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Not true. Bitcoin did two things that I am aware of: 1) Create a universal currency which can be easily exchanged and that appreciates rather than depreciates (
by czbond 13y ago
Not true. Bitcoin did two things that I am aware of: 1) Create a universal currency which can be easily exchanged and that appreciates rather than depreciates (over the long run I mean, I am not referring to short term market fluctuations). 2) It created a mode where many underground (eg: gray or black market dealings) can take place without the need for laundering money. [Note: I don't condone, just pointing out the facts]
- gizmo686 13y ago1) All major currencies can already be easily exchanged. The only reason they depreciate rather than appreciate is that we have decided that depreciating currencies are good for the market. 2) Bitcoin maintains a public record of every transaction. There are still ways to anonomize yourself (mixing services, proposed extensions like Zerocoin), but cash would still be my first choice.
- johndevor 13y agoAs for your 2): why did the Silk Road explode in popularity? I think, done correctly, Bitcoin offers people on-the-couch access to anything they could want, with the level of risk largely depending on their technical expertise.
- poolpool 13y agoWebsites to buy drugs have been around with weird e-currency like pecunix and e-buillion for so many years before bitcoin existed. The only difference between silk road and them is how little silk road did to stay low key.
- johndevor 13y agoYou're right. The black market gives Bitcoin a "floor" value, just like Gold or Silver. It is a very efficient means of currency for the black market, as proven by the Silk Road and others.
- nawitus 13y agoI don't believe bitcoin has a floor value in the same sense as gold or silver. A currency doesn't need to have a floor value just because currencies traditionally had. Besides, modern currencies are fiat money without a true "floor" value.
- johndevor 13y agoI'll rephrase my argument: given the vast demand for some people to do illicit transactions on the internet, an online currency (or more than one) will emerge to fill that need. So, given that, I think Bitcoin (or something like it) does realistically have a floor value, given its current front-runner stance. That may change, of course, if people choose a different currency, but that currency will be similar to Bitcoin in most, if not all, fundamental ways.
- declan 13y agoGold and silver have industrial uses. Gold and silver are used in jewelry. Gold and silver have proven to be a store of value for thousands of years. Gold and silver are also, to a first approximation, truly anonymous. Not one of those four characteristics is true for Bitcoin, so saying it's "just like" gold and silver is a bit of a stretch. This doesn't mean Bitcoin is awful, as Krugman's trollish column is titled, but just that it doesn't have the same intrinsic floor value as gold and silver.
- johndevor 13y agoI meant to say that Bitcoin - or something like it - will emerge to facilitate online transactions of the black market kind. Rightly so that Bitcoin doesn't inherently gain value from the black market, but I do believe the black market will use something to do online transactions (as shown by the Silk Road and others). Thus far, that currency has been Bitcoin. Gold and silver have industrial uses today. That may change tomorrow (albeit highly unlikely). Bitcoin is the currency of cyber criminals today (hence giving it value today). That also may change tomorrow.
- 13y ago