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This won't last; is a bitcoin at least as valuable as 10 USD for people who use BTC?

by pizza 14y ago

Permit 14y ago
Most vendors simply convert their USD prices to BTC during the day so anyone who uses them gets ~10USD out of them for the time being.
mrb 14y ago
As long as its crypto primitives remain secure (SHA-256, Elliptic Curve crypto, RIPEMD), if the Bitcoin economy continues to grow 5x, 10x, 20x, etc, then its value should increase 5x, 10x, 20x, etc, because there is a fixed number of coins available. Both of these assumptions are likely. So I would say, yes, this exchange rate should last (of course there will be some bumps on the road, bubbles, crashes, etc).
- mtgx 14y ago
  That's exactly how it should grow - in relation to the growth of the economy. But I worry all these posts about the latest Bitcoin price will push it again on the speculation train.
- btilly 14y ago
  there is a fixed number of coins available. Not necessarily true! There is slow growth in coins. But if it takes off then we know all of the primitives to make a second bitcoin. Establish one with a price peg to existing bitcoin. If you maintain it long and well enough, it will become accepted as equivalent. Once that happens you've done a big one-time increase in the supply. In fact I would recommend doing this at some point. Because otherwise bitcoin has built-in deflation. That is bad economically because it discourages investment in anything else, like building businesses.
  - jimktrains2 14y ago
    It's asymptotic growth of coins. There will never be more than x number of bitcoins. (I forget the value x is exactly, but it is a finite, pre-definded number).
    - mrb 14y ago
      Correct. The fixed number of coins I referred to is 21 million. https://en.bitcoin.it/wiki/Controlled_Currency_Supply https://en.bitcoin.it/wiki/Controlled_Currency_Supply
  - rictic 14y ago
    How would one peg the price to existing bitcoin (honest question)?
    - btilly 14y ago
      See https://en.bitcoin.it/wiki/Contracts#Example_5:_Trading_across_chains https://en.bitcoin.it/wiki/Contracts#Example_5:_Trading_acro... for how to verify trades across currencies without trust. So what you would need to do is have an account in both currencies with large amounts of currency in it, and publicly advertise that you will trade across currencies in some predetermined ratio. If your account has enough currency to succeed in handling people who might deliberately try to trade against you, then you will successfully peg currencies. Admittedly an attempt to provide a peg like this might fail. But what is in it for the entity trying to do it? Quite simply, that entity presumably starts with a much larger amount of the new currency than they used for establishing the peg. If you can successfully create the peg, your net worth decreased by the amount of bitcoin you had to accumulate to create the peg, and increased by the amount of other currency that you had. So you make a handsome profit. (Conversely you have the risk that people will set about mining your new currency and converting it all to bitcoin through your peg, then when you have to abandon the peg you've lost the bitcoin you had to purchase to try to establish said peg.) There are a number of tricks that can improve your odds of establishing a successful peg. But that's the principle.
- waterlesscloud 14y ago
  The "market cap" is a hair under $100 million now. I don't see that it's current economy justifies that, it all looks like speculation to me. I've got some bitcoin, a token amount I bought to have some, but I'm skeptical that it's anywhere near being an actual economy yet.
btdd 14y ago
SERIOUSLY, WHAT THE FUCK ARE YOU EVEN SAYING? Who are you to make a claim as to if it will last or if it won't or how valuable bitcoins are. >This won't last We have no evidence to the contrary, and in fact, bitcoin being a deflationary currency by definition means it will likely increase in value and, what's more, if you look at the trend it has been increasing in value. If you were to use a single shred of logic then your conclusion would be "it might or might not last", but that's hardly a useful post. >is a bitcoin at least as valuable as 10 USD for people who use BTC? Well, since people are RIGHT NOW paying over 10 dollars for a bitcoin that indicates that yes, yes it is. Seriously, this comment says nothing, provides no useful information, and is also probably wrong. It's one of the worse comments I've seen in my life. Please please please delete your account. Please don't buy a renewal for your internet connection. Please never interact with me, or anyone with an appreciable amount of intelligence, again.
- deleted 14y ago
  [deleted]
- polshaw 14y ago
  >We have no evidence to the contrary except the previous mega-crash. >bitcoin being a deflationary uh, no, it's not yet. Masses of new bitcoins are being created every day. That is inflationary (and much more so than USD). @greg_bt: it matters little how you frame it, but the supply of bitcoins is increasing. It will gradually reduce and stop, all of which is predetermined, yes. Today it is inflationary (IIRC its about 15%/y currently, but don't hold me to that), eventually it will be deflationary.
  - greg_bt 14y ago
    I don't know if 'bitcoins are being created every day' is the right way of looking at it? Bitcoins are more discovered as opposed to created. It would be like if every USD ever was buried and people were gradually digging them out of the ground and everyone knew exactly how many were buried? The amount of bitcoins in circulation is increasing but the total amount of bitcoins that will ever exist isn't increasing at all.

