2013-05-09 FORBES: Bitcoin is a junk currency

[Singlebyte]

http://www.forbes.com/sites/nathanlewis/2013/05/09/bitcoin-is-a-junk-currency-but-it-lays-the-foundation-for-better-money/

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[BitChick]

I saw this article yesterday. 

I thought maybe we should start an archive of articles to pull up if and when BTC becomes mainstream.  It could be really funny to read then!

[Blaztoize]

IMO this is crap. I will not even go into depth as to why. Just read the comments section of the article, let alone the actual article. _/closetab

[Gabi]

Fail article detected. 

[BTC Books]

Fail article detected. 

No shit.  That guy is a massive gold loon.

I don't understand how Forbes' coverage of bitcoin can be so widely divergent.  I wouldn't even mind the anti-bitcoin articles if they weren't so unbearably stupid - it's good to have rational arguments to counter.  But did you notice I said rational?

[cypherdoc]

some ppl just have a static snapshot way of thinking about things.

which is why most of the ppl around here who understand fluid dynamics or rates of change (best example i could think of right now) get Bitcoin.

[Mahn]

I'm confused. First forbes was against it, then in favour of it, now they are against it again. Dear forbes writers, can you make up your mind?

[Gordonium]

I thought maybe we should start an archive of articles to pull up if and when BTC becomes mainstream.  It could be really funny to read then!

Very good idea indeed.

[melvster]

I saw this article yesterday. 

I thought maybe we should start an archive of articles to pull up if and when BTC becomes mainstream.  It could be really funny to read then!

+1

[Rygon]

I'm confused. First forbes was against it, then in favour of it, now they are against it again. Dear forbes writers, can you make up your mind?

I kinda like it that Forbes shows both points of view (even if one has no legs to stand on) on a lot of topics. Not many news organizations are capable of doing that anymore.

[melvster]

http://www.forbes.com/sites/nathanlewis/2013/05/09/bitcoin-is-a-junk-currency-but-it-lays-the-foundation-for-better-money/

Aren't JUNK currencies supposed to go DOWN in value?

[DeathAndTaxes]

Today, you could peg the bitcoin to the dollar. Of course, this is rather pointless, as we could just use dollars instead.

Or, you could peg the bitcoin to gold. That would be rather more interesting, as it would provide a genuine high-quality alternative to the U.S. dollar.

Shows a complete lack of understanding on how Bitcoin (or more generally crypto-currencies work).  One can't "peg" anything without centralized control.  If you have centralized control you have no need for the overhead of the blockchain and you now must have implicit trust in the issuer/controller.

[melvster]

Today, you could peg the bitcoin to the dollar. Of course, this is rather pointless, as we could just use dollars instead.

Or, you could peg the bitcoin to gold. That would be rather more interesting, as it would provide a genuine high-quality alternative to the U.S. dollar.

Shows a complete lack of understanding on how Bitcoin (or more generally crypto-currencies work).  One can't "peg" anything without centralized control.  If you have centralized control you have no need for the overhead of the blockchain and you now must have implicit trust in the issuer/controller.

An order to buy 21 million bitcoins at $100 each would be an effective lower bound

[EvilLizardApparel]

This comment is great...

QUOTE FROM ARTICLE COMMENTS, aa515dk@gmail.com """""""""""  'sub-kindergarten level of monetary understanding" describes YOU, not Bitcoin. You work for Forbes and never heard of something called a HEDGE? An employee would much rather be paid $10/hour WORTH of Bitcoin at Payday's market conversion rate, than $10/hour worth of USD or other fiat...Why you ask? Their $10 USD, American money, or 10 Euros, or whatever they are getting paid in will only DECREASE IN VALUE. If they get paid the equivalent in Bitcoin, theres a huge chance the value of their monetary holding will INCREASE. Why? Bitcoin has a set rate of minting new currency, that cannot be changed. The supply is fixed. Fiat currency, is being printed EVERYDAY in HUGE amounts. Supply increases, value diminishes. You, sir, are the one with sub-par monetary understanding.  """"""""

[Akka]

Funny thing is:

However, if a country or a person uses a gold-based currency today, the exchange rate between that gold-based currency and the U.S. dollar then becomes very unstable.

Or:

However, if a country or a person uses a Bitcoin today, the exchange rate between Bitcoin and the U.S. dollar then becomes very unstable.

 


Just read the whole article again, but replace the word Gold with Bitcoin and the word Bitcoin with Gold --> Nothing Changed. All Statements are equally true or false as before.

[superduh]

so one does not need to go to college and have understanding of economics or journalism to write for Forbes?
"hiring Forbes writers. No experience or understanding necessary."
i am going to write an article on something i don't understand and submit to Forbes for publishing

[kiko]

Well that was painful. Having said that I'm glad. These articles get me thinking. So lets be a little bit academic about what the author has misunderstood. 

In the entire article I can only really find one real assertion: All currencies that are not currently useful as unit of account are to be deemed "Junk-currencies".

Fine. I don't know what Junk-currency means (the author doesn't elaborate), but I'll go with it, because why argue semantics. Let's continue.

From the article:

I suppose some people would argue that you could effectively set the price in U.S. dollars, and then just use bitcoin for transactions at whatever the market rate is at that time.
<snip>
In this case, you would just be using bitcoin as a payment device, while actually doing business on a dollar basis.

The author clearly understands about separating currency from payment system. He is confused (upset?) about the undisputed fact that a lot of people are talking about bitcoin. He must either think they are prematurely exited about using it as a new unit of account, or be insinuating bitcoin offers no advantages over mass adoption of the Turkish banking system.

Let's make it real clear for him.

• Bitcoin has plenty of advantages over the Turkish banking system.
• People are not interested in a new unit of account for the foreseeable future.
• They are exited about bitcoin: The payment mechanism that never sleeps.
• They are exited about borderless tranactions.
• They are exited about ending the Visa/Mastercard duopoly.
• They are exited about getting a 3% discount off everything they buy remotely.
• They are exited about ending Inflation...forever.
• They are exited about ending the threat of capital controls, globally.
• They are exited about renewed financial privacy.
• They are exited about a new long-term store of value, one you don't have to bury in the garden.
• They are exited about one day closing their bank account, for good.

I hope that clears up the confusion.
It's good to spell it out once in a while.