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The Age Of Cryptocurrency
"Bitcoin represents a monumental paradigm shift that will transform the social, political and economic landscape," according to Paul Vigna and Michael J. Casey in this presentation. Since its advent, Bitcoin has gained a reputation for instability and illicit business; naysayers fear its power to eliminate jobs and upend the concept of a nation-state. Vigna and Casey show that cryptocurrencies can also bring good. For one, they remove the middleman from the financial system, giving the power to the people and safeguarding from the devastation of a 2008-type crash. They also promote financial equality; Bitcoin has already given the world’s unbanked - those marginalized billions who’ve never had a bank account - unprecedented access to the global economy.
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Worth the read:
http://debtcrash.report/entry/bitcoin-an-e-dollar-beta-test
Bitcoin , BTChezzzz.
Yeah bitchez! Funny thing, BTC only went up to $1000 when the fbi was trying to unload a shitload of it....
FUCK YOU!
Fiat currency is backed by "faith". Faith in the government, the currency, and the fact that the world will keep spinning. What is Bitcoin? A bunch of ones and zeros somewhere. I'd say you need a whole bunch more faith in that than paper bills. I'm no fan of where the value of currency is going, but for the 99% of people who don't really understand how Bitcoin works (roll out mt Gox!), it's hard to have sympathy for them.
But what is bitcoin backed by?
I tell you what, I'll trade you my 1s and 0s for your bank account, deal or no deal?
(Don't worry, you can trust me, my 1s & 0s are 100% Secure!!)
Bitcoin is backed by the same thing that backs gold: A group of people willing to buy it at various price points and another group willing to sell it. Also known as supply and demand.
If you are selling your bitcoins significantly below market price to make it worth my while, my bank account is yours. Digitally sign for an address that holds some bitcoins so I know you're not just bullshittin' us. With bitcoin there is no need to trust you, your digital signature is enough and I can independently verify the status of your claim.
But what is bitcoin backed by?
Laws of mathemathics.
The same thing that backs gold: Energy.
With Matt Mellon and Bill Gates pushing BitCoin, what could go wrong?
http://srsroccoreport.com/pilgrims-society-takeover-of-bitcoin-the-high-...
as long as you make your decisions based on what bill gates thinks, you are a sheep.
as far as the article, bitcoin and silver are not at odds. gold/silver are a store of wealth. bitcoin is a tool for circumventing capital controls, and can remove power from the banking system, among other things. they serve different purposes.
people who try to play up a divide in gold vs bitcoin have a shallow understanding, it is a false dichotomy.
srsrocco usually posts useful intelligent material...i guess no one is perfect.
Ok, point taken but a weak point in my view is the fiat- to bitcoin conversion and vice versa. How do you handle the volatility or avoid getting screwed over by the exchanges.
Gold is Store of Value.
Bitcoin is transactional.
Dollar used to be both. Financial Banksters have removed that functionality.
Volatility is completely natural at this stage due to its infancy. It will get better with wider adoption and better coin distribution. If you can't tolerate the risk then check it in a few years.
People on this site don't know jack about Bitcoin.
1. The processing network is massively subsidized through the so-called "block reward" (Bitcoins that are gifted to miners in return for their processing power), yielding an effective cost *per transaction* of $41. So far 99.5% of miner revenue has been from block reward, .5% from transaction fees. Ok smart-ass...the block reward has been 2/3rds spent already, what happens when that hits 100%? If you ask Bitcoiners they will say "oh oh, transaction fees will rise to make up for it". Do the math, that's supposed to be what you're good at.
2. Governance: the network does 4 transactions per second on a good day (Visa does 10,000 on a bad day). In order to bring that all the way up to 200 tps they need to increase the block size. Log into any Bitcoin blog these days and you will see there is a massive debate about this change, with 30% of miners saying they will "fork" Bitcoin if it goes through. That means there will be multiple Bitcoin networks, with old Bitcoins "orphaned" on the old blockchains and unspendable/worthless. Even if they agree this change, the disruption of the required "hard fork" will be massive, with so many wallet versions out in the wild.
I could go on and on. I wanted to believe in it, we've got to break bankster power somehow...but it doesn't stack up.
