[TrevorJ]

Even the media is complicit in this. NPR had a short story on Bitcoin this morning and made a point to say transactions were untraceable. One of the KEY points of Bitcoin is the public ledger. I'm amazed that as a journalist, you can get that so badly wrong.

Having said that, I think there are serious hurdles to overcome with Bitcoin, and the hype cycle and speculators are doing very little for the credibility of Bitcoin.

[jwesley]

Bitcoin doesn't need credibility. It just needs to work. Hype and speculators are a natural product of the energy gathering around the massive technical innovation and corresponding social movement that is Bitcoin.

[dragonwriter]

> Bitcoin doesn't need credibility. It just needs to work.

What currencies need to work, more than anything else, is for people to believe they will work -- i.e., credibility.

That's what, ultimately, discussions of supposedly "intrinsic" value (which are somewhat dubious taken literally, value is, arguably, inherently extrinsic) of commodity currency and the reliability of the particular governments backing fiat currencies are about -- credibility. Because, ultimately, a currency like anything else is worth exactly what people are convinced that its worth.

[jwesley]

Fair enough, I see your point and completely agree that all currencies are based on belief. I guess that why I am all over the internet all day long trying to convince bitcoin is worth a shot.

[bmelton]

It's kind of naive to say that currencies are entirely based on belief, and I think you had it more right with your initial statement.

The only big distinction between the US Dollar and Bitcoin, from a practical perspective, is that Bitcoin doesn't have any armies willing to defend its status as legal tender. Even if everybody stopped 'believing' in the dollar, its buying power might tank, but it's still legally required to be accepted as payment for all debts, public and private. That legality is implemented through force of law, not good natured belief.

[Crito]

Bitcoin does need credibility in the real world.

Consider wire transfers. Those undeniably work, but their reputation has been tarnished to the point that most people who do business online will run the other direction if the other party so much as mentions the concept (see: craigslist).

[TrevorJ]

Bitcoin does need credibility. Not in the abstract 'if everyone believes it is worth something then it is worth something' way, but in the sense that for Bitcoin to survive, it needs to be usable at a wide variety of merchants. Merchants aren't going to adopt some clown-car currency where a dozen or so flawed rumors come piling out whenever you mention the word Bitcoin to somebody.

[thisosound]

I don't think they are intentionally trying to mislead people to favour Bitcoin.