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1 bitcoin worth more than dollar
- sgornick 16y agoFor those who are new to Bitcoin and would like to learn more: Bitcoin FAQ - https://en.bitcoin.it/wiki/FAQ https://en.bitcoin.it/wiki/FAQ Bitcoin Wiki - https://en.bitcoin.it/wiki/Main_Page https://en.bitcoin.it/wiki/Main_Page How Bitcoin Works - https://en.bitcoin.it/wiki/How_bitcoin_works https://en.bitcoin.it/wiki/How_bitcoin_works Installing Bitcoin - https://en.bitcoin.it/wiki/Getting_started https://en.bitcoin.it/wiki/Getting_started HowTo Mining Bitcoin: Fedora 14: http://bit.ly/fb54ye http://bit.ly/fb54ye and Ubuntu: http://bit.ly/ewVzhu http://bit.ly/ewVzhu The Bitcoin Faucet (free bitcoins) - https://freebitcoins.appspot.com https://freebitcoins.appspot.com Buying bitcoins - https://en.bitcoin.it/wiki/Buying_bitcoins https://en.bitcoin.it/wiki/Buying_bitcoins Bitcoin 6-Month Price Chart - http://bit.ly/hzVKpq http://bit.ly/hzVKpq Bitcoin Community Portal - https://en.bitcoin.it/wiki/Bitcoin:Community_portal https://en.bitcoin.it/wiki/Bitcoin:Community_portal Recent Posts here on the forum - http://www.bitcoin.org/smf/index.php?action=recent http://www.bitcoin.org/smf/index.php?action=recent
- sabj 16y agoI'm more confused than when I started. I understand the concept, but not the ecosystem or money supply... or exchange rate.
- sgornick 16y agoEcosystem? How about the Payment portion of the ecosystem ... let's take a "competitor", PayPal, for example. When you send $100 to a business using your Paypal, the recipient gets $97, or less. With bitcoin, when you send $100, the recipient gets $100 (at least until fees are necessary ... but even when that starts being necessary the fees should be just a FRACTION of what Visa / MC / PayPal / etc. take.)
- johnny22 16y agoso, you're saying if paypal/mastercard/visa charged no money for transfer, you would continue using them? that example isn't reason enough for me to use bitcoin.
- kiba 16y agoSaid paypal/mastercard/visa would lose money to fraud. The bitcoin miners only process the transactions. They don't care about fraud and chargeback.
- sgornick 16y agoA less expensive payment network is one reason bitcoins might be used. Ask ten people why they use bitcoins and you'll get ten different answers. For some, it will be the ability to send money without needing a bank. For another person the reason might be related to the anonymity that bitcoin offers. Bitcoin's benefits range from supporting micropayments to supporting large transfers with no chargeback risk. But for the long term, When the list of payment methods reads: Visa / MC / AmEx / Bitcoin (receive 2% discount) which button do you think most consumers will choose?
- efnx 16y agoI'll agree that it's confusing, but I will also say that it's less confusing than our practices with mainstream fiat currency.
- Charuru 16y agoOK, I understand how they're created and how many there are. But why?
- jackowayed 16y agoThe idea is that it's not under any entity's control, and the amount of currency grows in a predictable (and decreasing) way. This should prevent the crazy inflation we've seen occur with normal currency where the government can always just print more.
- akkartik 16y agoWhy does the number of bitcoins in circulation converge to an asymptote?
- jackowayed 16y agoBecause 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.
- akkartik 16y agoI 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?
- jackowayed 16y agoAh, 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.
- mynameishere 16y agoAll of the above absolutely screams BULLSHIT harder than anything I've ever read before.
- kiba 16y agoPlease tell us why it is absolute bullshit?-
- icarus_drowning 16y ago(2.10.11, at around 14:10 MST): How does this have any positive karma at all?
- s0urceror 16y agoAll I wonder is, what happens if you delete a portion of the wallets in existence. Given that the supply of bitcoins is limited, does that mean you've essentially permanently destroyed part of the bitcoin economy?
- jackowayed 16y agoYou haven't destroyed part of the economy. You've just made everyone else's bitcoins worth a little bit more.
