Comment: Why bitcoin will fail

(See in situ)


Why bitcoin will fail

For something to become a medium of exchange, it must already be valued as a commodity (regression theorem). More to the point, for something to be widely used as a medium of exchange, it must already be widely valued as a commodity. Bitcoin arguably meets the condition of the regression theorem (a handful of techies valued it as a commodity originally: "digital jewelry" as they say), but it is definitely not widely valued as a commodity, nor is it likely to be (IMO), and so it has very limited potential as money.

If you want to demonstrate that bitcoin has the potential to become money in a meaningful sense (a widely excepted medium of exchange), then you need to make a case for how bitcoin becomes a widely accepted commodity.

Note: by "commodity" I mean simply a good, whether a producer or consumer good. Hwwever, since bitcoin cannot possibly be a producer good (one cannot make anything with bitcoin), bitcoin can only be a commodity in the sense of a consumer good (e.g. as "digital jewelry"). So, again, if you think bitcoin can become a widely accpted medium of exchange, you need to explain how it first becomes a widely accepted consumer good.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."