The Truth About Bitcoin and Alternative Currencies

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Bitcoin has been making headlines for months. With the price fluctuating wildly, is it really a currency, or just a scam? To find out, we have to analyze its properties.

Gold and silver give us good examples of which properties make a sound currency, and bitcoins seem to measure up well. Will they ultimately outcompete the US dollar, gold, or silver? We can’t know, but with the Federal Reserve devaluing the dollar every day, it is only a matter of time before people start looking for an alternative currency.

To learn more, visit: http://www.fee.org/the_freeman/detail/is-bitcoin-a-viable-currency, and to learn the basics of Bitcoin, visit: http://www.fee.org/the_freeman/detail/bitcoin-for-beginners

Bitcoin address: 15wDJRfsyomAgvX2TdW32gdYtAWZtAd1ps

Scripted, animated, and produced by Steve Patterson. Special thanks to Julia Patterson.

21 COMMENTS

  1. A limited supply… and who decides how limited? who decides its distribution? Fiat money is controlled and regulated by the state and financial industry. Bitcoin is no fucking different. It's controlled and regulated by those with the technical expertise and the greatest share of computational power. All you delusional people can't see the obvious. Only the people can control and regulate the limitation and distribution of a currency. It's the exchange of promises between free and equal persons that should determine economic life. Bitcoin is bullshit capitalism 2.0. Fuck you.

  2. Top Lel. I love how you butchered Aristotle's definition of money. Gold and Silver have remained valuable because gold and silver have intrinsic value. BitCoins do not. Enjoy your private sector fiat currency. 

  3. The value of bitcoin has seen massive fluctuations over the last 24 months, one cause of the drop in value of bitcoin was the collapse of an international drug ring, I'm not sold on bitcoin at all

  4. I love how they just brushed over the biggest problem of bitcoin, which is that's it's a much more speculative currency than all the others. Twenty new cryptocurrencies could pop up tomorrow and everyone could lose interest in bitcoin. It could easily be the MySpace of currency, or worse, the Friendster. The dollar's weakness is also it's strength — which is that it's an officially recognized state currency managed by a central bank. 

  5. SO MUCH BULLSHIT. THEY FORGET THE MOST IMPORTANT PART OF IT, AND IT'S FUCKING SECURITY. HOW CAN YOU SECURE ONES AND ZEROS FOR FUCKS SAKE, IT'S UNREAL. THE MONEY WHICH IS NOT MATERIAL BUT VIRTUAL IS FAIL. THIS VIDEO SO GHEY.

  6. I thought this was going to be an educational video, and it has good educational content, but all the complaining about the Central Bank and the Federal Reserve puts this outside of the realm of educational and makes it propaganda. The example of paper currency could have been made with any currency and any regulatory body; it did not have to specifically complain about the US's current system.

  7. To say that bitcoin "stays valuable" is a little misleading. We can say that about gold and silver because they have an extremely long record of being desired by humans for their physical attributes: their beauty and utility.

    It's vanishingly unlikely that mankind will wake up one day to find that it no-longer finds yellow shiny things attractive; nor is it likely that the element Au will cease to be useful. We can't have that kind of confidence in bitcoin, as much as I wish we could.

  8. I don't think Bitcoins or other digital currencies is going to be the main stay. Gold and silver will be. The one thing that Bitcoins lack is intrinsic value. Yes, they may be more portable and unlike paper currencies, have a limit to the amount of Bitcoins, but as long as you don't have the intrinsic value, that particular currency is not going to last. That is true for the last 4,000 years and I don't believe anything is capable of changing that. Man has used gold and silver as money for the past 4,000 years and they still hold value, and the value is most probably going to stay in-tacked infinitely.

    The value that gold and silver holds comes from the chemical properties (intrinsic value). Gold and silver glitters, they cannot corrode, they are extremely malleable, they are a good conductor of heat, and recently with the introduction of electricity, the demand for gold and silver pushes forward further as they are very good conductors of electricity. That is why people want to buy and keep gold and silver for their intrinsic value.

    The only reason why you are going to buy a Bitcoin is because you are going to sell it to someone. Hoping that someone is willing is trade it for goods and services. That's because you can't do anything with a Bitcoin, because unlike gold and silver, Bitcoins are not tangible and there is hardly any chemical property or intrinsic value backing it up.

  9. I think there can be a marriage between bitcoin (or any other cryptocurrency) and a commodity (gold/silver). I think markets evolved naturally to paper because it is superior as a medium of exchange. (no one likes carrying around quarters/silver) So it made sense to back paper with gold that way you can have the intrinsic properties and longevity of gold without sacrificing the convenience of paper. Digital currency is superior to the paper but nothing can beat a hard commodity in the long run. 

    Money 1.0 = Gold/silver
    Money 2.0 = Paper
    Money 3.0 = Cryptocurrencies, paypal, visa, digital forms of money

    It makes sense to tier money 3.0 on top of gold/silver just like we did with paper.

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