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February 09, 2012, 01:43:08 PM |
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The OP argument turns up a lot in different forms.
It is, essentially, this: "bitcoins will never become successful, because if they are successful then a small number of people will hold all the value".
To translate: being successful will mean they aren't successful. You'll forgive me if I find that argument... odd.
The fundamental fallacy here is the fallacy of the distributed middle. Essentially the argument is that there are only two states for bitcoin: success or failure. With success being defined as bitcoin being the only currency on the planet.
It's nonsense. Bitcoin price can be any number of dollars. If it truly is the case that the more successful it becomes, the less people will want bitcoins then that will be reflected in the exchange rate. An equilibrium will always be found (even if it is short lived on any particular day).
For a more practical definition of success, bitcoin just needs to be in common use. Paypal transmits $100 billion a year. That is well within bitcoin's grasp and could easily be argued to be "success".
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