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 Posted: Mon, 2nd Jan 2012 06:21 Post subject: General Cryptocurrency thread |
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| Quote: | | Bitcoin is an experimental new digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network. Bitcoin is also the name of the open source software which enables the use of this currency. |
http://bitcoin.org
What do you think about this project?
renamed from „bitcoin - new digital currency“
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| Posted: Mon, 2nd Jan 2012 06:56 Post subject: |
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Repost. Someone posted a topic about this a year or two ago, I think.
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| Posted: Mon, 2nd Jan 2012 07:03 Post subject: |
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Bitcoin has been around for quite some time, it gained some recognition but as far as its huge takeoff that it requires to be a real powerhouse, it has kind of landed in a resounding flop.
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| Posted: Mon, 2nd Jan 2012 07:36 Post subject: |
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Hmm, but you can just buy it from exchangers ... I mean, if you have something useful to do with them.
The actual value on the mtgox exchanger is 1 bitcoin : 5.37 USD
I don't understand the reason to be a flop.
( sorry for my bad english )
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spankie
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| Posted: Mon, 2nd Jan 2012 08:58 Post subject: |
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This is what Paul Krugman thinks about it...
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Over the past few months a number of people have asked what I think of Bitcoin, an attempt to create a sort of private cybercurrency. Now Alexander Kowalski at Bloomberg News directs me to this Jim Surowiecki article on Bitcoin, which is very interesting.
My first reaction to Bitcoin was to say, what’s new? We have lots of ways of making payments electronically; in fact, a lot of the conventional monetary system is already virtual, relying on digital accounting rather than green pieces of paper. But it turns out that there is a difference: Bitcoin, rather than fixing the value of the virtual currency in terms of those green pieces of paper, fixes the total quantity of cybercurrency instead, and lets its dollar value float. In effect, Bitcoin has created its own private gold standard world, in which the money supply is fixed rather than subject to increase via the printing press.
So how’s it going? The dollar value of that cybercurrency has fluctuated sharply, but overall it has soared. So buying into Bitcoin has, at least so far, been a good investment.
But does that make the experiment a success? Um, no. What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that’s not at all what is happening in Bitcoin.
Bear in mind that dollar prices have been relatively stable over the past few years – yes, some deflation in 2008-2009, then some inflation as commodity prices rebounded, but overall consumer prices are only slightly higher than they were three years ago. What that means is that if you measure prices in Bitcoins, they have plunged; the Bitcoin economy has in effect experienced massive deflation.
And because of that, there has been an incentive to hoard the virtual currency rather than spending it. The actual value of transactions in Bitcoins has fallen rather than rising. In effect, real gross Bitcoin product has fallen sharply.
So to the extent that the experiment tells us anything about monetary regimes, it reinforces the case against anything like a new gold standard – because it shows just how vulnerable such a standard would be to money-hoarding, deflation, and depression.
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fisk
Posts: 9145
Location: Von Oben
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| Posted: Mon, 2nd Jan 2012 14:42 Post subject: |
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New?
Yes, yes I'm back.
Somewhat.
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| Posted: Mon, 2nd Jan 2012 14:49 Post subject: |
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No, plus I think we had a topic about it, but I guess since search is broken and all...
"Quantum mechanics is actually, contrary to it's reputation, unbeliveably simple, once you take the physics out."
Scott Aaronson | chiv wrote: | | thats true you know. newton didnt discover gravity. the apple told him about it, and then he killed it. the core was never found. |
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LeoNatan
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| Posted: Mon, 2nd Jan 2012 18:13 Post subject: |
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[quote]New[/quote]
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LeoNatan
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| Posted: Mon, 2nd Jan 2012 18:40 Post subject: |
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Well, our search is "new" as well.
But I didn't mean it in that way. BitCoin has been around for a long time. 
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Lutzifer
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| Posted: Mon, 2nd Jan 2012 18:44 Post subject: |
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the tl;dr.-version: it has issues (security, ecologically and otherwise)
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| Posted: Mon, 2nd Jan 2012 18:56 Post subject: |
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ecologically
| Quote: | No more so than the wastefulness of mining gold out of the ground, melting it down and shaping it into bars, and then putting it back underground again. Not to mention the building of big fancy buildings, the waste of energy printing and minting all the various fiat currencies, the transportation thereof in armored cars by no less than two security guards for each who could probably be doing something more productive, etc.
As far as mediums of exchange go, Bitcoin is actually quite economical of resources, compared to others.
