Professional Traders Show Interest in Bitcoin • Hacker News Board

Re: Professional Traders Show Interest in Bitcoin

#31

Post by maaku » Mon, Apr 02, 2012, 4:20 AM UTC

stuhood wrote: post #11

javert wrote: post #6

Earlier quoted context omitted.

What do you expect to happen? What are the possibilities?

Since the block reward is the only source of 'new' bitcoin, the rate of bitcoin creation will be halving as well. So there will be two competing effects: 1) 'monetary' inflation will decrease, because the rate of bitcoin creation will drop from 7200BTC/day to 3600BTC/day 2) miners will be earning half as much when denominated in BTC If the decrease in inflation doesn't cause a large enough corresponding increase in p…

> ...and meaning longer transaction confirmation times (for at most 2 weeks, while the network adjusts to the change in capacity)

To be clear, it wouldn't be two weeks. The network adjusts every 2016 blocks, which under normal circumstances would be approx. 2 weeks. Typically it's a little less as new hash power comes online, but in the case of a drastic loss of hash power, it could be much much longer than two weeks. We saw that with namecoin where it took almost half a year between adjustments (or would have, if developers hadn't intervened with merge mining).

Re: Professional Traders Show Interest in Bitcoin

#32

Post by politician » Mon, Apr 02, 2012, 4:25 AM UTC

ewillbefull wrote: post #25

soup10 wrote: post #15

Bitcoin has several huge flaws that make it just a toy. The first is that it is insecure. As seen by the constant incidents of stolen and lost bitcoin's. Physical currency is much more secure than a string of bits sitting on a hard drive, the solution to this is having bitcoin banks that assume responsibility for the bits, but that defeats the purpose. The second is that it's much less convenient than cash. The third…

I don't know if this is a troll post, but I'll humor it anyway. > The first is that it is insecure. As seen by the constant incidents of stolen and lost bitcoin's. If this is the standard by which you deem a currency insecure, you may want to be more specific. Physical goods are also susceptible to theft. > Physical currency is much more secure than a string of bits sitting on a hard drive This isn't really substanti…

You'll admit, though, that a bitcoin lost is lost forever, and that at some point the rate of lost bitcoins will exceed the rate of newly minted bitcoins. Even if it attains 100% adoption, the current system will simply dissipate.

In that sense, if not insecure, it certainly isn't resilient.

Re: Professional Traders Show Interest in Bitcoin

#33

Post by adrianwaj » Mon, Apr 02, 2012, 4:39 AM UTC

I have a gut feeling that the bitcoin price will eventually explode. I don't know when, how or why, nor am I putting my money where my mouth is, so I don't say it. But unless some other substitute system is devised, I suppose the crash of fiat currencies would cause it. But in this case I think gold would be better.. or would it?

add: I heard someone talk about India buying oil from Iran using gold now - if gold replaces the petrodollar, that might trigger something. The sanctions on Iran could ultimately affect bitcoin by way of new oil trade with Iran in gold that doesn't include the Western bloc of nations. Oil4bitcoin might make an interesting website.

Re: Professional Traders Show Interest in Bitcoin

#34

Post by Iv » Mon, Apr 02, 2012, 5:07 AM UTC

To be fair, everything that has a price vraying in time will interest traders.

Re: Professional Traders Show Interest in Bitcoin

#35

Post by jakejake » Mon, Apr 02, 2012, 5:17 AM UTC

I've read about Bitcoin various times and I'm confused about what "mining" is. Maybe somebody could set me straight? Are Bitcoins currently generated by anybody who wants by solving difficult math problems? If so, is this CPU power being used for something, or just a way to tie the value of the currency to something tangible?

Re: Professional Traders Show Interest in Bitcoin

#36

Post by jarek » Mon, Apr 02, 2012, 5:23 AM UTC

lwat wrote: post #29

3pt14159 wrote: post #18

Earlier quoted context omitted.

It isn't a majority attack. Infact, today, it would probably be cheaper since bitcoins are a third of what they were when I found it. All you need to do is crash the market and buy put options against it, you don't need to create nonvalid transactions.

Who exactly will sell me put options on BTC?

You could probably find a willing "I'm putting all of my life savings in Bitcoin because it is rapidly appreciating" type to do the deal, it's free money as far as they see it.

