BitInstant CEO Says World Operates "On an Inferior Monetary System" 185
hypnosec writes "BitInstant's CEO Charlie Shrem and Erik Voorhees were invited to speak about virtual currency at the NACHA (the North American Payments Association) Annual Global Payments Forum held in Rio de Janeiro. At the conference the duo stated that the world operates 'on an inferior monetary system'. One of the more interesting parts of the whole forum was how Bitcoin as a currency and transaction system "works within current legal frameworks." A presentation by Senior Legal Counsel to the Federal Reserve titled: 'The Implications of Dodd-Frank Section 1073' sheds light on requirements that need to be fulfilled by "Remittance Payment Company" (RPC) guidelines. This law requires such companies to disclose a lot of information about money transactions. This is where Bitcoin as a currency and system collide head-on with the law."
newsflash (Score:5, Insightful)
Re:Ignoring the theoretical for a moment (Score:4, Insightful)
My credit card has pending transactions for days sometimes.
Re:Ignoring the theoretical for a moment (Score:3, Insightful)
1) For low-value transactions (say, $50), 0 confirmations is usually fine. For higher value transactions, 1 confirmation (average of 10 minutes, sometimes more) is pretty good. If you're buying a car or a house, waiting an hour or two for more transactions is reasonable. You'd spend at least that time on paperwork.
2) There are several thin clients now that do NOT require the full blockchain. For example, MultiBit, Electrum, Blockchain.info, various cell phone clients... the implementation depends on the client, but there's more than one way to tackle the size problem.
Re:better than bitcoin though (Score:4, Insightful)
So all the folks running the exchanges and other hacked services, if indeed they were hacked and not just subject to fraud by the owners, were all fools who hadn't taken 10 minutes to learn basic security?
Face it, whatever the security of the protocol, the record of the bitcoin community and the services run by said community is deservedly in the gutter.
Re:Tracking money (Score:4, Insightful)
Re:Tracking money (Score:5, Insightful)
Not just interesting. Wonderful.
You could characterize the use of cash exactly the same way. I like paying cash. It would be nice if I could pay cash over the intertubes. If Bitcoin does (the equivalent of) that, lots of people are going to like it for lots of reasons, some nice and some not so nice.
Just like cash.
Re:Tracking money (Score:3, Insightful)
Hash codes can still be sent around on "sneaker net" and other ways to ensure that Bitcoins can be transmitted to each other.
You don't need a 24/7 internet connection, all you really need is the ability to get your transactions processed eventually on the global network. Eventually means just that... it just has to be incorporated into the larger chain when it becomes convenient. As long as everybody acting locally agrees upon the values being exchanged there isn't even a loss of value among the bitcoins being exchanged. About the only thing "lost" is the ability to "coin" new Bitcoins and to receive payments for processing transactions as that sub-net will not be participating with the global network until it reconnected.
It is also possible to set up a "local network" that would be processing the payments between users using the regular Bitcoin system. It would need to be noted that such a local network would be in effect a different "bitcoin" currency though in terms of coining new bitcoins and payments received. That is something to keep in mind too.... there can be more than one Bitcoin network. In fact, there is a "test network" that has a different "root block" which is being used only for testing the Bitcoin network ideas and isn't really taken seriously by the rest of the developers as having value. You can set up your own "root block" if you care to only transmit values between close friends. Good luck on getting your own private Bitcoin accepted by anybody else though. In an extreme situation such private Bitcoin currencies certainly could be created (such as an independent Bitcoin network on Mars). There would obviously be an exchange rate between the alternate Bitcoin and the main "Earth" or "global" Bitcoin, but such alternate currencies certainly could be created.
Double spending can't happen because the subsequent attempts at making a purchase (or rather transferring the Bitcions) would be invalidated and wouldn't actually happen. The person "receiving" the Bitcoins might be pissed, but that is between you and the person who thought they were getting paid and didn't. Verification that the 2nd person didn't receive the Bitcoins is public knowledge, as it is in the Bitcoin chain itself and can be verified.
As for how to transmit information about transactions for eventual incorporation into the global transaction chains, you could use a system similar to RFC 1149 [ietf.org]. This system has been implemented in the past, and certainly could be used for transmitting transaction information instead of just Internet Protocol packets instead.
All of this of course would take somebody who knows the Bitcoin protocol very well, but it isn't impossible.
It is also possible to "print" Bitcoins as paper currency, but that is a whole other subject.