Bitcoin discussion thread - Page 39

On March 06 2014 01:26 GoTuNk! wrote:


No it is not. The wallet takes a moment to check the first string of code is legit (so it's a real bitcoin). Afterwards at regular intervals it checks bigger chunk codes, but faking a bitcoin is extremely costly so small transactions are legit with 1 check (first 60 seconds) and 2nd and 3rd are only needed for extremely large money sums.

On March 06 2014 03:19 DoubleReed wrote:
I don't think you would use it for stock trading. For rapid transactions like that you probably want to drop the pseudanonymity for speed. Trade offs.

On March 06 2014 07:58 semantics wrote:

It's more like a commodities market, bit coin values always going up encourages hoarding continues to make it less of a currency more of a speculative bubble.

On March 06 2014 10:06 DoubleReed wrote:


Yep.

And there are a limited number of bitcoins (probably all mined out by 2040), which means it will have inevitable deflation. And deflation in currency means people hoard it instead of spend it (because it's 'gaining in value'). So you'll get a deflationary spiral eventually. Remember kids, deflation is 1000x worse than inflation.

But that's a much more long-term problem. By that time, people could just transfer out to another cryptocurrency. I assume it will crash way before then. Maybe by the end of the year.

Mitchell suspects Nakamoto's initial interest in creating a digital currency that could be used anywhere in the world may have stemmed from his frustration with bank fees and high exchange rates when he was sending international wires to England to buy model trains. "He would always complain about that," she says. "I would not say he writes flawless English. He will pick up words and mix the spellings."

On March 07 2014 00:55 intrigue wrote:
yea very interesting. though the whole article is exactly what he's been trying to avoid this entire time. hard to pull that if you're gonna create bitcoin i guess =[

the pix of his house is a bit over the top. hi world, this super rich privacy freak with health problems and his 90+ yo mom live here alone!

A young American woman who ran the First Meta bitcoin exchange was found dead in her Singapore apartment last week. Police are investigating the “unnatural death”.

Autumn Radtke was found on the morning of February 26 after Police received an emergency call from an apartment building. She was pronounced dead at the scene. A preliminary police investigation has ruled out foul play, but neighbors told police they suspected Radtke jumped from an apartment.

On March 06 2014 10:06 DoubleReed wrote:


Yep.

And there are a limited number of bitcoins (probably all mined out by 2040), which means it will have inevitable deflation. And deflation in currency means people hoard it instead of spend it (because it's 'gaining in value'). So you'll get a deflationary spiral eventually. Remember kids, deflation is 1000x worse than inflation.

But that's a much more long-term problem. By that time, people could just transfer out to another cryptocurrency. I assume it will crash way before then. Maybe by the end of the year.

On March 06 2014 21:36 zatic wrote:
Profile of the (likely) creator of Bitcoin, really fascinating:

http://mag.newsweek.com/2014/03/14/bitcoin-satoshi-nakamoto.html

Best part:

On March 08 2014 18:16 Ace wrote:


This isn't necessarily true. While there may be some deflation, it won't be due to coins being mined out. Unlike real money, bitcoins are digital and milli, micro, and nano (up to 10^-8) denominations exist. As 1 bitcoin is currently around 650 US dollars, a .1 bitcoin transaction for $65 is valid. Hence even with 21 million coins, a octillion or whatever the unit is would be able to exist digitally - more units of currency than the entire world has right now. There isn't even a likely amount of a quadrillion US bank notes floating around. As for what I outlined in red, I'd like to hear an explanation for that in how it applies to digital currencies. A lot of the noise I've been seeing about bitcoin, like by noted economist Paul Krugman, is due to misunderstanding of what bitcoin is, and classic economic principles being applied to something that is "new".

People aren't exactly hoarding coins either. At least, not the majority. bitcoins are seeing actual use and volume movements across the blockchain. It has actual utility which means coins are always in circulation.

On March 08 2014 21:12 Ace wrote:
Sigh....

The value of 1 bitcoin does not change. All we're doing is dividing coins into smaller units. 1 BTC is just ten units of .1 BTC. That's all. We aren't creating new coins. There isn't a lot more of anything that needs trading. All we're doing is dividing the currency into more units which will be reflected in the price of goods.

This may seem foreign because physical money can not do this. If you wanted to jump on Coinbase right now and purchase a .001 bitcoin unit guess what? You can. The actual decimal place, a "1.0", or ".1" bitcoin does not matter to the actual value itself. As an actual example, you can buy stuff in .05 BTC transactions, or even .002 transactions.

In fact I'll make it simpler:

https://blockchain.info

Notice anything about the size of the transactions?

On March 08 2014 21:12 Ace wrote:
Sigh....

The value of 1 bitcoin does not change. All we're doing is dividing coins into smaller units. 1 BTC is just ten units of .1 BTC. That's all. We aren't creating new coins. There isn't a lot more of anything that needs trading. All we're doing is dividing the currency into more units which will be reflected in the price of goods.

This may seem foreign because physical money can not do this. If you wanted to jump on Coinbase right now and purchase a .001 bitcoin unit guess what? You can. The actual decimal place, a "1.0", or ".1" bitcoin does not matter to the actual value itself. As an actual example, you can buy stuff in .05 BTC transactions, or even .002 transactions.

In fact I'll make it simpler:

https://blockchain.info

Notice anything about the size of the transactions?

On March 08 2014 21:41 Simberto wrote:


Yes. One coin will always be a thousand millicoins, or however you want to split it up. However, the total amount of coins will also always be limited. Now, if more stuff gets traded, this means you require more currency. If you reach this goal by using smaller parts of coins, that means that a whole coin is now worth more. Which means that you have deflation.

If the value of one coin does not increase, then once again the fact that you can split them up is utterly irrelevant. There is a maximum amount of times any given coin/millicoin/whatever can switch hands a day. This means that without deflation, there is a hard limit to the amount of goods that can be traded for bitcoins daily. And at the current value, that limit is actually pretty low.

For example, apparenty one bitcoin is currently worth ~600$. At 21 million bitcoins, that would be a total of 12.6 billion dolllars. There are currently ~1.26 TRILLION dollars in circulation, and that is only physical money, not counting non-physical money transfers. So if you assume that a bitcoin will be traded ~ as often as a dollar, for bitcoins to be used as non-niche currency, you need enormous deflation from their current value. This fact discourages you from using it as an actual currency, because if you assume that it will be used in that way, you should keep your bitcoins, because they will greatly increase in value.

And it doesn't stop here. If bitcoins are the main currency at some point, and the guys who hoarded theirs are now absurdly rich because the one bitcoin they had is now worth at least a 1000 times what it is worth today (this is absolutely necessary for bitcoins to become a big currency), the fact that they are limited in amount still means that they will grow in value by the same amount that the economy grows. So why would you ever spend them. So they are an inherently deflationary currency. And it should be obvious why an inherently deflationary currency is really bad for the economy.

And the reason that nobody hoards real world currency is because it is inherently inflationary due to the way our banking system works. Thus, it would be retarded to hoard it.

And the reason that nobody hoards real world currency is because it is inherently inflationary due to the way our banking system works. Thus, it would be retarded to hoard it.