I'm a sceptic, convince me!

[knight22]

and I'll actually buy 10 Bitcoin today. Hope they will increase in value. What do you think?

That's what most people here think but there is no guarantees. Bitcoin is still experimental and you should only put money you are comfortable to lose at this point.

[nachoig]

I have to admit that I'm sceptical about Bitcoin. I'll give you my reasons, then please convince me!

Bitcoin is not backed by anything.

None of the currencies are, unless trust in the central banks can count as a form of backing.

It would probably not exist in a free market. Money in a free market has always been some kind of commodity. Something that has value beyond its use as a currency. The problem with Bitcoin is that it has no value beyond its use as a currency. Why should it then be regarded as money? Money came into being as a medium of exchange, so that if you got stuck with it it was useful in some way. It wasn't just a piece of paper. It was something that was useful in and of itself. Like gold. Like silver. Bitcoin has none of that. It's just a string of 0s and 1s. Where does it get its value from? I don't think in a free market it would be valued.

Well, if money is a medium of exchange in the strict sense, gold and silver can't be considered money. I can't go to the supermarket and pay with gold or silver. They only accept notes and coins of the Central Bank and credit/debit cards. Following the same path, a national currency isn't money outside the country.

Something like Bitcoin could be used as a currency if it was backed by some commodity to do anonymous/quick transactions, but there would be a standard, ultimately, for exchange. It would always be exchangeable into e.g. gold.

National currencies aren't backed by commodities, but they still are useful as currencies. Anyway, there are some places where you exchange bitcoins for gold, so I don't get the point.

So that the banks who issued the Bitcoins were contractually obligated to redeem them into gold. Then Bitcoin would serve as a currency, but the money would be the gold.  

For this purpose, there are gold certificates. Anyway, Bitcoin isn't issued by banks. It's generated by miners. Also, the banks aren't obligated to redeem a national currency in gold.

There's also the problem with Bitcoin of inflation. Yes, there's a fixed amount of Bitcoins qua Bitcoin, but anyone can create alternative cryptocurrencies. I don't see why Bitcoin has any unique features that cannot be replicated by others, and therefore you will create massive inflation in a digital coin space.

The creation of alternative cryptocurrencies has nothing to do with Bitcoin inflation. They are created to offering features which doesn't exist in Bitcoin, or to just try a different approach. Sometimes they are created just to do a pump-and-dump.

So why do I think Bitcoin is still valued today? I think it is because people are fearful of the dollar. They think it's gonna get useless, and they're looking for alternatives. Bitcoin is a product of this fear. Also, I think people are worrying about their privacy. And with good reason, given the growing government intrusion in our lives. People are looking for ways in which to remain private. In which to remain outside the government's abitily to monitor them. Bitcoin provides that. So right now it's providing a value. The value as privacy. The value that it's not paper money. But in a fre market, which we are all working to realize, I do not believe Bitcoin would exist.

If you want privacy, I think cash is still better than Bitcoin.

Regarding the question of free market, I strongly disagree with you. In a free market, we have the freedom to create our own currency without ask to the government.

Good point about confiscation (e-gold). What about stability? Without being backed by a commodity, how do we keep the value of Bitcoin stable? Under a gold standard, the stability of the money is pegged to the value of gold.

The answer is simple. Bitcoin doesn't have a stable value. There isn't any mention to "stable value" in the Bitcoin's whitepaper. Gold also doesn't have a stable value. But you still trust in gold.

But after all, why Bitcoin? In my opinion, because it's a honest and secure way to pay someone for goods and services.

Paper money is created according to the desire of the governments and central banks.

Credit and debit cards are just numbers typed in computers. They aren't secure, they can be easily cloned, so you have to trust the merchant won't try to scam you.

Banks work with fractional reserve. So, when you tranfer the fund from your bank account for another bank account, they are just tranfering numbers or a "eletronic promise to pay in paper money, even without sufficient paper money for this" from your accountto another. In case of a bank run, the banks go to bankruptcy. With Bitcoin, you don't have this, nobody will give to you a "promise to pay in Bitcoins", they'll pay with the Bitcoins like the same way with paying in cash. In other words, with Bitcoin, you can have more control over your money than in a traditional bank,.

Note: it's still posible to have fractional reserve with Bitcoin. Mt. Gox is a example of this. But in the Bitcoin you can avoid this. In banks, no way.

Also, gold and silver are complicated to send over the world. With Bitcoin, you can send any amount, paying a low fee, to any place of the Earth.  

[jonald_fyookball]

Good point about confiscation (e-gold). What about stability? Without being backed by a commodity, how do we keep the value of Bitcoin stable? Under a gold standard, the stability of the money is pegged to the value of gold.

