Then we’re at least partly in agreement. You want a robot to manage your economy to keep the currency stable, I’ll keep the imperfect but time tested system of central banks and regulation.
I do think you’re putting too much faith in the ability of some mathematician or programmer somewhere to devise a currency that can keep itself stable and regulate itself, but that’s not my problem! Let me know how you get on with that - we’ve been trying to simply model the existing economy for about 70 years. I’m to the point where I can just about determine whether you will return to the emergency room twice in a quarter for the same ailment. Kind of.
(ETA - nobody needs to be compelled. If a single currency were introduced to replace existing currencies one result would be instant globalization of capital. If bitcoin is only to be used by the few who believe in it, then I really don’t care about it - and I’ll keep taking potshots from my ivory tower of real economics.)
No hate, just little sympathy. Many of the worlds problems are down to people thinking they can get something for nothing, and speculation falls squarely into that camp.
Speculation leads directly to bubbles, which hurt all the people who are trying to simply use a currency as a medium of exchange (or own a home to live in…) as intended, instead of as an investment gamble.
One has to wonder if the fact that it has become harder to turn bitcoins into drugs easily, conveniently, and (by all accounts) with generally excellent customer service has something to do with it.
Aside from the pure electric-goldbugs, who have an ideological interest in currencies that the central bankers can’t use their sinister International Money Trust powers on, the only other demand is either people who hope to buy something with them, or people who believe that a sucker willing to pay more than they did will come along. Lack of things to buy certainly hurts the first group, and likely indirectly hits the second as well.
Wel, speculation is a way of personally enriching oneself while doing nothing of worth - that is, enriching oneself at the expense of others, sometimes catastrophically. Thus the hate.
Oh, sure laugh. But unlike bitcoins or other forms of “dough”, tulip bulbs can be held in your hand, when planted they yeild pleansantness, and in extremis can be eaten as bread.
If a system is used by people who don’t believe in it - that’s basically what is mean by coercion. Deciding that your social reality is more real than other people’s amounts to an ideological problem.
On the plus side, perhaps this indicates the end of wild speculation. For bitcoin to be a useful currency, its value should be stable enough that a merchant who accepts bitcoin isn’t also an involuntary currency speculator. Having to decide whether to immediately sell all BTC for USD, or maybe wait until next week in hopes of a better exchange rate is a headache that most humble merchants could do without. Worst off are the online sellers who end up with customer BTC payment held in escrow until the customer deigns to acknowledge receipt of their order before the merchant can receive payment. Even one day of valuation change while the BTC is held in escrow can be enough to obliterate any profit from a transaction. You cannot build a business on these shifting sands.
My hunch is the closing of the silk road caused a drop in the value (and possibly observed transactions). This signalled just how much of the value was due to the online drug trade and the value started to drop. The moment bitcoin starts to drop there’s no underlying assets or contracts to catch it except for short term interest from people looking to make illicit purchases, so the speculators fear an unrestrained fall, dump their assets, which causes a collapse.
For me the big problem with bitcoin is that the number of possible bitcoins is fixed, which means deflation and suffering economies. Other cryptocurrencies could fix this problem but I think they still need some degree of adoption by a country to get an underlying value and price stability which seems very problematic. They would have to run parallel systems because they couldn’t get their hands on enough to switch over. And either way I don’t see what motivation a country would have to give up control of its own monitary policy, nor do I see individual businesses motivation to price their goods in a currency out of synch to their national currency.
However, I do suspect some form of cryptocurrency will survive as a medium of exchange for black market transactions.
It’s worth noting that it’s perfectly reasonable for a company doing something on the internet to be worth more than the entire brick & mortar industry they’ve entered. The size of that market is not static, and making things easier, cheaper, and more convenient can grow the size of that market.
If I never paid for rides because cabs suck & black cars are expensive, but start taking Uber twice a week, that market has gotten larger. It’s certainly conceivable for that to happen on a large scale.
That doesn’t necessarily mean that those companies are worth their valuations, just that the existing market size isn’t the only data point to use when making that calculation.
