Hacker News Reader

Comment by hugh3 | Hacker News Reader

Short answer: they aren't. However, anyone who has managed to acquire some is currently busy trying to talk up their value.

Or to put it another way, it's a pyramid scheme with some geek-friendly features.

View on HN

I totally disagree. Their intrinsic value is that they cannot be controlled by despotic governments, nanny state mothers and fathers, or by corrupt bankers or payment gateway vendors. They do not suffer from long term inflation. They have negligible to zero transmission fees.

The fact that the currency is as stable as it is is remarkable, and this is a perfect site to take advantage of bitcoins.

Their intrinsic value is that they cannot be controlled by despotic governments, nanny state mothers and fathers, or by corrupt bankers or payment gateway vendors

You could say that for any currency you might care to invent. Limited-edition Franklin Mint velvet Elvis collector plates? They'd be a great currency, if only you could persuade anyone to use 'em.

Alternatively, if you don't like that, then I could invent Bitcoin Prime. It's exactly like Bitcoins, except... well, it's called Bitcoin Prime. Every string of bits that is a bitcoin is also a Bitcoin Prime... except that regardless of who "owns" that bitcoin, I own the Bitcoin Prime. Who wants to buy some?

(Oh, and if such a thing ever does become popular, I guarantee that despotic governments, nanny states and corrupt bankers will find a way to get in on the action.)

The fact that the currency is as stable as it is is remarkable

Stable on a one-year timescale? When the only people who own them so far are the first-gen speculators trying to drive the price up? The "beanie baby" alternative currency lasted longer than that.

You could say that for any currency you might care to invent. Limited-edition Franklin Mint velvet Elvis collector plates? They'd be a great currency, if only you could persuade anyone to use 'em.

True, but Franklin Mint collector plates are not supremely divisible, easily transferable, or free to store.

Go ahead and try, nobody will get on your bandwagon because the market will expect that a fragmented market for crypto-currency is in nobody's interests.

Oh, and if such a thing ever does become popular, I guarantee that despotic governments, nanny states and corrupt bankers will find a way to get in on the action.

Short of large scale quantum computing (which is my largest semi-fear), bitcoins mathematically cannot be controlled. Your statement is the equivalent of "if ssh tunneling every truly took hold you can guarantee that despotic governments will will find a way to listen in on them." While some governments may try to take measures stop traffic that looks as if it could be bitcoin, they cannot stop the wallet-on-a-usb-stick and in practice they would have an extraordinarily hard time doing so anyways.

There is a real market need for non-reversible, hidden transactions, driven mostly by the Governments that erect inane laws in the first place. Also, governments move slowly, they won't turn their focus onto bit coins until the first kidnapping and ransom is facilitated via bitcoins (a very real possibility).

> There is a real market need for non-reversible, hidden transactions

BitCoin's transactions are all publicly available, even if only coins can be tracked, not users.

Not if the transaction is made via usb or CD in the mail.

Edit: and by transaction I mean a "wallet" is loaded up with bitcoins and then handed off to someone else.

That's very interesting and I hadn't thought of that, but it seems that you'd need to conduct a transaction with the newly-acquired coins in order to ensure that they aren't spent twice.

>The fact that the currency is as stable as it is is remarkable

the currency will fail as soon as NSA withdraws its funding from this project of distributed generation of these hash signatures with very specific properties. Who else do you think maintains such a stable and modestly growing valuation? Free market? :)

If your password is stolen and someone steals all your bitcoins, how enthusiastically will the police investigate this crime?

Is your bitcoin wallet covered by your home insurance policy against loss or theft?

Your short answer is just that; You do not mention any of the positives.

Some of the positives:

* anonymous

* decentralized

* finite supply

* no transaction fees

* open source

* growing in usage

* is traded on online currency markets

I'm sure there are more, but that is just off the top of my head. BTW, I'm speaking as someone who has ZERO BTC.

How is it a pyramid scheme? Bitcoins are just a scarce resource..

I admit it's not exactly a pyramid scheme, but it does have many features in common -- in particular, the fact that the folks who get in on the ground floor can potentially earn lots of money by persuading as many other folks as possible to join in and then cashing out before the bubble bursts.

In a pyramid scheme, the people at the top of the pyramid want to stay in the game for as long as they can, not cash out as soon as the opportunity arises. What you've described sounds closer to "pump'n'dump".

And people who first got into computers benefited greatly by convincing others that to get into computers as well.

I mean, the more widespread the use of bitcoins the more negligible the initial advantage of early adopters will become.

Reply on news.ycombinator.com