Topic: Bitcoin Is Not Really A Good Money - page 8. (Read 4287 times)

Imho bitcoin is not a complete money. At least as it is today.
Right now it more looks like an instrument for investment and speculations. To make it look like money it should be more tradable. Most of the problems are already discussed and I hope will be solved pretty soon.

We can get financial crisis !! Oh come on what are you thinking about bitcoin. To be honest the 21 million cap for bitcoin is not its limitation but it is its security. If the limits are increased then there is no value to bitcoin as it will be available on mass number. Today's bitcoin works on the strategy that it is limited and people are trying to grab as much as they can.

Developers have absolutely no real power whatsoever.

What makes BTC a much more free money than gold or silver is that anyone can run any client at any time.  You want 100 kajillion coins?  Go ahead, have them.  Good luck getting everyone else to run your stupid client.

The only power that developers have is producing a client.  If the economic majority want to increase the supply of coins, they'll run a client which increases the supply of coins.  If the economic minority still don't want to increase the supply, they can keep the supply and that's perfectly fine.  The same applies with all of the other consensus rules, such as the block size.

Handing gold from one place to another is almost 100% untraceable, just like physical cash.  Moving Bitcoin is many times more transparent because every single transaction is accessible on a public ledger.  That means that you could see banks shifting money between each other and all other economic activity that takes place.  BTC would massively increase transparency unless banks attempted to keep their addresses hidden, but that would be tough since people can see the addresses they deposit to (if they even deposit to a bank at all).

That's not how bitcoin works. So you either don't understand how bitcoin works OR you're implying that Satoshi or core developers would change the algorithm to serve this nefarious purpose.

Perhaps they could to that, but then they'd have to rely on the miners, node operators, and owners of Bitcoin to accept it. Everyone who participates in the system has the privilege of supporting the existing system as a result. You see an example of this in Bitcoin Cash and Bitcoin prices. The success of Bitcoin Cash is driven entirely on (1) the will of miners and node operators to process their transactions (i.e., they must agree with Bitcoin Cash as an alternative to Bitcoin), and (2) the general public to want to own and trade Bitcoin Cash.

You're right, Bitcoin is not good money. Why would anyone spend today what they know will be worth more tomorrow? Bitcoin is an asset class, a store of value. That's it. It's beautiful.

I know, Bitcoin is designed to be as free from central bank and politician control as possible.  It is open-source, decentralized, etc.

But if you think about it, Bitcoin is still fundamentally worse than gold and silver as a truly free money.

First things first: all of gold, silver and Bitcoin are subject to central bank manipulation by pegging.  When central banks store up enough non-state money, they can sell that money for a fixed dollar or pound price, and thus suppress any appreciation of the non-state money in currency terms.  This enables the elites to acquire wealth and power for free, by issuing state currency and debt, as long as the central bank has enough of the non-state money to fight off any 'run on the bank.'

This was the real nature of the gold and silver standards through most of modern history, that mainstream economists praised for stabilizing state currencies and economies, at that time.  (Of course, they are now firmly against the gold standard, thus both times saying the elites' system was/is good for the economy.)

That said, Bitcoin suffers from the additional problem that it's secured not by physics, but by algorithm.  Algorithms can change.  Algorithms are only guarded by humans who are subject to persuasion.  At some point, the elites will have issued too many IOUs against the Bitcoin in their vaults.  Either we increase the issuance limit from 21 million, or we get a financial crisis and depression.  I imagine most of the developers will be open to talking.  (BTW, some version of this is almost guaranteed to happen, due to the nature of the world system.  For example, all countries have defaulted on their promises to redeem gold at a fixed price.)

This is in contrast to gold and silver, where violating the limit of issuance is physically impossible (or very expensive, with radioactive reactions.)

Another major weakness of Bitcoin is transparency.  In order for the public to hold the elites accountable for their monetary actions, however partially, the easier it is to observe and monitor the system, the better.  The reality is that computer networks and data structures are not easy for most of the public to understand, compared to the age-old concept of holding physical metals.