Economic Argument 1
Bitcoin mining is a highly competitive, dynamic, almost perfect, market. Mining rigs can be set up and dismantled almost anywhere in the world with relative ease. Thus, market forces are constantly pushing mining activity to places and times where the marginal price of electricity is low or zero. These electricity products are cheap for a reason. Often it’s because the electricity is difficult (and wasteful) to transport, difficult to store, or because there is low demand and high supply. Using electricity in this way is a lot less wasteful than simply plugging a mining rig into the mains indiscriminately.
For example, Iceland produces an excess of cheap electricity from renewable sources, but it has no way of exporting electricity because of its remote location. It is conceivable that at some point in future Bitcoin mining will only be profitable in places like Iceland, and unprofitable in places like central Europe, where electricity comes mostly from nuclear and fossil sources.
Market forces could even push mining into innovative solutions that have a net electricity consumption of zero. For example, electric heaters could come equipped with a cheap CPU instead of a resistance coil.
Economic Argument 2
When the environmental costs of mining are considered, they need to be weighed up against the benefits. If you question Bitcoin on the grounds that it consumes electricity, then you should also ask questions like this: Will Bitcoin promote economic growth by freeing up trade? Will this speed up the rate of technological innovation? Will this lead to faster development of green technologies? Will Bitcoin enable new, border crossing smart grid technologies? …
Dismissal of Bitcoin because of its costs, while ignoring is benefits, is a dishonest argument. In fact, any environmental argument of this type is dishonest, not just pertaining to Bitcoin. Along similar lines, it could be argued that wind turbines are bad for the environment because making the steel structure consumes energy. |
Found here: https://en.bitcoin.it/wiki/Myths
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spankie
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| Posted: Tue, 3rd Jan 2012 11:37 Post subject: |
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I'd rather listen to Paul Krugman than some random dude online...
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The critical point missed by economists is that bitcoins are ideally used online and with today’s ecommerce, a dollar is not worth a dollar. A dollar spent online is roughly worth (to the ecommerce merchant) only ninety-seven cents. This is because when a payment is made online around three percent goes to the merchant payment processor. Bitcoin doesn’t have this problem. Transaction fees for Bitcoin payments are significantly lower — under one percent and less even.
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A dollar is a dollar. It doesn't matter where the transaction fee is going. There are no transaction fees when I use a paper bill in the local supermarket. And you could argue the transaction fee for using Visa, Ebay or Paypal is higher. Of course, but that has nothing to do with Bitcoin itself. They just eliminated some transaction friction, but the money supply still is restricted. Old gold standard failed and bretton woods failed and all limited money suppy models will fail. Unless you fall under the Friedman spell.
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TSR69
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| Posted: Wed, 17th Oct 2012 13:21 Post subject: |
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Okay lost interest in reading the whole thread somewhere....
Bitcoins you can generate by letting your PC doing calculations. Last thing I read about it is that AMD cards are best for it. So you generate a virtual currency out of nothing and everyone else can do so. Ehh, enough said.
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garus
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| Posted: Wed, 17th Oct 2012 13:22 Post subject: |
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snip
Last edited by garus on Tue, 27th Aug 2024 21:51; edited 1 time in total
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TSR69
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| Posted: Wed, 17th Oct 2012 13:39 Post subject: |
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Yep out of nothing, it might cost me money, but these bitcoins are cast into existence. The more people that farm them the less they will be worth. ATM the bitcoins are worth something because some people/businesses accept them as payment.
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spankie
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| Posted: Wed, 17th Oct 2012 13:39 Post subject: |
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| garus wrote: | | iconized wrote: | Okay lost interest in reading the whole thread somewhere....
Bitcoins you can generate by letting your PC doing calculations. Last thing I read about it is that AMD cards are best for it. So you generate a virtual currency out of nothing and everyone else can do so. Ehh, enough said. |
Out of nothing? Do you have free electricity and unlimited time?
This is like mining gold, you spend time (and in this case resources). Everyone can make cash by working, does it make your currency any less attractive to you? |
yes
If i work, i get paid. That money is a transfer that represents an exchange of inputs. I make a car, you make some breads. I pay you for the bread, you pay me for the cars. The money transfer represents a transfer of goods.
If i work and i get paid with newly printed money bills, my previous money bills become worth less...
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| Posted: Wed, 17th Oct 2012 14:19 Post subject: |
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| iconized wrote: | | ATM the bitcoins are worth something because some people/businesses accept them as payment. |
This rule is true for avery kind of money.