And just keep in mind that literally every time you pay for something with BTC as an American citizen, you are required by law to report this to the IRS, as it is considered a capital gain/loss.
Thanks for adding that fact to the table...
Same with everything else. If you gain anything you are expected to pay taxes.
I cannot believe how fucking stupid people are on this board.
Actually if you own coins prior to the hard fork, you'll have coins in both versions of Bitcoin, both will have value, but I suspect the one with a larger blockchain block will have the most value.
The software upgrade will not affect wallet balances.
If bitcoins were not created through a competitive process open to anybody willing to invest in hardware and electricty then either of 2 things would have happened: 1) There would be no bitcoins and we wouldn't be here talking about it, or 2) Some dude would have created all the bitcoins uncompetively and somehow or other have distributed them so that we would have something to talk about. The way things turned out seems to be the best of the 3 options. Here we are talking about it and each bitcoin currently has an exchange value over $200.
Miners revenue divided by the number of transactions (a.k.a. "cost per transaction", a misnomer in my opinion) is back below $10 these days and Bitcoin is functioning just fine. I think there is room for it to fall further with no problem or drama.
The issue of scaling beyond a few transactions per second without jeopardizing the decentralization of Bitcoin is mostly a technical question calling for technical solutions. If you keep reading some of the Bitcoin blogs you'll probably come across some good proposals for improving Bitcoin Core that can keep the running of full nodes on reasonable computing/networking resources convenient. There is huge room for optimization. There is e.g. blockchain pruning already implemented which cuts storage requirement today from 33GB to 1.3GB. There are various proposals for drastically cutting bandwidth, processing and memory requirements. All these things have the potential to make larger blocks less controversial and more acceptable to everyone. If the community decides to go that way it's a straightforward way to allow more transactions per second (which pushes the Miners Revenue per Transaction metric downwards) and less upwards pressure on mining fees.
On those blogs you may also find some quite promising proposals such as the Lightning network, sidechains/treechains, etc. You'll find visions of the future where the main Bitcoin blockchain is used primarily for larger scale transactions while your morning coffee is paid for off-chain, or on a different chain. Blockchain settlement is a powerful and important thing and perhaps the whole world doesn't care to see every single morning coffee you buy recorded on the blockchain. By the way, off-chain transactions can be helpful for privacy, too.
In practice those who are competent and interested in fixing these things will fix them. We'll probably see a combination of these fixes/improvements/innovations.
Bitcoin is not static... Your points are idiotic at best. You lack any vision.
Bitcoin is an application built on an innovative ledger technology. Worrying about fiat and bitcoin largely misses the point of the improvements that are being promised. We're already being screwed. It's not whether we will be screwed that's important. It's whether we will be screwed more or less that matters as a practical matter. A financial system suddenly only populated by honest saints is just not in the cards.
History repeats itself, it's just that most plebs are too fucking ignorant to see why...
There are many ways to convert these days. If you want to avoid centralized exchanges you could do exchange person to person. Exchanging bitcoin for cash is a low trust business, meaning there isn't much risk to get screwed.
If you have someone you can trust you could hedge your bitcoins' volatility via some derivative contract with them. If you look for bitcoin derivatives you'll find some places where you can get them and I'm sure people are working on providing more.
people who try to play up a divide in gold vs bitcoin have a shallow understanding, it is a false dichotomy.
Hooray for sanity!
You mean thanks to crypto currency Janet Yellen, Lady lagarde, Mario Draghi are HISTORY???
hahahahaha! Voilà la solution !
What happens if Algore can't keep his internets up and running during "the devastation of a 2008-type crash"? EMPs? Cyber attack/theft?
For some people life ends with no internet. Their event horizon goes as far as the palm of their hand.
Cybercurrencies are not a complete solution. What they are is a cheap solution that provides improvements to the global system at far less than the cost. Maintaining a global ledger is nowhere near as expensive as maintaining a national currency.
That's when all that gold we been hoardin' comes into play. Lord knows we ain't using gold much to conduct our bizness while them there internets and YellenBux ATMs be a'hummin'.
this thread is worthless without fonestar
quite the contrary.
Exactly! fonestar is worthless without this thread.
bitcoin? /s
"this thread is worthless without fonestar"
fonestar is with you! And also with you!
It's a transaction mechanism and a bloody good one. Nothing else. STUPID!!
