Vince
The Daily Attack

In spite of attention grabbing headlines, Bitcoin has proven its resiliency the past few days by maintaining a stable price in the $16-17 per BTC range. Many wrote off Bitcoin as doomed after it’s largest exchanger, MtGox was taken off line following a wave of abuse and hacks that caused a panic sell off. What most have failed to realize, however, is that the attacks were not on the infrastructure of Bitcoin itself, but on MtGox. Bitcoin itself remains intact and as secure as ever. The only thing that has changed is that scammers have taken note of what was an immature, innocent community that had sprung up around the crypto currency. That same community has pulled through, and is unlikely to fall for the same tricks again.

Why has Bitcoin retained value through it all? The reason is that it’s fundamentals are intact.

What are it’s fundamentals?

• It’s low transaction cost – you can send payments across the world for less than a penny. Try that with a credit card.
• It’s decentralized nature – no issuing authority can manipulate it, nor can an outside entity. Compare that to E-gold or the Liberty Dollar. Granted, Bitcoin is yet to be tested by a crackdown from the Federal Government. Still, what exactly could they seize? They’d have to shut down the internet or at least ban individual users to fully stop it.
• It’s relative anonymity – taking a few precautions, you can expect a pretty reasonable level of anonymity in spending bitcoins.
• It’s cash like nature – what’s spent is spent. There are no automatic charge-backs. Though some may count this as a fault of Bitcoin, I know there are merchants out their who would see it as an asset, compared to the nightmares that a service like paypal and credit cards can cause.
• It’s finite nature – we know the maximum number of Bitcoins that will ever exist, 21 million. The usefulness of this feature is debatable. But one thing is for sure, this feature differentiates Bitcoin in the market from fiat currencies, which tend to be inflationary.

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