Prediction: Bitcoins will be irrelevant by 2013 and will never emerge from a very small niche market.
In fact, they are already irrelevant today. This is what happens when open source supporters, crypto experts and privacy nuts think an understanding of C++ and maths equates to knowledge of economics and monetary systems. Oh, and add in an unhealthy dose of paranoia and persecution complexes.
The technology and theory is interesting – bitcoins are effectively a peer-to-peer currency with various controls around their creation, existence, trading and (lack of) tracking.
From a monetary system perspective they are irrelevant. To show the extent of the problem, just read this nonsense article “explaining” why Bitcoins will always have value. The article includes how the “Federal Reserve rescued the dollar in 2008”. I must have missed that. Anytime supporters of a particular idea have completely incoherent arguments for it, that’s a pretty good sign there are no coherent arguments for it.
Prediction: None of MTN, Cell C or Vodacom will ever officially support Bitcoin.
I can’t begin to explain how many different ways this is a bad idea. Good news is several people already have. Much of the hype about Bitcoins and other cryptocurrencies stems from a lack of appreciation for the devastating impact of deflation, misunderstanding of what the money supply really is and the role of the Federal Reserve in this crisis and the Great Depression.
Now I just need to find a way to short Bitcoins.