- hippich 16y agoplus - there is slight chance someone will generate same private/public key combo and suddenly "find" "lost" coins =)
- po 16y agoExcept bitcoin has no way of marking a coin as "lost" so if you did generate that combo, everyone would be in agreement that it already belongs to a lost wallet.
- johnny22 16y agountil you destroy 99% of all the wallets and then you can't exchange them for anything useful. I'll wait for bitcoin 2.0 :)
- noagendamarket 16y agoThere already is bitcoin 2.0 tl;dr testnet
- 0x6763 16y agoThe only part of the economy that's "destroyed" is access to some of the bitcoins. All the goods and services that were there before the wallet is destroyed are still there after the wallet is destroyed. The effects of a destroyed wallet are limited to the owner of the wallet and their plans for the money...A good reason to learn how to backup your wallet!!
- iheartmemcache 16y agoI read the wiki on BitCoin and I still don't understand how the BitCoin forex market is made. Usually currencies are based on national GDP and that sort of thing, but I haven't the faintest as to what controls the strength of this currency. Can someone enlighten me?
- hippich 16y agoprice of bitcoins depends on amount of bitcoins in circulation and number of people using it.
- deleted 16y ago[deleted]
- sgornick 16y agohave you read the blog on Technical Analysis for bitcoin? You might find some good info there: http://mtgox.com/blog http://mtgox.com/blog
- antimatter15 16y agoI think I read somewhere that the value is derived from the amount of electricity and hardware required to mine for a bitcoin.
- sgornick 16y agoNot really, but to make MORE bitcoins yourself you would need to expend a fair amount computing power that chews up a fair amount of electricity. Here's a chart showing that possibly as the price rises, the amount of computing power (and thus electricity) rises to match. http://www.bitcoin.org/smf/index.php?topic=2399.msg42269#msg42269 http://www.bitcoin.org/smf/index.php?topic=2399.msg42269#msg...
- hunterp 16y agomobiles take pennies a day of electricity to power. mobiles are computing and cheap to power.
- daeken 16y agoTopic correction: s/then/than/
- hippich 16y agothank you. i still learn english =)
- solipsist 16y agoAnyone 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.)
- hippich 16y agoonline currency which is not controlled by one issuing center but is being "generated" by all members of p2p network. this currency has limit on number of coins in circulation.
- sgornick 16y agoSecurity Now on TWIT tv covered Bitcoin today. Steve Gibson does a pretty decent job describing it. http://twit.tv/sn287 http://twit.tv/sn287 Bitcoin coverage is from 0:41:25 to the end of the podcast.
- kleevr 16y agoThis 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.
- deleted 16y ago[deleted]
- kablamo 16y agoI followed all kinds of links and couldn't figure out bitcoins. This link actually answered some questions. Sounds really fascinating. Definitely will look into this more.
- trotsky 16y agoA gentleman's agreement between a certain faction of econ-crypto-tinfoil-hat-botnet nerds to assign trade value to the wastage of increasingly large amounts of electricity.
- deleted 16y ago
- jackowayed 16y agoWow. The value has roughly 4x-ed since I was looking at bitcoin for the first time a couple months ago. Maybe it is worth it to implement my idea of writing something that tries to get free cycles out of EC2 Spot instances by predicting when the price will rise and spinning up instances before it does. (They don't charge you for fractional hours if they kill you due to a price increase.) EDIT: I think it's actually gotten a little less favorable to generate bitcoins. My cheap VPS peaks at 1M hashes/sec, which according to http://www.alloscomp.com/bitcoin/calculator.php http://www.alloscomp.com/bitcoin/calculator.php used to mean it would take around 250 days to generate a block, as I recall. Now, the value of a block has 4xed, but the average time to generate a block at 1M hps is now 1300 days, which is more than 5x as long.
- deleted 16y ago[deleted]
- sgornick 16y agoCPU mining produces a tiny fraction of the level that GPU mining does. Even on Amazon's GPU clusters, it is a money loser: http://www.bitcoin.org/smf/index.php?topic=1793.0 http://www.bitcoin.org/smf/index.php?topic=1793.0 If you got the GPU hardware, though, it can be worth it to mine! Read this Twitter stream: http://twitter.com/bitcoinminer http://twitter.com/bitcoinminer
- bdonlan 16y agoThese days there are 'pooled' mining systems in which you can receive payment for working on fractions of a block.
