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Many currencies in existence are now riskier and less stable than Bitcoin. Yes, it's true. As of right now, there are 182 official currencies worldwide[1], mo

by cs702 14y ago

Many currencies in existence are now riskier and less stable than Bitcoin. Yes, it's true. As of right now, there are 182 official currencies worldwide[1], most of which you've never heard of in your life, and many of which have total market capitalization lower than Bitcoin.[2] Others are subject to extreme sociopolitical, economic, or military-conflict risks. Would you rather own bitcoins, which are traded globally, or, say, Libyan dinars, North Korean wons, Syrian pounds, etc.? Even the US dollar and euro, supposedly bastions of stability, have seen their exchange rate jump from US$0.80 per euro in 2002 to US$1.60 in 2008 (100% jump), only to drop back down to US$1.20 in 2010 (25% drop), then jump to US$1.45 in 2011 (20% jump), only to drop back down to around US$1.29 today.[3] If Bitcoin survives the horrific economic crises in countries like Spain, Greece, and Cyprus, and the even more horrific military conflicts in countries like Syria and Sudan, it will continue gaining credibility as the currency of last resort -- the global digital commodity that will survive even if your country or economy goes to hell. -- Edit: changed "most currencies in existence" to "many currencies in existence," which is what I actually intended to write. -- [1] http://en.wikipedia.org/wiki/List_of_circulating_currencies_by_country http://en.wikipedia.org/wiki/List_of_circulating_currencies_... [2] http://reason.com/24-7/2013/04/01/at-1b-bitcoin-holds-more-value-than-20-n http://reason.com/24-7/2013/04/01/at-1b-bitcoin-holds-more-v... [3] https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Linear&chdeh=0&chfdeh=0&chdet=1364991894838&chddm=1773204&q=CURRENCY:EURUSD&ntsp=0&ei=gh9cUaDRGbKr0AG8tQE https://www.google.com/finance?chdnp=1&chdd=1&chds=1...

andylei 14y ago
> Even the US dollar and euro, supposedly bastions of stability, have seen their exchange rate jump Is this comparison serious? See below > their exchange rate jump from US$0.80 per euro in 2002 to US$1.60 in 2008 (100% jump) that's over the course of 6 YEARS. the most recent 100% jump in BTCUSD took 14 DAYS. > drop back down to US$1.20 in 2010 (25% drop) that's over the course of 2 years. Last August, BTCEUR took a 25% tumble in 5 days.
philwelch 14y ago
Bitcoin has the volatility over a month that USD have over half a decade, in other words?
chjj 14y ago
If your point is, "other currencies suck too", it's not a good one. The entire goal of bitcoin was to be better than these currencies. The writer of this article simply said bitcoin doesn't work as a currency. The fact that there are (unsurprisingly) a lot of failed currencies out there doesn't make bitcoin a better currency. This isn't a school paper where the grade is curved.
- RickHull 14y ago
  BTC is still the adoption / speculation phase. As the market share increases, it should tend to stabilize. If Felix is saying that Grandma shouldn't take out a BTC loan, then I agree completely. But it might be a different story in a few years. Also remember that there are two sides to currency volatility. If the USD/BTC rate is changing, it could indicate USD volatility.
  - Nursie 14y ago
    It's difficult because bitcoin has to keep deflating in the long run, and with deflationary currency loans are less attractive - every BTC is worth more tomorrow than today so they are harder to pay back and you can make money just by sitting on them.
    - iSnow 14y ago
      We are a long way from that - but ultimately this could result in a competition between BTC and $ where loaners would prefer BTC and debtors would rather take out loans in $. In the end this would result in a much higher interest rate for $-denominated loans and near-zero interest rate for BTC-loans.

by cs702 14y ago

andylei 14y ago

> Even the US dollar and euro, supposedly bastions of stability, have seen their exchange rate jump Is this comparison serious? See below > their exchange rate jump from US$0.80 per euro in 2002 to US$1.60 in 2008 (100% jump) that's over the course of 6 YEARS. the most recent 100% jump in BTCUSD took 14 DAYS. > drop back down to US$1.20 in 2010 (25% drop) that's over the course of 2 years. Last August, BTCEUR took a 25% tumble in 5 days.

philwelch 14y ago

Bitcoin has the volatility over a month that USD have over half a decade, in other words?

chjj 14y ago

If your point is, "other currencies suck too", it's not a good one. The entire goal of bitcoin was to be better than these currencies. The writer of this article simply said bitcoin doesn't work as a currency. The fact that there are (unsurprisingly) a lot of failed currencies out there doesn't make bitcoin a better currency. This isn't a school paper where the grade is curved.

RickHull 14y ago
BTC is still the adoption / speculation phase. As the market share increases, it should tend to stabilize. If Felix is saying that Grandma shouldn't take out a BTC loan, then I agree completely. But it might be a different story in a few years. Also remember that there are two sides to currency volatility. If the USD/BTC rate is changing, it could indicate USD volatility.
- Nursie 14y ago
  It's difficult because bitcoin has to keep deflating in the long run, and with deflationary currency loans are less attractive - every BTC is worth more tomorrow than today so they are harder to pay back and you can make money just by sitting on them.
  - iSnow 14y ago
    We are a long way from that - but ultimately this could result in a competition between BTC and $ where loaners would prefer BTC and debtors would rather take out loans in $. In the end this would result in a much higher interest rate for $-denominated loans and near-zero interest rate for BTC-loans.