

Bitcoin is dying? - raullen
http://bitcoincharts.com/charts/mtgoxUSD#rg60ztgSzm1g10zm2g25zv

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Osiris
Over the years Bitcoin has had a tendency to have spikes of speculative
trading. Most of these spikes last for fairly short periods of time and tend
to settle a standard trading rate.

I don't think it's indicative of the viability of the currency itself. Just
think of oil. There are frequent speculative spikes in price and subsequent
falls in price but the oil still flows and people still buy it.

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msbarnett
On the contrary, I think the observation that Bitcoin's behavior is similar to
that of other commodities speaks _volumes_ about its (non-)viability as a
currency.

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anonymoushn
Could you elaborate on this? As massive "Bitcoin deposits" cannot be
discovered and Bitcoins cannot be consumed for any useful purpose, most of the
causes of rapid price changes to commodities do not apply. What prevents
Bitcoin from having a stable price while permitting the U.S. Dollar to have a
stable price?

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msbarnett
Liquidity, a highly desireable property of currencies, is confered by virtue
of 'healthy' levels of inflation. Bitcoin is, somewhat by structure, lacking
in inflationary pressures, leading to the tendency for it to behave as a
commodity, which makes it undesirable as a currency.

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bunderbunder
While commodities can't inflate like a fiat currency, the rate of change of
supply for most commodities can respond to changing demand to at least some
extent. For example, take fossil fuels: we've known about the potential of oil
sands and fracking for a very long time, but nobody bothered with them because
the price wasn't high enough to make it worthwhile to chase after those
sources. Now that's changing, and the extra fuel that comes from exploiting
them helps to keep the market price a bit more stable.

Bitcoin, by virtue of having a pre-determined and constantly diminishing
growth rate, doesn't even have that. Which makes it even less desirable a form
of currency. It's like an instant deflationary spiral. Just add economy!

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snogglethorpe
Bitcoin was alive?!

