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> The rate of money supply increase will be halved in 2013, so don't expect any recovery before then. The value is mostly driven by mass psychology, the inflat

> The rate of money supply increase will be halved in 2013, so don't expect any recovery before then. The value is mostly driven by mass psychology, the inflation caused by miners is only one factor. If some goverment-issued currency would start hyperinflating, bitcoin or similar cryptocurrency would be pretty good choice for people to move to.

tomkarlo 15y ago
So they should jump out of a highly liquid, government-backed security that's proving untrustworthy to go into an experimental currency that's relatively illiquid? I'd think they'd go towards gold, which seems like the opposite direction. If people are jumping out of a printed currency to avoid inflation, they're going to want something where they know it's easy to convert back into something you can buy things with. Jumping into a cryptocurrency for their cash holdings would require they believe that they can easily jump back out.
- jerguismi 15y ago
  Of course it would require more infrastructure around bitcoin. There is already an impressive amount of exchanges, and it would be pretty easy to exchange bitcoins with software like android bitcoin wallet. excellent app btw: https://market.android.com/details?id=de.schildbach.wallet https://market.android.com/details?id=de.schildbach.wallet Gold isn't really a good instrument of exchange. Gold-backed currencies are, but the central issuer has proved problematic historically. Of course cryptocurrency used widespreadly is just a nerd fantasy right now, but I believe in it more than to a new gold standard :)
  - tomkarlo 15y ago
    It's not a matter of infrastructure. It's a matter of belief: people who are looking for safety and refuge from inflation aren't going to move their money into a less-liquid, less-tangible asset with no track record (relative to alternatives.) Moving cash into bitcoin would make sense if there were some inherent advantages: better returns, more liquidity, better privacy, more stable values, faster transactions. So far, I don't really see any of those being offered; it's essentially an experiment, and folks who are using it are either doing to speculatively or for curiosity value, not economic reasons.
    - vrotaru 15y ago
      > people who are looking for safety and refuge from inflation aren't going to move their money into a less-liquid, less-tangible asset with no track record (relative to alternatives.) I will. The point is, at the margin, some people will. All and at once? Never! The more adventurous and tentatively? Yes. Now it all depends on relative outcome of different strategies.

tomkarlo 15y ago

So they should jump out of a highly liquid, government-backed security that's proving untrustworthy to go into an experimental currency that's relatively illiquid? I'd think they'd go towards gold, which seems like the opposite direction. If people are jumping out of a printed currency to avoid inflation, they're going to want something where they know it's easy to convert back into something you can buy things with. Jumping into a cryptocurrency for their cash holdings would require they believe that they can easily jump back out.

jerguismi 15y ago
Of course it would require more infrastructure around bitcoin. There is already an impressive amount of exchanges, and it would be pretty easy to exchange bitcoins with software like android bitcoin wallet. excellent app btw: https://market.android.com/details?id=de.schildbach.wallet https://market.android.com/details?id=de.schildbach.wallet Gold isn't really a good instrument of exchange. Gold-backed currencies are, but the central issuer has proved problematic historically. Of course cryptocurrency used widespreadly is just a nerd fantasy right now, but I believe in it more than to a new gold standard :)
- tomkarlo 15y ago
  It's not a matter of infrastructure. It's a matter of belief: people who are looking for safety and refuge from inflation aren't going to move their money into a less-liquid, less-tangible asset with no track record (relative to alternatives.) Moving cash into bitcoin would make sense if there were some inherent advantages: better returns, more liquidity, better privacy, more stable values, faster transactions. So far, I don't really see any of those being offered; it's essentially an experiment, and folks who are using it are either doing to speculatively or for curiosity value, not economic reasons.
  - vrotaru 15y ago
    > people who are looking for safety and refuge from inflation aren't going to move their money into a less-liquid, less-tangible asset with no track record (relative to alternatives.) I will. The point is, at the margin, some people will. All and at once? Never! The more adventurous and tentatively? Yes. Now it all depends on relative outcome of different strategies.