Congressman Accepts BitCoin For His US Senate Run 165
SonicSpike writes "U.S. Representative Steve Stockman, a vocal opponent of Federal Reserve policy, told reporters that he wants to promote Bitcoin, whose most fervent evangelists tout as an alternative to fiat currency. To do so, he is now accepting Bitcoin for his Senate campaign against incumbent John Cornyn of Texas. The announcement was made last night at the launch event for the NYC Bitcoin Center, located just up the street from the New York Stock Exchange. Center founder Nick Spanos a real estate developer and Bitcoin enthusiast says the Center itself is still in something of a planning stage, existing more as a statement about Bitcoin itself, though he plans on hosting a hackathon later this month."
By all means (Score:4, Insightful)
Let's make it so it's even harder to tell who's bribing their way into power in Washington.
Re:I like the idea (Score:5, Insightful)
It needs to become less speculative and more stable to be a true alternative.
It cannot become more stable. The supplies of BTC are limited by design. As BTC is used more and more in the world trade, each BTC keeps increasing in price. This is on top of the built-in deflation in a market of fixed size. This is why it cannot be used as money. Nobody wants to part with something that becomes more expensive as you hold it. There is an awful amount of USD in circulation, and only 21 million BTC. If you replace all USD with BTC, each BTC would cost a million dollars, and you'd run out of divisibility of BTC, and the "small" payment fee would be unaffordable. Also, BTW, early adopters would own half of he planet's wealth.
The reason it can't become more stable (with a click of a button) is that not enough people use it. Deflationary and supply issues aside, there just isnt enough capitalization (with respect to other currencies) to prevent huge swings due to speculation. But contrary to the original assertion about "too much speculation", if enough _more_ people were speculating (raising the value and volume of daily trades), you would see it stabilize compared to the current roller coaster. Bitcoin is like a micro crude oil market; big speculators can drive it any way they want, and since the total capital (relative to USD) in bitcoin is so low, a single heavyweight speculator can run the show.
Speculation will never go down (Score:2, Insightful)
I like the idea of crypto currencies...
Why? Bitcoin has many of the worst aspects of a gold standard. It is useless for transactions that don't involve a computer to facilitate trade - i.e. cash transactions. Bitcoin has very high levels of exchange rate risk due to volatility, speculation and lack of liquidity. Few people really know what it is and even fewer accept it for payment. For most merchants it costs extra resources and adds risk to handle and exchange since they will have to convert it back to dollars anyway - the same problem with them accepting foreign currencies which is why most don't. It's very expensive to use once you account for the full cost of the risk factors. Basically it scratches some ideological itches but as currencies go it doesn't have a lot to recommend it.
It needs to become less speculative and more stable to be a true alternative.
It will NEVER become less speculative. It might become less volatile (though I doubt it) but every single currency gets heavily speculated against. The Dollar, the Euro, etc. Every one. Bitcoin is more vulnerable to fluctuations from speculation for the same reason any thinly traded asset or currency is. If there is a perceived opportunity to make money speculating on bitcoin then the speculation will occur.
Isn't it nice? (Score:4, Insightful)
Isn't it nice that Bitcoin can be used to buy both drugs and Senators?
Re:Speculation will never go down (Score:5, Insightful)
Sure it has issues, even compared to cash but... cash can't be used for online purchases either. I don't think it is a problem if one currency isn't the perfect solution for all problems. Is it really a failure of one currency if it only fills in a niche? Do you really think the niche of providing online transactions to people who are distrustful of other currencies is a failing?
As a niche market, I think bitcoin works pretty well overall and fills in a real gap between cash and traditional bank mediated transactions.
Re:Colour me confused (Score:5, Insightful)
rather than Nature regulating it with a fixed amount of, say, gold, or any other naturally occurring element that has it's own value (gold is a super-conductor).
I know you meant "gold is a super good conductor" (gold has not been demonstrated to be a superconductor under any condition) but either way that raises one pointed problem; what happens to semiconductor manufacturing if the value as a currency (in other words the need to store value in it) gets too great? Are we supposed to just stop making CPUs (or make CPUs that are 5x or 10x more expensive) just because someone decided that gold was pretty enough to base an economy off of? Or do we just give up having fast CPUs and go back to (shudder) copper?? It is this very property (its central place as a commodity) that would give me the strong opinion that it should not be used as a currency at all.
Serious answers only, please.