Tangential, but a subject of some local interest:
Why Bitcoin will fail by Avery Pennarun. "The sky isn't red." Thesis:
- The gold standard was a bad idea.
- Even if it [Bitcoin] was a good idea, governments will squash it.
- The whole technological basis (cryptosystem) is flawed.
- It doesn't work offline.
I'm not sure I buy these and am not competent to evaluate his claims on 3., but would like others' critique.
L019: Bitcoin P2P Currency: The Most Dangerous Project We've Ever Seen by Jason Calacanis. A rather more enthusiastic viewpoint of the project:
- Bitcoin is a technologically sound project.
- Bitcoin is unstoppable without end-user prosecution.
- Bitcoin is the most dangerous open-source project ever created.
- Bitcoin may be the most dangerous technological project since the internet itself.
- Bitcoin is a political statement by technological libertarians.
- Bitcoins will change the world unless governments ban them with harsh penalties.
The actual text contains many more caveats than the eye-catching selection of points above.
(Disclaimer: my ownership of bitcoins constitutes a financial conflict of interest with respect to everything I write on the topic.)
I think Jason Calacanis has it right, and Avery Pennarun has it wrong. Bitcoin is likely to succeed.
True, but has no bearing on whether Bitcoin will succeed or fail. Even if Bitcoin causes economic instability in the same way that the gold standard did, individual users of Bitcoin have no reason to care.
Possible, but I don't think it's very likely, because its decentralization makes squashing it hard. It's not like they can raid some company's offices and disable the network. The dollar-to-coin exchanges could be targeted, but they're independent, expendable, and located in many different jurisdictions.
False, and Avery makes this claim from a position of admitted ignorance which makes it irresponsible. There are a lot of eyes on Bitcoin and the primitives it's constructed from; if it were flawed, the flaws would very likely have been discovered by now.
True, but irrelevant. PayPal and bank wire transfers don't work offline either. And wireless internet access is quickly becoming a worldwide universal anyways.
I don't know a whole lot about bitcoins, so maybe you can help me. You argued that decentralization makes the bitcoin system difficult to shut down. I'm assuming that before the US government would want to shut bitcoins down, bitcoins would have to significantly grow in prominence, and be accepted by a number of large businesses (Amazon, eBay, Barnes & Noble, Target, JC Penny's, etc) with websites. Because bitcoins would then be available for a wider variety of purchases, they would get a lot of new users. Assuming that the government then decided to s... (read more)