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Yes, that could be related to the fact that bitcoin isn't something anyone with any familiarity with economics should take seriously. (For the purposes of this

Yes, that could be related to the fact that bitcoin isn't something anyone with any familiarity with economics should take seriously. (For the purposes of this comment "familiarity with economics" should be understood to mean: has so much as shopped in a grocery store).

whit537 14y ago
Mind saying more or linking? I keep hearing strong opinions against bitcoin but haven't heard details.
- kingkilr 14y ago
  http://www.quora.com/Bitcoin/Is-the-cryptocurrency-Bitcoin-a-good-idea/answer/Adam-Cohen-2 http://www.quora.com/Bitcoin/Is-the-cryptocurrency-Bitcoin-a... is a pretty good summary.
  - whit537 14y ago
    Thanks, linked on the ticket.
- rjsamson 14y ago
  The biggest problem I have with bitcoin is that the fixed bitcoin supply and decreased rate at which coins can be mined rewards hoarding behaviors. If you know that the bitcoins you have in your account today will be worth more in the future, you have a powerful disincentive to spend.
  - kiba 14y ago
    If you know that the bitcoins you have in your account today will be worth more in the future, you have a powerful disincentive to spend. That's only if you're a scrooge and don't like spending anything. Since bitcoin started, I spent bitcoin on hosting and domain, t-shirt, musics, development bounties, writers, and other things that I forgot to mention. I never spent a bitcent on mining hardware, though. You have to remember that humanity is a not a paper wealth maximizing function. We don't exists to horde money, but to spend it doing things that we like.
    - natrius 14y ago
      "We don't exists to horde money, but to spend it doing things that we like." Deflation increases the incentive to hoard cash. People respond to incentives. Economies based on deflationary currencies end up suffering from problems caused by this. You may not agree, but pretty much every economist does.
      - kiba 14y ago
        I don't dispute the incentive, I only dispute the preference and the outcome.
        natrius 14y ago
        So you're saying that people won't respond to the incentive to hoard cash? An economy based on a currency with low, predictable inflation will have less hoarding than a deflationary currency. Hoarding in itself causes deflation, so deflationary currencies risk causing a deflationary spiral. Do you have an example of a vibrant economy based on a deflationary currency? I have several historical counterexamples.
        mindcrime 14y ago
        So you're saying that people won't respond to the incentive to hoard cash? I'm hungry... really f%!#ng hungry, right now. I have $10.00, which - today - buys me 2 hotdogs and a soda. But, if I wait a year, that same $10.00 will buy me a nice steak, some corn chowder, a side of sweet potato fries and a margarita. What do I do? Hmmm....
        natrius 14y ago
        That's not how economics works. Sure, some decisions won't be affected by the increased incentive to hoard. However, there are some decisions where the marginal incentive to hoard pushes people over the edge to decide to hoard. Instead of focusing on the sentence of my argument you chose, try disproving the one that followed: "An economy based on a currency with low, predictable inflation will have less hoarding than a deflationary currency."
  - witten 14y ago
    The Bitcoin money supply is currently inflating at a rate of 33.3% a year.
- nhaehnle 14y ago
  The most clear-cut argument against Bitcoin is that it is a ridiculous waste of energy. The nature of mining in the protocol implies that if Bitcoin takes off on any significant scale, there is a dichotomy going on: either there are so few miners that single large actors can dominate the total hashing power of the network, making it vulnerable; or, a significant fraction of the total world computing power goes towards mining - which means that the electricity used up by the Bitcoin network would be much larger on any reasonable measure than what you need to maintain other currencies. Wasting energy is not exactly a good plan for the future.
  - kiba 14y ago
