I don't know if this is a troll post, but I'll humor it anyway.
> The first is that it is insecure. As seen by the constant incidents of stolen and lost bitcoin's.
If this is the standard by which you deem a currency insecure, you may want to be more specific. Physical goods are also susceptible to theft.
> Physical currency is much more secure than a string of bits sitting on a hard drive
This isn't really substantiated by anything, and I implore you to read about paper wallets. But you're also ignoring another useful characteristic of bitcoin: coins cannot be counterfeited, unlike any other currency. They are crytographically ensured.
The security of your funds is not inherently endangered by the network by any means. I can accept bitcoin donations anonymously and there is no way they can be targeted without additional context. With physical transactions, there is always location.
> The second is that it's much less convenient than cash.
Cash is much less convenient than digital transactions. Have you heard of a credit card? Cash is only useful for anonymity.
> The third is that the distribution system is set up as ponzi scheme where early adopters reap enormous amounts of wealth if they recruit more bitcoin users(which is why the bitcoin astroturfing is so persistent), people generally don't like participating in ponzi schemes.
The currency incentivizes its own operation, yes, but this is not even close to a ponzi scheme -- you should look that term up. The technology does not distinguish early adopters from other participants.
> If this is the standard by which you deem a currency insecure, you may want to be more specific. Physical goods are also susceptible to theft.
Theft and loss of bitcoin is much much more common than theft and loss of any normal currency. Insecure.
Bitcoins are data, and data is very easily lost. What if the hard drive with your wallet on it fails? When a hard drive fails at a bank your money is still secure. Storing bitcoin on a home computer is not even close to as secure as storing money in a bank.
>Cash is much less convenient than digital transactions. Have you heard of a credit card? Cash is only useful for anonymity.
Bitcoin is much less convenient than cash and credit cards. Nobody accepts bitcoin as payment. And as far as I know there is no existing way to link a bitcoin account with a credit card. I'm not saying the flaws are unfixable just that they are huge flaws with bitcoin. I'm criticizing bitcoin for what it is, not what it could be.
>The currency incentivizes its own operation, yes, but this is not even close to a ponzi scheme -- you should look that term up. The technology does not distinguish early adopters from other participants.
The bitcoin distribution system is a big problem. Whatever you call it, it is an unfair and unstable system where early adopters profit when more people adopt the currency, and late adopters end up holding a risky asset with unstable value. Without a backing authority stabilizing the price, alternative currencies are just toys and far too risky for normal people to get involved in.
> Theft and loss of bitcoin is much much more common than theft and loss of any normal currency. Insecure.
That's a pretty big conclusion to jump to. People using the currency have more of a burden to protect their bitcoins from hackers, I'll admit, but it is not fair to blanket describe the currency as insecure because of the practices of some lousy companies.
> Bitcoins are data, and data is very easily lost. What if the hard drive with your wallet on it fails?
Did you read about "paper wallets" like I mentioned? It's not a problem for most people, but if it's a problem for you, there are ways to avoid it.
> Bitcoin is much less convenient than cash and credit cards. Nobody accepts bitcoin as payment.
Is this really your argument against bitcoin individually? What you described applies to pretty much any currency in its infancy. Either way, my defense of bitcoin's convenience is of the mechanisms of exchanging them, not something as arbitrary as acceptance. You seem to be clasping to straws.
> The bitcoin distribution system is a big problem. Whatever you call it, it is an unfair and unstable system where early adopters profit when more people adopt the currency, and late adopters end up holding a risky asset with unstable value.
Hilarious. Can you give me one reason your last sentence didn't just describe an investment? Do you realize any other stock, commodity or currency will also naturally favor early adopters, because they can buy something when it's low and sell when it's high? What drawbacks could there possibly be for a system like that anyway?
I also don't understand what you mean by "bitcoin distribution system", would you like to clarify?
> What you described applies to pretty much any currency in its infancy.
Nitpicking here, but what is described applies to non-government-mandated currency or payment methods. Infant currencies can indeed very quickly gain widespread acceptance if introduced and mandated by government, as recently demonstrated by the euro.
