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On December 22 2013 04:01 revy wrote:+ Show Spoiler +On December 21 2013 03:54 TokO wrote:Show nested quote +On December 21 2013 02:56 ParasitJonte wrote: The method at which bitcoins are gained is just ridiculous. You contribute nothing to no one. It's basically just clock cycles on your GPU being wasted. It represents nothing. For bitcoin to have any value, there would be a need for some type of system that, say, meant you could only mine them by solving someone elses problem. And one bitcoin represented XYZ FLOPS that you could later redeem on someone elses computer. Something along those lines. Of course I know of no practical way of achieving this  . I think this view is mistaken. From what I understand mining is what maintains transactions. So you contribute something to the people making transactions. Show nested quote +On December 21 2013 02:56 ParasitJonte wrote: The fundamental point is that bitcoin is backed by nothing whereas something like gold has real inherent value. Why would I ever accept a bitcoin for goods and services I produce? The half-assed assumption that there's an even bigger idiot that will in turn accept my bitcoins? For most people gold doesn't have an inherent value. I have no use for gold. My valuation of gold is conditioned on other people wanting to buy it from me. The same mechanism is true for Bitcoin. And it is also why someone would accept bitcoin. If there is two separate markets buying your goods and services, one transacting in bitcoin and one in normal currency, you would basically open yourself up to both markets by accepting bitcoin in addition to normal currency. For your last sentence. It doesn't matter whether it's idiotic or not that someone else accepts your bitcoins. If it is true that people want your bitcoin, then that is the reality we have consider. Show nested quote +On December 21 2013 02:56 ParasitJonte wrote: Now I very much like the idea of a currency outside of centralized control. The irony is that bitcoin will never be successfull here simply because they are void of value and bitcoin is not under centralized control which would give them artificial value! Again, bitcoins are not void of value as long as people want to have bitcoins. Most commodities on the planet are void of value for the individual, but they still trade them because there is a possibility of earning a profit. Show nested quote +On December 21 2013 02:56 ParasitJonte wrote:The second major problem with bitcoin is not that it can be used for criminal activities or whatever. That's another red herring but in the other direction. No, inequality is the major problem. Most coins are owned by very few individuals. And given how coins are produced, that is likely to escalate. You need to elaborate on this. What difference does it make if most of the coins are owned by very few individuals? What makes it a major problem? Show nested quote +On December 21 2013 02:56 ParasitJonte wrote: So again, why would the general public ever accept bitcoins in return for their labour? I don't think we are stupid enough to play an unfair game over a bunch of meaningless ones and zeros. I don't think it will be forced upon us. So no, bitcoin is seriously flawed and people need to stop speculating over them asap. You're posing some philosophical questions here, and it's difficult to see exactly what you are attacking, other than Bitcoin in general. You don't have to do mining to be involved in bitcoin, so you don't necessarily have to invest labour. What is this game? And why is it unfair? Nobody is forcing anything on anyone. I see why you think it is flawed, but I don't understand why people "need" to stop speculating. Only bad thing is that money will go from certain people to certain other people, based on their skills in the market, and that's something that's inherent in the real world anyway. Why are you making Bitcoin out to be so dangerous? At the very basest of levels bitcoin is not very different than gold or any fiat currency. At the end of days none have any real value. However in the real world bitcoin has only faith to keep it's value. A fiat currency at least has a large entity backing it which drastically reduces the risk. However, with nothing backing it, it seems plausible to me that bitcoin could go illiquid overnight.
Yep, this is exactly the point I was trying to make. However, I don't think illiquid is a good term. It is a little bit extreme (that nobody would buy it for any price). I do think it could lose a lot of value. But at the moment I do not have any good cause for it happening in the imminent future. Just because there is possibility does not mean that it is going to happen. Just because there is a risk of an airplane crashing doesn't mean we stop going on them. It's a risk-reward thing.
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Can anyone explain to me how Bitcoin isn't a scam?
So, basically, someone not willing to reveal his identity creates a currency out of a thin air, not backed up by any goverment authority, with additional mechanism of money creation which also happens out of thin air...
The only reason of it's relative success is that a) standard currencies aren't backed up by anything real either and b) standard currencies are currently being managed in equally scamming ways (aka printing dollars without limits, salvaging private banks that are too big to go down etc.). But that doesn't add anything positive to Bitcoin itself; just exposes the shittyness of regular money that made people to look for the alternatives on-line.
