Topic: Disadvantages of Bitcoin why price might drop. - page 2. (Read 6738 times)

I enjoyed 2 considering that would make the price of bitcoins go up! (lost or destroyed, not so much stolen)

The terms you use are nebulous. How do you know it's "rallying too fast". How do you define a Bitcoin "crash"?


This is only true so long as things are not sold directly for Bitcoins. As more individuals and business adopt it as a payment method, this will be less and less of an issue.


If you encrypt and back up your wallet, this should not really be an issue. It would be very helpful if there were robust tools to enable this. Additionally, there are many ways to lose physical money that don't apply to Bitcoin.


Retailers can peg their prices to an exchange. Right now there is still a very low volume on the exchange, and prices fluctuate, but that's the cost of accepting Bitcoins right now. The upside is that the exchange rate could potentially be much higher, and they are quite easy to accept. Again, this is only an issue while prices are first set in USD, and then converted to BTC.


Everyone has  copy of the block chain. You can indeed prove that you sent 10,000 BTC to the address specified by the seller. Using ClearCoin or other escrow services, and only trading with trusted individuals (see the OTC WOT) can mitigate risks of fraud.


I agree, this can be annoying. There are two types of clients that exist in theory but not practice. The first is the light weight client, which only downloads block headers. This would be a big improvement over the standard clients, which has to store full blocks. There is also the ultra-lightweight client which would need to store even less information, but would require some method of receiving data outside the normal Bitcoin channels.


There's nothing wrong with Bitcoin banks, not even fractional reserve ones. Before central banking, banks were kept from inflating the money supply too much by the threat of bank runs. It would be the same for BTC backed bank notes, as there is and can be no central reserve to create Bitcoins out of thin air.


That is true, but Bitcoin was designed to be resistant to attacks. Cryptographic breaks would most likely also apply to all other financial transactions as well, so I don't see it as a big thing. As far as governments go, I rather doubt they will be able to wield much of their power at Bitcoin. They may label it as a haven of terrorists, pedophiles, and money launderers, but I think it will be too late by the time they bring out the propaganda machine.


I don't think these are very likely scenarios.

Lol, those are definitely not all factored into the price. Most of them don't factor into reality. I especially enjoyed 5 and 8.

Seems things are rallying too fast.   Here are some reason why bitcoin could crash. 

1. If you trade in bitcoins you still have to find a buyer of them if you want a pizza.  Thus you will have to use a service to exchange your money to dollars on their terms.  If you drive to a bitcoin meet-up you are still wasting gas to do the exchange.  You will have a middleman more often.

2. There is a risk of lost, stolen, or disk failure wallets.  Yes you can lose your wallet in real life, but you usually find it under the bed. 

3. Shops are slow in adjusting prices, if the price rises and their store might have prices that are 2 months old and they seem expensive.   What if prices crash 90% will the shop honor the price?  I doubt it they buy all their materials in USD, CAD, RUB, or EUD.

4. There is no record of exchange.  What if you buy a car and you go to pick it up and there is no car or address?  You are out 10,000 BTC.  If you buy something over the internet even for 1 BTC, if they don't send it you are out of luck.

5. The churning of your hard-drive is already annoying to run the bitcoin client.  If the economy gets 10x bigger that churning is going to be 10x bigger.  Are there any stats to Mb per day you waste on hard disk space?  What about bandwidth?

6. In the end you might have to end up using a bitcoin bank anyways where you store your bitcoins to take the risk out of lost wallets.  Then you run the risk that the goldsmiths, take your money and spend it loans and blow.

7. There is always the risk of someone destroying the network or finding a flaw and taking the system down.  Since BTC could be used for money laundering, it might be a big goal of the governments of the world to take it down.

8. What if people stopped mining BTC, or the euphoria of a deflationary currency would people lose interest in it?

I suppose you say all these are already factored into the price of BTC.