General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsPros and cons of Bitcoin?
I really have no content or stories or opinion to share about this.
I'm just posing the question and hoping others will chime in with their opinions (especially based on direct experience perhaps?), as well as resource links regarding the pros and cons of Bitcoin.
I've never completely wrapped my brain around what it IS or what it can do, and I see so much conflicting information about it that my head spins when I see the word "Bitcoin" now but I'm trying to keep an open mind as to the possibilities.
I'm hoping the DUers can educate and enlighten me as to the various potential pros and cons of Bitcoin based on your own experience or research.
For those who have no idea what Bitcoin is, here's the wiki link:
http://en.wikipedia.org/wiki/Bitcoin
Thanks in advance.
MineralMan
(146,262 posts)problem. You can get and spend bitcoins only where they are accepted.
bemildred
(90,061 posts)Of course, that's true of all our currency these days, pretty much.
closeupready
(29,503 posts)the fact that it's more liquid than most hard currencies.
bemildred
(90,061 posts)But the gov't and the banks will not stand still for any real competition.
closeupready
(29,503 posts)we won't know it's happened until after it's hit the dustbin.
bemildred
(90,061 posts)And that seems unlikely, perhaps on a small scale, and that's why I'm not going to get into bitcoins.
HappyMe
(20,277 posts)that could very easily be turned into a scam.
frazzled
(18,402 posts)it's mostly a method for criminals to launder money ... there's this.
First, because it has the endorsement of no government, it will never be usable for official transactions. If you are an American, you will eventually have to pay your taxes, which means getting hold of some dollars, and as long as everyone needs to use dollars, that will be the way the currency in which an overwhelming majority of U.S. transactions occur.
Second, the cap on the supply of bitcoins may reassure people that there will be no inflation, but in fact it ensures that it can never go into widespread use. A currency needs to be elastic that is, its supply has to rise and fall in order to keep prices stable even as peoples demand for money varies. Part of the reason the Federal Reserve was created a century ago is that the dollar was at that time an inelastic currency, its supply was basically fixed based on how much gold banks had in their vaults. That meant that when harvest season came around in what was then a heavily agricultural nation, there was always a shortage of cash and a spike in interest rates, and in some years a banking panic.
Bitcoin exacerbates that problem. Its supply is capped in the long run. That means that if it ever came under widespread use, demand for bitcoins would rise faster than supply (which is what happened between February and earlier this week), and the price rise rapidly. That may sound good your money is more valuable! but in fact it means that prices of goods and services are plummeting. Thats deflation, which as the Great Depression showed us, is not much fun. It is a situation in which everyone has every incentive to hoard money rather than spend it, leading the gears of commerce to grind to a halt.
In effect, bitcoin is a reminder of this fundamental truth: To function in a modern economy, youre always putting your faith in something, whether you like it or not. And you may not like putting that faith in a powerful, independent central bank imbued with power from the state, but the alternatives may just be a lot worse.
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/12/bitcoin-is-ludicrous-but-it-tells-us-something-important-about-the-nature-of-money/
But go ahead, be my guest if you want to convert your retirement fund entirely into bitcoins.
Capt. Obvious
(9,002 posts)Con: They're wildly popular at L.A.R.P. and Anime conventions