321–330 of 431 posts
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Only in this case it's not a single buyer. i.e. completely invalidating the comparison.
That's not true, there could be multiple buyers and the punchline would just be, "to whom? there's only the three of you."
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They are applying old-world money ideas to something that is so new that we don't have useful models yet for deciding how it will behave, thinking that they do apply without loss of content. The rules of supply and demand apply, sure, but none of the other common-sense intuitions about how money works. BitCoins don't have any resistance to movement, or very little. Physical money does. This means the difference betwe…
Did you forget about wire transfers? At least where I live it is possible to live without touching physical money for a long long time, we have pretty advanced e-banking and m-banking (and we never had checkbooks). Yes id does involve the bank, but from the end user perspective it is almost no overhead and sometimes even saves the trouble. Is stuff like direct-debit even possible with bitcoin?
In the tech sector, new things come along every day. We see new ideas, approaches, left-field thinking on a steady, almost predictable pace.
We also see that, more often than not, the very first version of the thing is not the thing that lasts. It's a proof. It mostly works. There are problems. It sticks around for a bit, till someone else comes up with a better idea, implementation, etc, which takes hold. And then something else replaces that.
If you believe Bitcoin is Money 2.0, that it is destined to replace the USD, or other global currencies, you clearly accept that a newer, better thing is destined to replace an old flawed thing.
If you don't believe in Bitcoin, you cannot deny that while IT might not be the thing to take down the USD, something else might.
So why does every article treat Bitcoin as a yes/no proposition? Either it is a moonshot success, or tulips? Either it changes the world and creates new millionaires, or it joins the pantheon of quick money schemes that tempted and fooled so many in the past?
I realize we're talking technology here, but it doesn't have to be binary.
Bitcoin, the software, solved a few problems thought unsolvable. It showed that you can decentralize the ledger, with some amount of stability. It showed you can solve the double-spend problem, and create some guarantee of transactional consistency.
But bitcoin has a few obvious issues. It is illiquid, and deflationary. It is slow (unless you just pretend its fast and hope for the best). It is only basically anonymous, though not foolproof. It is easy to steal, and easy to destroy.
Some of these problems are solvable, and some are inherent to BTC itself and cannot be removed from BTC.
But that's not to say something can't come along with all the good properties of BTC and fewer of the bad. Or none of the bad. That's not to say there's not some kid sitting at a computer thinking of a better way.
I 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…
In practice, no one suddenly got richer because they'd gotten all this new gold, they just experienced massive inflation (and forgot to peg their tax rate to it, so their revenues collapsed but their expenditures did not and they went bankrupt).
Because it turns out you can't eat gold nor make weapons or ships with it.
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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…
jnbiche, it's not letting me reply to you so I'm doing it here. You make a good point, and my above explanation was a bit confused. I think BTC faces both problems: There's high volatility, driven by the current level of speculation and the fixed quantity of Bitcoins that exist on the market. This makes Bitcoin a fairly poor medium of exchange since it is unlikely to hold a stable value from one day to the next. Ther…
US/EUR seems to commonly be around 100 billion or so a day.
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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 equi…
Payment processors such as bitpay offer same-day bitcoin-to-fiat conversion and bank deposit with extremely low fees (0.1% - 1%), and are becoming the defacto standard. This is expected during the bootstrapping phase. Later, if bitcoin firmly establishes itself, merchants could choose to not convert directly to fiat.
Bitcoin won't fail because the criminal underground have accepted it. It is the perfect way to pay for drugs or other illegal activities. No way to stop, no way to trace. They reduce the risk of acting out their criminal affairs. They no longer need to move money across boarders, thus basically halving the risk of smuggling things. Power to the people, right?
I 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…
wut. you do know what middle-ages, gov't issued currency was made of, don't you? and who funded the new world expeditions? and for what reason? and you do know that even given the spanish crown's desire to repay their debtors, the bulk of that gold and silver windfall ended up going to china to fund their switch away from paper money by the Ming dynasty?
acting like gold != governments is... well, frankly, it's ignorant.
"They will fail, because money that is not issued by governments is always doomed to failure. Money is inevitably a tool of the state." How about gold? Bitcoin can just as easily be seen as a limited commodity as as currency. It's even mined :).
Bitcoin has no intrinsic value. It's a financial instrument.