[2013-12-15] TheAtlantic - Why Bitcoin will never be a Currency - in 2 Charts

[ButchHashidy]

http://www.theatlantic.com/business/archive/2013/12/why-bitcoin-will-never-be-a-currency-in-2-charts/282364/

I'm curious what people's opinions are on this.  FUD?  The author doesn't take into consideration the divisibility of bitcoins or the use of it to buy goods and services instead of just it's exchange.  If bitcoins were in circulation being exchanged for actual products, it'd be used as a commodity, rather then how most of us see it now, as an investment.

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[Carlton Banks]

Um, you can already buy with bitcoin.

All these people that say "well, technically..." fail to recognise that businesses already accept it, and that some of those businesses have already priced goods in bitcoin. And they also fail to see that upstart currencies have a tendency to have wobbly exchange rates, especially when they start with such low levels of support that they're close to zero in terms of established currencies. All the more so if the supply is handled conservatively. 

[RoadTrain]

Tired of that keynesian nonsense about deflation.

[e521]

this article is really stupid, I don't even understand how people can write shit like this.

Bitcoin, the virtual currency you can theoretically use to buy things online. >> you can already buy things, not only online.
But prices aren't set in terms of Bitcoin. They're set in terms of dollars. >> service aren't, good are because they seller use FIAT to buy them I guess
Why spend bitcoins today when they might be worth much more tomorrow? The only reason would be to buy or do things online that you can't buy or do with dollars (or euros or yuan)—something illegal. >> they guy is a genius, I think this is the first time I read this..

What Bitcoin really needs is a central bank to stabilize its value. When the demand for Bitcoin goes up, they need to print more to keep it from skyrocketing. That is, they need to decide whether they want Bitcoin to be a Ponzi scheme for techno-libertarians or an actual medium of exchange.

seriously?

[spooderman]

It will work , but only in the context of having other currencies to instantly convert it to.

I genuinely feel that deflationary currencies like bitcoin are like the author says, something people really really don't want to spend. I've spent a few and now realize that at the time I spent 5k future dollars on a phone or something. Having learned from this, I'm now very apprehensive to ever sell them.

However I am also hesitant to get rid of my inflationary money too....So....I actually take this all back.

[cr1776]

OR "Why The Atlantic Will Never be a Reliable News source" in one article....

http://www.theatlantic.com/business/archive/2013/12/why-bitcoin-will-never-be-a-currency-in-2-charts/282364/

I'm curious what people's opinions are on this.  FUD?  The author doesn't take into consideration the divisibility of bitcoins or the use of it to buy goods and services instead of just it's exchange.  If bitcoins were in circulation being exchanged for actual products, it'd be used as a commodity, rather then how most of us see it now, as an investment.

[davidgdg]

Oh come on everybody. Where are your senses of humour?  He's JOKING.

(Isn't he? ..... )

[ButchHashidy]

this article is really stupid, I don't even understand how people can write shit like this.

Bitcoin, the virtual currency you can theoretically use to buy things online. >> you can already buy things, not only online.
But prices aren't set in terms of Bitcoin. They're set in terms of dollars. >> service aren't, good are because they seller use FIAT to buy them I guess
Why spend bitcoins today when they might be worth much more tomorrow? The only reason would be to buy or do things online that you can't buy or do with dollars (or euros or yuan)—something illegal. >> they guy is a genius, I think this is the first time I read this..

What Bitcoin really needs is a central bank to stabilize its value. When the demand for Bitcoin goes up, they need to print more to keep it from skyrocketing. That is, they need to decide whether they want Bitcoin to be a Ponzi scheme for techno-libertarians or an actual medium of exchange.

seriously?

right, and with that they kill one of bitcoins' main purposes -- taking the fate of our money, economy and status quo out of the hands of the easily corruptible and putting it into the hands of mathematical elegance.  Whether bitcoin's particular design has that ability has yet to be seen, but that's always as reparable as a software update, correct?  I like the idea that in order for a major change in the bitcoin software/protocol, 81% of the clients have to accept an update.  If that's not the definition of a true democracy, I don't know what is.

[I_bitcoin]

It will work , but only in the context of having other currencies to instantly convert it to.

I genuinely feel that deflationary currencies like bitcoin are like the author says, something people really really don't want to spend. I've spent a few and now realize that at the time I spent 5k future dollars on a phone or something. Having learned from this, I'm now very apprehensive to ever sell them.

However I am also hesitant to get rid of my inflationary money too....So....I actually take this all back.

As the price per BTC has risen I actually use more.   I think you are right.   This is likely the more common occurrence.   Goat just bought a Lambo and while I am sure he has plenty more BTC this is probably more representative of the behavior we can expect.   Higher it goes the more people use it!

[virtimus]

Funny math inside:

"You can see that in the chart below from Jason Kuznicki, which looks at the dollar value of all bitcoin transactions each day divided by the dollar value of all bitcoins each day"

Isn't it just amount of BTC daily  by all BTC ? What for to mess with dollar - those nowadays mathematics ...

Not worth reading.

[ButchHashidy]

It will work , but only in the context of having other currencies to instantly convert it to.