Re: Professional Traders Show Interest in Bitcoin

#37

Post by stuhood » Mon, Apr 02, 2012, 5:26 AM UTC

politician wrote: post #32

ewillbefull wrote: post #25

Earlier quoted context omitted.

I don't know if this is a troll post, but I'll humor it anyway. > The first is that it is insecure. As seen by the constant incidents of stolen and lost bitcoin's. If this is the standard by which you deem a currency insecure, you may want to be more specific. Physical goods are also susceptible to theft. > Physical currency is much more secure than a string of bits sitting on a hard drive This isn't really substanti…

You'll admit, though, that a bitcoin lost is lost forever, and that at some point the rate of lost bitcoins will exceed the rate of newly minted bitcoins. Even if it attains 100% adoption, the current system will simply dissipate. In that sense, if not insecure, it certainly isn't resilient.

The current encoding of bitcoin on the wire allows for division to 8 decimal places, but there is discussion around improving the encoding sooner, rather than later. https://en.bitcoin.it/wiki/Divisibility_extension

Re: Professional Traders Show Interest in Bitcoin

#38

Post by jarek » Mon, Apr 02, 2012, 5:28 AM UTC

ewillbefull wrote: post #25

soup10 wrote: post #15

Bitcoin has several huge flaws that make it just a toy. The first is that it is insecure. As seen by the constant incidents of stolen and lost bitcoin's. Physical currency is much more secure than a string of bits sitting on a hard drive, the solution to this is having bitcoin banks that assume responsibility for the bits, but that defeats the purpose. The second is that it's much less convenient than cash. The third…

I don't know if this is a troll post, but I'll humor it anyway. > The first is that it is insecure. As seen by the constant incidents of stolen and lost bitcoin's. If this is the standard by which you deem a currency insecure, you may want to be more specific. Physical goods are also susceptible to theft. > Physical currency is much more secure than a string of bits sitting on a hard drive This isn't really substanti…

> But you're also ignoring another useful characteristic of bitcoin: coins cannot be counterfeited, unlike any other currency. They are crytographically ensured.

That's not a useful feature for me. Receiving counterfeit currency is very low on my list of concerns in life. It is a useful feature for governments, who would no longer need to ensure its currency isn't being counterfeited, but governments don't like this currency for a number of other reasons.

Re: Professional Traders Show Interest in Bitcoin

#39

Post by stevenwagner » Mon, Apr 02, 2012, 5:32 AM UTC

politician wrote: post #32

ewillbefull wrote: post #25

Earlier quoted context omitted.

I don't know if this is a troll post, but I'll humor it anyway. > The first is that it is insecure. As seen by the constant incidents of stolen and lost bitcoin's. If this is the standard by which you deem a currency insecure, you may want to be more specific. Physical goods are also susceptible to theft. > Physical currency is much more secure than a string of bits sitting on a hard drive This isn't really substanti…

You'll admit, though, that a bitcoin lost is lost forever, and that at some point the rate of lost bitcoins will exceed the rate of newly minted bitcoins. Even if it attains 100% adoption, the current system will simply dissipate. In that sense, if not insecure, it certainly isn't resilient.

There is no requirement for any number of coins to be in the system. The amounts are infinitely divisible. You could start the economy with 1 bitcoin, and break it into 7 billion fractions for everyone to share..and if all those are lost, you could do the same with the last 1 bitcoin again.

Re: Professional Traders Show Interest in Bitcoin

#40

Post by stevenwagner » Mon, Apr 02, 2012, 5:35 AM UTC

ewillbefull wrote: post #19

3pt14159 wrote: post #18

Earlier quoted context omitted.

It isn't a majority attack. Infact, today, it would probably be cheaper since bitcoins are a third of what they were when I found it. All you need to do is crash the market and buy put options against it, you don't need to create nonvalid transactions.

Why would you call this a "mathematical" flaw? Your original post implied there was some algorithmic issue, when you're really just proposing dumping the exchange market -- which is a completely independent mechanism of trade. > Also the only way to get bitcoins securely is to buy and sell them for cash. And even then there are ways of figuring out who is who. This is ridiculous. The psuedoanonymity of bitcoin allows…

I buy and sell bitcoins for cash from people on craigslist. No identifying information is given. Guess its not the "only way."