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Comment by gwern | Hacker News Reader

> If Bitcoin ever graduates to anything more than a toy currency (last count was a billion or two USD globally?)

This isn't a response to any of your points, but I'm deeply amused to see someone still calling Bitcoin a 'toy currency' at a market cap of $2b. Many people were calling Bitcoin a toy currency when the market cap was more like millions. Truly, people can differ in opinions a great deal.

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I knew I'd get called out on that no matter how I worded it. I have nothing against Bitcoin, but in regard to the points I made - yes, it's a toy currency: it's magnitude is nowhere near enough to be even close to relevant to the business cycle. There are many circumstances where the phrase "Bitcoin is a toy currency" would not apply, this just isn't one of them.

The point is $2bn is a significant amount of money. There's a LOT that can get done transaction-wise with that kind of money. It's the start of a mini-economy of its own... but only mini in comparison to current economies.

It's already a bigger economy than some small countries. That's a pretty decent size in my book. Add to that the fact that it's increasing in size exponentially at the moment and it's looking like it's going to be a pretty serious currency.

Th problem with bitcoin, if nothing else, is that the exchange market, USD:BTC is rather illiquid. Doesn't MTGOX take forever to process the withdrawals in USD?

This is a big problem that does make it a toy currency. The slow exchange probably brings up the price. I expect, without much proof, that the USD:BTC ratio would be lower, at least short term, if you could exchange them easier.

$2b in circulation is pretty decent of course, but if you cannot convert those BTC to USD with ease then the valuation is flawed.

There are many more exchanges than gox. Bitstamp has a consistent 3 day turnaround.

Fair enough, but mtgox is the most famous one, so I naturally picked up news about it. That makes it somewhat better at least.

3 days is still a very long time compared to the 'real' currency exchanges.

It takes 2 days to get USD in and out of my trading account. I'm not sure how long 'real' currency exchanges take, but I bet it isn't immediate.

Microseconds. It's called FOREX.

You are comparing apples with oranges.

Taking dollars out of an account != exiting a trade. It takes one to two days to get USD out of an OANDA account (source:http://fxtrade.oanda.com/help/how-to-withdraw-funds). So 3 days isn't terrible.

You're right I totally misunderstood, my bad.

By three days, I mean, I initiate a transfer from bitstamp, and I get it into my thai bank account within three business days. The transfer is always verified and initiated on the other end on the same day I make it.

So, following your logic, the Bangladeshi Taka is a toy currency, as well?

Not following my logic at all. This is the currency of a country, which has a business cycle - it's relative magnitude is not relevant. Bitcoin is a global currency - the impact of the business cycle of the underlying assets is directly proportional to the amount of global assets represented by Bitcoin. Bitcoin BC's won't affect us until Bitcoin holdings are sufficiently large.

Edit: or it's not evenly distributed. A few thousand people holding all of their wealth in Bitcoin would be enough to study this.

Right. so the Bangladeshi Taka is not a globally-recognized currency. got it. we should probably get it de-listed from xe.com, then.

Global is not the same as globally recognised.

Ah, so you were moving the goalposts, 5 posts back, when your statement about "toy currency" was rebuffed.

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