Quote
Bitcoin, however, does not require "everything to believe in it completely and abandon their dollars." All it requires to be successful is people, at the margins, to give it a try. Dollars and BTC are not an either-or proposition.
+1
Topic: Only one of many reasons why bitcoins wont fail (Read 1854 times)
hero member
Activity: 836
Merit: 1007
"How do you eat an elephant? One bit at a time..."
+1
The problem is that no rational person would want to keep their life savings in Bitcoin right now. It's way too volatile. If you can't go on vacation for a week without having to check MtGox every hour, people are going to convert them to USD pretty quickly.
No rational person would want to keep their life savings in any one thing, ever. Diversify!
And cutting edge technology is not the place for savings of any kind. Anyone even thinking about putting savings into Bitcoin is absurdly foolish. Bitcoin is perhaps the most speculative and volatile financial instrument out there.
Bitcoin, however, does not require "everything to believe in it completely and abandon their dollars." All it requires to be successful is people, at the margins, to give it a try. Dollars and BTC are not an either-or proposition.
The problem is that no rational person would want to keep their life savings in Bitcoin right now. It's way too volatile. If you can't go on vacation for a week without having to check MtGox every hour, people are going to convert them to USD pretty quickly.
I know that bitcoin won't fail because there are enough smart people in the room that can see through all the disinformation spreading on the forum nowadays.
Agreed.
I'm with bitcoin until the very end. Whether that means it withering to two nodes or blossoming to millions.
+1
“I’ve never had a real job,” Geithner told his interviewer ... “I’ve only worked in public service. I live for this work.”
Treasury Secretary Geithner considering leaving post after debt talks
http://www.washingtonpost.com/business/economy/treasury-secretary-geithner-considering-leaving-post-after-debt-talks/2011/06/30/AGd682sH_story.html
Treasury Secretary Geithner considering leaving post after debt talks
http://www.washingtonpost.com/business/economy/treasury-secretary-geithner-considering-leaving-post-after-debt-talks/2011/06/30/AGd682sH_story.html
I know that bitcoin won't fail because there are enough smart people in the room that can see through all the disinformation spreading on the forum nowadays.
Agreed.
I'm with bitcoin until the very end. Whether that means it withering to two nodes or blossoming to millions.
I know that bitcoin won't fail because there are enough smart people in the room that can see through all the disinformation spreading on the forum nowadays.
Failure to raise the debt ceiling could cause the government to default on its debt payments, something unprecedented in U.S. history.
The government IS defaulting on its payments already. It merely prints money and buy treasury debt, thereby devaluing the dollars with which it pays of its creditors. That is a de facto default by any honest accounting measure.
This form is default is called "quantitative easing" so that it sounds fancy and all econ-like.
hero member
Activity: 836
Merit: 1007
"How do you eat an elephant? One bit at a time..."
I wrote the following response to another thread (http://forum.bitcoin.org/index.php?topic=26103.0) that I think has relevance here:
The average customer needs to have a compelling reason to use bitcoin for purchases. Here are few reasons that "could" motivate him:
1. He values the privacy of a bitcoin transaction
2. He prefers to hold his money in his own personal "bank" (wallet) instead of at a traditional (fractional reserve) bank
3. There is a major loss of confidence in his nation's currency
4. He feels that bitcoin is a better store of value than his national currency
5. The vendor offers a discount for customers who pay with bitcoin - (key strategy for vendors who prefer bitcoin!)
6. He likes the "ease of storage" feature of bitcoin
7. He likes the portability feature of bitcoin (especially across national borders)
8. He has philosophical reasons (prefers free-market money over central-planner money)
As noted in the previous post, there doesn't need to be 100% acceptance of bitcoin for everyday exchanges in order for it to be useful. Consider that gold is primarily valued as a "store of value" but that it is not used in everyday exchanges/purchases in any meaningful way. The question then becomes, are bitcoin's features valued enough that people will trade national currencies (and other assets) for them? I think this question has already been answered in the affirmative by the market. The next major question, in my opinion, is how will attacks from nation states effect bitcoin's value? If it is forced into the black market will it's price go up, as is in the case of illegal drugs, or will its value drop due to fear of prosecution?
