LK.
Everyone here knows the basic fundamentals of currencies. Bitcoin as a currency is backed by math, secure transactional history, decentralization, etc. USD is backed by the US government, who while may be more substantial, openly adopts bad policies that some people don't like. Both have their positives and negatives. Very simple.
Your emotional reasoning in this thread sound like Ebert declaring "video games aren't art". Pure emotional bias against something that is new and different... and quite possibly better.
Why don't you fuck off like a good little troll if you can't add to the discussion?
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Anyone have more information about DHS seizing MTGox's assets? I saw 1 article yesterday and a short one found
HERE. Didn't affect the value at all. I figured it would have done SOMETHING....
LOL @ my "emotional" response. Dude, I balance risk/reward every day in my career in finance and do it quite successfully and without "emotion". I was called "emotional" on GotApex, on the CFA Forums, and here, in 2004-2006 when I claimed a RE crash was happening. Why? Because it is an easy way to undercut somebody's argument online. You cannot tell emotion, you can only infer it and inference is influenced by your own perception and emotions. You want me to be emotional because it allows you to justify your side. "Well, he's being emotional, thus his arguments lack merit".
Further, as far as you saying I should exit the thread if I am not adding to it, that's akin to saying "I don't like your side, leave". I mean, really, is that all you can do when you run out of arguments, resort to pithy and petty undercuts of "emotion" and then stomp around?
Who is being emotional and illogical?
Chiro - the problem is that, like any other derivative that has no grounding in reality, it will be prone to far more fluctuations and manipulation. People claim silver is being manipulated, yet no central government controls it. Look at the Hunt brothers, or even derivative gold which is perceived as still a "currency" by people.
Bitcoins inherent weakness and inescapable flaw is that people do not want something that will inflate or deflate on a whim. Businesses cannot plan, people cannot be hired if businesses cannot plan and people will not spend if they think they cannot be hired or may be fired just because a currency fluctuates wildly. This is the inherent flaw in gold, not to mention the deflationary tendencies.
Systemic risk equates to lower growth because the discount rate at which projects are discounted is higher just from the fact that risks spreads from the riskless rate (if there is one) return and the actual risk of the product will be higher. The natural occurrence is that projects which would be viable at a lower discount rate will not be at a higher one, merely because of the added systemic risk. This lowers growth.
Removing the risk has a huge additive benefit, hence why a centrally managed currency has resulted in far higher growth and less volatility in the market. I will grant you that there have been several bubbles, but I would not equate those bubbles purely on the Fed but also on our political system and tying that to corporate politics more than monetary policy.
What it really comes down to is behavioral finance. Gold, quite illogically, has history to stand behind it and some innate fascination with shiny rocks. People like that security. The dollar has your future and your kid's future and their kid's future tied to it. People like that security. Bitcoins has fuzzy topics and "hard stuff" tied to it. It has no security and cannot be held. It doesn't even have a base reason for existing, jewelry or otherwise. People do not like what they cannot touch, what they cannot observe, what cannot be managed in some way. This is simple psychology.
Is Linux superior to Windows in many areas. Sure. However, every since I can remember Linux has a big problem. There is no central authority to help you. If you go online and ask geeks for help they start off by chuffing and then go into some gobbly crap about consols or this or that, or at least they did. Perhaps it has advanced in the 15 years since I started venturing into Linux. The problem is the same. It remains the realm of the highest denominator. You may have your own disdain for that, but for overall acceptance things must be tailored to the lowest common denominator. One that grandma can get, or a single mom with 3 children and 2 jobs can understand and can have faith in that it won't devalue at some geek's whim or that it won't deflate naturally, so she can buy bread at the same price next week as she did today.
Bitcoins, at least at this point and for the foreseeable future lacks all of this, just like Linux does. It lacks predictability, management and a central figure to do that management and that management is important.
I am sure you guys are chuffing now, thinking "We know this" but you easily dismiss it which is why, overall, Bitcoins, like Linux, will fail to be anything but a niche product.