Let's compare USD and BTC

[bitcoinbear]

You need to be very confident about your computer knowledge before you do all this alone by yourself

When the sum of money becomes larger than salary, it need to be managed against potential loss, people start to rely on institutional services. Even if you stashed 10000 BTC in your offline wallet, you will feel unsecure

No I would not.

You WILL if one BTC exchange value is $1000, by that price, a team will brake into your house with a gun pointing to you to get that string  If they succeed, no trace to chase them, it is almost a risk free robbery. Actually this could be a problem preventing BTC from going main stream

And to the computer part, either a web based online account or a managed pension fund, normal people can not go higher than this degree of complexity

How will this band of robbers know who owns the bitcoins? will they just randomly pick houses, break in , and demand money? What is to stop these people from doing this now, but instead of a bitcoin password demanding cash, jewelry, everything else? I think it would be harder to guess who has bitcoins lying around on their home computer, so to me it seems safer to stash money away as bitcoins than to keep other kinds of wealth.

[1714005386]

1714005386

[Crypt_Current]

You need to be very confident about your computer knowledge before you do all this alone by yourself

When the sum of money becomes larger than salary, it need to be managed against potential loss, people start to rely on institutional services. Even if you stashed 10000 BTC in your offline wallet, you will feel unsecure

No I would not.

You WILL if one BTC exchange value is $1000, by that price, a team will brake into your house with a gun pointing to you to get that string  If they succeed, no trace to chase them, it is almost a risk free robbery. Actually this could be a problem preventing BTC from going main stream

And to the computer part, either a web based online account or a managed pension fund, normal people can not go higher than this degree of complexity

How will this band of robbers know who owns the bitcoins? will they just randomly pick houses, break in , and demand money? What is to stop these people from doing this now, but instead of a bitcoin password demanding cash, jewelry, everything else? I think it would be harder to guess who has bitcoins lying around on their home computer, so to me it seems safer to stash money away as bitcoins than to keep other kinds of wealth.

^ yerp.  Until we get into "ghost-hacking" territory as seen in things like Ghost in the Shell, I would consider BTC + brainwallet a fairly safe haven for savings.

[Shotgun_WooWoo]

I think that if BTC is treated well and developed/secured accordingly, the only thing left would be the exchanges.  MT Gox obviously isn't very safe, having been hacked.  There needs to be more focus, integration, and attention put on the BTC marketplaces such as bitmit.  Silk Road is a good example of what BTC is capable of, but some of the stupidity I've seen associated with it doesn't give it a good name. 

I'm not putting any part of BTC down, but it's not working 'with' me so far.  First I found out I needed a dedicated rig, then ASICs came out, it's very unstable in terms of security/stability.  There is a lot of work going into it code wise, but every story I read about hacked/cracked wallets makes me cringe.  I can't stand the dark side of this hobby, it's way too dark.  What's so wrong with makeing a whir box that makes fake/hobby money?

[peepee]

I can't stand the dark side of this hobby humans, it's way too dark.

FTFY

[Shotgun_WooWoo]

Hey man, I sure hope that meant 'fixed that for you' =)

[johnyj]

You need to be very confident about your computer knowledge before you do all this alone by yourself

When the sum of money becomes larger than salary, it need to be managed against potential loss, people start to rely on institutional services. Even if you stashed 10000 BTC in your offline wallet, you will feel unsecure

No I would not.

You WILL if one BTC exchange value is $1000, by that price, a team will brake into your house with a gun pointing to you to get that string  If they succeed, no trace to chase them, it is almost a risk free robbery. Actually this could be a problem preventing BTC from going main stream

And to the computer part, either a web based online account or a managed pension fund, normal people can not go higher than this degree of complexity

How will this band of robbers know who owns the bitcoins? will they just randomly pick houses, break in , and demand money? What is to stop these people from doing this now, but instead of a bitcoin password demanding cash, jewelry, everything else? I think it would be harder to guess who has bitcoins lying around on their home computer, so to me it seems safer to stash money away as bitcoins than to keep other kinds of wealth.

unless you never touch exchanges

[Spaceman_Spiff]

I have another thought: It could be regarded as a digital asset which is very secure and can hedge against inflation, since it is not issued by any government, the risk of default is zero. But first the exchange should be well regulated and accepted by pension funds

And if lot of people put their savings into BTC, it will reduce the unemployment (they dare to spend more since their retirement is secured now), and inflation will be low (Fed does not need to print more money to stimulate spending)

I don't think bitcoin can be considered very secure at the moment, but I think you have a valid point that in the future, if bitcoin has grown and has shown itself to be secure, people might consider it a very safe way to keep their savings.  Due to the inherent inflation-protection, this would indeed reduce fear of loss of purchasing power in economically bad times (such as exists among several economically interested people today).  This could indeed lead to lower volatility in spending behavior, as this would probably be less correlated with the economic cycle. 


