I am kind of embarrassed to admit that after all these years, I still don't understand Bitcoin. Not the underlying software and algorithms - but the concept, the system.
I can maybe see where it'd be useful in minimizing electronic transaction costs. But, most transaction costs (credit card fees) that I pay are already rolled into the price of things, so I don't benefit by purchasing them with Bitcoin. And, I guess I can see that it'd be useful to maintain anonymity, but I don't have that use case. Isn't it just easier to buy things with Dollars?
I also don't understand the dynamics of it. Doesn't it require increasingly more capital to mine coins and to maintain the ledger? What happens when the value of a coin is less than the mining costs or ledger maintenance? Or, does the coin just keep continuing to increase in value? And, if so, what's to stop people from just using another crypto-currency?
And, what is the 'value' of a coin? The article implies that the value is created by the users' trust in the value. But, is that how currencies generally work? I had assumed that currencies either have tangible value, like precious metals, or that they are abstract derivatives of another's debt (government or people).
I can maybe see where it'd be useful in minimizing electronic transaction costs. But, most transaction costs (credit card fees) that I pay are already rolled into the price of things, so I don't benefit by purchasing them with Bitcoin. And, I guess I can see that it'd be useful to maintain anonymity, but I don't have that use case. Isn't it just easier to buy things with Dollars?
I also don't understand the dynamics of it. Doesn't it require increasingly more capital to mine coins and to maintain the ledger? What happens when the value of a coin is less than the mining costs or ledger maintenance? Or, does the coin just keep continuing to increase in value? And, if so, what's to stop people from just using another crypto-currency?
And, what is the 'value' of a coin? The article implies that the value is created by the users' trust in the value. But, is that how currencies generally work? I had assumed that currencies either have tangible value, like precious metals, or that they are abstract derivatives of another's debt (government or people).