterunix 14y ago
"What generally prevents tons of fracturing is the same thing that always has- perceived value of the currency." Except that "perceived value" is not what prevents fiat currencies from fracturing. A government could, at any time, issue a new currency that competes with or replaces its old one. The reason governments almost never do this is that it amounts to defaulting on a loan, at a fundamental level. To put it another way, if a government decides to issue some new, incompatible currency, and whatever currency you had previously lost some or all of its value, would you trust that the new currency would not also be replaced by yet another currency later on? Money does not just magically get its value; the "perception" that money has value is, like the perception that anything else has value, based on supply and demand. We are all familiar with the money supply; money demand is generally driven by the legal structure that surrounds that money. Money demand comes from things like tax codes, debt/bankruptcy laws, torts (which often deal in monetary terms when speaking of damages), civil fines, etc. Another way to look at it is that laws allow you to use money to cancel debts of some kind, and thus the demand for money can be traced to the need people have to cancel various debts (and thus people with no debt can trade money for the goods or services of people who must cancel some debt). Bitcoin is unique in having no legal structure surrounding it, and its demand comes principally from technical features (primarily one feature, which is secure online payments). Unsurprisingly, this demand does little to help Bitcoin survive on its own, hence the overwhelming important of Bitcoin exchanges (were these to vanish, Bitcoin would die overnight; on the other hand, the Ruble had some value in Russia even during the period of time when it lacked easy convertibility with other currencies).
- dr_doom 14y ago
  I'm interested in your third paragraph, particularly "Money demand comes from things like tax codes, debt/bankruptcy laws, torts, ...civil fines, etc." In prison, packs of cigarettes are money and none of the things you mentioned exist. Yet in a prison I can trade a pack of smokes for a tattoo, drugs, cellphones, etc. It seems like money arises out of the need to have a reliable, constant value for exchanging good and services. Do you differentiate between money and currency(medium of exchange)?

Zigurd 14y ago

"What stops any country that's adopting it from simply forking their own version?" Nothing. Anyone could start their own bitcoin2. But new instances of a digital currency cannot debase other instances. So that isn't a viable way for a government to capture bitcoin, or to debase the value of the original bitcoin. In fact, were I running a banana republic with a worthless currency, I'd be tempted to try using a new "bitcoin-space" as a currency with strong protections against being debased. But that has plusses and minuses if you are a government. The reasons people are using this particular instance of bitcoin is that it was launched successfully enough for people to have sufficient confidence. The mining mechanism is one key element.

jessaustin 14y ago

I expect we'll eventually see a new bitcoin instance for items and gold in an MMORPG. Actually it seems to me that bitcoin could govern more than that: basically any random event ("you made a wooden shield") could go into the blockchain.

weavejester 14y ago

People have mentioned perceived value; i.e. a fork of bitcoin would only be worth something if people generally agreed it was. However, there's also another reason, and that is that the security of bitcoin is directly related to how many people are using it. In order to double-spend, you need 50% of the CPU of the system, so the more CPU power you have on the network, the more secure you are from double-spending.