DailyTech - Bitcoin Rollercoaster Ride Sees Currency Soaring to New High of $32/CoinSome of these comments are so misguided (and some have very valid points):
By p05esto - I can't help but feel that at any point Bitcoins could instantly go to $0 in value. They seem really sketchy and mostly used by people doing illegal things. Could just be me, but this is how I feel and why I keep away with a 10' pole.
By kleinma - [...] Bitcoins if I understand it correctly are just hashes of data generated from video card GPUs. Meaning that as the GPU gets better, more coins can be produced, and eventually people will be able to make how ever many they want, causing the whole system to fail, or just inflation to cause one US dollar to equal 50 billion bitcoins where it is not worth it to have them.
By Solandri - A currency needs to grow slightly faster than the economy. If it doesn't, it becomes more cost-effective for currency holders to stuff it under a mattress and wait for its value to go up, instead of using that currency to increase their productivity through economic activity.
By Gondor - It is amazing that there are gullible idjits out there who would put a value on something as imaginary (and backed up by noone) as "bitcoins".
The thing with "bridge for sale" springs to my mind whenever somebody mentions this crap. The funny part about this particular bridge is that it is free (as in: everybody can create one at no cost). How daft must one be to invest real money in something like that ?
By TSS - I hate Bitcoins. There i said it. I have and always hate them and their concept. For a very simple reason.
Right now, we're paying with money that's made up out of thin air. The vast majority of money is virtual, made up by typing numbers into a screen. Now there are some problems with that.
But bitcoins are virtual money, paying with thin air, that you first have to burn a real world lump of coal for, before the numbers are typed into the computer. How else is that GPU getting the power in order to mine bitcoins? the biggest source of power in the world is coal. Wether we have a script add the numbers or a human doesn't matter, they are still digital bits floating around in cyberspace.
This is the madness that i hate. Rather then saying "right we just won't print any more money", we have to burn real world resources to limit the creation of virtual money. It's the ultimate form of decadence. Instead of paying for something with nothing, you pay for something by destroying another thing.
i HATE em. I'd rather return to gold, and i really dislike the gold standard for the same reason, turning a society that has learned to pay for something with nothing back into a medieval society which *has* to pay for something with something else or nothing gets done.
We could just, get this, put it in the constitution that the government is the only entity allowed to print money, and then, in that same constitution, tie the rate of inflation to the rate of growth of last year. 2% growth last year? 2% inflation this year. And then NOBODY gets to change that anymore. It can only possibly be changed by a 2/3rds majority in house, senate, president has to agree AND a referendum has to be held in which >60% of the population votes yes. It'll be a cold day in hell before all of that happens. And when the economy shrinks more or grows less then the numbers allow? TOUGH.
No need for bitcoins or massive lawbooks. The only problem that needs solving is people printing *more* money. Not people printing money.
By Shadowmaster625 - Only a fool would use as a store of value a currency that went from being worth $2 to $32 in a year. Imagine if the dollar went from being worth 2 to 32 euros in a frickin year. It would kiss its reserve currency status goodbye. (Assuming it was the dollar and not the euro that was so volatile!)
^Now that's a fair point, but this "fool" would be 16 times richer if that were the case.
By schmandel - It's safe to say that Bitcoin would not be around were it not for its use for black market transactions, primarily the Silk Road web site on Tor. There was some early interest in money laundering, but it's just another tool with limitations in this regard and really too small to handle laundering placement volumes for work of consequence. Bitcoin is way too much of a PITA for any legitimate payment system use unless you are some sort of True Believer ;-)
The limited number of Bitcoins is a feature that is a tribute to the idea of money that doesn't inflate due to fixed supply ( e.g. gold ) and all the magical ideological thinking that comes with it.
It is all working out as the creators mush have intended, the coins they mined two years ago for pennies are now worth dollars, a few parties hold nearly all the bitcoins in existence and are the central bankers of this not-so-decentralized currency.
Outside of the transaction engine itself, the Bitcoin infrastructure is remarkably amateurish and crappy, leaving it rife with hacking issues and fraud.
If small time black marketing and wing nut economic theories turn you on, Bitcoin just may be the place for you. However, if Silk Road is broken by law enforcement, I would expect Bitcoin to be gone, gone, gone.