The essence of bitcoin = decentralized + somewhat anonymous + open (for all to see) + transaction LEDGER.
The essence of bitcoin is something some British brats got together to scheme up, they sold the idea to some gamers who started farming bitcoins on their massive Enthusiast Desktops, and were paid to do so, in exchange they came out and made a public offering on the currency, to which some British tard whom most of you have never heard of had A LOT of freaking bitcoins that he bought up, when the price was right, guess what? HE SOLD THEM and walk smooth the hell away a multi-millionaire, while you fools were watching the prices fall out & they were wanting people's head for it (& Suddenly the founders mysteriously died, cough were oosted cough), he was on the Keiser Report bragging about his ventures in Bitcoin, and this bugger was making me laugh because guess what? He was spilling the beans on the show!!! (Including the entire purpose behind crypto-currency government tracking) If you followed Darknet, then you'd understand they are also trying to get fools to take bitcoins for illicit transactions which the gov. secretly brokers, so they can bust in the door with guns and take everything you ever owned, and of course have a good laugh at the pub about it too...
Now, to all those above me who would like to say something in defense of this digital ponzi-scheme which is backed by absolutely nothing but false hope, please have a nice tall glass of STFU, sit down, and put that into your pipe and smoke it....
You can short bitcoin. If things are really as you say there's a shitton of profit still to be made from the drop down from $240 --> 0$. We need more smart folks like you shorting bitcoin.
For fuck's sake, these tools are from the WSJ. I suppose next week there'll be shills from The Economist plugging Shitcoin as well.
Buy Shitcoin, folks - just keep away from gold, and especially toxic silver !
Gold and silver is for the elite jews. They will buy more as they unload the shitcoins that they invented and mined way before you did. Go israel innovations division!
Only an absolute fucking idiot could come up with something as hilarious as that I am laughing but not in a way you would appreciate.
http://www.economist.com/news/special-report/21650295-or-it-next-big-thing
How does bitcoin work without a supply of electricity?
Charge your smartphone from a solar panel.
1.) Bitcoin is a decentralized global system. It doesn't affect the network if one or more country goes down.
2.) If utilities go down for a prolonged period you'll have higher priorities and money will be mostly weapons, ammo, shelter, knowledge, food, and other essentials. Also, the main goal will be to restore electricity.
3.) Most of our modern life depends on utilities including the internet (inlcuding your bank account and your digital dollars)
Well,
Then just stock up on weapons, ammo, shelter, knowledge, food and other essentials. Why bother with bitcoin. You kind of defeated your own point.
Dont forget to include your Flat Earth map.
Because Bitcoin = freedom.
You can't buy things for weapons, ammo, etc now. You can't trade with anything else friction- and restrictionless.
You realize that your bank account is just digital numbers don't you? They don't have a pile of paper rectangles for you in the vault. If you think they do, just try asking for it all at once (over 10k that is). You won't get it.
Just for the fact that bitcoin eliminates the need to pay idiots at a place that says "Bank" on the outside to hold our digitial money for us make Bitcoin the winner all around. Start reading about it and using it and you will finally open your eyes and see the future. Or you can pack my groceries while I drive by in my new corvette with a big-titted hottie next to me. Don't put the eggs on the bottom of the bag, either.
All these weird unknown folks come out of the woodwork when ZH posts a bitcoin story. Kind of like ZH was developed to be a shill for bitcoin.
It doesn't work without electricity. That's why it's called DIGITAL currency. Where you been the last 5 years, sniffing glue? But it's not like you have to constantly water your bitcoins with electricity. It's okay, you can turn your computer off, your bitcoins will still be there when you turn it back on again. I have some bitcoin stored right next to my gold in a offsite EMP-hardened location that haven't seen a joule of juice in over 2 years.
I've been watching bitvoin since 2011.
Lawski just issued the first new york state 'bit license' to it bit.
I think the financial regulation is a garbage story. But I also think many people will be fooled by this story. For the first time since bitcoin hit 1000 bucks I have ceased being bearish on bitcoin as a pure instrument of speculation. I think bitcoin prices have bottomed out at 215 bucks until either a major negative bitcoin story breakers or until there is a full 20%+ bear correction in the stock market.
