Bitcoin thoughts

I’m not interested in trading Bitcoin.  It’s too hard to time when the crash will come.  It’s important to keep in mind, it’s not Tulip bulbs.  There is a rational basis for the currency.  Unlike traditional currencies:

  1. Flows from one country to another are not tracked
  2. Sender and receiver of a flow are anonymous, unlike any bank transfer or credit card transaction
  3. Flows are not taxed
  4. Balances are not identified with any country or legal jurisdiction
  5. No central bank can expand or contract the money supply for political reasons

These are benefits for Gold bugs, tax dodgers, rebels and criminals.  All of the value resides there.  I expect the competitive response to this will be a universal currency, UN-style, using the same technology, but addressing some of the above needs in some kind of legal way.  When that happens, Bitcoin will drop to 0 except for purely criminal transactions and other transactions requiring secrecy.

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