Bitcoin's comeback: should Western Union be afraid?

#1

Post by evo_9 » Wed, Dec 21, 2011, 7:03 PM UTC

Bitcoin's comeback: should Western Union be afraid?
arstechnica.com

Re: Bitcoin's comeback: should Western Union be afraid?

#2

Post by onemoreact » Wed, Dec 21, 2011, 7:47 PM UTC

30 billion is a rounding error in world finance so saying you need sound fundamentals to back up a currency worth 30 million for a month after a crash is silly. Bitcoins's apparent stability over the last month simply means people are not willing to sell them for less than 1/10th of what they where worth a few months ago which may or may not be rational but means little.

Re: Bitcoin's comeback: should Western Union be afraid?

#3

Post by Helianthus » Wed, Dec 21, 2011, 7:51 PM UTC

>This presents a bit of a puzzle for Bitcoin skeptics.

Uh, no, it presents absolutely no puzzle at all for those of us who believe Bitcoin will follow a boom-bust cycle without ever providing a truly stable currency.

Re: Bitcoin's comeback: should Western Union be afraid?

#4

Post by JohnTHaller » Wed, Dec 21, 2011, 7:57 PM UTC

No.

Next question, please.

Re: Bitcoin's comeback: should Western Union be afraid?

#5

Post by vlasta2 » Wed, Dec 21, 2011, 8:05 PM UTC

Bitcoin's design (limited amount of coins) attracts the wrong kind of people - investors and speculators - there is no wonder the "value" is fluctuating heavily.

A real virtual currency must attract buyers and sellers of actual goods, not just get-rich-quick speculators. Maybe an easy change to the way bitcoins are mined would be enough to get it on the right track. If the amount of coins is determined democratically and not by a magic constant (chosen by the programmer God), things could be different...

Re: Bitcoin's comeback: should Western Union be afraid?

#6

Post by schraeds » Wed, Dec 21, 2011, 8:06 PM UTC

Helianthus wrote: post #3

>This presents a bit of a puzzle for Bitcoin skeptics. Uh, no, it presents absolutely no puzzle at all for those of us who believe Bitcoin will follow a boom-bust cycle without ever providing a truly stable currency.

Wonder what will last longer, the euro or bitcoin.

Re: Bitcoin's comeback: should Western Union be afraid?

#7

Post by bunderbunder » Wed, Dec 21, 2011, 8:07 PM UTC

I can't dispute the author's concession that falling 90% against the dollar in a short period of time is a sign of an unstable currency.

On the other hand, I most heartily dispute the author's assertion that rising 90% against the dollar in a month is a sign of a stable currency.

Re: Bitcoin's comeback: should Western Union be afraid?

#8

Post by DTanner » Wed, Dec 21, 2011, 8:15 PM UTC

I really like the concept of "metacurrency" that this article talks about. This is exactly the area I think Bitcoin will be most successful. I don't ever see it replacing the dollar, or even credit cards. The one thing that Bitcoin really excels at is the instantaneous transfer of unlimited amounts of money from one place in the world to another. Rick Falkvinge talks about this a bit in his "four drivers" series: http://falkvinge.net/2011/06/18/bitcoins-four-drivers-part-t...

I think eventually Bitcoin will compete with (or maybe replace) Paypal/Dwolla. But its killer app is long-distance point-to-point money transfer.

Re: Bitcoin's comeback: should Western Union be afraid?

#9

Post by bunderbunder » Wed, Dec 21, 2011, 8:18 PM UTC

schraeds wrote: post #6

Helianthus wrote: post #3

>This presents a bit of a puzzle for Bitcoin skeptics. Uh, no, it presents absolutely no puzzle at all for those of us who believe Bitcoin will follow a boom-bust cycle without ever providing a truly stable currency.

Wonder what will last longer, the euro or bitcoin.

I don't think that's an analogy you really want to draw.

The Euro's current problems are due to governments with Euro-denominated debt being unable to take the easy way out of servicing their debt by printing money. One of Bitcoin's defining features is that it's impossible for governments to devalue the currency by just printing money.

Since both currencies behave the same way in this regard, a Bitcoin economy would feature the exact same Achilles heel that is causing such trouble for the Eurozone right now.

Re: Bitcoin's comeback: should Western Union be afraid?

#10

Post by moonchrome » Wed, Dec 21, 2011, 8:24 PM UTC

vlasta2 wrote: post #5

Bitcoin's design (limited amount of coins) attracts the wrong kind of people - investors and speculators - there is no wonder the "value" is fluctuating heavily. A real virtual currency must attract buyers and sellers of actual goods, not just get-rich-quick speculators. Maybe an easy change to the way bitcoins are mined would be enough to get it on the right track. If the amount of coins is determined democratically…

Volatility is high because of low market depth and low liquidity, if the market had a billion dollars in small players it wouldn't be very volatile.