BitCoin
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R. Giskard Reventlov wrote:
You mean apart from the fact it hasn't been around that long and most crypto-currencies are months old???
The subject was BitCoin :)
R. Giskard Reventlov wrote:
It's still subject to wild volatility and goes down as well as up.
Again, what is the long-term trend? :rolleyes: Looks like it be going up from where I'm standing, even if it stumbles now and then.
Bastard Programmer from Hell :suss: If you can't read my code, try converting it here[^]
Eddy Vluggen wrote:
Looks like it be going up from where I'm standing, even if it stumbles now and then.
That is an overly optimistic view and I'm an optimist.
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It's funny how everyone believes the banks are going to squash cryptocurrencies. No they won't, they would just handle it the same way as every other "currency". And earn some money in the process. Authorities is a completely different question, many countries has already outlawed them. Sweden is more pragmatic, the tax authorities simply defines them as a commodity like any other, and demand that the profits are taxed the same way as anything else. You make a profit, you pay a percentage. You have a bitcoin farm, you pay VAT and income tax. Simples.
Wrong is evil and must be defeated. - Jeff Ello
That is not an unreasonable approach.
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You must remember: Bitcoin existed long before "Bitcoin inc". Bitcoin itself not a scam. It may-or-may not be overvalued. Just like a single tulip cost bazillions in the 17th century ([Tulip mania - Wikipedia](https://en.wikipedia.org/wiki/Tulip\_mania)). Tulips were not a scam either, just extremely overvalued. As for "Bitcoin inc" they might be scammers, does not mean that Bitcoin is.
... such stuff as dreams are made on
Fair point and agreed that the company mentioned does come across as a possible scam - may not be, but that's how it looks.
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Jeremy Falcon wrote:
. Banks aren't just going to give up their power willy-nilly. They're going to have some control over it. And since they have the money right now, they can watch Bitcion et al to see what happens then develop their own... to keep control.
I am wondering about this. And I still don't see a way they can do it, even if they create their own, they can't stop Bitcoin or other cryptocurrencies from existing, plus the base of blockchain is no centralized control so... I see this as a point of no return, where banks can either board the train or be left behind. PS: I saw the pointless discussion you got drawn into. Economics is hard, many people don't get it. It's hard to imagine value that's not based on a touchable asset (like gold). Gold does not back the currencies anymore, but they are an asset. Bitcoin is an asset (crypto asset) what I find hard to grasp is how much of it is a bubble, as it's hard to see what backs it, except for computing power and electricity.
To alcohol! The cause of, and solution to, all of life's problems - Homer Simpson ---- Our heads are round so our thoughts can change direction - Francis Picabia
Fabio Franco wrote:
I am wondering about this. And I still don't see a way they can do it, even if they create their own, they can't stop Bitcoin or other cryptocurrencies from existing, plus the base of blockchain is no centralized control so... I see this as a point of no return, where banks can either board the train or be left behind.
Yeah, I have no idea how it's going to be done either. It's a new world out there. Maybe they'll have government specific. Who knows, as we can only guess at this point. But I'm willing to bet something will change about it before the banks are like cool "it's gonna be the new dollar now." :)
Fabio Franco wrote:
PS: I saw the pointless discussion you got drawn into. Economics is hard, many people don't get it. It's hard to imagine value that's not based on a touchable asset (like gold). Gold does not back the currencies anymore, but they are an asset. Bitcoin is an asset (crypto asset) what I find hard to grasp is how much of it is a bubble, as it's hard to see what backs it, except for computing power and electricity.
You are correct sir. When it comes to money and economics there are so many pretenders out there, and we've unfortunately found one on CP. Anyway, to your point, kinda makes you wonder, I know there are limits to the amount of BitCoin that can be generated, but in the future with quantum computing becoming mainstream... if we'll effectively be able to generate the max amount of currencies quickly and thus deflate them from popping the bubble instantly. We can only guess, but the future is crazy to think about. About to read your hyperinflation post...
