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Saturday, 13 September 2014

What is bitcoin? Get rich quick or exiting new technology?

Bitcoin at USD 8 billion market cap is almost nothing compared to the hundreds of Trillions in fiat transactions. Bitcoin has - as of now (2014) - done nothing to the status quo in the credit card hegemony (scam/rip-off), for example.
Bitcoin - as an ever-increasing-in-real-value investment destroys its chances to be a real currency.
As a real currency (real money) bitcoin has to be perfectly or at least relatively stable in real value which is the absolute last thing bitcoin enthusiats want (in their natural, human unlimited greed). Greed is good: Gecko :-)
There is absolutely nothing wrong with bitcoin being the greatest niche value-transfer medium of exchange ever. What would be wrong with that?
As a medium of exchange bitcoin could be valued at 1 cent or even 0.0001 cent too. It would work perfectly well at any value - with very efficient (nano-second) medium of exchange technology. As a medium of exchange you want to (eventually) go into and out of bitcoin in a nano second.
That is bitcoin´s unique selling point, and not its potential to have an exponential increase in real value over time.
Bitcoin´s best value to the world economy would be the ability to absolutely securely and instantly transfer real value at almost no cost to anywhere else in the world - outside the traditional banking system. Governments are still going to regulated it to protect consumers.
Just as it was very difficult to make money from the internet in the beginning, so it should be very difficult to make money from using bitcoin as a medium of instant exchange in the beginning until clever minds monetize free bitcoin exchange in a profitable way - similar to monetization of successful internet businesses.

Nicolaas Smith Copyright (c) 2005-2014 Nicolaas J Smith. All rights reserved. No reproduction without permission.