฿ - Official Bitcoin Thread - ฿

[Drew1204]

I'm not saying other currencies (such as USD) are without flaws, but I would have to argue against A.) The necessitation for an online currency and B.) The idea that bit coins will increase in value as they are lost or removed from circulation.

Every currency, regardless on what it is backed by, at the very core represents work or labor done. We go to wotk, then we get paid, and then we exchabge that pay for the results (products) that others have worked on. Credit cards of course allow us to spend our labor first, for a fee, but all in all currency equals human labor, energy and work. Everyone's skills and labor are worth different amounts, but at the very basis of currency is simply the idea that you exchange your skills, knowledge, time, energy and power for that of another's.

The problem with bartering was that a construction worker might build a house, but not necessarily need what the farmer was growing. What currency allowed was the farmer to exchange his goods to those that needed it, and in turn use the currency he received to pay the construction worker for what he needed. And everyone might have a slightly different opinion on what their time and products were worth, but as long as you had this overlying currency, you at least weren't tied down to trying to exchange your very specific products directly for someone's else's specific products. The only major stipulation being that the currency had to be something that couldn't just be obtained. I mean, you can't just use rocks because everyone knows they can go to their back yard and get roxks, so gold and precious metals were popular...or in the case of bit coins, something without physical presence, computer "puzzle solving" to put it simply.

So, back to bit coins. Let's assume that as the years go on, the creation of new bit coins slows as they become more difficult to mine, some wallets are lost as a result of HD crashing, fires, sending to nonexisting wallets, lack of interest, etc which is frustrating and unappealing, and overall the number of available bit coins is declining. According to the article, these bit coins should gain value, but in my opinion the exact opposite will happen.

Because now were going to either have a very small minority using them that doesn't justify the integration as a large scale currency or there will be so much of a minority with them that people won't really care. Imagine if there was only $100 left in the entire US in the form if a crisp $100 bill. Do you think society is simply going to crash waiting for that person to spend the money or do you think society will leave that person behind along with their $100 and find a new mass currency that works for society as a whole? The only value then in the currency is suddenly purely novelty and historical, but with bit coins you don't even have something feasible to hold onto and display. I mean, people might want them simply because they're rare, like a collectible silver dollar, but not with the objective of using them as a currency...and even then, you're not really holding onto something "collectible" because its just a string of binary code.

But then, we still haven't even discovered its necessity as a currency. Many different countries have different currencies as a result of what they culturally value and created before international trade was normal. So when you fly to another country then of course, you often convert cash as necessary. But online, there's really no need to convert to an online currency because websites often convert your cash directly, which means if I shop online and buy a product from India, there are already systems in place that allow me to pay directly from my USD bank account. If there wasn't already a system in place for making transactions online, then maybe there's be a place for bit coin, but in large part, the Internet is a location where it doesn't matter what currency you use. Best of all, there's safety nets in place to ensure I don't lose money because a hard drive crashed immediately after converting to bit coin, there's systems in place to ensure money gets exactly where it needs to go, there's a system in place that protects me as a buyer (and seller), and bit coins simply can't compete from that perspective.

Unless you're trying to be anonymous......which comes with its own implications. The benefit of an online currency such as bitcoin is the lack of government or private control (Paypal) and stipulations on who, what, when, why and how we spend it. Its why we see bit coin lottery sites, poker sites, and other (often shady) websites operating beyond financial jurisdiction on a basis of trust that isn't always deserved. I believe people should be free to make their own choices, but the complete lack of financial oversight makes me very curious as to what underlying purposes bit coins may be used for. I like to believe the world would be better if we could govern ourselves, but the fact is that we need certain jurisdictions, rules and control over bit coins and their use, else who knows exactly what illegal activities bit coins are being used for...terrorism, child trafficking, etc.

Posted via Topify on Android

I agree with you on some aspects that Bitcoin does not have inherent value such as Gold and Silver do, and the benefits of Bitcoin have not all come to realization yet either, which is the exciting part.