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On December 22 2013 21:40 wingpawn wrote:
Can anyone explain to me how Bitcoin isn't a scam?
So, basically, someone not willing to reveal his identity creates a currency out of a thin air, not backed up by any goverment authority, with additional mechanism of money creation which also happens out of thin air...
The only reason of it's relative success is that a) standard currencies aren't backed up by anything real either and b) standard currencies are currently being managed in equally scamming ways (aka printing dollars without limits, salvaging private banks that are too big to go down etc.). But that doesn't add anything positive to Bitcoin itself; just exposes the shittyness of regular money that made people to look for the alternatives on-line.
Everything about how bitcoin works is transparent though and the increase in amount available has exact limits.
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On December 22 2013 21:40 wingpawn wrote:
Can anyone explain to me how Bitcoin isn't a scam?
So, basically, someone not willing to reveal his identity creates a currency out of a thin air, not backed up by any goverment authority, with additional mechanism of money creation which also happens out of thin air...
The only reason of it's relative success is that a) standard currencies aren't backed up by anything real either and b) standard currencies are currently being managed in equally scamming ways (aka printing dollars without limits, salvaging private banks that are too big to go down etc.). But that doesn't add anything positive to Bitcoin itself; just exposes the shittyness of regular money that made people to look for the alternatives on-line.
Currencies aren't scams, they're just a way to make trade more convenient.
Currencies have several main functions:
Medium of exchange: If I'm an artist, I can sell my paintings to person A to get money, and then use that money to buy wine from person B; I don't need person B to have an interest in paintings in order to make a transaction, as I would in a barter system.
Unit of account/measure of value: The value of money is standardized and easily divisible, so you can express the value of any good in terms of money, and thus also serves to be able to compare prices for different goods.
Store of value: You can save money, and then be able to take it out and use it later. A currency whose value changes significantly over time (e.g. a currency that suffers from high inflation, such as the Zimbabwean Dollar or the Venezuelan Bolivar) gets bad grades in this function.
Analyzing Bitcoin, it gets bad grades as a Medium of Exchange (because the vast majority of businesses don't accept payments in Bitcoin), it's decent as a unit of account/measure of value, and it's fairly dreadful as a Store of Value, partly because it's a lot less secure to store, and partly because you have no idea if next month your Bitcoins will be worth twice as much as they do now, or half as much.
As far as currencies go, I think Bitcoin is pretty awful, except maybe for very niche uses (like if you want to buy illegal drugs from The Silk Road), and most of their draw is as a novelty speculative vehicle with little to no fundamental value behind it- kind of like buying stakes in dotcom businesses between 1999-2000 because their stock kept going up, and you could always just resell it for more... until the music stopped and your investment was suddenly worthless.
If you want a real crypto-currency, you should use Dogecoin (yes, I'm kidding).
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I would like to buy one Bitcoin, because I am fascinated by the idea(I do not see it as an investment), but still I do not want to buy at a particularly bad time(who would?) .
Would you guys recommend to buy now or rather in a few weeks? This is obviously not my only source of advice for this matter but I have faith in some mighty TLers opening new perspectives^^
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Pandemona
Charlie Sheens House51449 Posts
Well buying 1 coin u would prefer to buy at a bad time..then you buy it for cheaper with the expectation it gets more value.
http://preev.com/
As of right now 1 BTC = 633.1 $ (€462.90)
It should climb up gradually, but as the post above you states there might be a crash sometime soon with alot of BTC being moved around and such.
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Well, with "bad time" I obviously meant bad time four buying i.e. current high rate, but I like how you misunderstood it as "bad time for bitcoins". ^^
On December 23 2013 22:05 Pandemona wrote:Well buying 1 coin u would prefer to buy at a bad time..then you buy it for cheaper with the expectation it gets more value. http://preev.com/As of right now 1 BTC = 633.1 $ (€462.90) It should climb up gradually, but as the post above you states there might be a crash sometime soon with alot of BTC being moved around and such.