The average customer needs to have a compelling reason to use bitcoin for purchases. Here are few reasons that "could" motivate him:
1. He values the privacy of a bitcoin transaction
2. He prefers to hold his money in his own personal "bank" (wallet) instead of at a traditional (fractional reserve) bank
3. There is a major loss of confidence in his nation's currency
4. He feels that bitcoin is a better store of value than his national currency
5. The vendor offers a discount for customers who pay with bitcoin - (key strategy for vendors who prefer bitcoin!)
6. He likes the "ease of storage" feature of bitcoin
7. He likes the portability feature of bitcoin (especially across national borders)
8. He has philosophical reasons (prefers free-market money over central-planner money)
As noted in the previous post, there doesn't need to be 100% acceptance of bitcoin for everyday exchanges in order for it to be useful. Consider that gold is primarily valued as a "store of value" but that it is not used in everyday exchanges/purchases in any meaningful way. The question then becomes, are bitcoin's features valued enough that people will trade national currencies (and other assets) for them? I think this question has already been answered in the affirmative by the market. The next major question, in my opinion, is how will attacks from nation states effect bitcoin's value? If it is forced into the black market will it's price go up, as is in the case of illegal drugs, or will its value drop due to fear of prosecution?
Why bitcoins?
Because:
U.S. Hits the Debt Ceiling: What Does It All Mean?
Failure to raise the debt ceiling could cause the government to default on its debt payments, something unprecedented in U.S. history.
In a statement released Monday, Treasury Secretary Tim Geithner warned such an outcome will result in "catastrophic economic consequences for citizens."
http://finance.yahoo.com/blogs/daily-ticker/u-hits-debt-ceiling-does-mean-201846202.html
Wow, that means the his resignation comes very timely. For him...Because:
U.S. Hits the Debt Ceiling: What Does It All Mean?
Failure to raise the debt ceiling could cause the government to default on its debt payments, something unprecedented in U.S. history.
In a statement released Monday, Treasury Secretary Tim Geithner warned such an outcome will result in "catastrophic economic consequences for citizens."
http://finance.yahoo.com/blogs/daily-ticker/u-hits-debt-ceiling-does-mean-201846202.html
Failure to raise the debt ceiling could cause the government to default on its debt payments, something unprecedented in U.S. history.
The US was practically bankrupt more than once over the last century (1933, 1971).
I don't see the point in calling what happens now unprecedented.
http://en.wikipedia.org/wiki/National_bankruptcy
Well the basic fact is that ALL fiat currencies are printed to such an extent that there is always inflation. With bitcoin the currency can actually increase in value. If bitcoin were a fiat currency this would NEVER happen. Just imagine going to mtgox. The first day: $1.00/bitcoin, the next day $.95/bitcoin, the following day $.90/bitcoin etc etc etc. When you hold fiat currency, this is what is happening to your wealth. The wealth is being transferred to those who print the money.
With bitcoin the price can actually go up which is amazing for a currency. Thats something that only tangible assets do and that is so because those assets are inherently limited to something.
The simple fact that bitcoin has a limited supply, and controlled growth rate makes it 1000x better than fiat.
Also even if bitcoin doesn't go mainstream, the people who hold bitcoin are much better off since they can easily convert their btc to fiat and vice versa. We all have to keep some amount of cash reserves on hand to pay bills. Normally this would be saved in fiat, which always loses its value. However, with bitcoin you can now transfer some of those cash reserves into bitcoin so atleast it maintains its value.
With bitcoin the price can actually go up which is amazing for a currency. Thats something that only tangible assets do and that is so because those assets are inherently limited to something.
The simple fact that bitcoin has a limited supply, and controlled growth rate makes it 1000x better than fiat.
Also even if bitcoin doesn't go mainstream, the people who hold bitcoin are much better off since they can easily convert their btc to fiat and vice versa. We all have to keep some amount of cash reserves on hand to pay bills. Normally this would be saved in fiat, which always loses its value. However, with bitcoin you can now transfer some of those cash reserves into bitcoin so atleast it maintains its value.
When you hold bitcoins (currently) your wealth is being transferred to those who print money: miners. Right now the monetary inflation of bitcoin is ~40% annually. The interesting difference lies in how the inflation is distributed and how transparent the process is.
Yes, the wealth is being transferred to miners and those who hold existing bitcoins. Also yes, the inflation is 40% but the difference is the fact that bitcoin is a controlled/predictable rate of expansion. BTC is going up in value due to more people using it. With fiat currency the objective of the central banks is to never have deflation of the currency, only inflation. With BTC that doesn't occur and hence the reason btc has deflation.
