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I'm seeing a lot of posts on HN supportive of Bitcoin, and honestly, I just don't get it. Someone explain. 1) I don't see that Bitcoin can escape any boom-bus

I'm seeing a lot of posts on HN supportive of Bitcoin, and honestly, I just don't get it. Someone explain. 1) I don't see that Bitcoin can escape any boom-bust cycle. I don't. Arguably the dollar can't either, but I think that's part of my point: that's with people _trying_ to regulate it. Bitcoin ultimately has a finite economy, which means that it's only stable if it is constantly deflationary (unless the population size stays the same I guess? I'm not going to make _that_ assumption) and _that_ motivates hoarding, which locks down currency. You can _maybe_ construct some differential equation where the amount of hoarding is balanced out by the amount of 'cashing out' as people give up hoarding to spend freely, but that's a _heck_ of a wild guess to base a currency on. And anything _less than that perfection_ will inevitably result in boom-bust: freeze until you sell your dough, therefore simultaneous motivation to sell, therefore flooding of market, therefore crash. Which tangentially brings up: 2) In the above example, Bitcoin is (like any other currency) a surrogate of value for the things you can _do_ with it, which tells us that value lies outside of currency altogether and that currency is just a measuring stick. And therefore... 3) Bitcoin is essentially _still_ a fiat currency, but without the benefits of, you know, a significant support base. Sorry, you can go into almost any bank in the world and exchange an American dollar for local coin. I'd rather just _abolish money_ than supplant it with even _more_ imaginary money. Sure, some counterculture activity subsists on Bitcoin. Sure, it's a neat thought experiment. But I can't see it becoming practical (read: successful).

gregschlom 15y ago
> But I can't see it becoming practical (read: successful). And to add one more point: if it were to become successful, governments would likely make it illegal. Yes, it's decentralized, but they could still sue random people for using it, just like with people downloading music. So, yes, neat thought experiment, revolutionary idea, but very unlikely to be used by more than a handful of people.
- vectorpush 15y ago
  I feel like this is the real achilies' heel of bitcoin. Once governments start losing tax revenue they're going to pull out all the stops. Beyond that, US law enforcement is already concerned with bitcoin because of its use in drug trafficking, online poker, and other dubious crimes then you add in the omnipotent banking lobby who have an obvious agenda to assert. I can't imagine a world where a successful bitcoin would be allowed to thrive.
- jasonzemos 15y ago
  This is just the kind of thinking (nonsense) that will continue to relegate bitcoin out of the mainstream. It makes no sense from a legislative standpoint to make the actual 'system' of bitcoin illegal, instead, your income and unreported transactions will violate tax codes. Law enforcement will pursue those violations, not the system of bitcoin itself. This is the same as law enforcement currently pursuing people downloading illegal content from torrents, not people using torrents for legitimate purposes.
weavejester 15y ago
Bitcoin starts to make more sense when you realise that it is an open protocol for transferring and manipulating wealth, in the same way that HTTP is an open protocol for transferring and manipulating data.
- ohashi 15y ago
  Is it? It's incredibly unstable and has a tiny pool of buyers/sellers, that makes it a terrible characteristic for wealth transfer.
  - weavejester 15y ago
    Why? The long term stability of the currency is irrelevant if you're just using bitcoins as a temporary intermediary, as the exchange rate only has to be remain constant for the time taken to verify a transaction.
    - ohashi 15y ago
      Because with such a tiny market you cannot actually move a lot of wealth without influencing the value of the currency itself.
      - weavejester 15y ago
        But that would only be a problem if you wanted to move large amounts of wealth infrequently. If you only wanted to move small amounts of wealth frequently (like Paypal), then there wouldn't be any problem.
        ohashi 15y ago
        Your argument basically boils down to: it's a toy 'currency,' is that really the best argument you can make? If so, this really isn't worth discussing because it's a joke.
        15y ago

gregschlom 15y ago

> But I can't see it becoming practical (read: successful). And to add one more point: if it were to become successful, governments would likely make it illegal. Yes, it's decentralized, but they could still sue random people for using it, just like with people downloading music. So, yes, neat thought experiment, revolutionary idea, but very unlikely to be used by more than a handful of people.

vectorpush 15y ago
I feel like this is the real achilies' heel of bitcoin. Once governments start losing tax revenue they're going to pull out all the stops. Beyond that, US law enforcement is already concerned with bitcoin because of its use in drug trafficking, online poker, and other dubious crimes then you add in the omnipotent banking lobby who have an obvious agenda to assert. I can't imagine a world where a successful bitcoin would be allowed to thrive.
jasonzemos 15y ago
This is just the kind of thinking (nonsense) that will continue to relegate bitcoin out of the mainstream. It makes no sense from a legislative standpoint to make the actual 'system' of bitcoin illegal, instead, your income and unreported transactions will violate tax codes. Law enforcement will pursue those violations, not the system of bitcoin itself. This is the same as law enforcement currently pursuing people downloading illegal content from torrents, not people using torrents for legitimate purposes.

weavejester 15y ago

Bitcoin starts to make more sense when you realise that it is an open protocol for transferring and manipulating wealth, in the same way that HTTP is an open protocol for transferring and manipulating data.

ohashi 15y ago
Is it? It's incredibly unstable and has a tiny pool of buyers/sellers, that makes it a terrible characteristic for wealth transfer.
- weavejester 15y ago
  Why? The long term stability of the currency is irrelevant if you're just using bitcoins as a temporary intermediary, as the exchange rate only has to be remain constant for the time taken to verify a transaction.
  - ohashi 15y ago
    Because with such a tiny market you cannot actually move a lot of wealth without influencing the value of the currency itself.
    - weavejester 15y ago
      But that would only be a problem if you wanted to move large amounts of wealth infrequently. If you only wanted to move small amounts of wealth frequently (like Paypal), then there wouldn't be any problem.
      - ohashi 15y ago
        Your argument basically boils down to: it's a toy 'currency,' is that really the best argument you can make? If so, this really isn't worth discussing because it's a joke.
        15y ago