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7 Comments

1. 

   Volatility is definitely an issue, but since it’s an online currency, in practice most people will just set their prices in regular currencies and convert automatically when you pay. I’ve got some money server code that does this for OpenSim – it’s not rocket science. That means your customers have some unpredictability in the value of the balance they hold, but as you say nobody should be putting more money into Bitcoins than they can afford to lose.

   On crime – well, just like you say, Bitcoins are a lot like cash. Don’t hold large amounts of cash unless you know what you’re doing.

2. 

   It is volatile, but the other concerns are not really more justified than for any other online currency. I use bitcoin for moving money around rather than for storing (although having bought many coins for less than a dollar, It might have been better to wait until now for the exchange). Fiat currencies are also subject to some volatility, but also the whims of fascist governments and the manipulations of the FED and the banking oligarchs that control it. A case in point: The governments and banks set up a financial blockade to stop donations to wikileaks, but bitcoin was still able to get through with no problem. Freedom from encroaching fascism and total surveillance requires such currencies. Of course criminals will use them as well, but it may not be long before bank-owned governments see most of us as criminals.

   One reason for the current rise of the coin, was the threat of the bank-owned government of Cypress threatening to steal from the accounts of the people. The result was a reaction: dump the bank owned currencies for non-bank owned currencies. I think that bitcoin may be one of the few things that can save human freedom.

   http://agorism.info/

3. 

   Exactly how does a fiat currency have underlying value?

   1. 

      He said the value was in the ability to pay taxes with said currency in the country of origin.

4. 

   Decent article with some good points, but many misguided thoughts in my humble opinion. Gold is actually a pretty close comparable. It would drop dramatically if people didn’t use as a store for value. Its industrial uses don’t require large quantities and value in jewelry is reflective of the fact that people use it as a store for value.

   Pricing can be automatic based on current exchange rate price.

   As you mentioned, there has been massive fraud even in regulated exchanges. You mentioned Martha Stewart, but what about LIBOR fixing scandal? Also the tactics used by hackers don’t work if you don’t overreact to price changes.

   Botnets will exist whether or not bitcoins exist. They will be used for nefarious purposes either way. Them mining bitcoins is probably one of the more benign uses.

   Criminals already currently break into your computer to collect personal information from your credit card purchases. With bitcoins, they won’t be able to do that and you can store your bitcoins in an offline wallet and only transfer the bitcoins needed for purchase onto an online wallet. More services will continue to grow as bitcoin becomes more popular.

5. 

   Wait, what! We are allowed to hack private computers and websites with no fear of jail? Sweet!

6. 

   Fiat currencies and stock prices don’t have a minimum landing value, the unit price goes to zero if people lose faith. Even for gold the intrinsic value is much less than it’s “faith” value. There’s nothing exceptional about Bitcoin in this respect.

   Central bank guarantees are looking shaky lately. Over the last century we’ve seen numerous countries get into a money-printing spiral leading to hyperinflation and fiat currencies don’t survive that. This is Bitcoins’ point of difference – there’s no central authority able to succumb to the temptation to print the stuff. As for volatility, it’s early days.