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Bitcoin Was 2016's Best-Performing Currency (newsweek.com)

Posted by EditorDavid on from the stable-currencies dept.

The co-founder of Blockchain published an opinion piece in Newsweek today mocking predictions about the death of bitcoin, saying "each is more wrong than the last... Bitcoin was again declared the world's best performing currency in 2016 by Bloomberg. In fact, it's held that title every year since 2010, with the notable exception of 2014, when it was the worst." An anonymous reader writes: Bitcoin president Nicolas Cary writes that bitcoin has become more stable than many of the world's top currencies, while the British pound "has dropped by more than 17% in a colossal collapse of confidence... In Africa, the Egyptian pound dropped 59% and the Nigerian naira fell 37%. In South America, the Argentine peso plummeted over 17% and the Venezuelan bolivar tumbled so far off a cliff it's difficult to measure -- even bricks of cash are worthless for everyday purchases there. Perhaps most dramatically of all, India, the world's second most populated country, introduced a stunning policy of demonetization declaring banknotes illegal overnight...

"During this time period, and partially in response to it, the price of bitcoin surged... Bitcoin also trounced the stock market from a performance perspective. Brand names like McDonald's, Home Depot and Disney grew at a paltry 1.6% or less; bitcoin outpaced them by over 70 times."
In 2009 one man in Norway bought $27 worth of bitcoin while writing a thesis on encryption, then forgot about them. Six years later, he discovered they were worth nearly $500,000.

104 comments

  1. Um no... by Anonymous Coward · · Score: 5, Insightful

    " has become more stable than many of the world's top currencies" and "the price of bitcoin surged" contradict each other.

    If it's surged then it wasn't stable...

    1. Re:Um no... by BarbaraHudson · · Score: 3, Insightful

      If it lost 28% in two days like it did in 2 days in the first week of 2017, it's far from stable.

      --
      "Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
    2. Re: Um no... by Anonymous Coward · · Score: 0

      Just like most other currencies, stock and instruments then? It's all about "market forces" and manipulation by those who own the most of it.

    3. Re:Um no... by Big+Hairy+Ian · · Score: 1

      If it lost 28% in two days like it did in 2 days in the first week of 2017, it's far from stable.

      I see bitcoin has had it's own Brexit then

      --

      Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.

    4. Re:Um no... by Big+Hairy+Ian · · Score: 1

      The last line of the summary reminded me of this guy http://www.smh.com.au/technolo... ahh the joy of schadenfreude

      --

      Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.

    5. Re: Um no... by BarbaraHudson · · Score: 1

      Most currencies don't gain or lose almost 30% in 36 hours. As for the stock market, it's been, and continues to be, manipulated by the government to provide the illusion of growth, and paper profits for investors - otherwise the economy would collapse.

      --
      "Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
  2. What do you want to be ? by Fly+Swatter · · Score: 3, Interesting

    Brand names like McDonald's, Home Depot and Disney grew at a paltry 1.6% or less; bitcoin outpaced them by over 70 times.

    Is bitcoin trying to be a currency, or an investment scheme ?

    1. Re:What do you want to be ? by Anonymous Coward · · Score: 1, Insightful

      bitcoin is almost by definition a pure ponzi scheme

    2. Re:What do you want to be ? by Billly+Gates · · Score: 1

      Actually traditional businesses are doing quite well now. With a booming economy Home Depot and Disney are growing as they actually make money by providing a product or service.

      --
      http://saveie6.com/
    3. Re:What do you want to be ? by StevenMaurer · · Score: 2

      Actually, it's not. Its a commodity designed to make untraceable (and mostly illegal) economic transactions easier, everything from evading oppressive government rules, to drug deals, to ransomware payoffs. The only reason why it's not used for tax evasion is that due to it being a commodity, it quite literally can't handle the scale that that criminality; it'd be like a minnow swallowing a whale.

    4. Re: What do you want to be ? by Anonymous Coward · · Score: 0

      and traditional cash has not been involved in those things?

    5. Re:What do you want to be ? by JasonVergo · · Score: 3, Informative

      It wasn't designed to do any of those things. The problem that Bitcoin was designed to solve was how to transfer value without needing to rely on a central authority. The most common central authority for transferring of value is a bank.

    6. Re:What do you want to be ? by Anonymous Coward · · Score: 1

      If tax evasion is such a large-scale problem, then maybe you cannot possibility consider it criminal; maybe taxation itself is the wrongheaded idea.

    7. Re:What do you want to be ? by OpenSourced · · Score: 0

      Is bitcoin trying to be a currency, or an investment scheme ?

      Is neither, is, and always has been, an opaque transfer system, with added storage. Changes in value are simply a sub-product of the structure of the transfer units.

      --
      Rome taught me patience and assiduous application to detail. Virtues which temper the boldness of great, general views.
    8. Re:What do you want to be ? by JasonVergo · · Score: 1

      Bitcoin is not a company or a sentient being so it's not trying to be anything. It's a platform for storing value and transferring value. How people use it is up to those people. Your question is like asking, Is the Internet trying to be a currency, or an investment scheme. Or is the internet trying to be a library, or a card catalog.

