Pyrian on 5/11/2013 at 00:34
BitCoin wants to be like digital gold, but it's really more like a fiat currency minus the fiat. Last I heard, money-laundering was the big game, but with silk road gone, I'm not sure how well that's going.
Fafhrd on 5/11/2013 at 01:33
Quote Posted by Nicker
I thought one of the features was supposed to be its stability because no new coins would ever be issued but I guess it turned out to be as volatile as any other currency once people stopped using it as a symbolic medium of exchange and started treating it like a commodity. Which reminds me...
A curse on currency traders, the hoards of monetary mosquitoes sucking the blood out of the world's economy, one fraction of a percent at a time.I think you're thinking of stability the wrong way. Bitcoin's value fluctuations are supposed to be more predictable because the issuance of more coins is on a set schedule. The value goes up because 'mining' bitcoins becomes more complex as time goes on, making it harder to get more of them. Based on (
http://bitcoincharts.com/charts/mtgoxUSD#rg2920ztgMzm1g10zm2g25) this chart, the value has followed a pretty consistent upward trend up until this past April. Even the Silk Road shutdown didn't significantly impact the value.
Pyrian on 5/11/2013 at 20:40
Explain to me, then, how we're supposed to think of stability such that a long period of massive and unsteady deflation followed by huge swings of inflation and deflation is thereby "stable"?
Nicker on 5/11/2013 at 22:00
Quote Posted by Pyrian
Explain to me, then, how we're supposed to think of stability such that a long period of massive and unsteady deflation followed by huge swings of inflation and deflation is thereby "stable"?
My question too.
I may not be using the term stability correctly in formal economic sense but my recollection about Bitcoin when it was issued was that it would NOT be subject to speculation or manipulation, especially by the issuers.
But as with existing currencies, Bitcoun has crossed over the line between symbolic medium of exchange and actual commodity. Even though it is not an actual commodity it behaves like on in the market, based entirely on its perceived value. It sounds like a tulip craze.
I appreciate the the great utility which an internet medium of commerce is (without using credit cards, etc.) but if it is going to bounce around like pre-war German currency, it is more a danger than a convenience.
Volitions Advocate on 7/11/2013 at 04:45
The story goes, as i've heard it.
That the miners get a reward of X bitcoins for processing a "block". Which I don't know a lot about other than its a complex type of encryption or something and its designed so that people can't alter their transactions after they've committed to them. But after every X number of transactions, the amount of bitcoins that is rewarded to the miners gets cut in half. IIRC right now the reward is 25 bitcoins. The plan is that they already know exactly how many bitcoins there will be out there once the maximum amount is reached. Then no more will ever be created. Their hope is that when this happens, the miners will still be doing their thing because in addition to the reward, they also get a share in the transaction fee, and by the time there are enough users and traders in bitcoin (when there will not be anymore bitcoins created) it will still be lucrative to mine because there will be so many more transactions than there are now.
It seems like a solid plan to me, and the supporters are pretty dead set on making sure its stable and successful.
The problem is that processing these blocks takes a tremendous amount of processing power, and unless you have a couple of quad SLI rigs in your house doing nothing but bitcoin mining, you're not going to get your value out of the bitcoins you receive after you pay your power and internet bill. So a miners have joined together and created these kabals or mining pools where they all work together than split the rewards. I think this is problematic because you're going to get the same thing we have in the real world. A concentration of wealth and power. Get a group of miners big enough that controls a majority of the market, then suddenly a network that is supposed to be run by nobody is run by a group that gets to choose who gets the money when it comes in.
If I had started bitcoin mining when I first heard of it, I'd probably be pretty happy with the service, but all that i've read shows that starting now would be far too difficult.
Pyrian on 7/11/2013 at 15:52
As I've heard it, most of the bitcoin mining being done now, is being done by botnets - hacked machines working for a criminal.
ZylonBane on 7/11/2013 at 21:14
Quote Posted by dethtoll
You know what you could do? Donate to poor musicians.
I think I'd rather donate to good musicians.
SubJeff on 7/11/2013 at 22:38
Badom-tish. ZB brings it.
june gloom on 8/11/2013 at 03:42
"It" being the funk, of course.
faetal on 8/11/2013 at 13:25
Quote Posted by ZylonBane
I think I'd rather donate to good musicians.
Lovely :)
