Response to Jesse Ventura´s video about Bitcoin
We saw your video and thought that you asked some good questions. I think that a lot of people have very similar questions. I want to try to clear up a few misconceptions and start a discussion about bitcoin and crypto currencies in general.
Here is the video:
Here are some of the questions and comments you and your viewers made:
Should we trust a currency that doesnt physically exsit?
You can have bitcoin in a physical form. I am sure you have seen pictures of the golden colored coins with a big “B” on the front of them. You can also create so called “paper wallets” which are basicly bitcoin in a paper form. Normaly using paper wallets is done to store your bitcoins 100% offline for security. However you could trade them but you would need to trust the person that you are trading with or immediately scan them with your smart phone or webcame to see if they are vaild. Before moving on we need to get straight what is “money” and what is “currency”.
We do not know the inventor of bitcoin.
Yes that is true, does it matter? The entire code is open source. Open the hood and take a look.
Doesnt money have to be backed up, how does bitcoin have value?
Bitcoin is limited, it can not be printed at will like dollars. Bitcoin has fungibility and it can not be counterfited or double spent you can not confiscate it. It is possible to use it and obscure the transaction history, to hide your identity. At the same time bitcoin is extremly transparent. All transactions are in a public ledger called the “Block Chain”. That means if company A says “you can trust us we have 1 million bitcoins here is our address” then you could check if they in fact have one million bitcoins. (the use of the block chain is beyond currency and money and needs a seperate discussion)
This is what backs up the U$ Dollar
So you buy these bitcoins for a certin ammount of money? Seems like you still have to have the bank involved…
Yes you can buy them for US Dollars, Euro, Yen or Chinese Yuan however you do not have to use a fiat curreny to get bitcoins. You can sell goods or offer services and get paid in bitcoin. You do not have to use money from a bank to get bitcoin. You could sell some of your silver or build a website for someone and get paid in bitcoin. Recently the website FIVERR allowed users to accept bitcoins for their services.
What about Silk Road?
Yes you can buy illegal things on Silk Road and pay in bitcoin, so what. What about all the illegal things you can buy with US Dollars? Does that make the USD criminal or bad since it is the number one choice world wide for criminal activitiy? Silk Road is not bitcoin, it is a marketplace.
– Silk Road shows a real life example that you can not confiscate bitcoin (if stored correctly). The robbery of bank accounts that happened in Cyprus in 2013. The goverment simply took money from peoples accounts. This was against the law but they did it anyway. It did not happen in some “bananna republic” but inside the EU.
Just like when they took the handcuffs off wallstreet?
No not like wall street, wall street is regulated stealing and looting. It is sanctioned by the goverment. Mt. Gox went bankrupt, they did not get a bail out from the goverment. If they were a bank, they might have just gotten bailed out even though they were commiting fraud. Wall street buys and sells contracts on commodities that do not exsist. This kind of activity has 0 to do with bitcoin.
a viewer asked:
bitcoin vs. “paper” money what is the difference
without going into great detail
1. bitcoin is limited, it can not be printed
2. bitcoin can not be counterfited
3. bitcoin can be used in person or sent worldwide in seconds without a clearing house
4. bitcoin cna not be confiscated.
BTW: History shows EVERY Fiat currency has FAILED, so far….
In my humble opinion:
Mt. Gox losing bitcoins due to a “bug” is a myth, a smoke screen used by them to blame the bitcoin code. Mt. Gox commited fraud.
There are risks,for sure.