Bitcoin: Experts clash over the crypto-currency - BBC News

the email to my father addressing a forbes article he read that negativly criticised bitcoin.

thought might be useful to others:
http://www.forbes.com/sites/karlwhelan/2013/11/19/how-is-bitcoin-different-from-the-dolla
http://www.independent.ie/opinion/columnists/stephen-kinsella/stephen-kinsella-once-bitten-twice-shy-so-stay-away-from-ponzilike-bitcoins-29764982.html
the forbes one is passable, this independent one is really appalling (in that it simply makes statements that BTC is this and that, without any explanation or arguments for such statements). 1st the fact that the first thing he says about his statement is that it is a "deep and terribly clever insight" (narcissistic much?) should put anyone off to a significant extent from taking this seriously; he says BTC has no use value, only exchange value; he basically says that BTC has only value from what people will sell it for later on: how is that different from any other currency (besides precious metals that are also a commodity)? it's that same.
then in the forbes article, it at least puts this exact question, and the answer is (basically) that other government currencies are legal tender. true that legal tender status gives value to currencies, but is it really the only thing that gives it their value? would euros or dollars be deemed worthless after being not legal tender anymore? what would people use as money instead of euros/dollars if this was to occur? back to barter (as the article suggests)? seriously? you think people would stop using the much more convenient euro or dollar and barter instead? they'd probably use precious metals instead, but they'd still be far less convenient then euros or dollars, would they not? so I don't think currencies only value derives from legal tender status. currency has it's value from ease and security of storage and exchange, difficulty in falsification, limited and predictable supply, and fungability; BTC is better at all these then existing currencies, that's why it's being used. the 1st people buying or mining BTC didn't do it for future profits (why would others buy it from them? only explanation would a ponzi scheme, and for that people need to believe that it does have value, when in fact it does not. the fact is that it does have intrinsic value due to the qualities of money of which BTC is better then any existing currency)
"Once big enough to be termed a success, any such currency would attract more attention from governments than a cursory Senate hearing." this is the only good argument, and is one that I have already recognized when we talked about it. but even then, only if gov would ban it, would that be bad for BTC; but it would also be bad for the country that does that, because it would ban a tech that is an improvement over exiting tech with similar uses. the most probable case is it will regulate it as much as it can (which will decrease it's value in the eyes of those against the state, and increase it's value in the eyes of those for the state). Although but it might choose to ban BTC and create a "govcoin" to take advantage of the tech but within it's chosen laws, these are possibilities that I am well aware of.
on government induced value through augmenting the security of currencies, it points to historical cases, none of which are similar enough to BTC to be of use. it even admits it does not know whether this argument is true for BTC when it states: "Bitcoin enthusiasts may believe that problems with security and verification are less likely to affect a digital currency. Time will tell us the extent to which that is true." claiming that BTC has no such security and simply saying "time will tell" if I'm right, is not an valid argument and shows it cannot prove as of now it' argument and shows that it does not understand how BTC functions, because if it did it would acknowledge that BTC is different and has the huge potential it has because it has security without relying on a central authority such as a government or bank (and BTW it pointed to historical cases and conveniently failed to mention the private moneys of banks, before government outlawed them. banks used to issue their own currency, and people used them, the security was done solely by the banks that issued such currencies; the main problem with this situation was: 1st there were various currencies in circulation, with varying exchange rates, for every bank, which made it cumbersome, etc; 2nd the banks could create as much of their own currency as they wished without telling anyone, thus debasing everyones elses currency from that bank; thus it required a big amount of trust on the bank. BTC has neither of these problems: it only requires 1 currency, any bank can use it; it can't be "printed at will").
finally: "Advocates of Bitcoin enthuse about its commitment to limiting its supply of virtual coins. Goodhart’s paper discusses whether such commitments from private providers of money can actually be credible. He concludes such commitments probably run against the interest of those who control these currencies" the miners do have an incentive to augment their mining fees. they could do this only by running a new/different version of BTC code on their computers, but why would the non-miners accept such a change? non-miners would simply not update their BTC wallet software, and keep the old version of BTC (which in turn could be mined by anyone using the old version). This is another thing that is different from any previous private money, it does not rely on any central authority for issuance, it relies on people willing to use whatever version of BTC they prefer. if a new version comes out that most people don't agree with, most people would simply not use that new version, and the ones that would benifit from that new version would find themselves alone, holding some bits of info that others don't accept as valuable enough, given the better already existing alternative. miners can't force others to use their version of BTC, like a central authority/issuer of any currency existent to date.
This is the best opinion I have that I have gather from my research, which is also shared by most "bitcoiners". and I have yet to find evidence to the contrary in the several months I spent researching. sorry if I repeated myself too often, I just wrote my thoughts out, can't be too bothered to edit it properly.
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