Bitcoin Forum

"While bitcoins are designed so that they cannot be hyperinflated in name, they certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as litecoin, namecoin, and freicoin in place."

How would you debunk this argument?

http://mises.org/daily/6401/Bitcoin-Money-of-the-Future-or-OldFashioned-Bubble

There can be as many things of the type "cryptocurrency" as can be imagined, but there cannot be more than the specified number of tokens of any sub-type of cryptocurrency.  In any event, there's no reason this criticism wouldn't militate against ordinary fiat, or gold, for that matter.  Since the type of thing ordinary fiat is is paper notes, and anyone can create any number of paper notes; but it's very difficult to print token notes qualitatively identical to, say, modern US dollars.  And gold is a type of metal, but it shouldn't be worrying to the value of gold that there are other things of that type -- metals -- that are more abundant than gold.

It just happens that history has given bitcoins a certain perceived value and it isn't possible to pass another cryptocurrency (a litecoin, say) off as a bitcoin.

What's your take on the rest of the article?

US dollars are not mere paper notes. They are in fact backed by debt.

Moreover, gold has a lot of advantages in comparison with other metals, while the bitcoin seems to be more or less similar to any other cryptocurrency.

Good point.  I'll give you 10 billion proudhoncoins for 10 bitcoins.  Just for fun.  Yes?

When will they make Farm coins so I can trade you 3  Cow COins for 5 Chickens and a sheep Coin? >_>

No. Since there is a bitcoin bubble now, driven by a lot of stupid people hoping to get rich, I'd rather have the bitcoins :)

People buy bitcoins because others buy bitcoins - not because they are inherently better than other cryptocurrencies or because they have any objective value as money. That's my view.

And people buy USD (with their labor and goods) because others buy USD - not because they are inherently better than other pieces of paper with printings on them or because they have any objective value as money.  No?

USD is backed by debt and force. Otherwise I would agree - paper notes qua paper notes have no objective value as money.

Most pieces of paper are backed by nothing.

I didn't make any claims about what it's backed by.  I doubt the man on the street has in his mind things like violent government force and debt backing when he buys USD.  Rather, I think most people do what they do with money, USD in this case, because other people do it.

"While gold is designed so that it cannot be hyperinflated in name, it certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as platinum, silver, and copper in place."

Gold is being durable, amalgamable, malleable, divisible, homogeneous, rare, easily recognizable...

Bitcoin and other cryptocurrencies are more or less clones. Different metals are not.

It's not inflation exactly. It's more like competition from almost identical forks, but the effect is similar to inflation, as it reduces the value of each coin, to the extent that the market for bitcoin-based cryptocurrency is fragmented across the forks.

It's possible that the network effect will prevent any bitcoin-variant from posing any significant competitive threat to bitcoin, especially if bitcoin is ready to adopt any feature that is found to be useful in a bitcoin variant, like hypothetically, faster block generation.

Platinum is being durable, amalgamable, malleable, divisible, homogeneous, rare, easily recognizable...

Silver is being durable, amalgamable, malleable, divisible, homogeneous, rare, easily recognizable...

Copper is being durable, amalgamable, malleable, divisible, homogeneous, rare, easily recognizable...

Different metals have different properties.  Different cryptocurrencies have different properties.  Bitcoin has the property of having been the first.  That's apparently a big property for this sort of thing.  In any event, you and I both know bitcoin is in a massive bubble that will eventually pop and bring the price back down to the single digits or lower.  When that happens, my offer still stands, I'll give you 10 billion Proudhon coins for 10 bitcoins.

Except for the term "hyper-inflation", I think this argument is valid. Bitcoin is also susceptible to inflation through fractional reserve banking.

I don't think bitcoin is susceptible to hyper-inflation because the alt currencies would become valueless first, removing surplus money supply until it is stable again.

Currency competition is a good thing. Bitcoin won't by every random guy making their Retardcoin. Bitcoin has adoptions that others don't. A new currency comes along that offers things better than bitcoin? It will outcompete them, but not inflate them.

Here, let's try this:

I just made 21 quadrillion of each of these: proudhon coins, ferklecoins, flapjackcoins, guitarcoins, carcoins, coincoins, moneycoins, and bitbitcoins.  

Therefore...[fill in the blank].