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Currencies typically aren't mined. If a currency can be generated out of thin air indefinitely that is usually a problem. You can actually "mine" paper dollars

Currencies typically aren't mined. If a currency can be generated out of thin air indefinitely that is usually a problem. You can actually "mine" paper dollars as well: it's called counterfeiting. In all countries the act of counterfeiting is unfair, leads to inflation and is almost always illegal. The fact that the mining is tapering off for bitcoin isn't a problem. It's actually a feature that is designed to mitigate uncontrolled inflation. The TRUE problem with bitcoin is that the nature of the coins themselves are changed by the way people perceive the coins. If people treat the coins as currency then thats what it becomes, but if people treat it as a speculative investment asset similar to a stock share then that's what bitcoin will become as well. Right now nobody buys bitcoins to use as a currency. I can assure you 99% of bitcoin transactions occur because people are gambling on the fact that the price will go up and not because you want to use the coins as you use a dollar bill. Currently, bitcoin is much more a speculative investment asset then it is a currency. It is exactly like the stock market: A market where people bid on worthless paper for the sole purpose of selling the paper for profit. In short the main problem with bitcoin is YOU and ME. As users of bitcoin the way we perceive and use the currency will change what it will become.

addandsubtract 13y ago
>You can actually "mine" paper dollars as well: it's called counterfeiting. The counterpart to mining coins would be to invest dollars and "mine" interests.
- crimsonalucard 13y ago
  counterfeiting is a closer counterpart in my opinion as interest is capped by the amount of money you have while mining is only capped by time and porcessing power. Anyway, all the money generated from the Fed, loans and interest is complicated to think about. I thought it was simpler to illustrate the whole thing with "printing money." Most people can perceive the bad part of counterfeiting and relate that to excessive mining, which is basically the point I was trying to convey.
- judk 13y ago
  That is not mining. Mining dollars happens when when banks engage in fractional reserve banking, lending out money that is simultaneously "in" a depositor's account. But that doesn't create money, so much as temporarily creates an illusion of more money existing, hoping that there will not be a bank run to withdraw all of it. With non-reserve banking, when gold is passed around as money (possibly with seignorage), it is mined by digging in dirt.

addandsubtract 13y ago

>You can actually "mine" paper dollars as well: it's called counterfeiting. The counterpart to mining coins would be to invest dollars and "mine" interests.

crimsonalucard 13y ago
counterfeiting is a closer counterpart in my opinion as interest is capped by the amount of money you have while mining is only capped by time and porcessing power. Anyway, all the money generated from the Fed, loans and interest is complicated to think about. I thought it was simpler to illustrate the whole thing with "printing money." Most people can perceive the bad part of counterfeiting and relate that to excessive mining, which is basically the point I was trying to convey.
judk 13y ago
That is not mining. Mining dollars happens when when banks engage in fractional reserve banking, lending out money that is simultaneously "in" a depositor's account. But that doesn't create money, so much as temporarily creates an illusion of more money existing, hoping that there will not be a bank run to withdraw all of it. With non-reserve banking, when gold is passed around as money (possibly with seignorage), it is mined by digging in dirt.