Saturday, March 30, 2013

Economists on Bitcoin (FUD, Part Two)

Saw this article whose author is puzzled/confused about the value of Bitcoin as a currency.

Why do people concentrate solely on the currency itself?  Bitcoin would be absolutely not worth mentioning as more than a curiosity in encryption if not for its backing network.

The true value brought by Bitcoin is not in some imaginary inherent value in the private key that can unlock a transaction, it's in the network backing that transaction.  I don't believe in the value of a given Bitcoin per se, but I do have a lot of confidence in the long-term value of a Bitcoin in its corresponding eponymous network.

In short, neither the Bicoin currency nor the Bitcoin network have any particular value separately, but together they break new ground.

People who have their attention focused solely on the monetary aspects are understandably confused.  It's like wondering why people think television breaks ground when the audio quality is no better than radio.

Unlike that author, my comments section is open.

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