Topic: The WikiLeaks of Money - Is Bitcoin a revolution or a bubble? (Read 1238 times)
It's a bubbly revolution
They said similar things about the internet itself. The dotcom bubble speculated about the value of websites to create commerce, but few websites became profitable. Certain niche markets did become very successful initially, then other markets eventually began to follow. Bitcoins can become the defacto currency of the internet once someone figures which niches will lead the way.
Is it a revolution?
- Sort of. In some ways it's just a continuation of trends that have been going on for years (once we traded in gold, then in representations of gold stored in bank vaults (coins and notes), then the gold was taken away and we traded representations of bank promises (coins and notes after moving from the gold standard), then we traded in bits representing the promises the banks made (electronic banking) and bitcoin simply takes away the banks. But then most revolutions are just evolutions of what has gone before.
Is it a bubble?
- If it's revolutionary then there will almost certainly be a bubble related to it. Once the bubble bursts and people stop valuing Bitcoin based on how valuable it will be in the future and start valuing it on what it is capable of now then we'll see if it's a technology which will last or not.
- Sort of. In some ways it's just a continuation of trends that have been going on for years (once we traded in gold, then in representations of gold stored in bank vaults (coins and notes), then the gold was taken away and we traded representations of bank promises (coins and notes after moving from the gold standard), then we traded in bits representing the promises the banks made (electronic banking) and bitcoin simply takes away the banks. But then most revolutions are just evolutions of what has gone before.
Is it a bubble?
- If it's revolutionary then there will almost certainly be a bubble related to it. Once the bubble bursts and people stop valuing Bitcoin based on how valuable it will be in the future and start valuing it on what it is capable of now then we'll see if it's a technology which will last or not.
"If Bitcoin becomes widely used, crimes like identity theft will be much harder" -- because transactions are tracked by the distributed server
This is one I personally hadn't considered, and is an excellent point. It will help promote BTC to freinds/family. With the old banking ways, consumers have very little control over their risk of identity theft. One sloppy merchant/bank/credit card company, and your details are in the hands of criminals. The best you can do is be wary of this and monitor your credit report. Possible in theory, but most of us I expect are too lazy. With BTC, the power and responsibility to be secure with our money or not is in our hands. 
It's a revolutionary bubble.
3 page article that can easily be your link to throw out to people to help them catch up with Bitcoin http://www.foreignpolicy.com/articles/2011/06/23/the_wikileaks_of_money
For something that few had heard of a month ago, the online currency Bitcoin tends to elicit pretty strong responses. Depending on whom you ask, Bitcoin is the "future of money," a "crypto-geek Ponzi scheme," an "online form of money laundering," or a tool for "libertarian hipsters and criminals."
The publicity has not been kind to Bitcoin, which has faced attacks from law enforcement, hackers, and cybercriminals alike. The currency's value has seen several sharp fluctuations. Early supporters appear to have lost confidence, and U.S. lawmakers are starting to ask tough questions. But shutting down Bitcoin may prove more difficult than its critics hope. And whether or not the experiment succeeds, its rise may herald the emergence of a new form of decentralized currency trading.
The above was the intro, here are some notable quotes
Full 3 page article at http://www.foreignpolicy.com/articles/2011/06/23/the_wikileaks_of_money
For something that few had heard of a month ago, the online currency Bitcoin tends to elicit pretty strong responses. Depending on whom you ask, Bitcoin is the "future of money," a "crypto-geek Ponzi scheme," an "online form of money laundering," or a tool for "libertarian hipsters and criminals."
The publicity has not been kind to Bitcoin, which has faced attacks from law enforcement, hackers, and cybercriminals alike. The currency's value has seen several sharp fluctuations. Early supporters appear to have lost confidence, and U.S. lawmakers are starting to ask tough questions. But shutting down Bitcoin may prove more difficult than its critics hope. And whether or not the experiment succeeds, its rise may herald the emergence of a new form of decentralized currency trading.
The above was the intro, here are some notable quotes
Quote
What makes Bitcoin unique is its peer-to-peer structure. There's no start-up company or central authority that can go out of business or be shut down by the police. Bitcoins can be purchased through online exchanges by wiring money from your bank account, and there are also sites that will provide users with a few free coins to get started.
Quote
But for its advocates, Bitcoin is nothing less than revolutionary: What peer-to-peer file-sharing did for music and movies, and WikiLeaks did for government secrets, they say, Bitcoin will do to the global economy.
Quote
"The swings are ridiculously large compared to any normal market. It's a gutsy day-trader's wet dream," he said. "This is currency trading on Internet time."
Quote
"All currencies are used by criminals. Bitcoin is no different," Andresen says. "If Bitcoin becomes widely used, crimes like identity theft will be much harder" -- because transactions are tracked by the distributed server -- "while others, like avoiding cross-border capital flow regulations, will become easier."
Quote
The disruptive power of Bitcoin on banks and central governments has surely been overstated, but these institutions might be better served to take its emergence as a warning rather than a reassurance: They may not be the only game in town forever.
Full 3 page article at http://www.foreignpolicy.com/articles/2011/06/23/the_wikileaks_of_money
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