Forbes article on bitcoin

[accord01]

http://www.forbes.com/sites/gordonchang/2013/11/24/a-china-triangle-bitcoin-baidu-and-beijing/

Anything new here?  Is this bullish or bearish?

Didn't know so many vendors on the streets of China accepted bitcoins.  Looks like the Chinese government A) is definitely NOT against bitcoins B) probably mining like crazy right now.... C) Or else vendors would be scared to accept bitcoins... because vendor/ gov't relationships are very close in China... maybe too close if you know what i mean.

[ElectricMucus]

Didn't know so many vendors on the streets of China accepted bitcoins.

I count three.
And only one is named in the article, if this were mass usage this article would include a list of places and companies, which is no where to be found.

[beaconpcguru]

Why would a communist a government bent on control not support exchanges they have direct control over?  Hmmmm

[mvidetto]

http://www.forbes.com/sites/gordonchang/2013/11/24/a-china-triangle-bitcoin-baidu-and-beijing/

Anything new here?  Is this bullish or bearish?

Didn't know so many vendors on the streets of China accepted bitcoins.  Looks like the Chinese government A) is definitely NOT against bitcoins B) probably mining like crazy right now.... C) Or else vendors would be scared to accept bitcoins... because vendor/ gov't relationships are very close in China... maybe too close if you know what i mean.

I think its pretty neutral just informing the public.

[rocks]

Didn't know so many vendors on the streets of China accepted bitcoins.  Looks like the Chinese government A) is definitely NOT against bitcoins B) probably mining like crazy right now.... C) Or else vendors would be scared to accept bitcoins... because vendor/ gov't relationships are very close in China... maybe too close if you know what i mean.

I don't think so, but interesting idea. If at some point governments decide that they need BTC as central bank reserves, considering the resources they could deploy the most obvious method is probably to develop very efficient ASICs and mine like crazy instead of buying on the open market. Would make for interesting times.

[BitPirate]

This is all a bit off base.

A) There aren't many sellers accepting bitcoin in China yet -- that part is just not true. We're trying to change that, but don't get sucked into believing BTC is everywhere (yet).

B) The government doesn't care about Bitcoin too much yet -- the one thing they do care about above all else is "social stability" (read: "keeping power"). Anything that potentially destabilises that is a problem. A huge gold-rush like move to BTC would potentially be very damaging if lots of people lost their shirts in a crash. As such, the government is already trying to damp the flames a little. Recent CCTV and radio reports advise people not to rush and buy BTC, that it is unstable and dangerous.

The best thing that can happen now is a long consolidation. This constant push upward, potentially through 2k, will cause a spectacular crash with some potentially very negative consequences for all of us. We all need a bit of a breather.

[User705]

Didn't know so many vendors on the streets of China accepted bitcoins.  Looks like the Chinese government A) is definitely NOT against bitcoins B) probably mining like crazy right now.... C) Or else vendors would be scared to accept bitcoins... because vendor/ gov't relationships are very close in China... maybe too close if you know what i mean.

I don't think so, but interesting idea. If at some point governments decide that they need BTC as central bank reserves, considering the resources they could deploy the most obvious method is probably to develop very efficient ASICs and mine like crazy instead of buying on the open market. Would make for interesting times.

Because only in government it would make sense to print money to buy a money printing machine.

[crazy_rabbit]

"Bitcoin is on track to becoming the world’s first trillion dollar non-fiat form of money."

[lindatess]

Didn't know so many vendors on the streets of China accepted bitcoins.  Looks like the Chinese government A) is definitely NOT against bitcoins B) probably mining like crazy right now.... C) Or else vendors would be scared to accept bitcoins... because vendor/ gov't relationships are very close in China... maybe too close if you know what i mean.

I don't think so, but interesting idea. If at some point governments decide that they need BTC as central bank reserves, considering the resources they could deploy the most obvious method is probably to develop very efficient ASICs and mine like crazy instead of buying on the open market. Would make for interesting times.

Because only in government it would make sense to print money to buy a money printing machine.

Does China really print a lot of money to pay itself? What about all those excess currencies reserves? They also have a current account surplus, so they are always bringing in extra money. Why the fear of governments printing, especially when it will be unwound at a later date?

[rocks]

"Bitcoin is on track to becoming the world’s first trillion dollar non-fiat form of money."

Gold would the first one.

[slikes]

This is all a bit off base.

A) There aren't many sellers accepting bitcoin in China yet -- that part is just not true. We're trying to change that, but don't get sucked into believing BTC is everywhere (yet).

