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On December 06 2013 03:21 Warent wrote:Show nested quote +On December 06 2013 01:33 0x64 wrote:
My rhetorical question is: "What is the worst thing that can happen to you if the BTC is widely accepted?" Hm... let's see. Regression, followed by global depression, high unemployment and riots, eventually a third world war (probably financed by a new fiat currency). In order to understand how this work it is of vital importance to understand the key concept of what money is - and why we need it. It's furthermore important to understand why a deflationary currency would be bad, with a big b. The currency will be controlled by those who have most of it - and to increase the value of something you have lots of - you spend less - thus reducing the effective supply of money. The following consequence is that even fewer will spend their money as they keep increasing in relative value more quickly. Eventually trade stops and unemployment follows. Why isn't this happening today you may ask yourself? And the answer is inflation. If you want to keep your wealth in today's system you have to invest it, either indirectly through fractional banking or directly into projects or companies whom create value for their customers.
we been using inflationary money since forever and it always fails. u should be rewarded for saving no punished. another point is inflation forcing people to speculate and invest. i know now its much easier to invest when u have money but when u are scrapping by its pretty fucking god damn hard, i tell u. one mistake on your investment and it could screw your life (real estate)
Read a little: http://www.washingtonsblog.com/2011/08/the-average-life-expectancy-for-a-fiat-currency-is-27-years-every-30-to-40-years-the-reigning-monetary-system-fails-and-has-to-be-retooled.html
A graphs: http://blog.elliottwavetechnician.com/2013/10/the-life-span-of-reserve-currency-status.html
it is mind boggling the amount of turmoil and waste of resources it is to keep resetting the global currency.
another point is fiat paper/plastic money is extremely wasteful to create manage and control. im believe its useful but would probably be better if we toned this dinosaur crap back.
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On December 06 2013 03:33 Acrofales wrote:
Yeah, bitcoin as a currency has lots and lots of shortcomings.
Bitcoin as a commodity has nothing inherently wrong with it, but the question is: why should anyone invest in bitcoins as a commodity and the only answer I can really come up with is "hype". There is absolutely nothing that makes bitcoin inherently valuable, and in this sense it is best compared to gold.
Its main strength is that it is digital and can thus easily move in the global economy, as opposed to gold. But in many ways, it is simply a digital version of gold... and in the modern day commodities market you are already buying digital versions of gold. Most of the gold sits safely in a vault somewhere while pieces of paper (or rather, digital documents) stating who the owner of that gold is, get bought and sold.
So what exactly makes bitcoins better than gold?
FALSE!
does the email protocol not hold value
does the internet protocol not hold value
does TCP/IP not hold some value
btc is free and open software and it is valuable.
lastly gold holds value but cant be transported or easily divided like btc.
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You should definitely not be rewarded for sticking your money in a sock and hiding it under the bed. Deflationary currency is an absolute recipe for disaster, and the Japanese economic crisis of the 90s is a great field example for why.
While our current monetary system(s) has problems, its inflationary nature is not one of them.
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On December 06 2013 03:43 Acrofales wrote:
You should definitely not be rewarded for sticking your money in a sock and hiding it under the bed. Deflationary currency is an absolute recipe for disaster, and the Japanese economic crisis of the 90s is a great field example for why.
While our current monetary system(s) has problems, its inflationary nature is not one of them.
FALSE! we have not experimented nearly enough with deflationary currency. i doubt btc will become a global currency anyway, perhaps a small % of the global market is enough. internet money.
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On December 06 2013 03:43 Chrono000 wrote:Show nested quote +On December 06 2013 03:33 Acrofales wrote:
Yeah, bitcoin as a currency has lots and lots of shortcomings.
Bitcoin as a commodity has nothing inherently wrong with it, but the question is: why should anyone invest in bitcoins as a commodity and the only answer I can really come up with is "hype". There is absolutely nothing that makes bitcoin inherently valuable, and in this sense it is best compared to gold.
Its main strength is that it is digital and can thus easily move in the global economy, as opposed to gold. But in many ways, it is simply a digital version of gold... and in the modern day commodities market you are already buying digital versions of gold. Most of the gold sits safely in a vault somewhere while pieces of paper (or rather, digital documents) stating who the owner of that gold is, get bought and sold.
