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.
Bitcoins have value because other people think that they do.
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?
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.
The idea of an online currency was predicted in N. Stephenson’s great book “Cryptonomicon”.
Bits and Bob [analysis of Bitcoin]
http://www.freerepublic.com/focus/f-news/3097370/posts
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.
The New York Times is a contrarian indicator for me. While I never believed in BitCoin before, now that the NYT hates them, I love them.
“Money” it seems to me is anything that both parties agree to exchange for goods or services. If enough purveyors are willing to accept bitcoins in exchange for their goods or services bitcoin will succeed. The government by necessity will use every attempt in their power to stop the idea of bitcoins because at this point they have no control over them.
“They will fail, because money that is not issued by governments is always doomed to failure. “
I have no opinion as to whether bitcoin will succeed or fail, or whether it is a great idea or foolish; but I do not accept the premise of this article because it is obviously wrong. Whenever governments do a poor job of regulating commerce you get a black market. We have a black market for many things in the US. Russia has an even bigger one. Black markets thrive because they are either more efficient than government regulated ones or because they provide access to things the government does not want to be bought or sold.
If this person’s theory was correct then illegal drug trade would have collapsed as a business because they do not have government support.
If countries attempt to outlaw it, it will become even more valuable.
It is certainly going to be an interesting aspect of economics.
Bitcoin might fail but not for the reason this doofus says
Guess he missed the period 1800-1863 in American history where money was ALL privatized. The ONLY thing government can do-—and it is legit-—it accept the payment of a certain money for taxes. That is how they give national fiat money value (and why Confederate notes failed so miserably).
Economic history shows that different money forms (gold, bank notes, Bitcoin, etc.) can co-exist as long as government does not demand monopoly power over over media of exchange. For the near future, the dollar will tend to be preferred because (1) the public is used to dealing in dollars and (2) governments demand dollars for payment of taxes, purchase services in dollars, and pay benefits in dollars. But this could change if inflation takes-off.
I heard an interesting description of bitcoin that sort of clarified it in my mind.
Imagin a society where the currency is large rocks. You can trade large rocks with each other for goods and services, and you can even go to work in the rock mine to mine your own new rocks.
Everyone is happy with the system.
But on the way back from the rock mine, you drop a large rock into the lake. It still exists, but it is underwater.
Well, as long as you and everyone else agrees that you still own that rock, you can buy and sell the rights to own that rock, as long as everyone is in agreement.
That is bitcoin, everyone participating agrees on the value and ownership of bitcoins, but no actual rocks exist.
No. Money is most definitely not the sole domain of the state. And any currency lacking any backing can be expected to eventually fail. Dollars or Bitcoins or Monopoly money
“A Prediction: Bitcoin Is Doomed to Fail”
So is the dollar. All fiat currencies are doomed. Not a single one has ever survived in all of history.
Here’s something from Wired Magazine that gives you some background and history on how it started. However, it’s not a current article as it’s two years old.
The Rise and Fall of Bitcoin
http://www.wired.com/magazine/2011/11/mf_bitcoin/all/