      Bitcoin is a limited resource. Only 21 million bitcoins will ever exist. So, some people see that and think that there is a potential that a significant number of people(significant amount of value) will use it to transfer and to store value. If that happens, than the price of bitcoin will go up. So they buy some as an investment. It can also be used as a currency to transfer value. In some cases, the value of a bitcoin doesn't matter when it comes to transfer value. Let's say I want to buy a product listed at $100 USD on Overstock. I could buy a $100 worth of bitcoin and then purchases the item. Overstock than can immediately convert those bitcoins into $100 USD. The value of a bitcoin doesn't matter in this case. Even if it fluctuates wildly. You're probably think, "Great. Why won't I just use a credit card?". Great question. There are a number of answers to this. One use case, imagine I'm a US company and I ship worldwide. A customer wants to buy $5000 of product. I ship the product. They contact their credit card company and say it was a fraudulent charge and they issue a chargeback. My company is out of $5000 and there is not much recourse. Do you know of any payment options where the risk of chargeback is not present? The only one that I know is bitcoin(and other cryptocurrencies).

       

    9. Re:What do you want to be ? by murdocj · · Score: 1

      Remind me, when was that a problem?

    10. Re:What do you want to be ? by Anonymous Coward · · Score: 0

      International money transfers are final, too. Only way to get the money back is to sue. A bank to bank check used by a seller and buyer is also final. Courts are the on recourse there.

    11. Re:What do you want to be ? by JasonVergo · · Score: 3, Informative

      An example of when that was a problem was when banks imposed a bank deposit levy in Cyrpus in 2012.

      https://en.wikipedia.org/wiki/2012%E2%80%9313_Cypriot_financial_crisis

      Another example is when you sell something online and ship the item and the buyer used a stolen credit card or the buyer called their credit card company and asks for a chargeback.

    12. Re:What do you want to be ? by JasonVergo · · Score: 1

      A problem with wire transfers is that you need to share your account information. With that account information the other party can initiate a debit transfer. The debit transfer can be challenged within a certain amount of time.

    13. Re:What do you want to be ? by Anonymous Coward · · Score: 0

      without needing to rely on a central authority.

      Because the official blockchain servers are not any sort of central authority.

    14. Re:What do you want to be ? by Jeremi · · Score: 1

      One use case, imagine I'm a US company and I ship worldwide. A customer wants to buy $5000 of product. I ship the product. They contact their credit card company and say it was a fraudulent charge and they issue a chargeback. My company is out of $5000 and there is not much recourse

      If I'm not mistaken, the flip side of this is if you take the customer's Bitcoins and decide not to ship their product. What recourse would your customer have then?

      --


      I don't care if it's 90,000 hectares. That lake was not my doing.
    15. Re:What do you want to be ? by Powercntrl · · Score: 1

      It wasn't designed to do any of those things. The problem that Bitcoin was designed to solve was how to transfer value without needing to rely on a central authority.

      Which it fails miserably at. Due to its volatility, unless you're a speculator/gambler, you don't want to hold Bitcoin. Which means you're going to pay to convert your fiat currency into Bitcoin, then you'll pay a mining fee when initiating the Bitcoin transfer, and finally, the merchant has to eat the cost of getting their Bitcoin converted back into fiat. The only people willing to deal with all that hassle are speculators and criminals.

      Cryptocurrency is predominately a stock trading simulation that people play using real money. In other words, not much different than Las Vegas gambling. The difference is, no one is disillusion enough to believe that someday we'll all be getting paid in poker chips.

      --

      ---
      DRM is like antifreeze, to the MPAA/RIAA it's sweet, to the consumers it's poison.
    16. Re:What do you want to be ? by Powercntrl · · Score: 1

      Bitcoin is a limited resource.

      So are used pairs of Miley Cyrus's underwear, but you don't see people investing in those. Bitcoin's value is based on the same "bigger fool" dynamics which power pyramid schemes. As long as someone out there thinks they can turn around and re-sell it to someone else at a profit, the the scam keeps churning...

      --

      ---
      DRM is like antifreeze, to the MPAA/RIAA it's sweet, to the consumers it's poison.
    17. Re:What do you want to be ? by ArmoredDragon · · Score: 1

      It doesn't even begin to resemble a Ponzi scheme. A Ponzi scheme is any investment instrument that pays dividends to its investors based entirely off of the funds given by later investors rather than its own intrinsic value. Bitcoin doesn't do this at all.

      Bitcoin is, by all definitions, a fiat currency. That is, it's only worth whatever people think it's worth, and trades accordingly. Practically all of the world's currencies today do exactly this, as opposed to commodity backed currencies of the past (the US dollar used to be backed by gold and silver for example; the older notes had the message "PAYABLE TO THE BEARER ON DEMAND", meaning that the dollar bill was redeemable at banks for its face value in silver or gold, effectively making it a voucher.)

      Bitcoin only differs from other fiat currencies in that it relies on scarcity for its value, rather than being managed by some governing authority's central bank.

    18. Re:What do you want to be ? by Anonymous Coward · · Score: 0

      I'd argue The Force Awakens is a crime against humanity and the equivalent of drug dealing. Disney should be run out of business.

    19. Re:What do you want to be ? by Dagger2 · · Score: 1

      ...and people who are happy to pay fees for transferring money but don't want to pay those fees to Paypal or VISA. That doesn't make you a criminal.

