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Comment by makmanalp | Hacker News Reader

What about bitcoins? I thought you could convert those back to dollars.

Good question. Early on when I was trying to create a milli-cent currency for subscription buying of content from a website we wondered if we offered a refund for our digital cash tokens if we'd get in trouble for it.

As it turned out the Digi-cash folks had all the patents and were being real dicks about licensing so we never got to test the question.

I can absolutely predict that if you can buy several hundred thousand dollars worth of bitcoins from person X, and then go to persons P, Q, R, ... Z and redeeem them back for cash, that the authorities will shut down that sort of thing quite quickly.

"I can absolutely predict that if you can buy several hundred thousand dollars worth of bitcoins from person X, and then go to persons P, Q, R, ... Z and redeeem them back for cash, that the authorities will shut down that sort of thing quite quickly."

It's already been done:

http://i.imgur.com/PUMtG.jpg

That's 400k BTC (about $400k) being sent to a number of different accounts.

Good luck cashing that out without crashing the market. Somebody pointed out, just a few days ago, that a $10k sell-off recently scrubbed 25% off BCN/USD. A 400,000BCN sell-off would almost certainly drop it to pennies.

I suspect that anyone confident enough in the Bitcoin economy to invest that amount of money is not looking to cash out quickly. They may be gambling that Bitcoin becomes a commonly-used internet currency, in which case they stand to gain a lot of money in the long term.

edit: Ah, I see your point. You said "redeem back to cash". Yes, that probably wouldn't work in an economy only worth a few million :)

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