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I think this is a hugely important distinction. The linked-to analysis seems to assume that BTC are bought with USD, sit around in a wallet, and then come back
by matthew-wegner 14y ago
I think this is a hugely important distinction. The linked-to analysis seems to assume that BTC are bought with USD, sit around in a wallet, and then come back out as USD.
When in fact, BTC's usefulness is its frictionless-but-secure, anonymous transactional nature. Its anonymity is even stronger if you mine coins yourself (or acquire coins directly from a miner for favors or whatever).
You can probably make the case that BTC must be deflationary, in order to draw in traders/investors, who actually provide necessary market liquidity to proxy BTC as USD, backing the worth of BTC-for-goods transactions...
- DanBC 14y agoBitcoin is not anonymous. (http://anonymity-in-bitcoin.blogspot.co.uk/2011/07/bitcoin-is-not-anonymous.html http://anonymity-in-bitcoin.blogspot.co.uk/2011/07/bitcoin-i...) (https://en.bitcoin.it/wiki/Anonymity https://en.bitcoin.it/wiki/Anonymity)
- Nursie 14y agoIt's not really anonymous though, transactions are publicly recorded for all time. It's also not 100% frictionless. There are fees and though they are currently low, they are there.
- matthew-wegner 14y agoI know there are transaction fees. I meant friction as--once you have BTC in a wallet, you are absolutely free to spend them as you wish. There is no way for anyone to prevent a transaction. Bitcoin addresses are public but anonymous. But yes, you can analyze the public ledger to tie known data (publicly-posted donation addresses, etc) to try to de-anonymize someone. There are coin tumblers/mixers in place in some markets, although it's hard to tell how effective they are.