Posted on 12/27/2013 7:39:33 PM PST by Errant
Bitcoin is rapidly becoming part of the everyday lexicon. Following David Woo's investigation, National Australia Bank's Emma Lawson looks at its creation, use, and quality as "currency," and find that Bitcoin meets most, but not all the conditions required to be a currency. Lawson concludes Bitcoin may not be the most efficient monetary system, given the costs to create, and that the supply set-up can be seen as both an advantage (hyperinflation is not possible) but also a disadvantage (there are conditions which may create deflation). But, if enough people believe in it, and use it, it may be here to stay as a payment system. Simply put, its success (or failure) will depend on establishing trust and adoption.
(Excerpt) Read more at zerohedge.com ...
Perhaps some enterprising prepper will develop a hand-cranked global computer networking device so that wealth in Bitcoin can be accessed in the event of a grid failure or other catastrophe.
In the meantime as far as I can tell Bitcoin’s current value is mostly based on the “greater-fool” concept - some other guy will pay more for them so they must be worth that amount. I’m very curious about what will happen when large numbers of people stop holding Bitcoins and actually start trying to use them to buy goods and services.
Don’t feel bad about that. It takes awhile to get your head around it. Took me a long time too and I’m still learning more about it. Still learning about the Fed too and find that Bitcoin is not only easier to understand, but the information doesn’t require a FOIA request and court fight to get. :)
Have you heard that they've given O an internet kill switch? It won't only be Bitcoin users that are in trouble. It will be the equivalent of an EMP attack once he pushes that button as everything now relies on the internet.
“Have you heard that they’ve given O an internet kill switch?”
Oh hell, don’t anyone tell him about this website!
bitcoin’s problem is current or future copycat-currencies.
bit ping
Most of the dollars running around in our economy exist only in electronic form, which makes bitcoin less than adequate to replace the dollar. And given that bitcoin is a virtual currency it has no ability to replace physical currency.
Thanks, I was wondering about that.
the dollar is a virtual currency
unless you think magic scribbles on paper somehow make it impervious to counterfeiting
and it’s already proven to be dilutable
fiat currencies are weak at best and open to corruption. this is why gold has value... it cannot be diluted (significantly) and cannot be corrupted (once verified it’s gold).
crypto currencies are more aligned with gold then the dollar
All currency is fiat currency. Gold is no more innately valuable than dollars, things of actual value make bad currency because we’re too busy eating them or using them to build things. Crypto currency is just another brand of making up currency, the big problem it has is that it’s self limited, making it not useful for a large flexible system.
you have no concept of why currencies exist. your understanding is based around the barter system of goods with no concept of an item that can represent wealth inherently
your mindset would have you walking around with 30 chickens to buy a side of beef instead of selling the 30 chickens for 1/2 ounce of gold and taking that gold to buy the beef. that’s the point of currency
the main qualifier for such a currency is that it cannot be easily counterfeited nor diluted in value by virtue of someone arbitrarily printing more.
Actually I know EXACTLY why currencies exist, and no my mindset would have me use the 1/2 of gold because the 30 chickens would be a pain in the ass which is exactly why currencies exist. But one of the most important parts of a currency is that it not be useful for things other than a currency, because if they were useful for something else people would use them for something else, which is why all currencies, including gold, do NOT have intrinsic value. If you and I agree 1/2 gold, a side of beef and 30 chickens all have the same value then they do, but only the beef and the chickens (stuff that can keep you alive) have intrinsic value, the gold is only useful as a currency or ornamentation.
And nothing represents wealth inherently, only things we’ve decided represent wealth do, and that’s a societal decision not inherent property.
In the old days when all money was physical protection from counterfeiting and diluting was important. But those days are on the way out as less and less money is physical. Which is funny because we’re putting more and more effort (and cost) into making our less and less important physical dollars hard to counterfeit, so hard in fact we have a hard time making them legitimately, meanwhile most of us barely ever even touch the stuff.
“I read the whole thing but I don’t know any more than I did before. I don’t understand the language in which it was written. I’m too old to learn it.”
I don’t understand it either, much.
I just know that I manage the mining machines for my geeky son. I know the electricity and cooling aspects. He’s been involved in btc for years now. He has been a home renter for years with 4 kids and a wife. Just a week ago he bought a home on 2.5 acres for cash, and only touched a 1/4 of his bitcoins to do so. Thank you btc.
Send him to WV, I have a big ole ten-room house with full basement for sale...cheap.
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