From time to time I get truly surprised by commentaries.
Having just casually written about bitcoins – and having just been caught up inside the crash with the MtGox bitcoin exchange myself – I’ve been keeping my ears out about this subject.
Personally I believed that lots of with an interest in economics, especially absolutely free markets and Austrian economics, would appreciate getting an alternate currency around, but somehow it seems that lots of of them are just stuck on gold, and truly don’t get it.
This Bitcoin ‘hack crash’ at www.MtGox.com has brought all this ‘Told you so’ out of the woodwork.
In reality, a collapse in Bitcoins – in this case from an exchange rate of $17 all the way down to 1c and back up – was a forseeable and fairly significantly inevitable blip inside the growth and development of literally the greatest innovation in funds I can think of since the paper currency was developed in China.
Will bitcoins catch on? Perhaps, perhaps not, but there is rather a bit of commentary going around that doesn’t dig deep adequate.
Take this one from Casey Analysis, a often well-considered source, from Jeff Kopocis, Junior Analyst and was the first to surprise me:
When I sent about a note a couple weeks ago to some folks at Casey alerting them of Bitcoin’s existence, our own David Galland responded just, “I kind of get Bitcoin… but give me a thing tangible I can lay my hands on any day.”
Now this makes numerous sense to me so far, but the piece went on to say…
Referring back to how Aristotle characterized dollars, David’s comment makes all of the more sense. Around two,000 years ago, Aristotle mentioned very good capital should be:
Durable
Portable
Divisible and consistent
Have intrinsic value
The astute reader will right away realize that Bitcoin will not possess any of those characteristics and was subject to trouble from the get-go – not to mention the security troubles that quickly arise with anything computer- and Internet-related. A computer-generated currency isn’t durable, because the recent hack demonstrates. And it is undoubtedly not portable. Can you imagine bringing your laptop for the door to spend for the subsequent Chinese food delivery? You get the idea for the remaining characteristics.
Well I consider myself as somewhat of an ‘astute reader’ and I for one don’t get the thought.
Why did the analysis quit prior to divisible? Appears like an electronic number like bitcoin could be infinitely divisible, whereas gold has a final limit after you commence dealing in 1 atom of gold at a time (don’t laugh it truly has been proposed.)
Click here for additional about bitcoin crash at Dr. Martin Russell’s weblog about digital cash.
Related posts:
