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Bitcoin Hits $1 Billion

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Re: Bitcoin Hits $1 Billion

#111

Post by [deleted] »

WhoIsSatoshi wrote: post #84
waffle_ss wrote: post #47

Earlier quoted context omitted.

There are some real concerns with Bitcoin. For example, I was going to write an app that accepts Bitcoins as payment. However, the problem is that the amount of time it takes for a transaction to become "verified," i.e. be part of the official block chain, can take up to 10 minutes. What am I supposed to present to the user during this time? Am I supposed to tell them that their payment may or may not have been accep…

How do you think credit card work? They approve blindly but might later reverse the transaction. You might want to setup a holding period for big transactions, and otherwise setup a system that incurs an expected loss/scam: Visa takes 2-5% of transactions and expects irrecoverable loss in that buffer - a Bitcoin seller still could undercut that with expected petty theft. e.g. under $100 transaction: no waiting. $100-…

[deleted]

Re: Bitcoin Hits $1 Billion

#112

Post by baddox »

dragontamer wrote: post #110
baddox wrote: post #108

Earlier quoted context omitted.

> The problem is that all the advantages of Bitcoin is now lost, and you have transferred control of Bitcoin to the Bitcoin bank. That isn't a loss of the advantages of bitcoin, because you got to choose which organization to trust, if any. With government currencies, you don't get to choose.

What is preventing me from converting my USD into Euros or Yen? I can choose whichever Government / Central bank fits me the best.

Sure, but you can also choose bitcoin, which has no government or central bank, if that fits you best.

Re: Bitcoin Hits $1 Billion

#114

Post by cinquemb »

ChuckMcM wrote: post #9

Pretty much seems to have hit the speculation threshold. Perhaps the Eurozone crisis will do for Bitcoin what the first Gulf War did for CNN.

Until the next country needs to be bailed out again at the expense of deposit holders.

greece in 2010, portugal in 2011, spain and greece in 2012, and cyprus so far in 2013.

2 more for 2013 before it starts to look like a Fibonacci sequence :D

Re: Bitcoin Hits $1 Billion

#116

Post by kyledrake »

So, in a sentence: Bitcoin is being used by people as a highly liquid, defensive store of value from within Cyprus, where capital controls are preventing people from moving their money out through traditional means.

This is what gold used to be used for. But gold is not liquid, and Bitcoin is. It appears that hackers have made something better than gold, the longest standing store of value in human history. What an incredible achievement! For the first time in history, I can somewhat safely make the argument that we now live in a post-gold economy. Gold is still there, but we now have something even better for storing value.

This is getting deep into the economics of mediums of exchange, which are important for understanding what is going on here.

I did a talk on Bitcoin a while ago where I went into describing Bitcoin from a medium of exchange perspective rather than a technology one. It may help you to understand what is going on here, and why I think that this will continue into the future: http://www.slideshare.net/KyleDrake/bitcoin-the-cyberpunk-cr...

Re: Bitcoin Hits $1 Billion

#117

Post by drusenko »

WhoIsSatoshi wrote: post #84
waffle_ss wrote: post #47

Earlier quoted context omitted.

There are some real concerns with Bitcoin. For example, I was going to write an app that accepts Bitcoins as payment. However, the problem is that the amount of time it takes for a transaction to become "verified," i.e. be part of the official block chain, can take up to 10 minutes. What am I supposed to present to the user during this time? Am I supposed to tell them that their payment may or may not have been accep…

How do you think credit card work? They approve blindly but might later reverse the transaction. You might want to setup a holding period for big transactions, and otherwise setup a system that incurs an expected loss/scam: Visa takes 2-5% of transactions and expects irrecoverable loss in that buffer - a Bitcoin seller still could undercut that with expected petty theft. e.g. under $100 transaction: no waiting. $100-…

That's not how the credit card system works. The merchant first makes an "Authorization" which is a promise by the credit card company to pay the merchant that amount of money within the next 90 days. When they make that promise, they check the customer's account to verify that there are enough funds and then deduct that amount from the available funds.

Assuming everything else goes as expected, the merchant then issues a "Capture" which finalizes the transaction, and they receive the funds once settled (within 24 hours).

If the CC # details were stolen or the customers otherwise feels that it was a fraudulent transaction, they can call up the bank who will do what's called a "chargeback" and take the money back from the merchant plus a $25 "fuck you" fee.

Fraud rates are expected to be less than 1%, if they get higher than that you get in trouble as a merchant.

But the thing that's absolutely not happening is blind shipping of goods or delivery of electronic goods with a guess that the customer will probably pay, even below any amount.

Re: Bitcoin Hits $1 Billion

#118

Post by bitcartel »

cs702 wrote: post #35

As usual on HN, any submission about Bitcoin is met with concerned comments about its high volatility, present impracticality as a currency, disadvantages versus precious metals, current concentration of transactions in a single exchange (MtGox), potential for market manipulation by governments and/or speculators, etc. This is analogous to being present at the creation of the World Wide Web, but instead of getting ex…

What is the potential impact of Bitcoin forking, given that it's trivial[1]?

Q1. We can differentiate between fiat currencies by looking at the qualities of the issuing authority, and thus determine that it's better to have savings in Swiss Francs rather than Zimbabwean Dollars. With Bitcoin, Litecoin and other forks, how do we differentiate apart from popularity of the network?

Q2. I've heard the argument that Bitcoin is valuable because there is scarcity in the system, a limit to the number of coins, thus it is similar to gold. However, if tomorrow somebody discovered vast amounts of pink gold, with exactly the same chemical and physical properties as gold, except for the colour, it's likely the price of gold would fall. As Bitcoin is facing this exact scenario via forking, what are the potential consequences, and does it even matter?

[1] http://litecoin.org (changed the hashing algorithm from SHA256 to Scrypt)

Re: Bitcoin Hits $1 Billion

#119

Post by rmc »

reaclmbs wrote: post #20
mrkmcknz wrote: post #17

I want to be able to get behind Bitcoin I really do. I just don't understand the purpose it serves. As an asset class it's far too volatile even for someone who plays naked options. Imagine putting $10,000 into an asset class that swings 20-30% daily on a regular basis. Trading curbs eat your heart out. As a currency it's too impractical and there are serious hurdles involved with turning central bank currency into B…

OK, let's play a game. Say you had $5mm. How would you manipulate the Bitcoin market and earn a guaranteed return?

You find out who Satoshi is (private investigator) , and you hack their computer. Since they invented bitcoin there's a good chance that they own a nontrivial percentage of all currently mined bitcoins.

Likewise you could hack the computers of early adopters who own a lot of bitcoins (back when mining was easy). For example, someone paid someone else 10,000 bitcoin for a pizza a few years ago.

You now own a significant portion all all the bitcoins.

Alternatively, hire security professionals and finds bugs in the bitcoin protocol or client software. You may be able to force another fork.

Re: Bitcoin Hits $1 Billion

#120

Post by rmc »

tocomment wrote: post #113

Basic BTC 101 question. Are there a fixed number of txns in a block or is it variable? (And what do you recommend I read to learn this kind of stuff)

As far as I know there is no limit on the number of transactions, but there is a limit on the total number of possible bitcoins (about 21 million IIRC)
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