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A Prediction: Bitcoin Is Doomed to Fail

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Re: A Prediction: Bitcoin Is Doomed to Fail

#161

Post by justincormack »

andrewla wrote: post #148
fiatmoney wrote: post #45

Earlier quoted context omitted.

That's not my reading; I believe what he is getting at (similarly brought up in Graeber's book) is that when the government controls a large enough share of the economy, the sine qua non of "money" is that you can pay taxes with it. That doesn't require anything about the historical origins of money.

I should probably read Graeber's book, though based on what I see here I might find it a bit exhausting. I hear this argument a lot in discussions about bitcoins, and I ask, but have not yet received, a good explanation. Let me ask you if you can summarize the reasoning for why paying taxes in a currency helps a currency? It seems very obvious that the opposite is true -- if you don't have to pay taxes by working in…

The example in Graeber's book was the government pays soldiers in some currency it invents, and then taxes the non soldiers in the economy the same amount. The soldiers need to eat (which is important as they might otherwise just give the coins to the civilians). So the transaction of food for money makes sense, and the civilians can pay their taxes and the soldiers can eat, and the arbitrary currency has a measurable value.

Re: A Prediction: Bitcoin Is Doomed to Fail

#162

Post by hnha »

trekky1700 wrote: post #131
Aqueous wrote: post #30

Earlier quoted context omitted.

If you use a service like BitPay, which most BitCoin merchants too, you declare your price in dollars and the API uses the current exchange rate to convert it to BitCoin, minute-by-minute. The prices float up and down with the currency, so pricing is largely a non-problem. It makes rational sense for merchants to accept BitCoin and to keep some holdings in BitCoin because the price is increasing at such a rapid pace.…

If you're valuing everything in dollars, setting your price in dollars, and converting to and from dollars, why not just use dollars. I think this is the leap BitCoin is yet to make. When we no longer have to convert it and compare it to dollars. It has loads of benefits over using the dollar, but a lot of those benefits are lost the second you're having it exchanged. For instance, if I wanted to use bitcoin for cont…

I read a great comment at a local forum earlier along the lines of: No one wants bitcoin, everyone wants ... to exchange their bitcoins for as many dollars as possible.

Re: A Prediction: Bitcoin Is Doomed to Fail

#163

Post by brownbat »

The argument boils down to:

1. Money has always been controlled by governments,

2. So money always will be controlled by governments.

3. Bitcoin is identical to money, but

4. Bitcoin cannot be controlled by governments,

5. Therefore bitcoin is doomed to fail (no date specified).

I'm not sure any of the premises are beyond scrutiny, or that the conclusion is even meaningful.

Anyone can say that nothing lasts forever. Let us know when someone predicts that bitcoin won't last out the year.

Re: A Prediction: Bitcoin Is Doomed to Fail

#164

Post by iand »

jkarni wrote: post #153
iand wrote: post #136

Earlier quoted context omitted.

The computing power directed at bitcoin is already huge. You would need to persuade those miners (who also verify transactions don't forget) to switch to your new coin. If they stop mining bitcoins then they fall behind their competitors. They then have to swallow the risk of mining a new coin that has no users yet.

But presumably the computing cost would be much lower for the new coin, since it'd be earlier on in it's mining history. Who knows where the respective expected values stabilize. Also, what if the new coin has some minor technical improvement? How do we know that won't outweight the established network effects?

We don't know any of those things. That's why it would be higher risk to start mining it. The rewards might be huge or they might be nil.

Re: A Prediction: Bitcoin Is Doomed to Fail

#165

Post by Aqueous »

patmcc wrote: post #115
Aqueous wrote: post #30

Earlier quoted context omitted.