    20. Re:What do you want to be ? by Anonymous Coward · · Score: 0

      As a user of the currency i would prefer it was reasonably stable with regard to price. But users are not driving the current prices this is being done by multiple large scale investment operations. As we saw a few days ago they were all waiting to hit that new high and when one sold out the others all followed and the price tumbled. Its is a gambling game but with higher stakes than normal currency price and thus gamblers will prefer it.

      To answer your question it is of course a currency. Currencies can be an investment.

         

    21. Re:What do you want to be ? by NitroWolf · · Score: 1

      without needing to rely on a central authority.

      Because the official blockchain servers are not any sort of central authority.

      What official blockchain servers? There's no such thing.

    22. Re:What do you want to be ? by DanielRavenNest · · Score: 1

      One third of Americans are "unbanked", and higher numbers in less-developed countries. One bout of unemployment or illness, and your credit and bank accounts can be lost for years. Or has happened in my case, Bank of America decided to make the automatic credit card payment twice in one month, for no reason. Fortunately I caught it right away, but I was overdrawn for two days and still had to pay a fee. Someone who doesn't catch it could run up all kinds of fees from bounced checks, and then banks don't want you as a customer.

    23. Re:What do you want to be ? by DanielRavenNest · · Score: 1

      There is no such thing as an "official blockchain server". My home PC becomes a bitcoin network node whenever I run the software, and updates my copy of the blockchain when I do so.

      Ingenious software is what keeps everyone's copy of the blockchain the same and un-alterable. Solving that problem was the key invention of bitcoin's creator(s).

    24. Re:What do you want to be ? by DanielRavenNest · · Score: 1

      > Bitcoin is, by all definitions, a fiat currency.

      No, that's not what a fiat currency is. "Fiat" is Latin for "let it be so", as in "Fiat Lux" (let there be light) from the Bible. A fiat currency is one that a government authority says is a currency. Commodity money is the kind based on a commodity that has value. Cattle, sea shells, gold, and silver have all been commodity money at one time or another. Usually the most easily traded and widely accepted good ends up that way. Bitcoin is easily traded, being fully electronic, and has other properties good for money (divisibility, durability, scarcity, etc.) and has therefore become a well traded commodity. It is not yet widely accepted aside from the community of merchants and users, so it is not yet a full currency at the level of dollars or euro.

    25. Re:What do you want to be ? by DanielRavenNest · · Score: 0

      The service that the Bitcoin Network provides is transfer of value, without restrictions from borders, lack of bank accounts, or high fees, and it does this fairly fast. It's better than bank wire transfers, PayPal, or Western Union in many cases, so some people use it. Bitcoins as value tokens are a necessary part of the Network they are part of, they are the accounting units for transactions. The usefulness of the Network is what gives the coins value, since they are scarce and necessary to perform the Network's function.

    26. Re:What do you want to be ? by DanielRavenNest · · Score: 1

      Wire transfer fees are often a hundred times higher than bitcoin fees.

    27. Re:What do you want to be ? by peawormsworth · · Score: 1

      Accepting cash into your hand is a payment option where there is no risk of chargeback.

      You are correct. The Credit Card companies love chargebacks. It is the best way to convince consumers that the Internet is dangerous and full of fraud and that the consumer needs to pay the additional 2%-5% credit card service tax and reveal all your purchasing habits to 3rd parties without compensation. Also, the credit companies do not pay for fraud. First they blame the customer and try to just make them pay. If that fails, they go to the merchant and demand the money back... suggesting that it is the merchants fault for accepting a fraudulent card... even though there is no real way to differentiate between a real purchase and a fraudulent buyer. So the credit companies never pay for fraud and they use it to convince consumers that they are needed to solve the very problem they have created.

      But it goes further. The Card companies will use fraud "strikes" against the vendor as a mechanism to increase their service fees percentage. That means a vendor may go from paying 2% to the card companies on each transaction to 3%. The choice for the merchant is to pay more or stop accepting credit cards. All merchants will pay whatever they ask for, because you cannot run a business online today without it.

      Yes. Fraud is a WIN-WIN for the Credit Card companies and they love it. They will never get rid of fraud in the card industry, because their model depends on it.

    28. Re:What do you want to be ? by peawormsworth · · Score: 1

      ...if you take the customer's Bitcoins and decide not to ship their product. What recourse would your customer have then?

      You are describing the "eBay problem" and it seems to have been solved by them. There is something called "reputation" online and it works. The thing about credit cards is that you pay their fees whether or not you want the protection. For example, Amazon is a company for which I would not pay these "protection fees". If I order from Amazon, I know that I will get the product in a reasonable time frame, it will be the product I expected and it will work as described. If something is wrong, I know Amazon will fix it. I trust Amazon, I do not want to pay a fee for protection I do not need.

      If I wanted to pay by bitcoin to a company that I do not trust, then I can use an escrow service that is trusted by both me and the vendor.

