It's easy to explain. Bitcoins are like American Airlines miles. If someone enter a miles account of another person, and use the miles to buy or receive a reward it, then I'd call the miles "stolen". Perhaps we need a lawyer to pick the exact name of the crime.
The difference is that Bitconin is decentralized, so there in no equivalent of A.A. to handle the servers. But it's easy to understand that a number in a computer screen is valuable. Well, most of the dollars are only a number in a computer screen, not real life bills.
Maybe ... but the governments are terribly keen on Bitcoin and it would be easy for them to say "we don't believe a crime has been committed". I think it's far safer for the Bitcoin community as a whole to police themselves, but determining how to add "self-regulation" in a decentralized way may take some time.
I've just smiled to myself picturing those guys coming together and then slowly re-learning everything we know about statesmanship and politics. Like the moment they first realize different people have different values and want different things. Then they're going to come up with the idea of democracy and a parliament. Only this time around it will be the Aspergers among us who try to figure out how to influence people. :)
But, of course, the best bit will be when they, so rationally, decide to give up the final ruling power to a super-intelligent AI, and then the look on their faces when the AI decides to do something that, while 100% rational, nobody wants.
I'd be curious how that would shake down. If someone were to claim that they lost $USD 500k worth of Bitcoin, I imagine there'd be someone at the IRS who would be quite interested to look into how much this person paid on capital gains / income tax on the appreciated value of said bitcoin.... The person could be in for quite a tax bill!
It'll be interesting to see how much resources the relevant law enforcement agency assigns to this case and how succesful they are at apprehending the culprits.
It's an interesting question of how much resources law enforcement should assign to a case like this.
Many fierce proponents of Bitcoins are the anarchy-leaning libertarians. Its appeal is that government agencies can't track and tax it (or have a tougher time with it)
While I do think a crime has occurred, it feels a bit like collecting a benefit you refused to pay into.
I'll trade your tulips for some of 1999's hottest stocks: Enron and Pets.com. Someone on the Internet assures me that their share price will go back up eventually.
I know people keep making the comparison between bitcoin & tulips. I still don't understand why. I do understand that there is a lot of speculation driving bitcoin prices up & down right now and I also understand that BTC is experimental tech where the chance of a random disastrous event killing the whole thing is possible(like almost anything else that is new), but I also think that bitcoin, its protocol & services built around it can't be compared to a flower.
People believe Bitcoin has value because it's beautifully designed and mining coins takes effort, which gives each coin some kind of intrinsic value in terms of expended energy.
The Dutch believed tulip bulbs had value because the new breeds of tulips were beautifully designed and growing them took effort, which gave each bulb some kind of intrinsic value in terms of expended energy.
What makes a currency robust to bubbles, is it's practical ability to act as a means of transaction. Fiat currencies generally survive bubbles, because they are the only legal tender in some geographical region, making sure that transactions still have to be made with it even after a bubble bursts.
There is no inherit reason for the transaction volume of tulips to stay strong after a burst bubble, because they have no special practical ability. Whereas cryptocurrencies generally have a practical application, like fiat, that makes people want to keep making transactions with them, even after a bubble. The practical application of Bitcoin is its low fees and ease of use for person to person international transfers.
Bitcoins don't really do anything, do they? They're just inert bits. Of course there are computations you can run on them, but the output is not productive.
(Assuming infinite parallel universes, there's bound to be a universe where each bitcoin is the genetic code for an awe-inspiring dragon... But that's not where we live.)
The value in those bits is a cultural intangible: someone you trust tells you that there's a value beyond the practical level. This is like an invisible piece of metadata attached to the seemingly useless information.
It's the same reason why a vintage Gucci bag costs $2000 even though you can get a used leather bag for $5... Or why an Andy Warhol canvas with a dollar sign on it costs $20 million, and one painted by me can't be sold at any price.
I'm not sure what you mean by "Bitcoins don't really do anything". It's a decentralized digital currency with protection against double spending. Isn't that something?
