Bitcoin Is Not Really A Good Money

[BobK71]

I know, Bitcoin is designed to be as free from central bank and politician control as possible.  It is open-source, decentralized, etc.

But if you think about it, Bitcoin is still fundamentally worse than gold and silver as a truly free money.

First things first: all of gold, silver and Bitcoin are subject to central bank manipulation by pegging.  When central banks store up enough non-state money, they can sell that money for a fixed dollar or pound price, and thus suppress any appreciation of the non-state money in currency terms.  This enables the elites to acquire wealth and power for free, by issuing state currency and debt, as long as the central bank has enough of the non-state money to fight off any 'run on the bank.'

This was the real nature of the gold and silver standards through most of modern history, that mainstream economists praised for stabilizing state currencies and economies, at that time.  (Of course, they are now firmly against the gold standard, thus both times saying the elites' system was/is good for the economy.)

That said, Bitcoin suffers from the additional problem that it's secured not by physics, but by algorithm.  Algorithms can change.  Algorithms are only guarded by humans who are subject to persuasion.  At some point, the elites will have issued too many IOUs against the Bitcoin in their vaults.  Either we increase the issuance limit from 21 million, or we get a financial crisis and depression.  I imagine most of the developers will be open to talking.  (BTW, some version of this is almost guaranteed to happen, due to the nature of the world system.  For example, all countries have defaulted on their promises to redeem gold at a fixed price.)

This is in contrast to gold and silver, where violating the limit of issuance is physically impossible (or very expensive, with radioactive reactions.)

Another major weakness of Bitcoin is transparency.  In order for the public to hold the elites accountable for their monetary actions, however partially, the easier it is to observe and monitor the system, the better.  The reality is that computer networks and data structures are not easy for most of the public to understand, compared to the age-old concept of holding physical metals.

And we know from experience that the elites take full advantage of lack of public understanding.  Besides the 'gold standard good, gold standard bad' flip-flop by establishment economists, almost every major issue of finance is distorted before the public receive the wisdom passed down to it by the media (and this includes, maybe especially includes, channels tailored to the highly educated, like The Economist magazine and America's PBS television.)  Southeast Asia in the 90s, Greece recently, and Germany between world wars were made to suffer deflation after their financial crises, and the economic justification was 'moral hazard.'  The US was allowed to print devalued money to ease the pain after its own financial crises, and the economic justification was Keynesian pain relief.  (The real reason for the differentiation was that American voters had more power to disrupt the elites' system than those other populations.)

With Bitcoin so much easier to manipulate than gold and silver, no wonder, all the signs are that the elites will promote Bitcoin as the store of value of the future.  This makes even more sense when you consider it would be embarassing for the elites to promote gold or silver instead, since their prices would have to rise to a level much higher than the last time the elites tried to fix them.  Gold has appreciated 30 time since the elites' fixed postwar price of $35/ounce, and would likely have to appreciate another 30 times before a new (de-facto) gold standard can become stable.  This does not make the elites' money look good.  Bitcoin has no such history, and the elites can claim (and likely be believed) that they are merely moving money onto a new, electronic foundation that is more stable than a totally fiat system.

As I mentioned before, the elites must secretly nurture, if not openly promote, some form of safe store of value that is totally trusted by the public.  In today's world, that can only mean non-state-issued money.  The only question is which.

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[cryptounicon]

Bitcoin is a modern store of value that will far exceed any other major store of value. Gold and Silver is just impractical in today's digital society. I fully support the deflationary aspect to Bitcoin, it ensure that its value will grow over time.

The scarcity is a large factor of the value that it has.

[bncbnc]

Bitcoin is a modern store of value that will far exceed any other major store of value. Gold and Silver is just impractical in today's digital society. I fully support the deflationary aspect to Bitcoin, it ensure that its value will grow over time.

The scarcity is a large factor of the value that it has.

yes that is right that bitcoin is the currency of the modern people specially the new generation who are showing more interest in bitcoin to use it for online shopping. they are now converting even their business to online and mostly giving preference to online shopping and other dealings, therefore we can say that bitcoin has a great and bright future.

[DrGuns4Hands]

for me bitcoin is a really good thing to be dependent on. it really helps me on daily instructions mostly business transactions bitcoin also always there for me when i needed money i can easily sell it out so that i can cash it out. even tho bitcoin is a decentralized money. i don't care because bitcoin is the one who helps me to be on my state right now.

