An article about bit coin

[brimic]

What do you feel that this problem signifies?

Bubble.

[AJ Dual]

Put the central banks in charge of bitcoin.  Problem solved.  

Seriously, bitcoin just dropped ~80% in a year.  That's borderline hyperinflation territory.  This isn't a problem for you?

Relative currency valuations is not exactly the same thing as inflation/deflation. The relationship between goods (and debts) and the currency is.

Although in this case I'll admit it's a good stand-in as Bitcoin is still new enough to not have an "internal economy" onto itself that's independent of external comparison.

But as Micro explains, the point of Bitcoin (from the standpoint of people who created it) isn't an investment vehicle, it's to function as a currency, and most importantly, one that's free of statist and corporatist influences. Obviously it does need to represent a stable store of value over reasonable lengths of time to do so, and hopefully it will as it matures. For all I know, the devaluation of Bitcoin is a good thing, because it's lowering entry barriers to more potential users, and people will start using it as an exchange medium rather than a speculation/investment vehicle.

So much of the criticisms of Bitcoin are like someone ragging on the Wright Bros. because they didn't come up with a 747 right out of the gate. Someone/something has to be first, someone has to try.

[Ron]

Does that explanation and theory really comfort and warm those in face of the reality of the loss of actual buying power?

I'm not opposed to bitcoin but it doesn't look like a real attractive alternative either.

Nothing I do really requires anonymity so what value does bitcoin offer me? Certainly not stability.

I want out of our fiat system for stability as well as preservation of wealth. Bitcoin isn't delivering so far IMHO. 

[Headless Thompson Gunner]

But as Micro explains, the point of Bitcoin (from the standpoint of people who created it) isn't an investment vehicle, it's to function as a currency, and most importantly, one that's free of statist and corporatist influences. Obviously it does need to represent a stable store of value over reasonable lengths of time to do so, and hopefully it will as it matures. For all I know, the devaluation of Bitcoin is a good thing, because it's lowering entry barriers to more potential users, and people will start using it as an exchange medium rather than a speculation/investment vehicle.

Is the purpose of bitcoin really to function as currency?  If so, it doesn't seem like it's working.  Good currency has several characteristics:  it's useful as a medium of exchange, as a store of value, for communicating prices/value of goods, etc.  Bitcoin can't do any of that worth a darn.

If the big point of bitcoin is to be exchangeable independent of government regulation and oversight, well then that's something different.  Bitcoin isn't monitored by government, but that's because it's an obscure novelty that nobody really cares about.  If bitcoin ever gains widespread acceptance, then you can be sure that government will find a way to muscle in on it.  This isn't a shortcoming of bitcoin, it's a shortcoming of government, and bitcoin can't fix it.

Bitcoin is caught in a catch 22 in this regard.  Its success will be its demise.

So much of the criticisms of Bitcoin are like someone ragging on the Wright Bros. because they didn't come up with a 747 right out of the gate. Someone/something has to be first, someone has to try.

Fair enough.  Try all you like.  I hope you succeed some day.  

To me, today, bitcoin just feels phony.  At the risk of offending people, and that's not my intent, I see bitcoin as a libertarian version of the Prius.  It's just a tribal identifier. 

[freakazoid]

Put the central banks in charge of bitcoin.  Problem solved.  

Seriously, bitcoin just dropped ~80% in a year.  That's borderline hyperinflation territory.  This isn't a problem for you?

And how much have precious metals fallen?