4 ms·

This is not practical. If bitcoins related to some sort of market value for computation, there would be inflation of 40% / year. Look at how mining for bitcoi

This is not practical. If bitcoins related to some sort of market value for computation, there would be inflation of 40% / year. Look at how mining for bitcoins compares to mining for real gold. Our species spends all this energy to dig gold up out of the ground, purify it, just to stick it back into the ground in vaults and then we pay someone to stand watching over it.

eli 15y ago
Sorry, I don't follow. Where does 40% come from? And to state the obvious, not all gold goes in vaults. Both the supply and demand for gold is affected by its fashion and industrial uses.
- abulafia 15y ago
  There have been attempts to fix the value of gold for currency purposes, http://en.wikipedia.org/wiki/London_Gold_Pool http://en.wikipedia.org/wiki/London_Gold_Pool but these tend to simply prove the silliness of bothering with commodities when fiat currency is inherently more elegant and functional.
- jdavid 15y ago
  Actually the largest price driver of gold now is 'fear'. Since many countries price their currencies to the USD, the USD has become a defacto currency. This means that inflationary pressure on the USD affects the whole world. Gold prices are up as people are speculating that some countries will price their currency against gold. If countries don't do this, or if people stop believing that countries will do this, gold will go down in value. Ironically large company stocks are probably the largest most stable and fluid currencies left. I think the term is fungible. So if you buy stock in say a microsoft or a google, the changes are that those large company stocks will trade well if your home country's currency is inflating. The reason is that large companies diversify their holdings and optimize those holdings for profit. This is something that governments rarely do well. I have started to wonder if investing in a sort of International Dow Jones as a currency base makes sense. I don't know how it would work, but it would be better than using gift cards as part of a currency as suggested by a few. As for bitcoin as a currency, it seems to be based off of the cost of energy/ computing efficiency, however the currency does not seem to have been designed to match the USD, but rather make use of a set of tech features that were convenient to demonstrate it's proof. It seems clear to me that Bit Coin Miner's will find the largest profits in using FPGA's, and that is unlikely to create a cloud structure that is useful for other things. How can you virtualize an FPGA? All currencies are imperfect.

eli 15y ago

Sorry, I don't follow. Where does 40% come from? And to state the obvious, not all gold goes in vaults. Both the supply and demand for gold is affected by its fashion and industrial uses.

abulafia 15y ago
There have been attempts to fix the value of gold for currency purposes, http://en.wikipedia.org/wiki/London_Gold_Pool http://en.wikipedia.org/wiki/London_Gold_Pool but these tend to simply prove the silliness of bothering with commodities when fiat currency is inherently more elegant and functional.
jdavid 15y ago
Actually the largest price driver of gold now is 'fear'. Since many countries price their currencies to the USD, the USD has become a defacto currency. This means that inflationary pressure on the USD affects the whole world. Gold prices are up as people are speculating that some countries will price their currency against gold. If countries don't do this, or if people stop believing that countries will do this, gold will go down in value. Ironically large company stocks are probably the largest most stable and fluid currencies left. I think the term is fungible. So if you buy stock in say a microsoft or a google, the changes are that those large company stocks will trade well if your home country's currency is inflating. The reason is that large companies diversify their holdings and optimize those holdings for profit. This is something that governments rarely do well. I have started to wonder if investing in a sort of International Dow Jones as a currency base makes sense. I don't know how it would work, but it would be better than using gift cards as part of a currency as suggested by a few. As for bitcoin as a currency, it seems to be based off of the cost of energy/ computing efficiency, however the currency does not seem to have been designed to match the USD, but rather make use of a set of tech features that were convenient to demonstrate it's proof. It seems clear to me that Bit Coin Miner's will find the largest profits in using FPGA's, and that is unlikely to create a cloud structure that is useful for other things. How can you virtualize an FPGA? All currencies are imperfect.