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Bitcoin & Ripple used by everybody?

It’s really difficult for the average person to understand how digital money works if only because it’s unfamiliar. The average person has conquered complex technology before, though, and digital money is getting better. In that case, Bitcoin and Ripple may become household words.

My feeling about Ripple is that it, or something very like it is going to be used for micro-payments for the average person worldwide. It may be that in the near future Bitcoin and Ripple will run in parallel channels, mutually beneficial to one another. Yes, it might be commercialized just like the web was when .com was added at the end of web sites rather than .org. The wealthy may gravitate to one and the rest of civilization gravitate to the other. Commerce has shifted many times in history.

I agree with Charles C. Mann

I’m reading a book titled 1493. It’s about ecological globalization. It tells about how quickly the world globalized after Columbus landed in the Carribean, which led to the Spanish trading with the Chinese in the Philipines from the new route. The book is by Charles C. Mann. He says, “Nothing like this worldwide exchange had existed before…nor had they operated on a scale large enough to disrupt societies on opposite sides of the planet . . . the worldwide network is still viewed w/ unease, even by many of its beneficiaries anti-globalization . . . In the end, though, they lost, each and everyone of them.”

I’m guessing that we are watching a seismic globalization of commerce. Merchants need speed in the money exchange, frictionless transactions. Google and Amazon-like businesses are hungry for territory, the poor are hungry for opportunity. Give them a phone and some Ripple XRP, and watch them acclimate. Today’s commerce is far behind what the market can handle. This won’t be linear; it will be exponential technological change. It won’t be just one technological change. When one change erupts others come along. I think what we are seeing is strong emergent system that ignores borders.

I disagree with Jon Matonis.

“Ripple’s trusted pathways are unlikely to be formed between people who are not already connected socially, he added. “Someone in Japan is not going to care about someone’s reputation in California,” he said. “I see Ripple being used more in localized, regional community environments rather than as a global international application like gold or Bitcoins,”

Does Matonis forget about the students in colleges and Universities the US, and Canada, worldwide for that matter, who have connections in Japan and other places, the student who needs money for an emergency, now, not in 48 hours or not in a week? Does he forget about the refugees from Africa and Egypt, and the immigrants from Mexico who have family who could use their help or vice versa?

Does Matonis forget about our military strewn about the world who have trust relationships? Walk through Union Station in Washington DC, that’s almost what the US population looks like now, it’s international. The average American is a myth. There is a trust network far greater than he imagines. And the trust from that group that will branch out will be exponential. Each family will bring friends of friends of friends.

Could it be that Ripple is going to be larger than Bitcoin, and actually be the unexpected concept that changes the world? This remark on reddit about the average person caught my attention.

We Are the Hosts of the Let’s Talk Bitcoin! Show! We just spent 4 days at Bitcoin2013, Ask Us Anything!

Bitcoin is important for the average person. We just forget who the average person is.

*The average person is a South-East Asian male, aged 22 without any bank account, access to credit or ability to participate easily in the global economy.

The reason Bitcoin fascinates me is that it embodies the possibility of bringing the other 6.5 billion online into the global economy on a level playing field.

Even in the US, 18% or more of the population are “unbanked” – lacking credit, legal status, or access to banking services. In the rest of the world, the unbanked are much higher percentages of the population. Some estimated by the UN and others put them as high as 6-6.5 billion.

Bitcoin can change all that and make it possible for anyone with a cellphone or an Internet kiosk or share computer to acquire the means to transact internationally with very small fees. It changes everything

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Bit Coin fascinates me not because it is a get-rich-scheme or a convenient way to buy weed off the grid, which I don’t smoke, but don’t mind if anyone else does, or because I’m a Libertarian with gold on hand, I’m not. Bit Coins are the perfect storm heading our way, and the perfect opportunity.

Bit Coins or Bit currencies are the tip of the “Fat Tail.” Fat tails “are events that appear highly unlikely to occur but that are earth-moving when they do.” Bit coin is the Cat 5 hurricane coming to you and me in the next five to ten years. It could be your best friend or your worst enemy depending on how world wide acceptance shakes out.

