The bitcoiners do get all heated up when they read my blog. Sadly, they rarely bother to try to avail themselves of the pages on money and banking before letting loose.
Tulip mania and beanie babies are not a legitimate comparison to bitcoin, no matter how much you want them to be. A more apt comparison to those things is ‘twinkies mania’ that is happening right now.
I agree that twinkies mania is an accurate comparison. It’s price is a bubble based on scarcity that far outstrips its utility value as consumer goods. Twinkie mania is exactly like tulip mania, which is exactly like beanie-baby mania. D’oh.
Bitcoin has production value in the electricity and mining, and market value in its *global* use which is now beginning to rival entire countries economies.
In the first half of the sentence, you are saying that the cost of electricity to maintain its existence indicates its value? And it appears, mining (I guess of coal) by extension? That’s quite an astonishing statement. That’s a maintenance cost. In the second half you appear to be saying:
Bitcoin is now beginning to rival entire countries economies.
Take a look at GDP by nation. http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) The lowest GDP nations in the world are in the range of $30 million to $160 million per year. If you look at the nominal market capitalization of all Bitcoins (many of which have been lost) it’s around $100-$120 million. Using the data at http://bitcoincharts.com/markets/ I summed the total trading volume (much of which is probably speculation) after correcting for currency. I get $1,565,318.81 as the total volume.
It isn’t clear if the dollar volume is total year to date or monthly. But let’s presume it is monthly volume. If so, then the total dollar volume of bitcoin worldwide in a year is on the order of $18.8 million dollars. That is below the GDP of all nations in the world with the exception of Niue’s $10 million estimated GDP. And Niue is only charted by the CIA.
So if we presume that ALL activity in Bitcoin is buying and selling of items in the utility value economy, then that entire volume is roughly 2/3rds of the tiniest nations in the world. That would be a decent dollar volume for a small company in the SF Bay Area. Much of that volume though, is speculation. Of the rest, much of it is illegal drug sales, prostitution, and such. So let’s not get carried away yet.
But sugarplum, there is no way in hell that even a tiny fraction of the nominal ‘market capitalization’ of Bitcoin is spent each year. Bitcoin is speculation – period. The transaction volume of Bitcoin is tiny.
1) by all means join bitcoin and get rich, put your money where your mouth is, show us all how much of a genius you are.
Discussed that already. I am, sadly, ethical. It’s terrible.
2) wordpress has announced it’s accepting bitcoin (the #22 website in the world and ironically, the host of this very blog…) so you’ve already made an idiot of yourself, though since your bitcoin blogs are the only ones getting any views or replies I imagine you’re going to keep trolling.
When you have bothered to read through the pages (not posts) on this blog. When you have bothered yourself to read all the bitcoin discussion and at least attempt to follow it, you might find you had learned a little something. That WordPress is accepting bitcoin has zero impact on the arguments I have made here.
As I have said earlier, Bitcoin has a place (see Lietaer) as a minor specialty currency. Its limitations should be clearly spelled out. It is similar to airline miles, credit card points and retail store coupons, but a hell of a lot smaller in dollar volume. However, it has a key difference. Those other specialty currencies have a specific value maintained by their creators. You can redeem airline miles for flights. You can redeem credit card points and coupons for something specific. Bitcoin is pure speculation.
Since I am the only one I know of giving an actual critique of Bitcoin, I will continue from time to time to blog about it. Cheerio.