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Re: If bitcoin succeeds....so what?
by
Richard Andreassen
on 19/06/2011, 03:18:09 UTC
Quote from: Hook^ on June 19, 2011, 02:53:43 AM
Quote from: Richard Andreassen on June 19, 2011, 02:45:46 AM
Quote from: vector76 on June 18, 2011, 11:14:44 PM
Quote from: EhVedadoOAnonimato on June 18, 2011, 09:35:58 PM
I don't get it... you're doubting bitcoin has value? Isn't that crystal-clear already? Even thieves are after them! Cheesy

Scarcity alone is not enough, but being scarce + being desired by some people is enough to attribute value to any resource.

Yes they have value because they are desired.  Tulip bulbs were valuable because they were desired, and desired because they were valuable.  My problem is that if a thing is ONLY desired because other people want them, then no rational price exists.  Tulip bulbs could be $100 or $1000 or $10,000 and none of these prices is any more rational than any other price.

Actually, there is a rational price, which is the commodity value.  If it has no commodity value then it is zero.

The solution to this is to peg the value of the coins to something with stable value like gold. I think this should be possible without introducing any form of centralized authority.
Any mechanism to do that is susceptable to manipulation.  US $ were pegged to gold, until someone decided to get greedy (Morgan, Loeb, etc.) when they made the Fed.

First of all; I do not believe in the conspiracy theory about the Fed that it was somehow created to enrich bankers or some nonsense like that. The original purpose was merely to be an insurance policy against bank runs. A lender of last resort.

I do however think that "power corrupts" and that creating such an entity inevitably leads to the abuse of the power it has been given. This is what happened to the Fed (and I do think it should be abolished).

Quote from: Hook^ on June 19, 2011, 02:53:43 AM
The beauty of BitCoin is that no central authority can manipulate it. 

That is true, but I believe it is possible to make it stable in value without any form of central authority. If this is the case then it would not be possible to manipulate the mechanism.

Quote from: Hook^ on June 19, 2011, 02:53:43 AM
When enough people use it for transactions, it will stabilize.  Right now it is in pure speculation mode.

It might become stable eventually within some broad range, like +/- 10-20%, but I don't think that is good enough to have a viable currency. Long term planning based on the value of bitcoins would be impossible.