So what exactly makes bitcoins better than gold? FALSE! does the email protocol not hold value does the internet protocol not hold value does TCP/IP not hold some value btc is free and open software and it is valuable. lastly gold holds value but cant be transported or easily divided like btc.
The POP (or IMAP), http and tcp/ip protocols hold value because of what they DO. What exactly does a bitcoin do?
The underlying bitcoin protocol might be valuable, but that doesn't mean a bitcoin is valuable. People aren't buying shares in the bitcoin protocol. They are buying digital certificates that can be transferred using the protocol. To put it in other terms: you're not buying the email protocol, you're buying emails.
The analogy isn't perfect, but seeing as you brought it up in the first place, don't blame me for that.
The main reason the analogy isn't perfect is because the bitcoin and its protocol cannot easily be unlinked: the protocol is ONLY useful for generating, maintaining and transferring bitcoins, and bitcoins are only useful within the context of the protocol.
However, lets look at what this protocol is doing. If bitcoin isn't a good currency (and it isn't and shouldn't be seen as one), that leaves it as a commodity. In fact, a commodity whose only real purpose is to make it easy to transfer money digitally.
However, if your goal is to transfer money from one end of the world to the other there are multiple different options, including western union and paypal... and I don't see why bitcoins method of doing so is better than other methods, except that it's fairly quick and their fees are currently lower than the alternatives... but that's related to the companies that do business, rather than anything inherent in bitcoins.
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On December 06 2013 03:46 Chrono000 wrote:Show nested quote +On December 06 2013 03:43 Acrofales wrote:
You should definitely not be rewarded for sticking your money in a sock and hiding it under the bed. Deflationary currency is an absolute recipe for disaster, and the Japanese economic crisis of the 90s is a great field example for why.
While our current monetary system(s) has problems, its inflationary nature is not one of them. FALSE! we have not experimented nearly enough with deflationary currency. i doubt btc will become a global currency anyway, perhaps a small % of the global market is enough. internet money.
Mind backing that up with actual economic research? The blog posts you linked offered absolutely NO alternative or any research into alternatives, but lots of fear mongering about the average timespan that fiat currencies survive... which means absolutely nothing.
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I think we are going to be moving to a multipolar world in terms of currency. There won't be any single dominant reserve currency as there has been for the last however long (sterling, usd). It's going to be very confusing but I think it will be a good thing. The central banks will try to prevent it but it will most likely be a losing battle, I wouldn't be surprised if in 100 years people walk around with several different currency in their pockets
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On December 06 2013 03:21 Warent wrote:Show nested quote +On December 06 2013 01:33 0x64 wrote:
My rhetorical question is: "What is the worst thing that can happen to you if the BTC is widely accepted?" Hm... let's see. Regression, followed by global depression, high unemployment and riots, eventually a third world war (probably financed by a new fiat currency). In order to understand how this work it is of vital importance to understand the key concept of what money is - and why we need it. It's furthermore important to understand why a deflationary currency would be bad, with a big b. The currency will be controlled by those who have most of it - and to increase the value of something you have lots of - you spend less - thus reducing the effective supply of money. The following consequence is that even fewer will spend their money as they keep increasing in relative value more quickly. Eventually trade stops and unemployment follows. Why isn't this happening today you may ask yourself? And the answer is inflation. If you want to keep your wealth in today's system you have to invest it, either indirectly through fractional banking or directly into projects or companies whom create value for their customers.
You didn't understand the question. There is huge step from widely accepted to the only money remaining in the world.
You are fooling yourself if you think inflation is helping anything at all. Inflation actually creates bubbles. Housing bubble for one. There is so much cash that it doesn't know where to go, the truth is that the $ is nowhere near it's current value, and that is creating bubbles on oil, bubbles on food commodities just because printing money doesn't change the value of anything in the world. Only those holding liquid are losing, therefor it is forced to be invested, but their is only so many things that need the money for growth and that creates a bubbles where ever there is the slightest growth and inefficient investments are hugely costly.
I don't want a money that is deflationary and that doesn't happen just like that, remember that also the price of the good adjusts accordingly. Just as printing money doesn't change the value of things, holding money out of the economy doesn't either.
You get a healthy economy, you want to invest your money, not keep it away. Anyway that's why we need the bitcoin as widely distributed as possible instead of having big accounts holding thousands in btc. This warrant a better stability as the services become more and more common, the will be a real healthy circulation of the btc. That day comes when those receiving BTC will use them directly in btc without converting them.