I believe that bitcoin will go 60 dollars up in price to 300 or more by july if yellen doesn't raise interest rates in June.
Disclosure. Bitcoin is a long run ponizui scheme that will go to zero value quicker than any major fiat currency. The story about it being a deflationary currency is mostly bullshit until 2022 , only 60% of all bitcoins yet exist. By 2022. 95% will exist.
Over 50% of bitcoins remaining have yet to be printed/mined into existence so bitcoin remains highly inflationary. There is almost no credit market for bitcoins so a credit crisis will not occur in bitcoins but in dollars trying to exit bitcoin. This means during a conventional dollar credit crisis people will be selling bitcoins FOR DOLLARS to a flight to the dollar, like they sell stocks.
No one is selling stocks FOR BITCOINS. For a flight to bitcoin. Bitcoin behaves like a speculative instrument rather than a reserve of value during credit crisis.
This will continue being the case for at least until 2022. If bitcoin even survives that long.
"No one is selling stocks FOR BITCOINS. " - yet.. They will be soon.
http://www.wsj.com/articles/a-bitcoin-technology-gets-nasdaq-test-143129...
<<< No thanks (Shi#coin)
<<< Oh, yes, MOAR Bitcoins for me
"Bitcoin represents a monumental paradigm shift that will transform the social, political and economic landscape,"
Bitcoin just represents another Medium of Exchange (MOE) con job.
Money is created by traders making trading promises and getting them certified. Money is expunged on completion of the trade as promised. Money allows simple barter to take place over time and space.
Bitcoin recognizes none of the precepts. It's no different than the system we have now where people believe governments or central banks create money. They don't. They counterfeit it.
Bitcoin just brings you counterfeiters in a different color.
Everything you've written is completely incorrect/BS. I recommend educating yourself.
https://en.bitcoin.it/wiki/Main_Page
I have a feeling you would have been buying tulips in 1637 and telling us all how incorrect and full of BS we are for not buying into it.
I have a feeling you come from a long line of ditch-diggers and grocery-packers. Well someone's got to do it. Enjoy life at the bottom.
I recommend educating yourself.
I have been thoroughly knowledgable about BitCoin since its introduction. At that time it was obvious to me that it was flawed on its face. It didn't know that money was "a promise to complete a trade". It thought gold was money and that scarcity and inability to control supply was the source of its value. It was that erroneous thought on which the premise of BitCoin is based. BitCoin will never have value in this way, and gold will only have such value for a short period of time after a reset (and will compete with silver) as an object of simple barter.
ignorance is a bliss
You, sir, are completely uninformed. You've read nothing about Bitcoin, nor do you understand how it works. I think it's better to keep quiet and let us assume you're stupid before spouting off and confirming it for us.
I resent people calling others stupid like you did.
All of you bitcoin proponents are like religious evangelists.
But you must have been short of a little reading yourself, as in Snowden.
If you pay a legintimate business with bitcoin, .gov knows what you have done.
What if you want to send someone $10,000 in bitcoin and have them take it out in currency so they can actually use it as most supermarkets, gas stations and other stores people frequent the don't accept it. Even if they did, the recipient will probably have to show id and what not to get cash for bitcoin, if they can even get the cash..
If you can't get an internet connection, what good is it?
If you fry or lose your digital wallet, what are you going to do?
Keep your bitcoin. Right now there are a multitude of ways to pay for things, but cash will always be there. The government can't outlaw cash and if they tried they would be ignored. Cash is not traceable through the internet.
.Gov and Bitcoin types all want you to believe their bullshit so they can attempt to go cashless. That would be one massive mistake.
My real wallet has cash and it may differ in value from one day to the next, so does bitcoin as in the end it is compared to other currencies for true worth. You buy a $10,000 USD item with cash, you will have to fork over the same value in bitcoins. It is not its own currency, never will be. The gold bugs have their short comings, but at least what they have is tangible. Bitcoin are bits and bytes and really do not represent anything other than that on this planet, no matter how much you claim otherwise.
I won't accept bitcoin and advise my customers likewise.
Like the old saying goes, there is a sucker born every minute.
Look lady, your ignorance is quite apparant. Keep hiding your head in the sand. You remind me of those stories about the people who screamed about that horrible invention called "the automobile".
