think33

It is being used as a currency, and any metric on this far exceeds where people thought it would be a few years ago. It's also having massive adoption from a wide number of people. The reason the price is moving is not "speculation" as people seem to assume, but adoption.

MtGox said they were getting 20,000 new accounts a day recently. By definition, new accounts are not "speculators" putting in trades to manipulate the price, they are people putting in trades to acquire their first bitcoins.

People rushing into a currency, right after the EU forced bank depositors to lose %40-%60 of their money in a state run bank (which was only insolvent because they were forced to buy greek debt by the very same EU) is not "speculation" -- it is seeking a safe haven.

A lot of people hope bitcoin will be a safe haven away from these increasingly manipulated and untrustworthy national currencies.

That's a huge level of success, given the limited expectations for bitcoin only a few years ago.

Suddenly it's actually considered a viable store of value for some segment of the population. Sure, it's a small percentage, but still, it's massive.

Having a thick skin isn't sufficient. Simply patiently explaining your position to people who are being hostile (eg: my previous experience on HN) doesn't do anything more than make them form up into mobs and start pursuing you and harassing you. (Seriously, everything from blatant name calling, to finding personal revelations in past comments and then posting them publicly to be mocked... ok I'm a minority, I should feel bad about that? Mocking me for being a minority was massively upvoted, while me asking why this was tolerated here was downvoted.)

Eventually, I find this site to be too much to waste time on, and simply left. (I doubt this account will last more than a day anyway.)

This site has a narrow minded and intolerant culture. (And those who are within the range of whats "Acceptable" think that its quite the opposite so they never see it.) This culture knows that it can call people names, attack them personally, dig up private information and harass them and get away with it because there will be no punishment-- since they all vote each other up in their game of "smear the queer".

This is, of course, why they do it. Hounding those who are different into leaving until you have an ideologically pure little "community".

Meanwhile the moderators of this site hellban people for the "crime" of linking to a scientific paper that disagrees with global warming (since this is a leftist site, obviously, if you disagree with global warming you're not part of the realm of people where "tolerance" applies.)

And so the people who are different leave, the "community" sits around and congratulates itself on how tolerant it is, never recognizing how completely homogenous it is.

Your quote is relevant, but it's a shame he doesn't address the implied claim that bitcoin doesn't "facilitate transactions". And while it is relatively small in that use now, he really needs to make a compelling argument to why it won't work that way in the future.

Further, it's worth pointing out that Krugman endorses a monetary system that makes people poor, via inflating the money supply by printing funds to underwrite policies that benefit, primarily, politicians.

A currency whose supply is fixed, or whose inflation rate is constant and predictable (like bitcoin) is better for facilitating transactions.

When you have a variable (and often high these days- in the US money supply is up over %50 in recent years) rate of inflation, it wrecks havoc with prices and other signals causing malinvestment and worsening the economy.

Something that Krugman, to my knowledge, has never answered for.

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Since I am not allowed to reply to the person below me:

It's quite silly to to say that a limited supply of a currency is bad for it. There is little incentive to hang onto bitcoins. A simple example will prove this to you: The amount of computer you can get for a given amount of money improves dramatically every three years. You could just hold onto your money and buy a much better computer. Thus, relative to computers, the dollar is deflationary.... yet people still buy computers.

This is the kind of argument Krugman gives because he wants to excuse the inflation that has destroyed the dollar, and the economy.... but it is nonsensical. People still buy computers.