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1 bitcoin worth more than dollar

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Re: 1 bitcoin worth more than dollar

#51

Post by 0x6763 »

svrocks wrote: post #45

I really like the idea, but I have a question about how transaction growth can be sustained once all 21MM bitcoins have been generated. In order to support borrowing/lending IMO you need an increasing supply of currency. Otherwise where will the interest on debt come from? The only other type of non-inflating "currency system" I can think of is the market for collectibles (baseball cards, limited edition artwork, etc…

To ensure that all debt can be paid back with interest the money supply must continually grow - FALLACY! See this simple google spreadsheet - http://bit.ly/f2yE4D

Intrinsic value - FALLACY! Behold, the Subjective Theory of Value - http://en.wikipedia.org/wiki/Subjective_theory_of_value

Concerned about long-term viability of bitcoins? Maybe your concern should be with learning logic and economics first.

Re: 1 bitcoin worth more than dollar

#52

Post by pzxc »

hristov wrote: post #34

Wow, I just learned about bitcoins and I have to say they are very clever. Their brilliance is in that they play to the urge to collect in humans. You run the software and makes bitcoins for you. Almost like earning money in your sleep. And of course once you have "earned" these bitcoins by installing the software you have a psychological inclination to assign actual value to them. Of course like most things academic…

If anybody else has trouble setting it up I wrote a tutorial on it: http://pzxc.com/how-to-get-started-with-bitcoins

Re: 1 bitcoin worth more than dollar

#53

Post by 0x6763 »

vinyl wrote: post #40

"No central authority" ? Well, I think the guys who decide there will only be 21 million bitcoins can be considered a central authority. Currency, in any form, is deemed to have a central authority -- national currencies, for example, have real-life value because states limit the available quantity. In this case, the Bitcoins people are acting as the central bank. Especially when I see that the total produced bitcoin…

Someone proposed 21 million coins, and others, by voluntarily choosing to run the software, agreed to the 21 million coin limit. That's not a central authority...just an agreement between individuals.

In all of your statements you're conflating a protocol, and voluntary social agreement, with a central authority.

Anyone is free to fork the software and change the rules to create their own protocol for people to use! If they like the rules, they join...if they don't like the rules, they don't join. Freedom.

Re: 1 bitcoin worth more than dollar

#54

Post by akkartik »

jackowayed wrote: post #41
akkartik wrote: post #37

Earlier quoted context omitted.

Why does the number of bitcoins in circulation converge to an asymptote?

Because every few years (4, I think), the number of bitcoins in each "block" (what you generate) is halved. So right now you get 50 BTC when you generate a block. In a few years it'll be 25. Then 12.5. Etc. In a very long time, they'll round from 10^-8 down to 0, but generating a block will still get you transaction fees from the transactions that occurred since the last block generated.

I asked why, not how :) I understood from the FAQ how it was done, but there's no mention of why it's desirable? Why not either fix the number of bitcoins now for all time, or let them grow unboundedly at a constant rate?

Re: 1 bitcoin worth more than dollar

#55

Post by 0x6763 »

jerf wrote: post #31
Charuru wrote: post #12

Earlier quoted context omitted.

OK, I understand how they're created and how many there are. But why?

Bitcoins are a creation by some who don't understand what a currency is. Bitcoins back to nothing and are only useful to the extent that you can fool another ideologue into taking them; for as long as they've been around, it is far, far easier to obtain goods or services with Warcraft gold or Microsoft Points, which aren't even trying to be universal currencies. (Just yesterday I was on a blog that cataloged the reas…

"Bitcoins are a creation by some who don't understand what a currency is."

How ironic that someone would say such a thing, and then immediately post a few paragraphs displaying their own misunderstandings of what a currency is.

Do you know what a "hard money" is? Bitcoin is a digital hard money.

You talk so much about backing...backing is nonsense. Gold isn't backed by anything. It's just matter, like everything else. The value of that specific form of matter is in the eye of the beholder. Lookup the Subjective Theory of Value. Then go to http://mises.org

Re: 1 bitcoin worth more than dollar

#56

Post by janzer »

kevinburke wrote: post #18
rgrieselhuber wrote: post #17

Does this mean that people are actually paying for bitcoins or that, based in bitcoin's own systems they are worth more than $1?

I think it's the exchange rate - you can buy 1 bitcoin for $1.

I see a lot of people basically saying this same thing. It seems to me though the real question is how easily can I sell my bitcoin for a dollar?

To me at least that seems more defining as a currency rather than simply say a digital good.

Re: 1 bitcoin worth more than dollar

#57

Post by hristov »

hippich wrote: post #32
arohner wrote: post #28

Most of the comments here are "why bitcoin?" I'll ask again, but in a form that I hope is slightly more detailed: Gold was valuable before it started being used as money. It started being used as money because it has several valuable properties: it's rare, it's portable, it's fungible. Why would someone start using bitcoin? Who will accept a bitcoin in trade, and why is that bitcoin more valuable to them than $1?

'cos "it's rare, it's portable, it's fungible."

And it can be quickly sent and received over the internet anonymously, which is something gold cannot do.

Re: 1 bitcoin worth more than dollar

#58

Post by jackowayed »

akkartik wrote: post #54
jackowayed wrote: post #41

Earlier quoted context omitted.

Because every few years (4, I think), the number of bitcoins in each "block" (what you generate) is halved. So right now you get 50 BTC when you generate a block. In a few years it'll be 25. Then 12.5. Etc. In a very long time, they'll round from 10^-8 down to 0, but generating a block will still get you transaction fees from the transactions that occurred since the last block generated.

I asked why, not how :) I understood from the FAQ how it was done, but there's no mention of why it's desirable? Why not either fix the number of bitcoins now for all time, or let them grow unboundedly at a constant rate?

Ah, ok. I think they're trying to balance 2 interests:

They don't want inflation. One of the impeti for this initiative is to have a currency that some politicians can't decide to print more of.

But at the same time, they can't just issue 90% of the total money that will exist right at the beginning. No one's going to buy into a currency where the vast majority of the "wealth" goes to a few early adopters.

So it makes sense to have the money supply grow fast at the beginning, when the currency is hopefully getting more popular as well, preventing inflation, and then to gradually slow down the money supply growth to achieve the goal of preventing inflation.

Re: 1 bitcoin worth more than dollar

#59

Post by kleevr »

sgornick wrote: post #10
solipsist wrote: post #5

Anyone want to offer some insight into what a bitcoin is? (Sorry for my ignorance. I tried looking it up, can't seem to understand what it really is.)

Security Now on TWIT tv covered Bitcoin today. Steve Gibson does a pretty decent job describing it. http://twit.tv/sn287 Bitcoin coverage is from 0:41:25 to the end of the podcast.

This was an excellent explanation, and it's a really brilliant idea. And the fact that it already has an impressive perceived value (parity with USD), I would totally accept it as a form of payment. It will be interesting to see what this does over time.

Re: 1 bitcoin worth more than dollar

#60

Post by akkartik »

jackowayed wrote: post #58
akkartik wrote: post #54

Earlier quoted context omitted.

I asked why, not how :) I understood from the FAQ how it was done, but there's no mention of why it's desirable? Why not either fix the number of bitcoins now for all time, or let them grow unboundedly at a constant rate?

Ah, ok. I think they're trying to balance 2 interests: They don't want inflation. One of the impeti for this initiative is to have a currency that some politicians can't decide to print more of. But at the same time, they can't just issue 90% of the total money that will exist right at the beginning. No one's going to buy into a currency where the vast majority of the "wealth" goes to a few early adopters. So it make…

Ah, very cool, thanks.
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