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A Prediction: Bitcoin Is Doomed to Fail

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Re: A Prediction: Bitcoin Is Doomed to Fail

#251

Post by waps »

pathy wrote: post #180
GhotiFish wrote: post #127

Earlier quoted context omitted.

?? Bitcoins are a currency, there's no need to convert them. It's just happening now because some people want into this environment.

>there's no need to convert them. Have you tried paying your taxes in Bitcoin? The IRS (or regional equivalent) is not going to accept bitcoin any time soon and they will want you to pay taxes on, for example, profits. There is a need to convert, don't believe otherwise.

No, but I imagine coinbase has. As will many other people who accept bitcoin payments.

Re: A Prediction: Bitcoin Is Doomed to Fail

#252

Post by gwern »

jimmcslim wrote: post #221

With all the news about the meteoric rise in the value of BTC and many folks presumably sitting on a huge paper profit, I haven't seen (or just haven't be looking hard enough) for stories along the lines of: 'I sold my modest holdings of BTC and was able to repay my mortgage; I don't have enough money to stop working but at least I fully own my home and can work four days a week instead of five and spend a bit more t…

You can find most of those stories on /r/Bitcoin. Off the top of my head: the Norwegian apartment, the asshole, the nurse, & the WalMart clerk. (And a few counter-stories like the Brooklyn embezzler who has taken a $1m inheritance and squandered it down to ~$300k by astonishingly bad Bitcoin trading over the past year.)

Re: A Prediction: Bitcoin Is Doomed to Fail

#253

Post by waps »

reflectiv wrote: post #75
altoz wrote: post #36

Earlier quoted context omitted.

I can't help but think a lot of these "experts" can ONLY see from their narrow perspective. Bitcoin the protocol is just scratching the surface.

Exactly... Even if you take the assumption that bitcoin will fail, the problems/issues the protocol or something similar solves are far too beneficial to ignore. So basically if bitcoin fails, some other similar form of digital currency will rise up in its place. I feel as though its a 'cat is out of the bag' scenario.

Yes it does seem like bitcoin is lacking in a few places. You could (try to) add things like

* disconnected operation (solve the double spend problem in a disconnected setting) (this would really make something gold-equivalent)

* a provably correct, but cryptographically secure ledger (meaning real anonymity)

* proof of work based on a single crypto standard seems risky. Use 5 of them.

* provably no way to compromise the network even with overwhelming computational power

Re: A Prediction: Bitcoin Is Doomed to Fail

#254

Post by bsbechtel »

The author's argument goes like this: Bitcoin is not backed by The State. The State makes currency. The State is all powerful. I am not capable of conceptualizing a currency that is not backed by an all powerful state, therefore Bitcoin is doomed to fail.

Terrible argument.

Re: A Prediction: Bitcoin Is Doomed to Fail

#255

Post by djur »

dwaltrip wrote: post #215
stevewilhelm wrote: post #178

Earlier quoted context omitted.

In any financial exchange, both parties, the buyer and seller, need to come to agreement on a price. Given the fact that current BTC to USD exchange volume is fairly small, it wouldn't take that many large global goods and service providers pegging their BTC/USD exchange rate to cause the speculation market to collapse. Those that recently bought their Bitcoins at $900 would sell below the current high price to reali…

The buyers and sellers have come to an agreement already. They prefer the price of $1000. Any large retailer attempting to manufacture an artificial peg would only create a good amount of temporary humor.

Retailers aren't going to set prices for their goods that might fluctuate from $1 to $10 to $50 back to $1 within a week or so. It'd make it impossible to run a business.

What they ultimately want is to guarantee they're going to receive the equivalent of $X for every widget they sell, so they'll either have to declare that Y BTC = X USD regardless of market prices, or they'll have to accept whatever Y in BTC is equivalent to X USD on a given exchange on a given day -- which is essentially equivalent to doing business in USD directly, with BTC as just a weird payment mechanism.

Businesses are going to be hesitant to accept BTC for the same reason they don't tend to accept payment in kind -- you need dollars to pay taxes and wages.

Re: A Prediction: Bitcoin Is Doomed to Fail

#256

Post by fat0wl »

aryastark wrote: post #200
fat0wl wrote: post #84

Earlier quoted context omitted.