[yugyug]

many old-fashion economists and old-fashion investors can't hardly explain how the bitcoin or cryptocurrency really work. even the genius investor Warren Buffett talks bullshits about bitcoin and he tried to predict 4 years ago that bitcoin would burst like a bubble and that time the bitcoin's value is below 300 usd and now the price is soaring as high as 4000 usd , he even can't understand how it was going. OP is right bitcoin is not a good money; for an old-fahsion man but it is a very good money for a cyber generation, gold and silver is not the real wealth status of this modern times as you can see Microsoft, Facebook, Apple, Twitter, Google, IBM, Intel, Spotify and other computing related services are the new wealthy elite and they didn't need gold to hold, DATA is the new money. Bitcoin is DATA so this is where the value it holds.

[Hydrogen]

I will contend that.

1. Bitcoin has many advantages over both gold and silver. Bitcoin is easier to transact and buy/sell with than a 2 pound gold/silver nugget. Bitcoin is easier to store and keep safe than gold/silver. Bitcoin is more portable. Bitcoin is more difficult to counterfeit than gold/silver bars. If bitcoin is stolen it may also be easier to track down and recover than gold/silver due to the publicly accessible ledger and a good portion of the internet containing logs which allow tracking of transactions to a relative degree.

2. Bitcoin's algorithm is a major advantage being a creator of long term value. The second people have control over something like ethereum or bch is often the second they sacrifice long term value for short term gain. We can see this in many crypto and fiat currencies which are manipulated to produce short term gain, rather than long term value. People criticize bitcoin's algorithm but also fail to acknowledge the algorithm has proven much more reliable and stable than more arbitrary and often greed driven human regulation.

[skyline247]

I will contend that.

1. Bitcoin has many advantages over both gold and silver. Bitcoin is easier to transact and buy/sell with than a 2 pound gold/silver nugget. Bitcoin is easier to store and keep safe than gold/silver. Bitcoin is more portable. Bitcoin is more difficult to counterfeit than gold/silver bars. If bitcoin is stolen it may also be easier to track down and recover than gold/silver due to the publicly accessible ledger and a good portion of the internet containing logs which allow tracking of transactions to a relative degree.

2. Bitcoin's algorithm is a major advantage being a creator of long term value. The second people have control over something like ethereum or bch is often the second they sacrifice long term value for short term gain. We can see this in many crypto and fiat currencies which are manipulated to produce short term gain, rather than long term value. People criticize bitcoin's algorithm but also fail to acknowledge the algorithm has proven much more reliable and stable than more arbitrary and often greed driven human regulation.

Bitcoin's algorithm definitely isn't an advantage over gold, because it was modeled on gold to begin with. There is only a certain amount available (like gold), as time goes on it gets harder to mine (like gold) and thus becomes more rare and the price or demand increases (like gold). This is why it is called virtual gold in the first place. :p

[gadimbrut]

Bitcoin is not really money but bitcoin is better than money in terms of usefulness and in many countries there are many who accept payments using bitcoin, so we do not need to exchange money, just we use bitcoin

[Mtoo]

well you , me, other people they knows about that  BTC and when you see the majority of them don't  believe or care about projects BTC . okay let them there up get more bitcoin.

[HabBear]

At some point, the elites will have issued too many IOUs against the Bitcoin in their vaults. 

That's not how bitcoin works. So you either don't understand how bitcoin works OR you're implying that Satoshi or core developers would change the algorithm to serve this nefarious purpose.

Perhaps they could to that, but then they'd have to rely on the miners, node operators, and owners of Bitcoin to accept it. Everyone who participates in the system has the privilege of supporting the existing system as a result. You see an example of this in Bitcoin Cash and Bitcoin prices. The success of Bitcoin Cash is driven entirely on (1) the will of miners and node operators to process their transactions (i.e., they must agree with Bitcoin Cash as an alternative to Bitcoin), and (2) the general public to want to own and trade Bitcoin Cash.

You're right, Bitcoin is not good money. Why would anyone spend today what they know will be worth more tomorrow? Bitcoin is an asset class, a store of value. That's it. It's beautiful.

[Forhadm]

Bitcoin is really a good money. because bitcoin is a helpful project i will dependent for it per day per weeks per month also per years i think bitcoin is a good project also a good money now a day many young generation people are helpful for this bitcoin side, so i think its a perfect project.

[Vinalians]

who said that it is not a good money? all of us benefit in bitcoin the price of it is unstoppable it is now more than 4000$  and you are saying that it is not really a good money, no, it is a good money, and i am sure in the future the price of it will increase more.

