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Comment by joshontheweb | Hacker News Reader

Is this really a bad thing? Now people can stop hoarding them and start really using them as currency. It never really mattered what they were worth unless you were holding onto them. If you use bitcoins to enable transactions only and keep your money in real dollars then it can be pretty useful.

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It is if the only reason that they have value in the first place was the hoarding and speculating, which seems a reasonable interpretation of events to date. A currency of no value is not useful for trade.

I mean that "if" as a true logical statement, not an implied assertion that it must be true. (I do believe that, but I'm not asserting it right now, because I'm not defending it.)

Its apparent that people are finding value in them aside from their speculated worth. They are using them to facilitate anonymous transaction and more easily transact internationally. Whether those use cases are valuable enough to keep people using bitcoins, I can't say.

Bitcoins utility is a factor in its value.

True, speculation and hoarding dominates its usage at the moment but there is still potential.

It's a problem because the people who are using bitcoin have seen the value drop to less than 10% of what it was, so why should they trust it to be a currency worth using?

For it to be a currency it doesn't need a huge value per bitcoin, nor does it need to be constantly rising a huge amount - but it does need to be reasonably stable.

That's a great question as to why anyone would use a currency whose valuation had dropped to 10% of what it was. http://www.kitco.com/charts/popup/au3650nyb.html

I'm failing to see the relevance of the price of gold to the bitcoin discussion.

He's probably trying to claim that the 10x increase in the price of gold over the past ten years is a 10x decrease in the value of the USD rather than a speculative bubble in gold. (And even if it were, it wouldn't be remotely comparable to the 10x decrease in the value of Bitcoin over the past three months.)

As a sidenote, that's a terrible graph(as are most graphs of this nature). There's a wonderful technology called a logarithmic plot for that sort of thing.

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