[genwin]

Two benefits that makes it all worthwhile: 1) you can transfer it to someone else (e.g. an heir) cost free, tax free, paperwork free, without the gov't even knowing you did it. Illegal, but you can do it and probably get away with it. 2) It can't be devalued by gov't action.

[hft_throwaway]

1. You could do the same thing with cash or gold in many domestic cases. Transferring a substantial amount of cash in/out of a BTC exchange is going to require AML paperwork and the blockchain/exchange has enough information for a regulator to back out where the money went. You might be able to trade locally for cash to avoid this, but for serious amounts of money that could get you robbed or arrested.

2. BTC can be devalued by the actions (or inaction) of other participants in the market and their value changes wildly compared to major currencies. Yes there will never be hyperinflation in BTC terms, but your BTC could easily end up worthless in other ways. Furthermore, I don't think this is a real risk for actual wealthy people. Their wealth is primarily concentrated in ownership interest in businesses, equipment, land, etc., not in currency.

[genwin]

1. Good points. I'm thinking in terms of giving, not trading, as in heirs. Currently leaving money for heirs is messy with probate and paperwork and taxes. There are solutions like living trusts and so forth but again that's paperwork and management. Not so much with bitcoin. It's like digital gold, and less like cash, which loses value even if demand remains constant.

2. Yep, bitcoin can be indirectly devalued by gov't. Or it could end up like beanie babies.

[simias]

Both of those points can be seen as good arguments against bitcoin by many. Myself for instance, I don't consider facilitating tax evasion and impossibility to regulate by democratically elected governments a point in favour of bitcoin.

That being said to get back on the technical merits of bitcoin, I agree with the OP that I can't imagine every individual handling their own bitcoin wallet and risk losing everything if it gets compromised (and waiting for transactions to be validated etc...).

So even if the currency is successful we'll end up with bitcoin banks managing the risk for us and visa-like credit cards for day to day transactions. And then I fail to see any advantage over what we have now (besides making a few early adopters extremely rich, of course).

[VMG]

> Myself for instance, I don't consider facilitating tax evasion and impossibility to regulate by democratically elected governments a point in favour of bitcoin.

That makes Bitcoin immoral from your perspective, without saying anything about the feasibility.

You even restrict the morality argument yourself by saying it is good that a democratically elected government should have the ability to control financial transactions, which I completely disagree with, but even you will admit that there are a lot of unethical governments out there that hurt their population by controlling financial transactions and inflating the money supply.

[simias]

I never said my view was the correct one, I just said I had a different opinion on the matter.

The parent is the one who said that it made it "all worthwhile". That sounded like a general truth to me, I felt the need to point out that it was still up for debate.

And my 2nd point was about the feasibility, I still have to hear from the bitcoin crowd what's the solution for day-to-day use of the currency that does not involve a bank-but-we-don't-call-it-a-bank-seriously-it's-not-a-bank.

[VMG]

> And my 2nd point was about the feasibility, I still have to hear from the bitcoin crowd what's the solution for day-to-day use of the currency that does not involve a bank-but-we-don't-call-it-a-bank-seriously-it's-not-a-bank.

Bitcoin was designed to be a peer-to-peer payment system where the owner of the private key is the owner of the funds. Unfortunately, building secure hardware and software is very difficult, that's why many people choose to not keep their private key on their device but let a service deal with the security, which is often a bad idea. One secure hardware is cheaply available on the market[1] and two-factor-authentication becomes more widespread, this becomes less of an issue.

http://www.bitcointrezor.com/

[dllthomas]

"I never said my view was the correct one, I just said I had a different opinion on the matter."

I get what you're saying, but presumably the fact that you hold an opinion indicates that you think it's the correct one.

[genwin]

> Myself for instance, I don't consider facilitating tax evasion and impossibility to regulate by democratically elected governments a point in favour of bitcoin.

If we had a strong democracy I'd support your viewpoint here. But in our 2-party oligopoly gov't, the general voters' interests are typically secondary to the wealthy's. Bitcoin helps even the score.

[dllthomas]

Tax evasion helps the wealthy a whole heck of a lot more than it helps the impoverished, so I'm not sure it helps to even the score on that count. Avoiding regulation can go either way - reducing barriers to entry by circumventing regulatory capture is a plus (though the wealthy will be in a better position to enter), reducing the pricing in of externalities is a minus (and the wealthy will be best able to exploit this).

[euank]

You can transfer cash to someone else cost free, tax free, and paperwork free if you don't mind breaking the law. If you transfer money by other means (e.g. the bank, bonds, etc) there are perks that make up for the additional cost generally. If nothing else, simplicity.

You really think it can't be devalued by the government?

Its value changed when China implemented laws regulating it (and even when there was speculation of it).

If the NSA threw its resources at mining, it could become rich and then dump for cheap, thus crashing it.

The FBI already showed that they can seize some, and they managed to seize such a significant portion that it could be devalued that way.

What you should be saying is "It's not backed by a central authority we have to trust". A third party as powerful as the government can still do significant damage to it.

[genwin]

I get your point that it can be indirectly devalued. That should be true for any store of wealth imaginable.

A transfer of cash is a transfer of a continuously devaluing currency. If I bury a barrel of cash to give to my heirs it might be worth half in today's dollars by the time they dig it up. Not so likely with bitcoin, assuming demand for it remains the same or higher than now.

The gov't could ban bitcoin transactions but that's becoming more and more unlikely as Wall Street gets into bitcoin-related services.

> If you transfer money by other means (e.g. the bank, bonds, etc) there are perks that make up for the additional cost generally. If nothing else, simplicity.

Agreed. For heirs, for example, a living trust is probably the way to go, over bitcoin inheritance.