121–130 of 221 posts
Just realized, BitCoin could become a force to recon with overnight if just one step happened: Paypal started supporting BitCoin. Peter Thiel is a libertarian and seems like he would be very sympathetic to the idea - who knows, crazier things have happened.
Earlier quoted context omitted.
Rather than debating the validity of the Gold Standard (which is essentially what this discussion boils down to) I would direct you to a great set of podcasts from Planet Money[1] in particular [2][3] which discuss the general current thought on the Gold Standard, and show why most economists agree it is untenable in the long run. [1] http://www.npr.org/templates/archives/archive.php?thingId=13... [2] http://www.npr.…
Most of these arguments apply if you are going to be using a finite supply of money as your "main" currency. I agree that not having an inflatable supply is bad in such situations. However it is incredibly unlikely that bitcoin will ever occupy this niche(I highly doubt anyone is going to ever pay taxes in BTC). For what it is, an easy and quick way to transact payments anonymously* and securely online, it is incredi…
As it stands the only reason to use Bitcoin currently is for shady deals, novelty, and speculation. I find it laughable that Bitcoin advocates laud the increase in the currency's value as a good thing. It is most certainly not a good sign for a currency when it's value increases dramatically over time such as the Bitcoin has.
> Because Bitcoin is an open-source project, and because the database exists only in the distributed peer-to-peer network created by its users, there is no Bitcoin company to raid, subpoena or shut down. Which will leave only Bitcoin users to raid, subpoena and shut down.
Those gateways represent choke points that can and will be shut down, if our experience with other online currencies is any guide.
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Is a $20 bill something of value? No, it's merely somewhat hard to forge, and accepted as currency by lots of people. Or how about an entry in a ledger on some bank's computer? The only reasons the $20 bill or the entry in the computer retain value are because there's a central entity that limits the creation of too many of them, and people accept it as currency in exchange for good, because they expect that other pe…
>Is a $20 bill something of value? No, it's merely somewhat hard to forge, and accepted as currency by lots of people. I think perhaps you and I are using different definitions of "value". If someone is willing to accept something in exchange for something else, that act reveals that they value it, either for its use value or for its exchange value (i.e., as money). >The only reasons the $20 bill or the entry in the…
Granted, gold doesn't have any use value demand either. Its only advantage is that its rare and shiny. You can't eat gold, burn it as fuel, use it for tools, or build shelter with it. The only industrial application of gold is in specialized electronics processes, and even in those, gold has substitutes.
The only difference between gold and fiat currency is that gold has a finite supply, while fiat currency does not.
Just realized, BitCoin could become a force to recon with overnight if just one step happened: Paypal started supporting BitCoin. Peter Thiel is a libertarian and seems like he would be very sympathetic to the idea - who knows, crazier things have happened.
Even if Thiel was in favor, he is no longer with Paypal.
Bitcoin is both a really great idea, and a really stupid idea. sage_joch has already pointed out the reasons why it's a really cool idea. It's also flawed in a number of ways. First, the limited supply means that you've essentially just created an electronic version of gold. It's more easily tradeable, but its behavior as a commodity will be similar. If you like investing in gold, that's great. I guess. Second, bitco…
1) That's the point. It wants to be similar to gold. We traded based on a third party commodity (gold/silver) until 1974 and did alright. 2) So? I don't see your point. The goal of BTC is not to eliminate fees, but to make digital currency that you can use P2P. 3) I don't think government currencies are going away any time soon, but BTC provide an alternative.
2). I've heard a number of Bitcoin enthusiasts state this as an advantage/goal (even in this discussion), who perhaps have started developing their own ideas about what bc should be used for.
3). But an alternative to what purpose? Say that I believe strongly enough in the ideals of BC that I want to use it (privacy, accountability, etc). Do I convert part of my monthly paycheck into BCs? Do I convert all of it? This isn't terribly practical if my national currency is still popular. Perhaps I want to even-up with friends or acquaintances? Is transferring BCs easier than writing a check?
Now imagine that I don't believe strongly in the idealistic angles of BC (which, sadly, will be the vast majority of your potential users). I want immediate pay-offs for my efforts (this may sound petty, but isn't. Most peoples' time is extremely valuable to them - if you have a product, even a free one, you must compete for their time). What benefit to I gain from converting my money to BCs?
I don't think Bitcoin solves the main problem of new currencies: confidence of their acceptance. John Law introduced paper money into France by getting the government to accept it for paying taxes. Every Frenchman and woman was confident the state, no matter who took over, would still collect taxes. And the state, knowing the currency was valuable to everyone--even foreigners, could also use it. Where's my confidence…
Confidence comes gradually. When bitcoins started, confidence was extremely low. Thus the whole bitcoin economy was worth maybe $1000. Now confidence has grown significantly, and the whole bitcoin economy is worth approximately 5 million dollars. I wouldn't bet my life savings on it yet, but I find that already pretty good for something that has less than five years, and isn't backed by anything.
If a number of investors have enough invested in the system that their investment become worth more to them than maintaining the bitcoin system and some event decreases the confidence in the system, then those investors will attempt to "liquidate" their holdings. Whether they succeed or fail, the impact on the system will likely be terminal since there wouldn't be any entity ready to step in and buy unwanted bitcoins.
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There is a finite amount of bitcoins because it is designed to mimic a natural resource - easy to "mine" at first, much more difficult to mine as time goes on, and eventually there are none left. If there were an infinite amount of bitcoins that could be generated, there would always be inflation in place roughly proportional to the amount of computational power being used to mine, and soon your bitcoins would be wor…
You know I've thought about this for awhile and I'm starting to come to the conclusion that inflation is a good thing. Having a currency that doesn't inflate is bad for 2 reasons. 1. The population keeps growing, 2. Humans are hoarders. Having currency inflate encourages society to use their money instead of squirreling it all away. Everything in life devalues over time and I don't think currency should be any differ…
http://en.wikipedia.org/wiki/John_Maynard_Keynes
Of course, that viewpoint has been the subject of some debate in the last eighty years.