The deflationary spiral theory says that if prices are expected to fall, people will move purchases into the future in order to benefit from the lower prices. That fall in demand will in turn cause merchants to lower their prices to try and stimulate demand, making the problem worse and leading to an economic depression.

Although this theory is a popular way to justify inflation amongst central bankers, it does not appear to always hold true and is considered controversial amongst economists. Consumer electronics is one example of a market where prices constantly fall but which is not in depression. Similarly, the value of bitcoins has risen over time and yet the size of the Bitcoin economy has also grown dramatically along with it. Because both the value of the currency and the size of its economy started at zero in 2009, Bitcoin is a counterexample to the theory showing that it must sometimes be wrong.

Notwithstanding this, Bitcoin is not designed to be a deflationary currency. It is more accurate to say Bitcoin is intended to inflate in its early years, and become stable in its later years. The only time the quantity of bitcoins in circulation will drop is if people carelessly lose their wallets by failing to make backups. With a stable monetary base and a stable economy, the value of the currency should remain the same.

In the past 24 hours there was a quarter of a BILLION transactions, so there is already more than a small majority of people using them. You also can store your Bitcoin in paper wallets which is basically a paper print out, as well as have them on a USB drive, HD, dropbox etc. It is highly unlikely that your computer would crash, you would lose your piece of paper and USB drive at the same time. People that are heavily invested in Bitcoin have these precautions already and for example keep their USB drive in a safe deposit box and have made backups.

Bitcoin is divisible by 8 decimal places, so if it becomes very valuable you can trade in mili and microbitcoins.

mBTC = mili bitcoin = 1 thousandth of a bitcoin = 0.001BTC
uBTC = micro bitcoin = 1 millionth of a bitcoin = 0.000001BTC

A lot of people in Africa and 3rd world countries do not even have bank accounts. Yet they all have mobile phones. Fast-growing African economies such as those of Kenya and Nigeria rely heavily on cash transactions, particularly in rural areas where there are no ATMs and few people have bank accounts. In some places, large networks of illegal money changers are used for cross-border payments.

That situation is part of the reason for the early success in Africa of mobile-phone payment systems such as Kenya’s M-Pesa, which allows users to send each other money using text messages. Koch believes that mobile payments built around Bitcoin could be even more useful. “It’s interesting to see how creative Africans can be about transferring money,” says Koch. “They really think seriously about a cashless society.”

Open-source technology created by the Bitcoin community could be used to create simple mobile apps for payments accessible to almost any phone with a camera, says Koch. Use of smart phones is now growing rapidly in some African countries, particularly Kenya, as prices for models using Google’s Android software have dropped rapidly. He imagines a design similar to the Bitcoin for Android app, which allows one person to transfer bitcoins to another by using a phone to snap a photo of a 2-D bar code or QR code on the screen of another phone. “People could exchange money when they meet on the street,” says Koch.

The decentralized design of Bitcoin means a payment system that uses the currency would easily span national borders and could avoid system-wide outages like those suffered by M-Pesa in December, which left users unable to do business. “All centralized systems have the same problem,” says Koch. “If you rely on it and you don’t have a way to pay, then you are in trouble.”- technologyreview

Bitcoin is a lot bigger than just being used as a currency as well, but a huge benefit is 0% transaction fees.

This article: Bitcoin: More than Money - Reason.com explains a lot of good points too.

 

[Digital]

I think where you're failing to understand the actual benefit of bitcoins is that you can't manipulate the market like you can with real money. There is no bank holding the money and no market to influence. You can't bully the government into doing something thus changing the economy and effecting the currency.
Also because it's very hard to trace there will always be a criminal market and while some say that's a bad thing it actually helps to stabilize the market because there will always be a demand for the product.

While bitcoins are very hard to barter with do to the constantly changing market they do provide a unique option for a niche product.

