Never have I written a blog post with so little preparation, but in the wake of reading this steaming rant about Bitcoin (which was upvoted gratuitously on HN), I was compelled to do my worst.
Fact #1 – Bitcoin ≠ the Gold Standard.
Is Bitcoin a deflationary currency? Yes. That’s where the similarities end.
I cringe when people make these kinds of historically inaccurate comparisons.
What was the Gold Standard? It was a system in which one currency was tied directly to a finite resource. There was no choice in how one could pay, payments were made in a vacuum. All transactions had to be made in a currency backed by gold. That meant that any abuse of the Standard could affect the economy negatively and runs on banks were almost inevitable.
Bitcoin’s contribution to “capitalism” is choice, not control. Having choice is antithetical to any form of Standard. Let’s keep it that way.
Fact #2 – Bitcoin is a convenient solution for web transactions
Anyone who’s interfaced with the Bitcoin client will tell you that it is a brilliantly written program that can be controlled easily via JSON-RPC.
It’s not “a stupid inconvenient currency that’s worse than paper” like gold. That guy really took the whole Bitcoin = Gold thing way way too far.
Fact #3 – Unlike w/Paypal, floating cash is not at risk of being frozen
As scores of entrepreneurs will tell you, Paypal is notorious for taking action without warning, especially when thousands of dollars are at stake. As the vast majority of online transactions rely upon a few trusted third parties, this makes “choice” even more relevant.
Fact #4 – Cool, mainstream services use and accept Bitcoin
The bigger problem is that services accepting BTC are hard to discover.
Fact #5 – Bitcoin is highly international
This only enhances the point that it’s not a standard. How could something so distributed (distanced from a fiat currency) be considered a Standard?