Guys, you know I'm a huge fan of bitcoin.  I've been waiting for this for years, and I can't tell you how glad I am that someone made it for real.

However, I have some doubts sometimes.  It's human, right?


One of my concern is the capability to create a new chain.  Anyone could.  Of course, there has to be some good reasons to do it, and it would probably not hurt the previous chains, but still...

Money is a weird thing.  It's been a very important tool for human interactions since neolithics.  It's a very important stuff.  Some people would kill for money.  Just for pieces of paper, for pure symbolic proof of value.  Somehow this is stupid, but people are that stupid.


One of the thing people don't like with money, is the fact that some people can hoard it, and other people can have none of it.     Some people can have tons of gold, and other not a single gram.

That's one thing which is not possible with bitcoin: you can't be an ugly capitalist pig.  Say you want to dominate the world and have all the money in it, then immediately people will say "screw this guy, let's start an other chain".

Is it a good thing?  I don't know, I'm not sure.  If creating a new money becomes easy, then at some point it has to devaluate the very concept of money, doesn't it?

So what would be the solution?  Go back to gold and stick to it?  I don't think so.  Gold as money would be a convention just as bitcoin is.  So what?  Is it possible that a new technical possibility has actually reduced economic possibilities?  Is it possible to lose a capability when adding a capability?   Could the scarcity of money be actually just as usefull as the scarcity of a currency?

Will bitcoin kill the very concept of money?

I don't know guys, I guess we'll have wait and see if we want to figure it out.

The "scarcity of currencies" is an interesting concept, but it's amenable to the marketplace.

If bitcoin is a good currency, those who are using Bitcoin have nothing to fear from anyone who starts up a competitive but inferior currency.

Even if the competitive currency is roughly equivalent, Bitcoin has first-mover advantage and won't easily be shaken from its position.

But if the competitive currency is significantly and unambiguously better then, yes, Bitcoin will lose value. This would be painful for those who had adopted Bitcoin, but in the long run it means we get an even better currency.

I think Bitcoin is "good enough" that it will not be unseated by an upstart. I'm not worried. But I still won't spend all my money buying bitcoins.

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On a slightly different angle, consider that gold has not been unseated from its monetary role, even though there are an almost limitless number of other things that could replace it.

If gold became unusable as a store of value, e.g. due to a cheap way being found to extract the gold atoms that are in seawater), we could use other metals, or rare old postage stamps, or dinosaur bone fragments, etc. But hardly anyone is doing that now, even though those things have value.

Another thought. If currencies are easy to create, the scarcity or currencies is not there, but people will still consider "quality of currency".

Probably the "hardest to create" currency will be perceived as having the highest quality (if all else is equal). If Bitcoin already has a huge proof of work behind it, it's going to become increasingly difficult for any new currency to catch up with the proof of work and match Bitcoin's difficulty of creation.