 

[Drew1204]

So you're saying it is unwise to mine, but isn't the very existence of bit coins dependent upon mining. You're telling people not to mine, yet if no one mines then no new bit coins are created...

And what happens if your hard drive crashes that your wallet is tied to? You've lost those bit coins forever, and in fact the bit coins as a whole are gone forever. At least if you lose a wallet of cash, someone else can pick it up.

Posted via Topify on Android

It's not wise for the average person to mine because we can't buy expensive enough equipment and take delivery of it in time. There are a few mining rigs that you can pre-order now, but they won't reach you until Q1 of next year. By then, the difficulty of mining will be too high to ROI, you will probably just break even in Bitcoins. I should have said, "Don't mine if you are trying to make money, just buy the Bitcoins themselves." Ex: rig costs $500, it will mine 0.8 Bitcoin. You would have been better off just buying 1 Bitcoin for $500.

You have a Bitcoin wallet, and address. You store your address information. It is not tied to one computer. People create paper backups, store them on different offline machines, USB drives. But yes, you have to protect your information.

 

[Drew1204]

More money changed hands today on Bitcoin than PayPal. Discover card next.

Coinometrics

 

[dtheo]

Has anyone here bought some bitcoins? Curious how this process was for you and what do you plan on doing next?

 

[TJSwoboda]

You will need the hard drive from the computer where you had them stored. Search for a file called wallet.dat. If you find it...lucky you! $1,400,000 richer.

We now, officially, have a forum member who possibly threw out $1.4 million. :uh oh:

But yeah, the time to mine bitcoins was several years ago. I missed out...

 

[ITRIEDEL]

BUMP

What are your predicitions for the next few weeks on value? I've been buying and selling bitcoin past few months. I just sold out a couple of bitcoin last week. I'm hoping it dumps @ 900 again like it did earlier so I can scoop some more up. It's been floating right under 900 this past week. Up and down from 799-899; alot of resistance at 900.

Something tells me people are scared of that 900 again. It went from 900 to almost 400 flat last week and now it's back up in that area again. I guess that means buyers and sellers get ready. Once the 900 threshold is reached, it's going to be a fun ride up or a terrible ride down again.

Anyone thinking about bitcoin, go to www.coinbase.com. I buy my coins from them. Also look into litecoin. Litecoin is a new bitcoin with better features; however it's very cheap and may make bitcoin the predecessor if it ever is controlled. People always want anonymity currency.

 

[TJSwoboda]

I just tried to set myself up to mine litecoins, but can't get the GPU miner to work. I've only got a Radeon 2600 anyway, and CPU mining is supposed to be useless; four cores probably wouldn't help much.

Anyone here mining litecoins?

 

[Drew1204]

BUMP

What are your predicitions for the next few weeks on value? I've been buying and selling bitcoin past few months. I just sold out a couple of bitcoin last week. I'm hoping it dumps @ 900 again like it did earlier so I can scoop some more up. It's been floating right under 900 this past week. Up and down from 799-899; alot of resistance at 900.

Something tells me people are scared of that 900 again. It went from 900 to almost 400 flat last week and now it's back up in that area again. I guess that means buyers and sellers get ready. Once the 900 threshold is reached, it's going to be a fun ride up or a terrible ride down again.

Anyone thinking about bitcoin, go to www.coinbase.com. I buy my coins from them. Also look into litecoin. Litecoin is a new bitcoin with better features; however it's very cheap and may make bitcoin the predecessor if it ever is controlled. People always want anonymity currency.

Maybe $1,600?

It just hit 1,250 earlier today which is higher than gold.

 

[dtheo]

Crypto-Currency Market Capitalizations | Bitcoin Litecoin Peercoin Namecoin QuarkCoin Megacoin ProtoShares Feathercoin Primecoin WorldCoin and more...

