As a math nerd, I have lots of faith in numbers. Believing bitcoin to have value isn't about faith in numbers vs faith in governments. They're both about faith in people and what THEY choose to have faith in. If it's just about the numbers and the math, why do you and others have more "faith" and attach more value to bitcoin vs litecoin, etc? Did the others get the math wrong? Or is it about more than numbers?
Edit/offtopic: I just realized I was debating with the creator of a website that i ABSOLUTELY LOVE! Thank you for making portableapps.com - if it wasn't for that website, I wouldn't be doing what I do now. Long story, but thanks!
A handful of users asked for it, so I implemented it. It's only netted us $4 and I don't really expect it to go anywhere. But I do fire up the Bitcoin and Litecoin beta clients every few days and see where they're at. They're pretty resource hungry while syncing a few days backlog, so I only bring up em when I'm heading away from the PC.
And, for what it's worth, these are not strawman arguments. These are legitimate concerns I have as a businessman and as a consumer. Scan through my comment threads. My issues can be summed up as:
1. Chargebacks. Chargebacks are a biggy, I've had to use them in the last 2 months, and are a big reason why bitcoin (raw, sans a 3rd party allowing you to get your money back) are bad idea for consumers with respect to small businesses. Bitcoin advocates keep claiming that it can be the salvation of small businesses, but, as a consumer, it's these small businesses that are the MOST likely to not fulfill on the product I paid for. Not having any recourse would make me less likely to purchase.
2. Volatility/Risk. Risk of volatility is a big one, and why Overstock.com isn't taking it on themselves (they've pushed that risk to Coinbase). I'd never agree to sell a physical good at a given bitcoin price as it could be 50% of the value within hours on any day. And, yes, it is a risk that Coinbase could go out of business suddenly. The regularity with which bitcoin players get hacked and go under as a percentage of the players in the space has been a bit frightening the last year. True, it is due to poor security on their own systems, but this is a new space and folks haven't had to worry about money being stolen directly from an internet-connected server before. I'd wager a couple players will get it sorted.
3. Perceived Value. I understand the math behind bitcoin, but the value appears to be based on pure speculation and a dash of wishful thinking. Lots of bitcoin players say they have faith in the numbers, but then why does bitcoin have more value than litecoin, dogecoin, or the 100 other cryptocurrencies that have popped up, since those are based on the same or similar numbers. So, it's obviously not just faith in the numbers, it's something else. For some, it seems to be a bit of libertarian gung ho we can do it. For others, it seems to be a bit of technology can solve everything. For others, it seems to be about not having faith in governments. But none of those are really something to base a system of currency around. It needs to be numbers plus something else for me, and it's just not there. At least right now.
We all have to place our faith somewhere. Some of us choose to place faith in numbers, some of us choose to place faith in governement. I prefer numbers.
I realize I am throwing myself in the fire by offering up the whitehouse/nuke scenario. However, nobody has proposed a reason as to why the value could fall out from under Bitcoin completely tomorrow which I assume would be an equally unplausible scenario as a nuke hitting the whitehouse.
I'm still long on BTC, but please have no illusions. Don't put anything in that you can't afford to lose.
Somali currency is not worth much, but it was never worth much. What is interesting is that the government basically going away did not lead to worthless currency.
The bottom would fall out of bitcoin if X% of the users decided they didn't want to use bitcoin anymore. If that's the same X% as the dollar, that's far fewer people, and thus correspondingly more likely.
Ah, that makes sense. I was wondering how Overstock could take such a risk bitcoin's volatility.