This intrinsic value can be mirrored by any cryptocurrency or even just a parallel network of Bitcoin. It is no justification for $1000/coin the way overzealous BTC investors claim.

$1000, for 1/12000000th the total current supply of bitcoins in existence? Sounds like a deal to me. The same fraction of USD is $100,000. There are 313 million people in the US. These are the majority of people using the dollar. There are 1.35 billion in China and another 1.2 billion in India. The former has already started using bitcoin. But only just barely . The market for bitcoin is enormous . Now let me ask you…

my god this is psychotic.

i'm sorry, i try to be polite but.... jesus.

i am 1000% confident that this particular bitcoin implementation of global currency is worth less than $12 billion USD. you are treating this currency like we are dividing up slices of the world money supply. We are not. People are paying $1000 and basically receiving an IOU from no one, with the hope they will be able to sell to future speculators.

If Bitcoin succeeded as an actual currency, it would be trivial to implement new blockchains and many such systems would exist in parallel (Litecoin, Ripple?). But so far, Bitcoin has proven nothing regarding stability, it is just wowing naive investors by increasing in value rapidly.

The problem in your analogy is that Facebook never sold accounts for $1000 because people are not that stupid, except when they start seeing $$ signs flash in front of their eyes. And why does it need to keep increasing in value if its divisible to like 6 decimal places? It's perfectly usable as a currency now. This is the internet, who the fuck needs WHOLE NUMBERS.

Just....... jesus, man.

Re: A Prediction: Bitcoin Is Doomed to Fail

#257

Post by diego_moita »

> truly private money is an inferior alternative to the money that comes with the backing of a political authority.

By the Gresham's law [1] (i.e.: "Bad money drives out good") being an "inferior money" is actually a good thing.

[1] http://en.wikipedia.org/wiki/Gresham%27s_law

Re: A Prediction: Bitcoin Is Doomed to Fail

#258

Post by jljljl »

cs702 wrote: post #29

Bitcoin befuddles experts who analyze it from a narrow perspective, because it is not just a new medium of exchange or a new store of value: it is also a new kind of point-of-sale payment system (one that doesn't require payment processors), a new kind of global financial transfer system (one that doesn't require financial institutions), a new kind of time-stamping certification system (one that doesn't require notar…

IS this all really that big of a deal? Everything you've described above shouldn't really shatter any sort of economic models, it just increases the velocity at which money is exchanged, and reduces any frictions that might occur during transactions. Nothing that can't be accounted for in existing models.

Re: A Prediction: Bitcoin Is Doomed to Fail

#259

Post by andrewljohnson »

jljljl wrote: post #258
cs702 wrote: post #29

Bitcoin befuddles experts who analyze it from a narrow perspective, because it is not just a new medium of exchange or a new store of value: it is also a new kind of point-of-sale payment system (one that doesn't require payment processors), a new kind of global financial transfer system (one that doesn't require financial institutions), a new kind of time-stamping certification system (one that doesn't require notar…

IS this all really that big of a deal? Everything you've described above shouldn't really shatter any sort of economic models, it just increases the velocity at which money is exchanged, and reduces any frictions that might occur during transactions. Nothing that can't be accounted for in existing models.

You could have said the same for PayPal.

Re: A Prediction: Bitcoin Is Doomed to Fail

#260

Post by jljljl »

jnbiche wrote: post #243
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.

Wrong. Have you actually tried to buy a Bitcoin? If not, ask someone who has. At the moment, it's hard for Bitcoin novices to buy Bitcoins, and much less hard to sell them. Actually, once you've been verified by an exchange (required prior to buying Bitcoins unless you do a private party sale), selling Bitcoins is easy; it's getting your USD wired/ACHed to your bank account that can be time-consuming. This is due to…

I think he's making a liquidity point. It may be easy from a process standpoint to cash out, but the question is how much the value of your bitcoins may change whenever you cash out.

http://www.investopedia.com/terms/l/liquidity.asp

Part of the value of dollars as a medium of exchange is that the value does not fluctuate greatly from day to day or minute to minute. In the short term, you can rely on prices remaining fairly stable.

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