      Never forget that many of the protections and insurances offered by using credit cards cover the very insecurities built in to using credit cards. Don't you think it is crazy that you give out all your credentials (card no, name, cvv, expiry) to vendors and 3rd parties for every purchase? The vendor now has everything needed to fraudulently charge you again. Or maybe they will lose your data and someone else will charge your card. The credit card system is designed to facilitate fraud so the card company can make all their money protecting you from it and you will latch onto this idea and defend them while they overcharge for their service and add to your debt.

      I think the real fraud is happening at the credit card companies. They make online purchasing is open to theft and then pull money from your pocket to save you from that danger... a danger that they made and support!

    29. Re:What do you want to be ? by peawormsworth · · Score: 1

      Bitcoin is a limited resource.

      So are used pairs of Miley Cyrus's underwear.

      I purchased a pair of underwear where the digital signature stitched into the strap did not match any on the public ledger and I heard about a friend who purchased a counterfeit pair of undies where the stitching was copied from a real pair.

      The Miley Cyrus underwear currency has many valid uses, but it does not provide any defence against fraud or duplication the way that Bitcoin does.

      The moral is that if you want to compare Bitcoin to another payment method, then you should know the features and benefits of bitcoin.

  3. Didn't it crash? by Anonymous Coward · · Score: 0

    Didn't bitcoin crash a few days into the new year?

    1. Re:Didn't it crash? by Anonymous Coward · · Score: 0

      It's up $US 300 since the last time a story ran less than a week ago about the "crash". Selectively citing only the dips is not a good argument.

  4. Clippy here... by Anonymous Coward · · Score: 0

    I think you meant "volatile".

  5. Wow by kamapuaa · · Score: 3, Funny

    It's a stable currency, and it went from $27 to $500,0000 in 8 years! Everybody, buy, buy, buy! We're all going to get rich!

    --
    Slashdot: providing anti-social weirdos a soapbox, since 1997.
    1. Re: Wow by Anonymous Coward · · Score: 0

      its not a view of the future but if you baught or mined back then and site on it(or forgot) then sure. it will go down more but prices will fluctuate yet stabalize espesially if it becomes something everyone or many accepts like visa master type of thing.

    2. Re:Wow by JaredOfEuropa · · Score: 0

      Mostly the people who "forgot about them" got really rich from BTC, or people with very large amounts selling slowly on the way up. Most others have unloaded after gaining a "modest" profit (10 - 100x), thinking that surely the limit must have been reached.

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    3. Re:Wow by radarskiy · · Score: 1

      Outperformed the ruble!

    4. Re:Wow by DanielRavenNest · · Score: 0

      I never forgot about them, but mined or accumulated steadily from mid-2011 to mid-2016. When the price and my accumulation goal were met, I started selling, which I will do for the next few years, so as not to take a big capital gain all at once. I've already covered my original investment, so it's all profit at this point. I can't predict what the price will do in the future, so it might end up a small or a large gain. We'll see.

  6. Performing??? by Anonymous Coward · · Score: 0

    Best performing currency? The function of a currency is to facilitate transactions. I would guess that bitcoins facilitate 0.00011% of the world's transactions.

    Nice try, pump-n-dumpers.

  7. Disco Stu nails it by Anonymous Coward · · Score: 0

    If this trend continues.. then ehhhhhhhh!

  8. Why would you be surprised? by Anonymous Coward · · Score: 2, Insightful

    Why would you find this surprising? The volatility in those other currencies is driven by political factors and economic conditions in the countries that produce those currencies. Bitcoin isn't tied to a particular nation, so it is somewhat shielded from the political and economic factors in individual countries that can drive changes in the value of other currencies. However, the rapid increase in the value of Bitcoins concerns me that it may be a bubble and, at some point, there may be more significant corrections in the value of this currency. Just because it's performed well and is insulated from factors that can drive volatility in other currencies doesn't mean that it won't be susceptible to corrections and other factors that will drive it's value. The value of a currency is driven by the willingness of others to exchange goods, services, and other currencies for it.

  9. Currencies do not perform! by Anonymous Coward · · Score: 0

    What do software, theatre, and currency have in common? Performance is not measured in terms of asset appreciation.

    If Bitcoin is a currency, then what you call "performance" everybody else calls "massive deflation." (Massive deflation is usually bad.) If Bitcoin is an investment vehicle, then you should compare it to other investment vehicles like tulips, gold, dot-com stocks, and beanie babies instead of dollars and yen.

  10. How can a currency be an investment"? by Billly+Gates · · Score: 5, Insightful

    I listen to Dave Ramsey who is very anti gold and find the whole concept bizaare.

    Gold and bitcoins don't actually produce anything. Investing in a property give you rent as you supply a service. Investing in a company provides you income as that company provides and product or service that other people pay money for

    If a few people got rich from either than it is not an investment anymore than casino chips are. Like casino chips they are for betting and speculating. The whole concept of Gold is the government can not do something stupid and it will always retain value .... well people only get rich if it fluctuates. Therefore it is a TERRIBLE currency and negates the whole purpose of bitcoin or gold over a dollar which is stable.

    What a dollar doesn't do anything? No shit. It is a currency, not an investment tool.

    --
    http://saveie6.com/
    1. Re:How can a currency be an investment"? by Anonymous Coward · · Score: 0

      You answered your own question, the reality is the foating value of national currencies allows countries to set policies. High dollar or low dollar can have negative effects on your economy, basically it depends on how value impacts different industries. Money works just like any other commodity just google "forex" or currency trading, it's not new, people have been trading currencies for a while.