Jeremy Falcon
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CEO at Bitcoin Inc [^] So I have an interest in cryptocurrency - either the biggest scam of all time or the best thing sliced bread - depends who you ask. If you ask the guy in the link he'll tell you it's the best thing, etc. If I read his resume and education history... tells another story. There was also an article in the DM yesterday talking about ICOs - China and SK have already outlawed them and the SEC has prosecuted a couple of companies in the US. And everyone and their dog are getting into blockchain. What to do, what to do... :-)
Giskard: Bitcoin is of course part a scam and part thin slice bread, or better yet, snake oil or cough syrup... ;P Joking aside you can comparte Bitcoin to the birth of Coca Cola... it started as a do it all, health beverage based on Coca leaves (where you extract Cocaine) and Kola nut which is a fruit rich in caffeine. It was served at room temperature so tasted like sh*t... that was John Pemberton and if you come to Atlanta there's a beautiful place called Pemberton plaza which houses "The World of Coca Cola". Alas, as a medicine, Coca Cola was a deep scam and today, original Coca Cola would be banned as it contains not only high concentrations of caffeine, but also traces of Cocaine. But, ironically Pemberton never became rich from his invention. He died of stomach cancer, being a morphine addict and sold most of his rights to the beverage to keep up with his addictions. But Coca Cola, later became a wild success and today it's an empire (based on Atlanta) which sells billions and has hundreds different brands and tastes. But the "secret sauce" of Coca-Cola still is "ground zero" for the full corporation. So with that in mind, Bitcoin might fare equally well. In the future we might have a Satoshi Nakamoto plaza somewhere in the US, Japan, Russia or whatever. Millions would be made with Bitcoin, but don't just yet dump you're full life savings on it. Dutch family sells everything to bet on bitcoins You must follow the "Wences rule for investing", created by my fellow Latin American Wenceslao Casares (sounds Russian, but he's actually from Argentina, which casually means "Place where the money is"). The simple formula for becoming a bitcoin millionaire, according to one of its innovators Just take 1% of your current state and invest it on Bitcoin, and let it mature (or rot) for 5 to 10 years. If all goes to hell, you've only lost 1% of your household. If everything goes as planned, you would have a 500% return on your investment. In the mean time, just buy the world a Coke and live in perfect harmony.... Mad Men "I'd like to buy the world a Coke" series finale, Coca Cola TV ad
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It's funny how everyone believes the banks are going to squash cryptocurrencies. No they won't, they would just handle it the same way as every other "currency". And earn some money in the process. Authorities is a completely different question, many countries has already outlawed them. Sweden is more pragmatic, the tax authorities simply defines them as a commodity like any other, and demand that the profits are taxed the same way as anything else. You make a profit, you pay a percentage. You have a bitcoin farm, you pay VAT and income tax. Simples.
Wrong is evil and must be defeated. - Jeff Ello
Exactly. I don't think banks will squash them... they can't. Technology is bigger than banks. I totally agree they'll accept them after they make changes to keep them in the power loop.
Jeremy Falcon
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About Hyperinflation. I have been working on a theory about that so let me know what you think if you so choose to read this. When it comes to our commonly traded tenders, you sort of have to throw common sense out the window up to a point. Fiat currency does not behave like normal commodity backed currencies. Instead of being pegged to a commodity, fiat currency becomes a commodity itself which allows its price to fluctuate and this is where things can get a little weird. Inflation has two ways of explaining it. One is the commonly held idea that things naturally become more expensive over time. Now, when you apply this to a long-term valuation chart where each inflation drives up the cost a little each year, the curve becomes parabolic (x2). Approaching inflation from this point of view, it becomes inevitable that hyperinflation will occur for any fiat currency. Another approach is not that everything is becoming more expensive but it is that our fake currencies are loosing a little bit of their value each year (a.k.a. devaluation). Since fiat currency is not physical and has no intrinsic value, it is impossible to apply any sort of science to it therefore using economics to analyze or predict its movements is pointless. So, if we approach this from the devaluation point of view, as long as people think that the currency has at least some value, hyperinflation cannot happen. The valuation curve will drop steadily for a while but will level off and decrease very