    Miners will generally operate when their revenue is greater than their loss in term of electricity bill(if they're not being parasites). Let calculate the revenue a miner would get if they win all the blocks: 50 bitcoin every 10 minutes mean 300 bitcoin, which mean 7200 bitcoin a day. The price of a bitcoin at the time I am writing this is 6.54 USD, so the total revenue is 47,088 USD per day. That mean, assuming a miner can win all blocks at 50 bitcoin forever assuming the price and difficulty stay the same, he can afford to pay an electric bill of 47,088 per day assuming that the price hold stable. This equals to 17,187,120 USD in revenue every year. The market cap of bitcoin is only 60,951,475 USD, which mean miner revenue equals 28% of the market cap. However, most economic activities are certainly not miners, but actually trading bots and speculators across exchanges. In the MtGox USD alone, about 8.7 million dollars worth of bitcoin were exchanged in 30 days. You can also add in the various economic activities other than trading currencies, such as virtual goods, hosting, ice creams, t-shirts, porn, illegal drugs, etc. You can conclude that the miners are guaranteeing more than just revenues for themselves, as the various activities in the bitcoin economy which actually probably dwarf what the miners are making in term of revenues. As far as being actually efficient method of security for a currency? Probably not right now, assuming that security measures actually scale economically. It could be that the actual electricity cost grows slower as more and more efficient method of hashing are found.
  - cabalamat 14y ago
    Mining bitcoins is useless work to exactly the same extent that mining gold is useless work. > which means that the electricity used up by the Bitcoin network would be much larger on any reasonable measure than what you need to maintain other currencies This is only true if the other currencies are fiat money. For a non-fiat currency, it is necessary that either (i) it is hard to make (or people will just make enormous amounts and its value will go away), or (ii) it has intrinsic value.
kiba 14y ago
Yes, that could be related to the fact that bitcoin isn't something anyone with any familiarity with economics should take seriously. You justify <things you don't like> with <anybody with expertise will hate>. This is a total non-starter. (For the purposes of this comment "familiarity with economics" should be understood to mean: has so much as shopped in a grocery store). Very low standard it seems. I shopped in a grocery store.
- coderdude 14y ago
  Then you'll know that you can't spend Bitcoin at a grocery store because it's some crap that people made up and not actual currency. Edit: My comment isn't US-centric, obviously, since I don't know where any of you hail from. Trolls.
  - kiba 14y ago
    Then you'll know that you can't spend Bitcoin at a grocery store because it's some crap that people made up and not actual currency. It's a currency because people actually use it as a currency. It doesn't mean universal acceptance. Did you ever tried spending yen or peso in an American supermarket? If you ever been to porcfest this year, you will know that a lot of vendors actually accept bitcoin along with precious metal.
  - executive 14y ago
    except you can spend BTC in some grocery stores. problem Batman?
    - kiba 14y ago
      If you know the name of the store, I would like to know.
      - deleted 14y ago
        [deleted]
  - deleted 14y ago
    [deleted]
olalonde 14y ago
No need to take Bitcoin seriously. You can simply convert your BTC donations to USD as soon as you receive them.
sgornick 14y ago
Will PayPal allow GitTip to escrow the funds? If not (and likely not, considering PayPal does not allow for their payment network to be used for "pre-sales"), then GitTip can only charge for the actual amounts tipped (and claimed by the donation target). Right now, let's say I'm willing to tip $150 per year. I can then donating $0.25 to ten people. Since I carry no balance myself (from received tips), that means every Friday I get a charge for the amount I tip. So I would see a charge of $2.50 (10 X $0.25) plus $0.30 plus ($2.50 X 3.9%) = $2.90. So that is a 16% payment network fee. Certainly this can be optimized, but Bitcoin doesn't have such high fees. The sender pays the fee, and even then it is a fraction of a penny. And the conversion from Bitcoin to USDs is generally under one percent. Cash (USDs) can be received once each week by GitTip as an ACH direct deposit (using BitFloor) or through Dwolla (using Mt. Gox, Intersango or Camp BX) so easy cash-out methods are covered. And there are no chargebacks. So regardless of your politics or what you want to use as a store of value, Bitcoin solves problems very well. Especially for micropayments problems like this.

