- Bitcoin is only in version 0.4. It's beta software, not even a "1.0" version yet.

- Version 0.4 does have wallet encryption. It now requires a password to send coins.

- Your idea to "remove speculation" is absurd. Speculation is good, both up and down - it's the ability of people to bring pricing information forward into the present. It's crucial for efficient markets to be able to adjust prices based on time-preferences and "value wagering." If you succeed in riding a currency of speculators you've succeeded in making it worthless.

- Your proposal to charge a fee on inactive coins is absurd. With no ability to save coins, there is little ability to desire them in the first place. Saving is a healthy part of an economy, and market price fluctuations due to savers and spenders provides important indications for how producers ought to channel their scarce resources.

- Your proposal to manipulate market price by accelerating or slowing inflation is also absurd. Again, prices are our friends. Stop messing with prices - yours is the same mistake made by every government who tries to centrally plan its economy.


Bitcoin remains king - I have yet to hear a proposal for a better-designed currency, and to surpass Bitcoin would require not just marginal improvements, but vast ones.

Don't be so quick to dismiss a beautifully-working system in favor of a completely untested hypothetical improvement. Bitcoin will be more widely adopted with time - the ecosystem being built around it is very much alive and strengthening each month

This is why it's silly when people confuse the "value" of bitcoin with the "price."  The value of Bitcoin as a monetary system is undoubtedly higher than a year ago, and higher than 3 months ago, and higher than last week.  The "price" on the other hand, has fallen.

Those who see a price fall and equate it with a fall in Bitcoin's fundamental value will always be missing the boat.

A wise investor figures out how to measure and perceive value, then looks at the price, and if there is a discrepancy he goes long or short. I'm long on Bitcoin. We'll see if I'm a wise investor =)

Sounds almost like those who say, why sell today when I can sell tomorrow for more! 

Both are assumptions, and speculation in either direction carries risk.

Those involved int he development mailing list are primarily working on the core protocol and client. There are myriad groups building various projects, some private and some public. The best ones are generally private, as the profit motive is involved.

The decentralized nature of Bitcoin means that it's a bit difficult for any person or group to get a full picture of everything going on. I pay quite a bit of attention, but only know a fraction of the people working on the big projects, and only still in English. I have no idea what's going on in other languages. Hundreds (thousands?) of entrepreneurs are building right now, they'll be getting rich with their creations, not with the speculation on current spot price of a Bitcoin.

If invading countries, toppling foreign governments, and bombing and murdering over a hundred thousands civilians is "defense of the nation," then such a nation is not worthy of defense.

Rarity - if you'd like to fund murder, please do it with your own money. Forcing me to pay for the murder of people around the world is abhorrent.

I'll be donating.

So sad that only one presidential candidate in "The Land of the Free" is actually promoting liberty as a platform. Liberty is a very extremist position in the USSA 

Actually, it is. Those of us involved in the projects are aware of this.

When the media announces a booming new industry, that industry is at its peak. When the media announces a dead industry, that's likely the bottom.

I don't understand why everyone is so concerned with the market price... people treat it like a stock, and ascribe the health of Bitcoin to the market (or share) price.

It belies an fundamental misunderstanding of the nature of Bitcoin. It's a protocol, not a company.

Let's examine this.

Say you have $100,000 at the end of the year. You can either send it to the IRS, or your can make a tax-deductible donation to a charity of your choice. In one case, $100,000 of funding goes to the Government, in the other case $100,000 of funding goes to charity.

It seems you'd rather let the government have it, instead of the charity. Now, you'll argue that much of what the government does is valuable "charity" work. Let's assume, for the sake of argument, that a whopping 90% of government funding goes to benevolent, wonderfully effective charity programs. The remaining 10% goes to war, bombs, killing people, subsidizing oil companies, paying massive farm corporations to sit on excess crops and burn them to raise prices, and paying foreign dictators to suppress and harm their people.

Alternatively, 100% of it could go to a wonderful private charity group, and 0% to war, bombs, killing people, and the myriad evils of government.  

Why is it that you choose to bomb and kill people with 10% of your money? And why do you think it's okay to force me to bomb and kill people? Please make the argument why that money isn't better given to the private charity that isn't killing people.

