Bitcoin has failed. Could something similar possibly work?

[PatrickHarnett]

Interesting that the "failed" Beenz is mentioned.  In other posts I have seen talking about failed currencies or electronic systems they have the single point of failure flaw.  That is, if the sponsoring company fails, so does the currency.  Airpoints/airmiles or store loyalty schemes are like that, as are gift vouchers that become worthless when the store fails.  Anyone want to buy some shares in  WorldCom or Enron?

Bitcoin will actually have a hard time failing because it lacks that similar single point of failure. 

[mizike29]

IN no way shape or form has bitcoin failed.  THe system itself is flawless, the difficulty in making them, people wanting to recover there money, and avg joes that panic, are causing it to lose value.  More businesses are accepting it, it is still a very young currency and is worth triple what it was months ago, so FAIL is far from the right word.  Recession, maybe, bubble burst recovery, probably.  30 is too high, 5 is too low, I think its still just a young currency and is balancing out still.  Hopefully will land around 13 bux stable. Thats what we need a 13 dollar stable market for months, then businesses and people will trust it more and use it more.  Hard to sell products for bitcoin when that same bitcoin could be worth half what it was when you sold your product for bitcoins, thats going to hurt the economy for sure.

[johnyj]

In a free market, if this model is so attractive and have long term potential, then there will be another type of P2P currency competing against it, but there is still no competing currency until today, seems no one take it seriously

[kokjo]

In a free market, if this model is so attractive and have long term potential, then there will be another type of P2P currency competing against it, but there is still no competing currency until today, seems no one take it seriously

i take it seriously.

and you are dumb, there is no need for a another p2p currency competing with bitcoin.
its a currency, its a trade-able object that have a certain value. just like gold.
why isn't there second "gold"? competing with real gold?

go away troll. just go away.

[Nagle]

why isn't there second "gold"? competing with real gold?

It's called "silver".

(Look up "free silver movement".)

[TiagoTiago]

In a free market, if this model is so attractive and have long term potential, then there will be another type of P2P currency competing against it, but there is still no competing currency until today, seems no one take it seriously

i take it seriously.

and you are dumb, there is no need for a another p2p currency competing with bitcoin.
its a currency, its a trade-able object that have a certain value. just like gold.
why isn't there second "gold"? competing with real gold?

go away troll. just go away.

Well, there are all sorts of different materials people buy and sell pretty much just like gold, gold's just among the most famous of them.

[DonnyCMU]

Now now... People... Mr.Nagle here is not a troll.... He is a reputable finance professional who made a very interesting and popular (14 pages of replies) introduction to our forum!

I'm John Nagle, the person behind Downside. Over the last decade, we predicted, well in advance, the dot-com crash (company by company), the oil spike, and the mortgage crisis. We've also explored some financial scams - Enron, Madoff, and their ilk. Downside was written up in Business Week, CNN, Fortune, etc. Our track record speaks for itself.

I've been looking at the Bitcoin world. It's amusing watching the classic forms of financial trouble happen in miniature.

He even published all his professional analytics and predictions in his website http://www.downside.com  !
How fortunate of us to have his guidance here.

[enmaku]

In a free market, if this model is so attractive and have long term potential, then there will be another type of P2P currency competing against it, but there is still no competing currency until today, seems no one take it seriously

Namecoin, Beertokens, Weeds, Martian BotCoins, United Kingdom Britcoins and Canadian Digital Notes to name a few.

There's a whole special branch of the bitcoin client (multicoin) to handle more than one at a time, and while I haven't researched the others, Namecoin has its own full-blown block explorer, miner calculators/tools and even an exchange where they can be traded for bitcoins.

"Google before you post" is the new "Think before you speak"

[Clipse]

Now now... People... Mr.Nagle here is not a troll.... He is a reputable finance professional who made a very interesting and popular (14 pages of replies) introduction to our forum!

I'm John Nagle, the person behind Downside. Over the last decade, we predicted, well in advance, the dot-com crash (company by company), the oil spike, and the mortgage crisis. We've also explored some financial scams - Enron, Madoff, and their ilk. Downside was written up in Business Week, CNN, Fortune, etc. Our track record speaks for itself.

I've been looking at the Bitcoin world. It's amusing watching the classic forms of financial trouble happen in miniature.

He even published all his professional analytics and predictions in his website http://www.downside.com  !
How fortunate of us to have his guidance here.

Looking again at his website reminds me that a more suitable name would be http://www.downsyndromeside.com

[doldgigger]

No one prices goods or services based on Bitcoins. They price it based on USD, EUR, CHF then convert it to Bitcoins ON THE FLY. There's lots of apis that will auto update Bitcoin prices for your goods.