    2. Re:How can a currency be an investment"? by nedlohs · · Score: 2

      Because capital preservation can be a component of investing. And historically gold has done that in the fact of economic and government failures. Of course "past performance is not an indicator of future results"...

    3. Re:How can a currency be an investment"? by JasonVergo · · Score: 1

      Does PayPal provide a service? If so, doesn't it reason that Bitcoin provides a service?

      The two obvious services that bitcoin provides are the ability to transfer value and to store value. Venezuela's currency is experiencing hyper inflation. If I lived in that country, I would be trying to convert from holding value in that currency to something else.

    4. Re:How can a currency be an investment"? by Anonymous Coward · · Score: 1

      It's more than that. Investing in a currency is investing in the economy that denominates its activities in that currency.

      Man you people are as stupid as fuck.

    5. Re:How can a currency be an investment"? by tommeke100 · · Score: 1

      right. That's why no one trades on the Forex ... or do they?

    6. Re:How can a currency be an investment"? by Billly+Gates · · Score: 1

      That is not investing. That is hoarding betting on a disaster.

      Investing to me is using that money to gain more money through a product or service. I could be wrong on this as Gold has performed terribly compared to housing or the S&P 500 which both make money by economic activity and not just speculation

      --
      http://saveie6.com/
    7. Re:How can a currency be an investment"? by TeknoHog · · Score: 0

      Gold and bitcoins don't actually produce anything.

      Try sending gold pseudonymously across the globe in 10 minutes. Now try the same with Bitcoin. Observe which one provides a useful service.

      --
      Escher was the first MC and Giger invented the HR department.
    8. Re:How can a currency be an investment"? by Billly+Gates · · Score: 1

      It's more than that. Investing in a currency is investing in the economy that denominates its activities in that currency.

      Man you people are as stupid as fuck.

      Right so that means inflation which decreases the value in said currency.

      --
      http://saveie6.com/
    9. Re:How can a currency be an investment"? by Anonymous Coward · · Score: 1

      High dollar or low dollar can also have positive effects on your economy. Bitcoin takes a tool away from society and gives it to capitalists.

    10. Re:How can a currency be an investment"? by Anonymous Coward · · Score: 0

      What? Inflation is an increase in the money supply. Goddamn. Goddamnit! When will you people just.... die?!

    11. Re:How can a currency be an investment"? by Anonymous Coward · · Score: 1

      Try to store gold for your great grand children. Now try to store bitcoins for your future self within 20 years. Gold has been the default choice to protect your capital for thousands of years.

    12. Re:How can a currency be an investment"? by nedlohs · · Score: 1

      Being 100% in gold is hoarding betting on a disaster. Just like being 100% in oil futures is gambling. Or 100% in miami apartments is gambling.

      Having some of you holdings in gold, however, is not.

      Pick the right start and end dates and you can have any one of gold, housing, and the S&P 500 perform better than both of the other two.

    13. Re:How can a currency be an investment"? by Anonymous Coward · · Score: 0

      High dollar or low dollar can also have positive effects on your economy. Bitcoin takes a tool away from society and gives it to capitalists.

      Bitcoin takes a weapon away from the elites and redistributes the power among the people.

    14. Re:How can a currency be an investment"? by cant_get_a_good_nick · · Score: 1

      Bitcoin is controlled by a bunch of miners in china. why were they "chosen"? Because they have connections with the government and essentially get electricity for free.

      Bitcoin is not free, but controlled by mining costs, meaning it's controlled by who gets the best deals from whoever controls electricity. Power goes not to the people, but is now given by the people who control (electrical) power. Not the utopia people hoped for.

    15. Re:How can a currency be an investment"? by Anonymous Coward · · Score: 0

      No, an increase in the money supply can contribute to inflation, but they aren't the same thing.

      And since you'll undoubtedly offer an asinine reply implying that I'm stupid, here's a thought experiment: If you have a completely isolated society where the population grows but the money supply remains constant, then what happens to prices?

    16. Re:How can a currency be an investment"? by Billly+Gates · · Score: 1

      Try to store gold for your great grand children. Now try to store bitcoins for your future self within 20 years. Gold has been the default choice to protect your capital for thousands of years.

      A share in a company historically has a much much better rate of return as a company actually provides value and creates wealth rather than speculators jerk the price up. Also if you bought gold lets say in 1890 the value even if it goes up is eaten away by inflation by the dollar.

      True some companies go out of business but the majority do not after they make it to the stock market as a trade

      --
      http://saveie6.com/
    17. Re:How can a currency be an investment"? by Billly+Gates · · Score: 1

      Here is the difference betting on Miami apartments or oil actually generates revenue in addition to being able to trade. Yes downs happen but one creates money consistently. Gold and bitcoins do not. Only if someone wants to buy it more than what you paid hoping the value can go up. Yes housing got hit by this too but the prices are going up again. Why? Even if the value goes down you can collect rent.

      Gold is terrible and I am not a financial guru. Dave Ramsey has a point in investing in something that generates revenue is always a much better long term bet.

