[Chugalug] A comment on the Bitcoin .. fraud

Dan Lyke danlyke at flutterby.com
Mon Apr 15 16:13:25 UTC 2013


On Mon, Apr 15, 2013 at 7:10 AM, Stephen Kraus <ub3ratl4sf00 at gmail.com> wrote:
> I criticize it because numerous economics professors criticize it.

I don't think you need to look to outside sources for reasons to be
skeptical of bitcoin, on the other hand there are tremendous profits
to be made from bubbles if you can figure out when to get off.

Objects have value because people collectively  believe they have
value, but currencies also have the property where too much rarity
means they're no longer usable as a currency. Collector's items aren't
fungible, which means they don't work as currency: You have to find a
buyer for that specific item.

I believe the overall concept is flawed for a simple reason: Currency
supply is capped at at 21 million bitcoins. Over time bitcoins will be
lost, people will die and not leave codes to their wallets, hardware
will fail, entropy occurs.

Which means that the currency supply will, inevitably, shrink. This,
to a point, encourages hoarding, until people lose faith in the
currency and it collapses entirely.

The question is: how far off is that time?

So, yeah, you won't find me playing in that bubble, but if you wanna
soak some suckers on the rise up, no skin off my nose... And who
knows, that rise may last for years and years.

Dan


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