Hacker News Reader

Comment by joejohnson | Hacker News Reader

Silkroad. It has consistant business and I know people who have used this website.

However, it fails to use bitcoin as a currency in the sense that other stores use dollars as a currency. The prices on Silkroad are adjusted to mirror the USD->BTC exchange rate dialy. And, I would suspect that the majority of the users are buying bitcoins to buy goods on Silkroad, and that venders on Silkroad turn their BTC back into USD often. These two use cases don't support BTC as a viable currency. It is being used exactly as detractors presumed: merely a way to launder money.

View on HN

Using a currency as a means of payment is its main purpose. Using it to store value is also important, but secondary. Obviously some people where using it as an investment (which is kind of a store of value), but probably not the same people.

Anyway, a currency that people buy to use in particular markets is possibly a way that money got started in the first place. People traded for a currency to use in a (physical) market and then traded that into different stuff that day. Eventually, as things stabilized they might have been happy holding some money.

If bitcoin became commonly used as a way of transacting, but not of storing value or denominating prices it could still be a good enough starting point.

> If bitcoin became commonly used as a way of transacting, but not of storing value or denominating prices it could still be a good enough starting point.

Even if the only markets in which it was "commonly used as a way of transacting" were illegal ones, as a means of money laundering? Is that really a "good enough starting point," a way for drug dealers to clean their money?

I'm not sure that makes any difference. I'm not sure how big this market is, but it could plausibly be big enough. It would probably leak into other markets too. Drug dealers comfortable with bitcoin might also buy shoes with bitcoin etc.

And I'd be able to buy bitcoin from drug dealers trying to convert bitcoin into cash, buy shoes from someone with the bitcoin, and that someone could sell that bitcoin to someone looking to buy drugs from a drug dealer. The demand for bitcoin naturally smears over the entire market for bitcoin.

If a lot of people are buying bitcoins then that should push the value of them up (depending on the available supply of bitcoins) regardless of whether they exchange them back in to traditional currency shortly afterwards. It is a form of utility.

All currencies are valued against each other, it is no surprise to see the dollar value used most frequently to determine value, since dollars are the worlds reserve currency.

My opinion is that bitcoin is probably ahead of its time, the technology is amazing, and could be used in many different ways, and I am not yet ready to count bitcoin out just yet.

Reply on news.ycombinator.com