First all governments are trying to ban cash. You should probably keep at least one eye open: http://www.zerohedge.com/news/2015-03-23/fighting-war-terror-banning-cas...
Most people today (ie, 21st century) are using credit and/or debit cards. Do you use one? Then you're just paying a middleman to "hold" your digital money or pay from a digital account. Did you think they have all of your $3.25 with your name on it in a vault with a guard in front? All of your financial accounts are digitial.
Pretty paper rectangles may be your preferred payment method, as they are for me at times, but this will cease to be an option as the powers that be ratchet up their war on your money and mine.
Those bits and bytes you think are worthless are EARNED by mining (I am also a BC miner) which costs time and money and effort. Just as with gold. How are your digital dollars made? One stroke of a keyboard. Dollars have NOTHING backing them. Bitcoin is similar to digital gold - at least some stored effort and energy - which real money is defined as. Your revered paper rectangle dollars are also worthless - less than the cotton and paper they are printed on.
Each bitcoin is unique, cannot be duplicated (properly double-spent) and has yet to hacked and can be fixed quickly should any issue come up (as has been proven). You keep believing in your Holy Savior dollars. You'll be washing my toilets soon enough Einstein.
Let's just say the US government decides to devalue your paper rectangles by 30 percent overnight...What are you going to do about it? Nothing. If your money is in gold, silver or bitcoin you have true value. Gold and silver have outlasted every paper dollar system that has yet to be dreamed up over the course of humanity. Bitcoin is just digital gold or silver in the same manner.
Go ahead and wear your mom jeans and cry when it rains, but sometimes you have to get with the times. Don't forget to hand crank your car to start it and shovel some coal into your furnace tonight. God you're so scared of advances in technology.
Go fuck yourself.
If the $ devalues 30 percent, don't think bitcoin will survive, it will go for a ride.
You must work for .gov.
Anyone who would get hard working people to buy into this sleeze crypto currency is a scumbag.
You really got me with that comeback! What a wit on you! So once you finally get your GED maybe I'll hire you to clean up the dog shit in my yard.
Fortunately, the small-brained such as yourself will eventually be rooted out by evolution. Don't worry, I'll throw you a couple fractions of a bitcoin so you can purchase your Top Ramen for dinner.
Why not throw him a few bits via a ChangeTip one time link and show him just how easy it is?
Your statements about bitcoin are spot on cheryy picker. Ignore bcking, like everyone else does. You have to hand it to him though, he chose an appropriate avatar. BTC will either become a plaything of TPTB or fade into the night like most of the other tech dork wet dreams have. Their religous fervor seems to blind them from the fact that it is intangible, which means it does not actually exist. I think perhaps the popularity of on-line role playing games have had a negative effect on many of todays youth. They have spent so much time in a digital intangible world, they have trouble differentiating between fact and fantasy. I am not bashing MMORPGs. I play them regularly, and think they can teach young people many valuable lessons in resource management. In fact, I made quite a few bucks in the past exchanging game items that don't actually exist for dollars that do actually exist. I learned rather quickly that dealing in intangible goods has it's upside, as well as it's downside. These BTC fanatics will learn as well. They are to be pitied, really, for their blind ignorance, as they are led to the slaughter.
"Money is a medium of exchange, a unit of account, and a store of value." -Marc Faber
Bill Gates talking about Bitcoin is:
like Bill Gates talking about the internet
like Bill Gates talking about search
like Bill Gates talking about browsers
It didn't matter in those three cases either (missed it by this much...holds hands as far apart as possible)
I don't trust bitcoin. It is a new unproven medium of exchange with limited retailers acceptiing it. It's been hacked/stolen and recovered by the .gov so how secure or anonymous is it really. Silk Road was one really good use for it til that party ended badly. Maybe as a small part of an investment portfolio? I do see it as a beta test of the new enforced electronic fiat. Good luck you silly bitcoiners. Good luck to my AU/AG fetish. The future will tell.
You will find most bitcoiners also have an AU/AG fetich as well.
Hogwash. Many of the Fonestar Brigade did nothing but bash real money (gold and silver) around here.
