Bitcoin is backed by nothing other than the hope that it might be worth more tomorrow
Bitcoin is a relatively new crypto-currency that has received a lot of media attention recently as the price of bitcoin has skyrocketed to over $1000. It’s no surprise that in this Federal Reserve quantitative easing (QE) driven bubble economy that digital “assets” would be priced higher than paper assets and that paper ones would be priced higher than physical ones.
While I am in favor of consumer choice and competing currencies, including electronic currencies, I would not choose Bitcoin.
This is the case against Bitcoin.
From Jim Quinn
I hereby make a prediction: Bitcoins will go down in history as the most spectacular private Ponzi scheme in history. It will dwarf anything dreamed of by Bernard Madoff. (It will never rival Social Security, however.)
To explain my position, I must do two things. First, I will describe the economics of every Ponzi scheme. Second, I will explain the Austrian school of economics’ theory of the origin of money. My analysis is strictly economic. As far as I know, it is a legal scheme — and should be.
for bit coin
Makes sense that there would be such skepticism towards Bitcoin at a metals site. I have nothing against JQ but it seems like he needs to learn a little more about it. Also, why does he keep referring to it as money? It's called a crypto-currency for a reason...emphasis on currency..
"Money is the product of the market process. It arises out of anunplanned, decentralized process."
Bitcoin is peer-to-peer so it actually is decentralized.
If merchants and private-parties do begin to accept BTC's as payment, then it can in fact be helpful to consumers. (And merchants as well by saving them on merchant fees. How many merchants don't accept American Express because merch fees too high? Think those sellers will be open to BTC's low transaction fees instead?)
Didn't Richard Branson say Virgin would accept BTC's for their space travel stuff? What about young homeboy in NY who is accepting BTC at his Subway?
The only thing I can agree with JQ here is whether or not Bitcoin will maintain stable purchasing power. The hard-cap at 21 million means that there is some potential in my mind that this stays relatively stable, but I think it's far too early for Jim or anyone here to assume it will not hold any sort of purchasing power.
Sell your metals? Duh! No...but it doesn't hurt to dabble in these new technologies especially if you are under 30. It would give youth much more of an advantage to learn about both metals and crypto-currencies as the world looks for alternatives to fiat.