And we know from experience that the elites take full advantage of lack of public understanding.  Besides the 'gold standard good, gold standard bad' flip-flop by establishment economists, almost every major issue of finance is distorted before the public receive the wisdom passed down to it by the media (and this includes, maybe especially includes, channels tailored to the highly educated, like The Economist magazine and America's PBS television.)  Southeast Asia in the 90s, Greece recently, and Germany between world wars were made to suffer deflation after their financial crises, and the economic justification was 'moral hazard.'  The US was allowed to print devalued money to ease the pain after its own financial crises, and the economic justification was Keynesian pain relief.  (The real reason for the differentiation was that American voters had more power to disrupt the elites' system than those other populations.)

With Bitcoin so much easier to manipulate than gold and silver, no wonder, all the signs are that the elites will promote Bitcoin as the store of value of the future.  This makes even more sense when you consider it would be embarassing for the elites to promote gold or silver instead, since their prices would have to rise to a level much higher than the last time the elites tried to fix them.  Gold has appreciated 30 time since the elites' fixed postwar price of $35/ounce, and would likely have to appreciate another 30 times before a new (de-facto) gold standard can become stable.  This does not make the elites' money look good.  Bitcoin has no such history, and the elites can claim (and likely be believed) that they are merely moving money onto a new, electronic foundation that is more stable than a totally fiat system.

As I mentioned before, the elites must secretly nurture, if not openly promote, some form of safe store of value that is totally trusted by the public.  In today's world, that can only mean non-state-issued money.  The only question is which.

I think through solid development, the evolution of BTC will continue to solve many problems including the "Free Money" concept.

Huck

yes that is right that bitcoin is the currency of the modern people specially the new generation who are showing more interest in bitcoin to use it for online shopping.

But if you think about it, Bitcoin is still fundamentally worse than gold and silver as a truly free money.

Bitcoin's algorithm definitely isn't an advantage over gold, because it was modeled on gold to begin with. There is only a certain amount available (like gold), as time goes on it gets harder to mine (like gold) and thus becomes more rare and the price or demand increases (like gold). This is why it is called virtual gold in the first place. :p

These are real advantages of Bitcoin over gold and silver, but they all come at a cost -- making the system more complex and contingent (ie contingent upon there being electricity, cross-device communications, etc., and most important of all, upon users being able to trust an electronic rather than physical system -- there are multiple points along the path where deception can be introduced in such a complex system.)

My main point was that this complexity and contingency make the system fundamentally more vulnerable to abuse and fraud than a gloriously simple, stupid and honest physical store of wealth like gold.

There are times in life when we need simple and stupid honesty.  I contend that, in the world we live in, money is one of them.

If Bitcoin is more long-term oriented than Ethereum and Bitcoin Cash, isn't gold or silver even more so?

Bitcoin is money. And it is good money. However, maybe it could be said that it is not great money. Why? Because transactions are too expensive and take far too long.

Bitcoin is light years ahead of fiat money, which is still our predominate system that we use.

It is a step in the right direction and it is much easier to transact in, than precious metals currently.

Is it better? I wouldn't say that, precious metals is backed up with over 10,000 years of history, as being a safe store of value. BTC however, does not just function as a store of value, it has many other valuable applications, that should NOT be overlooked.

It is not apples vs apples. They are quite different and to simply BTC is a disservice to it.

I will contend that.

1. Bitcoin has many advantages over both gold and silver. Bitcoin is easier to transact and buy/sell with than a 2 pound gold/silver nugget. Bitcoin is easier to store and keep safe than gold/silver. Bitcoin is more portable. Bitcoin is more difficult to counterfeit than gold/silver bars. If bitcoin is stolen it may also be easier to track down and recover than gold/silver due to the publicly accessible ledger and a good portion of the internet containing logs which allow tracking of transactions to a relative degree.

2. Bitcoin's algorithm is a major advantage being a creator of long term value. The second people have control over something like ethereum or bch is often the second they sacrifice long term value for short term gain. We can see this in many crypto and fiat currencies which are manipulated to produce short term gain, rather than long term value. People criticize bitcoin's algorithm but also fail to acknowledge the algorithm has proven much more reliable and stable than more arbitrary and often greed driven human regulation.