It's a shame. If those API designers realized how they damage bitcoin through distributing these, they would probably do something more productive. Unfortunately, you don't have to have a clue about finance when hacking up such logic.

Please do also see https://bitcointalk.org/index.php?topic=34874.0 for discussion of a more reasonable trading approach.

[doldgigger]

Bitcoin will actually have a hard time failing because it lacks that similar single point of failure. 

Exactly. Though for this reason, some people get scared and try to lure the community into similar currencies with a single point of failure added, e.g. https://bitcointalk.org/index.php?topic=29135.0

[Nicolai Larsen]

Bitcoin will only fail when people stop believing in it, which is.... never? ^^

[walidzohair]

Bitcoin will only fail when people stop believing in it, which is.... never? ^^

OR when people stop buying them with other currencies/commodities.

[The_Duke]

Bitcoin will only fail when people stop believing in it, which is.... never? ^^

Most people have indeed never believed in bitcoin ^^
(And also never will)

[PatrickHarnett]

Bitcoin will only fail when people stop believing in it, which is.... never? ^^

OR when people stop buying them with other currencies/commodities.

Some observations:
 - There are a few central bank currencies (physical notes and coins) where the locals refuse to take them for goods and prefer another currency (like USD).
 - The volatility of the exchange rate is simply reflective of an early stage.  If I look at other currency cross rates (JPY/USD or GBP/USD) they are also volatile, but at a different level, and people still price cross-border goods like amazon in multiple currencies.
 - There are a few physical stores accepting multiple currencies.  I had the choice of paying for my burgerking in an airport in at least four currencies last month (JPY/EUR/USD/SGD), and when I booked a flight yesterday had the choice of using real or fake dollars to pay for the ticket.
 - I also used BTC to quickly transfer some USD to someone this week at a reasonable exchange rate, that's a function I like.

[TiagoTiago]

Bitcoin will only fail when people stop believing in it, which is.... never? ^^

OR when people stop buying them with other currencies/commodities.

Actually, that is probably a significant threshold to consider Bitcoin a success, when people start using it as their everyday money instead of interfacing back and forth with govt. money

[Boussac]

IMHO, it's too early to discuss possible succcess or failure.
Failure is just wishfull thinking on the part of some bankers that are so technologically illliterate that they have yet to realize they can in fact find opportunities in bitcoin.
Bitcoin is an alternative 1/to gold as a hedging investment 2/to transaction nettworks like Visa or Mastercard. In these two categories, there is a LOT of room for improvement and bitcoin does bring obvious benefits.

[goodlord666]

I give in. I will immediately sell all my BTC now and forget it ever existed!

[lathomas64]

At this point, we can write off Bitcoin as a failed experiment. It's worth thinking about how a different distributed digital currency might be made workable. A few problems which have to be solved:

• Mutual mistrust between buyer and seller needs to be supported. This is the toughest problem. Right now, sending Bitcoins is not tied to receiving something in return, and is irrevocable.
• The double-spending check system has to be as least as fast as normal credit card processing. Waiting minutes for the block chain to update is unacceptable.
• Some price stability is needed. Value shouldn't change more than 1% per week, worst case. 1% per month would be better.
• A better way of launching the currency needs to be developed.

There's an approach to mutual mistrust that might work.  First, as with credit cards, there's a need for an "authorize" and a "capture" stage. In the "authorize" stage, A indicates that they intend to send value to B. This locks up the value from other use by A, and B receives a reliable confirmation that A has that value. In the "capture" stage, the value is actually transferred to B. A has to authorize the "capture". 

That's the normal case. The hard cases might work as follows:

• If A does an "authorize", and then does nothing, a "capture" automatically takes place after some number of days. So sellers don't have to nag buyers.
• If B cancels the capture, that's an agreed cancellation of the transaction, and the value becomes available to A again.
• If A does an "authorize" and later cancels before a "capture", the value becomes available to them again after some number of days. This is the tough case, and it puts B at risk of the buyer backing out after shipment of the product. To discourage backing out, when A does this, they are no longer anonymous to B, and B can publicize the cancellation, which affects A's reputation. Also, because cancellations aren't immediate, A's value is tied up for days, so they can't do this too often.

Discuss.

Don't bother.  People are unwilling to consider fatal flaws in the system.  This isn't a forum of logical, factually-interested intellectuals it is the Church of Bitcoin & Libertarianism.  Either praise its name or be labeled an apostate.

If this is the case where would be a forum for logical factually interested intellcutals interested in discussing bitcoin?

[lxFlasHxl]

its pretty stable