I genuinely feel that deflationary currencies like bitcoin are like the author says, something people really really don't want to spend. I've spent a few and now realize that at the time I spent 5k future dollars on a phone or something. Having learned from this, I'm now very apprehensive to ever sell them.

However I am also hesitant to get rid of my inflationary money too....So....I actually take this all back.

As the price per BTC has risen I actually use more.   I think you are right.   This is likely the more common occurrence.   Goat just bought a Lambo and while I am sure he has plenty more BTC this is probably more representative of the behavior we can expect.   Higher it goes the more people use it!

people tend to think that as the price increases, so does the stability as it would take much greater and greater amount of fiat to affect (or manipulate) the price.  Would the danger then be from those holders of massive amounts of coins, who could decide to dump their bitcoin load and send the price plummeting into the fiery pits of damnation?  I wonder if there are any economic simulators where you can plug in certain values (ie. bitcoinesque parameters) to test liquidity and volatility in a free market economy.  That'd be delicious

[empoweoqwj]

Shock horror - another stupid article from a "journalist"

Of course people will spend bitcoins - any time the price is stable or going down they will spend, spend, spend

[goxed]

meant for Onion.

[dave111223]

If deflation turns out to be a bad thing, then people can simply upgrade their client to bitcoin version xx where the 21mil limit is removed and block rewards continue forever.

[empoweoqwj]

If deflation turns out to be a bad thing, then people can simply upgrade their client to bitcoin version xx where the 21mil limit is removed and block rewards continue forever.

It will never be removed. Dream on.

[dave111223]

If deflation turns out to be a bad thing, then people can simply upgrade their client to bitcoin version xx where the 21mil limit is removed and block rewards continue forever.

It will never be removed. Dream on.

I also find it unlikely, but it will be whatever the majority wants.

[empoweoqwj]

If deflation turns out to be a bad thing, then people can simply upgrade their client to bitcoin version xx where the 21mil limit is removed and block rewards continue forever.

It will never be removed. Dream on.

I also find it unlikely, but it will be whatever the majority wants.

True enough. But the bitcoin network is built on trust and trust alone, shaky ground to begin with because trust is rarely regained if lost. If you promise from the start there will only ever be 21M coins and then change that, the trust ends. If you start increasing, where do you end? 30M, 100M, 20 billion, infinity? Just leave it at 21M. There's enough issues with bitcoin without messing with the fundamentals.

[laowai80]

For the record, there is already a central bank in bitcoin, it's just it's decentralized. It's called alt-coins People 'print' as many brands of coins as they want, other people choose to take a share. The value of bitcoins is thus diluted into alt-coins. Is this good or bad? This is just the way it is. It's been like that with any invention, people copy inventions, sometimes blindly, sometimes making them better, but regardless of that the value of the original invention is diluted. So, the value of bitcoin is already somewhat stabilizing, as people choose not to pour all their money into just bitcoins, but a portion into others. With time it'll be even more obvious. The s-curve of the bitcoin growth will be getting flatter with time. Of course, it's still way off from now, but there are already signs of this.

It looks like people want at least 1 whole bitcoin, and many can't afford that, and with time it'll be even more so, so they buy alt-coins. Nothing you can do about human psychology here. Owning a fraction of something just doesn't look attractive to people, making them feel like losers, no matter how divisible bitcoins are, etc. Satoshi should have fixed the supply at 1 bln at least, then the chances of bitcoin being the only one for a longer time would be higher.

[empoweoqwj]

For the record, there is already a central bank in bitcoin, it's just it's decentralized. It's called alt-coins People 'print' as many brands of coins as they want, other people choose to take a share. The value of bitcoins is thus diluted into alt-coins. Is this good or bad? This is just the way it is. It's been like that with any invention, people copy inventions, sometimes blindly, sometimes making them better, but regardless of that the value of the original invention is diluted. So, the value of bitcoin is already somewhat stabilizing, as people choose not to pour all their money into just bitcoins, but a portion into others. With time it'll be even more obvious. The s-curve of the bitcoin growth will be getting flatter with time. Of course, it's still way off from now, but there are already signs of this.

It looks like people want at least 1 whole bitcoin, and many can't afford that, and with time it'll be even more so, so they buy alt-coins. Nothing you can do about human psychology here. Owning a fraction of something just doesn't look attractive to people, making them feel like losers, no matter how divisible bitcoins are, etc. Satoshi should have fixed the supply at 1 bln at least, then the chances of bitcoin being the only one for a longer time would be higher.

Oh no. Not that "we need more bitcoins" stuff again. They are divisible, down to 8 decimal points. Which could be increased in the future. What's so difficult to grasp here?

[Mike Christ]

The top comments on all of these articles are always pro-bitcoin; so long as this remains the norm, I'm happy.

Naysayer's gonna say nay

So who's the perfect person to run Bitcoin? It'd have to be someone with central banking experience. Someone who understands why deflation is a problem. And someone who thinks virtual currencies hold promise. Someone like ... Ben Bernanke.

And in the end, it was just a troll article   Someone paid this guy good.