http://www.weusecoins.com/ The new concept in cyber money is called Bitcoin.This enables direct purchaser to sales transactions with no bank middleman fees.While they assure us that the amount of Bitcoins are limited by credits generated by contributing members,what central authority makes sure that the money produced will equal productivity?

The US Federal Reserve has lost all credibility in creating too much money to bail out the worthless derivatives of Wall St.Can a new private monetary system work without Govt or Banks operating as intermediaries?

Some Pacific Islands use shell money.
Not a chance it or your on line cash will buy any thing from me.

Belly the concept is taking off.Satoshi Nakamoto began the concept 2 yrs ago.He has used his knowledge of computer cryptology to invent a currency that cannot be forged. I'm not sure of how the mining coins concept works but this is the mechanism by which new coins are added to the system.Only 21 million coins will be added to the system so it seems it will not be used as store of wealth.

I'll be interested to hear from anyone who has used the system.They obiviously are far from reaching critical mass.ie having enough confident users for everyday transactions.When the Department and grocery stores accept it as payment,then the Banks and Credit card companies will be rocked to their foundations.

I'm curious.

Having read the documentation carefully, I still don't know how it works, or why it is better/handier/safer or whatever, than money. I certainly couldn't explain it to anyone else.

Can you help with this, Arjay? Or are you in the same place that I am - intrigued, but puzzled.

I suspect, though, that if neither you nor I can understand it, it is unlikely to take off.

This mining of coins Pericles puzzles me also.What productive work is proven to justify the creation of new coins? I think that the concept if sound,is a great idea.You can convert from other currencies ie Euro $ US etc It seems that initally small transactions will be the norm but he has to spend a lot on advertising to make it universally acceptable and how does he make a profit if the service is basically free?

That's why I'm asking the question; Has anyone has used it?

Interesting concept Arjay. I listened to the link twice and don't understand what one has to produce or provide (service?) to amass the bitcoins. The narration suggested one built up bitcoins based on providing some sort of open source contribution (free access?)but I am still none the wiser.

Also you can trade bitcoins for currency - that can ony happen with the involvement of banks.

There has been a non-currency system in Australia for a while - Local Exchange Trading Systems otherwise known as LETS. LETS trades in points for labour, services or products eg. you babysit my kids and I will mow your lawn, swap a basket of veg/eggs for some meat, repair my fence in exchange for cleaning your house for a month etc. It is based on the agreement of the two parties on what they think is fair, some smaller communities set up parameters for what different services might be worth but it is essentially whatever is agreed.

http://www.lets.org.au/
http://en.wikipedia.org/wiki/Local_Exchange_Trading_Systems

The area my father lives uses the LETS idea a lot. One woman built much of her entire house using LETS and trading/swapping labour or goods.

The government at one point floated the idea of taxing this non-currency system when it seemed to take off in Australia in the 70s, and probably would have found some way but for the strong opposition the proposal aroused. How an earth would you police it anyway - it is nobody's business if two parties swap labour to get a job done.