# Last edited on 2014-02-21 20:34:21 by stolfilocal

Thanks for the kind words, I bear no ill feelings.

I would rather not enter into lengthy discussions again.  You have read many of my arguments, I have read yours, but obviously neither side has convinced the other, and that does not seem likely to change.  Logic and mathematics are only part of what defines one's opinions and probabilities.  Experience, with things and with people, is even more important; and it cannot be esily shared.

Let me just clarify my position a bit more:

* It is true that I do not know the technical aspects in detail.  But I know enough to believe that there is nothing wrong [i]technically[/i] with the concept.  (I was surprised by the "malleability bug", and surprised that it did so much damage; but I trust that it is not serious, and that all buggy software out there will soon be fixed.)

  My skepticism has to do [i]only[/i] with the economical, political, and practical aspects of bitcoin.  We all agree that bitcoin is an original concept, that does not fit well into any conventional economic model.  Therefore, my ignorance about those aspects of bitcoin does not seem to be much greater than anyone else's, even that of the bitcoin pioneers.


* Also, one does not have to harpoon a whale before being allowed to form and express one's opinion about whaling.


* Once again: I distinguish the "bitcoin project" (creating an internet payment method that is cheaper and/or faster and/or safer than other alternatives) from "investing in bitcoin" (buying bitcoins with the goal of making a profit, whether in crypto or in "fiat").

  I very much wish that the [i]bitcoin project[/i] succeeds, meaning that crypto-coins (any or all of them) eventually will be used by common people for their advantages (rather than to show support for the project).  Even though I still see some big obstacles on the road to that goal.

  As for [i]investing in bitcoin[/i], that would be a sensible proposal only if the expected future price were to keep rising more than inflation plus 5% per year above the present price.  That expectation, today, does not seem to be supported by any valid argument, over any time scale. On the contrary, I see good arguments to expect the opposite: that the price will mostly stagnate or decrease, perhaps even to zero.  That is why I believe that bitcoins today are, [i]objectively[/i], a terrible investment option, and should not be recommended to anyone as such.

  If it is indeed true (as some have claimed), that the bitcoin project will succed [i]only[/i] if many more people invest in bitcoins now, then methinks that the project has a big problem right there.


* Being a "newbie" (who has been poking around for only three months, instead of all of three years) has its advantages, methinks.  It seems that some people got convinced early on of certain "truths" by arguments that seemed strong at the time, but have lost their weight in the last six months.

  So, a newbie may actually get a clearer picture of the bitcoin phenomenon by questioning and rejecting some of those "truths", that, for the "old-timers", were categorically proved long ago.

  For example, the "demand/supply formula", by which one used to "prove" that bitcoins will one day be extremely valuable, has been considerably weakened in the last six months by the existence and persistence of other crypto-coins.  If one replaces "bitcoin" by "crypto-coin" in the argument, the denominator becomes infinity, and the resulting price is zero.

  Ditto for the "network effect" and "first-player advantage" that were supposed to prevent the appearance of alternative coins.   Or the myths about crypto-payments being untraceable and impossible for governments to restrict, tax, or regulate.  Methinks that Silk Road and China disproved those claims in the clearest possible way --- yet there are still people who not only repeat them, but see them as [i]the[/i] most important advantages of crypto-coins.

  Another random example of this "newbie's advantage", I think, is being open minded about the role of the Chinese exchanges (and Chinese bank holidays, and, yes, even Chinese sleep hours) in determining the market price of bitcoin -- a possibility that some old-timers apparently won't even discuss, perhaps for sentimental or political reasons.

  And, of course, a newbie who does not own any bitcoins will probably have a more dispassionate view of probabilities and possibilities than an old-timer who invested several years of work in the project, and owns a few thousand coins.


* I am not a libertarian.

  I hate the banks we have, all of them; but I believe that banks of some type are necessary, even if the bitcoin project succeeds.  I do not trust governments, even those that I voted for; but I believe that they are essential, and should be democratized, opened, and held on a short leash, rather than abolished.

  Therefore, I am absolutely [i]not[/i] at all excited by the idea that bitcoin will be a libertarian Golem, the magic weapon that will destroy banks and governments and bring forth the libertarian utopia --- whether the non-libertarian majority likes that or not.

  But, fortunately, I have no fear that bitcoin will do that.  One thing that I have learned in life is that social and political problems cannot be solved by technological gimmicks alone. The car did not abolish national frontiers, electronic voting did not eliminate election fraud, the internet did not free us from copyright, Google did not abolish censorship, and so on.

  Without a strong [i]political[/i] and [i]social[/i] effort to solve a problem, a purely technological solution will be banished or heavily restricted, as China already did with bitcoin; or it will be co-opted, and then it will become part of the problem. (Google, for example, has now become a very effective tool to hide "undesirable" internet contents from the public, rather than to help the public find such contents).

  So I see absolutely [i]zero[/i] chance that governments and banks will just sit there, sucking their thumbs and whining, while a small ill-coordinated band of nerds robs them of their powers and profits.  If [i]that[/i] is what bitcoin means to you, prepare to be severely disappointed.


Anyway, sorry if this reply does not address all your points, but I fear it is too long already.

Till next time, and all the best, to all of you.