491–500 of 600 posts
This is one of the scenarios I think that would incorporate bitoin into the current financial system.
Excuse my lack of knowledge, but seeing as how one BTC is now worth $100. Is it possible to send someone half a bitcoin or 1/10th? Or is it a single unit or nothing?
Also there is talk of making the default traded unit a mBTC, (I think) Its a unit that represents a thousandth of a unit. once this becomes the standard unit the psychology is there to allow BTC to rise even further.
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I fired up a miner again recently just for fun. Took 5 days to dig out $15. That's comparable to the $3/day the same GPU could mine back when the exchange rate was $5/coin. But yes, the ASICs are coming. There are only a few in the wild right now. Pretty soon there won't be much point to GPU mining.
Nice, that's not a bad return! I can't even get $2 a day out of mine. I wonder how difficult it would be to build a ASIC yourself?
PCBs can be made for hobby projects. ASICs cannot, unless you have money literally coming out of your ears.
http://electronics.stackexchange.com/questions/7042/how-much...
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> The reason it's bad is that deflation makes it more profitable to do nothing than to invest. This makes no sense to me. If keeping 100 units makes one richer because they are worth more in a year, then any investment which has a positive return (that is, you end up with more than 100 units in a year) must be that much better... What am I missing?
Let's pretend the deflation is at 3% (i.e. there's a inflation rate of -3%). Then your 100 units will be worth 103 units (in today's money) in 1 years time. This is a guaranteed rate of deflation (bitcoin has a guaranteed rate of deflation, I don't know if it's 3%) So someone comes along and wants a loan, but they can't pay back 3% interest rate, only 2%. Why would you give that person your 100 units if you'll only g…
This is not true. There is no guaranteed rate of deflation.
The rate at which you can 'mine' bitcoin is limited and there is a hard limit to the total amount of bitcoin that can be mined.
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There are a few replies here that seem to be reacting negatively to the OP due to the tone of the submission instead of the content. To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. The reason it's bad is that deflation makes it more profitable to do nothing than to invest. When this happens, people react by not spending money. The market dies. While inflation…
> To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. I hear this argument a lot, but no nation that we know of has ever collapsed because of deflation, right? We've never (recently) been in a period of significant deflation, so how can we be so certain of its effects? > deflation makes it more profitable to do nothing than to invest. Investment won't ever stop,…
The Weimar Republic, arguably.
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A massive chain-split that erodes confidence in the perceived value of the currency. Gold is a tangible substance. BTCs are just data and we all know how volatile that can be.
They just had a split. They resolved it in short order and the value skyrocketed after that.
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Good luck. You're swimming against a tide of people minted from education with the mindset of deflation bad, inflation good. Of course, everyone likes deflation when it means they can buy more for less. Of course, if prices of things get so low that people start to purchase, then deflation will eventually reverse, unless you assume that deflation will continue forever until prices reach zero and everything is free. O…
Just because people hold money in bank does not mean that the banks will lend people money. In fact, after being bailed out with TARP, many banks did not turn around and increase the amount of lending that they were doing. However, most of them did pay back their lender (the Fed). As with anything, too much of any extreme is bad. Too much inflation or too much deflation. But with fiat currency, it's natural to expect…
The financial systems works different.
You seem to be conflating wealth and money. Money doesn't disappear from the system when someone fails to repay a loan. (Unless you are taking a rather wide, but still sane, definition of money, and hold that lending increases the money supply.)
No extra money needs to be printed to pay back all that interest. That's because central banks pay a dividend to their governments.
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Gold is a piss poor investment. Owning Real Estate (and making money off of it) entails taking care of it. People taking care of their land (so that it can appreciate in value) is a good thing. The typical Real Estate "investor" adds a ton of value to their home, not just through maintenance, but also additions (ie: a new deck). This maintenance is true value added to the economy. True value that wouldn't have been a…
You are severely miscategorizing real estate. Look at what happened in the 2000s bubble. Property was flipping with no value adds, and even with added wear and tear. Buying desert property today and selling it for profit in 10 years when the city next door expands-- that is not wealth creation.