Well a lot of them did think that the Futuire of Money is to bury your PM's in the bottom of some random lake and wait for Armageddon. Please explain how you will find your stash after the shit hits the fan , and there is no GPS ? Do you make a star map ? And what about filling your scuba bottles ? A foot pump ? If that really is the best the goldbugs can come up with on the Future of Money then I am not surprised they got a bashing. But that is not to say bitcoin and gold are in competition , quite the opposite in fact.
What I like about Gold is that I can easily pry it from your cold dead hands with the aid of my friend, Mr. AR-15.
Bitcoin is safe from Mr. AR-15 if you are smart enough not to reveal the BIP-38 secret.
To be fair, in some places and for some people it is somewhat practical to hide gold without being seen and to remember the exact location. As a way to store value for very long periods of time (very infrequent use) it still works, although in a potentially more complicated way than it did thousands of years ago.
Bitcoin beats it hands down in terms of flexibility for avoiding physical attacks.
For example, a family or company could secure common funds by requiring the signature of multiple members (multisignature). With gold someone has to know the whole secret, while with Bitcoin it can be spread.
1.) The system has been working for 6 years now. It's opensource and transparent.
2.) It never was "hacked". The most severe bug was found in 2010 which enabled a couple of hundred million BTC to be issued. It was fixed promptly.
(looking for issues and fixing them is part of software development)
3.) Since the fall of silkroad, darknet markets are booming
4.) Bitcoin goes against the status quo that's why banks/governments are vary of it.
In my opinion bitcoin and precious metals are complementary. One would be foolish to not acknowledge the utility (restrictionless transactions and uncorruptible money) while appreciating gold.
If the banksters have their fascist rule, which they have, we will live in a cashless society and Bit Coin will bight the dust.
Everyone knows how psychopathic bankster GREED works, they want control of everything financial like outlawing rummage sales, kids mowing lawns, marijuana sales, day labor, lemonade stands, handy man and anything else financial that they are not controlling.
The black market economy has become the real economy of the nation and the banksters want to destroy and control of that market. Greedy bastards.
Fixed it for ya.
Gold backed crypto, Anthem Vault
http://www.businessinsider.com/hayek-cryptocurrency-backed-by-gold-2015-...
Best of both worlds. But i'm sceptic, just one cocksucker is enough to confiscate the collateral, all in one handy spot.
Bitcoin is backed by the same thing that backs gold: Energy.
So are we, ct.
Exactly wrong. Bitcoin represents energy wasted, not energy stored or available. The energy wasted calculating bitcoins is gone forever and can never be recovered.
Collecting bitcoins is like saving the ashes after a fire has burned out.
If you call transaction verification and network security a waste of energy then you are deluded. Bitcoin will replace entire banking datacentres and PoS systems , once fully deployed it will actually save huge amounts of energy vs. the current dinosaur system which wastes huge amounts of energy.
Correct imho. Depends how you look at it; when energy fails (peak fossils), BTC will have blackouts and other failures, while gold mining grinds to a halt because you need lots of energy to dig it up.
Excisting gold, and silver, is still there. Dunno about a wallet.... Gold or silver backed crypto's would be a nice thing to go around, but in this fucked up system i need it in my hand without asking my bank or my exchange for permission to buy something.
More and more people are mining with solar power and renewables. In fact bitcoin mining is going to really push this sector.
Forget about mining with solar. We're lucky if we can survive on solar. Mining with solar is like charging your Tesla on a hometrainer.
The largest mining rigs are located in places such as Iceland where they have enormous amounts of geothermal energy available and nowhere to send it to. Just think how much power will actually be saved once this system is fully deployed. Do you realise how much power is used by PoS teminals in a supermarket ? All retails PoS will be replaced by low power tablets within a few years.
Funny how you started out with solar as you point and ended up with geothermal when your argument failed.
Where to next?
Quote: "More and more people are mining with solar power and renewables." FACT.
Solar has a definite positive return on investment period less than the life of the panel. Solar has reached a magical $1/kW point where it is a no brainer for many people in the right climate. You would be a fool to live in any Western State and not have solar if your roof has good exposure. The reason most have no solar power is lack-of-funds and ignorance. Or, more likely, people would rather buy Beer and Comcast than solar power.
