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30 December 2013 @ 05:57 am
Back to the drawing board.  
A nerd (relative to Paul Krugman) tells us that Bitcoin doesn't work.
Joshua Kronengoldmneme on December 30th, 2013 08:46 pm (UTC)
He doesn't, really. He just says that -he- doesn't see a mechanism causing bitcoin to retain value.

I'm guessing that bitcoin will continue to have real value as long as there's real money tied up in maintaining bitcoin.

The fact that you have to reveal your entire transaction chain isn't news; not -all- bitcoin value, or even most, is tied up in illegal transactions.

But the biggest likelihood of a crash is after the last bitcoin is minted (or close enough), whether the profit attached to transaction costs remains sufficient that it's worth keeping real money tied up in running miners.

As long as there's a lot of cash tied up in miners, the "value" of the bitcoin network is itself a basis for bitcoin value; if value spikes high enough more miners show up to underly it until the value per $ of miner is sufficient. But if people start pointing their miners at other networks, eventually the currency, its technology, and the entire basis for its existence crashes.