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A Prediction: Bitcoin Is Doomed to Fail

dealbook.nytimes.com

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Re: A Prediction: Bitcoin Is Doomed to Fail

#391

Post by psionski »

bitops wrote: post #228

Disclaimer right up front: I personally doubt that Bitcoin will be a long-term success. I fall into the camp of people who believe it is not a mature enough technology, unproven despite the hype. It is much too volatile to be any good other than as a risky investment, though if you time it right, you could stand to make a fair profit at the moment. What I do think is very interesting about Bitcoin is that it is a har…

These mini-states sound fun, I bet many more people would understand why they're paying taxes when it's not called "taxes", but instead giving directly to the person that needs help... Especially since you at least vaguely recognize that person because he's one of the 150-200 or so members of your mini-state.

Re: A Prediction: Bitcoin Is Doomed to Fail

#392

Post by erikb »

nostrademons wrote: post #14

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…

What you describe is the failing of bitcoin itself. What the author discusses is the failing of all electronic, not-gov-backed currencies. I think as with every new thing we can be sure that bitcoin will go through a lot of trouble and the string b-i-t-c-o-i-n might be unusable in a short future. But pure electronic currencies will still strive when happen what you explain. What the author discusses are problems that will make all electronic currencies fail. So both topics can be discussed, but they are not really the same thread. And you might actually both be correct.

Re: A Prediction: Bitcoin Is Doomed to Fail

#393

Post by erikb »

vijayboyapati wrote: post #12

He 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…

Although I believe that what you say will be correct in maybe 10 years, currently this is not the situation in my eyes. Currently nobody fears bitcoin, because it is still way too low profile to harm anybody. And although their arguments might be wrong we all agree that bitcoin and even the general idea of crypto money can still fail because of a vast amount of reasons, right? The thing is at the moment no crypto money has a real success. Yes, thousands more people care about bitcoins than 2 years ago, but it's not a critical mass yet.

Re: A Prediction: Bitcoin Is Doomed to Fail

#394

Post by psionski »

caublestone wrote: post #110

At Soylent, we have been accepting Bitcoin using coinbase. The decision to do so was based on marketing and the anticipation that not many people would actually use Bitcoin and we wouldn't have a large risk exposure. To date only 130 people out of 12,000 have pre-ordered Spylent using Bitcoin. Our total risk exposure was less than 1% of total revenue. The recent rocket ship rise in a Bitcoin valuation has valued our…

Don't... don't do that. There are people insisting that you can't buy anything with Bitcoin, you're ruining it for them.

Re: A Prediction: Bitcoin Is Doomed to Fail

#395

Post by parasubvert »

rockyleal wrote: post #359
fiatmoney wrote: post #249

Earlier quoted context omitted.

"Bitcoin is debt-free... since bitcoins are mined" That's not true. Debt is perfectly possible with a fixed currency base, and mining or grabbing transaction fees is not a substitute for debt in any way. In fact, you can have a whole expansionary currency system on top of a fixed asset like BTC, in the same way that the USD was once convertible in and out of gold.

No, it is true. To describe a currency as 'debt-free' means that it is not created through the process of creating new debt. The way modern currencies like the dollar are emitted is through the generation of new debt (government bonds are government debt, and banks create new currency when they 'loan' money). The negative consequences of not paying what you borrow (forclosure, etc.) are ultimately what backs debt-bas…

I think you may have misread Graeber. He is NOT advocating for commodity/debt-free currency. His whole point is that money started as credit - only later was it viewed as commodity, and only occasionally.

Money effectively is both commodity and an IOU. Attempts to force it into one category or another eventually leads to social breakdown.

The key question for our time is how to craft a stable monetary system that is decentralized. We don't know how to do this yet, and Bitcoin is not likely the answer BECAUSE it is finite (which would be catastrophic, as gold was). Crypto currencies can and should grow in experimentation but this one has a fundamental flaw.

http://www.theguardian.com/culture/2011/dec/16/note-worthy-n...

Re: A Prediction: Bitcoin Is Doomed to Fail

#396

Post by highbees »

rimantas wrote: post #152
Aqueous wrote: post #83

Earlier quoted context omitted.

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?

CoinKite [0] is a new Bitcoin debit/merchant machine company based in Toronto. The key to driving Bitcoin's value is increasing its utility, and this is done by enabling every day transactions.

CoinKite will be interesting to watch.

[0] https://coinkite.com/

Re: A Prediction: Bitcoin Is Doomed to Fail

#397

Post by parasubvert »

busterarm wrote: post #39

This article gives many headaches. It's a bit nonsensical to try and peg Bitcoin to right wing ideology. It's even more nonsensical to associate Hayek with Thatcher and call Hayek a "darling of the right". The guy was every bit a classical liberal, like nearly all of the US' founding fathers, emancipationists and suffragettes. Classical liberalism is decidedly anti-collectivist and modern conservatives are much more…

Apparently historical fact is nonsensical now?

http://www.pieria.co.uk/articles/lady_thatchers_relationship...

Thatcher was one of the primary reasons that Hayek had a resurgence of popularity in the 1980's.

Re: A Prediction: Bitcoin Is Doomed to Fail

#398

Post by parasubvert »

vilda wrote: post #63

Edward doesn't know what money is. Whether it is issued by a government or not is a matter of convenience (or legal issues) and not a condition. Everything can be a currency satisfying these criteria: (1) enough quantity (2) limited quantity (3) convenient to move/exchange (4) widely accepted That's it, nothing else. All currencies is based on "faith". Any currency is doomed if it looses trust. For instance cigarette…

Who does understand what money is? We have debates it for centuries. Money is both trust (credit) AND commodity. Though most economists religiously pick one view (Keynesians) or the other (Austrians).

Being based on "math" is nonsensical. Money is based on math, that's the whole reason it evolved - to keep track of debts!

The question is one of the axioms behind the monetary system. Bitcoin's axioms are every bit as political as a fiat currency, the only difference is the entity that made the political judgement.

Users of Bitcoin must trust in the algorithm, as users of currency must trust in the central bank.

Re: A Prediction: Bitcoin Is Doomed to Fail

#400

Post by kamjam »

jljljl wrote: post #281
kamjam wrote: post #43

Earlier quoted context omitted.

I don't think gold failed as a currency, I could pretty much go anywhere in the world with a bar of gold and exchange it for currency to buy whatever I want. It is still a universal currency, although not an everyday currency.

Exchanging gold for currency doesn't make it a currency. Gold is an asset. If you brought your gold to different people, they might all quote you different amounts, based on how easily the merchant or exchanger could convert the gold into their own currency.

Same goes for anything you actually buy with currency also.
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