Quote from: mmdough on July 21, 2011, 03:31:26 PM

As a baker, I would say that this scenario is unrealistic. Bakers who wish to sell their products via mail, with transactions taking place over the internet, are poor bakers. Bread doesn't ship well.

Okay; well I was only giving an example using the same commodity that the poster picked: loaves. I don't think I said anything about mail order bread. I was hoping that the point would make its way through without needing exact details. Obviously not though; let's pick another trade to make my point.

How about this: I have a car to sell, as a private citizen. I'm already into bitcoins, and am not scared of them at all. I want $5000.

Which option has least risk for me (and let's assume a timescale were bitcoins are going to change value significantly): (a) a stack of dollars; (b) paypal; (c) bank transfer done in my presence; (d) bitcoins.

(a) Fake notes are close to indistinguishable nowadays.
(b) Ha. Not while I'm still in my right mind
(c) Stolen bank details is a possibility; reversed transactions or even a faked web page that looks like an online bank. Let's remember the three day clearing period.
(d) MINE, MINE, MINE. I can see the broadcast transaction instantly. In ten minutes it'll be in the block chain and require more computing power than the NSA to double spend. In an hour it'll be so confirmed that it couldn't be undone by Bletchley park.

Given that; I could probably knock 5% off the selling price for Bitcoins. Therefore bitcoins are not a proxy for dollars.

Quote from: mmdough on July 21, 2011, 03:31:26 PM

So, instead, you're talking about a face-to-face transaction. Cash would be inherently simpler than BTC, free from bank fees, anonymous, instantaneous, and I pay my suppliers in it.

BTC would be preferable to credit cards, especially for small transactions, but currently transactions are verified so much more slowly that there might actually be a greater security risk involved. Plus, I can't pay my suppliers with it.

If there is greater risk, then you might offer a discount for dollars. The point is the same: bitcoins are not proxy dollars; and so aren't bonds.

Double spending is a risk; but it's not a big risk. Seriously the amount of investment an attacker would have to make to steal one loaf of bread is ridiculous. No one would do it.

Even for a car sale; I personally wouldn't be that upset at 0 confirmations. I'd probably wait for one or two. I'd like to hear any single report of anyone having being fleeced on a double-spend attack. Or even an attempted double spend.

They just are not happening.

Quote from: mmdough on July 21, 2011, 03:31:26 PM

So, if anything, I would probably have to charge a small premium for BTC, although I might waive this if I'm confident that they'll be a more valuable asset long-term. This confidence is going to be based on the speculation marketplace which, hey surprise, is denominated in dollars.

I'm pretty sure you can set Mt.Gox up to convert instantly from incoming BTC to USD for a merchant account.

Quote from: mmdough on July 21, 2011, 03:31:26 PM

I don't think OP's point was to criticize BTC or the technology underlying them-- nor is this my point-- merely to suggest that the value of that technology is limited by the social systems which accept them.

I don't think that either; I'm happy with just a discussion.

However, bitcoins are definitely not bonds. There is far too much decoupling them to make this true, whether you think bitcoins are better or worse; they aren't the same.