The Quora post that killed Bitcoins. Please discuss if his arguments are valid.

It seems like it would just create aristocracy. If I inherit a large sum of money, I have incentive to ensure that my large sum of money increases (or at least doesn't decrease) in value in the easiest, least risky way possible. If my wealth was in bitcoin, I wouldn't have to do much, except ensure that more people join bitcoin and that the bitcoin didn't disappear. Otherwise, I would just play warcraft all day, procreate, and then die and split my wealth amongst my children to continue the cycle.

If my wealth was in an inflationary currency, I would have much more incentive to take on risk. Perhaps through that risk taking, I end up losing my wealth, and others gain. Or, perhaps I gain more wealth. At least I have incentive to take productive action.

#2) Deflation is bad with real currencies because real currencies are tied to real economies and key things like food bein grown, healthcare, etc - and they are run on debt. In deflation, things get cheaper. Money buys more. But people only need so many cards, so many houses, so many rolls of toilet paper - so produces get net less money for their product over time. You now have to sell twice as many shoes to keep up payroll. BTC could be fine because in this - as it's position of a value store is somewhat different - it's not attached to anyone or anything, and it works digitally in the true sense of a crypto currency. The fact that it has an exchange rate demonstrates that it is working.

Convertibility: This is the same with every other form of electronic-transfer today. State actors telly ou how much, when, where, and what kind you are and are not allowed to do. Some states forbid their citizens from removing currency from the country period. They still "work"

4) This is the same as any other e-commerce provider out there (e-gold, etc) - except in those cases we feel we have someone to sue or whatever. But we're not just talking electronic payment methods - we're talking about an actual crypto currency. If the algorithm turns out to be flawed, yes, it will collapse totally. Thankfully it's open and transparent - and hopefully strongenough. If someoen wanted to damage any currency, tehy could buy up tons of it (with real money! and zap it from circulation. All that buying might drive the price up as well. If they then destroy it - right on, they've driven the price ven higher.

Again, the deflation would only be a problem if people start denominating debts in bitcoins - rather than at market rates set against other currencies they actually get paid in, which seems to be where this will go. If it turns out to be managed and run the way it's planned out - I'd have no problem telling someone "Yup, you can pay me $x USD in BTC calculated at the average closing rate over the last week" or whatever was a mutually agreeable term.

Also - as I haven't read the whole protoocl (but mean to) - if someone deliberately destroyed them - hwo would that affect value - they'd have to let everyone know, right? How do you prove you destroyed them?

http://forum.bitcoin.org/index.php?topic=11189

That's very similar with a Ponzi scheme, where you need early adopters to pour money in, so you can have a positive cashflow on which to iterate with other customers. But otherwise you don't have an underlying asset to sustain the value.