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1. What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. Bit

by bdr 15y ago

1. What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. Bitcoin is facilitating transactions. The Bitcoin economy is growing, slowly. There are a lot of people, including funded startups, working on making it useful in more cases. It's far, far too early to say that Bitcoin isn't facilitating enough transactions. 2. Bitcoin hoarding is not due to the fixed total supply, but due to the expectation that the Bitcoin economy will grow. If there was built-in inflation at 3% and the economy was growing at 20%, hoarding would still happen. 3. No matter how much hoarding is happening, there will be some exchange rate from Bitcoins to dollars. The existence of a traded exchange rate is proof that some people think Bitcoins are not undervalued. These people will be willing to spend their Bitcoins. 4. The claim that Bitcoin is worthless because of guaranteed deflation is self-contradicting. 5. Volatility is bad for a currency, but this is an addressable problem. Bitcoin-priced marketplace The Silk Road offers its sellers currency-hedged escrow. 6. Even if it fails as a currency, Bitcoin is interesting and novel as a technological invention. For the essence, see the last paragraph of Hal Finney's insightful email from 2008 (and the surrounding thread): http://www.mail-archive.com/cryptography@metzdowd.com/msg09996.html http://www.mail-archive.com/cryptography@metzdowd.com/msg099...

shazow 15y ago
Agreed. Couple more points that may not be obvious: 7. Even if Bitcoin is not a useful currency today, not only is it a novel tech invention but it is also a useful medium of exchange (akin to credit cards). You can buy coins temporarily just so you can buy something from Amazon.com and have it shipped to Africa (as one Bitcoin startup does international shipping for many US-only retailers). 8. Bitcoin could be a useful currency someday, but it might take 200 years. What most people don't realize is that all the properties of Bitcoin (such as the maximum supply or its present growth) can be adjusted with a new genesis block at any point (effectively forking the currency). If the majority of the network clients agrees with this fork, Bitcoin continues under the same name. Side note: I remember hearing that Gavin was going to start a non-profit to help guide (read: sort-of regulate) the official Bitcoin fork. Not sure if this happened, I've been out of the loop. 9. There is no way Bitcoin as it is today could reach any kind of significant scale, purely from the perspective of the protocol. Bitcoin was built with the intention of evolving further down the line. This is part of what makes the technology really interesting.
- wmf 15y ago
  7. You can buy coins temporarily just so you can buy something... This is so kludgey that I don't see it as a benefit, and IMO touting it as a benefit just makes Bitcoin look worse. 8. all the properties of Bitcoin can be adjusted if the majority of the network clients agrees with this fork I suspect that there will be many Bitcoin forks, and none of them will take off due to a combination of path dependence (i.e. kooks sticking with "the true Bitcoin") and the paradox of choice.
  - thesteamboat 15y ago
    >> 7. You can buy coins temporarily just so you can buy something... > This is so kludgey that I don't see it as a benefit, and IMO touting it as a benefit just makes Bitcoin look worse. It's a benefit if it can easily add anonymity to transactions under existing currency schemes.

by bdr 15y ago

shazow 15y ago

Agreed. Couple more points that may not be obvious: 7. Even if Bitcoin is not a useful currency today, not only is it a novel tech invention but it is also a useful medium of exchange (akin to credit cards). You can buy coins temporarily just so you can buy something from Amazon.com and have it shipped to Africa (as one Bitcoin startup does international shipping for many US-only retailers). 8. Bitcoin could be a useful currency someday, but it might take 200 years. What most people don't realize is that all the properties of Bitcoin (such as the maximum supply or its present growth) can be adjusted with a new genesis block at any point (effectively forking the currency). If the majority of the network clients agrees with this fork, Bitcoin continues under the same name. Side note: I remember hearing that Gavin was going to start a non-profit to help guide (read: sort-of regulate) the official Bitcoin fork. Not sure if this happened, I've been out of the loop. 9. There is no way Bitcoin as it is today could reach any kind of significant scale, purely from the perspective of the protocol. Bitcoin was built with the intention of evolving further down the line. This is part of what makes the technology really interesting.

wmf 15y ago
7. You can buy coins temporarily just so you can buy something... This is so kludgey that I don't see it as a benefit, and IMO touting it as a benefit just makes Bitcoin look worse. 8. all the properties of Bitcoin can be adjusted if the majority of the network clients agrees with this fork I suspect that there will be many Bitcoin forks, and none of them will take off due to a combination of path dependence (i.e. kooks sticking with "the true Bitcoin") and the paradox of choice.
- thesteamboat 15y ago
  >> 7. You can buy coins temporarily just so you can buy something... > This is so kludgey that I don't see it as a benefit, and IMO touting it as a benefit just makes Bitcoin look worse. It's a benefit if it can easily add anonymity to transactions under existing currency schemes.