[trecore4]

We can get financial crisis !! Oh come on what are you thinking about bitcoin. To be honest the 21 million cap for bitcoin is not its limitation but it is its security. If the limits are increased then there is no value to bitcoin as it will be available on mass number. Today's bitcoin works on the strategy that it is limited and people are trying to grab as much as they can.


Though one day it is circulated completely, it doesn't mean it won't have deposit securities but it will keep moving through the wallets, peer to peer and this algorithm is non ending.


Paper money & Gold are destructive, they can degrade through the time and can be created again and again to reach market capital again but bitcoin is stable and the algorithm is not destructive, it's computing power that keeping it on always. There is no off switch. That's bitcoin is better.

[Beerwizzard]

Imho bitcoin is not a complete money. At least as it is today.
Right now it more looks like an instrument for investment and speculations. To make it look like money it should be more tradable. Most of the problems are already discussed and I hope will be solved pretty soon.

[@prashant]

Imho bitcoin is not a complete money. At least as it is today.
Right now it more looks like an instrument for investment and speculations. To make it look like money it should be more tradable. Most of the problems are already discussed and I hope will be solved pretty soon.

bitcoin original was not designed to become day to today money ,it was designed as a asset to blockchain technology ,the main focus was blockchain .now it has become the most profitable investment asset,is used widely because of its anonymous nature.

[Xavofat]

Either we increase the issuance limit from 21 million, or we get a financial crisis and depression.  I imagine most of the developers will be open to talking. 

Developers have absolutely no real power whatsoever.

What makes BTC a much more free money than gold or silver is that anyone can run any client at any time.  You want 100 kajillion coins?  Go ahead, have them.  Good luck getting everyone else to run your stupid client.

The only power that developers have is producing a client.  If the economic majority want to increase the supply of coins, they'll run a client which increases the supply of coins.  If the economic minority still don't want to increase the supply, they can keep the supply and that's perfectly fine.  The same applies with all of the other consensus rules, such as the block size.

Another major weakness of Bitcoin is transparency.  In order for the public to hold the elites accountable for their monetary actions, however partially, the easier it is to observe and monitor the system, the better.

Handing gold from one place to another is almost 100% untraceable, just like physical cash.  Moving Bitcoin is many times more transparent because every single transaction is accessible on a public ledger.  That means that you could see banks shifting money between each other and all other economic activity that takes place.  BTC would massively increase transparency unless banks attempted to keep their addresses hidden, but that would be tough since people can see the addresses they deposit to (if they even deposit to a bank at all).

[BobK71]

Bitcoin is a modern store of value that will far exceed any other major store of value. Gold and Silver is just impractical in today's digital society. I fully support the deflationary aspect to Bitcoin, it ensure that its value will grow over time.

The scarcity is a large factor of the value that it has.

Me too, but the deflationary aspect is basically the same among all the non-state monies.

Bitcoin has the special problem that it is only software and data, and thus the safeguard against human issuance is not as secure.

Certainly, in the digital age it would be more convenient to have electronic money.  But when going electronic compromises the integrity of the system, IMO the compromise is not worth making.

The increase of convenience generally increases the degree of trust required to keep the system honest and stable.  What humans should do is not to use systems that assume their fellow humans are trustworthy.  What they need to do now is to have a sound monetary basis for their economy, use that to build a healthy and strong economy and society, where trust grows naturally.  With more trust, we can then look for convenience.  The horse before the cart, so to speak.

[BingoDog]

I wouldn't say bitcoin isn't good money but bitcoin isn't traditional form of money. That still confuses majority of people. The whole concept was designed much different that typical currencies work and that is actualy good. The problem can happen when people actualy don't know how and for what they can use bitcoin to have the maximum benefit out of it. In such situations they get disappointed and their final conclusion is that bitcoin is no good.

[blackmagician]

I will only say that bitcoin is not a good money when it has no value anymore. How can you say that bitcoin is not good  money if some people are earning it and holding it.  As long as bitcoin has value it will always be a good money.

[QueenOf]

Bitcoin is a modern store of value that will far exceed any other major store of value. Gold and Silver is just impractical in today's digital society. I fully support the deflationary aspect to Bitcoin, it ensure that its value will grow over time.

The scarcity is a large factor of the value that it has.

yes that is right that bitcoin is the currency of the modern people specially the new generation who are showing more interest in bitcoin to use it for online shopping.

Yes agree we must admit it, some countries are already using bitcoin as a means of buying and selling, this is good even in my country a lot of young people involved bitcoin and the result they use for mebayar school fees, this is a very good impact for us, don't care for their elite they just think about themselves.