slowly. Math: since I forgot how to write up those sum formulas, I will use spreadsheet formulas. For this, let A1 be 100 for both approaches where i is the inflation rate for that year Inflation (adding a percentage): A2 = A1 + (A1 * i) Deflation (subtracting a percentage): A2 = A1 - (A1 * i) When graphing inflation adding a percentage, eventually it will lead to a nearly vertical line straight up. When graphing devaluation subtracting a percentage, eventually it will lead to a nearly horizontal line into perpetuity. My argument in support of devaluation is based on observations that the economies of scale and technology have driven down the cost of doing business far more than inflation has increased it since the mid 1970's when the U.S. ended the gold standard. To get an accurate comparison, you need a common point of reference. I like to use gold as a reference because it always had, still has, and always will have intrinsic value. If you compare how
I tend to fall into the second camp myself. I also use the gold example as well, and for the same reasons. But her's the kicker... On a macro scale, I think things keep the intrinsic value that we as humans assign to it, just the number changes with whatever currency / money we're using. That's why the richest people are in basic human necessities like real estate and oil. We value those things as long as we value living comfortably. This is the part that never changes, we compare stuff to one another and get a sense of what's important... which is the basis of supply and demand. Anyway, so the currency changes and nothing else. Take gold, and let's go back a few thousand years, an ounce of gold then got you a hot meal and a nice garment. An ounce of a gold right now is $1,320 USD an ounce. Most nice suits are at least $1k and a nice meal is going to be anywhere from $100-$200 for the family. Thousands of years later it's still almost the same. But this is on a large big picture scale. Like with quantum physics, things are quite the opposite on the micro scale. On a micro scale (days, years, decades) gold fluctuates or so it seems because our base point of reference is the dollar. It's the most liquid. It's where our minds our on a day-to-day basis and it's just how we look at the economy... through the eyes of the dollar. Gold will go up and down, up and down, up and down, etc. This is why some people are against investing in gold. If you buy gold and it goes down in price, then boom it's a bad. Which it's not bad to invest in... it's just a long term instrument. It's the same thing with inflation or devaluation. In the short term inflation is good. We get more stuff for "less". So you're absolutely correct. I mean Japan is doing that right now with quantitative easing, and on purpose to save their economy. We mitigate debt too, double bonus. And in fact, right now, with the situation we're in... I think devaluation is the only thing we have going for us to save the country's economy before eventually dropping the dollar like a bad habit. But this is only because we repeated the same mistakes throughout history... again. The catch is, devaluing is akin to declaring bankruptcy. In the short term it's great... what a relief it is. In the long term it's gonna hurt. People's savings will be wiped out since it's now worthless. 100 years ago, you could buy a Coke for a nickel. Now the same coke is going to cost you a $1 or $1.50. In fact, the whole reason the Fed exists is to try and control this rate of dec
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Eddy Vluggen wrote:
Looks like it be going up from where I'm standing, even if it stumbles now and then.
That is an overly optimistic view and I'm an optimist.
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R. Giskard Reventlov wrote:
Bitcoin -3.59%. It's nowt more than a gamble in a highly volatile market.
..and how is the result based on its ten year performance? Anything that is traded in a volatile market moves up and down fast, but only BC keeps climbing as gold was expected to :)
Bastard Programmer from Hell :suss: If you can't read my code, try converting it here[^]
What is this "up and down" of which you speak? Oh, right, you are interested in how much BitCoin is worth in terms of dollars... A lot of people are also interested in crypto-currency's technical characteristics; blockchain, security, how they get 'mined'. To me I think the most interesting aspect in evaluating BitCoin is what can I buy with it, and how stable are those prices. I'm only a casual observer, but so far it seems like mostly I can buy illegal goods and pay off ransomware. If so, in this regard, I'd say BitCoin and all the rest are still useless (worthless?) to me.
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Fabio Franco wrote:
I am wondering about this. And I still don't see a way they can do it, even if they create their own, they can't stop Bitcoin or other cryptocurrencies from existing, plus the base of blockchain is no centralized control so... I see this as a point of no return, where banks can either board the train or be left behind.
