BitCoin Under Fire
marginalrevolution.com
BitCoin Under Fire
1–10 of 32 posts
Re: BitCoin Under Fire
#2I don't understand what he is saying. Aren't dollars just worthless pieces of paper? They are only worth something because people accept them as payment. Obviously at the moment investing in BitCoins is rather speculative, but so is investing in other currencies (and dollars don't have the best reputation anymore, either).
If he converts everything into dollars and dollars are being devalued, he loses. Is he saying that dollars are the only solid currency in the world, and everybody should convert all their assets into dollars as fast as possible?
Re: BitCoin Under Fire
#3I'm having trouble seeing how his argument doesn't apply to every other currency that exists, and feel like he's ignoring that if you want to pull money out of the cayman islands to spend locally, there is likely to be some hassle, delay, or loss of anonymity involved. Surely an economist understands opportunity cost? Is there more to his argument that I'm not seeing?
Re: BitCoin Under Fire
#4I don't understand what he is saying. Aren't dollars just worthless pieces of paper? They are only worth something because people accept them as payment. Obviously at the moment investing in BitCoins is rather speculative, but so is investing in other currencies (and dollars don't have the best reputation anymore, either). If he converts everything into dollars and dollars are being devalued, he loses. Is he saying t…
[deleted]
Re: BitCoin Under Fire
#5I don't understand what he is saying. Aren't dollars just worthless pieces of paper? They are only worth something because people accept them as payment. Obviously at the moment investing in BitCoins is rather speculative, but so is investing in other currencies (and dollars don't have the best reputation anymore, either). If he converts everything into dollars and dollars are being devalued, he loses. Is he saying t…
Aren't dollars just worthless pieces of paper?
Apparently not. Try spending dollars in a store (both in the U.S. and many places besides) and see if it works.
They are only worth something because people accept them as payment.
Including the U.S. government as payment for debt. If the most powerful government in the world says dollars have value, it's not so easy to lose all of that value, even without it being a backed currency.
Is he saying that dollars are the only solid currency in the world, and everybody should convert all their assets into dollars as fast as possible?
Most of the world uses non-backed fiat currency now, not just the U.S. People do convert their assets into and out of dollars (and other currencies) all the time.
Re: BitCoin Under Fire
#6I don't understand what he is saying. Aren't dollars just worthless pieces of paper? They are only worth something because people accept them as payment. Obviously at the moment investing in BitCoins is rather speculative, but so is investing in other currencies (and dollars don't have the best reputation anymore, either). If he converts everything into dollars and dollars are being devalued, he loses. Is he saying t…
Aren't dollars just worthless pieces of paper? They are only worth something because people accept them as payment.
Some of those people are the IRS, who will throw you in prison if you don't turn over a sufficient quantity of said paper. That guarantees a minimum level of demand for dollars.
Re: BitCoin Under Fire
#7[deleted]
Re: BitCoin Under Fire
#8Cohen's GMU colleague Russ Roberts interviewed BitCoin's Andresen a few weeks back. Roberts, normally hyper-critical, was ecstatic over it. A great podcast: http://goo.gl/mNcQW
Re: BitCoin Under Fire
#9It's not the best-written criticism (incidentally, why was the title changed for submission?) but it has a point. Right now, Bitcoins ain't worth jack-shit as a currency in any denomination larger than "a few".
If I have a hundred thousand dollars, I can buy a Porsche. If I have a hundred thousand bitcoins, I can't buy anything, because I doubt I'll find a buyer for a hundred thousand bitcoins.
I'd be interested to know: what's the largest bitcoin-to-dollar (or bitcoin-to-real-goods) transaction that has ever taken place?
Re: BitCoin Under Fire
#10Can someone explain the velocity of money argument to me?
The blog post seems to be: 1. If btc are liquid, everyone will want to move btc wealth out to some other store of wealth and btc will fail. 2. If btc are illiquid, then it fails by definition. Currently btc are at this stage.
Here's why I don't get it: 1. If they ARE liquid and its easy to convert btc value to other value, why would everyone want to move value out of btc? seems like people would want to move value IN to btc because of the other benefits (anonymity, instantaneous transaction). Regardless, it doesn't follow that easy value conversion predicates value drain. 2. "Bitcoin seems to be at this stage [of being unable to convert Bitcoin assets into other, non-Bitcoin assets easily now]" -- this seems to be false. There's a highly liquid market for BTC-USD (21k btc have traded so far today). Yes, its not easy to transact 500k, but thats true for most new assets including exchange listed backed equities.