      My boss loves Poker and Las Vegas and we have funny arguments on his so called 2nd job generating revenue. Sure you can win one good hand on a poker table but is this a wise long term investment?

      To me it is not gambling as much per say if one does a return on investment. I got into a flamewar 5 ytears ago on shares with no dividends. I refuse to invest without a solid dividend because it is Monopoly money that someone MIGHT pay more for later. Hmm no thanks.

      --
      http://saveie6.com/
    18. Re:How can a currency be an investment"? by Billly+Gates · · Score: 1

      Providing a service vs a currency is different. Yes a service generates money. Having a piece of paper called a dollar does not and goes down in value over time because of inflation.

      My point is there is a big difference between investing and gambling. Sure McDonalds might not be doing well at hte present moment due to intense competition, but it generates consistent revenue from customers. You won't see the wild swings and historically has grown more than gold or other commodities. Even housing is going back up due to it collecting rent every month which is a great value. Do your bitcoins make money every month?

      --
      http://saveie6.com/
    19. Re:How can a currency be an investment"? by Dagger2 · · Score: 1

      Then use gold for that. Use the right tool for the job; when you want to store money, Bitcoin isn't it.

      (I'm not convinced that gold is either, but Bitcoin definitely isn't. Bitcoin is for moving money around, not for keeping it.)

    20. Re:How can a currency be an investment"? by djinn6 · · Score: 1

      Investing is more than trying to make the most money long term. It must also take into account when you need to spend that money. If you're on the verge of retirement and you suspect there's disaster coming, then putting 20% of your money in gold is perfectly reasonable, because if the economy crashes, then you have something to fall back on.

      The idea that you can diversify away all risk using traditional investment vehicles is provably false. Bonds depend on the issuer not going bankrupt, currency depends on the country's economy, real estate can become worthless and obviously stocks can fluctuate wildly even in good years. With an increasingly global economy, if one large country fails, then you will see a chain of failures all around the world. All of your investments will fail at once, leaving you with absolutely nothing. At that point, that $50k you put into a stable currency substitute is going to put food on the table until everything recovers.

      Yes, you'd lose out on maybe 3% of income if disaster never comes to pass, but that 3% isn't worth nearly as much to you if the rest of your investments are doing fine.

    21. Re:How can a currency be an investment"? by nedlohs · · Score: 1

      You are free to pretend that wealth preservation isn't a valid form of investment.

      Yes gold is not going to generate income, in fact it is going to have holding costs. It is a terrible thing to put large amounts (in relative terms) of money in, it is not however betting on disaster when it isn't large amounts. It is hedging against downturns in the asset classes that historically have had a negative correlation with gold. No every part of an investment has to be income generating.

      And no you can't always collect rent. It's within the realm of possibility for the value of real estate to go to 0. Locations can become uninhabitable for various reasons. Having 100% of your money invested in apartments in Chernobyl in 1986 probably wouldn't have worked out well, for example. Not a lot of renters...

    22. Re:How can a currency be an investment"? by peawormsworth · · Score: 1

      Bitcoin is safer than gold for long term storage. At least in some respects. So what is your prediction for Bitcoin in 20 years? And why will it be less safe than gold stored for an equal amount of time?

      I agree with your opinion that Bitcoin competes more with cash, checks and credit cards than gold, but bitcoin also has strong points in terms of storing value. For example, you can create "paper wallets" where the keys are never stored on a computer so it cannot be stolen by hacking a digital device that you own. Or you can create multi-signature wallets which allow you to split the keys between multiple locations. So if one bank vault is robbed, your coins are not at risk and can still be moved to a new secured location at your leisure.

      Once the robber breaks into the vault, your physical gold is gone. But Bitcoin is like "ether gold" where you can divide it into 3 or more parts where you need to combine 2 or more of these parts before you can reconstitute and move the original "ether gold".

      The gold you left for your great grand kids is not protected by advances in cryptography.

      And also: you can verify that your bitcoin is exactly where you think it should be from a remote location. Gold in a vault requires you to go to the location where it is stored and then inspect it in person. And this assumes that your gold investment for your grandkids is something more than a piece of paper promising gold on demand in the future. Whereas, you can safely view your bitcoin exists where you expect without creating any additional risks to its safety.

    23. Re:How can a currency be an investment"? by Dagger2 · · Score: 1

      Cool cryptography stuff is cool, but it only protects the coins, not their value. And who knows where that's going to go; if China and the US made it illegal or impractical to run a Bitcoin exchange then that would remove a lot of the speculation that's currently pushing Bitcoin's price up.

      I don't really have any idea how good gold is for storing money either, it's just that the AC clearly thought it was a good idea so I figured I'd run with it. You're free to bet on whatever you think will work out well. I'm just tired of seeing people claim that Bitcoin is a failure due to not being good at doing something that it wasn't designed to do.

  11. Currently shouldn't perform by Anonymous Coward · · Score: 0

    It should facilitate transfer of wealth.

    1. Re:Currently shouldn't perform by cant_get_a_good_nick · · Score: 1

      Though i agree with your title 100%, there's another thing it does and that's act as a store of wealth. People confuse an appreciating currency as one spectacularly storing wealth. They are confused.

