Comment Re:Bitcoin is not worthwhile as a currency (Score 3, Interesting) 476
IANAE, nor have I even properly studied economics, but it does seem like bitcoins by design can't help but become a bubble. I may not know much about economics, but it's telling that on seeing how increasingly slowly new coins were generated I had to resist the urge to buy up a bunch before adoption became widespread and they became valuable. A quick inspection of the bitcoin system reveals that since the number of bitcoins in existence is in no way related to the number of people using them, their value should go up as adoption goes up, which in turn leads some investors noticing this trait to try and buy up a bunch before they get valuable, leading to a bubble.
Also the amount of processing that goes into them seems a massive waste of electricity/energy. I understand the need with this generation system to make it not worthwhile to forge bitcoins, but the result has been massive amounts of kWh going in to farming bitcoins, generally costing nearly as much in electric bills as the value of the bitcoins. It's just such a ridiculously wasteful way of 'minting' currency, it makes me very skeptical of the whole p2p currency idea.
I'm not sure how their system could've been changed to avoid those problems - I expect it's extremely difficult to create a new currency without having a government to just say "We're using X". Maybe bitcoin could have worked if it adjusted better for the number of users to avoid the deflation bubble, or maybe any new currency needs to be backed by something until it gets off the ground.
I expect bitcoins will eventually go down in flames once the bubble bursts, and may well prevent any future better thought out attempts at the p2p currency thing from succeeding.