Posted on 12/02/2013 8:26:08 AM PST by Star Traveler
The developers of bitcoin are trying to show that money can be successfully privatized. They will fail, because money that is not issued by governments is always doomed to failure. Money is inevitably a tool of the state.
Bitcoin relies on thoroughly contemporary technology. It consists of computer-generated tokens, with sophisticated algorithms guaranteeing the anonymity, transparency and integrity of transactions. But the monetary philosophy behind this web-based phenomenon can be traced back to one of the oldest theories of money.
Economists have long declared that currencies are essentially a tool to increase the efficiency of barter, which they consider the foundation of all organized economic activity. In this view, money is a convenient instrument used by individuals to get things done. It is not inherently part of the apparatus of government.
I think of the concept of privately issued tender as “right money,” because the whole idea appeals instinctively to right-wing thinkers. They dislike centralized authority of all sorts, including monetary authority. For example, Friedrich Hayek, Margaret Thatcher’s favorite economist, proposed replacing the state’s monopoly on legal tender with competing currencies offered by rival banks.
(Excerpt) Read more at dealbook.nytimes.com ...
Asserted with out proof. Without even defense.
Ah... so we see a hatin’ on the right in the middle of the “analysis”.
This guy hates bitcoin BECAUSE the government can’t manipulate it.
“This guy hates bitcoin BECAUSE the government can’t manipulate it.”
To many (about 40%) in this country Government is both spouse and deity. And that number is growing.
Bitcoins have value because other people think that they do.
“Similarly, truly private money is an inferior alternative to the money that comes with the backing of a political authority.”
Right. There could very well come a time when that “truly private” chicken is worth more than that corrupt “political authority” $100 bill. In fact, I’ll bet on it.
Federal Reserve Notes have value because other people think they do.
/johnny
This article has actually made me curious about the validity of Bitcoins. The article misses the most important component of ALL currency. Confidence, followed closely by demand. Unadulterated barter between two entities engaged in commerce is not affected by the currency or any government. The entities must decide on what is traded, whether money, gold, bitcoins, goods, services, etc. Commerce should not be reliant on the government. So from where an agreed upon currency comes from should make no difference of its success or failure.
Bitcoin is supposedly limited to only 21 million units. Similar to Gold, it is a limited supply (no even yet fully distributed). Confidence may be a problem if you can’t hold it, feel it, smell it and taste it. You have to trust another entity to hold (or recognize) your bitcoin.
Demand is another story. A Bitcoin value is based on demand which is ironically based on confidence and security. If I have 4 tons of Gold divided into 1 once units in my basement, it’s a good bet it will always be of value to others. But if the power goes out, I can’t spend a bitcoin.
I’m going to look into it some more, but only as an investment, not as a viable currency. How could I make money on this and at what risk? When the dust settles, what will a Bitcoin be worth? How easy will it be to trade as the value goes up and down? How secure is it? Will it be recognized as wealth in a portfolio?
They’ll have value as long as there is confidence that the next guy will accept them in exchange for a desired good or service.
The “backing of a political authority” means they can put a gun in your face and make you accept it.
Lefties love this concept to an equal degree that they deny that it’s true.
You can do a printout but that still is just a check that sez you have zeros and ones somewhere on the internet.
And I've heard all these stories on how bitcoin is infallible and safe yet they've already had incidents wherein people gamed the algorithm and produced illegal bitcoins.
So no thanks.
I'll put my trust in precious metals. Copper Brass Lead Aluminum and Steel.
5 minutes after the first genius thought of trading in gold coins a “political authority” thought of mixing a little led with the gold to make it go farther.
Yep. But then the “truly private” chickens will become nationalized.
The idea of an online currency was predicted in N. Stephenson’s great book “Cryptonomicon”.
Right. We have a currency backed by nothing but the flimsy concept of confidence. What could possibly go wrong? lol
Bits and Bob [analysis of Bitcoin]
http://www.freerepublic.com/focus/f-news/3097370/posts
This is true of course. But he could have offered proof and defense because it is not hard to do. Here is how:
Bitcoin is a threat to all governments everywhere.
Bitcoin is a threat to all banks everywhere.
Bitcoin allows unaudited exchanges between free individuals.
Governments and Banks cannot allow bitcoin to succeed.
Ergo Bitcoin will fail.
Actually I believe the above is correct. The only question is when. I just don't believe that our government can allow bitcoin to succeed as it is currently implemented. The laws restricting it's use are certain to come pouring out of Congress sooner if not later. The Supreme Court may or may not accept the inevitable challenges to these anti-freedom laws. I would not be surprised if the Supremes dodge the issue completely assuming the lower courts rule in favor of the government.
But I will make yet another prediction. Bitcoin will just go underground. Transactions should be easy. Purchasing bitcoins somewhat harder. I'm not sure how that will be done.
I thought this was from The Onion.
The biggest liability and IMO the failure mechanism, is that there is no tangible value for a bitcoin. It is merely an internet creation relying on popularity hence value. Once the fad fades, bitcoins evaporate in value.
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