Bitcoin isn't a currency. It's a speculative bet on a social network instrument. As one person pointed out, a "digital house" has many benefits compared to a real house. A real house requires maintenance, taxes, lawn care, etc. whereas a digital house does not. But, a digital house you can't live in. Sure, you could "trade" digital houses, I guess, if there's a market for digital houses. But a digital house, just like a digital "coin", is just code. You need something tangible behind it. That's why a digital house is ridiculous, but a REIT isn't. Bitcoin is a ridiculous mania given there's nothing tangible at the end of the day---but a gold Bitcoin where the Bitcoin were tied to something tangible would be logical.
A bank account is not tangible, either. It is just some ones and zeroes in a computer memory bank somewhere.
No one is laboring under the false notion that "a Bitcoin" is a "thing", in the sense that a house is a thing. Bitcoins exist as entries in an implied digital ledger (called the "Unspent Transaction Output set" or "UTXO set") that can be calculated by scanning the blockchain, starting from the Genesis block. The tally of this ledger is exactly equal, at all times, to the total number of Bitcoins that have been mined. So, if you were to add up ever ledger entry in the UTXO set right now, it would add to 16,683,662 Bitcoins. So, if you own 100 Bitcoins, then you own exactly 100/16,683,662 of the "Bitcoin pie", so to speak.
I've been reading that Bitcoin transactions take minutes---up to 10 minutes?? Contrasted to the pin-chip cards where people complained it took 5 seconds for a transaction...This is more glacial to transact than bidding on an eBay item in 1998 and paying with PayPal with dial-up internet.
An "on-chain" transaction requires a minimum of 10 minutes to confirm, but full confirmation requires 30-60 minutes. Lightning Networks, micro-payment channels and atomic cross-chain swaps allow transactions to performed off-chain, instantaneously and securely (no additional trust required).
will have gold-backed digital currencies that actually serve the purpose of being a currency.
I sure hope we will, one day. Bitcoin might even play a role in breaking up the central banking system that has got a stranglehold on the use of gold as a currency. Until the central banks are taken out of the way, nobody is going to be using gold as a currency, cf the LibertyDollar and other examples of gold-backed currency takedowns.
What we really need is a
free market in the production of money. And that's precisely what Bitcoin has made possible. Gold-backed notes, silver-backed notes and other kinds of currency that we haven't even thought of may one day become commonplace. Bitcoin is just one contestant in the market for money production.
Bitcoin is simply a social network.
That's incorrect. A social network is a computer system that enables a large number of users to selectively share personal information about themselves - Facebook, LinkedIn, Twitter, SnapChat, etc. Bitcoin is not even capable of telling you who else is using Bitcoin, so it fails to meet the definition of a social network.
labor-value theory argument that the "electricity to generate a Bitcoin = thousands of dollars" as if establishing a floor for Bitcoin price. That's ridiculous---
It is ridiculous. There are superstitious people who believe ridiculous things like Marx's labor theory of value and who use Bitcoin - they do not define what Bitcoin is.
If Bitcoin turns into MySpace,
Your comparisons of Bitcoin to Facebook and MySpace, and your description of Bitcoin as "a social network" indicate that you deeply misunderstand the basic operating parameters of Bitcoin.
From a blog post I'm drafting on this very topic:
What is Bitcoin? Bitcoin is a digital, distributed, peer-to-peer network for exchanging money between untrusted parties. The money that can be exchanged on the Bitcoin network is called Bitcoin (or BTC) and is denominated in units called "bitcoins" (also BTC). The Bitcoin network is not a money-transmission service (like Western Union, for example) because it is not transferring dollars or some other kind of money. The money that is exchanged over the Bitcoin network is its own monetary unit, that is, Bitcoin.
Let's break it down:
- Bitcoin is digital. This means that the Bitcoin network needs computers in order to operate although using Bitcoin does not always involve using a computer or mobile device. Bitcoin is based on digital computers.
- Bitcoin is distributed. This means that there is no "central hub" or authority that operates, maintains or regulates Bitcoin.
- Bitcoin is a peer-to-peer network. This means that every user connected to the Bitcoin network is the same as every other user connected to the Bitcoin network - all connected users are "peers". (Note: there are a couple different kinds of connections, which we will discuss below)
- Bitcoin is for exchanging money. This means that Bitcoin is not designed for other kinds of things which you might use a network for - sending messages, storing data in a database, and so on. The Bitcoin network is designed for one purpose and that is to exchange money between users.
- Bitcoin is for exchange between untrusted parties. This means that Bitcoin does not require users connected to its network (or anybody else, for that matter) to trust one another. This principle is built in at the core foundation of the Bitcoin protocol and it is rigorously applied at every level of Bitcoin's protocol.
