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Bitcoin hits US$ 4, after being mentioned on CNN yesterday

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Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#81

Post by kd0amg »

geuis wrote: post #66

Just as a quick reminder, since most people commenting don't understand how bitcoin generation works. It is not possible to "corner the market" by having more gpu power than other people. The btc algorithm was designed to only produce bitcoins at a constant rate. Adding a million more systems trying to calculate the answer to the next hash block only makes it a million times slower. If the bubble were to pop tomorrow…

It is not possible to "corner the market" by having more gpu power than other people. The btc algorithm was designed to only produce bitcoins at a constant rate. Adding a million more systems trying to calculate the answer to the next hash block only makes it a million times slower.

Which means you mine them as fast as everyone else used to, while everyone else mines them at one millionth the rate they used to.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#82

Post by jerf »

lsc wrote: post #71
JulianMorrison wrote: post #45

Earlier quoted context omitted.

Interesting argument. Trying to go against users is hard, the government is not as dumb as the music industry, to play whack-a-mole versus grandmothers and kids. My guess is they would attack exchanges trading BTC USD. There are fewer, and separating the BTC economy from the USD one would make the currency significantly less attractive. Even the threat to do so would crash its USD price.

I hope you are right. >the government is not as dumb as the music industry, to play whack-a-mole versus grandmothers and kids. I think the war on drugs would be a counterexample to this statement. Especially considering that legitimate bitcoin use is largely confined to nerds, I don't think the government would have a hard time painting bitcoin users as people who ought to be punished.

When the government wages its war on drugs, it cuts supply of drugs, which raises the price, which raises the incentives to smuggle drugs. Meanwhile, there is a certain contingent of people who will basically do anything for drugs. If the government could push the price of drugs for them above "all economic value a person can possible generate in any manner including through illegal means", they would win, but they just can't do that effectively.

When the government goes after a BitCoin exchange, they make BitCoins less valuable by raising the transaction costs associated with them, and severing the BitCoin economy from the general global economy. This will cause BitCoins to reduce in value against the currencies traded in the general global economy. This will cause people to be less inclined to use them because they will be less valuable. In this case, where the economic characteristics of drug trade fights against the government's goals, the economic characteristics of alternate currencies give the government a multiplicative advantage in its efforts to shut it down.

It is not a defense of BitCoin that the government can't shut down drug trade. It's a different problem. Indeed, the question BitCoin faces is even if the government never takes exception to it, will the multiplicative advantage that any attempt to shut down or game BitCoins will obtain be insufficient to kill it or gravely wound it? I don't think the government will have a need to demonize BitCoin users, they will be perfectly capable of shutting it down without that effort.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#83

Post by lsc »

jerf wrote: post #82
lsc wrote: post #71

Earlier quoted context omitted.

I hope you are right. >the government is not as dumb as the music industry, to play whack-a-mole versus grandmothers and kids. I think the war on drugs would be a counterexample to this statement. Especially considering that legitimate bitcoin use is largely confined to nerds, I don't think the government would have a hard time painting bitcoin users as people who ought to be punished.

When the government wages its war on drugs, it cuts supply of drugs, which raises the price, which raises the incentives to smuggle drugs. Meanwhile, there is a certain contingent of people who will basically do anything for drugs. If the government could push the price of drugs for them above "all economic value a person can possible generate in any manner including through illegal means", they would win, but they j…

that's a pretty convincing argument.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#84

Post by cgerard »

mmaunder wrote: post #68

There's this received wisdom among sociologists that three prerequisites for a stable country are laws, someone to enforce them and a judiciary. I mention this since Bitcoin is creating it's own economy which is analogous to a virtual country. The major benefit of Bitcoin, it's lack of jurisdiction, may also be a disadvantage. As the first disputes arise, hopefully a body of precedent will be developed that strengthe…

An economy is based more on the trust between the actors within it than on its medium of exchange or the goods and services being exchanged. Bitcoin doesn't address this aspect. Because fraud and collusion are still possible in a Bitcoin economy there exists the possibility of both currency instability and the creation and enforcement of monetary policy.

An irrational public can be just as damaging to a currency's value as an unwise central bank or government.

Regardless, I find Bitcoin to be a very interesting system and I'll keep tabs on its development.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#85

Post by zbanks »

JCB_K wrote: post #46
zbanks wrote: post #33

Earlier quoted context omitted.

To be fair, the same happens in the stock market: http://en.wikipedia.org/wiki/Penny_stock#Artificial_Inflatio...

ha! that reminds me of my Economy class in high school. We used to do a weekly game, where in the beginning of the year we'd have a certain amount of money, and we'd have to buy stock. The teacher would every week update us with the latest stock information, and based on that we'd have to make decisions. The person with the biggest amount of money at the end of the year won. So I picked stock of a company which was b…

When we did a stock market game in high school, we weren't allowed to use penny stocks.

I was so excited to find stocks that were doubling or tripling daily, only to realize how worthless it'd be in real life.

If anyone out there is a trader that works with penny stocks, I'd love to hear your insight. Is it possible to "game the system" by working with just a few (10-100) shares, instead of large holdings?

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#86

Post by cookiecaper »

xnerdr wrote: post #25
kiba wrote: post #24

Earlier quoted context omitted.

As a bitcoin veteran, I expect carnage, always. I learn that the hard way several months ago. Moreover, I tend to be fatalistic about the price of bitcoin. Whether or not the market is manipulated, as long goods and services are popping up in the bitcoin economy, we'll be alright in the long run.

As a bitcoin veteren, what, if any, do you expect will be the US reaction once it becomes big enough to cause problems?

I expect that they will do everything possible to marginalize or damage it.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#89

Post by narrator »

jerf wrote: post #82
lsc wrote: post #71

Earlier quoted context omitted.

I hope you are right. >the government is not as dumb as the music industry, to play whack-a-mole versus grandmothers and kids. I think the war on drugs would be a counterexample to this statement. Especially considering that legitimate bitcoin use is largely confined to nerds, I don't think the government would have a hard time painting bitcoin users as people who ought to be punished.

When the government wages its war on drugs, it cuts supply of drugs, which raises the price, which raises the incentives to smuggle drugs. Meanwhile, there is a certain contingent of people who will basically do anything for drugs. If the government could push the price of drugs for them above "all economic value a person can possible generate in any manner including through illegal means", they would win, but they j…

One thing about bitcoin... since there's no central server, the bitcoin economy can live all over the world and there's no single door for the feds to bust down. A war against it would look like the music companies trying to shutdown pirates in developing countries. A decade long crusade of state department aggressive diplomacy to get a global 3 strikes copyright policy enforced.

Re: Bitcoin hits US$ 4, after being mentioned on CNN yesterday

#90

Post by ceejayoz »

27182818284 wrote: post #42
xnerdr wrote: post #25

Earlier quoted context omitted.

As a bitcoin veteren, what, if any, do you expect will be the US reaction once it becomes big enough to cause problems?

So far the US reaction has been positive. The CIA is paying BitCoin members to give talks about it. As someone pointed out in a Bitcoin forum, unlike Liberty Dollars or E-Gold, Bitcoin could prove to be a useful way of securely and anonymously paying people off

> So far the US reaction has been positive. The CIA is paying BitCoin members to give talks about it.

By that definition, the US reaction to IEDs in Iraq has been positive, as people with bomb making experience are brought in to give talks about them.

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