      Having an appreciating store of wealth is actually very bad for a currency. People don't spend money, they hoard it to let it appreciate. Hoarding instead of spending and keeping the economy flowing is pretty much the exact opposite of what you want.

  12. It is too volatile by OneHundredAndTen · · Score: 1

    For as long as it remains this volatile, its importance will remain minor.

    1. Re:It is too volatile by Anonymous Coward · · Score: 0

      most people use bitcoin by converting as much as they need then spending it right away. volatility doesn't matter in that case.

  13. Bitcoin president? by Anonymous Coward · · Score: 0

    You people are fucking hilarious. This world is inhabited by and run by people who don't know what the fuck is going on; the stupidity and incompetence is ENDLESS.

  14. Your exchange rate is wrong by Anonymous Coward · · Score: 0

    $500k does not equal £600k

  15. "... was ..." by CaptainDork · · Score: 1

    ... being operative.

    --
    It little behooves the best of us to comment on the rest of us.
  16. 3 Requirements for a currency by FeelGood314 · · Score: 0

    1. Store of value
    2. Medium of exchange
    3. Unit of account

    As long as it doesn't drastically lose value bit coin is a good store of value.
    Where it is accepted it's transaction costs are very low compared to using banks or credit cards. It does differ from cash in that transactions do not occur instantly.
    Unit of account is where bitcoin currently fails to be a currency. Very few items are actually valued in Bitcoin. Most items are valued in US dollars and then the current bitcoin conversion is quoted. Even if I had an online business that sold everything in bitcoin I would still likely count the value of my inventory in US dollars, or Euros.
    2017 might be the year that bitcoin does become a unit of account. If the weekly/daily fluctuations in its value compared to other major currencies decrease then I could very well see it used as a unit of account in places like Argentina, Venezuela, Egypt or any other moderately wealthy, educated country with an unstable local currency. Currently bitcoins value is too variable to be a unit of account. Where it is accepted it is a very good medium of exchange with low transaction costs. It is used as a store of value - There are many countries where bitcoins medium term stability is better than the local currency. So bitcoin has 2 out of the 3 requirements for a currency and it may with time gain the 3rd.

  17. Not as good as the zimbabwe dollar! by Anonymous Coward · · Score: 0

    The zimbawbe hundred trillion dollar note has gone up by over 1500%!

    https://www.theguardian.com/money/2016/may/14/zimbabwe-trillion-dollar-note-hyerinflation-investment

    1. Re:Not as good as the zimbabwe dollar! by _Sharp'r_ · · Score: 1

      The zimbawbe hundred trillion dollar note has gone down by over 1500%!

      Fixed that for you. You're thinking of deflation, not inflation. Bitcoin is gaining in value relative to other currencies and commodities. The Zimbabwean currency is losing value.

      --
      The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
    2. Re:Not as good as the zimbabwe dollar! by Anonymous Coward · · Score: 0

      Read TFA you moron. The notes are worth more now than they were first printed.

    3. Re:Not as good as the zimbabwe dollar! by _Sharp'r_ · · Score: 1

      You're thinking what they were once worth to collectors as a rarity, not of their worth as currency.

      From the article:
      "In 2009 the government scrapped the currency, leaving US dollars and South African rand as the main notes and coins in circulation. To this day, Zimbabwe still has no currency of its own, although the government last year offered to swap old deposit accounts into US dollars, giving savers $5 for each 175 quadrillion (175,000,000,000,000,000) Zimbabwean dollars."

      So as currency you can maybe get $5 for 175,000 of your trillion denomination notes now....

      --
      The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
  18. No, it wasn't by Sycraft-fu · · Score: 3, Interesting

    Not just because it doesn't work as a currency, but because for currencies big swings in valuation, up or down, are no "good performance". Ideally a currency would be completely stable. What $1 buys now would be what $1 buys tomorrow, and what it buys in a thousand years. Of course in reality none of them are totally stable, but the good ones are pretty stable. They move a very small amount, and do so very gradually. They function as a good store of wealth for that reason, and more importantly make for a useful medium of exchange. Since their value is pretty constant, people have a good feeling for how much they are "worth" and can mentally price things.

    Bitcoin did well as a speculative bet. If you want to play financial speculation, Bitcoin is a good target as it moves like a very thinly traded stock. That means it can swing bit and make you a lot of money. Also means it can swing big the other way and lose you a lot. So like any sort of speculation, you need to know what you are getting in to and understand the risks.

    You BTC promoters can't have it both ways: If Bitcoin is a good currency then it needs to be stable. If Bitcoin is a good investment, then it isn't a currency.

    1. Re:No, it wasn't by Anonymous Coward · · Score: 0

      An ideal currency is predictable, not "completely stable". A small amount of inflation is better than no inflation at all. It's necessary social lubricant.

    2. Re:No, it wasn't by Orgasmatron · · Score: 0

      Bitcoin is unstable because it the market is small, and the market is small (mostly) because it is new. It won't always be new, and it won't necessarily always be small. It also doesn't have any laws favoring it the way that, for example, the dollar does in the US.

      It does, however, have the advantage that no bank or government can devalue it by inflation. Instead, the inflation function is well known up front.

      At any rate, bitcoin is just math. It has no more influence over what people say about it than the moon has.