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On December 06 2013 04:47 sam!zdat wrote:
I think we are going to be moving to a multipolar world in terms of currency. There won't be any single dominant reserve currency as there has been for the last however long (sterling, usd). It's going to be very confusing but I think it will be a good thing. The central banks will try to prevent it but it will most likely be a losing battle, I wouldn't be surprised if in 100 years people walk around with several different currency in their pockets
I just had a long conversation with my Economics/Accounting dual major brother about bitcoins....which basically resulted in me not knowing enough about the back-end process... but one thing we continually discussed was the fact that USD is the dominant currency that pretty much all currency in the world and all economy in the world is based around....and his biggest concern with bitcoin is it could lead to the eventual devaluation of the dollar and if it replaces it as the standard it would be effectively reducing the US' power over the world economy.
However I made the point, that in theory there is no such thing as a "dominant" or standard currency, as all currencies exist in correlation with one another, in that all are affected by the other, and so I am not sure how bitcoin would be any different. The existence of the others and their relationship with bitcoin will always have a correlating effect. I dont see BTC as a threat to the USD or a threat to the Euro because I dont understand how it would overcome any direct relationship with the USD or Euro, the only thing that lets it transcend those boundaries is its ability to be converted and moved more easily than USD or EURO due to the lack of regulations or fees.
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On December 06 2013 07:55 Azide wrote:Here's a pretty good article outlining the positives/arguments for the case of Bitcoin that makes sense to me: https://medium.com/p/5e55825fd226
That guy is delusional. The article you linked is basically the checklist for being a certified BTC zealot devoid of any reasoning. His understanding of the position of government relative to cryptocurrency is ridiculously flawed. Let alone the part where he underestimates the "me too" cryptocurrency trend. BTC's deflationary nature ends up driving people who are interested in the cryptocurrency concept to other forms of cryptocurrency (aka, creating the competitors he says can't be created).
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On December 06 2013 07:55 Azide wrote:Here's a pretty good article outlining the positives/arguments for the case of Bitcoin that makes sense to me: https://medium.com/p/5e55825fd226
1- His argument is essentially "it won't be a bubble because it can look like a bubble without being a bubble". Which is fine, except it doesn't tell us anything about how it won't be.
3- That's amusing as fuck. Also, see number 10
5- He first says that Bitcoins have intrinsic value and then proceeds to list two completely worthless reasons.
6- "Deflation implies people are incentivized not to spend. This is true, but who cares?": Everybody cares. Hoarding currency is bad for everybody.
8- How can 2 currencies on a free market not compete? It's literally impossible that they wouldn't have any incidence on each other.
9- lololo
10- Point 3: Government is not threatened. But BTC can apparently disrupt the global financial system. Is he lying or dumb?
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I know that this is a bitcoin discussion thread but id like to put my thoughts in on cryptocurrencies in general. I've been messing around with BTC/ Altcoins for about 6 months now mostly (mined a little bit of bit coins a couple of years ago as well).
Mostly i would like to point out that Bitcoins are surely an improvement but that there are alot of alt coins in development that help fix more of the issues that not only real money but bicoins as well have issues with. Most of the ones you know about are first gen alt coins i.e litecoins , namecoins ect ect are closely related to bitcoins in concept however there are alternate coins quickly coming out that i feel could eventually replace BTC completely and fix alot of the issues. examples of fixing issues with bitcoins would be a lot of them confirm faster, have different algorithms for hashing or can be used to do other things other than just keep track of the currency (i.e primecoins have prime number research, im not all that savvy with math to the ramifications of what it could change if it actually did 'solve' primes but it claims to be pretty important)
A good link for anyone interested in some of the different altcoins: http://coinmarketcap.com/
I feel cryptocoins as a concept is fantastic, i dont feel BTC is good enough to replace fiat now but i certainly will keep my eye out for better versions later that could, potentially, be a universal currency for everyone.
Just my 2 cents from a hobbyist miner.
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I have asked this before (on reddit) and looked up a bitcoin wiki but I still don't quite understand how bitcoin garners value. I understand that some people use other currencies to buy them, so there is that. And US currency used to be backed by gold, and is now backed by bonds and shit which is sort of dumb but makes sense.
