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- It's false that bitcoin isn't a means of payment. People DO use it as payment. - It's false that it's not a medium of savings. It has reservation demand whic

- It's false that bitcoin isn't a means of payment. People DO use it as payment. - It's false that it's not a medium of savings. It has reservation demand which is the only reason it has a price. It does not matter that it has "no assets in it", whatever that confused statement means. The dollar also no longer has any asset backing. The medium of savings role exists while people perceive there is value in holding a monetary good in the hope it will appreciate in the future. They perceive it will appreciate because it has comparative advantages to other goods which serve a similar purpose. Bitcoin has many comparative advantages to other monetary goods. In particular, it allows the transfer of value to anyone, anywhere in the world, near instantaneously, with low transaction fees, without the need for a trusted intermediary such as a bank. This has literally never been possible before in the entire history of civilization. - It's true that bitcoin is not currently a unit of account. This mostly has to do with the fact that it's still nascent and needs to increase in liquidity. As it does more and more entrepreneurs who are primarily accepting bitcoin (it will start with the miners) will begin to calculate profit and loss in bitcoin terms - It's true bitcoin is used for so-called criminal activities. But so too is the dollar. In fact, the dollar isn't just used for buying illegal drugs, the dollar is used to funnel gigantic sums of tax payer wealth to well connected bankers when their businesses fail. Which is the bigger crime, Nouriel? - Bitcoin isn't susceptible to hacking - individual bitcoin businesses are susceptible to hacking such as the incredibly incompetent MtGox, which deserved to fail. Blaming Bitcoin for the incompetence of a particular business is like saying the dollar is a failure because Lehman Brothers collapsed. To me that is a much worse "hack" than anything that happened with Gox. - And no, Bitcoin is NOT a ponzi scheme. Bitcoins are a monetary good whose price fluctuates with demand on the market just like any other monetary good, such as gold.

baudehlo 13y ago
| It's false that bitcoin isn't a means of payment. People DO use it as payment. But places that accept bitcoin aren't holding on to it. They transfer immediately to local currency (because their suppliers can't be paid in bitcoin). So currently* bitcoin is more a means of money transfer than it is a currency in itself. * This might eventually change if suppliers are willing to accept bitcoin too.
- IceyEC 13y ago
  I accept Bitcoins for advertising on TorSearch. I then pay my hosting costs in Bitcoin.
- splintercell 13y ago
  > They transfer immediately to local currency (because their suppliers can't be paid in bitcoin). That is correct, but the question which arises, why are companies introducing this level of complexity for no reason? Why are people hell bent on paying for goods through bitcoins? Yes its true that currently its a means of money transfer but there is no reason why companies won't just start holding bitcoins. There is no added utility offered in USD which cannot be offered by bitcoins. Once enough market for bitcoin appears people will switch to holding in dollars.
  - JohnTHaller 13y ago
    Well, except for that whole thing about there being no secure place to store bitcoins as they come in. You can store them with a third party, but that often ends badly (Flexcoin, Mt Gox, Poloniex, etc). You can store them yourself, but having your money be stolen by a simple server breach is not an attractive prospect for a company, whether startup or established. It wouldn't be quite so bad if there were any regulation or legal structure or any way to get your bitcoins back when they are stolen, but there isn't.
    - splintercell 13y ago
      > Well, except for that whole thing about there being no secure place to store bitcoins as they come in. Yes, that's also a fact. Bitcoins have revealed a really unprepared facet of technology. Information security. Bitcoin or not, the fact remains that we don't have a fool proof way(other than going offline) to keep the data secure for an average man. Sure smart people can keep their data secure, but common man(who wants to use bitcoins) is unable to do so. Talking about bitcoin and regulation is like talking about anti-bullying regulations. If it may make you feel better that your kid is protected by anti-bullying regulations, or you could prevent things online by merely making a law against it, then you're delusional.
andrewla 13y ago
> Bitcoin isn't susceptible to hacking - individual bitcoin businesses are susceptible to hacking While I am a big fan of Bitcoin, this is a valid criticism. The degree to which hackers can steal money right now is very limited, because of the ability to unwind transactions, and the very long clearing time associated with larger transactions. Two prime benefits of Bitcoin are the short clearing time and the inability to unwind transactions. The dark side of this is that hacking machines storing keys for Bitcoin addresses is the same thing as stealing the money held there; there's no need to have a bunch of bank accounts in shady countries lined up to try to move the money fast enough that you can step out into the tropical sun with a briefcase full of cash before the money gets clawed back.

baudehlo 13y ago

| It's false that bitcoin isn't a means of payment. People DO use it as payment. But places that accept bitcoin aren't holding on to it. They transfer immediately to local currency (because their suppliers can't be paid in bitcoin). So currently* bitcoin is more a means of money transfer than it is a currency in itself. * This might eventually change if suppliers are willing to accept bitcoin too.

IceyEC 13y ago
I accept Bitcoins for advertising on TorSearch. I then pay my hosting costs in Bitcoin.
splintercell 13y ago
> They transfer immediately to local currency (because their suppliers can't be paid in bitcoin). That is correct, but the question which arises, why are companies introducing this level of complexity for no reason? Why are people hell bent on paying for goods through bitcoins? Yes its true that currently its a means of money transfer but there is no reason why companies won't just start holding bitcoins. There is no added utility offered in USD which cannot be offered by bitcoins. Once enough market for bitcoin appears people will switch to holding in dollars.
- JohnTHaller 13y ago
  Well, except for that whole thing about there being no secure place to store bitcoins as they come in. You can store them with a third party, but that often ends badly (Flexcoin, Mt Gox, Poloniex, etc). You can store them yourself, but having your money be stolen by a simple server breach is not an attractive prospect for a company, whether startup or established. It wouldn't be quite so bad if there were any regulation or legal structure or any way to get your bitcoins back when they are stolen, but there isn't.
  - splintercell 13y ago
    > Well, except for that whole thing about there being no secure place to store bitcoins as they come in. Yes, that's also a fact. Bitcoins have revealed a really unprepared facet of technology. Information security. Bitcoin or not, the fact remains that we don't have a fool proof way(other than going offline) to keep the data secure for an average man. Sure smart people can keep their data secure, but common man(who wants to use bitcoins) is unable to do so. Talking about bitcoin and regulation is like talking about anti-bullying regulations. If it may make you feel better that your kid is protected by anti-bullying regulations, or you could prevent things online by merely making a law against it, then you're delusional.

andrewla 13y ago

> Bitcoin isn't susceptible to hacking - individual bitcoin businesses are susceptible to hacking While I am a big fan of Bitcoin, this is a valid criticism. The degree to which hackers can steal money right now is very limited, because of the ability to unwind transactions, and the very long clearing time associated with larger transactions. Two prime benefits of Bitcoin are the short clearing time and the inability to unwind transactions. The dark side of this is that hacking machines storing keys for Bitcoin addresses is the same thing as stealing the money held there; there's no need to have a bunch of bank accounts in shady countries lined up to try to move the money fast enough that you can step out into the tropical sun with a briefcase full of cash before the money gets clawed back.