Yeah, I have no idea how it's going to be done either. It's a new world out there. Maybe they'll have government specific. Who knows, as we can only guess at this point. But I'm willing to bet something will change about it before the banks are like cool "it's gonna be the new dollar now." :)
Fabio Franco wrote:
PS: I saw the pointless discussion you got drawn into. Economics is hard, many people don't get it. It's hard to imagine value that's not based on a touchable asset (like gold). Gold does not back the currencies anymore, but they are an asset. Bitcoin is an asset (crypto asset) what I find hard to grasp is how much of it is a bubble, as it's hard to see what backs it, except for computing power and electricity.
You are correct sir. When it comes to money and economics there are so many pretenders out there, and we've unfortunately found one on CP. Anyway, to your point, kinda makes you wonder, I know there are limits to the amount of BitCoin that can be generated, but in the future with quantum computing becoming mainstream... if we'll effectively be able to generate the max amount of currencies quickly and thus deflate them from popping the bubble instantly. We can only guess, but the future is crazy to think about. About to read your hyperinflation post...
Jeremy Falcon
Jeremy Falcon wrote:
with quantum computing becoming mainstream...
I try no to think about it, because it asks more questions than it answers. What will happen with current cryptocurrencies once quantum computing becomes viable. Even before it reaches mainstream some powerful hands could break current cryptography. The defense of blockchain is because it's hard to crack, if it's not hard anymore then it becomes vulnerable.
Jeremy Falcon wrote:
but the future is crazy to think about.
Tell me about it. Mind boggling.
To alcohol! The cause of, and solution to, all of life's problems - Homer Simpson ---- Our heads are round so our thoughts can change direction - Francis Picabia
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What is this "up and down" of which you speak? Oh, right, you are interested in how much BitCoin is worth in terms of dollars... A lot of people are also interested in crypto-currency's technical characteristics; blockchain, security, how they get 'mined'. To me I think the most interesting aspect in evaluating BitCoin is what can I buy with it, and how stable are those prices. I'm only a casual observer, but so far it seems like mostly I can buy illegal goods and pay off ransomware. If so, in this regard, I'd say BitCoin and all the rest are still useless (worthless?) to me.
Ken Utting wrote:
To me I think the most interesting aspect in evaluating BitCoin is what can I buy with it, and how stable are those prices.
A the "unstable" argument; while most fiat-currencies are devalued (nice and stable), BC cannot be devalued. That means that, as a measurement-unit for value, it is hard to beat :)
Ken Utting wrote:
I'm only a casual observer, but so far it seems like mostly I can buy illegal goods and pay off ransomware.
Which was not possible with the other currencies - there were no illegal goods before BitCoin existed :rolleyes:
Bastard Programmer from Hell :suss: If you can't read my code, try converting it here[^]
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ssoares wrote:
Just as the bank notes we have in our pockets have no value.
First world currencies are far less volatile than crypto currencies in terms of valuation. This is both due to perception and reality that the respective country can and will make changes if the currency becomes too volatile. There is nothing at all like that for cryto currencies. If anything crypto currencies seem to behave more like third world nations which can and do suffer from hyper inflation and deflation.
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Jeremy Falcon wrote:
with quantum computing becoming mainstream...
I try no to think about it, because it asks more questions than it answers. What will happen with current cryptocurrencies once quantum computing becomes viable. Even before it reaches mainstream some powerful hands could break current cryptography. The defense of blockchain is because it's hard to crack, if it's not hard anymore then it becomes vulnerable.
Jeremy Falcon wrote:
but the future is crazy to think about.
Tell me about it. Mind boggling.
To alcohol! The cause of, and solution to, all of life's problems - Homer Simpson ---- Our heads are round so our thoughts can change direction - Francis Picabia
Fabio Franco wrote:
I try no to think about it, because it asks more questions than it answers. What will happen with current cryptocurrencies once quantum computing becomes viable. Even before it reaches mainstream some powerful hands could break current cryptography. The defense of blockchain is because it's hard to crack, if it's not hard anymore then it becomes vulnerable.
Yeah exactly. So something will need to change I'm sure. I suppose when computers eventually rule us they'll figure something out. :laugh:
Jeremy Falcon
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R. Giskard Reventlov wrote:
Bitcoin -3.59%. It's nowt more than a gamble in a highly volatile market.