 

[dtheo]

Digital money: The Bitcoin bubble | The Economist

Digital money
The Bitcoin bubble
It looks overvalued. But even if this digital currency crashes, others will follow
Nov 30th 2013 | From the print edition

BITCOIN is booming. Investors are piling into the digital currency, which is not issued by a central bank but is conjured into being by cryptographic software running on a network of volunteers’ computers. This week the price of a Bitcoin soared to above $1,000, from less than $15 in January.

Having long been favoured by libertarians, gold bugs and drug dealers, Bitcoin is attracting some surprising new fans. Germany has recognised it as a “unit of account”. Ben Bernanke, chairman of the Federal Reserve, told a Senate committee on virtual currencies that the idea “may hold long-term promise”. A small but growing band of shops and firms accept payments in Bitcoin. Some like the way it allows funds to be transferred directly between users, without middlemen. Others are attracted by the potential for anonymous transfers, or by the fact that the number of Bitcoins in circulation has a fixed upper limit—so there is no way a central bank can inflate their value away by issuing more.

But the recent price surge, driven by Chinese investors stashing money offshore, looks like a classic bubble. Hoarding means that Bitcoin is currently more of a speculative asset than a currency. And a crash is not the only risk Bitcoin users face. As the price rises, Bitcoin theft is increasing, both from individuals and from online exchanges that store the coins and convert them into other currencies. Around $1m in Bitcoins was recently stolen from BIPS, a European exchange. GBL, a Chinese Bitcoin exchange, abruptly vanished in October, taking $4.1m-worth of deposits with it.

The system itself is straining at the seams (see Technology Quarterly). The amount of computing power consumed by its transaction-verification system, which has the side-effect of “mining” new Bitcoins, is mushrooming: it now far exceeds that of the world’s 500 fastest supercomputers combined. At the same time Bitcoin’s method of recording and processing transactions, and compensating those who verify them, is becoming unwieldy. Adjusting Bitcoin’s protocols, however, requires getting the volunteers who maintain its software to agree on the necessary changes, and the Bitcoin community to adopt them, before anything goes wrong.

Excitement about Bitcoin, and concerns about its limitations, have prompted the emergence of many other cryptocurrencies, or altcoins. Litecoin, for example, retains Bitcoin’s limited money supply but offers faster transactions and is intended to prevent a computational arms-race among miners. And whereas Bitcoin was created by a mysterious figure known as Satoshi Nakamoto, who vanished in 2010, Litecoin’s creator, Charles Lee, makes no secret of his identity. Peercoin has no money-supply limit, built-in inflation of 1% and a more energy-efficient mining process, though, as with Bitcoin, its creator is unknown. Anoncoin and Zerocoin, meanwhile, strive for complete anonymity—which Bitcoin lacks. And so on.

We’ve heard this song before

Bitcoin, then, is merely the first and, for the time being, the best-known example in a new category. In many ways it is akin to Napster, the pioneering file-sharing service that upended the music industry in 1999 by allowing internet users to call up almost any song at will. Though Napster, unlike Bitcoin, was illegal, it demonstrated that there was enormous demand for what it provided, prompting many other services to spring up in its wake. Just as Napster paved the way for BitTorrent, iTunes and Spotify, Bitcoin has triggered a surge of innovation in digital money.

So let a thousand altcoins bloom. In the meantime, if you are lucky or clever enough to have owned an asset whose price has risen 60-fold in a year, it might be time to sell.

Correction: This article originally stated that Litecoin was intended to be more energy-efficient than Bitcoin. In fact, its design strives to prevent a computational arms-race among miners by reducing the benefits associated with specialised mining hardware; Peercoin is designed to allow more energy-efficient mining. This was corrected on November 29th.

From the print edition: Leaders

 

[Drew1204]

Digital money: The Bitcoin bubble | The Economist

Digital money
The Bitcoin bubble
It looks overvalued. But even if this digital currency crashes, others will follow
Nov 30th 2013 | From the print edition

 

[Drew1204]

Peter Schiff debate with Erik Voorhees on digital currency:

https://soundcloud.com/casper-cheng/peter-schiff-debate-with-erik

 

[bluestang41505]

Just got a 290x for $474 to game and mine with. Looking at litecoin and feathercoin to mine before the bubble jump.

