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Bitcoin has no real use or value. As a means to 'store wealth' - not really. There are 100 other things that make more sense than bitcoin. As a 'medium of exc

Bitcoin has no real use or value. As a means to 'store wealth' - not really. There are 100 other things that make more sense than bitcoin. As a 'medium of exchange' - it will never be a common currency so it has no real value there. (A shopkeeper cannot price his 5% margin Milk in Bitcoins as the price fluctuates too much vis-a-vis the dollar, which he must also price his milk in). The only real advantage of Bitcoin is total privacy, which 99.9% have no problem with, only people doing illegal things generally need this. The small benefit of the fact you can bypass credit card charges etc. is entirely offset by the lack of de-facto security in Bitcoin - although it is 'technically secure' - for the laymen, using it and securely storing 'bitcoins' is not straightforward. That major Bitcoin repos have been hacked is evidence of that. The banks are into 'block chain' because they saw how quickly Bitcoin spread - and they can't afford to not be part of a wave if it happens, but it won't. It's funny that so many of bitcoins backers have absolutely no understanding of finance, currency, monetary policy etc.. It's also funny how ideological people are about bitcoin: " I thought that Bitcoin was similar in many ways to the Internet. The metaphor that I used was that Bitcoin was like email - the first killer app - and that the Bitcoin Blockchain was like The Internet - the infrastructure that was deployed to support it but that could be used for so many other things. I suggested that The Blockchain was to finance" This is not particularly rational. What we need are strong, well backed, resilient and responsibly managed currencies. The only real systematic problem with today's currencies are: A) the oligcarchy of payment systems like visa grafting 1%-ish off the top and B) monetary policy decisions that ultimately favour the banks. It would be nice to get rid of A, but with bitcoin there is no 'monetary policy' and that's a much worse position than having central banks with the ability to do some degree of intervention, even if it's not perfect. The article is a good example of this - everyone talks about technology, but don't bother to even mention finance, likely because they don't have a clue. Fintech of the blockchain sort is in a 'bubble' because bitcoin does not solve any 'problem' for 99% of people. Even in 3rd world countries with scam currencies, the solution will migrate towards simply using the currency of the nearest nation with a credible currency, namely dollars, Euros, and possibly in the future, RMB.

pm90 10y ago
Agree with this. I like the libertarian and anti-government propaganda behind bitcoin, but I suspect few people understand the true benefits of a currency that doesn't fluctuate wildly. Federal institutions of stable democracies like the US, EU, India etc. strive to achieve this stability and its no easy feat. I'm not sure how a currency without a regulating institution would fare but the recent news around bitcoin, ethereum etc doesn't sound very encouraging (although I'm happy with both currencies existing simultaneously).
- Jtsummers 10y ago
  > I suspect few people understand the true benefits of a currency that doesn't fluctuate wildly. I suspect most people understand the true benefits of it. But most people in the US and (Western) Europe have enjoyed the benefits of very stable currencies (measured in decades). Compare this to countries like Argentina which saw 26.7% inflation just last year. See the price correction happen where your grocery store suddenly jumps up the prices on your food from $10 to $12 just to account for inflation. Then wait for your paychecks to catch up. Then your employer is stuck deciding if they have to let people go (may not be simple in some countries) or desperately seek other cost savings and methods of revenue increase. This leads, potentially, to further price increases on consumer goods, requiring further pay increases to be able to maintain basic consumption, leading to more pressure on employers, etc. Deflation has its own downward spiral once it gets past a small percentage.
  - jomamaxx 10y ago
    The 'solution' to bad currency policy is simply to use a currency that is well managed. Some small Caribbean islands use USD exclusively. After their national crises, Iceland almost switched to using Canadian dollars. The 'black market' economy in Venezueala works on USD, as it does in many parts of the world. So long as they are established currencies with widespread use and liquidity - we don't need bitcoin. The most 'legit' currency in the world today is probably the Euro. It's the only currency backed by real assets. The reason for this is because no European country can fully trust the other. Ergo - hard currency. Next would be Scandinavian countries, Canada, UK etc. The Fed is not the most trusted entity, but due to the massive and widespread adoption of the USD, they have a kind of 'seignorage' and strategic backing (Oil prices etc.) - and so it's kind of 'de facto' a very good currency. The Yen would be up there as well but the Bank of Japan has been doing crazy things to fight deflation and so it's risky for outsiders to own.

pm90 10y ago

Agree with this. I like the libertarian and anti-government propaganda behind bitcoin, but I suspect few people understand the true benefits of a currency that doesn't fluctuate wildly. Federal institutions of stable democracies like the US, EU, India etc. strive to achieve this stability and its no easy feat. I'm not sure how a currency without a regulating institution would fare but the recent news around bitcoin, ethereum etc doesn't sound very encouraging (although I'm happy with both currencies existing simultaneously).

Jtsummers 10y ago
> I suspect few people understand the true benefits of a currency that doesn't fluctuate wildly. I suspect most people understand the true benefits of it. But most people in the US and (Western) Europe have enjoyed the benefits of very stable currencies (measured in decades). Compare this to countries like Argentina which saw 26.7% inflation just last year. See the price correction happen where your grocery store suddenly jumps up the prices on your food from $10 to $12 just to account for inflation. Then wait for your paychecks to catch up. Then your employer is stuck deciding if they have to let people go (may not be simple in some countries) or desperately seek other cost savings and methods of revenue increase. This leads, potentially, to further price increases on consumer goods, requiring further pay increases to be able to maintain basic consumption, leading to more pressure on employers, etc. Deflation has its own downward spiral once it gets past a small percentage.
- jomamaxx 10y ago
  The 'solution' to bad currency policy is simply to use a currency that is well managed. Some small Caribbean islands use USD exclusively. After their national crises, Iceland almost switched to using Canadian dollars. The 'black market' economy in Venezueala works on USD, as it does in many parts of the world. So long as they are established currencies with widespread use and liquidity - we don't need bitcoin. The most 'legit' currency in the world today is probably the Euro. It's the only currency backed by real assets. The reason for this is because no European country can fully trust the other. Ergo - hard currency. Next would be Scandinavian countries, Canada, UK etc. The Fed is not the most trusted entity, but due to the massive and widespread adoption of the USD, they have a kind of 'seignorage' and strategic backing (Oil prices etc.) - and so it's kind of 'de facto' a very good currency. The Yen would be up there as well but the Bank of Japan has been doing crazy things to fight deflation and so it's risky for outsiders to own.