..and how is the result based on its ten year performance? Anything that is traded in a volatile market moves up and down fast, but only BC keeps climbing as gold was expected to :)
Bastard Programmer from Hell :suss: If you can't read my code, try converting it here[^]
Eddy Vluggen wrote:
Anything that is traded in a volatile market moves up and down fast
Currencies of first world nations do not. Exchange rates do not change by multiples in short time frames. As an example one can look to the Chinese yuan versus US dollar. As China has become a economic world leader the rate is far more stable than periods years ago when its economy was less stable. Dollar Yuan Exchange Rate - 35 Year Historical Chart | MacroTrends[^]
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Now this is only my opinion, but I don't think that crypto-currencies will ever become truly mainstream. The primary reason is that the central banks spent several centuries getting a nearly world-wide monopoly on our money supplies. They are tolerating this novelty for the time being but if they ever begin to expand beyond their little niche, the banks are going to wield their inexhaustible political power to squash them into oblivion.
if (Object.DividedByZero == true) { Universe.Implode(); } Meus ratio ex fortis machina. Simplicitatis de formae ac munus. -Foothill, 2016
Foothill wrote:
The primary reason is that the central banks spent several centuries getting a nearly world-wide monopoly on our money supplies.
Banks just like any other reasonable organization have come to realize that a stable economic exchange system leads to a better economic system. There is no conspiracy to gain control but rather the historical reality that attempts at other systems always lead to failures where the current system provides stability that no one could have imagined before. Banks do, just as the vast majority of organizations do, benefit from stable economies. And that is true for the world not just nations as many organizations seek to benefit from internationalization either directly or indirectly.
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I've been studying currencies for years now due to an interest in Forex. I am not a bazillionaire. This is a hobby of mine, so take my words with a grain of salt... 1) Rather than talk about the CEO of Bitcoin (he's obviously biased) I'll mention analysts... First, psychology teaches us its fun to jump on the bandwagon AFTER we see positive movement. And while that's all fine and dandy because people following along gives us swings in the markets to play with. But it A: limits profits and B: by its very nature means most people don't have to have a clue as to *why* it happened. And that's actually ok if you don't care about long term trends, but I digress. However, most will pretend they know to why things happened to sound smart. Remember, in the markets everyone claims to be rich and yet over 90% of people lose money (they just lie about it). So, forget what most people say. Watch what they DO. Because if they really know what they're talking about, they'd be in a yacht drinking mai tais. The point... most analysts get paid to sound smart and get readers. They don't make millions from the market themselves. So really, what do most know, if they themselves aren't profitable with the market they claim to know? They're not scientists. They're not economists. They're not even bankers. So really... what do they know? 2) Now, on to the future. Paper currency will die in developed countries. Over the past 100 years humanity has had a digital revolution. That's going nowhere. As population keeps on increasing but land and resources don't, we'll have to find a way to stop using paper for this. And we have it... digital crypto-currencies. However, it will take two generations at least to catch on big time. As in at least another 100 years. Old people that don't want to change will have to die to be blunt. Paper money will be around for a while, but it'll be phased out eventually just like gold was. In fact, there's not enough paper money right now to cover all the "money" in the US. Most of it is already just a number in a computer. Bitcoin is the guinea pig. It's being watched heavily as a tool for the future. It could die a sudden death though and that won't stop crypto-currencies or digital currencies in general. We need something new. The US dollar is doomed for failure. Right now it's impossible to fix it. As soon as people try to cut costs to pay off debt, people want to wage war. It's gotten out of hand and we're headed for hyperinflation as a way to "lower our deficit" if we don't
Jeremy Falcon wrote:
Now, on to the future. Paper currency will die in developed countries. Over the past 100 years humanity has had a digital revolution. That's going nowhere. As population keeps on increasing but land and resources don't, we'll have to find a way to stop using paper for this. And we have it... digital crypto-currencies.
First of course all trends indicate that the population of the world will level off and reach sustainability levels this century. Second there is no problem in terms of resources for creating currencies. Not to mention even that at least for the US currency paper isn't used, but even if it is producing paper for currencies would be a minor blimp in terms of total paper demand. Fourth there is a difference between digital economic transactions and crypto currencies as the currently exist. Current crypto currencies have basically the same problems that currencies owned by banks (which is not what happens now) which used to happen. And they are obviously too volatile to be allowed to support the world economy much less a nations economy. Might be a viable solution for those country that cannot manage to stabilize their own currency but that is it. So although one might suppose that electronic transactions might become the only norm, they will still be based on a 'currency' that the government, not a market (or worse markets) owns and maintains.
