Potemkin wrote:Bitcoins are useless as a currency. They're not even useful to criminals, since a record of every transaction using Bitcoins is recorded and retained essentially forever. In the long term, just like tulip bulbs, they are worth nothing. In the short term, people will speculate in them in the hope of getting rich for doing nothing and contributing nothing to the economy. This intense speculation in an ultimately worthless commodity is known as a 'bubble'. If the bubble gets too big before it bursts, this can affect the 'real' economy.
They aren't useless, as you can circumvent restrictions on product exchanges with them. This is an issue currently, for instance, when buying medication overseas which can be much cheaper and is perfectly legal in many countries, where the major credit card companies, paypal, etc. refuse to carry out transactions for some companies because of pressure by the pharma industry. It's the decentralised nature that matters.
Buying and selling bitcoins can be as anonymous as exchanging cash. As far as I know, there are also ways to make the tracking of transactions very expensive, and hence not worth the effort for the authorities unless it involves serious crimes such as terrorism.
B0cey wrote:Did you take note of the US property market exposure to governments in 2008 by the way? Some dangers are not noticeable until it is too late. This will be one of them I am sure.
Surely everybody knew about the banks' and government's exposure to the property market. It's the judgment about the risk of that exposure that was wrong.
Edit:
Oxymoron wrote:If you can answer this question I will agree with you about the value of bitcoin.
What is the security of Bitcoin?
What happens if the person or people in charge of controlling bitcoin are blackmailed?
What if Bitcoin starts manipulating it?
I mean that is why the US dollar is worth something, because the US Goverment has shown over a long term that the currency is stability. I am sorry I do not trust some Yoshi mother fucker to keep this shit afloat.
This is bullshit based on a pyramid scheme.
I'm no expert, but I'll try and answer your questions.
1. There is no security or backing for bitcoins which does make them more risky than a regular currency. Yet a regular currency is also not without risk, as we've seen historically in countries with hyper-inflation. In general the average person today will not engage in long-term investments in bitcoin anyway but use it for transactions where they hold the currency only for short periods of time, which obviously reduces the risk.
2. There isn't really anybody in charge of bitcoin. There is a person responsible for the (open source) bitcoin software and the risk of blackmailing here is not different to any other private software development company many of which produce software which is used in critical applications. The open source nature of the software actually reduces that risk as any programmer or software developer can see the code which is not the case with proprietary software.
3. See 2 above and further central banks and government do also manipulate currencies.