Comments on: European Central Bank Report On Bitcoin: It’s Likely To Grow And It Poses Risks

By: Tom

Tom — Thu, 22 Nov 2012 05:44:00 +0000

Actually, I love gold and silver – having tangible possession of real money. But I’m fascinated with virtual money – anything sensible that stands a chance of freeing us from the scheming central bankers.

By: Kir (Politicoid)

Kir (Politicoid) — Sun, 04 Nov 2012 01:39:00 +0000

Deflation would help the early adopters not the late adopters. Also the supply runs out after a very short period of time. Do you think people would have used gold if the entire reserve of gold in the world was going to run out in a few years? How long have we been mining gold and there’s still more.

There have been multiple large scale hacks and thefts through the bitcoin system. Malware is and has been used to mine bitcoins.

Exchange rates vary far more with bitcoin. There are massive swings in value.

I don’t think the information for bitcoin value is stored on every single computer at the same time. It wouldn’t be improbable for some information to be lost.

So again, for those reasons and others I don’t see bitcoin as gaining a large enough following to effect our economy. It’s an interesting experiment, but I feel nothing more than that.

It may serve as a foundation for something that does succeed however.

By: MC1171611

MC1171611 — Sun, 04 Nov 2012 01:32:00 +0000

1. Not a problem. Early adopters took the risk, plus mining is done by huge farms now, so individuals don’t earn much anyway. Plus, deflation will continually increase the value of later adopters’ Bitcoins.
2. So? If that’s the case, then why hasn’t someone done it yet? Even if that were the case, it becomes increasingly less useful, plus mining is doing a service to the p2p system.
3. Exchange rates between fiat currencies vary too. That shouldn’t be a reason to discount Bitcoin any more than the Renminbi or the Euro as a viable currency.
4. Everything is anonymous and encrypted with currently-unbreakable encryption, which can be augmented with future encryption standards. Thus, privacy isn’t an issue.
5. In order for this to happen, every Bitcoin-using computer in the world would have to be destroyed. And you lose everything if your wallet containing your cash goes missing.

It isn’t likely to replace the dollar as the reserve currency, but Bitcoin is a vital tool for counter-economic activity.

By: Kir (Politicoid)

Kir (Politicoid) — Sun, 04 Nov 2012 01:25:00 +0000

I have and there are issues with it.

1. Early adopters get rich quick while late adopters have trouble earning anything
2. It’s easy for someone to create malware that mines for them
3. Exchange rate with real currencies varies by a great deal
4. Lack of privacy
5. Lack of security of money — system goes down and you lose everything. Likewise you lose everything if you end up losing your .dat file.

I’m not saying that it doesn’t have potential, but I don’t think that bitcoin is going to have a major effect on our economic system and I don’t think it will be here to stay.

By: MC1171611

MC1171611 — Sun, 04 Nov 2012 01:20:00 +0000

Again, look into it. It’s completely decentralized; there’s nothing that a single individual can do to modify the system in his favor. It’s very well thought out. en.bitcoin.it/wiki/Main_Page

By: Kir (Politicoid)

Kir (Politicoid) — Sun, 04 Nov 2012 01:16:00 +0000

It’s still something that’s set in an arbitrary way and can be manipulated at any time. I’d imagine that a sufficiently skilled programmer can modify the algorithm to start spitting out coins.

By: MC1171611

MC1171611 — Sun, 04 Nov 2012 01:12:00 +0000

Perhaps you should look deeper into what Bitcoin really is. There is, indeed, a production cost for Bitcoins, and there is certainly scarcity involved. That’s why Bitcoins have been increasing in value, from less than $3 a year ago, to over $12 within the last month. Demand is increasing as more people learn about Bitcoin, while the dollar is simultaneously being devalued.

Seriously, look into how Bitcoins are “mined.” There’s a significant production cost involved.

By: Kir (Politicoid)

Kir (Politicoid) — Sun, 04 Nov 2012 01:07:00 +0000

Yes. On that I agree. It’s far more difficult for the government/banking industry to manipulate a virtual currency. It’s the closest intermediary to bartering.

The problem is that its value isn’t set by anything. What’s the difference between one bit coin and a million? How do you decide how much to charge in bitcoins?

With a real currency–not a fiat currency–the value is set by factors such as scarcity, energy required to produce the currency, etc.

By: MC1171611

MC1171611 — Sun, 04 Nov 2012 01:04:00 +0000

But fiat currencies have a very keen difference: their use is legally-required. Virtual currencies are market currencies, not subject to the whim of legislators and bureaucrats, and one can choose to use or not to use them at his own discretion. No, there’s nothing tangible or intrinsically valuable about a Bitcoin, but its value is set by the market, not twelve schmucks sitting in a boardroom at a mahogany table.

By: Kir (Politicoid)

Kir (Politicoid) — Sun, 04 Nov 2012 00:59:00 +0000

The issue with virtual currencies is that they have the same issues as other fiat currencies. In fact that lack even more of the qualities needed for a valid currency.

Now a barter system is a great supplement or alternative to our current economic system and depending on the tax code in Europe it may work. The current American tax code prevents bartering on a large scale.