What's the hype about Bitcoin?

[ImaLooser]

t pretty rare that a brand new idea comes along and makes it big fast. It's exciting!

Edit by moderator - You've already posted in the current thread. https://www.physicsforums.com/showthread.php?t=685768&page=4

 

[Office_Shredder]

The system is cleverly set up to entice joiners by giving easy profits at the beginning, just like gold. Every four years the number of new coins is halved, so it gets harder and harder over time to "mine" the coins. In the year 2140 that is the end: no more new coins ever. So the coins will tend to appreciate in value. People like that.

OK so on the one hand we have built in deflation

It is quite possible for the currency to split into versions. If the system changes in a way you don't like, you can stick with the old version. No one can force you to use the new stuff. Don't like it? Don't use it.

Our "you know everything about this currency ever" might split into two currencies? What the heck is the deal with that? What if everyone just switches to the new currency and my old bitcoins are worthless? This directly contradicts all the safety stuff you were talking about before

So...it's free, its secure, what's the catch? None, I'd say. The value against the dollar tends to fluctuate wildly. I first I thought that was bad but then realized it's an advantage. One problem with money is that people like to save it, and this complicates things. (Trust me on that one. It's a long story.) So the volatility discourages that. If I were going to use bitcoin I would buy it for an online transaction, then spend it right away. I save 3% over a credit card. Indeed, this is what happening. There are ways to avoid the price fluctuations.

Volatility just means it's not worth saving short term. It's still built into be deflating, so over 20 or 30 years of saving you come out ahead. And it's only volatile against the dollar because the usage is so low - if everyone used bitcoins, there would be no "dollar" to be volatile against, and you sure as heck wouldn't see prices double one night then fall by 70% the next. Honestly anyone who thinks that "bitcoins are worth a lot of money now" is equivalent to "bitcoins are a great alternative to currency!" is kidding themselves. Beanie babies used to wildly fluctuate, with artificial shortages to ensure prices would go up over time, and discontinued lines to force people to join early before missing out on the early versions. So we get that the price of bitcoins is going up for the same reason that the price of beanie babies is going up?

Bitcoins seem like they could be really cool, but I don't really get how a private organization offering fiat currency is better than a government doing it

 

[Evo]

There is already a thread here https://www.physicsforums.com/showthread.php?t=685768&page=4