If you use a service like BitPay, which most BitCoin merchants too, you declare your price in dollars and the API uses the current exchange rate to convert it to BitCoin, minute-by-minute. The prices float up and down with the currency, so pricing is largely a non-problem. It makes rational sense for merchants to accept BitCoin and to keep some holdings in BitCoin because the price is increasing at such a rapid pace.…

>>It makes rational sense for merchants to accept BitCoin and to keep some holdings in BitCoin because the price is increasing at such a rapid pace. Why wouldn't you want to sell something for x BTC today when that amount could be worth twice as much tomorrow? By this logic you should put all your available cash into bitcoins right now. Are you? If not, why not?

I don't put all of my money into BitCoin right now for the same reason I don't put it into any other promising investment. The simple answer is that I don't know everything and something could come out of left field tomorrow and demolish BitCoin's value. A bug in the software, more overbearing government regulation, some government in the world (not the US, I don't think) banning BitCoin, etc.... I'm betting that this won't happen which is why I have as much as I do in BitCoin right now.

Re: A Prediction: Bitcoin Is Doomed to Fail

#167

Post by JumpCrisscross »

chockablock wrote: post #139
brador wrote: post #107

Earlier quoted context omitted.

That's because Bitcoins are relatively easy to buy and very difficult to cash out into real currency. Once enough people see how hard it is to liquidate their Bitcoins back to USD the realization will follow.

Howso? If it's easy to buy BTC with USD, doesnt't that imply successful liquidation of BTC?

If it's easy to buy subprime mortgages with cash does that imply it's just as easy to sell said subprime mortgages for cash? Substitute any illiquid asset(relative to U.S. dollars) if you wish and the statement holds true.

Re: A Prediction: Bitcoin Is Doomed to Fail

#168

Post by tedunangst »

chockablock wrote: post #139
brador wrote: post #107

Earlier quoted context omitted.

That's because Bitcoins are relatively easy to buy and very difficult to cash out into real currency. Once enough people see how hard it is to liquidate their Bitcoins back to USD the realization will follow.

Howso? If it's easy to buy BTC with USD, doesnt't that imply successful liquidation of BTC?

I think the asymmetry revolves around the ease/difficulty in getting USD in and out of an exchange like mtgox. You can take physical paper money to the bank and transfer to an exchange, no problem. You can buy BTC at the exchange, no problem. You can sell your BTC at the exchange, no problem. You can transfer USD from the exchange to your bank and withdraw physical paper money, maybe a problem. Perhaps a slight delay.

Re: A Prediction: Bitcoin Is Doomed to Fail

#169

Post by JumpCrisscross »

jafaku wrote: post #141
brador wrote: post #107

Earlier quoted context omitted.

That's because Bitcoins are relatively easy to buy and very difficult to cash out into real currency. Once enough people see how hard it is to liquidate their Bitcoins back to USD the realization will follow.

News flash: A transaction requires a buyer and a seller. If you bought Bitcoin, someone else sold Bitcoin.

There is no balanced ledger - Bitcoins can be spun into existence through mining, i.e. without the transfer of hard currency.

Re: A Prediction: Bitcoin Is Doomed to Fail

#170

Post by fat0wl »

jafaku wrote: post #151
fat0wl wrote: post #121

Earlier quoted context omitted.

yeah as ars mentions, it's already happened... plus there is litecoin, buttcoin, etc etc When people compare to internet & DNS & things like that I get kinda pissed off. Those are standard protocol that we agree to because it helps ensure successful communication. Bitcoin is not anything like this stuff, it falls more into the category of "some code that runs on the internet". Think of it more like a website (Faceboo…

Actually there is no buttcoin (other than the website), which is the proof that you are a troll.

if making a mild semantic error regarding the universe whose fundamental premises i believe are flawed makes me a troll, troll i am

ad hominem is bad enough dont bring in semantics please. in bitcoin there are 3 types of people -- hypemongerSpeculators, techDesigners, nonBelievers. The hypemongers call all the nonbelievers trolls, the trolls talk trash to the hypemongers for blindly defending a greedpile, and the techDesigners (who are supposedly the enlightened HN readers) generally don't care.

The only reason I even bring these arguments here is cuz all the HN headlines are hypemonger trash. I'm readying myself to accept this model of Bitcoin forums and move on, lol

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