I think the quote is also erroneous because it assumes that all of those coins could be sold at $17 (or whatever price point you want to choose).  The MtGox hack proved that it takes only a small percentage (~6% if I recall correctly) of BTC's to be sold to bring the value down dramatically.

Which is why I said I hope your bullion is only a small percent of your total portfolio......

I'm assuming by your reply it is. 

I would imagine the early adopters of Bitcoin can also manipulate the market as they have a disproportionate portion of the money supply.  Even in the Bitcoin world, there are the elite that can pull strings.

I hope your bullion was only a small percentage of your investment portfolio.  If not putting 98% into anything, let alone something in its infancy, is a major gamble.  I hope you don't have any dependents.  The last thing I would want to see is someone getting wiped out so I wish you the best of luck but yikes....

Working on it.  I can still put too many holes through it but I'll post for criticism once I can clean it up.


You might be right.  Although natural stabilization may mean a dramatic drop in price.  I wonder what % of the community would bail at that point.

No, relative stability doesn't work.  By that logic I could declare I'm starting to dig the next grand canyon.  I dug a 10ft hole in my backyard in 1 day.  Grand canyon took thousands of years of erosion to create.  Relatively speaking, I'm on good pace!

Seen the list.  A bunch of start-up nobodies.  If I showed that list to some person walking down the street they wouldn't be able to recognize 1% of those names. 

For argument's sake, lets say I agree with you.  The currency has done well considering it's infancy (I actually have no issue with this).  What I'm trying to say is what propels BTC from an experiment to a viable medium of exchange.

People inherently dislike change.  It would take a rather monumental benefit for a mass of people to adopt something new.  It's not going to be merchant fees.  

Could it be a decentralized, deflationary currency that can move globally quickly and efficiently?  I can see that as the potential propellant.  If I didn't see some potential in Bitcoin, I wouldn't be here.  My point is even though BTC is in its infancy, there are some big flaws that need to be addressed.  You cannot have a medium of exchange without confidence.  You cannot have confidence without transparency and stability.  BTC may have transparency but it most certainly does not have stability.    

As I type, MtGox, Low: 13.51  High: 16.5

That's a change of 22.1% IN ONE DAY.  This is stability?  For perspective, the Dollar moved against the Euro by 0.8% today.  The dollar has fallen against the Euro by about the same 22% margin.... it just took EIGHT YEARS rather than a day.

Let me get this straight, a merchant would be upset to pay a few hundred basis points to MC/Visa yet would have no problem with accepting a currency that can swing 20% or more in any particular direction.  You're going to sit there and tell me that your selling point to these merchants is, "Hey we can end those 3% transaction fees hitting your bottom line.  The tradeoff is that 99% of your overhead can't be paid with these Bitcoins, and oh yeah, next week it might be worth half what it is today."

And this is going to be widely adopted?


Send me a list of these actual merchants and I'll ask them myself.  Curious, any of these Fortune 500 companies?  How about publicly traded?  How about revenues of $1MM+ per annum?  Please tell me you're talking about bonafide merchants that can further Bitcoins cause and not Joe Neighbor selling video cards out of his basement.

Seashells can be a currency as long as someone like you and myself are willing to use them as exchange.  I know Bitcoin is touted as a currency, and is being used by more merchants yada yada yada...

I'm talking about a viable currency.  

I think the first thing we need to decide here is what is the argument.  Everyone's examples are all over the map.

Is Bitcoin a store of value?  Gold and silver are commodities NOT currencies.  Last I checked, I can't take any bullion down to McDonald's and buy a happy meal.  My understanding is Bitcoins are supposed to be a P2P currency, so lets move on.

Is Bitcoin a medium of exchange (ie. currency)?  This is where the big problem lies because the Bitcoin apologists will argue that merchants and buyers are adopting BTC's in daily transactions.  While this may be true in geekville, the fact is the majority of merchants do not recognize BTC's as a medium of exchange.  And in its present state, can you blame them?  We're seeing 20%+ swings in price at the moment.  Most businesses (as someone pointed out) run on very slim margins.  Do you honestly think some merchant scraping by to make a profit will be willing to take those types of risks?  Is BTC worth a $1?  $30?  Somewhere in between?  Who the hell knows, it's been priced at all those points over the short-term and that's the problem.

The only way a big merchant would be willing to put up with that type of volatility would be if there is a way to hedge.  The same way a business would hedge foreign currency exposure, interest rates, commodity prices, etc.  As far as I know, no such hedge for Bitcoin exists.  All we have are speculators moving the price around wildly. 

Bitcoin in its current state is a giant casino of monopoly money with speculators running prices up and down until someone is eventually left holding the bag.  If you want to argue that Bitcoin is a store of value, then fine, but in that case I would suggest you go out and buy gold or silver.  At least those have a few thousands years of history that show it can be a viable store of value.  But this horseshit fantasy that BTC's is a currency needs to end.  It's not and will never be without some substantial changes.

Putting aside inflation/deflation, to make your statement comparable to Bitcoin, you would need to compare the dollar to another form of currency.  A dollar is a dollar, but is a dollar always equal to the same amount of Yen or Euro?  No, it fluctuates.

Same with Bitcoin, a BTC is a BTC but it fluctuates in comparison to other currencies, such as the dollar.   

People are up in arms about a trademark yet fail to see the much larger problem.  Bitcoin does not, and never will, have a patent on its intellectual property.  That's like Coca-Cola trademarking their name but allowing anyone to use their recipe for free.

Sounds like you're volunteering? 

I understand you're talking about the system but when you mention security to someone, a new adopter for example, in addition to the system they will care about how secure their personal Bitcoins are.  The fact remains that a persons cash held in a bank is much more secure than their Bitcoins held in an unsecured wallet.  

Your statement is not wrong, I just think it might be misread by the average person, particularly your target audience.

Interest rates would increase in an inflationary environment. 

Last week people were saying the exact same thing, except the price was $15 that looked like such a great deal.  You have time, quite a bit of time I would guess.  Bitcoin is still in its infancy, you're not going to "miss the boat" by being one day late to the game.  

I agree.  During the Gox downtime, I predicted $8 by August.  It will stick around $10 as the Bitcoin apologists desperately try to keep prices above single digits but this will be short lived.  Capitulation will hit when it falls into single digits.  

Rage Against the Machine.  Benefit concert.