Once you have "free" Solar, mining Bitcoin with it is just another work load. Driving with Solar is just another work load. Heating water is just another work load. Turns out that mining Bitcoin with "free" solar is better than using it to goto work in your Tesla. Why? Because now I don't have to leave home to earn the money to buy things... Although, I still drive the Tesla with Solar as it is just too much fun.
BTW, when bitcoin gains traction it will be shorted, manipulated and rehypothecated like paper metals. When that blows up, as lots of people expect, there are two choices: phyz metal or a usb stick.
The only reason gold can be rehypothecated is because it is physical and requires storage and transport which is expensive. Storage and transport of bitcoin is instant and free. It is mathematically impossible to rehypothecate bitcoin because the ledger is open and publicly viewable, it shows every wallet's balance in real time. Unlike gold where everything is hidden and it's impossible to audit and therefore very easy to sell non-existant paper gold.
In a sense, these things already happened with Mt. Gox. Indeed, people should have strongly avoided storing anything at a third party like Mt. Gox and instead held it in USB sticks, brain memory, etc.
How can you short something with a decimal point that slides to the right without cutting your own throat?
How can you charge interest on a loan with a with a decimal point that slides to the right without cutting your own throat?
How can you hide a transaction of questionable market manipulation in a currency that is built to track each transaction to the location of issues of fraud?
For an open source, fully transparent, funigble, functional and freely given solution that is completely documented top to bottom for any one to see that is literally built of encryption technology for commercial security and act as an ISBN/inventory tracking tool. It is the leatherman tool of currency.
The beta test to test those things you've listed btw was over a while ago. Alpha release is already live with 80 million users worldwide. The financial system issues that you describe once BTC is mainstream will not exist any more.
Because for the last four years, developers and engineers allowed the financial community to do what they usually do. They were used like lab rats to find the holes and weaknesses using current paradigms like unwarranted 'leverage', imaginary credit facilities, 'shorting' and all the other tools of manipulation. It was fully expected that everything you've mentioned would be tried. In fact it was part of the project plan, they did an exceptional job of providing free QA services and free Security testing since no one expected them to act any differently. Remember stupidity is a constant in the universe and they aren't that imaginative using the same tools and tricks over and over and over again. They made themselves Bitcoin's bitch and excelled at being useful idiots in the development of it. To those that tried and failed in the economic community. Thank you. (LOL!)
In a nutshell. They are fucked, while holding the bag of the dead economy and should understand that everything is a technology. Even money. Upgrades happen. Updates happen. Otherwise we'd all be still using tally sticks. The current paradigm is a 8track tape in a world that uses cloud delivery services on complex infrastructure only to match the just in time delivery services that make sure they eat, have clothes and live somewhere. They are antiquated with no creative process, zero ability to manage and a complete lack of self control.
How can you short something with a decimal point that slides to the right without cutting your own throat?
How can you charge interest on a loan with a with a decimal point that slides to the right without cutting your own throat?
How can you hide a transaction of questionable market manipulation in a currency that is built to track each transaction to the location of issues of fraud?
For an open source, fully transparent, funigble, functional and freely given solution that is completely documented top to bottom for any one to see that is literally built of encryption technology for commercial security and act as an ISBN/inventory tracking tool. It is the leatherman tool of currency.
The beta test to test those things you've listed btw was over a while ago. Alpha release is already live with 80 million users worldwide. The financial system issues that you describe once BTC is mainstream will not exist any more.
Because for the last four years, developers and engineers allowed the financial community to do what they usually do. They, the 'modern' financial community, were used like lab rats to find the holes and weaknesses using current paradigms like unwarranted 'leverage', imaginary credit facilities, 'shorting' and all the other tools of manipulation. It was fully expected that everything you've mentioned would be tried. In fact it was part of the project plan, they did an exceptional job of providing free QA services and free Security testing since no one expected them to act any differently. Remember stupidity is a constant in the universe and they aren't that imaginative using the same tools and tricks over and over and over again. They made themselves Bitcoin's bitch and excelled at being useful idiots in the development of it. To those that tried and failed in the economic community. Thank you. (LOL!) ITIL and SDLC processes ftw.