I assume you mean a free market doesn't exist today.

Of course it doesn't. Central banks and fiat money have nothing to do with a free market. In a free market there's a complete separation between state and economics.

Since the number of Bitcoins is constant, the value will be determined by the demand. But the demand can change, and then there are no mechanisms to correct it.

Why does there need to be?  If demand increases or decreases, price will follow.

If your concern is fluctuation, well.... Everything fluctuates.  there is no currency, commodity, asset, or anything else on the planet whose value doesn't fluctuate relative to other things.

You seem smart enough that you already understand the pros and cons of Bitcoin.

Not sure what exactly you wish to be convinced of or what your point is with this thread.

[bitteeinbit]

None of the currencies are backed by gold

I'm not out to defend fiat currencies.

Well, if money is a medium of exchange in the strict sense, gold and silver can't be considered money. I can't go to the supermarket and pay with gold or silver.

Because it's not allowed. But in a free market you would be able to pay with gold and silver. Maybe not physical gold and silver, but with redeemable paper notes.

National currencies aren't backed by commodities, but they still are useful as currencies.

Because the government forces people to accept them. If the government forced you to accept squirrel snot, that would be useful too. But it doesn't mean it would survive as money in a free market.

The creation of alternative cryptocurrencies has nothing to do with Bitcoin inflation. They are created to offering features which doesn't exist in Bitcoin, or to just try a different approach. Sometimes they are created just to do a pump-and-dump

But the point is, when people start accepting other cryptocurrencies, the value of the existing ones will drop.

If your concern is fluctuation, well.... Everything fluctuates.  there is no currency, commodity, asset, or anything else on the planet whose value doesn't fluctuate relative to other things.

You seem smart enough that you already understand the pros and cons of Bitcoin.

Not sure what exactly you wish to be convinced of or what your point is with this thread.

There are degrees of fluctuation. It's a big problem if I save bitcoins over several years, and then it's value is decreases by maybe 90 percent because it's not backed by physical commodities.

[x0Jakeyboy0x]

Let's turn this around a bit.

I am skeptical about gold. It's not backed by anything. It's a fairly useless metal, especially to the everyday person. It fluctuates in price. Why are people so interested in it? Convince me.

Gold is to the Earth as Bitcoin is to the Internet. Perception is reality.

[bitteeinbit]

I am skeptical about gold. It's not backed by anything. It's a fairly useless metal

Perception is reality.

Gold does not have to be backed by a commodity, because it is a commodity.

I don't agree that it's useless.

I don't agree that perception is reality. Reality is what is is. regardless of what people believe it is.

Adam’s Smith’s greatest student, J. B. Say, wrote two centuries ago: “money is indebted for its currency . . . to its being a commodity bearing a peculiar and intrinsic value.”

[knight22]

I am skeptical about gold. It's not backed by anything. It's a fairly useless metal

Perception is reality.

Gold does not have to be backed by a commodity, because it is a commodity.

I don't agree that it's useless.

I don't agree that perception is reality. Reality is what is is. regardless of what people believe it is.

Adam’s Smith’s greatest student, J. B. Say, wrote two centuries ago: “money is indebted for its currency . . . to its being a commodity bearing a peculiar and intrinsic value.”

Every form of money is a human abstraction. In that sense, reality is pretty subjective.

[freedombit]

Currency is only a way to measure exchangeable value. Nothing more.

Each person on this planet gets to use their measurement (or currency) of choice. Most people select the currency of their nation to measure the value or purchasing power in their pocket. This is all we've known for the last few thousands years, and replacing this concept with something new may or may not be quick. You're healthy skepticism is shared by many.

Rulers measure distances. Thermometers measure temperature. Scales measure weight. Currency measures value.

Each one of these are flexible enough that anyone can make their own language. For example thermometers use Fahrenheit or Celsius, scales measure pounds or kilograms, currency measures dollars or euros. Another similarity is that all of these measurement tools have exact ratios or formulas that never change and make it easy to convert and communicate from one to the other. One kilo equals 2.20462 pounds, one inch equals 2.54 centimeters, even F to C has a formula.

Now think about your dollars to euros. The formulas to convert one to another constantly change, and they change by the hands of only a few people. Every time this changes, the tool that you are using to measure value changes. WHO GETS TO DECIDE? Do you? Do you influence this decision at all? Do you get to vote on it or vote for people that make this decision for you? No, no, no and no.

You may or may not have noticed it, but your entire life someone has been sneaking into your toolbox and switching the tape measure you've been using to measure your wealth and purchasing power.

This is why cryptocurrency is revolutionizing the world.

[x0Jakeyboy0x]

Gold does not have to be backed by a commodity, because it is a commodity.

