Quote from: Kazimir on July 02, 2012, 07:06:56 PM

Quote from: payb.tc on July 02, 2012, 07:25:08 AM

to be fair, having only 2 decimal places isn't an inherent feature of government currencies; it's simply the way banks and other institutions store amounts.

there's no reason why a pack of gum couldn't cost $0.4529839 if being paid for electronically.

In theory, yes. In practice, we are heavily dependent on tons and TONS of bank & payment infrastructures, with billions of different standards and implementations.
It's indeed the way the banks work, as you already mention, and there's no simple way around them if you want to stick with euros and dollars.

It would be virtually IMPOSSIBLE to get $ 0.000001 units actually working in practice, and would at least take many many many years of development, insane debugging / hacking / workarounds, deciphering tons of spaghetti code on crummy old systems, and disentangling a plethora of highly non-standardized finance processing programs, modules and servers. Not gonna happen.

Bitcoin, on the other hand, is very clear about this in its protocol specifications (theory) AND it's been implemented perfectly in every client (practice). So, there's one problem that Bitcoin solves.

+1

Here's where the major discrepancy between cash vs credit comes in. The major disadvantage/challenge to bitcoin is showing all those who 'love' credit (usually Western consumers) and all of the 'protections' that it affords the buyer. From secondary school on up, you are taught that credit is the best thing since sliced bread. "Look at all these social programs that those 3rd world countries don't have...." etc, etc. And credit offers convenience to the consumer. Zero liability, near-unlimited chargebacks ability, and the 'convenience' of receiving your product ahead of having to pay. Who can beat that offer? Chargebacks aren't so bad....but 120-180 days to "take back" your purchasing decision? Someone has to eat that cost. It's either going to be the bank, the payment processor or merchant vendor, or the merchant. Credit really permeates a good portion of the entire infrastructure of the Westernized country. Social programs were already mentioned, but public education, transportation, telecommunications, trucking industry, printed money, housing, etc; just about everything you see is a result of a credit transaction.

In societies where cash is the primary medium of exchange in banking transactions (like Thailand and most of SE Asia, Russia, etc), bitcoin can catch on much faster because they are already used to in-person or longer-distance cash transactions via direct deposit. In fact, Thai banks (for example) have CDMs (cash deposit machines) in most major shopping mall branch locations or attached to their stand alone bank locations; and anyone can deposit cash without a debit card nearly 24 hours a day to anyone with account # for a nominal fee (roughly $0.33 for every $330, with $0.67 minimum) So your savings account could actually be in the 'open' (advertised on merchant website) and its not a huge security deal because without the ATM card or going in person with the passbook/photo id for the account, you cannot access the account. Plus, merchant could simply have a second account and immediately transfer their funds into that account. And most utilities are either prepaid or postpaid, but prepaid options are accessible. In these countries, it's a cultural thing to take responsibility for your purchases (and actions in general) ahead of time.

The common problems amongst Eastern and Western (or wherever-ern) monetary systems are usually rooted the reliance on the central authority. Each perceived benefit comes with strings attached from that authority. The authority can be corrupted, make mistakes, and impose certain restrictions that make it difficult to cover . In the mean time, there are real costs that need to be covered. If you already have a large cash reserve, such as larger businesses, especially those who are debt-free, then you may not be so offended by the inefficiency of the credit/banking system (you already have the 'cash is king' advantage) But for small-mid size businesses and sole proprietors, you need a method where you can get cleared, transparent payment for little upfront cost. And there are no restrictions either locally or internationally. Individuals who value their own sovereignty obviously benefit from decentralized payment methods to pay for their goods/services without 3rd party interference.

Other payment processors, including "gold-based" processors like e-gold have attempted to fill this void, but even if the underlying currency is legitimate, that trust in the central authority can easily be broken for the same reasons as any other corporation: bankruptcy, incompetence, another authority sabotaging/intervening with the currency, etc. Bitcoin is the only form of currency that can be used as long as an internet connection is present long enough to validate the transaction, which can be done with a dial-up connection if necessary. And all those 'check cashing' places, or places that accept western union/money gram can just as easily exchange bitcoin without too much additional investment in equipment (can re-use existing modern computers and internet connection).

Bitcoin will NOT replace all forms of fiat currency. Credit will still be 'needed' for those who do enjoy the social programs and other privileges that are only possible with credit. It will actually improve the credit system, by allowing credit to be used where it is best suited, and bitcoin (or cash) to be used where it makes the most sense. Instead of a strict one-size-fits-many blanket approach to economics; consumers will have the choice (and the associated responsibility) to make their own choices on their own terms.