> On 2017/Sep/22, at 10:22 AM, Jim Birch <[email protected]> wrote: > > > Bitcoin might be suitable for short term trading. Virtual currencies > certainly have potential for low friction transfers.
This is a key point and one which banks, the gatekeepers of money transfers dislike because they do not get their cut of inter-currency transfers. None-the-less, if cryptocurrency has only this use it is a pretty decent use. >> As long as the total value of any kind of currency is small, it is going >> to be volatile. > > This might be true in general but Bitcoin show classic bubble behaviour, > not ordinary currency volatility. I'm not sure this is the case. The rising value of bitcoin has pretty much matched its uses in China as a way for Chinese to get around government restrictions on moving RMB to foreign currencies. The transaction amounts of that has overshadowed all the other things happening. Now that China has started banning cryptocurrencies and exchanges, that will probably settle down. But any currency that has major influxes of other currencies flowing into it will have similar volatility. > Humans are have a fashion-driven herd > mentality and counteracting this is a key function of economic management. > > >> We trust a particular kind of paper money because that government has >> proved trustworthy so far? >> > > Distrusting the government is a minor secular religion in the West - and > has certainly produced some significant positives - but this is not > actually an evidence-based argument for eliminating government from > anything. Zimbabwe? >> (Unlike bitcoin's value which is basically an emotionalized >>> fantasy.) >> >> Actually, it's based on mathematics. >> > > The mathematics determines the computation requirements to produce a > bitcoin, or in practice how much CO2 your bitcoin farm needs to pump in the > atmosphere per bitcoin, Except it seems that ethereum is moving to a different, much less energy intensive system of "mining". > but the value of a bitcoin, ie, what people will do > for control of these funny numbers - is driven by emotions and > mythologies. Government currencies also require mythologies but these are > deeply bound into fundamental real world economic activities like paying > taxes. They are just the mythologies and fantasies we know. This is all just a religious argument. Which mythologies and fantasies we prefer. > There is a lot of hype, there is also something happening that no-one >> thought possible. >> > > Bubbles, the black economy and currency optimisation are actually standard > economic subjects that don't surprise economists. Virtual currencies are > here to stay but economics says the real ones are going to be government > sponsored (and may not be blockchain based). Bitcoin is as likely to > vanish in a decade as not. The major reasons to be involved with Bitcoin > at all are libertarianesque coolness, and, to facilitate criminal > activities like tax evasion or dealing in proscribed items. Or just buying online without having to go through the current gatekeepers. > Bitcoin might > survive as an enabler of these activities but it will be under increasing > attack by governments because that it enables crime and avoids tax. No different to cash though. Less transparent than cash really. -- Kim Holburn IT Network & Security Consultant T: +61 2 61402408 M: +61 404072753 mailto:[email protected] aim://kimholburn skype://kholburn - PGP Public Key on request _______________________________________________ Link mailing list [email protected] http://mailman.anu.edu.au/mailman/listinfo/link