B) The government doesn't care about Bitcoin too much yet -- the one thing they do care about above all else is "social stability" (read: "keeping power"). Anything that potentially destabilises that is a problem. A huge gold-rush like move to BTC would potentially be very damaging if lots of people lost their shirts in a crash. As such, the government is already trying to damp the flames a little. Recent CCTV and radio reports advise people not to rush and buy BTC, that it is unstable and dangerous.

The best thing that can happen now is a long consolidation. This constant push upward, potentially through 2k, will cause a spectacular crash with some potentially very negative consequences for all of us. We all need a bit of a breather.

The fact that we would be better off if the market took things slowly won't change it's behavior. I haven't read enough to confirm what you're saying about China, but both of your points support the conclusion that the market is speculative right now. For better or worse, I don't think the speculation is going to slow.

[Impaler]

CR:  BTC is Fiat as is not backed by anything, it's simply programmer-fiat rather then state-fiat.  People here have confused the word Fiat with 'government issued' but that is not what the word means.

[Qoheleth]

CR:  BTC is Fiat as is not backed by anything, it's simply programmer-fiat rather then state-fiat.  People here have confused the word Fiat with 'government issued' but that is not what the word means.

To be fair, there are a few different definitions of "fiat money" in common use, so whether BTC is "fiat" per se depends on which definition you're using. Personally, I tend to go with the definition that interprets "fiat" in the "law or decree" sense, where a currency is "fiat money" when the force of law demands it to be accepted as payment (as in the case of most national currencies today, where a payment of the currency extinguishes a debt no matter what is actually owed).

Of course, if you define "fiat money" as "any currency without intrinsic value", BTC could easily qualify (although I'd still make the argument that BTC have some intrinsic use as the mechanism for storing balances on a trust-free distributed ledger, even if they weren't a currency themselves).

[wachtwoord]

Of course, if you define "fiat money" as "any currency without intrinsic value", BTC could easily qualify (although I'd still make the argument that BTC have some intrinsic use as the mechanism for storing balances on a trust-free distributed ledger, even if they weren't a currency themselves).

Of course NOT. Bitcoin has intrinsic value. Anything that is useful and scarce has intrinsic value.

[Carlton Banks]

"Fiat" in practice means face-valued, or more literally, "it has value because I [the issuer] declare that it does".

State fiat is not strictly 100% fiat, it does have some monetary properties, such as being difficult to counterfeit. But the overwhelming amount of it's properties are conferred by legislation, not any objective assessment of monetary properties.

This is what makes the cryptocurrencies unique as money for an internet age, they have been designed to possess entirely objective monetary properties, and hence the only way of valuing them is the same way that many a financial press commentator has complained of, namely through supply and demand. And the irony of the financial press saying such things as evidence of them being not like money, is that money behaves just like that, even under the fiat system today (witness the trillions per day forex market).

[Kazimir]

BTC is Fiat as is not backed by anything,

BTC is backed by math and cryptography. I consider that a lot more trustworthy than banks and governments.

[Zangelbert Bingledack]

Bitcoin has no intrinsic value, because nothing has intrinsic value, because value isn't intrinsic - it requires a valuer.

Bitcoin isn't backed by anything, because it's not a promise like a gold-backed dollar used to be.

Bitcoin is like a club with ironclad rules. As long as that club exists, those rules ensure that your BTC have purchasing power within that club. It's "backed" simply by the solidarity of that social formation, the Bitcoin fraternity, the Bitcoin community, whatever you want to call it. And that solidarity is ensured by the rules of the protocol and the fact that following those rules has proven extremely valuable and promises to be even more extremely valuable in the future.

[Kazimir]

Bitcoin isn't backed by anything, because it's not a promise like a gold-backed dollar used to be.

Let me repeat that for you:

BTC is backed by math and cryptography. I consider that a lot more trustworthy than banks and governments.

And what was gold backed by, again?

[wachtwoord]

And what was gold backed by, again?

Physics.

[chriswilmer]

Bitcoin has no intrinsic value, because nothing has intrinsic value, because value isn't intrinsic - it requires a valuer.

Bitcoin isn't backed by anything, because it's not a promise like a gold-backed dollar used to be.

Bitcoin is like a club with ironclad rules. As long as that club exists, those rules ensure that your BTC have purchasing power within that club. It's "backed" simply by the solidarity of that that social formation, the Bitcoin fraternity, the Bitcoin community, whatever you want to call it. And that solidarity is ensured by the rules of the protocol and the fact that following those rules has proven extremely valuable and promises to be even more extremely valuable in the future.

+1

We really need to stop people from trying to come up with creative arguments for Bitcoin's intrinsic value or explanations for what bitcoins are backed by (e.g., the network! mining! math!). These concepts just don't apply and/or are irrelevant.

Trying to answer "What is Bitcoin backed by?" (without just pointing out that it isn't a meaningful question) is like trying to answer "What color is Bitcoin?"