Bitcoins: Just for the love of it!

A person living in a cash-dependent economy will use Bitcoins, if ever, just for the love of it, because there’s not enough motivation for spending in Bitcoins. I can understand the reaction of the Urdubit team and many Bitcoin enthusiasts; yet, I believe it is of no use for an ordinary person.

The question, of course, is why?

You can find many benefits listed on blogs, but most of them are temporary, uncertain and questionable. Apart from that, Bitcoins come with many disadvantages and risks associated with them as well. Right now, I’ll focus on the core benefits. First, the Bitcoin network is isolated from the banking laws and second, owner of the wallet is anonymous outside the network. These two points give Bitcoins much of the attention that they’ve got today.

Three main reasons that attract people to become part of such a system, where they can remain anonymous while doing transactions.

  • Making money, using means that they don’t want to disclose.
  • And… they’re making a lot of it, and want to hide it. Yes, I can see it coming: offshore shell companies as an alternative!
  • They have an interest in buying the stuff that is legally prohibited, raises ethical concerns, or they just want to remain untraceable.

Just putting myself as a test subject, I tried to find out the value it can offer to an ordinary person like me.

I’m legally employed and yes, paying my taxes, so the first point doesn’t make sense for me. Regarding the second aspect, guess what? I’d rather have been enjoying the serenity in Caribbean islands on my yacht instead of writing this post from my living room. If privacy or traceability is the concern, then everything is readily available in cash in the country, so the last point doesn’t fit either.

If I want to pay using Bitcoins, I need to set up my wallet, and that’s the beginning. Further, I need to protect Bitcoins from losing just like cash or even more at times. And, then I’ll exchange my currency with Bitcoins, using my credit or debit card. Finally, I’ll have to search for places, where I can use my Bitcoins. Sparing a few exceptions, there aren’t many acceptance locations, even in the United States.

Why should I take all the trouble? Don’t need to.

It does make sense for people with special needs, but it’s certainly not for everyone. A person living in a cash-dependent economy will use Bitcoins, if ever, just for the love of it, because there’s not enough motivation for spending in Bitcoins.

You have a lot to disagree. I’ll be glad to hear it from you.

On a separate note, there can only be 21-million Bitcoins mined with the current protocol and the mining will end around 2140. People have mined around 70% of Bitcoins, and they have already lost some of them over time.  Satoshi Nakamoto, the creator of Bitcoin, has around 1-million Bitcoins with him or her. These Bitcoins were worth more than $400 million by the end of the year 2015.

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Note: above image by “Allanlau2000” is available on Pixabay under a CC0 Public Domain license.

2 thoughts on “Bitcoins: Just for the love of it!”

  1. Great to read your perception on bitcoin. And I am sure you were expecting a response from me. Lets see for a case like yours.

    1. Bitcoin is not anonymous, its decentralized and peer to peer. You can easily trace it with IP and block explorers. How can something be anonymous be tracked on a public ledger?
    2. For your particular case and why you would prefer to be paid in bitcoin. You and all the people who currently believe in the current interest based economy is advised to look at this link http://www.nationaldebtclocks.org/ and for Pakistan http://www.nationaldebtclocks.org/debtclock/pakistan so by this standard even your unborn child owes roughly Rs30000 if you consider just the money you owe to international lenders, not to mention you owe roughly 3 times more if you just add the money you owe the local bank.
    3. Concept of money which was based on promissory note is no more hence your money does not have value.
    4. For a tax abiding law citizen such as yourself and such as myself I am not allowed to spend my money internationally unless its done through expensive means such as credit cards that too at limits placed your current system.
    5. Who uses them. I would like to invite you to a freelancer session we plan to do at The Nest I/O which will discus case scenarios where people of Pakistan have had to suffer not having access to international access at the same pay scale as the world. Another case is remittance cheap ones also. Currently banks charge hefty amount for micro transactions, which brings out the beauty of bitcoin. Even eCommerce sites can greatly benefit form this as currently the other options are slow expensive to use in Pakistan and worldwide.
    6. Why would you want to get a wallet and why would you need to protect your bitcoins? Well why do you need to protect your cash by depositing in the bank? That is the same reason you would want to protect your bitcoins.

    I am sure all these points are debatable. There are no hard feelings at my end. And it was lovely reading this blog. If you dont mind is it possible I can share it on my wall also? Because these questions are not just yours these are by each and everyone who first hears the word bitcoin and realizes it doesnt benefit them in anyway.

    Liked by 1 person

    1. Thank you, Danyal. You have nicely made your point with very informative comments. I can see you are both a Bitcoin enthusiast and also from the Urdubit team 🙂

      I will respond to the following points in your comments.

      #1. I agree that Bitcoin or Bitcoin transaction is certainly not anonymous in its entirety but the owner is! The transaction is only traceable to a private address that the owners can change for every transaction to maintain their privacy. What good it is? No one can tell how much Mr. Satoshi owns but can only guess.

      #3. Regarding value, Bitcoin is highly fluctuating currency itself. What value it will have tomorrow? No one can be sure.

      #4. The benefits of no-fee or that the payments are cheap right now, I think, is temporary. As per law of diminishing returns, the miners will continue to lose economies of scale and would need to apply fee to offset the cost of verification of the transaction blocks. Who will eventually bear that cost?
      Further, the limits currently applied on cards are there to protect interests of all parties. We should not ignore the good side of an established system.

      #6. There are serious risks with Bitcoins like there are for paper currencies – even some risks are still unknown and will be visible when there will be wider acceptance of the Bitcoins. We should not consider Bitcoins entirely safe and secure alternative. For a common person Bitcoins is relatively difficult to manage as compared to a bank account or a debit card.

      I would love to attend The Nest I/O and to learn more about practical application of Bitcoins, specially in Pakistan. Please feel free to post the questions and answers on your wall and do mention my post if you like.

      Thank you again.

      Like

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