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On December 21 2013 07:13 Wegandi wrote:Show nested quote +On December 21 2013 02:56 ParasitJonte wrote:My general opinion on bitcoin is pretty one sided. When I originally heard about it in 2010 or so I didn't really understand it and wasn't all too interested. Lately it has popped up ever more frequently and is now probably as known as it has ever been. First of all, and this is the most crucial point, a bitcoin is completely void of any inherent value. Enthusiast try to side-step this and claim there is some inherent value in the network and transfer system. I think these are just red herrings. There are many competing currencies that replicate this and it's not as if things don't change in technology. Bitcoin doesn't have a free ride just because it was first. It might as well be MySpace. The method at which bitcoins are gained is just ridiculous. You contribute nothing to no one. It's basically just clock cycles on your GPU being wasted. It represents nothing. For bitcoin to have any value, there would be a need for some type of system that, say, meant you could only mine them by solving someone elses problem. And one bitcoin represented XYZ FLOPS that you could later redeem on someone elses computer. Something along those lines. Of course I know of no practical way of achieving this . The fundamental point is that bitcoin is backed by nothing whereas something like gold has real inherent value. Why would I ever accept a bitcoin for goods and services I produce? The half-assed assumption that there's an even bigger idiot that will in turn accept my bitcoins? At this point bitcoin enthusiasts will of course point to the fact that all currencies are void of value in this very same sense. This is true but with one twist. We are all forced to use these fiat currencies in order to pay taxes and more. That's the only reason they exist, because of central mandates. Now I very much like the idea of a currency outside of centralized control. The irony is that bitcoin will never be successfull here simply because they are void of value and bitcoin is not under centralized control which would give them artificial value! The second major problem with bitcoin is not that it can be used for criminal activities or whatever. That's another red herring but in the other direction. No, inequality is the major problem. Most coins are owned by very few individuals. And given how coins are produced, that is likely to escalate. So again, why would the general public ever accept bitcoins in return for their labour? I don't think we are stupid enough to play an unfair game over a bunch of meaningless ones and zeros. I don't think it will be forced upon us. So no, bitcoin is seriously flawed and people need to stop speculating over them asap. There is no such thing as 'inherit value'. Value is derived from the subjective valuations of the individual, not from some objective measurement. The reason gold is valued as currency is not because of some innate value, but because of its properties that make it useful as a currency over other commodities. It's scarce, easily changed (e.g. melted down), relatively easy to store and transfer, does not have an expiration date, and doesn't take up too much space like say cotton or other perishable commodities. The reason bitcoin is valuable is because of these and others - such as anonymity, skirting State control, can be broken into extremely small units, redundant and easy to store and transfer (decentralized), and again, allows transactions outside the Eye of the State (especially the IRS). That's where it derives its value from, among many of the same reasons gold does. Value is subjective, not objective!
Yes, value is subjective - sloppy wording on my part.
The problem for bitcoin is that all of it's benign properties are easily replicated as evidenced by this list: http://en.wikipedia.org/wiki/List_of_cryptocurrencies . That's why the scarcity part is just a joke.
Compare this to a real scarce resource that is used in electronics, computers, aerospace, glassmaking, medicine, dentistry and enjoys unsurpassed popularity in jewelry and my guess is that, in the end, even "the greater fool" will find it beneficial to erase all bitcoin strings on his harddrive just to be able to save a lolcat.png.
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they need to use their money and hire some dudes to program thier stuff. every other driver update breaks my shit. don't even mine anymore because it's such a hassle.
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Cayman Islands24199 Posts
bitcoin is an exchange currency in theory only. would not be surprised to see it being a pump and dump scheme. also based on the hoarding rent extracted, not that different from common gold standard problems or even a pyramid scheme
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On December 27 2013 01:22 oneofthem wrote:
bitcoin is an exchange currency in theory only. would not be surprised to see it being a pump and dump scheme. also based on the hoarding rent extracted, not that different from common gold standard problems or even a pyramid scheme
I would disagree that bitcoin is anything close to a pump and dump scheme as that requires a party or a group of party to deliberately hype up the value of bitcoin through false/misleading statements with the intent of selling it off. No such group really exists that can exert such influence. I would hardly call it a pyramid scheme as that requires organization in such that current clients of bitcoin actively recruit others to both buy bitcoin and recruit others. That isn't the case for most bitcoin owners: they just hoard and hold them like securities without really trying to raise its value by active recruitment.
