What are your thoughts on BitCoin?

[Zelig]

Primarily because the government doesn't have any power to control it.

I assume people who mine WoW gold also aren't reporting it as taxable income. (Though the government could go hassle Blizzard about that if they really wanted to - I would really find it quite amusing if the Chinese government did so.)

 

[Tahuti]

Uh. What? I'd say the most common reasons BitCoins receive hate is that they're a technologically advanced method of destroying wealth.

Just think about it, would you say that if BitCoins were not associated with Libertarians?

 

[Mise]

If BitCoins were being marketed as a way to subvert the global banking system, eliminate the profit-skimming, rent-seeking, Too Big To Fail banks, rid the world of fatcat bankers and their obscene bonuses, and create a co-operative banking system based on mutual trust, free from the endless fees and rules and punitive charges of the traditional banking system, people like Crezth would be its number one cheerleaders, as blind to its flaws as they presently are to its benefits.

Zelig is right on all 3 of his points. I can use it to send money without having to pay bank fees, nor exchange rate spreads. I send money to my family in the US and South America fairly frequently; to send $100 it usually costs me $105 when you take bank feesinto account, and more like $110 when you consider the spread between the Buy and Sell price on the exchange rates. If I had to send BitCoins, it would cost maybe $101? I don't know, but it would be a hell of a lot cheaper. For me, the utility goes GBP > BTC > USD > EUR > every other currency on the planet. It's #2 for me. Do that for ever individual in the country, and you get broadly the same answer. So tell me again how BTC isn't a positive thing?

 

[Mise]

BTW the article below suggests that one reason for the high price of BTC and simultaneously the high liquidity is that people in China are using it to circumvent the Chinese government's capital controls, and get money into and out of China easily and cheaply.

http://marginalrevolution.com/marginalrevolution/2013/11/china-and-the-soaring-price-of-bitcoin.html

 

[Crezth]

Even if bitcoins were being marketed as all that - hell, especially - I'd still be here telling you guys how much they suck. A cooperative banking system built on mutual trust? Please. It's a game of chumps.

So far I've heard their main utility is to evade the government and banks. This does not strike me as overwhelmingly convincing in its own right, especially as I do not consider there to be anything wrong with fiat currency nor paying taxes nor subsidizing banks' reinvestments - at least insofar as I have to accept that there is currency to exist in the first place.

But I will admit if I was more deluded in a different way I might be cheerleading for bitcoins. There go I but for the grace of god etc.

But by all means, continue to assassinate my character, because how cool is it to transfer in anonymous crypto currency? Yeah, 99%, down with fat cats, etc.

 

[Mise]

Okay, well, carry on paying big banks 5-10% to transfer money, instead of using technology to eliminate these nonsensical, pointless fees. I mean, you're really doing yourself a disservice by not even acknowledging that there are advantages to using BitCoin to as a medium of exchange, whatever disadvantages might also exist in tandem.

To be clear, do you deny that transferring money from the UK to my family in America or South America would be a hell of a lot cheaper if we used BitCoin as the medium, rather than Western Union/Moneygram/etc or a direct bank transfer?

 

[Crezth]

Nonsensical, pointless fees, huh? So let me get this straight. You pay 0% to convert to bitcoins and back? And the wallet transfer system which you must download a transfers record to use is worth the difference?

Maybe it is. I can't tell you what your own time is worth. But I do know that the volatility of bitcoins (dropping 200 bucks in the blink of an eye) means i would be leery to use them even for an eye-blinking transfer.

Theoretical all-in-one service that eliminates that possibility only charging an exchange fee, not a transfer fee? That'd be pretty nice I guess.

 

[Mise]

The fees are nonsensical and pointless because banking these days is all done electronically; transferring money from one account into another is basically costless. In fact, the UK banks have pretty much admitted that it is costless when the UK banking regulator challenged its fee structure: what they said was that these fees covered not the cost of the transfer, but the cost of actually having a bank account itself (this is an arcane, wonkish legal argument that happened in 2007 so I don't expect you to know anything about it). As a result of those legal cases, and the courts not finding the banks' arguments convincing, bank transfers within the UK are now not only free, they are mostly instantaneous as well (previously they took 5-7 days to "clear" -- which was another nice money spinner for the banks, as they didn't have to pay interest to either account during this time). The only reason they charge fees is because they can get away with charging fees -- once the regulators stepped in in the UK, they were forced to stop.

