From Cellbe
The “currency” has no real value Repeat something often enugoh and it becomes true? Anonymity aspect is misunderstood: everyone can generate new Bitcoin addresses, which are completely anonymous, they are just a very long string of seemingly random letters and numbers (a hash). If you want to do a transaction, you give this address' to the counterparty. They send out a transaction to this address over the network. The transaction is recorded in a public logfile. But all that is recorded is two meaningless addresses and balances between them. Noone can know who an address belongs to, unless you tell them (by reusing it on a site that requires ID for example, but you can generate new addresses for every transaction if you want). Noone can know what IP address a Bitcoin address is associated with except the few nodes in the Bitcoin network you connect to, and if you use something like TOR, noone can know, period. In other words, you are anonymous, if you know what you are doing, and almost completely anonymous if you don't. This is true up until a transaction is classified top priority by a heavyweight like the NSA and they throw their considerable might behind it, which means world wide deep packet inspection. This is exceedingly unlikely because it costs a ton of money, they really won't care about some pot you like to order online. So technically yeah, *they* can connect the dots, but not even a well organized hacktivist collective, let alone a jealous husband. “there is no possibility for chargeback” – This is why I will never use Bitcoin to pay for anything. Donations, yes, maybe, but payment for a real good sent via mail? Only an idiot or a criminal, with more to lose than by using the “normal” method woud do that. You may not be aware of this but entire countries are using exactly this system, for example in the Netherlands, which is an electronic payment method that most of the major Dutch banks are using for web commerce since 2006. No chargebacks possible. Millions of Dutch are happily using it to full satisfaction. Are they all idiots and criminals? no Paypal like buyer protection – This again does not help me if I am a buyer. But it does. If a seller isn't constantly fighting fraudulent chargebacks, frozen accounts and time wasted on this, they can lower the price of the goods and offer better service. That's exactly why CC is relatively expensive, they factor fraud into the prices. With Bitcoin there is no need to distrust the customer, all payments are unforgeable and final. Paypal's fraud department costs a lot of money too. They roll that into the fees they charge to merchants, who roll it into prices to the customer. No longer with Bitcoin. This will also make merchants pay *better* attention to their reputation, because their image now becomes actually important with this system, not like with Paypal who simply don't care. Win-win. “very low markup (e.g. 0.25-0.75%) compared to other means of payment like CC” – This does not help the buyer at all. Again, it very much does. Those markups go back into the price of the goods. Lower markups, lower prices. Also, the buyer has no exchange markups, only transaction cost, which can be zero. The current default is 0.0001 BTC (~0.0015 USD), but it's optional (no difference yet for decades). In the Paypal equivalent both sender and recipient pay a sizeable percentage markup. Which goes back into the price of the good. So yes, it does matter, the difference could be something like 4-5% overall, depending on amount and medium. So, as a buyer and adding the volatility into the equation, I am left wondering: why should I ever use Bitcoin to buy your product. Volatility for the merchant does not have to be an issue, see above. For the buyer it may be until the economy size increases, but in general Bitcoin should be deflationary, so holding BTC over the medium to long term should not have to be an issue, unless of course the whole system tanks. If you don't trust it, sell on the various markets until you need it, then buy. Even with the dual exchange markup it's still cheaper than using CC or Paypal. Re rest: cheaper, faster, no middlemen with agendas. Tell me, would you use Bitcoin over Paypal as a buyer? I think you know the answer to that one. Lots of people are tired of Paypal's practices, paranoia, frozen accounts and all the associated hassle. As a seller, I would only accept what my buyers are happy to pay with. Since payment with Bitcoin is painless, I think most people will be happy with it once it's out of the experimental phase. I don’t charge for my products in tomatos because my buyers do not use tomatos as a currency. Apples and.. tomatos. Bitcoin has been designed as a currency, tomatos as pizza topping. Stock, bond and commodity markets have measures in place to prevent market crashes. I guess that's why there has never ever been a stock market crash, or tulips are still priceless. Their prices are based, at least in part, on real value those products provide. I posit that the magical mystery wand the Federal Reserve waves every time they print up another trillion has no backing in fact or fiction. Except the full faith and trust of the nation, which will last until the bubble bursts. In Greece it's getting awfully close. Would it make any difference at all if the daily Bitcoin price was just a random number? I suggest not. That's just facetious. You would only be right once there is no need for exchange, i.e. with a large enugoh economy which can circulate just Bitcoin for goods internally, which will not be the case for many years to come. I do not argue that Bitcoin is not mature yet. It has many challenges ahead. Discounting it based on its current state is however a mistake. At the end of the day, the only force on Bitcoins price is up. There is no down force, since all owners of Bitcoin gain by price increases. Not necessarily. While the long term Bitcoin concept limits supply and prevents arbitrary inflation by fiat, it can in fact inflate if the economy shrinks. Or if trust, expectations etc. diminish, which can readily happen today, but much less so in the long term. The current exchange rate is too high, speculative. So it should experience inflation in the sense of either the economy catching up and perhaps overtaking it, or the price going down to more realistic levels. Also, mining new coins is theoretically inflationary, but this effect decreases over time and probably does not keep in step with the growth of the economy resulting in deflation anyway. Eventual collusion will result between the Bitcoin Exchange market leaders due to lack of regulation and price control. There is no guarantee exchanges are not going to be regulated. In fact the Bitcoin developers advocate regulation of the exchanges. In the end everything can be regulated, but due tot he decentralized nature of the system, it needs the participants' consent. You must see the exchanges as separate entities on top of the concept, necessary evils if you will. If you are cynical than sure, none of this will work, because not only will everyone collude to pervert the system but you should already be aware that the regulators don't want it to succeed to begin with. We shall just have to see. I’d assume you have a holding of Bitcoins, correct? I do not actually have any stake in Bitcoin, either as a developer, in holdings, related business or any other form except for wanting to see it succeed, as a fascinating technological and social experiment with major potential for the benefit of mankind in the long term. Until then, a convenient online payment method for smaller purchases of course.If I did have any significant holding it would be after the protocol is vetted properly (this will probably be attacked too not too far into the future) and the market and exchanges grew up a bit more. Until then I'm only considering incidental holdings for online purchases.