Well the basic fact is that ALL fiat currencies are printed to such an extent that there is always inflation. With bitcoin the currency can actually increase in value. If bitcoin were a fiat currency this would NEVER happen. Just imagine going to mtgox. The first day: $1.00/bitcoin, the next day $.95/bitcoin, the following day $.90/bitcoin etc etc etc. When you hold fiat currency, this is what is happening to your wealth. The wealth is being transferred to those who print the money.
With bitcoin the price can actually go up which is amazing for a currency. Thats something that only tangible assets do and that is so because those assets are inherently limited to something.
The simple fact that bitcoin has a limited supply, and controlled growth rate makes it 1000x better than fiat.
Also even if bitcoin doesn't go mainstream, the people who hold bitcoin are much better off since they can easily convert their btc to fiat and vice versa. We all have to keep some amount of cash reserves on hand to pay bills. Normally this would be saved in fiat, which always loses its value. However, with bitcoin you can now transfer some of those cash reserves into bitcoin so atleast it maintains its value.
With bitcoin the price can actually go up which is amazing for a currency. Thats something that only tangible assets do and that is so because those assets are inherently limited to something.
The simple fact that bitcoin has a limited supply, and controlled growth rate makes it 1000x better than fiat.
Also even if bitcoin doesn't go mainstream, the people who hold bitcoin are much better off since they can easily convert their btc to fiat and vice versa. We all have to keep some amount of cash reserves on hand to pay bills. Normally this would be saved in fiat, which always loses its value. However, with bitcoin you can now transfer some of those cash reserves into bitcoin so atleast it maintains its value.
When you hold bitcoins (currently) your wealth is being transferred to those who print money: miners. Right now the monetary inflation of bitcoin is ~40% annually. The interesting difference lies in how the inflation is distributed and how transparent the process is.
Well the basic fact is that ALL fiat currencies are printed to such an extent that there is always inflation. With bitcoin the currency can actually increase in value. If bitcoin were a fiat currency this would NEVER happen. Just imagine going to mtgox. The first day: $1.00/bitcoin, the next day $.95/bitcoin, the following day $.90/bitcoin etc etc etc. When you hold fiat currency, this is what is happening to your wealth. The wealth is being transferred to those who print the money.
With bitcoin the price can actually go up which is amazing for a currency. Thats something that only tangible assets do and that is so because those assets are inherently limited to something.
The simple fact that bitcoin has a limited supply, and controlled growth rate makes it 1000x better than fiat.
Also even if bitcoin doesn't go mainstream, the people who hold bitcoin are much better off since they can easily convert their btc to fiat and vice versa. We all have to keep some amount of cash reserves on hand to pay bills. Normally this would be saved in fiat, which always loses its value. However, with bitcoin you can now transfer some of those cash reserves into bitcoin so atleast it maintains its value.
With bitcoin the price can actually go up which is amazing for a currency. Thats something that only tangible assets do and that is so because those assets are inherently limited to something.
The simple fact that bitcoin has a limited supply, and controlled growth rate makes it 1000x better than fiat.
Also even if bitcoin doesn't go mainstream, the people who hold bitcoin are much better off since they can easily convert their btc to fiat and vice versa. We all have to keep some amount of cash reserves on hand to pay bills. Normally this would be saved in fiat, which always loses its value. However, with bitcoin you can now transfer some of those cash reserves into bitcoin so atleast it maintains its value.
Why bitcoins?
Because:
U.S. Hits the Debt Ceiling: What Does It All Mean?
Failure to raise the debt ceiling could cause the government to default on its debt payments, something unprecedented in U.S. history.
In a statement released Monday, Treasury Secretary Tim Geithner warned such an outcome will result in "catastrophic economic consequences for citizens."
http://finance.yahoo.com/blogs/daily-ticker/u-hits-debt-ceiling-does-mean-201846202.html
Because:
U.S. Hits the Debt Ceiling: What Does It All Mean?
Failure to raise the debt ceiling could cause the government to default on its debt payments, something unprecedented in U.S. history.
In a statement released Monday, Treasury Secretary Tim Geithner warned such an outcome will result in "catastrophic economic consequences for citizens."
http://finance.yahoo.com/blogs/daily-ticker/u-hits-debt-ceiling-does-mean-201846202.html
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