whit537 14y ago

Mind saying more or linking? I keep hearing strong opinions against bitcoin but haven't heard details.

kingkilr 14y ago
http://www.quora.com/Bitcoin/Is-the-cryptocurrency-Bitcoin-a-good-idea/answer/Adam-Cohen-2 http://www.quora.com/Bitcoin/Is-the-cryptocurrency-Bitcoin-a... is a pretty good summary.
- whit537 14y ago
  Thanks, linked on the ticket.
rjsamson 14y ago
The biggest problem I have with bitcoin is that the fixed bitcoin supply and decreased rate at which coins can be mined rewards hoarding behaviors. If you know that the bitcoins you have in your account today will be worth more in the future, you have a powerful disincentive to spend.
- kiba 14y ago
  If you know that the bitcoins you have in your account today will be worth more in the future, you have a powerful disincentive to spend. That's only if you're a scrooge and don't like spending anything. Since bitcoin started, I spent bitcoin on hosting and domain, t-shirt, musics, development bounties, writers, and other things that I forgot to mention. I never spent a bitcent on mining hardware, though. You have to remember that humanity is a not a paper wealth maximizing function. We don't exists to horde money, but to spend it doing things that we like.
  - natrius 14y ago
    "We don't exists to horde money, but to spend it doing things that we like." Deflation increases the incentive to hoard cash. People respond to incentives. Economies based on deflationary currencies end up suffering from problems caused by this. You may not agree, but pretty much every economist does.
    - kiba 14y ago
      I don't dispute the incentive, I only dispute the preference and the outcome.
      - natrius 14y ago
        So you're saying that people won't respond to the incentive to hoard cash? An economy based on a currency with low, predictable inflation will have less hoarding than a deflationary currency. Hoarding in itself causes deflation, so deflationary currencies risk causing a deflationary spiral. Do you have an example of a vibrant economy based on a deflationary currency? I have several historical counterexamples.
        mindcrime 14y ago
        So you're saying that people won't respond to the incentive to hoard cash? I'm hungry... really f%!#ng hungry, right now. I have $10.00, which - today - buys me 2 hotdogs and a soda. But, if I wait a year, that same $10.00 will buy me a nice steak, some corn chowder, a side of sweet potato fries and a margarita. What do I do? Hmmm....
        natrius 14y ago
        That's not how economics works. Sure, some decisions won't be affected by the increased incentive to hoard. However, there are some decisions where the marginal incentive to hoard pushes people over the edge to decide to hoard. Instead of focusing on the sentence of my argument you chose, try disproving the one that followed: "An economy based on a currency with low, predictable inflation will have less hoarding than a deflationary currency."
- witten 14y ago
  The Bitcoin money supply is currently inflating at a rate of 33.3% a year.
nhaehnle 14y ago
The most clear-cut argument against Bitcoin is that it is a ridiculous waste of energy. The nature of mining in the protocol implies that if Bitcoin takes off on any significant scale, there is a dichotomy going on: either there are so few miners that single large actors can dominate the total hashing power of the network, making it vulnerable; or, a significant fraction of the total world computing power goes towards mining - which means that the electricity used up by the Bitcoin network would be much larger on any reasonable measure than what you need to maintain other currencies. Wasting energy is not exactly a good plan for the future.
- kiba 14y ago
  Miners will generally operate when their revenue is greater than their loss in term of electricity bill(if they're not being parasites). Let calculate the revenue a miner would get if they win all the blocks: 50 bitcoin every 10 minutes mean 300 bitcoin, which mean 7200 bitcoin a day. The price of a bitcoin at the time I am writing this is 6.54 USD, so the total revenue is 47,088 USD per day. That mean, assuming a miner can win all blocks at 50 bitcoin forever assuming the price and difficulty stay the same, he can afford to pay an electric bill of 47,088 per day assuming that the price hold stable. This equals to 17,187,120 USD in revenue every year. The market cap of bitcoin is only 60,951,475 USD, which mean miner revenue equals 28% of the market cap. However, most economic activities are certainly not miners, but actually trading bots and speculators across exchanges. In the MtGox USD alone, about 8.7 million dollars worth of bitcoin were exchanged in 30 days. You can also add in the various economic activities other than trading currencies, such as virtual goods, hosting, ice creams, t-shirts, porn, illegal drugs, etc. You can conclude that the miners are guaranteeing more than just revenues for themselves, as the various activities in the bitcoin economy which actually probably dwarf what the miners are making in term of revenues. As far as being actually efficient method of security for a currency? Probably not right now, assuming that security measures actually scale economically. It could be that the actual electricity cost grows slower as more and more efficient method of hashing are found.
- cabalamat 14y ago
  Mining bitcoins is useless work to exactly the same extent that mining gold is useless work. > which means that the electricity used up by the Bitcoin network would be much larger on any reasonable measure than what you need to maintain other currencies This is only true if the other currencies are fiat money. For a non-fiat currency, it is necessary that either (i) it is hard to make (or people will just make enormous amounts and its value will go away), or (ii) it has intrinsic value.

kiba 14y ago

Yes, that could be related to the fact that bitcoin isn't something anyone with any familiarity with economics should take seriously. You justify <things you don't like> with <anybody with expertise will hate>. This is a total non-starter. (For the purposes of this comment "familiarity with economics" should be understood to mean: has so much as shopped in a grocery store). Very low standard it seems. I shopped in a grocery store.

coderdude 14y ago
Then you'll know that you can't spend Bitcoin at a grocery store because it's some crap that people made up and not actual currency. Edit: My comment isn't US-centric, obviously, since I don't know where any of you hail from. Trolls.
- kiba 14y ago
  Then you'll know that you can't spend Bitcoin at a grocery store because it's some crap that people made up and not actual currency. It's a currency because people actually use it as a currency. It doesn't mean universal acceptance. Did you ever tried spending yen or peso in an American supermarket? If you ever been to porcfest this year, you will know that a lot of vendors actually accept bitcoin along with precious metal.
- executive 14y ago
  except you can spend BTC in some grocery stores. problem Batman?
  - kiba 14y ago
    If you know the name of the store, I would like to know.
    - deleted 14y ago
      [deleted]
- deleted 14y ago
  [deleted]

olalonde 14y ago

No need to take Bitcoin seriously. You can simply convert your BTC donations to USD as soon as you receive them.

sgornick 14y ago

Will PayPal allow GitTip to escrow the funds? If not (and likely not, considering PayPal does not allow for their payment network to be used for "pre-sales"), then GitTip can only charge for the actual amounts tipped (and claimed by the donation target). Right now, let's say I'm willing to tip $150 per year. I can then donating $0.25 to ten people. Since I carry no balance myself (from received tips), that means every Friday I get a charge for the amount I tip. So I would see a charge of $2.50 (10 X $0.25) plus $0.30 plus ($2.50 X 3.9%) = $2.90. So that is a 16% payment network fee. Certainly this can be optimized, but Bitcoin doesn't have such high fees. The sender pays the fee, and even then it is a fraction of a penny. And the conversion from Bitcoin to USDs is generally under one percent. Cash (USDs) can be received once each week by GitTip as an ACH direct deposit (using BitFloor) or through Dwolla (using Mt. Gox, Intersango or Camp BX) so easy cash-out methods are covered. And there are no chargebacks. So regardless of your politics or what you want to use as a store of value, Bitcoin solves problems very well. Especially for micropayments problems like this.