[ExI] Bitcoin

[Gordon]

Thanks to all for the advice about Bitcoin.

This headline caught my eye the other day, among others:

A Guide to Bitcoin Mining: Why Someone Bought a $1,500 Bitcoin Miner on eBay for $20,600
http://motherboard.vice.com/blog/a-guide-to-bitcoin-mining-why-someone-bought-a-1500-bitcoin-miner-on-ebay-for-20600


Foolish or wise? One thing seems certain: Bitcoin is catching on like fire, at least for now. I might consider the purchase of an ASIC machine if I thought is was worthwhile. Is it?

As I wrote to another fellow here on ExI, my concern for the long term is that even while Bitcoin is structured such that there is a maximum number of coins which can be mined, ensuring scarcity and thus in this respect making it similar to a precious metal, there is no limit to the number of digital currencies which might compete with it. I know of at least six, including Litecoin which is said to be silver to Bitcoin's gold. But are digital currencies really analogous to precious metals? I rather doubt it. I can make a new digital currency but I cannot make a new precious metal.

I am studied in economics and investments, (in fact I spent much of my life as an investment adviser), but this is mostly uncharted territory for me.

Gordon
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