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Bitcoin itself is rare, but cryptocurrency as a whole is not because it's easy to create another blockchain.

aviv 9y ago
This right there is exactly why long term it's doomed and cannot be a reliable store of value. You don't see banks and random geeks inventing new precious metals out of thin air. So you have gold, silver, platinum and palladium and that's about it as far as store of values are concerned.
- stinkytaco 9y ago
  I mean, I suppose anyone can create a currency out of thin air. In fact, I'd wager there's hundreds of currencies, as nearly every sovereign state has one. It's not meant to be a store of value, which is why this bubble will burst, but that doesn't mean it's doomed. It has the characteristics of a currency: 1. scarce. 2. useful.
  - vec 9y ago
    But not 3. fast and easy to transfer ownership of or 4. stable in value over time. Plenty of things (houses, human toes, pre-release copies of films, etc.) Are both scarce and useful without also being good candidates for a medium of exchange.
    - stinkytaco 9y ago
      Fair enough, but Bitcoin certainly can be either of those things, even if it's not right now. History shows us any currency can have those problems. Inflation can become so high that as a medium of exchange it's pointless. It can become so unstable in value that people use something else. Bitcoin is no panacea, but the "fake money" argument seems misplaced to me. It's current failings are not failings of crypto-currency in general.
      - vec 9y ago
        Paying for a $5 cup of coffee with a debt card takes about 10 seconds and invites about $0.10 in transaction fees. Paying in physical currency is even faster and costs approximately $0. According to https://bitcoinexchangerate.org/fees https://bitcoinexchangerate.org/fees, getting a single transaction committed within the next hour costs just under $50. I've heard plenty of ideas to make the Bitcoin network a little cheaper or a little faster. Occasionally both! I've yet to hear a good theory for how the Bitcoin network can ever get both 500x cheaper and 500x faster.
- sowbug 9y ago
  Same is true about Facebook. Someone could clone the features and create facebook2.com, and everyone would flock to it. That's why Facebook stock is a Ponzi scheme. Anyone who thinks Facebook has a value above $0 is insane.
  - aviv 9y ago
    Nope. People use Facebook. People simply don't use Bitcoin for payments or any other use that benefits from its "network effect".
    - Klathmon 9y ago
      Look, i'm not convinced that bitcoin is worth the price it's at right even right now either, but that's just not true. The network effect is extremely strong in the cryptocurrency space. Everything in the cryptocurrency space supports bitcoin, and fractions of everything support anything else. Payment processors, exchanges, hardware wallets, software wallets, secure storage and backup systems, etc... All of it is focused on bitcoin first, and adds others later (if ever). If you want to buy or sell bitcoin, you've got tons of repudible options, you want to buy or sell monero? You've got 1/3 of the options, and most of them are small and shady or don't deal with fiat currencies in any way. If that's not a network effect, I don't know what is.
      - aviv 9y ago
        One could argue the exact opposite - that all the infrastructure around Bitcoin makes it an inferior store of value. For example, the fact that Litecoin does not (yet) have ETFs and other financial vehicles that can be used to manipulate its price without actually dealing with "physical" Litecoins, makes it a more stable store of value.
    - sowbug 9y ago
      Speak for yourself. We do. It took a while for 28.8K modems to catch up with bandwidth needs, and that's part of the reason people thought the internet sucked and was a joke compared to all its promises. I think even today people snort about pets.com as the poster child of the dot-com boom. Then their Amazon Pantry order arrives, which they consume without irony.
- spraak 9y ago
  Those metals are only valuable because because people agree that they are. The price of gold etc. is just as inherently meaningless as BTC etc.

aviv 9y ago

This right there is exactly why long term it's doomed and cannot be a reliable store of value. You don't see banks and random geeks inventing new precious metals out of thin air. So you have gold, silver, platinum and palladium and that's about it as far as store of values are concerned.

stinkytaco 9y ago
I mean, I suppose anyone can create a currency out of thin air. In fact, I'd wager there's hundreds of currencies, as nearly every sovereign state has one. It's not meant to be a store of value, which is why this bubble will burst, but that doesn't mean it's doomed. It has the characteristics of a currency: 1. scarce. 2. useful.
- vec 9y ago
  But not 3. fast and easy to transfer ownership of or 4. stable in value over time. Plenty of things (houses, human toes, pre-release copies of films, etc.) Are both scarce and useful without also being good candidates for a medium of exchange.
  - stinkytaco 9y ago
    Fair enough, but Bitcoin certainly can be either of those things, even if it's not right now. History shows us any currency can have those problems. Inflation can become so high that as a medium of exchange it's pointless. It can become so unstable in value that people use something else. Bitcoin is no panacea, but the "fake money" argument seems misplaced to me. It's current failings are not failings of crypto-currency in general.
    - vec 9y ago
      Paying for a $5 cup of coffee with a debt card takes about 10 seconds and invites about $0.10 in transaction fees. Paying in physical currency is even faster and costs approximately $0. According to https://bitcoinexchangerate.org/fees https://bitcoinexchangerate.org/fees, getting a single transaction committed within the next hour costs just under $50. I've heard plenty of ideas to make the Bitcoin network a little cheaper or a little faster. Occasionally both! I've yet to hear a good theory for how the Bitcoin network can ever get both 500x cheaper and 500x faster.
sowbug 9y ago
Same is true about Facebook. Someone could clone the features and create facebook2.com, and everyone would flock to it. That's why Facebook stock is a Ponzi scheme. Anyone who thinks Facebook has a value above $0 is insane.
- aviv 9y ago
  Nope. People use Facebook. People simply don't use Bitcoin for payments or any other use that benefits from its "network effect".
  - Klathmon 9y ago
    Look, i'm not convinced that bitcoin is worth the price it's at right even right now either, but that's just not true. The network effect is extremely strong in the cryptocurrency space. Everything in the cryptocurrency space supports bitcoin, and fractions of everything support anything else. Payment processors, exchanges, hardware wallets, software wallets, secure storage and backup systems, etc... All of it is focused on bitcoin first, and adds others later (if ever). If you want to buy or sell bitcoin, you've got tons of repudible options, you want to buy or sell monero? You've got 1/3 of the options, and most of them are small and shady or don't deal with fiat currencies in any way. If that's not a network effect, I don't know what is.
    - aviv 9y ago
      One could argue the exact opposite - that all the infrastructure around Bitcoin makes it an inferior store of value. For example, the fact that Litecoin does not (yet) have ETFs and other financial vehicles that can be used to manipulate its price without actually dealing with "physical" Litecoins, makes it a more stable store of value.
  - sowbug 9y ago
    Speak for yourself. We do. It took a while for 28.8K modems to catch up with bandwidth needs, and that's part of the reason people thought the internet sucked and was a joke compared to all its promises. I think even today people snort about pets.com as the poster child of the dot-com boom. Then their Amazon Pantry order arrives, which they consume without irony.
spraak 9y ago
Those metals are only valuable because because people agree that they are. The price of gold etc. is just as inherently meaningless as BTC etc.