      --
      See that "Preview" button?
    3. Re:No, it wasn't by Anonymous Coward · · Score: 0

      Ideally a currency would be completely stable. What $1 buys now would be what $1 buys tomorrow, and what it buys in a thousand years.

      Even better, a currency would be very deflationary. What $1 buys now, would be what $0.50 buys tomorrow. This way, we'd quickly have a world in which everyone is insanely rich and no-one has to work.

      Maybe it's not possible to design a currency which doubles in value every day (the example is illustrative), but surely we should prefer a currency which gains 5% a year to one that gains nothing, all else equal.

    4. Re:No, it wasn't by Big+Hairy+Ian · · Score: 1

      So it dumped 30% in two days a bit like Sterling (GBP) in June 2016

      --

      Build a Man a Fire, and He'll Be Warm for a Day. Set a Man on Fire, and He'll Be Warm for the Rest of His Life.

    5. Re:No, it wasn't by Sycraft-fu · · Score: 1

      Well two things there BTChead:

      1) Some currencies DO move large amounts and that is NOT considered successful. When the pound was experiencing instability, that was a big cause for concern. It was not considered a "success" as people seem to think for BTC.

      2) It was 8%, not 30%. Bit of a difference there.

      Like I said before: You can't have it both ways. If you want it to be a good currency, then stability is what you want. If you are happy with rapid fluctuations, then it is a speculative betting opportunity.

  19. Performing? by thegarbz · · Score: 2

    The ideal currency doesn't bounce around, it moves back and forth only to provide economic stimulus or a break on the economy. The "ideal" currency shouldn't rise or fall and I think McDonalds shares would form a far better currency than bitcoin.

    1. Re:Performing? by peawormsworth · · Score: 1

      The ideal currency doesn't bounce around, it moves back and forth only to provide economic stimulus or a break on the economy.

      So you think a "ideal currency" does this without the hands of a 3rd party manipulating it in order to benefit the economic needs of one nation over another? Or do you think a "ideal currency" just does this naturally?

      Is it your opinion that these fluctuations help to stimulate or slow an economy when the country needs it? Or are do those fluctuations happen to allow more of the "ideal currency" to fall into the hands of those 3rd party manipulators?

      I am guessing what you are saying is that Bitcoin needs a 3rd party manipulator in order to ensure that its value suits your economic needs. I am suggesting that the opposite is what gives Bitcoin unique value over the "ideal currency".

    2. Re:Performing? by thegarbz · · Score: 1

      So you think a "ideal currency" does this without the hands of a 3rd party manipulating it in order to benefit the economic needs of one nation over another?

      No quite the opposite. An idea currency provides a handle on the economy.

  20. Compared... by Anonymous Coward · · Score: 0

    ... To pounds. Didn't pounds loose that much over the months of Brexit? And Bitcoin did that in a day.

  21. Still not even close to Black Opal. by Khyber · · Score: 1

    Which is worth $2,355 per 0.2 grams.

    Wake me up when Bitcoin gets even close to that value. Meanwhile, I'll sit on my 500 carats of Lightning Ridge.

    --
    Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
    1. Re:Still not even close to Black Opal. by Anonymous Coward · · Score: 0

      Wake me up when Bitcoin gets even close to that value.

      Wake me up when I can use my black opal to buy alpaca socks.

    2. Re:Still not even close to Black Opal. by Anonymous Coward · · Score: 0

      Black Opal is only worth $2,355 per 0.2 grams? That's just $235.50 per 0.02 grams. A bitcoin is worth $908.13 and certainly does not weigh as much as 0.02 grams.

    3. Re:Still not even close to Black Opal. by Khyber · · Score: 1

      In the Andes, people would take the black opal all day.

      --
      Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
  22. Unbiased source says... by JustAnotherOldGuy · · Score: 2

    "Bitcoin president Nicolas Cary writes that bitcoin has become more stable than many of the world's top currencies"

    Bitcoin guy says "Bitcoint is awesome!". Film at 11.

    Except as others have pointed out, its volatility means it is in NO WAY "stable" by any use of the word that I'm familiar with.

    --
    Just cruising through this digital world at 33 1/3 rpm...
  23. Re:Official by hackwrench · · Score: 1

    Well on what basis did they become "official"? Where are they located?

  24. Re:problems by hackwrench · · Score: 1

    Or maybe neither is the problem it is made out to be. Just how big a problem the original poster thinks it is really wasn't specified, just that Bitcoin wasn't suitable to do it with. Or maybe being criminal isn't the problem it is made out to be. I hear it's great to be a big-time criminal, but lousy to be a two-bit one.

  25. Wait, what? by rebelwarlock · · Score: 2

    You compare it against "many of the world's top currencies", and then reveal those currencies to include the Egyptian pound and the Nigerian naira? You ignore the wild surges and plummets that take place in very short time spans, then call it stable? You call it a currency at all, then compare it to stock? What is going through your head, the Meow Mix jingle on loop?

  26. yeah, whatever by Anonymous Coward · · Score: 0

    The point of a currency isn't to increase in value. Its to facilitate transactions, and from the perspective of the nation-state, to accommodate economic growth. On that mark, bitcoin fails, and cannot help but fail, because it is intrinsically deflationary.