91–100 of 221 posts
Bitcoin is a fantastic idea, with one crucial mistake: the finite nature of bitcoins. The fact that coins will one day "run out" will almost certainly lead to increased speculation, which will in turn lead to a deflationary spiral, followed by a "bubble burst" when speculators sell all their bitcoins and average coin holders are left holding the bag. Infinite coins would tie the value to the opportunity cost of compu…
As far as I can tell, the only way to actually stay anonymous and have a foothold in the bitcoin economy would be to exchange bitcoins for cash in person with someone. Even then, once you tried to combine that account with any other you owned that was traceable to you (record in an exchange, email sent to a client containing your bitcoin address) it would be easy to link them together, since the entire ledger is publ…
Of course, if you do this to cover up illegal activity and get caught at it (someone searches your computer and finds the private keys for both sides of the transaction) then you could probably be prosecuted for money laundering as well, so I don't necessarily recommend it. But achieving anonymity is not all that hard as long as you pass the money through a large third-party pool somehow.
> Because Bitcoin is an open-source project, and because the database exists only in the distributed peer-to-peer network created by its users, there is no Bitcoin company to raid, subpoena or shut down. Which will leave only Bitcoin users to raid, subpoena and shut down.
And that worked so well for copyright piracy! I'm glad we live in a world without pirated music and movies!
Bitcoin is a fantastic idea, with one crucial mistake: the finite nature of bitcoins. The fact that coins will one day "run out" will almost certainly lead to increased speculation, which will in turn lead to a deflationary spiral, followed by a "bubble burst" when speculators sell all their bitcoins and average coin holders are left holding the bag. Infinite coins would tie the value to the opportunity cost of compu…
There is a finite amount of bitcoins because it is designed to mimic a natural resource - easy to "mine" at first, much more difficult to mine as time goes on, and eventually there are none left. If there were an infinite amount of bitcoins that could be generated, there would always be inflation in place roughly proportional to the amount of computational power being used to mine, and soon your bitcoins would be wor…
However I don't believe currency should be unpredicatble and inflate at the whims of the government.
Earlier quoted context omitted.
Is a $20 bill something of value? No, it's merely somewhat hard to forge, and accepted as currency by lots of people. Or how about an entry in a ledger on some bank's computer? The only reasons the $20 bill or the entry in the computer retain value are because there's a central entity that limits the creation of too many of them, and people accept it as currency in exchange for good, because they expect that other pe…
>Is a $20 bill something of value? No, it's merely somewhat hard to forge, and accepted as currency by lots of people. I think perhaps you and I are using different definitions of "value". If someone is willing to accept something in exchange for something else, that act reveals that they value it, either for its use value or for its exchange value (i.e., as money). >The only reasons the $20 bill or the entry in the…
Earlier quoted context omitted.
That's a valid strategy, and one the US government may even employ. However, other countries would have to agree to similar restrictions, otherwise you could trade dollars for euros, then euros for bitcoins. It also wouldn't prevent over-the-counter exchanges between individuals. The US government would also run into opposition from groups like the EFF, and I think it would be difficult to word the law to ban bitcoin…
That's completely unrealistic. There is very tight cooperation between the major currency blocks when it comes to the crackdown on anonymous payments and on everything anonymous for that matter.
Bitcoin is a fantastic idea, with one crucial mistake: the finite nature of bitcoins. The fact that coins will one day "run out" will almost certainly lead to increased speculation, which will in turn lead to a deflationary spiral, followed by a "bubble burst" when speculators sell all their bitcoins and average coin holders are left holding the bag. Infinite coins would tie the value to the opportunity cost of compu…
Speculation is exactly what is required for Bitcoin to take hold as a legitimate currency. Without speculation it's a product/service no one wants (because it has no value or potential), by definition. Before today Bitcoin was "just" interesting to me, after reading this I now see the potential it has. I think I'm going to run an experiment and also accept payment for my product in Bitcoins: http://www.devside.net/se…
Earlier quoted context omitted.
