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The Pros and Cons of Bitcoin – What You Need to Know!

from Stefan Molyneux:

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5 comments to The Pros and Cons of Bitcoin – What You Need to Know!

  • Wazza

    I have yet to hear anyone counter my argument, including BrotherJohnF…

    Trust me I love the idea and 99% of the Bitcoin concept but…

    – Barriers of Entry –

    There are no barriers of entry in the Crypto-Currency market. Computer code can be copied and pasted in seconds, if not milliseconds. Eventually there will be 1000+ Crypto Currencies just like there are websites.
    Based on unlimited competition, there will be unlimited Crypto Currency “Units”. When you add up them all up together limited, scarce supply will not exist.
    What makes one Crypto more valuable than another? Value is based on brand loyalty only. Remember when Netscape Navigator or AOL were the “Top Dogs” of Internet Search… Where are they now…?

    Bitcoin value is based on speculation. There is no intrinsic value and Bitcoin is not a stable store of value.

    – Bitcoin’s use in Business –

    I run an online business and have physical hard product that have hard costs. With the volatility of Bitcoin how do I price my goods to protect my margins? Yes, services like BitPay may convert to USD at the time of sale but how do my customers protect themselves from the volatility? There is always a time lag in the process.
    You would need to have an instant exchange where customer converts USD to BitCoin, then purchases goods, then business exchange BitCoin back to USD. This does not exist. What is the point when you can just use USD and avoid the hassle of exchange rate losses?

    – Bitcoin is a Commodity –

    Compare the Bitcoin to a local US bank. There are thousands of US banks for customers to choose from. Banks are commodities. Payment systems such as VISA, Mastercard, American Express, Interact, etc allow a business to collect funds from any customer regardless of their bank.
    As the Crypto Currencies business systems develop there will be a business who will create a payment system where businesses will be able to collect payment from the 1000+ crypto currencies. Therefore businesses will not care which crypto currency the customer use. A business only cares about getting paid in funds that cover costs and produce a profit margin.
    Businesses only care about a stable store of value. We have budgets to meet and need stability in our pricing decisions. How do you pay staff 30 bitcoins per week when the price goes from $100 to $900 per bitcoin in a month?

    – TPTB can corner the market –

    TPTB have infinite supplies of paper currency. They can print it up and buy up the bitcoin market. It doesn’t cost them anything to do this as the paper currency is all counterfeit anyway. Once they corner the market they can play havoc with price volatility to shake everyone out. They also can use the confiscated bitcoins from Silk Road and others to sell in mass to drive price down.
    TPTB can also afford the mega computer warehouses to build their computer mining operations.

    – If you could match Gold and Silver with Bitcoin’s technology, now that would be a game changer. it needs to be backed with something tangible… BOTTOM LINE

  • Wazza

    Forgot to mention, BJF has proved the Substitute / Barrier of Entry argument.

    He now accepts 13 different Cyrypto Currencies on his bitcoin channel. Look on the right column. http://www.thebitcoinchannel.com/

    Sorry BJF, I love your work on everything else.

  • Wazza

    Wall street Journal Reports 2 new Crypto Currencies every day!!

    http://live.wsj.com/video/fastcoin-peercoin-bitcoin-opens-door-to-new-currencies/F7798154-510D-4AF5-AC92-BE43F9289F56.html#!F7798154-510D-4AF5-AC92-BE43F9289F56

    Back it with Gold and Silver and I am in… until then I will watch the entertainment

  • JJ

    Wazza is 100% correct. I also love all of BJF’s “real” stuff. Sit back and enjoy the show… Aaaaaaaaaaand it’s gone!

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