Originally Posted by
JasonM
Ok, so why would we need it or want it
There are many ways it could be used and reasons why it might be useful, just as with any currency. Choice is never a bad thing (although I note that many people do in fact fear choice because they find it bewildering).
Not being controlled by any state is only one possible advantage, but a potentially significant one (for example, if you're Ukrainian at the moment). Not being controlled by banks is another possible advantage (for example, if you're Cypriot).
It often seems to me that asking "but why do we need it?" in relation to a new technology or a new invention somehow misses the point. When a potentially disruptive new invention comes along it is sometimes better to just accept that it's happening and cannot be uninvented, to see where it leads, and to then make the most of it. Maybe that sounds a bit Silicon Vallery-ish but it's how things are. ;-)
Originally Posted by
JasonM
Is it a 'anti-establishment' thing?
Not specifically. It doesn't have to be.
But it could be used as an anti-establishment tool. It certainly seems to be the case that some nation state 'powers that be' fear its use in this manner although, that said, my impression is that they seem to fear it more because they didn't invent it and cannot realistically now stop its spread[1],
even amongst people who have no specific anti-establishment intent. Thus they seem to fear that it could upset the status quo in relation to the political/social influence that they have through control of their national currencies and related 'regulation' and legislation. They may also be concerned that it might render existing tax collection apparatus ineffective.
Originally Posted by
JasonM
Do you see it ever coming out into mainstream use and not confined to the digital underground?
What is the "digital underground" exactly? You give me the impression of seeing it as a "them and us" situation. As a heavy web forum user there are many people who would still see
you as a member of the "digital underground". ;-)
I'd say that Bitcoin is already in 'mainstream use' but it is also true that there are many levels of 'mainstream'. As far as I know you can't yet pay for your gas supply anywhere using Bitcoin, for example.
Originally Posted by
JasonM
By that I mean mr average in the street going into Next and buying a jumper with a Bitcoin debit card....
Not yet, for sure.
Originally Posted by
JasonM
I guess that is what the ultimate aim is
I don't think it can be said to have an ultimate aim. It has no de jure ruling body to set specific goals like that (although there is a group of core developers who are de facto leaders) and it can be forked by anyone who wants to start a new currency using the same or similar technology or who wants to do something different with it. This has been done many times so far, with varying levels of success. (N.B. Even though other currencies may use Bitcoin's technology, they are still not Bitcoin).
My impression is that Bitcoin was originally launched as an experiment, albeit an experiment that was very cleverly and thoroughly thought through indeed and which was thus useable in the real world.
How Bitcoin ends up being used is anyone's guess. It is a natural and obvious expectation that it should be used in exactly the same way that conventional currencies are used (e.g. debit card in Next), and that is certainly a likely possibility sooner or later, but it could equally well be the case that Bitcoin, or some other cryptographically-backed currency not yet invented, will change the way that money is used entirely. What might happen in the longer run is not yet imaginable. That is the nature of disruptive technologies: Their outcomes are chaotically unpredictable.
Note that I don't suppose there are any significant technical barriers to the Visa or Mastercard payment authorisation networks being used to authorise payments on a bank account denominated in Bitcoin. From Visa's or Mastercard's perspective it would just be a currency like any other. Exchange rates, just as at present with EFTPOS payments, would be the responsibility of the issuing bank. I'd be amazed if someone wasn't working on just such a thing right now, although I expect the nation state regulatory hurdles would be horrendous. Nevertheless, it's a ripe area for an entrepreneur to exploit (even with variable exchange rates).
Note also that there are some nascent digital payment providers (which are effectively currency agnostic) which will in time potentially compete against the likes of Visa, Mastercard, and PayPal in a perhaps more decentralised fashion.
Lots of "potentially" and "perhaps" but that's how it is. It's all being made up as it goes along.
Originally Posted by
JasonM
but surely its value needs to stabilise first...
The market will make of it what it does. As I see it, saying that "its value needs to stabilise first" presupposes that there is a specific goal for it. As I mentioned above, there is no (and can be no) de jure goal. It will become what the market wants it to be, what people imagine it to be, and what the technology allows it to be.
The price is, so far I believe, a very long way indeed from being stable due to the nature of the Bitcoin cryptographic protocol and its built in constraints (in other words, the price will continue to rise for a long time to come with occasional scary drops from which it will recover relatively quickly[2]). Will this actually hold back the progression of the network effect in terms of growth of Bitcoin after a certain level of progress? I don't think so but only time will tell.
Footnotes:-
1: See my thoughts on this in
#33.
2: Unless a killer fault that cannot be fixed is found in the protocol or unless a better and cooler idea comes along to replace it.