There is a finite amount of bitcoins because it is designed to mimic a natural resource - easy to "mine" at first, much more difficult to mine as time goes on, and eventually there are none left. If there were an infinite amount of bitcoins that could be generated, there would always be inflation in place roughly proportional to the amount of computational power being used to mine, and soon your bitcoins would be wor…
You know I've thought about this for awhile and I'm starting to come to the conclusion that inflation is a good thing. Having a currency that doesn't inflate is bad for 2 reasons. 1. The population keeps growing, 2. Humans are hoarders. Having currency inflate encourages society to use their money instead of squirreling it all away. Everything in life devalues over time and I don't think currency should be any differ…
Earlier quoted context omitted.
Is a $20 bill something of value? No, it's merely somewhat hard to forge, and accepted as currency by lots of people. Or how about an entry in a ledger on some bank's computer? The only reasons the $20 bill or the entry in the computer retain value are because there's a central entity that limits the creation of too many of them, and people accept it as currency in exchange for good, because they expect that other pe…
>Is a $20 bill something of value? No, it's merely somewhat hard to forge, and accepted as currency by lots of people. I think perhaps you and I are using different definitions of "value". If someone is willing to accept something in exchange for something else, that act reveals that they value it, either for its use value or for its exchange value (i.e., as money). >The only reasons the $20 bill or the entry in the…
I meant intrinsic value in that context. Of course I agree that it has value based on what people are willing to exchange it for. That's precisely the point I was trying to make; in your original post, you had claimed that bitcoin was flawed because it wasn't based on a commodity originally, and I was pointing out that that really has no bearing on its present value.
> Why do you think that? It's certainly true that artificial scarcity raises prices (for money, in terms of all other goods), but that scarcity is not what is being subjectively valued.
> A $20 bill today is valued (as money) based on what it could buy yesterday. And yesterday's valuation (as money) was based on the day before that.
You trimmed out my next sentence in your quote in which I said almost exactly that. My only point about artificial scarcity is it limits the rate at which value can be lost due to inflation; it helps it retain its value, because you know that someone else won't be able to just go and get more for themselves, but instead will be more likely to want to trade you something for the currency you are trading.
> Go back far enough and the money valuation will have spawned from the commodity valuation.
It doesn't really matter how far back you look; just because a currency was originally based on a commodity has no bearing on its value now, other than as a historical artifact. What matters is what it will buy you when you spend it, which is in the future, and while not entirely predictable, in the near future tends to be close to what it would buy you in the recent past.
All I'm saying is that there is as much intrinsic value to a bitcoin as there is to a dollar, or a euro, or what have you. The difference is mainly in how they are transferred, and how the supply of them is constrained. I'm not entirely convinced that a deflationary currency is a good idea, but I think that bitcoin is a technically, economically, politically, and socially interesting experiment.
I generated a few back in the day when I could do so on my laptop in a few hours without dedicated GPUs running constantly, and I'm going to hold onto them for a while to see how this whole thing pans out. Who knows, with only 21M in existence, if this thing takes off the few I have could wind up being pretty valuable later on; and if not, well, I just lost a few hours of CPU time, no big deal.
If you don't think that bitcoins will hold their value, I'll gladly take any you have off your hands. Just send them to 1Lz9u29gLLUJ3yH6GrMeSuRUmbUounXinG ;)
Bitcoin is a fantastic idea, with one crucial mistake: the finite nature of bitcoins. The fact that coins will one day "run out" will almost certainly lead to increased speculation, which will in turn lead to a deflationary spiral, followed by a "bubble burst" when speculators sell all their bitcoins and average coin holders are left holding the bag. Infinite coins would tie the value to the opportunity cost of compu…
There is a finite amount of bitcoins because it is designed to mimic a natural resource - easy to "mine" at first, much more difficult to mine as time goes on, and eventually there are none left. If there were an infinite amount of bitcoins that could be generated, there would always be inflation in place roughly proportional to the amount of computational power being used to mine, and soon your bitcoins would be wor…
[1]http://www.npr.org/templates/archives/archive.php?thingId=13...
[2]http://www.npr.org/blogs/money/2011/02/15/133781593/the-tues...
[3]http://www.npr.org/blogs/money/2011/02/18/133874462/the-frid...