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Jeremy Falcon wrote:
Now, on to the future. Paper currency will die in developed countries. Over the past 100 years humanity has had a digital revolution. That's going nowhere. As population keeps on increasing but land and resources don't, we'll have to find a way to stop using paper for this. And we have it... digital crypto-currencies.
First of course all trends indicate that the population of the world will level off and reach sustainability levels this century. Second there is no problem in terms of resources for creating currencies. Not to mention even that at least for the US currency paper isn't used, but even if it is producing paper for currencies would be a minor blimp in terms of total paper demand. Fourth there is a difference between digital economic transactions and crypto currencies as the currently exist. Current crypto currencies have basically the same problems that currencies owned by banks (which is not what happens now) which used to happen. And they are obviously too volatile to be allowed to support the world economy much less a nations economy. Might be a viable solution for those country that cannot manage to stabilize their own currency but that is it. So although one might suppose that electronic transactions might become the only norm, they will still be based on a 'currency' that the government, not a market (or worse markets) owns and maintains.
- In regards to your first point. I did hear about that. I tend not to guess when a trend will end however since nobody can predict the future... no matter what people say. I do know at some point it'll have to taper off though. The question is when. 2) In regards to your second point. The first part of it, I'll admit it's a loooooong way away, but out of 4 trillion trees on the planet we go through 15 billion a year right now. This will only increase if we have more people. And the entire world knows we're getting away from paper at some point. Which is my point. But yeah, the demand isn't high right now as in this second. But I'm talking big picture stuff here. I thought it was evident in my posts, but I guess not when on CP. The second part of it is simply restating what I said already. So, thanks. :) 3) I'm fully aware of the difference. And I'm not going to elaborate on volatility again. If things change the volatility will change. Volatility is a sign of where it's at right now, not where it's going. And there are key fundamental economical reasons it's the way it is that will change in the future. But I digress and have no desire to get into this... again... on CP... again... with the usual peeps that argue... again. 4) To the fourth point, that's what I've been saying all along. Try again bro.
Jeremy Falcon
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Au contraire, I think you're getting right and left the wrong way round.
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CEO at Bitcoin Inc [^] So I have an interest in cryptocurrency - either the biggest scam of all time or the best thing sliced bread - depends who you ask. If you ask the guy in the link he'll tell you it's the best thing, etc. If I read his resume and education history... tells another story. There was also an article in the DM yesterday talking about ICOs - China and SK have already outlawed them and the SEC has prosecuted a couple of companies in the US. And everyone and their dog are getting into blockchain. What to do, what to do... :-)
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Ken Utting wrote:
To me I think the most interesting aspect in evaluating BitCoin is what can I buy with it, and how stable are those prices.
A the "unstable" argument; while most fiat-currencies are devalued (nice and stable), BC cannot be devalued. That means that, as a measurement-unit for value, it is hard to beat :)
Ken Utting wrote:
I'm only a casual observer, but so far it seems like mostly I can buy illegal goods and pay off ransomware.
Which was not possible with the other currencies - there were no illegal goods before BitCoin existed :rolleyes:
Bastard Programmer from Hell :suss: If you can't read my code, try converting it here[^]
When I talk about stability of prices, what I mean is, if it costs X BC to buy a widget today, how many BC does the widget cost a year from now? If a widget costs me 10 BC today, 35 next week and 5 the week after that, it isn't doing a very good job as a currency, in my opinion. And I'm not saying that BC is no good because it helps me buy illegal items. I'm saying it seems useless if I can't use it to go and buy groceries, or gas, or pay my mortgage, or whatever. And I know there is some gradual adoption of BC for ordinary goods, and so some day maybe it will be more useful. But the endless splintering into me-too "currencies" doesn't help. It just seems to me that a lot of the excitement around this stuff is due to the investment angle or the philosophical angle. But in order to sustain itself, its eventually got to become more useful as a currency.