- jackowayed 16y agoBut that doesn't change the fact that, since I was able to get $12.50 every 250 days and now I can get $50 every 1250 days, I'm getting less money per day than before.
- rgrieselhuber 16y agoDoes this mean that people are actually paying for bitcoins or that, based in bitcoin's own systems they are worth more than $1?
- kevinburke 16y agoI think it's the exchange rate - you can buy 1 bitcoin for $1.
- janzer 16y agoI 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.
- 0x6763 16y agoThose are prices that people are buying and selling bitcoins at. Many thousands are traded every day on mtgox.com alone.
- arohner 16y agoMost 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?
- hippich 16y ago'cos "it's rare, it's portable, it's fungible."
- hristov 16y agoAnd it can be quickly sent and received over the internet anonymously, which is something gold cannot do.
- mkramlich 16y agoAnd today, not only do we not send gold over the Internet to buy things, we don't even send paper US dollars. Instead, banking systems send electronic messages to one another, indicating a transaction has occurred and that two or more accounts should be modified in a certain way. Take this second thing, get rid of actual physical gold or actual paper dollars, and you basically have what Bitcoin is. Pure electronic, pure virtual, and not backed by any single bank or national government. Paper was to gold somewhat like Bitcoin is to paper. A step further in the same direction, just more extreme, with a couple of cool additional features and potentially scary quirks. (Counter: arguably the US Federal government and world banking system has some "scary quirks" but we're effectively forced to accept them.)
- arohner 16y agoYes, but my biggest question is, why will anyone start using it? Gold was valuable before it was money. Bitcoin is not. These first movers that are paying real money for bitcoin, seem to only be doing so because they think other people will use it in the future. There's a name for that, it's called a bubble. To have a sustainable currency, the medium of exchange should be valuable, even if no one else is using it as money.
- hristov 16y agoWow, 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 it falls flat on its face on execution. My software did not work. I had to spend half an hour diving through forums and wikis to find some obscure command line argument that may make it work, although I am still not sure it is working properly. Of course 99% of ordinary people would have just given up. So the folks at bitcoin have ensured that only persistent nerds like me use their service.
- 0x6763 16y agoAll I did was download the client and run it. It "just worked" for me without doing any special on either Linux or Windows (XP). This was with the current version 0.3.19.
- kiba 16y agoI don't mine bitcoin. I just earn them as a freelancer.
- pzxc 16y agoIf anybody else has trouble setting it up I wrote a tutorial on it: http://pzxc.com/how-to-get-started-with-bitcoins http://pzxc.com/how-to-get-started-with-bitcoins
- vinyl 16y ago"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 bitcoins will be halved each year by decision.
- 0x6763 16y agoSomeone 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.
- svrocks 16y agoI 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.). But collectibles have intrinsic value while bitcoins only have value inasmuch as they are useful for transactions. So, TLDR I am concerned about the long-term viability of bitcoins
- svrocks 16y agoTo try to answer my own question, I believe the asymptotically decreasing inflation in bitcoins is compensated by its increase in value against traditional inflationary currencies. For example, on the surface it looks like a bad deal to lend someone bitcoins when almost all bitcoins have been generated. You will most likely receive a very low interest rate. Why wouldn't you just convert to some other currency (say USD), lend money out in that currency, and capture a higher interest rate? The answer is that because since bitcoin inflation will be nonexistent by that time, its exchange value against USD would increase by precisely the amount of US inflation.
- 0x6763 16y agoTo 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 http://bit.ly/f2yE4D Intrinsic value - FALLACY! Behold, the Subjective Theory of Value - http://en.wikipedia.org/wiki/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.
- hristov 16y agoYou are entirely correct. This will eventually develop all the problems associated with a strictly limited currency. If a nation's economy was purely based on bitcoins, one would expect that economy to quickly grind to a halt as people start hoarding their bitcoins instead of investing them in businesses, etc. (BTW something like this is currently happening to the world with gold). However, I doubt any economy will be purely based on bitcoins. If successful, the bitcoin will merely be a useful way to do painless and anonymous internet transactions, and not the only money out there. And if bitcoins get too rare for internet transactions (because people are hoarding them) it would be very easy for someone else to start another bitcoin-like currency.