This won't last; is a bitcoin at least as valuable as 10 USD for people who use BTC?

by pizza 14y ago

This won't last; is a bitcoin at least as valuable as 10 USD for people who use BTC?

Most vendors simply convert their USD prices to BTC during the day so anyone who uses them gets ~10USD out of them for the time being.

mrb 14y ago

As long as its crypto primitives remain secure (SHA-256, Elliptic Curve crypto, RIPEMD), if the Bitcoin economy continues to grow 5x, 10x, 20x, etc, then its value should increase 5x, 10x, 20x, etc, because there is a fixed number of coins available. Both of these assumptions are likely. So I would say, yes, this exchange rate should last (of course there will be some bumps on the road, bubbles, crashes, etc).

mtgx 14y ago
That's exactly how it should grow - in relation to the growth of the economy. But I worry all these posts about the latest Bitcoin price will push it again on the speculation train.
btilly 14y ago
there is a fixed number of coins available. Not necessarily true! There is slow growth in coins. But if it takes off then we know all of the primitives to make a second bitcoin. Establish one with a price peg to existing bitcoin. If you maintain it long and well enough, it will become accepted as equivalent. Once that happens you've done a big one-time increase in the supply. In fact I would recommend doing this at some point. Because otherwise bitcoin has built-in deflation. That is bad economically because it discourages investment in anything else, like building businesses.
- jimktrains2 14y ago
  It's asymptotic growth of coins. There will never be more than x number of bitcoins. (I forget the value x is exactly, but it is a finite, pre-definded number).
  - mrb 14y ago
    Correct. The fixed number of coins I referred to is 21 million. https://en.bitcoin.it/wiki/Controlled_Currency_Supply https://en.bitcoin.it/wiki/Controlled_Currency_Supply
- rictic 14y ago
  How would one peg the price to existing bitcoin (honest question)?
  - btilly 14y ago
    See https://en.bitcoin.it/wiki/Contracts#Example_5:_Trading_across_chains https://en.bitcoin.it/wiki/Contracts#Example_5:_Trading_acro... for how to verify trades across currencies without trust. So what you would need to do is have an account in both currencies with large amounts of currency in it, and publicly advertise that you will trade across currencies in some predetermined ratio. If your account has enough currency to succeed in handling people who might deliberately try to trade against you, then you will successfully peg currencies. Admittedly an attempt to provide a peg like this might fail. But what is in it for the entity trying to do it? Quite simply, that entity presumably starts with a much larger amount of the new currency than they used for establishing the peg. If you can successfully create the peg, your net worth decreased by the amount of bitcoin you had to accumulate to create the peg, and increased by the amount of other currency that you had. So you make a handsome profit. (Conversely you have the risk that people will set about mining your new currency and converting it all to bitcoin through your peg, then when you have to abandon the peg you've lost the bitcoin you had to purchase to try to establish said peg.) There are a number of tricks that can improve your odds of establishing a successful peg. But that's the principle.
waterlesscloud 14y ago
The "market cap" is a hair under $100 million now. I don't see that it's current economy justifies that, it all looks like speculation to me. I've got some bitcoin, a token amount I bought to have some, but I'm skeptical that it's anywhere near being an actual economy yet.

btdd 14y ago

SERIOUSLY, WHAT THE FUCK ARE YOU EVEN SAYING? Who are you to make a claim as to if it will last or if it won't or how valuable bitcoins are. >This won't last We have no evidence to the contrary, and in fact, bitcoin being a deflationary currency by definition means it will likely increase in value and, what's more, if you look at the trend it has been increasing in value. If you were to use a single shred of logic then your conclusion would be "it might or might not last", but that's hardly a useful post. >is a bitcoin at least as valuable as 10 USD for people who use BTC? Well, since people are RIGHT NOW paying over 10 dollars for a bitcoin that indicates that yes, yes it is. Seriously, this comment says nothing, provides no useful information, and is also probably wrong. It's one of the worse comments I've seen in my life. Please please please delete your account. Please don't buy a renewal for your internet connection. Please never interact with me, or anyone with an appreciable amount of intelligence, again.

deleted 14y ago
[deleted]
polshaw 14y ago
>We have no evidence to the contrary except the previous mega-crash. >bitcoin being a deflationary uh, no, it's not yet. Masses of new bitcoins are being created every day. That is inflationary (and much more so than USD). @greg_bt: it matters little how you frame it, but the supply of bitcoins is increasing. It will gradually reduce and stop, all of which is predetermined, yes. Today it is inflationary (IIRC its about 15%/y currently, but don't hold me to that), eventually it will be deflationary.
- greg_bt 14y ago
  I don't know if 'bitcoins are being created every day' is the right way of looking at it? Bitcoins are more discovered as opposed to created. It would be like if every USD ever was buried and people were gradually digging them out of the ground and everyone knew exactly how many were buried? The amount of bitcoins in circulation is increasing but the total amount of bitcoins that will ever exist isn't increasing at all.