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Comment by nyarlathotep | Hacker News Reader

I think we have to wait a little longer to make that call. The "correction" seems to be correcting itself now:)

Yep, very true. Things were moving down very quickly (down 30% in 30 mins) when I posted this.

Completely - this is a very new commodity market upon which lots of people are speculating. I intend to speculate on it and so do (are) many people in the tech and now wider communities.

Worth remembering that at least bitcoin is backed by some value of work, what is USD backed by again? Debt :-D

That debt is backed by the collective work of the citizens of the US. In total, and discounted by the tax rate, this is far, far more work, and of course far more useful work, than Bitcoin mining.

A debt that can never be repaid, so we'll just print an ever increasing amount of cash and sell gold to make sure no-one realises the dollar is worthless?

Obviously, I'm being a little bit facetious...

A little bit facetious and entirely wrong, sure.

The US Dollar is based upon the full faith and credit of the American nuclear weapons stockpile.

Can you give a little more explanation for that claim? It sounds like you're saying the US will blow cities up if people stop accepting the dollar.

It is a snarky form of the statement, but basically the idea is that fiat currency is similar to corporate bonds.

If you think General Motors is going to tank, you don't want their bonds, nobody does, they are junk. If Google were to issue a corporate bond series, everyone would eat them up like candy though.

Because the USA is the only remaining military superpower in the world, it's fiat currency is going to be #1 in the world. The Eurozone is #2 militarily, and it isn't a coincidence that the Euro currency is also #2. And places like Zimbabwe have jokes for militaries and jokes for currencies. A few years ago someone gave me a 100,000,000 Zimbabwe note as a gag gift.

1. Bitcoin is not backed by anything. The work that goes into creating Bitcoin via the mining process has no bearing whatsoever on the value or utility of Bitcoin.

2. USD is backed by the law -- laws concerning debts, laws concerning taxes, laws concerning torts, etc. The law is what makes USD useful, which is why USD has value.

Nice touch - write comments like this while smoking grass purchased on SR2 with Bitcoins:) You have great sense of humor.

You are wrong about point number 1. The purpose of mining is to process and secure bitcoin transactions. The work that goes into mining is what provides the utility of bitcoin. The 25 btc mining reward is just an incentive.

The problem with your theory is that it permits anyone to start their own Bitcoin fork and magically people will use it.

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