The Economist made an interesting comparison between BitCoin and Napster. Both were new, flawed technologies that nonetheless provided consumers with something of real value, which disrupted the established industries and resulted in positive change within those industries. We can now download music instantly and relatively cheaply, in part because Napster proved that there was (a) the demand for it, and (b) the technology for it. In a few years time, we might find that transferring money across borders becomes instant and cheap, in part because BitCoin proved that there was the demand and the technology for that, too.

 

[bhsup]

So you don't think businesses should be allowed to make profits?

 

[Terxpahseyton]

Wow, interesting POV mise! Makes me wonder about the fees credit and ec cards demand for every purchase with them.

 

[Mise]

So you don't think businesses should be allowed to make profits?

Of course they should. But if there is another business that can do it for a fraction of the cost, then why wouldn't I use that instead? I believe in capitalism, I believe in free markets and I believe in competition. BitCoin is providing competition to traditional banks, and there is a great deal of value in that for me, the consumer.

 

[Wrymouth3]

Paul Krugman

I don't understand why people pull the Paul Krugman card all the time, it's not like name dropping him is going to do anything, he's not the god of economists. As a matter of fact, people like Daron Acemoglu, Gary Becker, Tyler Cowen and Paul Samuelson are actually just as well-regarded in the field in the present. Oh yeah, and I don't actually think Bitcoins are a good idea, my 2 cents.

 

[bhsup]

Of course they should. But if there is another business that can do it for a fraction of the cost, then why wouldn't I use that instead? I believe in capitalism, I believe in free markets and I believe in competition. BitCoin is providing competition to traditional banks, and there is a great deal of value in that for me, the consumer.

Okay, fair enough. It just seemed like you were applauding/approving the courts slapping down the fees the banks charged.

 

[Mise]

I was! Those fees were disproportionate and punitive, and the delays in transferring money were, by the banks' own admission, completely unnecessary. If the banking industry in this country was truly free and competitive, those fees would not have existed. It was right for the courts and regulators to slap down the fees, as they were the result of market failure.

What I was driving at in the latter post was that, if BitCoin (or some less flawed, more widely used alternative) had existed in 2007, we wouldn't have needed the regulators to step in, because the banks would have been forced by this cheaper competitor to eliminate those fees, or risk losing business to BitCoin exchanges. This is clearly valuable to consumers and I don't see what's controversial about wanting to use technology to reduce the cost of transferring money.

 

[Crezth]

Well, I guess you have a point. I admit I don't really know about money transfer stuff. Just so long as nobody is harboring any delusions about making an economy of bitcoins then I have nothing to say.

 

[Mise]

Okay great, at least we're on the same page in that regard!

 

[hobbsyoyo]

I have no idea what you mean.

I've answered the point.

The point was made.

You threw out a strawman using semantics to get away from it.

I clarified the point that was made to you.

Now you don't get it.

Ok well that fine so long as you don't accuse me of not being able to read next.

 

[Symphony D.]

Otherwise, you haven't really said anything to refute anything I've posted in this thread. I suspect you're going to disagree since you don't realize what any of my actual point are.

I'm going to break this down very slowly for you:

1. The system cannot scale much more due to how it's setup to handle transactions.
2. Ergo it cannot see much more adoption that it already has.
3. Ergo the total number of users is very limited.
4. Ergo it will only ever be a niche novelty.
5. Ergo its utility is greatly compromised and there is little reason to adopt it by merchants.
6. Ergo your arguments on its personal utility to you or to any given hypothetical one person are meaningless.
7. Ergo as a robust and useful currency, it is stupid. As something that many supporters hope will replace fiat money, it is stupid.
8. Your arguments do not invalidate this statement, and I don't really care what your arguments are, because my point still stands regardless of them. If you have a problem with that, the onus is on you to refute the statement, not me to apply it to whatever you're arguing. BitCoin being useful for you does not mean it isn't stupid in general.

An SR-71 is a really great way to get somewhere, but that doesn't matter when there are none available to fly, and they are therefore not an economical mode of transport for the masses; certainly not one that will replace traditional airliners. BitCoin in this analogy is more like suggesting we replace airliners with single-man gliders.

 

[dutchfire]

BTW the article below suggests that one reason for the high price of BTC and simultaneously the high liquidity is that people in China are using it to circumvent the Chinese government's capital controls, and get money into and out of China easily and cheaply.

http://marginalrevolution.com/marginalrevolution/2013/11/china-and-the-soaring-price-of-bitcoin.html

Yeah, if I was living in a country like China (or Argentina, or Zimbabwe) and had some money to spare, I'd rather put it in Bitcoin than in the local currency.

 

[dutchfire]

As something that many supporters hope will replace fiat money, it is stupid.

(Hint: look at posts #395 and #396)