Pete
Search my blog for “bitcoin”. You’ll see the arguments.
Also, see the 38 pages of arguments linked to above.
I know your opinion and the reasons for it. You have expressed them most eloquently in the 38 pages. Let’s agree to disagree.
Take encouragement that bitcoin has risen to $5.67 from it’s low of $4.19. Maybe it will hit $30 again.
Smiling Dave,
you might have provided some arguments at the very beginning, but my point is that you are avoiding confrontation. You just alternate between jubilating and whining. I’m having a hard time taking you seriously. My goal in participation in debates is to learn, and I do that by throwing arguments against each other in the battle of falsification. Maybe my expectations of the mises forums were simply misplaced and I can’t find here what I’m looking for.
Pete,
I am not writing for you. Feel free not to read my posts. Pretend they don’t exist.
I’ve been mocking bitcoin’s plunge from $30 a share to $4.19 in three months.
But it seems I was mistaken. In these troubled times, with investors in stocks and gold and the euro losing heaps of money, bitcoin is the new safe haven.
How else to account for it’s dramatic rise to $5.95?
Plenty of posts today on the forum explaining to me why I have it all wrong about bitcoin.
But the bitcoin discussion is becoming academic. Bitcoin has dropped yet again. At the moment of writing, it’s at $4.70.
21% in three days.
What does the future hold? Will there be an ever increasing amount of people latching on to this? Are there so many millions of lemmings who are dying to throw away their hard earned cash?
Anyone out there who bought it at $30? Are you happy now? Do you share the enthusiasm for bitcoin that various contributors here feel?
You can’t even sell your failed investment for scrap, because there is no scrap.
21% in three days.
Dave,
Gold is not doing fine either:
May the drop of both GC and gold be caused (at least partially) by some common monetary reason?
You mean as opposed to trolling? Good!
When bitcoin was at its peak of $30, gold was about $1,550.
Since then, bitcoins has gone straight downhill to a current $4.87. Gold has swung up and down, mostly up, to a current $1,788.
There is a huge difference between them.
Nobody buys bitcoin as safe haven. They buy it to speculate. My guess is that when it reached $30 [=pump], someone decided to sell his vast holdings of bitcoin [=dump], hence its death.
The only thing in the world central banks own [other than paper money] is gold. Not bitcoins, gold.
When you want to declare your eternal love, you put a gold ring on your girl’s finger. You don’t give her a bitcoin.
I don’t know if anyone saw this. The history of Bruce Wagner, as a scam artist.
http://buttcoin.org/has-bruce-wagner-pulled-off-the-financial-biggest-scam-on-the-bitcoin-community
TY John, great stuff.
Loved this artwork:
I propose as an alternative a Venn diagram displaying the following sets:
people who like pictures
people who cannot argue
people who troll on forums
And the intersection of those free, is of course, Smiling Dave.
Im of the impression that Bitcoin’s value is predicated on its network of anonymity, not because its a safe haven from inflation. Hence why its the currency of choice among online drug dealers (1 nickelbag of grade A strain of cannibis, only 1 Bitcoin!!!1) and child pornagraphy collectors. My question is, if a similar mechanism is derived for precious metals, would Bitcoin retain any value? My gut feeling is no, although Im open to arguments claiming otherwise.
James,
the anonymity of the Bitcoin network is not entirely what you portray it to be. Data mining techniques can help to reveal the identity of the participants. See http://arxiv.org/abs/1107.4524. However, it is possible to build substitutes or different forms of Bitcoin that increase anonymity. One example would be the http://bitcoinlaundry.com/. Also, physical forms of Bitcoin, such as Bitbills or Casascius coin essentially allow the same anonymity as you have with cash.
Apart from the predictable supply, the main advantage, in my opinion, of Bitcoin, is the decentralised open source nature. It is much more difficult for third parties to interfere with the usage (compared to current banking system and remittance services), and easier to use it for innovative services.
I don’t think you can create an online anonymisation service with physical commodities as base, because I don’t think it can be decentralised, and it requires substitutes to work (unless you can figure out how to construct Star-Trek-style transporters). Due to its centralised nature, if the issuer is shut down, the digital currency becomes impossible to use (as that requires the issuer’s servers to be online).
I’ll even skip the whole issue of regulation (banks and digital backed currencies are regulated, Bitcoin is not). And even if there was a regulation that inhibits the use of Bitcoin, it’s unclear to how it would be enforced.
Bitcoin does not require substitutes to add new features (it’s possible, and sometimes advantageous, but not necessary). With precious metals, the only new feature you can add is to coin it. Everything else (e.g. bank notes/warehouse receipts, bank accounts/wire transfers, cheques, debit cards etc) is a substitute. Substitutes cause all sort of issues, like the Austrian favourite complaint, fractional reserve banking.
It is a complex topic. In some areas, Bitcoin has a comparative advantage, in others it does not.
It made me laugh even though I disagree with you on this issue 
This is the first interesting thing I’ve read about Bitcoin in a long time… so in your view it’s not an unbacked currency, it’s actually back by drugs, child porn and other commodities which cannot be legally traded and for which the risk of using traceable money (even cash) is extremely high.
Clayton -
so in your view it’s not an unbacked currency, it’s actually back by drugs, child porn and other commodities which cannot be legally traded and for which the risk of using traceable money (even cash) is extremely high.
Well, I think this is not the standard definition of “backed”. I guess there must be a promise by specific party (e.g., Bank of England) to pay specific amount (one pound) of specific commodity (such and such grade silver) to the bearer.
it’s actually back by drugs, child porn and other commodities which cannot be legally traded and for which the risk of using traceable money (even cash) is extremely high.
Lol. That’s what I like my currency to be backed by 
If I ever run for office or anything big, please note that the above statement is a joke
(parody)Gold is down. Its supporters appear to be ready to suspend rational thought as they throw money into something that they desperately want to succeed.(/parody)
I’m not actually claiming that. I don’t have anything against gold either personally nor as an economist. I’m just using attempting to point out the logical fallacies of Bitcoin critics.
The difference between gold and bitcoin is that gold has several thousand years of history behind it, as well as a sound theoretical basis for its continued worth.
Yes, gold has gone down 16% and bitcoin has gone down 600%. Yes, you read that right, 600%.
In other words, if you bought $1,000 of gold at its peak, you now have about $800. Yes, a loss of $200 which I predict will return to you by year end.
But if you bought $1,000 worth of bitcoins at it’s peak, you lost $800. Of your $1,000, you are left with a measly 200 bucks. You have been wiped out, pretty much. And you will never see your lost money again.
Both have gone down. But gold has a future; bitcoin doesn’t.
Come back in a month or two and we’ll compare notes.
