Free Market Currency 'Bitcoin'

[BenVitale]

It is not clear to me why anyone would buy bitcoin. Is it a scam?

Find out what is a bitcoin: http://bitcoinme.com/

http://www.youtube.com/watch?v=Um63OQz3bjo

[Evo]

I would agree with the people saying it's a Ponzi Scheme. Imaginary money that only exists in a computer?

[BenVitale]

MIT's Technology Review reports that Bitcoin is booming and makes the peer-to-peer currency secure and anonymous

http://www.technologyreview.com/computing/37619/page1/

[talk2glenn]

I would agree with the people saying it's a Ponzi Scheme. Imaginary money that only exists in a computer?

This is different from dollars, how? I'm going to guess most of your dollars only exist on computer. Indeed, you don't even posess the digital bits themselves - they're likely held in trust on your banks servers. At least in the case of bitcoins you have rights to the digital property itself, if I'm understanding the concept correctly.

It is not clear to me why anyone would buy bitcoin.

I suppose one would buy bitcoins for the same reason one might buy any currency: store of value, medium of exchange, investment instrument.

Whether it is a scam or not probably depends on how able one would be to find people willing to trade bitcoins on demand in the market. If you can readily buy them, but not sell them, then you're probably getting screwed. Of course, the same thing can be said for any currency.

The private currency market is far less "alien" to citizens of developing countries, where the public finance system is often woefully ineffcieint and underdeveloped outside main urban areas. I've heard that in some African countries, for example, private digital currency tradeable via cell phone text message is a more popular store of value than the official currency outside the main cities. This only seems exotic and/or redundant to you because westerns have strong, public institutions to handle this market function. You probably aren't the intended customer.

[chingkui]

There is a paper on SSRN that address some of the issues:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1817857