Why Bitcoin will never be a real currency | Hacker News Reader

Why Bitcoin will never be a real currency

blog.chron.com

I see this as an article written at the command of some interested parties to limit Bitcoin's adoption. I don't fancy these kind of attacks, but in the current context I think it may be in the Bitcoin's benefit - the steep growth is not good.

"First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you." Nicholas Klein, Proceedings of the Third Biennial Convention of the Amalgamated Clothing Workers of America (1918), p. 53, (http://books.google.com/books?id=QrcpAAAAYAAJ&pg=PA53...)

This article appears to be somewhere between the "ridicule" and "attack" stages.

That quote lost a lot of its punch after it was used over and over by parapsychologists, perpetual motion device "inventors" and other groups that went on to deserve ridicule. I'm not saying that Bitcoin isn't going to do interesting things, but being used as the rallying cry of clowns seems to have given it a stigma. There are plenty of ways to promote BTC without claiming that ridicule means that history will absolve you and give a stunning legitimacy to whatever concept.

There are 3 major flaws in his criticism of Bitcoin.

1. "Why would I buy pizza with it when it’s far more profitable to hold onto the money and let the value appreciate."

Because you need to eat. Now. Not in 5 days. In other words, nobody sits on "paper" money forever and ever. Eventually everybody spends it, reinvests it, etc. Do you think Bitcoin holders are going to sit on their stash, never spending it, and watch the economy and value dies as nobody spends it? Of course not!

By the way, the market has already proven you wrong: all indicators show that Bitcoin spending is increasing, despite everybody knowing about Bitcoin deflation: https://news.ycombinator.com/item?id=5296889

2. "Bitcoin is backed by, well, the faith of those who are willing to put money into it."

Nothing backs gold either. By your logic, gold is a dangerous investment. We all know this is not true. Bitcoin, like gold, does not need to be backed by anything to succeed. Both assets are valued because people value their properties. That is all. (For the record, industrial demand for gold is negligible compared to demand from the speculation or jewelry markets, so saying gold has value because it is useful is not enough to justify most of its market value.)

3. "After all, if someone steals your bitcoins — hacks your account, let’s say — is it really a crime? And if it isn’t, then what incentive does anyone have to actually honor them?"

If you had done some research, you would be aware that the US FBI and SEC are investigating and have investigated numerous Bitcoin thefts. They do consider it a crime.

By "real currency" I assume the author means a viable long term currency substitute -- he can't mean a medium of monetary exchange, as Bitcoin is already being used in that manner.

While there are some points worth a look in this article, he is sadly ignorant or misinformed about Bitcoin on a variety of points:

- refers to Bitcoin as a "Internet play money fad" when the monetary base for Bitcoin is now over $1 billion dollars and has been running for over 4 years

- claims its "origins don't inspire a lot of confidence" because it was invented by a "pseudononymous hacker", ignoring the fact that the client is open source and can be (and has been) read by anyone

- asserts that "Bitcoin is backed by, well, the faith of those who are willing to put money into it", ignoring the cryptographic foundation of the protocol which is slightly more important than the faith of the users

- confusingly states that Bitcoin could be a "glorified Ponzi scheme" because it might not be "really a crime" if someone steals Bitcoins from you (how would that be a Ponzi scheme?), ignoring that Bitcoins can't be stolen without stealing the Bitcoin wallet.dat, much like cash

All in all it's a pretty shallow commentary with very little basis in fact by a business columnist with an obvious axe to grind.

Why would anyone build a content based site with content not showing up in the first 3 seconds? The site loads fine but the text is so delayed. Tried in latest firefox and chrome.

This doesn't seem to actually explain "why", besides mentioning deflation.

Why would I buy a computer now when I know the same computer will cost less in 6 months due to technological advances? Because I need a computer.

Well if the author says so.

Came here to say exactly this. I read the article, but I couldn't see any logic to substantiate the claims of the title.

Also, what is this supposed to mean? "After all, unlike real money, Bitcoin isn’t the coin of the realm. It is, at best, currency competition. Since it lacks the social contract of real money, it’s likely to last only as long as the U.S. or other governments allow it to last."

How does bitcoin lack a "social contract" and how does this have anything to do with the U.S. government?

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