You mention unemployment a lot, and the effect monetary policy has on this. 
First of all, I think it is important to realize that employment rates don't necessarily say a lot.  I am not talking about differences in U3 or U6 or whatever. Just that it is actually quite easy to have 0% unemployment.  The question is if the jobs created are productive or meaningful jobs.  It would be very easy for a goverment to decree that everyone who doesn't have a job will now get paid for the job of "stone-smasher", consisting of finding stones and smashing them to little pieces with a hammer...  There would be no unemployment, but obviously living conditions would go down as many people go about smashing stones, while necessary products and services are being underproduced or under-offered.  This might sound ridiculous, but although I am not sure if this is historically correct, I believe a similar situation existed in many communistic countries, where there would be a lot of unnecessary functions created to get full employment (I have heard accounts of small shop having many employees, most of them just sitting around, from time to time working the register or putting some foods in a bag, then sitting around some more).

Now, with inflationary monetary policy and low interest rates, lending is encouraged.  This reduces the threshold for companies to be profitable, so certain companies that would not be profitable if they had to pay a lot of interest on their loan can now start up after all.  As they need employees, unemployment will be reduced.  However, high inflation risk and low lending rates also enhances the risk of malinvestment, in which bad companies get money that is put to work unproductively, which is destructive for the economy.  Therefore, boom conditions will often lead to recessions.  My guess is that in a BTC economy, if the deflation isn't too strong, overall economical growth will be somewhat lower, but there will be less booms and busts, so the system should be more stable.

[bitcoinbear]

You need to be very confident about your computer knowledge before you do all this alone by yourself

When the sum of money becomes larger than salary, it need to be managed against potential loss, people start to rely on institutional services. Even if you stashed 10000 BTC in your offline wallet, you will feel unsecure

No I would not.

You WILL if one BTC exchange value is $1000, by that price, a team will brake into your house with a gun pointing to you to get that string  If they succeed, no trace to chase them, it is almost a risk free robbery. Actually this could be a problem preventing BTC from going main stream

And to the computer part, either a web based online account or a managed pension fund, normal people can not go higher than this degree of complexity

How will this band of robbers know who owns the bitcoins? will they just randomly pick houses, break in , and demand money? What is to stop these people from doing this now, but instead of a bitcoin password demanding cash, jewelry, everything else? I think it would be harder to guess who has bitcoins lying around on their home computer, so to me it seems safer to stash money away as bitcoins than to keep other kinds of wealth.

unless you never touch exchanges

What does using exchanges have to do with anything?

[EskimoBob]

Why do you guys keep calling bitcoin a currency? It is not a currency.
Bitcoin is a secure, cheap and relatively fast way to transfer any currency (in theory) from point A to point B.  As I have mentioned multiple times before, calling BTC a 'new internet currency' or currency at all, is probably the biggest PR fck-up so far.  
Merchants do not want new shiny "internets currency" and all the technobabble. They need a break from getting ripped of by banks and "new currency" is a pair of words that sound like "more water!?" do a drowning man.

BTC is a way to transfer EUR/USD/etc. from you to merchant or to anyone else. Yes, the BTC-FIAT is real PITA but hopefully this gets better or becomes unneeded.

You want BTC to be noticed more? Talk about it as a replacement to bank transfers, VISA, MC, AMEX and those silly paper things you guys still use over there

My point is, comparing BTC to currency is a bit pointless. Comparing it to money transfer mechanisms like VISA or flaky Paypal make way more sense.

[Spaceman_Spiff]

Why do you guys keep calling bitcoin a currency? It is not a currency.

We probably do that because it IS a currency.  You do not transfer USD or euros.... 
I agree that for the moment, for merchants, it is way more interesting to immediately reconvert the bitcoins to traditional currencies again, to avoid exchange rate risks.  The more bitcoin is used, the more attractive this will become as liquidity improves ('bid-ask' spreads go down), exchange fees and payment processor fees will get more competitive etc. .

But in the end, bitcoin is a currency, and is being bought by some as a store of value, so don't call it just a new paypal.

[bitcoinbear]

Why do you guys keep calling bitcoin a currency? It is not a currency.
Bitcoin is a secure, cheap and relatively fast way to transfer any currency (in theory) from point A to point B.  As I have mentioned multiple times before, calling BTC a 'new internet currency' or currency at all, is probably the biggest PR fck-up so far.  
Merchants do not want new shiny "internets currency" and all the technobabble. They need a break from getting ripped of by banks and "new currency" is a pair of words that sound like "more water!?" do a drowning man.

BTC is a way to transfer EUR/USD/etc. from you to merchant or to anyone else. Yes, the BTC-FIAT is real PITA but hopefully this gets better or becomes unneeded.

You want BTC to be noticed more? Talk about it as a replacement to bank transfers, VISA, MC, AMEX and those silly paper things you guys still use over there

My point is, comparing BTC to currency is a bit pointless. Comparing it to money transfer mechanisms like VISA or flaky Paypal make way more sense.

Bitcoin is many things, and to each person it will serve a different purpose. You are right, we should spend more time talking about how it is a better way to transfer money than the status quo. But it is also a way to save value for later, and people can use it as a currency if they want. Bitcoin is so new and different it is hard to fit it into one category.