[ExI] Bitcoin

[Eugen Leitl]

On Sat, Apr 13, 2013 at 07:51:15PM -0700, Gordon wrote:
> Eugen,
> 
> > Gold is not an investment, it's a hedge against 
> 
> > against hyperinflation. This is where you're interested
> > in return of (at least parts) of your investment.
> 
> Bitcoin is also a hedge against hyperinflation. Like gold, when the supply of fiat currency inflates, bitcoins will become more valuable in terms of that fiat currency.

Gold works offline and has a human history of many kiloyears.
Bitcoin cann well be gone in a decade. Or not.
 
> > The bets on Bitcoin are on its utility as a transfer
> > currency, which is unrelated to short-term animal
> > spirits (fear and greed). 
> 
> The spectacular rally in BTC and subsequent crash suggest that fear and greed have everything to do with it.

Yes, the short-term animal spirits. We, here, know better,
hopefully.
 
> 
> As Stuart pointed out, rightly I think, Bitcoin is currently seen more as a store of value than as a real currency. The built-in scarcity of bitcoins over time make them comparable to physical coins or tokens made of a precious metal. To extent that these virtual coins are comparable to real coins made of precious metals, we can expect them to trade like them. 
> 
> Consider Bitcoin as a sort of hybrid: part currency, part virtual precious metal.

I don't really care how it's classified. It is useful already,
and will become more useful if the volatility goes down.

20% of all bitcoins changed hands in the last few days,
with about 200 MUSD volume. This suggests this is no
longer a geek playground.