Why bitcoin will fail

apenwarr.ca

19 points·nagrom··5 comments

The government doesn't really control the economy. The main job of the central banks is to fight high inflation and stay the heck away from deflation. The mere fact that bitcoins are deflationary is enough to suffocate the bitcoin economy, why would you spend money now when it will be worth more tomorrow?

The bitcoin wiki states that it has little inflation in its money supply, which misses the point that currencies should remain stable with respect to real goods and services and much less so towards its history. A small inflation is needed to remove the incentive for money hoarding (saving), this provides a system-wide economic stimulation which keeps it stable. The amount of money in the system doesn't matter, what matters is that 10k cash now is worth more than 10k of cash hoarded for a year.

imo, the real kicker for bitcoin is that it has no failsafe. What happens when confidence in bitcoin is lost? The gold standard was backed by real gold, the dollar is backed by the governments' ability to collect taxes. The bitcoin currency is backed by what? cpu power?

Excellent points and solid article. Good to see some cohesive, realistic thinking on this.

As soon as you go electronic, forgery becomes trivial to do on a massive scale

So, does the author know anything about Bitcoin?

Nicely executed! Thanks for the laugh.

Edit: Why the downvote? The author clearly states that it's a troll:

"See, a bitcoin rant is almost too over-the-top for me. Asking why I think bitcoin won't work is like asking why the sky isn't red. I mean, wait, you think it is red? You actually took that seriously? Oh boy. Where do I even start?"

"For the record, I'm stupid and trolling. That's why it was hard to tell."

Did you miss the sarcasm tags around that statement?

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