I'm sick of people treating the exchange rate of bitcoin as a metric for how successful it is. It doesn't matter.
>There's a reason precious metals like gold and silver have retained value for millennia, and schemes like this have not.
Ironic you would mention that. Gold only has value because people believe it has value. It's also somewhat volatile and not immune to bubbles.
Paper currencies are far more widely used and accepted than bitcoin and work just fine.
Not true, gold has both ornamental and practical value (can be used in semiconductor components for instance).
A cursory read of history would show that jewelry/ornaments are huge factor in the historical value of gold.
Gold and silver don't really have bubbles, they are kind of anti-bubbles. When it seems the music is about to stop in the musical chairs of the world economy, people pay a premium for precious metals because they feel safe in that they have value. Bubbles tend to happen in a go-go economy, precious metals become temporarily overpriced when people are worried about the world economy. Like the era when the Hunt brothers were buying silver.
http://colabopad.blogspot.com/2013/04/bitcoins-agent-smith-p...
I think there is a future in virtual currency but it will have to be anchored to reality.
"they are worth something because people think they are worth something".
gold and the paper currency is printed on is only worth something because people think they are worth something.
Paper currency is backed by a government promise. Of course, if people lose faith in a state or a government persistently debases the fiat currency, people will lose confidence in it. But as I've pointed out before, while there have been many hyperinflationary episodes, it's not that frequent of a problem relative to the number of countries and currencies in existence.
Gold has value. It can be used by dentists. It can be used in electronics. It has been inherently valuable for millennia.
As I said, paper currency is too complex a topic to go into fully here. Unlike gold, it obviously is not inherently valuable. You can look at Weimar German marks, Confederate dollars etc. to see that. Or even a US 1978 dollar versus a US 2014 dollar, to some extent. People who think Bitcoins can be worth something because the dollar seems to have some value are going to learn a hard lesson.
This is a moot point. The value of gold is almost totally unrelated to its utility.
Here is a post I made 143 days ago, at a time when Bitcoin was seeing high after high every day -
https://news.ycombinator.com/item?id=6753545
Bitstamp Bitcoin was worth $460 that day. Today it is worth $350.
People who would have listened to me and those who agree with me then would be a lot better off now, especially if they had shorted Bitcoin (which is doable, sort of).
I was right saying Bitcoin will go down. It will continue to go down. That the Bitcoin bagholders and snake oil peddlers of HN will downvote me into oblivion is instructive. Not that I mind, I am only losing a little bit of HN karma while they have obviously lost thousands of dollars. They would be better off cutting their losses and trying to learn a lesson about their mistaken belief system then deciding to remove karma from those who observe that the emperor wears no clothes.
Yeah, because gold and silver are good to use as money. They are fungible, long lasting, easily identifiable, can be divided without losing total value.
Kinda like bitcoin, except it can be traded with anyone with a computer over the Internet.
Bitcoin has plenty of uses that gold and silver can't touch. But that doesn't make it a precious metal by any stretch.
The VCs who have peddled this garbage are going to look like a bunch of frauds and fools. Not that it will materially affect them. The Cassandras who have been warning about Bitcoin will continue to be ignored, the press will still beat a door to put a microphone in front of these snake oil peddlers. With the talk of a bubble - if there is any sign of a bubble, it is a bunch of useless hashes like Bitcoin becoming worth $5-12 billion.
I suggest anyone who bought Bitcoins go read the Bitcoin FAQs of why Bitcoins are worth anything. It is complete nonsense. Moreover it is not falsifiable. It is basically "they are worth something because people think they are worth something". So even if Bitcoin crashes, that theory can still stand, since it can not be falsified. That stripe of value theorist can just say people stopped thinking Bitcoins were valuable, so their price fell.
Wise people can take the rise and fall of Bitcoin and ask real questions about where the value of commodities come from. The answer of the Bitcoin theorists, which is not that far off from mainstream economists, is a far cry from what economists like Benjamin Franklin, David Ricardo, Adam Smith thought the value of commodities came from.
I already mentioned how precious metals have retained value over millenia. Some Bitcoin advocates point to the dollar and say if the dollar retains value, why can't Bitcoin? This is a complex issue which would take too long to go into here. For one thing, the dollar does not retain its value - a dollar from today is worth much less than a dollar in 1978. Also, the conspiratorial gold bugs who say the dollar is about to collapse are probably overstating the immediacy of the problem - but that does not mean there is not a kernel of truth to their worries about paper currency. Just look at the history of currency from antiquity up until the Weimar Germany Mark to see why. No magic bullet has been found since then making the dollar bullet proof. Their worries may well be found to be correct, although probably are nothing to worry about for several decades.