I'm trying to think of some <Foo> that doesn't work in the pattern of "<Foo> will prosper until governments or banks decide to crush it".<p>Excepting the trivial cases of things that won't prosper regardless, I'm not coming up with anything. :)<p>Some of the assumptions in the article seem pretty weak to me: E.g. "Anonymity threatens control" uh, cash is a lot more anonymous than Bitcoin. The structure of cash's anonymity limitations are somewhat different than Bitcoin's but it's hard to argue that Bitcoin is too different on that point. ... and it's not just cash, any other valuable commodity is fairly anonymous, and easily argued as more so than Bitcoin— yet, as far as I am aware, there is no great effort afoot to outlaw coal.
<i>It is immune to the inflation that plagues all fiat currencies</i><p>Funny thing is, most actual economists would say that the inflexibility of Bitcoin is a <i>disadvantage</i>.<p>Discussions of Bitcoin are dominated by people for whom certain rules about money (such as: "it must be a forever fixed amount") are basically articles of faith. Outside of this comparatively small population, people primarily care about other things, such as good economic growth, full employment, social equity in the sense of equality, and all sorts of things.<p>Having a forever fixed supply of money tends to be detrimental for those things.
<i>Every currency created since the advent of money 2,700 years ago has fit nicely into one of two classifications: Either it was a representative money system, deriving its worth from a link to some physical store of value like gold, silver or gemstones; or it was fiat [...]</i><p>And then the author suddenly stops and ignores the next obvious question: where do gold, silver and gemstones get their value from? The simple answer is because people like to have them and their supply is more or less fixed (which causes people to believe they won't suddenly lose their value). The exact same thing applies to bitcoins: bitcoin is the store of value.<p>The US already tried once to make a certain type of currency it couldn't control illegal: in 1933 it forbid anyone to own gold. That didn't make gold worthless any more than it will make bitcoins worthless. The only thing I believe that could do that to bitcoin is if it is replaced by another digital currency.
My humble perspective: Nothing matters as long as profitability and opportunity exist. Bitcoin will continue its growth as long as it's profitable to operate a miner, a business, an exchange and as long as there is an opportunity to run something. People will go where the money is.<p>My other humble take: High-rises and businesses are built by continuous and large flow of money (wealth) into a system. Bitcoin business will continue to grow and solidify (have better security, legal status, branding...) as the money keeps flowing to the system.
The 'crush' scenario presented here -- governments using their fiat currency power to alternately buy and dump Bitcoins, creating a boom-bust cycle that scares other people away -- doesn't seem very smart or likely to succeed.<p>Speculators would recognize it and attempt to profit by front-running the government operations (increasing the cost to the government, and dampening the volatility).<p>Bitcoin service providers could offer volatility-protection (instant conversion to other currencies), as some do already.<p>Governments could lose money on each manipulated boom-bust cycle, and at the bottom of each cycle, Bitcoin would still be alive and ready for new uses.<p>Far more likely, in my mind, is an attempt to coopt Bitcoin. Officially approve it, with reporting/identity conditions that don't encumber legal use but ensure tax collection. Or, launch a Bitcoin-like competitor backed by government redemption guarantees (T-Bills, TIPS, etc). So, above-ground businesses can get most of the crypto-currency benefits without the rough edges created by its most anti-State qualities.
Bitcoin is not anonymous, why do people keep harping this falsehood? At best, Bitcoin is pseudononymous. But every single transaction is forever kept in the Bitcoin Ledger, for the rest of time (or at least... till the end of BTC's existence).
It is much easier for governments and banks invest in negative media like this poor and spiteful article. A massive negative media do some tickle, but Bitcoin always back stronger.