Comment by PnuklOEvolu | Hacker News Reader

Comment by PnuklOEvolu | Hacker News Reader

Articles like this demonstrate why most people don't get Bitcoin in the 1st place. Let's ignore the factual inaccuracies like bitcoin production bottoming out in 2040 (it's 2140, Justin, and that's a big difference) and focus on how Justin doesn't get it.

Bitcoin is in use right now transferring money around the globe. If I buy 100$ worth of bitcoin (0.478 bitcoin at current prices) and immediately use it to purchase anything, it has served its purpose as a value transfer medium. This is regardless of tomorrow or yesterday's price. It is this efficacy that people pay for when they buy bitcoins.

Bitcoin was not designed as a storage or investment medium it was designed to facilitate the transfer of value. As long as it performs that function it will continue to defy the misplaced expectations of those who refuse to go to the effort of understanding it.

I agree that Bitcoins were designed as an instrument to facilitate transfer of value and not as store of wealth. But the example of a transaction you just gave in your post is not how people spend currency. No one converts a currency (100$) to another currency (0.478 Bitcoins) for immediate spending in the real world. People generally minimize number of currency conversions (to save transaction costs) and store the currency (wallets or banks) for some time before spending it, and storing volatile currencies carries huge risk.

The current price explosion is not good for bitcoin if you look at it as a currency. People who believe this is a bubble will just cash out of bitcoins anticipating a fall and the (apparently) greater number of people thinking the value will rise will just hold on to the coins. The only way this price explosion can be helpful is in providing media exposure to bitcoins and cryto-currencies. Only after we have sustained period of stable prices we can hope of bitcoins becoming a major facilitator of transaction.

Storing volatile currencies creates risk, no doubt, but it also creates demand independent of speculation.

Interestingly, this implies that more convenient bitcoin exchanges could greatly lower the demand for bitcoin.

Until the time comes, as it almost certainly will, when your bitcoin crashes in dollar value and the "value" you were trying to transfer, becomes severely depleted.

Bitcoins have real issues and you ignore them or reject them at your peril.

The USD is not going to halve in value overnight - Bitcoins could easily do just that, or worse.

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