Fully agreed -- but I'm not trying to do very much with economics other than save money and pay taxes. For the things where I'm trying to act towards specific social change (e.g., privacy and security, in my case) I make an effort to be well-informed about, technically, socially, and legally. I don't have any illusions that the status quo is good, but there are also things that you can't be naive about when changing.
I think there are a lot of broken things about how currency works, but there are also quite a number of good things, and setting the whole thing on fire without understanding which parts are good and why is a recipe for hurting people and also failing to get your idea to succeed.
Given the value of BitCoin relies on desire and the only way they can possibly convince people that they want BitCoin is to spam it until they believe it...
I think it's fair to say that's a blaming statement. Comments by people who appreciate the value of the blockchain are not all naive. I'd say the vast majority of people don't quite understand the ramifications yet, and would rather talk about what we all focus on: money. That's not what I think the value of Bitcoin is, however.
For one, there's a massive disconnect in distinguishing between the value of the currency and currency as a medium of exchange. For example, most sites and discussions focus on the value of BTC vs USD. Very few look at volatility and transaction volume.
Using Bitcoin is basically, like using a foreign currency, with the only difference, that in case of a the conventional currency you might actually live in the country it is used.
In other words, whenever you use Bitcoin you take on FX risk. This means, that Bitcoin is something you wouldn't want to store value in for the long-term.
Hedging that risk will also prove a major headache, since there aren't that many Bitcoin contracts out there, and the ones that are, carry some major credit risk with them.
>This means, that Bitcoin is something you wouldn't want to store value in for the long-term.
I can think of a reason you would want to. Bitcoin is strictly supply-limited, and all fiat currencies are not. One might decide that, despite Bitcoin's volatility, the expected change in unit value over time is higher than that of any (inflationary) fiat currency.
With the difference that other fiat currencies are spectacularly unlikely to be declared illegal in your jurisdiction. There's a non-zero chance of your "bitcoin stored value" being about as desirable as a few suitcases full of cocaine, if your local laws fall that way.
I wonder if tip4commit have even considered whether any of the unsolicited donations they're collecting for are intended for residents in any of the non-green countries here: http://en.wikipedia.org/wiki/Legality_of_Bitcoin_by_country ? If you're a contributor to an open source project and you live in Bangladesh, this is about as welcome as receiving illegal drugs in the post in return for your open source project commits. (Yeah, a bit of hyperbole there, but still...)
True, if we expect the BTC FX risk to be lower, than the inflation risk of the best possible fiat currency choice, then BTC would be the superior choice.
It's different than most other foreign currencies in the sense that it's variance in value is MUCH higher than your usual currency. I would consider storing my personal fortune in CHF, JPY, USD, or even EUR but never in BTC.
Friction, lowest friction tends to win and bitcoin demands friction to run the blockchain. I don't think electronic exchange mechanisms are daft, but I do think the bitcoin model is.
It requires (electrical) power. I don't think this could reasonably be called "friction". When I think "friction", I think of burdens imposed on users. Bitcoin has relatively few of those.
There are about 500 transactions per block; each block contains 25BTC + fees (the fees are negligible at the moment). At the current price of $350/BTC that means that the revenue per transaction is 25*350/500 = $17, which means that the cost per transaction should be around that area. This means that the low transaction fee is actually massively subsidized by the fixed block reward.
The failure, nay the pigheaded refusal, to learn from history.
BitCoin is faux money and will likely be recorded as the "Dutch Tulip Bubble" [0] of our times.
Intentions and wishful thinking alone are not enough to create revolutions. Crises are invariably required to change such fundamental concepts as value of currency in the public's mind, and it has to happen on a massive scale in a tiny span of time. BitCoin will be no more than the butt of jokes in another decade unless it finds it's destiny in a crisis made for it to shine.
You haven't actually mentioned any economic principles; you've just compared Bitcoin to a historical bubble (of which there were certainly many) without any evidence supporting this comparison.
>BitCoin is faux money
Could you expand on this? How do you define "faux" money?
OK, you're making 2 different claims. The first claim is that Bitoiners refuse to learn from history. But the second claim is that crises are required for revolutionary change (history says, I presume). So how are Bitcoiners refusing to learn from history? By trying in the first place? Or by failing to manufacture a crisis?
And really, linking to the wikipedia page of tulip mania, as if we haven't heard that trope 10,000 times?