Re:What's the use for Bitcoin?
by random28345 on Thursday April 02, 2015 @03:13PM
(#9312536)
> And this periodically actually happens to real government-backed currencies in the world, especially during times of hyperinflation
Right, but that happens sometimes, and never with proper governance. (but what is "proper governance" you ask? It's a tautology that says that governments that never allow hyperinflation never suffer from hyperinflation)
ALL asset bubbles collapse. The magnitude of the collapse is determined by the non-monetary value of the asset. (e.g. tulip bulbs collapse harder than real-estate). Because the non-monetary value of Bitcoin is negative (you need to burn electricity to use Bitcoin), this implies the eventual collapse of Bitcoin will be absolute.
For the record, people said the same thing about paper currency. And again when paper currency stopped being backed by gold.
And this periodically actually happens to real government-backed currencies in the world, especially during times of hyperinflation (e.g. Germany in the 1920s, Zimbabwe in 2008, etc)