A Prediction: All Currencies Are Doomed to Fail (but probably not for a while)
A Prediction: Bitcoin Is Doomed to Fail
11–20 of 431 posts
Re: A Prediction: Bitcoin Is Doomed to Fail
#12He is essentially giving the chartalist theory of money. Money cannot arise except through the fiat of the state. Chartalists hate the Mengerian theory on the origin of money because it posits that money arises as a market phenomena. Eventually the state co-opted money, but that does not mean money arose because of the state. The emergence of bitcoin is a thorn in the side to chartalists. We can't really go back and figure out the exact history of how gold emerged as money, but bitcoin is being monetized right before our eyes. The angst felt by chartalists is also felt by inflationists. They hate the idea that you could have a successful currency that cannot be inflated beyond a fixed supply. So they are naturally defensive. Every success bitcoin has undermines their world view.
Re: A Prediction: Bitcoin Is Doomed to Fail
#13Why did the author of that article have a different title when the same article was posted on the Reuters blog? [1] Over there the article headline is: "Bitcoin is a step back not forward" Is that his choice or the editors? [1] http://blogs.reuters.com/edward-hadas/2013/11/27/edward-hada...
In news organizations, titles are usually written by editors, not writers.
Re: A Prediction: Bitcoin Is Doomed to Fail
#14I think Bitcoin's doomed to fail, but not for the reasons the article suggest.
There're ample historical counterexamples of currencies that are not tied to a government. Gold is the most obvious example; if currency was inextricably tied to governments, there would not have been a mad rush to colonize the New World (and extract its gold reserves). In prisons cigarettes frequently serve as currency, as a medium of exchange that is widely valued.
What really makes a currency is confidence. People have to believe that other people will continue to value the currency later. Government backing can provide one source of confidence. But so can strong crypto, and one could argue that these days people have more confidence in crypto than in governments.
What'll really kill Bitcoin is that this speculative wave has made the price incredibly volatile, so volatile that real merchants selling real goods have no idea what to price things at. So everyone holding Bitcoins purchases them for investment value, and then the price will crash when it stops going up. That destroys confidence in the currency, which destroys the currency.
I could easily see a successor currency based on the Bitcoin protocol emerging from the ashes, though. By then the speculators will have been burned so badly that they'll stay far away, so it'll quietly gain adoption in the background, and then eventually become the new currency of choice when inflation starts to make it's way through current fiat currencies.
Re: A Prediction: Bitcoin Is Doomed to Fail
#15"After all, no bank or bitcoin-emitter can be as public-minded as a government, and no private power can raise taxes or pass laws to unwind monetary excesses." I am not an expert by any stretch of the imagination, but this seems like a big point in the authors argument. Isn't the removal of this flaw baked into bitcoin by it's nature? " Besides, if bitcoin ever really started to take off, governments would either ban…
Isn't this pretty damn hard as well?
Nah. If all the govt. does is says that every merchant cannot accept bitcoin for transactions, that's enough to render every bitcoin market black.
Re: A Prediction: Bitcoin Is Doomed to Fail
#16"After all, no bank or bitcoin-emitter can be as public-minded as a government, and no private power can raise taxes or pass laws to unwind monetary excesses." I am not an expert by any stretch of the imagination, but this seems like a big point in the authors argument. Isn't the removal of this flaw baked into bitcoin by it's nature? " Besides, if bitcoin ever really started to take off, governments would either ban…
The large pools do levy taxes against the miners.
Re: A Prediction: Bitcoin Is Doomed to Fail
#17He is essentially giving the chartalist theory of money. Money cannot arise except through the fiat of the state. Chartalists hate the Mengerian theory on the origin of money because it posits that money arises as a market phenomena. Eventually the state co-opted money, but that does not mean money arose because of the state. The emergence of bitcoin is a thorn in the side to chartalists. We can't really go back and…
Inflation is a separate issue. That comes from the nature of money, not its source. You can have a decentralized, distributed inflationary currency. See Freicoin for example.
Re: A Prediction: Bitcoin Is Doomed to Fail
#18"After all, no bank or bitcoin-emitter can be as public-minded as a government, and no private power can raise taxes or pass laws to unwind monetary excesses." I am not an expert by any stretch of the imagination, but this seems like a big point in the authors argument. Isn't the removal of this flaw baked into bitcoin by it's nature? " Besides, if bitcoin ever really started to take off, governments would either ban…
Isn't this pretty damn hard as well? Nah. If all the govt. does is says that every merchant cannot accept bitcoin for transactions, that's enough to render every bitcoin market black.
I don't think that the gov't has the power to say that.
Re: A Prediction: Bitcoin Is Doomed to Fail
#19Re: A Prediction: Bitcoin Is Doomed to Fail
#20I think Bitcoin's doomed to fail, but not for the reasons the article suggest. There're ample historical counterexamples of currencies that are not tied to a government. Gold is the most obvious example; if currency was inextricably tied to governments, there would not have been a mad rush to colonize the New World (and extract its gold reserves). In prisons cigarettes frequently serve as currency, as a medium of exc…
Also, with gold, there is intrinsic value beyond the monetary - jewelry use, or in these moderns days in electronics. That provides a value floor. Bitcoin doesn't have that.