Probably the best way to see this is simply a bubble in the sense that hordes of people are trying to get in on bitcoin under the speculation that its value is going to go higher.
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Cayman Islands24199 Posts
a lot of seemingly spontaneous internet events have designed fuses. in this particular instance though, ghe only signal needed to trigger hype is precisely price. a large player entering the market creates a signa that the market is going up. given the fairly concentrated bitcoin distribution and anony transactions there is eminent opporrtunity to send signals with a large enough mkt move. if i were a mobster looking to alternatives to hsbc for my pipeline bitcoin would be fantastic
i said it share features with pyramid scheme and gold becuz ofthe rent extracting power of early hoarding. later entrants caught in the rising hype are fish. the unequal share of risk n return is the point of my pyramid scheme comment
the active recruiting thing is old school, exploiting spontaneous social waves is next lvl esp with many internet libertarians championing this thing as an ideological vision
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On December 23 2013 22:03 KainiT wrote:
I would like to buy one Bitcoin, because I am fascinated by the idea(I do not see it as an investment), but still I do not want to buy at a particularly bad time(who would?) .
Would you guys recommend to buy now or rather in a few weeks? This is obviously not my only source of advice for this matter but I have faith in some mighty TLers opening new perspectives^^
you are contradicting yourself. First you are saying this is not an investment and then that you don't want to go in at the bad time. This is exactly what investment is about: going in and out at the right times.
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When reading about BCs I was wondering that since transaction costs are really low (or even non-existent for those owning the whole thing) how easy it is to manipulate the price by selling the coins between your own accounts, especially if the effort is coordinated and involves many participants.
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Zurich15312 Posts
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How can anyone guarantee that at some point those controlling BitCoin business will not create huge amounts of BitCoins for themselves? As far as I understand they are only stopped by their own regulations, and they've said themselves that there is no higher regulator.
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On December 27 2013 10:26 Cheerio wrote:
How can anyone guarantee that at some point those controlling BitCoin business will not create huge amounts of BitCoins for themselves? As far as I understand they are only stopped by their own regulations, and they've said themselves that there is no higher regulator.
Nobody controls bitcoin, it's completely decentralized. Many computers in a network do checks on each other to ensure that the transaction history is accurate. It would take astronomical amounts of computing power to fake transactions, and the amount of computing power required increases over time as hardware improves.
With that said, the person who created bitcoin supposedly kept 900k BTC for themselves from the start but they cannot simply increase that amount as they wish or steal from others because the network is out of their control.
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bitcoin as a currency isn't particularly exciting
however it has the possibility to completely revolutionize transaction banking with the technology - just ask a banker how a transaction REALLY works and you'll get a headache for sure (assuming he even knows the answer)
One interesting thing is still the entire network deals with a very small number of transactions, and one would be interested on how it handles a massive stress test
Also especially in terms of say, if i were to just screw around with the miners by sending 1 satoshi every single block for the rest of my life, what are they going to do about that? It has implications on working out something as simple as say, your wallet balance and other technical quibbles
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On December 27 2013 10:26 Cheerio wrote:
How can anyone guarantee that at some point those controlling BitCoin business will not create huge amounts of BitCoins for themselves? As far as I understand they are only stopped by their own regulations, and they've said themselves that there is no higher regulator.
Lets say you me and dudethree have a special currency between us called favors. Theres no physical thing being traded, we just keep three sheets of paper where we write every single transaction down. You do me a favor, so now i owe you one and its written on every one of the three sheets that each of us keep. Now you think, heh couldnt i just write more IOUs on it with stuff i havent actually done/given out? Sure, nothing stops you from doing that. So next time i need a favor from you, youre like: "hey wait, you actually already owe me x amount of favors, i wont do anything for you until you pay". And ill look at your sheet and see that its different from mine and dudethree's sheet. I COULD accept that and scrap my sheet, or i could tell you to go fuck yourself and exclude you from my currency. Now you have your own currency, and dudethree and me have our own currency. But you cant trade with us anymore and have to find new people who believe that your currency is superior and buy in.
Thats how bitcoin works. If anyone wanted to just "invent" some more bitcoins form himself, no one has to accept that and they would tell you to fuck off.
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EPT
