It would be great if tptacek actually explained what he means. It seems to be a muddled economic argument. I do not understand "meaningless as currencies goes".
It would be great if tptacek actually explained what he means. It seems to be a muddled economic argument. I do not understand "meaningless as currencies goes".
Please explain to me why my Flitcoin is inferior to your Bitcoin.
As you do so, note that all the world's Bitcoin software is trivially upgradable to Flitcoin; in fact, it requires less than 10 lines of code to do so.
Less snarkily: why are people using Bitcoin? What's the intrinsic value they see in Bitcoin? Based on what evidence can they predict that Bitcoins purchased today will be convertible to gold, dollars, or even toenails at any valuation? You've begged the question.
No, you just asked a different question.
>What's the intrinsic value they see in Bitcoin?
Well, free transfers, for one, and not being subject to having your money frozen by online payment companies (e.g. Paypal).
What's the intrinsic value? Why is Bitcoin unlikely to be worth $0 in 10 years? Because it is spectacularly unlikely that gold will be worth $0 in 10 years, and similarly unlikely that a dollar will be. Virtually any trader in the world would take the other side of that bet.
>What's the intrinsic value? Why is Bitcoin unlikely to be worth $0 in 10 years?
Why does a currency require a value as anything other than a currency to be expect to have value?
Bitcoin offers a useful service. There's is no reason to believe this service will stop being useful in 10 years. Therefore, it's reasonable to expect a demand for Bitcoin in 10 years, making it worth more than $0.
>Because it is spectacularly unlikely that gold will be worth $0 in 10 years
Isn't most of gold's value based on its demand as a currency? If people stopped buying gold just to trade and store value, wouldn't current gold owners lose immensely?
The tools to do this are currently in the pipeline or are really not that hard to devise. This is what bitcoin offers that others don't. Forget anonymity or libertarian arguments, 0 transaction costs are extremely disruptive.
Gold for instance, seems to be a fool's buy, because there are few truly-useful non-technical things to do with it (you can't eat it) but actually works well as a basis for some value transfers. In a crash your bitcoins would depreciate wildly because nobody would part with anything of value for some bits - or a piece of paper - or some shiny metal.
This is just inherent in trading - there has to be a difference in value or the trade wouldn't happen, and if there's a difference in value the values may not relatively correspond at all points.
To some people, at some times, a token may be a useful marker in trade, as cash is now. With World of Warcraft healthy, there can be a good market in magic swords. With a healthy world economy, cash can be useful. When either fails, current holders will suffer. Gold will suffer differently, it won't be counterfeit or lost, but it won't be liquid. Ditto for BTC, they just become irrelevant relative to food.
Gold is anonymous, but can't practically be traded that way in large quantities. Cash is only pseudonymous like BTC as usually used - bills are scanned when dispensed and deposited. It's not globally visible, just to the most likely and well funded enemy - your own government.
It really seems like you should be harshing on representational value systems in general, or something.
Actually, I believe that Bitcoin's (possibly short-lived) fame has created some sort of value in the sense that there would probably be, for quite some time, people interested in hoarding Bitcoins just as a kind of souvenir ("hey, remember, people used to get excited over this"); not so with Flitcoin. I am not saying that this is something reasonable to base a currency on, just that it is wrong to assume that Bitcoin and Flitcoin are strictly equivalent.