I don't agree that it's useless.

I don't agree that perception is reality. Reality is what is is. regardless of what people believe it is.

Adam’s Smith’s greatest student, J. B. Say, wrote two centuries ago: “money is indebted for its currency . . . to its being a commodity bearing a peculiar and intrinsic value.”

"I then submit to you that Bitcoin is a commodity as well." As written by me, the greatest me there will ever be.

And well surely you agree that many other metals are much more useful than gold though, why aren't they more valuable?

Then the reality of the matter is any of the money you have in your wallet is just paper, regardless of what you or anyone else believes it to be worth. The idea of worth and value is defined purely by perception, the only other option being perhaps God.

[bitteeinbit]

Too much subjectivism and religion for me

[nachoig]

Because it's not allowed. But in a free market you would be able to pay with gold and silver.

Well, it depends of the country. I think it will be good to do a search about the legal status of this type of transaction.

Maybe not physical gold and silver, but with redeemable paper notes.

A currency board with gold standard? Unlikely, governments don't want this. And I don't think this would solve the problems with the soreveign currencies. In some countries, commercial banks are creating 97% of the money. A currency board (independently if it's pegged to gold or to another currency) won't stop this.

Because the government forces people to accept them. If the government forced you to accept squirrel snot, that would be useful too. But it doesn't mean it would survive as money in a free market.

Yeah, I agree.

But the point is, when people start accepting other cryptocurrencies, the value of the existing ones will drop.

Cryptocurrencies are an experimental technology. I think those alternative cryptocurrencies are necessary, because innovation is necessary. Also, in a free market, the people have the rights to accept other cryptocurrencies. So, in this case, let the free market do the choices.

[Fernandez]

Bitcoin is not backed by anything.

That was the experiment with Bitcoin. Can something not backed by anything but agreed upon by a group can have value? So far Bitcoin has shown the answer to be a big yes.

[LordSonjai]

no offense but if you are skeptical and are here for us the bitcoin community to change your mind,I only have one thing to say to you.

You are a big boy,you can do your own research,we have the same internet. Their are countless people like you asking the same questions in those same exact words. So instead of answering your questions the exact same way I normally do I rather just tell you this.

[tss]

Bitcoin is backed by the laws of Nature:

THIS.. first sentence.. it is is not backed by anything, yes.  second sentence.. it currently exists in the FREE MARKET.  i didn't bother to read OP's post past that.

[turvarya]

Too much subjectivism and religion for me

I agree, your "Gold is superior"-argument sounds a lot like religion. So far, you didn't tell us, what makes gold so superior.
So, please tell us.

[12345mm]

*s(k)eptic is the correct spelling ... your spelling sceptic is closer to septic ... a human body affliction referring to severe infection ... or in reference to a septic sewage system handling human waste ... either of which is an accurate adjective to describe the functioning of bitcoin ...

[flipstyle]

The U.S. dollar is backed by the world's most powerful military pumped by $7xx billion dollars annually.  So yes, it IS backed by something.  Something very large and unfathomably destructive.


Bitcoin is not a currency.  A 'virtual currency,' perhaps...but not a currency.  It's simply a medium of exchange.  Just like credit cards, money orders, paypal, and the likes.  IT IS NOT A CURRENCY, no matter what a neckbeard or tinfoil hatter will tell you.

Yes, I know the hardcoin bitcoiners will preach to the choir about their grandeur plot to overthrow the government and have their hipster technology take over as the world's accepted money medium...but that's why the sane general public is laughing and pointing from the outside at their detachment from reality.

Now could it thrive and continue to grow as a medium of exchange? Perhaps.  My money isn't betting on that horse, though.  Its worth will forever be tied to the dollar, and there will be a better technology released by the government that is an OFFICIAL "currency" that will render bitcoin and all other alts worthless.  Yes, I know this saddens everyone.  But that's how the world works...the government with the nukes will control the money flow by any means necessary.

inb4 that's fud bro
inb4 troll bear
inb4 quit rekking my bitcoin get rich quick dreamz brah
inb4 u dont know sh-t im already 48% finished drawing up my blueprint to take down the military n congress

Back to reading more anarchist literature.

[LiteCoinGuy]

the internet is backed by ? so it should be worthless.

[flipstyle]

the internet is backed by ? so it should be worthless.

Try walking into a cafe and paying for your lunch with '3 internets.'  I tried.  But the damn workers are so stubborn.

[Elwar]

the internet is backed by ? so it should be worthless.

Try walking into a cafe and paying for your lunch with '3 internets.'  I tried.  But the damn workers are so stubborn.

If you hold the value of 3 internets you are the richest person in the world.