From what I understand, btc is farmed or mined by running some program that does math? Like what do you do leave your computer on consstantly doing this for fractions of cents all the time? Also, how is doing that math process worth anything? Does the extrapolation of that data work for some larger entity or something?
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On December 06 2013 11:55 Djzapz wrote:1- His argument is essentially "it won't be a bubble because it can look like a bubble without being a bubble". Which is fine, except it doesn't tell us anything about how it won't be. 3- That's amusing as fuck. Also, see number 10 5- He first says that Bitcoins have intrinsic value and then proceeds to list two completely worthless reasons. 6- "Deflation implies people are incentivized not to spend. This is true, but who cares?": Everybody cares. Hoarding currency is bad for everybody. 8- How can 2 currencies on a free market not compete? It's literally impossible that they wouldn't have any incidence on each other. 9- lololo 10- Point 3: Government is not threatened. But BTC can apparently disrupt the global financial system. Is he lying or dumb?
Hahaha the writing in the article is pretty bad and unclear too. Kinda like something I wrote too, when I have no clue what I was writing about.
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My friend who works in finance has a very, very grim perspective on the future of bitcoins. I wonder if he's right or if bitcoins are so new/different that all the classic analysis methods yield false results for bitcoins as an investment.
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On December 06 2013 14:32 MarlieChurphy wrote:
I have asked this before (on reddit) and looked up a bitcoin wiki but I still don't quite understand how bitcoin garners value. I understand that some people use other currencies to buy them, so there is that. And US currency used to be backed by gold, and is now backed by bonds and shit which is sort of dumb but makes sense.
From what I understand, btc is farmed or mined by running some program that does math? Like what do you do leave your computer on consstantly doing this for fractions of cents all the time? Also, how is doing that math process worth anything? Does the extrapolation of that data work for some larger entity or something?
ill try and answer this. bitcoin are in a way backed by how useful it is. its practically email money (way of transaction) and a store of wealth (like gold). the protocal has other uses that have not been implanted yet like the possibly to code in escrow and stocks. you cant hard code stuff in to what we use now but u can in bitcoin. the fact that money can free flow more easily will open up new worlds.
when it comes to mining people used to be able to mine on the CPU chip, then it moved on to graphics cards now there are very specific chips called asics with a soul purpose of only mining bitcoin. mining bitcoin is bascially looking for valuable numbers. it is a new concept but like mining for gold, mining for valuable numbers gets more and more difficult and thus requires MASSIVE amounts of computing power to figure out these math problems.
its a very interesting concept but placing value on important rare numbers is so new and my seem stupid for some. but so is digging around in the dirt for a piece of shiny metal. the usefulness of gold is not as useful as people think. silver infact is more useful but gold just looks a little nicer and has a lot of history behind it.
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On December 06 2013 17:01 Chrono000 wrote:Show nested quote +On December 06 2013 14:32 MarlieChurphy wrote:
I have asked this before (on reddit) and looked up a bitcoin wiki but I still don't quite understand how bitcoin garners value. I understand that some people use other currencies to buy them, so there is that. And US currency used to be backed by gold, and is now backed by bonds and shit which is sort of dumb but makes sense.
From what I understand, btc is farmed or mined by running some program that does math? Like what do you do leave your computer on consstantly doing this for fractions of cents all the time? Also, how is doing that math process worth anything? Does the extrapolation of that data work for some larger entity or something? ill try and answer this. bitcoin are in a way backed by how useful it is. its practically email money (way of transaction) and a store of wealth (like gold). the protocal has other uses that have not been implanted yet like the possibly to code in escrow and stocks. you cant hard code stuff in to what we use now but u can in bitcoin. the fact that money can free flow more easily will open up new worlds. when it comes to mining people used to be able to mine on the CPU chip, then it moved on to graphics cards now there are very specific chips called asics with a soul purpose of only mining bitcoin. mining bitcoin is bascially looking for valuable numbers. it is a new concept but like mining for gold, mining for valuable numbers gets more and more difficult and thus requires MASSIVE amounts of computing power to figure out these math problems. its a very interesting concept but placing value on important rare numbers is so new and my seem stupid for some. but so is digging around in the dirt for a piece of shiny metal. the usefulness of gold is not as useful as people think. silver infact is more useful but gold just looks a little nicer and has a lot of history behind it.