Awesome!!

Maybe someday you'll realize that the entire purpose of the central bank's inflationary activities is precisely for wealth redistribution - both from the rich to the poor (to buy votes from government spending programs) and from the poor to the rich (via inflation). In both cases, the government is strengthened at the expense of individual freedom.

How about we stop "redistributing" property justly acquired by humans. It's a lesson mankind is unfortunately taking thousands of years to learn - don't steal from or harm people, and society will be good.

It's incredible how "socialists" are always so eager to be charitable with other peoples' money, while typing their nonsensical tyranny on computers which could surely be donated to more needy children in 3rd world countries...

Sending money instantly across the world with no fees or intervening parties.

Dude, I use it as a currency almost daily.

You seem to think that just because many receivers of the coins will desire dollars instead, that such will always be the case. You assume it's static, not realizing that as the economy matures the need to "convert back" lessens over time.

Bitcoin becomes a common currency gradually, and for some of us it is already very much a currency now. And no I'm not a large holder of coins, only about 200... I had more yesterday but I paid someone, and in fact I received most of them by doing work for other people. It's almost like... a currency! And no fees + transferable instantly around the world.

Yes.

BitMunchies.com

That doesn't prove anything though. Bitcoin's usefulness and value does not derive from it's proximity to the acquisition of food.

Volatility is rough.

Onward.

LOL at the entire post. I love how he recommends to "end free trade" as if trade were a policy.

What he means is, "fine and imprison people who voluntarily transact goods and services across national borders."

How dare those Mexicans sell us things! How dare the Indian's buy our goods! We must stop the Brazilians from ruining our economy by providing our consumers with things they want at prices lower than our less-efficient producers make them!!

To the OP - Read Bastiat's "Candlemaker's Petition" and then review your thesis.

The people declaring it dead are (for the most part) the same people that have been declaring it dead for a long time. They declared it dead during the skyrocket bubble because it meant people will hoard it and never use it for currency. They declared it dead during large swings, because it was too volatile to use as currency. They've been declaring it dead every time it drops in price, because they assume it will drop forever.

Certainly, the falling price has shaken confidence. Those who are least confident in the technology have gotten scared. Some of us aren't so easily shaken. If you understand it as a payment system, instead of a speculative investment, then the price swings won't bother you as much.

Of course... if either Nagle or Foo was confident in their predictive ability, they would've shorted btc at 5:1 leverage on Bitcoinica and made a fortune. They can still short if they're confident. But I'm guessing they prefer to make predictions without backing them.

Enjoy your euphemism. The rest of us are building stuff.

Founder - the "true value" of the Bitcoin economy is coins + goods/services + infrastructure + net present value of all future coins/goods/services/infrastructure.

That value is impossible to calculate... but you are not even trying to calculate it. You are ONLY extracting that first component "coins" and labeling that as the "true value of the bitcoin economy."

Surely you must now understand your error? This is not a matter of economic opinion here, this is a matter of logical fallacy and I cannot endure the head of FlexCoin, the Bitcoin bank, to perpetuate it. 

Gah more fallacy heaped upon fallacy!

Gold is not worthless. Just because it's not for eating, nor for building things, doesn't mean it's worthless. It is attractive to people in ornamentation and that is where its original value comes from. On top of that, it is used as a money because its properties make it very effective for this specific purpose. Gold's value as money is not arbitrary... in fact it is almost inevitable given the geographic makeup of the Earth and the properties inherent in the gold element.

So people did not just "decide" that gold had value - it has value because of its usefulness and its properties. The same goes for Bitcoin - it has value because of its usefulness and properties as an international frictionless payment system. Specifically with Bitcoin, it is the protocol which has use value, and the Bitcoin units have market price because their supply is scarce and they are the only units usable with the Bitcoin protocol.

If you really want to claim that helium is more valuable than gold, because it's more useful, then you've lost your final credibility as an economic thinker  . Gold's primary value is in its effectiveness as money - this is an elementary concept. Money, as a "good," is far more useful than helium, and thus gold (being useful as money) is correctly priced above helium in the marketplace. The demand for money FAR outweighs the demand for birthday baloons (and whatever else helium is used for), so even if helium is more scarce it will still command a lower price than gold.