[ExI] Bitcoin

[Mirco Romanato]

Il 14/04/2013 10:28, Eugen Leitl ha scritto:

> Gold works offline and has a human history of many kiloyears. Bitcoin
> can well be gone in a decade. Or not.

As all human things it will die a day.
But the resiliency and endurance of Bitcoin are dependent on the
community that own and use it. Larger the community, larger the
investment in Bitcoin the individuals have, stronger the incentive to
keep Bitcoin going.

Bitcoin, as gold, have a monetary value (as a mean of indirect exchange)
because a (very large) group of people accept it and we believe they
will accept it in the future in exchange for goods and services.

>>> 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.

I do not believe in "animal spirits".
Talking and thinking in term of "animal spirits" is to reject
rationality and logic in economic matters.
It is thinking people just only react and never act and think ahead. And
support the idea someone can and must manage their reactions for "The
Greater Good".


>> As Stuart pointed out, rightly I think, Bitcoin is currently seen
>> more as a store of value than as a real currency.

The quality "store of value" is not binary.
Bitcoin is seen as a better store of value than the fiat money and an
easier and less costly store of value than gold and silver (or other
less liquid goods like real estate, durable goods, etc.)

People will prefer a currency as a store of value to another depending
on the circumstances.
For example many Bitcoiners have gold and silver (some at hand, some in
vaults outside their own government reach). But anyway, they have, for
now, fiat also; some in cash and some in bank accounts.

They just reduced  their exposition to the fiat risks, the bank risks,
etc. moving to bitcoin, gold, silver.

>> 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. 

I suppose Mr. Nakamoto sais. "I have a mustard seed and I'm not afraid
to use it".

Mirco