That's the problem, it isn't backed by how useful it is, atleast it shouldn't be that we derive value from that. The problem with Bitcoin is that there's countless other cryptocurrencies that may become more useful than Bitcoin. In fact there pretty much already are some that are arguably better suited for the task. Should they be valued higher than Bitcoins?
Gold has intrinsic value, in that it's a precious metal that (probably) cannot be replaced by something better. That definately doesn't hold true for Bitcoin, Bitcoin has no real intrinsic value, because it can easily be replaced by a different cryptocurrency.
Bitcoin in its current stage is simply a bubble. One of the telltale signs of it is that other cryptocurrencies rise and fall on Bitcoin's well-being. Why is that, why are they linked together so much? If a cryptocurrency has intrinsic value of itself it shouldn't be as linked as they are. It's simply the state of greed, shortly before the fall. Look up South Sea Company.
Cryptocurrencies may well be the future, however, the current price is simply a bubble, it rose way too quickly because of greed.
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On December 06 2013 18:18 Shival wrote:Show nested quote +On December 06 2013 17:01 Chrono000 wrote:On December 06 2013 14:32 MarlieChurphy wrote:
I have asked this before (on reddit) and looked up a bitcoin wiki but I still don't quite understand how bitcoin garners value. I understand that some people use other currencies to buy them, so there is that. And US currency used to be backed by gold, and is now backed by bonds and shit which is sort of dumb but makes sense.
From what I understand, btc is farmed or mined by running some program that does math? Like what do you do leave your computer on consstantly doing this for fractions of cents all the time? Also, how is doing that math process worth anything? Does the extrapolation of that data work for some larger entity or something? ill try and answer this. bitcoin are in a way backed by how useful it is. its practically email money (way of transaction) and a store of wealth (like gold). the protocal has other uses that have not been implanted yet like the possibly to code in escrow and stocks. you cant hard code stuff in to what we use now but u can in bitcoin. the fact that money can free flow more easily will open up new worlds. when it comes to mining people used to be able to mine on the CPU chip, then it moved on to graphics cards now there are very specific chips called asics with a soul purpose of only mining bitcoin. mining bitcoin is bascially looking for valuable numbers. it is a new concept but like mining for gold, mining for valuable numbers gets more and more difficult and thus requires MASSIVE amounts of computing power to figure out these math problems. its a very interesting concept but placing value on important rare numbers is so new and my seem stupid for some. but so is digging around in the dirt for a piece of shiny metal. the usefulness of gold is not as useful as people think. silver infact is more useful but gold just looks a little nicer and has a lot of history behind it. That's the problem, it isn't backed by how useful it is, atleast it shouldn't be that we derive value from that. The problem with Bitcoin is that there's countless other cryptocurrencies that may become more useful than Bitcoin. In fact there pretty much already are some that are arguably better suited for the task. Should they be valued higher than Bitcoins? Gold has intrinsic value, in that it's a precious metal that (probably) cannot be replaced by something better. That definately doesn't hold true for Bitcoin, Bitcoin has no real intrinsic value, because it can easily be replaced by a different cryptocurrency. Bitcoin in its current stage is simply a bubble. One of the telltale signs of it is that other cryptocurrencies rise and fall on Bitcoin's well-being. Why is that, why are they linked together so much? If a cryptocurrency has intrinsic value of itself it shouldn't be as linked as they are. It's simply the state of greed, shortly before the fall. Look up South Sea Company. Cryptocurrencies may well be the future, however, the current price is simply a bubble, it rose way too quickly because of greed.
your argument doesn't make sense. It raises and fall at the level people believe it should be, end of discussion. People being greedy would have sold their coins to make their little dollars and it wouldn't stay more than a day. It's not greed, it's investing and giving trust to a system that will benefit everyone.
Just accept that even if you have not and are not interested in anything than criticizing something you have nothing to do with. Just the mere interest of hanging out in this thread is enough to support that the coin will be very important.
The only question is that when it become more mainstream, until what point will you keep saying that it is useless. You are already 5 years late.
I want to be able to pay without using Visa/Mastercard, without using paypal.
Now, all you disbelievers, here is an good argument against the bitcoin.
All transaction are public and a big company selling directly for bitcoin either has to go through a BitPay type of company, or their revenue can be calculated and that can lead to some hurtful economic intelligence gathering...
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EPT
