[jafaku]

You realize Bitcoin and the USD are quite different things, right? One has its price regulated artificially by creating more of it, while the other depends solely on the whims of the free market. And besides, Bitcoin is much smaller, and therefore it fluctuates the same way startups' stock fluctuates.

So one could say this: If a startup's stock flucuates like this, it's the most normal thing in the world. But if it happens to Bitcoin, it's something we should criticize!

[mcs]

There are extremists that believe Bitcoin is poised to be the new world's reserve currency (which to me means a highly sought after commodity to compare against), as gold once was in the past 200 years to some degree. This party of thought see it as digital gold that is fungible through the internet. It doesn't have enough critical mass of actual economic value hedged on it yet to be that, if ever, so it's going to be a wild ride when any big players decide to put some monies in the slot machine of the market. Small level purchasers aren't moving the market, and if they're in the US they're probably using Coinbase or some other "Bitcoin bank" that does off-chain transactions. The begrudgoned trusted entities that the current world requires to exist for people to get involved aren't moving the price for the most part, and their prices reflect what the other exchanges are saying. Regardless of the potential for transaction exclusion collusion, any large amounts of Bitcoin bought off the chain can cause wild swings on the markets that are averaged for the prices, and for a while if Bitcoin continues to excel, it will remain just as exploitable as any other financial system such stocks w/ press.

[baddox]

I believe that Bitcoin (or perhaps another cryptocurrency based on similar concepts) absolutely has the technical capability of and some desirable traits for being an important reserve currency. I don't predict with any confidence that this will happen, but I see no reason why it couldn't happen. Not sure if that makes you label me an extremist.

[CocaKoala]

Have I fundamentally misunderstood bitcoins? I thought it was a crypto-currency, not a crypto-stock. If it's supposed to be a currency, then judging it in relation to how other currencies behave isn't unusual at all. If it's supposed to be a stock, why does everybody call it a currency?

[jafaku]

If you don't see the difference between a currency that can regulate its price artificially by printing more of it and Bitcoin, then you have definitely misunderstood it.

If you don't feel comfortable comparing it with stock, then compare it with gold. Even after thousands of years, and a market capitalization of 8 trillions of dollars, it still has price fluctuations.

Bitcoin has only ~7 billions of dollars of market capitalization. It's comparable to what we call a "penny stock". Anyone with a few millions can move the price. And even with hundreds of thousands of dollars, you could move the price in one particular exchange.

If you still don't understand it, watch this video:

https://www.youtube.com/watch?v=qHUPPYzzZrI

[baddox]

It's more of a crypto transaction system, which has obvious potential uses as a payment system or a stock. There is no objective "supposed to be" for the technology, but obviously the primary focus of the Bitcoin community is as a payment system.

[javert]

Bitcoin is brand new and it has to have a growth process because of its nature, unlike state-sponsored currencies like the Euro that can just be "rolled out." So you can't fairly compare it to mature currencies, even though it is a currency.

[Guvante]

> One has its price regulated artificially by creating more of it

Not on these scales. Artificial adjustments to the dollar happen on month increments, possibly days.

> while the other depends solely on the whims of the free market

Free is relative, the Bitcoin market is still too small to be isolated from manipulation.

> same way startups' stock fluctuates

Care to quote a startup stock that is traded decently (Bitcoin isn't a penny stock) and has a 10% dip in minutes that isn't newsworthy for anyone interested in that stock?

Because I can bet anyone following it would find it newsworthy.

[alphydan]

> > One has its price regulated artificially by creating more of it

> Not on these scales. Artificial adjustments to the dollar happen on month increments, possibly days.

To give you a sense of perspective, the FED was printing $55bn/month this year [0]. So the FED prints the whole Bitcoin economy ($6.7bn) every 3.6 days, ... day after day, month after month ... for many many years now [1].

[0] http://www.forbes.com/sites/samanthasharf/2014/03/19/fed-cut...

[1] http://static4.businessinsider.com/image/52e4250869bedd404cb...

[mcs]

Milton Friedman is famous for saying the inflation of the dollar is exclusively controlled by the FED, but that isn't 100% true today. There are other branches of government that capture back large amounts of the printed paper from operations that are illegal. So in a sense, the "war on drugs" could be keeping inflation lower than it would be without it. For inflation to be felt the money has to be in circulation. Also, when the US broke away from the gold standard and printed a lot of money for police actions, it took about 10 years for the inflation to become rampant. It is important to realize this was before the crack wave.

[alphydan]

Any references on the volume of paper that is confiscated and how it compares to $55bn/month? In any case, isn't drug money re-distributed into the economy? (I don't know, so I'm genuinely curious)

[dnautics]

paper confiscation isn't what he's talking about when he says capturing back dollars.

[jafaku]

> Care to quote a startup stock that is traded decently (Bitcoin isn't a penny stock) and has a 10% dip in minutes that isn't newsworthy for anyone interested in that stock?

"traded decently", gotta love those vague expressions.

Any company that at some point was just a small startup, sold stock privately, and today is big, has had these swings. Eg: Facebook, Amazon, etc.

If you don't know this, it probably means you have never bought private stock.

[sp332]

This swing is newsworthy, but EduardoBautista said it would cause huge problems to the world economy, which is not the same thing.

[CocaKoala]

If the value of the USD fell by 10 percent in fifteen minutes, I can see that causing some problems in the world economy; do you disagree?

[sp332]

This was on a single exchange. Bitcoin didn't really lose 10% of its value momentarily. If the same thing somehow happened at a currency exchange with such crummy controls as this one, a lot of people would lose a lot of money, but not 10% of the value of all USD.

[danielweber]

"regulated artificially"

[jafaku]

"danielweber"