 

[ElscottHavoc]

Found something pretty funny involving bitcoins.

Kid holds up bitcoin QR code and gets 24k at College Game

 

[TJSwoboda]

Just got a 290x for $474 to game and mine with. Looking at litecoin and feathercoin to mine before the bubble jump.

Looks like a great price. Let us know if you get GPU mining of litecoin up and running.

Found something pretty funny involving bitcoins.

Kid holds up bitcoin QR code and gets 24k at College Game

:lol:

 

[ElscottHavoc]

So....

What do you have to say about bit coin now that their largest exchange (Mt Gox) has been outted as a scam and hardly a secure place to deposit money? And how many others are fly by night considering the trend?

People lost hundreds of thousands and they're SOL because of hackers (how many times have you heard of PayPal, brokers, or online banks being hacked and losing all your money) and bad business principles. I'm not saying traditional banking is without issues, but at least you can track thieves and there is the FDIC. How many times does this have to happen before people find out an anonymous currency isn't without major flaws and that bit coin has serious problems. Ya know, I understand my stock portfolio could crash, but I'm confident my funds are safe from hackers and that my online broker is legit. I don't think anyone can feel comforted by 6% of all bit coins world wide vanishing from Mt. Gox. If a bank is hacked, you track down account numbers and I guess if bit coins are hacked you scratch your butt.

Now the same people who thought an anonymous currency was awesome are crying for help to track down where their money is. Good luck!

Posted via Topify on Android

 

[bluestang41505]

So....

What do you have to say about bit coin now that their largest exchange (Mt Gox) has been outted as a scam and hardly a secure place to deposit money? And how many others are fly by night considering the trend?

People lost hundreds of thousands and they're SOL because of hackers (how many times have you heard of PayPal, brokers, or online banks being hacked and losing all your money) and bad business principles. I'm not saying traditional banking is without issues, but at least you can track thieves and there is the FDIC. How many times does this have to happen before people find out an anonymous currency isn't without major flaws and that bit coin has serious problems. Ya know, I understand my stock portfolio could crash, but I'm confident my funds are safe from hackers and that my online broker is legit. I don't think anyone can feel comforted by 6% of all bit coins world wide vanishing from Mt. Gox. If a bank is hacked, you track down account numbers and I guess if bit coins are hacked you scratch your butt.

Now the same people who thought an anonymous currency was awesome are crying for help to track down where their money is. Good luck!

Posted via Topify on Android

Honestly, IMO, Bitcoin is the start of a world changing idea that is still at its new born stage. The thing is crap like MtGox will happen. Eron lost people their entire savings and lives that they will never get back. Gox, is just a well known trading place, the price of bitcoin ATM is over 550 up from the 400 range it was showing that there is still a want for bitcoin. If there a "rush" like in the 20's for cash, the price would completely collapse, but that didn't happen. So people can now go onto the other exchanges that have already been around, and if they got in around the 400 mark, made some serious coin in the last week. Once more people get involved and there is a mass understanding of how things work, the price will level off.
This thing also has created thousand of jobs, which will only grow. This has caused more startups and more money being invested in tech by people who would never have before. Right now the gold rush is in full swing, and some people are going to get rich and some will get ****ed. Things will change once the .gov decides what to do with it. I doubt anyone wants to spend the $$ on being a true bank for bitcoin with real security and insurance for these coins without knowing it will be legal to have tomorrow. If the .gov says we will allow it and tax it like normal stock, you will see the 2nd part of the gold rush by banks to offer returns like savings accounts and blah blah. Time will tell

 

[RedRocketMike]

Bitcoin is a joke, only a fool would own it at this point.

 

[TorchMach]

Bitcoin is a joke, only a fool would own it at this point.

Or only a fool wouldn't own some at this point..