You'll admit, though, that a bitcoin lost is lost forever, and that at some point the rate of lost bitcoins will exceed the rate of newly minted bitcoins. Even if it attains 100% adoption, the current system will simply dissipate.
In that sense, if not insecure, it certainly isn't resilient.
The current encoding of bitcoin on the wire allows for division to 8 decimal places, but there is discussion around improving the encoding sooner, rather than later. https://en.bitcoin.it/wiki/Divisibility_extension
There is no requirement for any number of coins to be in the system. The amounts are infinitely divisible. You could start the economy with 1 bitcoin, and break it into 7 billion fractions for everyone to share..and if all those are lost, you could do the same with the last 1 bitcoin again.
> There is no requirement for any number of coins to be in the system.
The math works out such that there are a precise number of bitcoins in the system, ~21M IIRC.
> The amounts are infinitely divisible.
8 decimal places.
Is that alot? Yes, but my point was that the current system is leaky. The rate of leakage may not be too bad now, but as the adoption rate goes up more careless nontechnical folks will get involved. Those people will fail to backup their wallets; that BTC will evaporate is an inevitable consequence of success.
This is a client-specific value, and not a necessary property of the protocol. They can become arbitrarily divisible by simply modifying the client code.
Of course new clients will not be compatible with old clients.
> But you're also ignoring another useful characteristic of bitcoin: coins cannot be counterfeited, unlike any other currency. They are crytographically ensured.
That's not a useful feature for me. Receiving counterfeit currency is very low on my list of concerns in life. It is a useful feature for governments, who would no longer need to ensure its currency isn't being counterfeited, but governments don't like this currency for a number of other reasons.
Counterfeit currency is only low on your list because the governments are working hard to prevent it.
If it was possible to print notes that could not be easily detected as counterfeit -- millions would be printed and it would devalue the entire currency.
It's possible to print notes not easily detected as counterfeit in the field with a lot of today's currencies. It's not very practical on a large scale in the long term because the government is intent on preventing introduction of meaningfully large amounts of fakes and has teams tracking these bills.
So bitcoin can't be devalued by "printing" fake "bills." That's a good prerequisite, but it's not a practical improvement for me over the current currencies.
> So bitcoin can't be devalued by "printing" fake "bills." That's a good prerequisite, but it's not a practical improvement for me over the current currencies.
Well, the value in bitcoin is that it can't be printed by anyone, even the goverments, uncontrollably - there will be only specific amount at max in circulation at specific time.
This might not be valuable to you, but it certainly will be for many else. Many people don't like the thing that goverments keep devaluing their fiat currencies.
Roughly on the order of $1 a year. I'm not going to lose sleep over that.
http://www.fin.gc.ca/budget06/bp/bpc3d-eng.asp names the amount for National Counterfeit Enforcement Strategy in 2006 as $9 million. I don't think these are the total expenses on preventing counterfeits, but it's within an order of magnitude. The official population count in the 2006 census was 31,612,897, so let's say the number of people who have paid any tax that year is around 30 million. Corporate taxes would complicate the "per taxpayer" calculation a little bit, but they would only make the amount smaller.
> The first is that it is insecure. As seen by the constant incidents of stolen and lost bitcoin's.
If this is the standard by which you deem a currency insecure, you may want to be more specific. Physical goods are also susceptible to theft.
> Physical currency is much more secure than a string of bits sitting on a hard drive
This isn't really substantiated by anything, and I implore you to read about paper wallets. But you're also ignoring another useful characteristic of bitcoin: coins cannot be counterfeited, unlike any other currency. They are crytographically ensured.
The security of your funds is not inherently endangered by the network by any means. I can accept bitcoin donations anonymously and there is no way they can be targeted without additional context. With physical transactions, there is always location.
> The second is that it's much less convenient than cash.
Cash is much less convenient than digital transactions. Have you heard of a credit card? Cash is only useful for anonymity.
> The third is that the distribution system is set up as ponzi scheme where early adopters reap enormous amounts of wealth if they recruit more bitcoin users(which is why the bitcoin astroturfing is so persistent), people generally don't like participating in ponzi schemes.
The currency incentivizes its own operation, yes, but this is not even close to a ponzi scheme -- you should look that term up. The technology does not distinguish early adopters from other participants.