Peer to peer banking. Bitcoin.

[Gregorian]

It seems that this is the way forward with banking. No humans involved. Just machines. We have seen what bankers have done. I'm still learning about it. It appears to be for converting currency to anything. I can't do it justice. But I think it's something really important.

http://bitcoin.org/

Bitcoin is one of the first implementations of a concept called crypto-currency, which was first described in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities.



edit- I'll throw this in here - http://en.wikipedia.org/wiki/Bitcoin

[Posteritatis]

1. Pity it more or less completely collapsed last month. (nt)

[Gregorian]

4. Argh. Oh well. It's a great idea. Maybe it'll come back in another form.

[MADem]

2. If it had survived....who controls the machines? nt

[Gregorian]

5. No one. Everyone. It's a network of computers.

It's like the way that people download movies on those websites that pirate software.

[MADem]

6. Well, those things are rife with opportunities for viruses, so I'm guessing

a human could insert some mischief in there the very same way.

I guess it's a moot point anyway, eh?

[Gregorian]

7. I doubt it could be worse than the banking manipulation we've got.

Which is why it was invented.

[MADem]

8. Well, there's always Islamic banking. Not free, but cheap.

And there's also Islamic money transfer--runs on faith, I kid you not.

[eShirl]

3. What could possibly go wrong?

[AtheistCrusader]

9. That only holds down the expansion of the money supply.

Bankers would still exist, as holders of large numbers of bitcoins, because someone has to make loans.

This scheme would be similarly constrained as using gold for currency, and the reduction in credit that this entails.

[Gregorian]

10. I'm stupid. Can you enlighten me about something?

First, I posted this because Max Keiser is pretty much ecstatic about it. He seems to be rather bright about markets.

But here's what I'm wondering about. Yesterday I finally discovered the purpose of the Fed. My reaction is that we need to get rid of it. After all, we've watered down our economy with practically worthless paper dollars.

What I hear from your reply is that gold has a limitation. I'm guessing it is limited in quantity, while the human race has grown to 7 billion. What is the alternative to gold?

I might add that I read the speech given by G. Edward Griffin regarding the Fed. He's a John Bircher. But his assessment of the fed is factual. Pretty much a fence for the bad checks Congress writes to fund wars, banks, etc.

[AtheistCrusader]

11. Currently, the treasury and the fed allow the money supply to be expanded

via fractional reserve banking. Money created out of pretty much nothing, at the point of sale (the bank) making the loan. It doesn't even exist as paper money in most cases.

One cannot do this with a fixed pool of XYZ resource, whether it be Bitcoins or Gold. Bitcoin was set up as a fixed amount of currency, once it reached full distribution (Mining done) and would not expand further.

This is nice to reduce inflation, but like our being on the gold standard so long ago, it constrains the creation of money to supply the needs of robust credit, which fuels our economy. Without it, we would grow at a much slower rate, and so would the rest of the world.

Granted, there are environmental, and malfeasance arguements that might show such slower growth to be better than what we have now, which has enabled rapid growth, consumption of resources in staggering quantities, and rampant cronyism and fraud in the financial systems. But that's a separate discussion.

[Gregorian]

12. OK, that's what I thought. But that does not address the basic flaw of the fed.

That flaw is why we are where we are right now, with respect to the banking bailouts and massively skewed wealth inequality.

The banks get their money for free, and we pay four times the price of stuff we get loans for.

Read this, if you have the interest or time. Part way down is this man's speech.

http://www.bigeye.com/griffin.htm