> One of the properties of a good currency is that over time it’s value must slowly creep downward.<p>Isn't a big part of the thesis behind bitcoin that this mainstream economic belief is false? After all, mainstream economic theory since at least the Great Depression would also say that central authorities (generally governments) should be very hands-on with their control of the money supply, which is another belief that bitcoin is clearly designed to challenge. I know very little about economics both mainstream and heterodox, but I think it's unfair to make this claim without at least mentioning that the designers of bitcoin are almost certainly aware of the belief and are deliberately challenging it.
> It has all desirable values of gold<p>No it doesn't. Bitcoin is only valuable as long as it's valuable. Yes, that's tautological, but it's also true. Bitcoin is only valuable as long as people are willing to pretend it has value. However, gold has an intrinsic value that it possesses whether or not people are willing to invest in it, because gold is useful for more than just investing (for example it's used in jewelry, dentistry, electronics, etc). If everyone in the world decided tomorrow to stop investing in gold, you could still sell any gold you had for an amount based on its utility. But if everyone in the world decided tomorrow to stop investing in bitcoin, its value would immediately plummet to $0.
Does anyone have some research links on analysts/opinion leaders and their hype cycles?<p>I remember Nouriel Roubini bashing Gold on Twitter like never before all of the sudden starting about two weeks before the gold "crash". The whole thing happened without any significant "new" developments taking place (at least from my laymen perspective). These boom and burst cycles seem a lot like echo-chamber hyping. I would so love to see some research on how these echo waves start and succeed/fail.
I couldn't make myself keep reading after this:<p>"The Federal Reserve, ... increasing the money supply ... by simply creating money out of thin air ..."<p>Ok so far...<p>"... which the Treasury then dutifully prints out as paper notes."<p>Um, what? Most money in circulation is never printed.<p>Also, bitcoin is NOT anonymous unless you're extremely careful about how you get it and how you spend it.
ObFuturamaLaughHarder: <a href="http://www.youtube.com/watch?v=FopyRHHlt3M" rel="nofollow">http://www.youtube.com/watch?v=FopyRHHlt3M</a><p>Instead of showing me a graph of gold price versus bitcoin price, at a time when analysts say gold has declined due to a lack of inflation in the world, as well as the Cyprus crisis, you should show me a graph of total amount of gold held as a store compared to total amount of bitcoins held as a store as that would demonstrate people actually switching out of gold for bitcoins.<p>Until then, I'm going to assume this is either a post of ignorance or perhaps just HN spam.
My instinct says the same thing on Bitcoin acting as surrogate for gold in the near term (Say the next 4-5 years or so). I also think that the way it is structured could help it fulfill its currency aspirations in the long term by its ability to be broken apart into tiny little pieces.<p>Our brains (and economy) are not really used to working in decimals of something on a day to day basis, but if Bitcoin eventually settles around 1,000 or so you could see people start using it this way.
You're right. 99% of the bitcoins owned today will never be spent on purchases. I wonder if this is simply due to ease of use. What can you really buy with them? If they were accepted everywhere would this be different?
The so-called "hoarding problem" was debunked decades ago:<p><a href="http://mises.org/money/2s9.asp" rel="nofollow">http://mises.org/money/2s9.asp</a><p>It's still orthodoxy among academic economists, but there isn't any historical evidence that it's actually true.<p>More recently, this article in Forbes explains the issue more succinctly:<p><a href="http://www.forbes.com/sites/timothylee/2013/04/11/bitcoin-doesnt-have-a-deflation-problem/" rel="nofollow">http://www.forbes.com/sites/timothylee/2013/04/11/bitcoin-do...</a>