It is being used as a currency, and any metric on this far exceeds where people thought it would be a few years ago. It's also having massive adoption from a wide number of people. The reason the price is moving is not "speculation" as people seem to assume, but adoption.

MtGox said they were getting 20,000 new accounts a day recently. By definition, new accounts are not "speculators" putting in trades to manipulate the price, they are people putting in trades to acquire their first bitcoins.

People rushing into a currency, right after the EU forced bank depositors to lose %40-%60 of their money in a state run bank (which was only insolvent because they were forced to buy greek debt by the very same EU) is not "speculation" -- it is seeking a safe haven.

A lot of people hope bitcoin will be a safe haven away from these increasingly manipulated and untrustworthy national currencies.

That's a huge level of success, given the limited expectations for bitcoin only a few years ago.

Suddenly it's actually considered a viable store of value for some segment of the population. Sure, it's a small percentage, but still, it's massive.

"By definition, new accounts are not "speculators" putting in trades to manipulate the price, they are people putting in trades to acquire their first bitcoins."

What definition are you talking about? That sounds exactly like speculation. You do not need to manipulate anything to be a speculator, you simply need to be making a gamble that what you are betting on will increase [or decrease if youre betting against] in value.

You can use fractional bitcoins for pricing

You seem to be hellbanned; I'm not sure why. This is the last comment of yours I can reply to.

Having a thick skin isn't sufficient. Simply patiently explaining your position to people who are being hostile (eg: my previous experience on HN) doesn't do anything more than make them form up into mobs and start pursuing you and harassing you. (Seriously, everything from blatant name calling, to finding personal revelations in past comments and then posting them publicly to be mocked... ok I'm a minority, I should feel bad about that? Mocking me for being a minority was massively upvoted, while me asking why this was tolerated here was downvoted.)

Eventually, I find this site to be too much to waste time on, and simply left. (I doubt this account will last more than a day anyway.)

This site has a narrow minded and intolerant culture. (And those who are within the range of whats "Acceptable" think that its quite the opposite so they never see it.) This culture knows that it can call people names, attack them personally, dig up private information and harass them and get away with it because there will be no punishment-- since they all vote each other up in their game of "smear the queer".

This is, of course, why they do it. Hounding those who are different into leaving until you have an ideologically pure little "community".

Meanwhile the moderators of this site hellban people for the "crime" of linking to a scientific paper that disagrees with global warming (since this is a leftist site, obviously, if you disagree with global warming you're not part of the realm of people where "tolerance" applies.)

And so the people who are different leave, the "community" sits around and congratulates itself on how tolerant it is, never recognizing how completely homogenous it is.

> Meanwhile the moderators of this site hellban people for the "crime" of linking to a scientific paper that disagrees with global warming

Hellbans are not always moderator implemented. Usually hellbans are the result of people downvoting. Since climate change denialism is usually bullshit I can understand why that kind of link gets many down votes.

The other stuff sounds horrible, and surprising, and I'm sad if your account of it is accurate. For what it's worth I've seen personal attacks heavily downvoted, and I've seen homosexual-positive comments upvoted.

  This site has a narrow minded and intolerant culture.

Perhaps... I am not sure I agree, but I did not have your experience. I did, however, notice that people sometimes react more to the style and less to the substance of what has been said. Which is remarkable considering how much effort is usually spent on focusing on the substance. I suppose we are all human.

It is fairly homogenous, in that it's made up of mostly men with a strong engineering/computing/scientific bent. I've not seen people react that violently to anything, though. You must have either said something that stirred people up a lot, or you may be overreacting. It's almost certainly not due to your status as some sort of minority.

I agree with you, having a thicker skin is not sufficient, but to me it's not either/or, it's both/and. We need better communities and people with thicker skins. Sometimes things can become so evil and caustic, no skin in the world is thick enough to endure it. That's when it's necessary to leave.

HN is probably too large of a community to improve the vitriol that sometimes flows here. I like what http://lobste.rs is trying to do, where you need a recommend to submit and post.

Don't let the haters win! Let's keep trying.

I agree you have to pick your battles on HN. You have to realize, however, that it comes with the nature of the animal that the progressive left is much more outspoken and mob like in their views. There are more people that agree with you than you realize, it's just that few of them bother to make it public.

Still, if true, it is sad to see it on HN.

For a tolerant, civil, agreeable collection of intelligent human beings who are interested in perusing anti-global warming literature while taking your throbbing martyr complex into nuanced account at every step of the way, please navigate to about:blank. It loads a hell of a lot faster than HN.

Your quote is relevant, but it's a shame he doesn't address the implied claim that bitcoin doesn't "facilitate transactions". And while it is relatively small in that use now, he really needs to make a compelling argument to why it won't work that way in the future.

Further, it's worth pointing out that Krugman endorses a monetary system that makes people poor, via inflating the money supply by printing funds to underwrite policies that benefit, primarily, politicians.

A currency whose supply is fixed, or whose inflation rate is constant and predictable (like bitcoin) is better for facilitating transactions.

When you have a variable (and often high these days- in the US money supply is up over %50 in recent years) rate of inflation, it wrecks havoc with prices and other signals causing malinvestment and worsening the economy.

Something that Krugman, to my knowledge, has never answered for.

---

Since I am not allowed to reply to the person below me:

It's quite silly to to say that a limited supply of a currency is bad for it. There is little incentive to hang onto bitcoins. A simple example will prove this to you: The amount of computer you can get for a given amount of money improves dramatically every three years. You could just hold onto your money and buy a much better computer. Thus, relative to computers, the dollar is deflationary.... yet people still buy computers.

This is the kind of argument Krugman gives because he wants to excuse the inflation that has destroyed the dollar, and the economy.... but it is nonsensical. People still buy computers.

The "computers make the dollar deflationary" argument is terrible.

Deflation is bad because it shifts investment into savings.

Computers are mostly immune to this effect because until a company has enough computer equipment, it's one of the highest ROI things they can spend funds on, and once the need is filled, there is very little additional benefit from buying more. This gigantic cliff in the demand curve overwhelms any marginal benefit to altering the number of computers you buy.

Most of the targets of investment are not like that, and you see a small return on incremental investment after accounting for things like risk. Deflation makes these productive investments impractical because they lose out to just holding the currency.

Uh, Krugman's whole point is that the capped supply is inherently deflationary so the incentive is to hang on to bitcoins, ie, not the best attribute of a currency.

When did the notion that a currency which loses value over time is ideal become orthodoxy?

There are plenty of legitimate arguments that can be constructed against the idea of an inherently inflationary currency too.

"Best to have a stable currency with low inflation" grew out of hundreds of years of observations in the history of human production, prices, and mediums of exchange, and what conditions have traditionally leads to periods of peace and prosperity in a region, and what conditions have led to war, revolt, famine, etc.

In short, empirically, wages and prices are sticky. We assume it has something to do with humans being stubborn, but don't really know why. However, until our imminent replacement by the kind robots, currencies must move if people won't.

"It's quite silly to to say that a limited supply of a currency is bad for it"

I think the field of economics disagrees with you.