Dr. Doom weighs in on Buttcoin:
Nouriel Roubini - bitcoin is bullshit. Here's the relevant quote:
As a currency, Bitcoin should be a serviceable unit of account, means of payments, and a stable store of value. It is none of those things. No one prices anything in Bitcoin. Few retailers accept it. And it is a poor store of value, because its price can fluctuate by 20-30% in a single day.If you don't know why that's important, go read the Wikipedia article on seigniorage, and maybe see if you can learn something.
Worse, cryptocurrencies in general are based on a false premise. According to its promoters, Bitcoin has a steady-state supply of 21 million units, so it cannot be debased like fiat currencies. But that claim is clearly fraudulent, considering that it has already forked off into three branches: Bitcoin Cash, Litecoin, and Bitcoin Gold. Besides, hundreds of other cryptocurrencies are invented every day, alongside scams known as “initial coin offerings,” which are mostly designed to skirt securities laws. So “stable” cryptos are creating money supply and debasing it at a much faster pace than any major central bank ever has.
Cryptocurrencies are just private seigniorage: they are printed, and then the printers accept goods and services (or, ha ha, real currency) for them.
In fact, it's blindingly obvious that a world with one private currency will quickly turn into a world of many private currencies, as long as the market offers more than the cost to produce. It is impossible to limit the total private currency money supply without hard-limiting either the cost of production or the going price.
Any idiot with a basic understanding of micro should know this.
And thus the only fair cost for any crypto is the cost of production: anything higher is just a seigniorage markup.