Is Bitcoin Flawed?

It seems a very unstable currency to me. How is it valued? It seems like its value is based more on its popularity than the supply and demand of the markets that use it...

 

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The bitcoin has flaws but it will rule the world, Duncan Hood

 

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Not many people can afford it at $700. How will that attract more people to use it?

 

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Because of it's power.

 

$750 now, Went up to 107% this week.

 

Unrecognised Ponzi scheme.

I'm either going to be very smug in a few years, or very pissed with myself.

 

What do you mean?

 

Stryder's post here:

http://www.sciforums.com/showthread.php?136416-I-am-new-to-bitcoin-and-need-some-advice

I said it first, but oh well what the hell.
So basically, I'm right, and I'm going to be laughing at you lot, or I'm wrong and I'm going to be very peeved with me for not buying in. Right? Wrong?
That is all.

 

For good over view of private money, See: http://www.scribd.com/doc/67161350/Two-Concepts-of-Money-by-Charles-A-E-Goodhart

"Goodhart argues that states have essentially always been in control of monetary systems. He emphasizes that governments have always viewed seigniorage as a useful form of revenue and are unlikely to allow this source of revenue to be replaced by a private source of money.

Right now, Bitcoins are effectively irrelevant when compared with the larger payments system, but those who anticipate it expanding to be widely used might ask how sure they are that private monies of this type would actually remain private. Once big enough to be termed a success, any such currency would attract more attention from governments than a cursory Senate hearing." (This quoted from link below.)

However, until governments ban or confiscated them, AND if you are not the "Greater Fool" some winner sells his to just before that, you can win (big even with the high volatility). Always a good idea to get out before a Ponzi collapses.
I think it was in 1932 when US made it illegal to hold gold, and paid $35/ oz for those who turned their's in (instead of burry it and hope not to go to jail).

 

I think governments will eventually make bitcoins illegal as it provides criminals with an easy way to avoid money laundering regulations. I wouldn't want to holding bitcoins when a single government rules against bitcoins. Bitcoins are currently under investigation by the US Department of Justice. There is no doubt in my mind that government action against Bitcoins will come at some point in the near future.

Two Bitcoins are up over 4,100% year to date. It's not a Ponzi Scheme, but is reminiscent of tulipomania (circa 1637). What are you buying when you purchase a Bitcoin? A bar code. If I want bar codes, I go down to the grocery store and buy a basket full of them. At least I will get some groceries with my bar codes. And even if you trust the people behind Bitcoins, it isn't regulated. And finally, anyone can download the code and start their own competing currency. Frankly, investment in Bitcoins is just plain risky. It's gambling. It's the Greater Fool phenomena in action.

Below is some material for those not familiar with tulipomania.
http://en.wikipedia.org/wiki/Tulip_mania

 

So the fascists win because they declare a monopoly and whoever tries to dispute it gets shot? Al Capone would be proud....

 

LOL, I think you need to go out and buy as many Bitcoins as you can.

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I WOULD, if they weren't so bloody expansive!!

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:m:

 

*expensive".... though "expansive" works too...

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Expanding rather than expansive. And frequently compressing also.
A big problem with the bitcoin is its volatility.
Business can't gamble on how much money it will receive.
Not even small businesses can do that.
Any thoughts on how the volatility could be controlled?
Could some variety of hedge currency spring up?

 

(1) (http://www.ibtimes.co.uk/articles/5...bitcoin-exchange-gbl-vanishes-takes-coins.htm
(2) http://rt.com/news/bitcoin-hacking-stolen-million-417/
(3) is more than a 20 million dollar loss (25,000 BTCs stolen back in 2011 and many others since then)
For link to good Economist discussion of bitcoin and link to the 25,000 BTCs stolen read: http://www.sciforums.com/showthread...-some-advice&p=3134636&viewfull=1#post3134636

 

It can be both and it is. It is truly the first global fad, when people from any country can join the pyramid rather easily, and enjoy getting rich...

It does have utility value, but it still depends on the incoming users will to buy and use more and more of it...

 

Whenever the bottom falls out of Bitcoins, be that today, tomorrow or years from now, the bottom will fall quickly. But make no bones about it, it will fall.

 

You did indeed, however I didn't spot your post on the subject until afterwards. Probably made us both shudder with "He said the same as me, that can't happen we're not suppose to agree on something." (not that there's been any reason to disagree as of yet)

 

And "two bits" was $0.25 in my day: