Is Buffet right or wrong? - page 10.

Kazimir

legendary

Activity: 1176

Merit: 1003

example 3
Person a pays x for £100 worth of US$ which is sent to person b. Person B trades the US$ with person x receives £100.

Thus US$ is merely a less efficient variant of Bitcoin.

Quote from: equinox9 on March 16, 2014, 02:49:07 PM

i.e why would anyone pay £350just to hold what is essentially the right to send a transfer.

Essentially, this is exactly what ALL money is.

Kenshin

sr. member

Activity: 280

Merit: 250

He is wrong. Just like he was wrong about Microsoft and Facebook.

equinox9

newbie

Activity: 40

Merit: 0

Bitcoin is essentially a modern moneygram.

This example is based on bitcoin maintaining price stability which is likely to occur when widely adopted.

example1
Person A pays x for a £100 money gram to which is sent to Person B. Person B trades the money gram to x and receives £100. The money gram is now worthless and disgarded. Person x charged £2.50 for holding and releasing the fiat currency.

example 2
Person a pays x for £100 worth of Bitcoin to which is sent to person b.Person B trades the bitcoin with person x and receives £100. Person x retains the bitcoin and is free to trade again.

The only difference between the two is that in example 2 the transfer method is reused in other transaction. i.e the bitcoin continues to be used and owned by new people. Wheras in example 1 the moneygram is destroyed at the end of the transaction. A new one is printed for a new transaction.

So despite the obvious advantage in speed and it being free...what gives the bitcoin any more value than a single money gram? i.e why would anyone pay £350just to hold what is essentially the right to send a transfer.

Any comments?

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