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Basically it's a distributed, unregulated (because it is virtually impossible to do so) digital currency. The technology behind it is sound and secure, not much debate there from anyone. It is not controlled by any single entity, and therefore can not be manipulated by any single entity, (hint - governments). It can't be counterfeited either.
It's stored digitally (on your computer, phone) but completely untraceable. Basically like cash without the serial numbers. For this reason it's big in the black market (see tor), only very recently did transaction volume for legal goods and services surpass black market transactions. It's susceptible to theft by hackers, but then again, so is cash, by less intelligent thieves.
It's inflation proof with a hard cap of 21 million ever in existence (they are being trickled out until 2040 through a process called mining). Being divisible up to 8 decimal points IIRC, this doesn't negatively affect usability for small purchases.
It has been extremely volatile for about 6 months now. Started at virtually nothing in 09, was $10-20 last year. In April it spiked to $240 (because of bank controversy in Cyprus) before crashing down to $130 in about a 12 hour time period. Right now it's hovering around $80-100. At current exchange rates, there are about 1.3 billion USD worth of BitCoins in existence.
A couple of common fallacies which I'll go ahead and address here:
"BitCoin is useless because it's not FDIC insured" - Yes. But no currency is inherently insured. BitCoin could easily be kept in a bank and insured, just like any other currency.
"BitCoin is useless because it is / will be too expensive" - Flawed argument. It's divisible to 8 decimal places, and I believe the granularity could be increased. Don't quote me on that. But either way, the price of "1 BitCoin" really means nothing.
So - ridiculous fad or viable alternative currency?
I don't see why the granularity can't be increased infinitesimally. Also, users are totally accountable for backing up their own wallet.dat file and that can lead to some big problems for many in the event of hardware failure(s).
Don't worry the fed has gone after bitcoin and there won't be much left of it. They can't attack it with the military like Iraq or Libya but they will do what they can to keep it down. The bankers don't like competition.
1 Easy medium to exchange goods and services. Bitcoin sucks when compared to cash transactions because the entire chain of ownership of that particular bitcoin must be validated by an exchange before anyone would accept it. Who wants to wait around in Walmart checkout lane for 5 or more minutes, while that happens?
This is a technical issue and can be dealt with. See LTC or PPC.
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Originally Posted by justanokie
2. Store of labor. Bitcoin is too volatile for this.
It's extremely volatile, right now. But who knows what'll happen.
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Originally Posted by justanokie
Not only that but by definition any crypto currency like bitcoin will have a record of every purchaser of that coin. Not a good way to prevent the government from finding out what you have been spending money on or selling.
These idiots using Bitcoin and TOR to evade the authorities are not nearly as safe as they believe.
Doesn't work like that. It's not traceable person to person. This is not like using PayPal or something.
Sites like this have been running for years, and LEO has had little to no success taking it down or even catching the users. If BitCoin were traceable, this would be an entirely different story.
I don't see why the granularity can't be increased infinitesimally. Also, users are totally accountable for backing up their own wallet.dat file and that can lead to some big problems for many in the event of hardware failure(s).
It can't as the software is written now.
Regarding losing money, it's not that much more risky than cash, but that's why we have banks.
As of right now obviously there are no reputable BitCoin banks or deposit insurance but that could change.
If you think about it....we are close enough to operating off a bitcoin type system right now. We print money in 1's and 0's and it's only redeemable in tangible nothingness backed by our governments word.
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