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I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

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Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

#31

Post by ars »

niklas_a wrote: post #30
ars wrote: post #28

Earlier quoted context omitted.

Then they aren't accepting euros as currency. At the end of the day they will immediately convert the euros to GBP. They are willing to use euros as a medium of exchange, but only because they know they can exchange them for (to them) real currency. (Currency is relative, obviously. And just as obviously it helps that somewhere in the world there are people who use that type of money, which gives you comfort that eve…

Plenty of people save in BitCoin, some would even argue that's where much of it's value comes today. Look at the article from Richard Falkvinge that he linked to for an extreme example. Nowhere did he suggest that the restaurant owner exchanged his BitCoins for USD. Maybe he saves them and uses them to buy something else. Who knows, maybe he buys the ingredients for his Meze using Bitcoins?

> Who knows, maybe he buys the ingredients for his Meze using Bitcoins?

If he does that, then why does he look up the exchange rate first?

Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

#32

Post by niklas_a »

ignifero wrote: post #25

Bitcoin is a commodity. Nobody issues it, it is mined and has a predictable, limited supply. People aspire to use bitcoin as fiat money, but that's impossible, there is no one to provide liquidity when the market runs out and there's no underlying economy it will be based upon. Commodities like gold, silver, petrol have been used or tied to money for centuries, but at some point their use was deprecated by the needs…

You are building a straw man. There are plenty of reasons why paperclips are unsuitable as money. They are easy to forge and there is no guarantee of how many will ever be in existence to name a few.

Trading oil or gold directly is obviously impractical. But Bitcoins are not. You can store an unlimited amount of Bitcoins on your smartphone or USB stick and you can securely and anonymously transfer them to someone else within a few seconds.

Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

#33

Post by ars »

c4urself wrote: post #2

There's a lot to like about BitCoin. They "just" need to solve the following: 1. Technical issues (make it more secure) 2. Economic issues (deflation) 3. "Competitor" issues (governments, banks, the powerful status quo)

> Economic issues (deflation)

This is actually a pretty serious problem.

The value of bitcoins always settles such that the cost of the electricity to make them is approximately their value.

But because the difficulty is adjusted such that a fixed number of bitcoins are generated per time (meaning faster or more efficient computers don't help), and that the number generated per unit time is constantly shrinking, it will cost more and more electricity over time to make bitcoins.

Deflation is built into it. And I bet the creator of bitcoins never realized that the scarce resource bitcoins track is electricity.

If you want to make a ton of money, buy bitcoins just before they switch from 50 per block to 25. I'm betting the value will double.

Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

#34

Post by tftfmacedo »

ars wrote: post #20
jalada wrote: post #19

Earlier quoted context omitted.

No, only because Bitcoin isn't stable enough right now to know what the price should've been in BTC.

You mean yes, not no. It's precisely because bitcoins are not stable that bitcoins are not a currency.

You should try living a country with high inflation. People lookup exchange rates every single day.

Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

#35

Post by ars »

tftfmacedo wrote: post #34
ars wrote: post #20

Earlier quoted context omitted.

You mean yes, not no. It's precisely because bitcoins are not stable that bitcoins are not a currency.

You should try living a country with high inflation. People lookup exchange rates every single day.

And those people do not willingly use that currency - they are forced to by their government.

Whatever currency it is that they are comparing to is the currency they really want to use, and probably do on the black market. I'm also confident that that is the currency they keep (or try to keep) their savings in.

Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

#36

Post by wedesoft »

ars wrote: post #33
c4urself wrote: post #2

There's a lot to like about BitCoin. They "just" need to solve the following: 1. Technical issues (make it more secure) 2. Economic issues (deflation) 3. "Competitor" issues (governments, banks, the powerful status quo)

> Economic issues (deflation) This is actually a pretty serious problem. The value of bitcoins always settles such that the cost of the electricity to make them is approximately their value. But because the difficulty is adjusted such that a fixed number of bitcoins are generated per time (meaning faster or more efficient computers don't help), and that the number generated per unit time is constantly shrinking, it w…

The cost of electricity per Bitcoin in turn depends on the computing power invested in the network. The strength of the next block is adjusted so that it takes approximately 10 minutes for the network to solve it. Also there are optional transaction fees.

Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

#37

Post by dexen »

kbd wrote: post #13

Excellent article. My favorite quote: > Apart from whether there is a central bank somewhere to bid against George Soros, doesn’t the difference between a real currency and an imaginary currency lie in some sense in the composure with which a customer can ask if the currency is accepted here and in the composure with which a merchant can say yes? Every currency is valuable only because other people consider it to hav…

> Every currency is valuable only because other people consider it to have value.

Two counterarguments:

- the idea of `legal tender' [1]. Usually the physical manifestation (coins and banknotes) of official currency in a given country/region/whatever is also codified by law as legal tender. Which means, when used for settling a debt, the creditor is obliged to accept it. Contrast that with gold, for example: it's considered valuable, but creditors are not required to accept it. Value of legal tender stems from both recognition and the legal framework of it being legal tender.

- taxes. Country's/region's law dictates the currency persons and organizations have to use for settling taxes and other dealings with administration. A currency that people don't trust or use for any other reasons could still have well-understood value in relation to settling taxes.

That having been said, I firmly believe Bitcoin has great potential. Even if this particular implementation fails at some point, other ones will follow.

----

[1] http://en.wikipedia.org/wiki/Legal_tender

Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

#38

Post by ignifero »

niklas_a wrote: post #32
ignifero wrote: post #25

Bitcoin is a commodity. Nobody issues it, it is mined and has a predictable, limited supply. People aspire to use bitcoin as fiat money, but that's impossible, there is no one to provide liquidity when the market runs out and there's no underlying economy it will be based upon. Commodities like gold, silver, petrol have been used or tied to money for centuries, but at some point their use was deprecated by the needs…

You are building a straw man. There are plenty of reasons why paperclips are unsuitable as money. They are easy to forge and there is no guarantee of how many will ever be in existence to name a few. Trading oil or gold directly is obviously impractical. But Bitcoins are not. You can store an unlimited amount of Bitcoins on your smartphone or USB stick and you can securely and anonymously transfer them to someone els…

How is it different from ordinary coins? (Obviously, in a hypothetical gold-coin economy credit cards would be in gold, too).

Btw, practicality was not the reason the world abandoned the gold standard, political and economical needs obviated it.

P.s. obviously, paperclips are not a good figurative example. The central banks might just give you a list of banknote numbers to exchange (and an API to verify their uniqueness)

Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

#39

Post by jasonzemos »

ars wrote: post #33
c4urself wrote: post #2

There's a lot to like about BitCoin. They "just" need to solve the following: 1. Technical issues (make it more secure) 2. Economic issues (deflation) 3. "Competitor" issues (governments, banks, the powerful status quo)

> Economic issues (deflation) This is actually a pretty serious problem. The value of bitcoins always settles such that the cost of the electricity to make them is approximately their value. But because the difficulty is adjusted such that a fixed number of bitcoins are generated per time (meaning faster or more efficient computers don't help), and that the number generated per unit time is constantly shrinking, it w…

I don't see how this is a problem. There will only be 21 coins in existence and their cost per generation (hence their intrinsic value) will rise up until that last coin is generated. At that point coins will just be subdivided many more times -- nobody will wield around an entire coin on a day to day basis the same way most people don't carry around a roll of $100 bills. Remember coins can be divided down to the 8th decimal place.

Re: I Spent A Coin (And I Liked It) — How I Bought Lunch in Manhattan with Bitcoins

#40

Post by jasonzemos »

discover wrote: post #17
drivebyacct2 wrote: post #12

Earlier quoted context omitted.

I'm curious. Where exactly do you see a security flaw in Bitcoin? Exchanges run by former magic the gathering admins don't count. What flaw is there is there in the security of the currency, I'm curious.

http://nerdr.com/shutting-down-bitcoin-really-taking-down-th... I'll add that the crypto will one day be broken (even brute force will eventually work once CPU/GPU have progressed far enough). And when it is, there is no reason you couldn't just sit back cracking those wallets in secret before funneling the coins your way. A significant weakness of the anonymity of the network means no one really "owns" a wallet in t…

You're right that sha256 will one day be in jeopardy, but there's no reason why the system can't update itself well before then. If sha256 is broken, all it takes is for people to update their clients and only start accepting sha3, etc.
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