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The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
byAnonymous Coward writes:
Like all currencies, it's main use is as a medium of exchange. It's pretty decent as that, but sucks for storing value.
byrmdingler ( 1955220 ) writes:
All currency is a medium of exchange AND a way to store wealth. In the principle's simplest example, I can work eight hours today and use the wages to feed my family for a week... thus storing my wealth in an easily carried, widely accepted fiat currency. The ability of a civilization to evolve a middle class from the landowner/sharecropper paradigm is only plausible when a worker can store away the fruits of his labors, rather than eat them every evening.
byhibiki_r ( 649814 ) writes:
Nah, they suck as a medium to store wealth for more than short periods of time. What the OP is missing is that currency is a method of account: A ton of prices are set up with respect to a currency: This is why, say, having oil be priced in dollars and not in Euros was such a big deal a while ago. High demand for currency as a percentage of GDP is telling you that all of the things that are far better stores for wealth than money are just no good (ie, a recession), or that the currency is not really a curre
byKjella ( 173770 ) writes:
While an electronic coin is theoretically possible, the Bitcoin implementation shares more with a pyramid scheme than with a real currency: Everyone that holds it wants to hype it so that it goes up in price vs actual currencies, but if the usage drops, it's useless, and only the people at the top of the scheme, those that mined very early, get anything that resembles a return.
But the thing is every currency is useless if the usage drops. Ask the people who had plenty Reichmarks or Zimbabwean dollars or Soviet rubles how that worked out, whether it's fiat money or gold standard doesn't matter since they'd never be able to convert all that money to gold if everyone wanted to cash out. That promise is as worthless as the paper money it was written on, sure you could do it in good times when you could have bought gold for it on the commodity market too, but not when you'd actually need it. The only real value in any currency is the belief that the economy will go on and you'll be able to get something for your money in the future. Currency speculation is a fairly common sport.
A good reason to think the BitCoin economy will go on are things like Silk Road. There's good reason to think there will be people with "real money" who want to buy BitCoin to buy drugs, and there's good reason to think there'll be drug dealers who want to sell drugs to sell BitCoin to get "real money", it is unlikely to be replaced by any other currency and this will be a sustained demand and supply over time. As long as the fluctuations are not too extreme and the deflation not too strong quite possibly nobody will care that you pay $100 and the drug dealers get $90 while the BitCoin speculators pocket the difference. Barring any regulatory or legal shutdown, it could be pretty stable.
Of course you can have legal trade as well, but if taxes are the foundation of fiat money well then I think illegal substances and other black market activity is the foundation of BitCoin. And I'm much more likely to believe people will stop paying taxes - certain countries seem to have made it a sport already - than doing drugs and other shady business. Of course that is also most of the risk, governments tend to really hate this and come crashing down with money laundering laws and regulations, so the danger is getting shut down or losing the whole "customer base" above. But slowly selling off BitCoin to secure their winnings shouldn't cause problems unless it becomes a stampede and a market crash.
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byElectricity Likes Me ( 1098643 ) writes:
The currency of a nation-state is always useful so long as that nation-state exists. It's the only way to interact with it's government, and it's citizenry in rendering any service are legally obliged to accept the debt's remuneration in that currency. This means the banks of that nation also have to accept repayment of any loans or other forms of debt in that nations currency.
BitCoin, not being bound to any nation state, or legally obligated to be accepted for anything, is not nearly as stable since the in
bygrahamwest ( 30174 ) writes:
I have some Zimbabwe dollars and it worked out great for me. I can tell people "I'm a trillionaire!" and show them the proof. It cost $20 to get $180,000,000,000,000 when they came out, including shipping etc, but they're such fun.
Oh, as actual currency? Of course if I'd cared about that I would've been upset.
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