It can't be money if you can't find someone that will accept it.
tl team is accepting them because they know that they have someone that will accept them in the future.
Also the gold has value because people give it value.
Everything can be money if are sure that someone will accept them in the future, so you are going to accept them now.
euro/dollars are printed out of nothing (and they worth less everyday), but people usually accept them because they are sure that someone will accept them in the future.
Bitcoin can't be more than 21*(10^14)
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TSR69
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| Posted: Wed, 17th Oct 2012 14:35 Post subject: |
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Hmm value is a mix of demand and rarity.
Edit: Bitcoins are not rare. Endless people busy generating Bitcoins -> infinite Bitcoins = Bitcoins are worthless
Last edited by TSR69 on Wed, 17th Oct 2012 14:39; edited 1 time in total
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TSR69
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| Posted: Wed, 17th Oct 2012 14:42 Post subject: |
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Supply is limited by rarity.
Formerly known as iconized
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| Posted: Wed, 17th Oct 2012 14:46 Post subject: |
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| iconized wrote: | | Edit: Bitcoins are not rare. Endless people busy generating Bitcoins -> infinite Bitcoins = Bitcoins are worthless |
Bitcoin can't be more than 21*(10^14)
https://en.bitcoin.it/wiki/Controlled_inflation
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TSR69
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| Posted: Wed, 17th Oct 2012 15:20 Post subject: |
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I guess you asked me to look into it further...
Okay there can be no more than 21*10^6 bitcoins according the wikis I have read.
Your 21*(10^14) should be written as 2.1E^15.
How lucrative is mining them now?
The problem I foresee that it will never be a universal currency.
Only some people/businesses on the internet might work with Bitcoins.
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| Posted: Wed, 17th Oct 2012 15:28 Post subject: |
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garus
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| Posted: Wed, 17th Oct 2012 15:40 Post subject: |
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snip
Last edited by garus on Tue, 27th Aug 2024 21:51; edited 1 time in total
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DXWarlock
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| Posted: Wed, 17th Oct 2012 15:47 Post subject: |
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The problem I see with it, is not becoming popular at any rate worth using them..is the obscurity of them, understanding tech behind them to understand the value of one, and the virtual element of them.
Joe average will not understand nor care to 'learn the tech' it takes to generate them. not being able to transfer them to some form of handheld tangible item will confuse/deter some people.
You can argue 'well your debit card doesn't have real coins inside it, its virtual money" yes..but people are reassured, even if just subconsciously, that they can goto a bank at anytime, and pull out real currency for what they have of it. Its unsettling to some people to think that the money they have isn't in their physical possession, or at least the ability to do so.
Then there is the value/denominations/limit/worth compared to what they use now to deal with. Say Joe average has a physical $1...he KNOWS how much its worth, $1..The value of that $1 may change globally, but he KNOWS if something says "$6" for the price..he needs 6 of them. With bitcoins, he needs to look up how much one of his coins is worth, convert it to real dollars, then do the math. Its an extra step people wont do to 'transition' away from old currency while both are in use during that time. (sure, the euro had this speedbump, but only reason it was overcome was because the euro was 'forced' to be used..if it would have been 'optional' to use them...it would have never became the standard)
As for the understanding of how it works, people also will want to know, on a basic subconscious level, how what they are spending works in being made or 'discovered'. people will be wary of using currency when they will have a hard time wrapping thier head around:
"Bitcoins are created each time a user discovers a new block. The rate of block creation is approximately constant over time: 6 per hour. The number of Bitcoins generated per block is set to decrease geometrically, with a 50% reduction every 4 years. The result is that the number of Bitcoins in existence will never exceed 21 million[1]. This algorithm was chosen because it approximates the rate at which commodities like gold are mined. Users who use their computers to perform calculations to try and discover a block are thus called Miners."
Sure you dont NEED to know that to use them...but again, to Joe average, that sounds complicated, and hard to put faith into an optional, virtual, non-tangible, currency that they cant understand how its generated to start with.
for any universal product to work, they need to think of the average human, and look at it from thier standpoint as if they never heard of it before..and see if they themselves, with that view, would even want to go thru the hassle of using it.
-We don't control what happens to us in life, but we control how we respond to what happens in life.
-Hard times create strong men, strong men create good times, good times create weak men, and weak men create hard times. -G. Michael Hopf
Disclaimer: Post made by me are of my own creation. A delusional mind relayed in text form.
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