Topic: Why the claim that copycat currencies are a threat to Bitcoin is a nonargument (Read 1137 times)

I dunno what businesses you know of, but the businesses I know of have an inventory sheet.

The value of a currency has absolutely nothing to do with value and everything to do with confidence.

Anyone who thinks that fiat actually has a measure of value in goods tagged to it in some ledger somewhere is a fool.

You're confusing currency with collector's items.

At some point in the future, the currency is either traded for a different currency or good.

At the moment Bitcoin seems like a good investment or a hold at least, but I am conscious that it is one press release away from another major correction.

I think some Starbucks baristas accept Bitcoin as payment,  some even accept Dogecoin, which is fair enough, but does that do anything for Starbucks other than offer a few customers another payment option, especially if the coffee shop across the road also accepts your coins?  What if, instead you had a Starbucks coin, designed with the needs of Starbucks in mind such as fast payment.  It would allow customers another means of digital payment and could be used to promote customer loyalty.  With limited use outside of Starbucks any volatility would also be hugely reduced or to a large degree controlled by the company itself   

I just can't see many arguments for companies not to at least try this experimentally this year.  The cost of entry for a large organisation is very small and would guarantee massive amounts of free press even if it didn't take off.

Yep, sell and hold off is your strategy.

Should Google or Paypal, Amazon, Valve, Facebook or maybe a coalition of Banking interests, possibly even Visa/Amex announce the release of their own crypto currency, the price of Bitcoin will drop like a stone.  These companies already have the infrastructure in place for exchanging virtual coins for normal currency and would in any case be quickly picked up by other exchanges.  We can question how likely any of these organisations are to enter the market, but I see that as more likely than any of them accepting Bitcoin.

I am starting to think that Bitcoin will act as the development engine of the crypto world. Very useful, but more as an adjunct to other commercial offerings than a dominant player.

Nope, it is the users' wish to hold that currency.

The value of a currency is the value of goods or currency that are demanded for the currency minus the transaction costs of that currency. These transaction costs tend to be so small that they may as well be ignored for established currencies.

Take for instance, paper money. Anyone can actually design and print paper money. Ignoring instances where people attempt to copy money, unique paper currencies not issued by a government are valueless for one reason: people are less likely to accept them, and it is more difficult to transmit them across vast geographic distances (no banks, no cheque clearinghouse). Both increase transaction costs, if one accepts the paper money, in order to purchase intermediate goods or pay for labor, one can either pay for it in paper money (which wouldn't be accepted), or exchange it for government money (which would be accepted).

You might note that there is a tautology there, value is linked to what you can exchange a currency for minus the transaction costs. If you can't exchange a currency for anything, then the transaction costs are high, and those high transaction costs will discourage people from accepting it because the currency has low value. The reverse will also be true. This is what gives the American dollar it's high value, that as well as the ability to pay taxes with it.

Now lets compare ACoin to BCoin. ACoin is accepted at as many places as American Express. BCoin is a new currency. ACoin can be exchanged for hard currency. You have to exchange BCoin for ACoin to get to government money. Which would you use?