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It seems that the author thinks Bitcoin is going to steadily appreciate indefinitely, which is obviously not the case. Give a kid a BC at $140 and you'll have a

by crabasa 14y ago

It seems that the author thinks Bitcoin is going to steadily appreciate indefinitely, which is obviously not the case. Give a kid a BC at $140 and you'll have a furious kid when it crashes to $15. Somewhat off-topic: isn't BC just digital gold? Is there any reason to think of it any differently?

Spooky23 14y ago
The difference is that gold is a tangible, immutable substance that doesn't decay much. It doesn't go anywhere. I bought a bunch of bitcoin early, and sold it for a handy profit at $10. The ones I kept aside (about 20) were lost on a PC whose hard disk crashed. My understanding is that these coins are forever lost.
- cdh 14y ago
  You may have lost bitcoins, but you did so before you knew they'd be worth hundreds of dollars. I'd expect that in the future, people will be much more careful to backup (or print out) their private keys. In any case, the ones you lost just increased the value of all the other bitcoins still in use. Since each unit is theoretically divisible into infinitely smaller units at some point in the future, people will just trade smaller amounts for larger values. That's a feature, not a bug! A lot of people are claiming that deflation is a death sentence for a currency like this. Something they overlook is that new coins will continue to be created for many years still, and that all it takes is a new version of the protocol to 'fix' any fatal flaws in the current system. If the majority of users have a financial interest in defending the value of their coins, it seems logical to me that they are likely to act rationally to achieve that if a threat were to emerge. But then, who knows.
maxerickson 14y ago
I think there is a rough analogy with gold, but I would think of gold as an established value instrument and bitcoin as an unestablished one. For instance, ~$690 million of trading has crossed a single gold trading instrument since this morning: http://finance.yahoo.com/q/bc?s=GLD http://finance.yahoo.com/q/bc?s=GLD I don't have an argument that bitcoin could not handle that sort of volume, but I don't think it is particularly controversial to say that it has not proven itself to be a stable store of value.
chollida1 14y ago
> Somewhat off-topic: isn't BC just digital gold? Is there any reason to think of it any differently? NO it isn't. Gold can be used for many different purposes other than just currency.

by crabasa 14y ago

Spooky23 14y ago

The difference is that gold is a tangible, immutable substance that doesn't decay much. It doesn't go anywhere. I bought a bunch of bitcoin early, and sold it for a handy profit at $10. The ones I kept aside (about 20) were lost on a PC whose hard disk crashed. My understanding is that these coins are forever lost.

cdh 14y ago
You may have lost bitcoins, but you did so before you knew they'd be worth hundreds of dollars. I'd expect that in the future, people will be much more careful to backup (or print out) their private keys. In any case, the ones you lost just increased the value of all the other bitcoins still in use. Since each unit is theoretically divisible into infinitely smaller units at some point in the future, people will just trade smaller amounts for larger values. That's a feature, not a bug! A lot of people are claiming that deflation is a death sentence for a currency like this. Something they overlook is that new coins will continue to be created for many years still, and that all it takes is a new version of the protocol to 'fix' any fatal flaws in the current system. If the majority of users have a financial interest in defending the value of their coins, it seems logical to me that they are likely to act rationally to achieve that if a threat were to emerge. But then, who knows.

maxerickson 14y ago

I think there is a rough analogy with gold, but I would think of gold as an established value instrument and bitcoin as an unestablished one. For instance, ~$690 million of trading has crossed a single gold trading instrument since this morning: http://finance.yahoo.com/q/bc?s=GLD http://finance.yahoo.com/q/bc?s=GLD I don't have an argument that bitcoin could not handle that sort of volume, but I don't think it is particularly controversial to say that it has not proven itself to be a stable store of value.

chollida1 14y ago

> Somewhat off-topic: isn't BC just digital gold? Is there any reason to think of it any differently? NO it isn't. Gold can be used for many different purposes other than just currency.