Bitcoin's Shared Ledger Technology: Money's New Operating System

But remember, a lot of things we use the internet and mobile phones for today were envisioned and promised in the late 90s but failed to materialize in a practical, mainstream way until very recently, over a decade later.

Who knows what cryptocurrencies, or the concepts behind them, will mean in another 5, 10, or 20 years. Maybe nothing, maybe a lot. It's still too early to tell.

(I'm skeptical myself, especially in actual currency applications, but open minded.)

A word in your sentence contains the answer to your statement. Commodity. I do not think Bitcoin is a commodity. Commodities are what I can go down to the store and buy - apples, flashlights. Maybe go to another store and buy a bar of gold. All of these things are useful. Precious metals like gold even have properties which allow them to be good currencies (portable, divisible, durable, uniform...) Bitcoins are not like these commodities - they are not consumed! Commodities are.

> You're confounding physical utility and symbolic value

I would not want to conflate the idea of arbitrary utility and the standard price and exchange value of a commodity. Obviously they are different - as someone else alluded to, an apple has more utility to someone who is very hungry than someone who is not.

> There's no shame in understanding a concept more and discarding misconceptions.

As I said earlier - I said right here on HN back when Bitcoin's price was twice what it is now that Bitcoin's price would crash to $0. That is what "maintaining my initial position" is. So far my prediction has been going in the direction I envisaged! Who should be understanding concepts more and discarding misconceptions, me who knew Bitcoins would lose half their value, or those who were hyping it back then?

Huh? Don't supply and demand meet at price? Isn't that mainstream economic theory?

If the price of gold went over its industrial value, or electrical coating value, or value as a tooth filling - then, as mainstream economic theory goes, demand falls as the price rises. The fact that wire manufacturers, dentists, industry etc. buy gold shows that it is trading at its proper value - when they want to use it.

Yes, the price of gold or any commodity can go above its real value for a short period of time, even for a few years. Eventually it always goes back to its utility price though.

> de Beers

I don't disagree that monopolies can fix prices for years, even decades. We can throw in Verizon/AT&T prices for mobile or land lines. Electrical companies. And so on. Yes, monopolies do throw off prices and values.

> ON A MONDAY MORNING seven Chain.com employees sit in a circle on their Aeron chairs plotting the week’s plan of attack for various projects. The shoptalk is a jargon-fest of “open assets,” “confirmation time,” “UI,” “sidechains,” “federated chains” and, of course, “coins.” Khosla Ventures’ Rabois, the company’s lead VC investor, says he backed Chain.com because it had a nucleus of “10X engineers,” which he defines as “engineers who have the output and insight that’s ten times better than a regularly good engineer.” Elite groups like these, he says, are essential to build tools “so more regular engineers can build applications” for blockchain.

In The Industry, how common is investing $4 million in a company before they have even "narrowed their focus to Bitcoin apps," based on the unproven potential of the founders? What am I missing?

I'm involved with a VPS hosting company called ChunkHost, and we've accepted bitcoin for many years. We're not criminals, and we don't tolerate criminals on our network, and nonetheless bitcoin has served us well as a means of payment. We've written on our blog[1] about how bitcoin payments are 20-30% of our revenue.

Another interesting company is purse.io -- they let you get something like a 20% discount on your Amazon purchases by paying in bitcoin. coffee.foldapp.com lets you get 20% off your Starbucks purchases by paying with bitcoin. Again, this is not a scam -- I use it and it works. Don't you think this is a real benefit that real people could appreciate?

I'm curious how long you've been following bitcoin. I've been interested in it since 2009/2010, and have seen the goalposts move a great deal: every time a goal is reached, the critics change it so they can declare bitcoin a failure. First it was that "you can't buy anything for it," which was true until a pizza was sold for 10,000 bitcoins in mid-2010.

Then it was "no store accepts it" -- which was true until a few months later when you could buy things like web hosting from tiny bitcoin-only companies. Then it became "no large company will ever accept it." That remained true for a while, but eventually Wordpress became the first large company to do so. Others like Newegg, Overstock, and even Microsoft followed soon after. "Nobody will ever pay with it" was another one, and that was shattered once those companies started posting bitcoin revenue which, despite being a tiny share of their overall revenue, showed that people were consistently spending their coins.

I'm not saying that grandma will be buying gas with bitcoin anytime soon (or ever) -- just that there is substance there: merchants accepting it, consumers spending it, and interesting things like purse.io that couldn't exist without it.

[1] https://chunkhost.com/blog/17%2Fbitcoin_revenue_in_2014