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Comment by ajarmst | Hacker News Reader

I always enjoy conversations with cryptocurrency cognoscenti: "Ok. Assume I have some bitcoin (a bitcoin? bitcoins?). How would I exchange it for, say, a carton of milk?"

Don't get me wrong. I'm a math nerd. I think bitcoin is fascinating as a technical achievement, and hope we keep exploring the blockchain idea. However, I also know that bitcoin mania has literally affected global supply chains of computer components and inflicted a measurable exacerbation of global warming. There is a colourable argument about whether bitcoins have value, but it's very clear that bitcoin has a non-trivial cost.

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Personally I see bitcoin more as internet gold, you wouldnt buy a carton of milk with gold either, but you can create commerce services on top of bitcoin who are backed by this descentralized currency

Presently sell bitcoin for cash, swap cash for milk. Same as for stocks, bonds, gold bars, foreign currency and many other time honoured investments.

Yes, but that would also apply if what I had was a used car, rather than bitcoin or gold, etc. The requirement for intermediate conversion to another currency in order to realize value implies that bitcoin isn’t (at least yet) a currency (even in the case where foreign currency isn’t local currency, there is a context where it is currency: that foreign country). I can also buy milk by exchanging my car for local currency, and it has at least some intrinsic value. I realize that the currency/money question is far more complex (my car is neither fungible nor easily portable), but I wonder how many of those speculating on bitcoin’s value appreciate that or are capable of explaining why Bitcoin has any advantages over gold or bearer bonds as a repository of value. Or, for that matter, how speculating in Bitcoin in the 20th century is different from speculating in Tulips in the 17th.

Right now, Bitcoin’s primary economic role seems to be as a demonstration of just how many Greater Fools the internet and social media give us access to.

I'm not sure replacing local currency in the corner shop was ever an objective of bitcoin. For it's actual objective of uncensorable money transfers over the internet it kind of works. I get the tulip thing but there are over 14,400 hectares of farmland growing tulips today. Something being overpriced at some point is not the same as it being useless.

Good points. Thanks. This isn’t really my area (I start to glaze over around when ‘fiat’ is the main topic), so I’m sure I’m ignorant of some subtleties.

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