With Euro Zone Problems, Bitcoin Experiencing Boost In Legitimacy

derekmead writes "Despite being used for drugs and beef jerky, Bitcoin is finding legitimate purposes. Bitcoin's decentralized convenience means international efficiency, in areas where local restrictions on money transfers to foreign companies make legal businesses cumbersome. 'I've been able to have cash in my bank account in a matter of hours using Bitcoin, rather than three days with traditional banking,' one British businessman in China told Reuters. In embattled Europe, Bitcoin offers some a viable alternative against central banks, said a Greek owner of an island bar and restaurant who accepts payment in Bitcoin. 'I don't put money in the banks. I trust the euro as a note, but I don't trust banks. I don't want them making money out of my earnings.' Indeed, Europe's financial woes are caused an unprecedented surge of interest in the alternative currency, as the continent loses economic credibility with each new bailout, according to a report by the Financial Post."

Comments

Re:No wonder the Greeks think BitCoins are great.

[roman_mir]

Oh god, it's not because they will do everything to avoid paying taxes. Their economy is fucked because it is economy of debt, exactly the type of economy that ALL modern 'main stream economists' are proposing.

There are so many people that for example defend Krugman (a thread with examples in it), believing he is an economist rather than a politician used to justify gov't fiscal and economic behaviour, that they completely miss the point that the 'solutions' given by these 'main stream economists' have been tried thousands of times and are still being tried today, and IF, IF these types of solutions ever worked, there wouldn't have been such cases as Greece or USSR economic failures for that matter, Argentina, Zimbabwe, Weimar Republic, USA today, etc.etc., they would all be great huge wealthy strong economies.

It is not that Greeks don't like to pay taxes, that's a very good healthy sign of people who still value their own freedoms, by the way. It's that Greeks are for the type of gov't spending that does NOT correspond to their earnings, so it's borrowed.

Of-course Greece hits the wall, because it can't print Euro (thus the misplaced calls to exit Euro and use Drachma again, so they can print it), USA didn't hit the wall yet because it's subsidised by foreign production (Asia, Germany...) and foreign central banks and governments willing to accept inflation of their own in order to subsidise USA and Europe for that matter.

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Now, Bitcoin is just another worthless fiat, it's only redeeming quality is that it is mathematically limited to a specific number of coins, it's worthless because it has no intrinsic value at all, there is no backing. It is used because it is easy to use over the networks and it is a game of musical chairs, you don't want to be the last person stuck with those, but it doesn't matter it can't continue being used for some time and traded and it doesn't mean its relative value cannot go up and down for some time before it crashes and burns.

Sure, right now Euro looks really bad, and it IS bad, but that is inevitable for all fiat currencies (those imposed by decree of gov't and not actually intrinsically worth anything more than paper they are printed on). There is nothing special about Euro, it will eventually collapse, but I think it will stabilise first, especially if Germany decides to print a bunch of them to bail out all these failures.

Of-course people who understand what's going on are moving on or have already moved out of Euro and dollars actually, they moved into commodities, into ownership of agriculture stocks, mining company stocks, whatever. Right now the gold mining stocks for example are very under-valued. They are valued lower than they were when gold was HALF the price in dollars than it is now, so this shows you huge lack of confidence of the market in the future of gold.

Market is still operating on principles it was programmed to believe in over these last 50 years, market is mostly agnostic when it comes to fundamentals and it cheers any gov't action that results in easy credit in fake money. Unfortunately for the market, this is what is going to rob people of most of their purchasing power and the currencies themselves.

Real money is not made up of ephemeral bits stored on the Internet, real money is something that can be used when the power goes down and real money cannot be faked by politicians and bankers.