8
1
Here in the Arabic world the biggest problem with online trading is the absence of a good, secure, and flexible money transfer tool or solution. I think Bitcoin is a great solution for this. I have an idea to start a payment processing service using Bitcoin in the Arab world.
I need to know what would happen if the Bitcoin project was discontinued for any reason. What would happen to people's money?
12
Bitcoin exists on a few levels. One is the protocol which evolves through a proposal process. Second is the Bitcoin client and bitcoind project which is an implementation of the protocol. Third is the currency managed by what's referred to as the Satoshi-blockchain. All of the above are available under free software licenses or are, at the very least, public information (in the case of the blockchain and protocol). It is therefore unlikely for any part of Bitcoin to be meaningfully discontinued.
Should everyone in the world stop using Bitcoin, the transactions and private keys to spend again would still exist so you could say the money will stay right where it is. The exchange rate wouldn't fare well but the Bitcoins would all just be there in deep freeze until someone started mining again. Once you know more, you'll see how unlikely any kind of discontinuation would be.
1Yes, if everyone stopped using bitcoin and you started with 100btc you would still have 100btc, of course it would not be worth anything just like say the Zimbabwe dollar is not worth anything – Zachary K – 2012-03-08T15:46:05.367
6
Bitcoins are stored in the blockchain. As long as at least one person holds a copy of it, all Bitcoins will remain in place no matter how many people are in the network or if new software is still being developed.
As the main client is open-source, even if it was discontinued anyone can pick it up and continue development on their own. Even if that was unavailable, the Bitcoin protocol is not too complicated, so one could create a new client from scratch if needed be.
Lastly, the main client is pretty mature at this stage, so even if no further versions were developed, it could provide enough functionality for a long while.
All in all, as long as you store your own copy of the blockchain and a client, your money is completely safe, at least in regards to the amount of it you have. The value of the stored Bitcoins, however, can always drop or rise regardless of the state of the project, which is another factor to consider.
4
I think you have several main risks/issues
1) Local political risk. Some government decides that using bitcoin breaks some local law and makes your life hard. That is beyond the scope of this site I think.
2) A collapse in the value of bitcoin. We have seen the price of a bitcoin go all over the place and while it is about $5/btc now it is very hard to predict what it will do tomorrow. It could be $20 or it could be $0.20. Now that does not mean that bitcoins have gone away, just that they have lost much of their value. At this point the total number of people using bitcoin is quite small and there is HUGE volatility in the market because of a general lack of liquidity.
3) Converting Bitcoin to and from local currency. If your goal is to transfer money from one country to another you need a way to use currency 1 to buy bitcoin and then use bitcoin to buy currency 2.
4) The bitcoin market is not very efficient, which is to say that if you want to change say Jordanian Dinars to say South African Rand by way of bitcoin you may find that you end up with a lot less Rand at the end than had you done it some other way.
1
I agree with https://bitcoin.stackexchange.com/a/3095/807 in that the biggest risk is in exchange rates with fiat currencies, rather than any "the Bitcoin project is discontinued" scenario. Even since I began last year it's been way too volatile and have way too large bid/ask spreads on exchanges for me to rely on in any substantial values. Not to mention on top of that, the percentage fees some party cuts almost every step of the way.
While one can't feasibly swap out every copy of the current blockchain in the world with your own copy, or with a blank copy (which would be like erasing everyone's balances), let's turn your question into: let's say by next century Bitcoin gets superceded by an entirely new and better government-free, decentralized currency, built on new standards and protocols obsoleting today's, that quickly becomes predominant. People would gradually cease using BTC in favor of the new one, it seems. Not sure if comparing legacy Eurozone currencies transitioning to the unified Euro is a good comparison.
1
Bitcoin has a dependency in that its hashing power must remain decentralized (no single party or cartel controls the majority of hashing power).
While the geographic distribution of this hashing power isn't easily identifiable, know that it will tend to gravitate towards where electricity is less expensive. Here's where Bitcoin nodes exist today:
So even if those in one jurisdiction or region discontinue the use of bitcoin, it will likely still have utility elsewhere in the world. When using a local wallet you are peering with these nodes, so there is no risk that those in a single geographic area would lose the ability to participate. Even in a network environment that is relatively hostile to bitcoin there are measures that can be taken to maintain connectivity to the bitcoin network.
But do keep in mind that the value of a bitcoin is entirely based on the price others are willing to pay for it. That value can, technically, go to zero -- just like with any other commodity.
0
I think your question is about trust. You may rephrase the question asking if you should trust the Bitcoin network. Bitcoin is backed by the unique intrinsic and mysterious properties of mathematics instead of faith in human institutions. Technology will spawn to serve Bitcoin to make it stronger as we are already seeing with GPU, FPGA and ASIC processors.
0
The Bitcoin project cannot be discontinued as such.
Bitcoin is not a company and if the core development team for some reason just decided to stop working on the project, anyone else could continue as they were. In fact although the core development team is regarded as the "main" developers of Bitcoin, all changes made by the team need to be approved by a majority of the community and miners, before the changes can take effect.
Even if development completely came to a halt and no one proposed any new changes, it would not kill Bitcoin necessarily as long as the miners and other ecosystem are still in place. And as long as it still has uses then it will still have value and the miners will still mine.
4Note that only Bitcoins you hold are at risk. Depending on the way you set up the system, Bitcoins may not need to be held by anyone for any significant period of time. And, of course, if you hold them, they may also increase in value. – David Schwartz – 2012-03-07T09:15:12.030
OT: Good luck with your project! – o0'. – 2012-03-07T09:48:34.060
1@DavidSchwartz if you hold them they may also decrease in value – Zachary K – 2012-03-07T11:15:51.060
Incidentally, there is a payment processor in the region: https://en.bitcoin.it/wiki/Karsha_Shopping_Cart_Interface
– Stephen Gornick – 2012-03-07T13:55:10.9305I think you have a misunderstanding besides. Bitcoins are not a way of storing money that is in a conventional currency like dollars or euros or pounds, it is a separate currency. So, if you buy bitcoins, your conventional money isn't "stored" anywhere, it goes to the person you bought it from and you are counting on being able to sell or spend the bitcoins later. – Random832 – 2012-03-07T15:33:21.237