Bitcoin hate... I don't understand it... ?

[BlueStreak]

56. It is not a crime. It is how the system works

Think of it this way. There is defined a finite, specific number of bitcoins (as an abstract numerical algorithm). This is 21 million coins.

But they aren't in a vault. They aren't even identified anywhere at first. They are just known to exist numerically. So the complex calculations are the steps necessary to discover bitcoins that are not already in circulation. As each one is discovered it gets increasingly difficult to discover the next one.

In the past, an individual with an average computer and above average tech skills could mine (i.e. discover) bitcoins rather easily. Today, an individual can only do it with very specialized hardware -- application specific integrated circuits built specifically for the job of mining bitcoins.

And really, even that is getting out of range. The dominant mode of mining now is as part of pools. If you have a powerful computer available, you can join a pool with hundreds of other people. The complex processing is divided among all of your collaborators and you all share in the coins that are mined.

It might be possible for a person with off-the-shelf hardware to make a few coins as part of a pool, but that is slowing down now, and realistically the pools will soon consist only of people with specialized hardware.

So the money supply grows in a way that has nothing to do with supply and demand. It will never be a stable currency. It was never designed to be. It was designed to be finite and to reward the insiders who got on board the earliest -- i.e.. just like a Ponzi scheme or multi-level marketing. Those who mined a lot of coin certainly didn't welcome the meltdown of Mt Gox because this scheme was designed to hyper-ingflate, but instead it is hyper-collapsing.

It could yet recover and return to hyper-inflation mode, which will please those holding bitcoins. And that is ultimately why there are some loud voices still pimping this stuff all over the Internet.