Why Bitcoin Will Fail As A Currency
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Why Bitcoin Will Fail As A Currency
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Re: Why Bitcoin Will Fail As A Currency
#2How many time are people going to scream...bubble? http://bitcoinweekly.com/articles/comic-reaction-after-drama...
Anyway, hoarding is not a problem. http://bitcoinweekly.com/articles/one-apple-today-two-apples...
Even if we need to use the satoshi(the lowest unit of bitcoin), we can extend decimal space.
Does anybody actually have anything new or novel criticism for bitcoin? Or are we going to repeat trending the same ground everytime a new bitcoin story come up?
Re: Why Bitcoin Will Fail As A Currency
#3Not defending BitCoin (I won't be buying any soon), but I think the author doesn't realized that BitCoins are divisible down to eight decimal places.
It's difficult for me to imagine a currency which is so divisible being "hoarded to death".
Re: Why Bitcoin Will Fail As A Currency
#4How many time are people going to scream...bubble? http://bitcoinweekly.com/articles/comic-reaction-after-drama... Anyway, hoarding is not a problem. http://bitcoinweekly.com/articles/one-apple-today-two-apples... Even if we need to use the satoshi(the lowest unit of bitcoin), we can extend decimal space. Does anybody actually have anything new or novel criticism for bitcoin? Or are we going to repeat trending the sa…
Speaking for only myself, this is the first article that I have read which goes beyond the usual arguments made against Bitcoin. I would strongly recommend reading the OP again properly as the links you have posted do not seem to address the issues it brings up.
Re: Why Bitcoin Will Fail As A Currency
#5I'm curious, does anyone know what fraction of dollars are "hoarded"?
Re: Why Bitcoin Will Fail As A Currency
#6Not defending BitCoin (I won't be buying any soon), but I think the author doesn't realized that BitCoins are divisible down to eight decimal places. It's difficult for me to imagine a currency which is so divisible being "hoarded to death".
The divisibility has no bearing on the hoarding.
The hoarding comes from the expectation of increased value over time, not the number of decimal places. If you have something that you think is going to steadily appreciate in value over time, why sell it now?
Re: Why Bitcoin Will Fail As A Currency
#7I'm curious, does anyone know what fraction of dollars are "hoarded"?
edit- I see now that I completely misread dollars as bitcoins. My response actually makes sense in that context, and not so much to the question you actually asked.
My understanding is that it would be impossible to know. How could you tell the difference between a dollar that was being hoarded, a dollar that had simply not been spend yet, or a dollar that it's owner had lost access to? The way the system is set up, it is supposed to be impossible to tell even how much money a single individual possesses. One person could own half of all the bit coins in a massive market manipulation attempt right now, and I don't know how anyone could figure it out.
Re: Why Bitcoin Will Fail As A Currency
#8I'm curious, does anyone know what fraction of dollars are "hoarded"?
Approximately none, because dollars are inflationary by design (of the Fed), not deflationary like bitcoin (again, by design of its creators).
Re: Why Bitcoin Will Fail As A Currency
#9How many time are people going to scream...bubble? http://bitcoinweekly.com/articles/comic-reaction-after-drama... Anyway, hoarding is not a problem. http://bitcoinweekly.com/articles/one-apple-today-two-apples... Even if we need to use the satoshi(the lowest unit of bitcoin), we can extend decimal space. Does anybody actually have anything new or novel criticism for bitcoin? Or are we going to repeat trending the sa…
That article on why deflation is allegedly not a problem does not address the concerns raised. In particular:
Deflation, on the other hand, can damage the economy by placing an incentive to save, rather than spend. Over-saving can be just as damaging as over-spending. But unlike saving, you have to spend some eventually, so there's a built-in incentive to spend: continued survival. A deflationary economy can also stifle entrepreneurship because it increases the risk of loss without significantly increasing the return on the investment over that of simply letting the money sit and gain value.
The first answer doesn't apply to a new entrant currency like Bitcoin - you don't have to spend bitcoins to survive, you can continue to spend local legal tender on the essentials of life. The second objection is noted but not even rebutted - it's just ignored.
This seems to be the real potential problem for bitcoin - the incentive is to sit on it, not to circulate it. I think the original article is spot on.
Re: Why Bitcoin Will Fail As A Currency
#10The key mistake the author makes is to assert no-one will ever spend or sell bitcoin trying to secure greater future wealth. As a bubble grows, large holders find that that a larger and larger proportion of their wealth is tied up in a single asset and start to diversify that wealth into other assets. I assume this is already the cause for most of the bitcoins being sold on the market.