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Friday, August 9, 2013 - 1:26pmSanction this postReply
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I thought this article was interesting because I've been generally skeptical about Bitcoins since they aren't really backed by anything, and I think their rise has been driven by part ideology and part speculation.

But maybe in countries where there are few good alternatives, one currency that's backed by nothing, but that can't be printed is better than another currency that also isn't backed by anything but can and is printed?

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Friday, August 9, 2013 - 7:56pmSanction this postReply
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The US dollar's monetary base has been increasing by 33% per year for the last 5 years. Its backed by... the might of the US government in enforcing fiat usage and attacking anyone other than the Fed who prints dollars? I'd say its also backed by its utility... its a way to track accounting, so long as the monetary base is reasonably stable.

I do like gold and silver, particularly for long term stores of wealth. But I think fiat has them beat for day to day transactions due to fiat's easy transportability and gold & silver's higher vulnerability to theft (including government theft). Its just so unfortunate that given we are using the fiat, the government gets so much power from being able to print and spend it.

I'd say Bitcoin is backed by its utility. That's not nothing. I like Bitcoin because it can be sent across the world at the speed of the internet, and because bitcoins can be protected by some pretty good cryptography. Due to these kinds of features, I think Bitcoin will increase in value through the future. There of course is the chance that maybe a better distributed currency technology will be created, and maybe people will prefer it over Bitcoin. But I think these kinds of currencies are here for the long haul.

I'm excited to see what will happen with Bitcoin in more black/gray market and developing countries. M-Pesa the cell phone currency recently integrated Bitcoin for some of Africa.

Cheers,
Dean

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Friday, August 9, 2013 - 11:11pmSanction this postReply
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Yeah, reading this article really made me realize that if Bitcoin really takes off, it very well might be in places with far worse monetary policy than the first world countries where most of the cheerleaders for it are. While a few people here might buy Bitcoins because of their ideology or for speculation, a lot of people elsewhere might buy it because they are desperate for any sort of alternative money that would work for them.


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