

1 bitcoin = 10 000 dollars - Vlasta
http://tan.staafl.net/2011/06/1-bitcoin-10-000-dollars/

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michaelochurch
The problems with Bitcoin:

1\. Even though the tech may be solid and the idea's appealing, Bitcoin itself
has a sleazy feel about it, especially because of its side effect of enriching
early adopters. It feels and looks like a pyramid scheme. About a third of the
Bitcoins that will ever exist in our lifetime already exist; who the fuck
wants to get into a game where 1/3 of the wealth has already allocated? People
are buying BTC now because they don't want to be left out (panic buying) of
something that might hit it big, but as a currency, I don't think it has legs.
And when Bitcoin fails to be actually useful, the value will drop... just as
$100+ Magic cards will be useless circa 2050.

2\. A parallel Bitcoin currency could be created using the same technologies
and there would be no distinction that makes one the better currency than the
other. It's like the MillionDollarHomePage: special because it was the first
one. An easy way to blow out Bitcoin is to create a currency that can actually
be exchanged for something useful, like cloud computing services or
crowdsourcing, at defined rate (i.e. 1 Q-coin = 24 hours of CPU time on a 3
GHz processor). Note that the currency doesn't need to be pegged to something
that most users care about; it just needs to be pegged to something useful to
some people. For example, the dollar is useful because you can buy groceries
with it, and you can buy groceries with it because grocery stores need dollars
to meet existing obligations (taxes, wages, merchandise).

Since absolutely nothing stops a new entrant from coming up with a new
"crypto-currency", if this idea is successful, someone will come up with one
that isn't so harshly deflationary.

3\. Bitcoin is going up because it's pissing people (namely, the U.S.
government) off, and this is popping its market value-- temporarily. When
you're a new entrant, there's no such thing as bad publicity. That's not a
good motion to invest on, however.

4\. My understanding is that the software, at least as it is now, relies on
data files stored on one's hard drive in a "wallet file". That's bad. Hard
drives die all the time. I would certainly not store an asset of $100+ in
value on my hard drive. People can upload to the cloud, but that raises the
same trust issues (for some people) that banks do: do you trust cloud
providers? For the record, I trust the cloud providers far more than I trust
BofA, but that's me: are the hard-core libertarians going to be smart about
their wallet files and back them up, or are they going to lock their hard
drives down and then get angry when their hard drives die?

5\. Liquidity. 1 BTC = $30, so if you have 10,000 BTC, you have $300,000,
right? Wrong. Selling those 10,000 BTC means that you'll get filled at a lower
price-- possibly much lower. You might dry out all the liquidity available and
get filled at ridiculously low prices (i.e. screwed). On top of that, Bitcoin
is such a small economy (with the currency's value rooted in _nothing_ ) that
a 10,000 BTC sell-off just might trigger a crash. Who knows? It's not
something I'd want to bet my life savings on.

If you want to put a few hundred dollars into BTC, go ahead. I would have done
it myself at $1 or even $5, acknowledging that I might be wrong and there is
potential upside (although I think it's very unlikely to hit). But investing
money in BTC that you can't afford to never get back is a really _bad_ idea.

