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Old 03-30-2013, 06:06 PM   #10
Ring of Famer

Join Date: Nov 2006
Posts: 5,123


The vast majority of "use" of Bitcoin is currently:

* People trying to get rich quick, riding the bubble.
* Drug dealers, child pornographers, and anyone else interested in doing online transactions "anonymously".

The problem is

a.) There is absolutely nothing backing the value of Bitcoin other than people think it has value. At least a USD is backed by the U.S. economy. Roh's comment about unicorns pretty much sums it up. Bit coin has a high probability of having zero value tomorrow. It's happened before and will happen again when various nodes in the system were compromised. The USD and other fiat currencies, as vulnerable as they are, will not lose all their value because someone hacked a single server.

b.) Bitcoin isn't actually anonymous. Every transaction (including what 'addresses' were involved) are recorded permanently. The only way to gain anonymity is to attempt to prevent whomever from knowing that you are the owner of a particular 'address'. Use of tools like Tor, and technologically complex solutions (i.e. splitting a single transaction into thousands of individual transactions), etc. can help, but at the end of the day you have to get someone to convert Bitcoins into whatever currency you actually want, which means you have to tell someone what 'addresses' you own.

In addition, there is no way to "insure" bitcoins like in a bank with USD. Get your computer compromised and have someone take all your bitcoins? To bad! Good thing it's not trivial to compromise the typical computer user's system with real simple things like clicking on the wrong link from the Mane!
Fedaykin is offline   Reply With Quote