Bit currency is an emergent electronic payment system similar to Pay-Pal, which is an over simplistic way towards explaining it but about the best I can do. It’s an electronic money system whereby we all could become merchants. It’s a system where a few law abiding entrepreneurs now pay for a pizza or buy a WordPress site or sell yard sale items without a credit card or without cash. It’s a money-medium that’s convenient for not-so law-abiding people to buy and sell items, or move money they don’t want traced. It’s a money system without bill collectors. It’s permanent; you can’t get your money back. All sales are final.

Speculators are drawn to it. It has a future. It’s security is okay — that is until you cash out your cyber bits in exchange for dollars. That’s a crack in the system right now. There are robbers waiting to take your money when you cash out. It helps if you’re tech savvy. And, oh yea, speculators may try to crash the currency so they can buy it back from you when the price drops like it recently did. Or you may lose your encrypted back up file or accidentally wipe it out, and your Bit coins are gone. Yet, this nascent system is the tail end of the hurricane.

Since it’s an emergent system, it’s also similar to a snowflake or a termite cathedral or DNA replication or Wolfram’s computations where a pattern begins simply but generates complex designs over replication. Like DNA something pleasing might come from it like a baby or like the termite cathedral something not altogether likable. Emergent systems like Bit Coin don’t emerge in a vacuum, they bring other systems to the forefront with them, hence complexity.

Eric Schmidt, Googleplex person, says that by 2020 the entire world will be online. If so, we will want to buy and sell from our neighbors, which will include the entire world, which will require other emergent systems as helpers. If that’s so, a fairly secure Bit currency is going to be necessary, a stronger Maker culture will most likely be put in place, and a faster transportation system might have evolved.

We’ll need a world wide communication system to propel the buying and selling, and making, and a same day world wide system for delivery of concrete goods, and a maybe an unsettling shift in government. But like termites when disturbed governments are self-organizing, and seem to fare well after turmoil, coming back stronger and we should hope, more democratized.

A fairly secure Bit currency: Fairly secure but not absolutely secure Bit currency with a fast connection, and maybe free phones, is all that’s keeping us from buying instant art from an African artist in Timbuktu or hand knit wool socks from North Korea (well maybe more). The network doesn’t need to be absolutely secure, just secure enough. If products were cheap enough that I could afford to lose money on a small percentage of my purchases or sales, then it would would work as a currency. If we accepted a small loss it could work. It might be called fuzzy accounting for Bit currency instead of bank or credit card accounting where each penny is accounted for, and an over-priced transaction fee is charged.

A healthy Maker culture: Couple Bit currency/micro payments with a home or community based, Maker printer, and an artist living in Timbuktu, Africa, could send me her sculpture plan, created in her village, or the North Korean, homemaker could send me his sock design created in his village, ready to print anywhere in the world on a Maker printer in any suitable medium, be it yarn, wood, plastic, or steel. Or if the fat tail is really fat, and imaginative, those original North Korean socks could be delivered same day by a transport fueled with a NASA UW fusion rocket recently proposed to reach Mars within 30 days. Far fetched, maybe, but … I’m still waiting for my robot.

So, why should Bit currency matter to you and me? Bit currency is an emerging technology that’s going to revolutionize commerce. It may not stay in the present form but mutate into something we haven’t anticipated yet. Whatever it is when Bit Coin was unleashed it was like going through a gate that had a one way spring, there is no going back — Bit currency is here, and it’s a reality. Oh, yea, there are going to be Bit currency billionaires made just like railroad moguls and oil barons. Wouldn’t you like to be one of them.

It’s a circus this morning. Opened up my digital wallet, BitCoinSpinner. One Bitcoin’s worth $69.11 at this moment.  It dropped like a rock from $266.00. A new sheriff is in town – Ripple backed by Silicon Valley behemoths announced they were releasing into the wild 50 billion coins in May for those who sign up. A new posse is trading up Bitcoins for Ripples this morning, raking gravy from the nerd-famous, volatile currency for drug lords, libertarians, and those who can’t help themselves. Mt. Gox sounds like a biblical place but it’s the Japan based home for a centralized, math-based, coin exchange. Looks like the Winklevoss twins have saved the day or BitCoin currency I should say. The trade slide has stopped for now, the wounds cauterized. Watching the currencies battle it out is like watching a new sport for the new decade — Bitcoin-ball.

Bitcoin has received its most high-profile endorsement yet as the Winklevoss twins, famous for their legal battle with Facebook, reveal they could be the largest holders of the controversial digital currency – just as the bubble bursts and the price plummets.