In a nutshell. They are fucked, while holding the bag of the dead economy and should understand that everything is a technology. Even money. Upgrades happen. Updates happen. Otherwise we'd all be still using tally sticks. The current paradigm is a 8track tape in a world that uses cloud delivery services on complex infrastructure only to match the just in time delivery services that make sure they eat, have clothes and live somewhere. They are antiquated with no creative process, zero ability to manage and a complete lack of self control.
You could say gold and silver are supernova ashes. Ashes from a very special and rare kind of fire. Then when we mine for them there is an irreversible expenditure of useful energy again. The analogy works.
Being something that uniquely represents energy spent in the past is enough to make that thing subjectively valuable.
"Being something that uniquely represents energy spent in the past is enough to make that thing subjectively valuable."
Wow. That's amazing. So how much is the carbon building up in the combustion chambers in my car's engine worth?
That carbon cannot be proven to come from an engine. Moreover, not every engine produces the same kind or quantity of carbon buildup. So carbon buildup is not an appropriate choice for proving anything. Heck, perhaps if you showed me a picture of you and the carbon build up inside your Bugatti Veyron's engine (proving significant usage) that would be at least somewhat impressive.
What you need to publish on the network in order to get a bitcoin reward (a piece of data) cannot be gotten in a fundamentally more efficient way than through Bitcoin mining. That's why I said uniquely (there's a lot behind this word and perhaps I should have explained more in my previous post).
In Bitcoin there is a one-to-one relationship between a very specific kind of computational work done at a specific point in time and the result of that work (and separately there's also a one-to-one relationship between that result and a certain amount of bitcoins, thus a bitcoin uniquely represents an amount of work done at a specific time). With gold there is a similar relationship, with some differences. Basically when you see a bitcoin you can make sure that there has been no cheating and that at some point in time it has taken some amount of computing power to issue it fairly (distributed according to each miner's share of the total computing power dedicated for mining at that moment in time). When the scheme as a whole is fair, the unit (a bitcoin) can become valuable.
Final note: assuming the scheme is fair the value of a unit of the product (a bitcoin, a piece of gold) need not be determined solely by the exact amount of energy spent producing that specific unit (it is the case with both Bitcoin and gold - they are considered fungible).
Spent energy is of no use whatever.
What about the spent enrgy that was used to mine gold ?
Neither gold nor bitcoins are backed by energy. Both are backed by supply and demand only. It matters little how much it cost to feed the Roman slaves that dug my gold nugget out of a riverbed 1000s of years ago. The cost of energy (also ruled by supply and demand) has an affect on how much new supply is added to the market. What matters is what goods and services others are willing to exchange with me for my gold/usd/bitcoin and if I am willing to part with it at that rate.
You could say a work of art or other collectible is of no use whatever either. But they do have value on the market. And when you have something of value you can use it as a store of value, and you can use it for transfer of value. Simple. So, some things which represent spent energy are of use.
Bitcoin is backed by math and a distributed ledger.
You confuse documentation with backing.
Klepto currency you mean.
Dont even have to hold a gun to your face to steal it.
In Principle, Crypto-Currencies (CCs) are PART of the "PARALLEL ECONOMY". As is PM (Gold, Silver, Platinum, Palladium) and Barter. Heck, I'd consider owning Strategic Metals and Strategic Minerals (in whatever useful form) part of the Parallel Economy, and perhaps better or safer than just Gold & Silver bullion/coins.
Insofar it is a genuine part of that Parallel Economy, I am happy for CCs and their users. But, unlike the other options (Analog options like PM, Barter), it is Digital and thus leaves a Digital Trail. The question as to how "secure" it is, is a Secondary and separate argument to the fact that "It leaves a trail".
If I leave emotion and old habits by the door, then the clever part of my brain says to use CCs when and as it's convenient and makes sense, and to keep using the other two (PM and Barter) that have proven themselves over the millennia of human history.
Each one of us needs to figure out what the Mix is, as it applies to their situation and tactical needs.
p.s. As an afterthought, I now recall having made the argument others have also figured out: That using CCs can be or IS part of a bigger scheme -- that of getting people/sheeple used to transitioning to a Paperless, Cashless society (a la Pavlovian Conditioning of the Herd). In which case, the decision I/you have to make is... Is the Tactical Convenience of CCs worth the Strategic Gamble of helping to usher in a Cashless Society? Hmmm...
The sheeple are already in good hands. The people who think their current "cash" is safe from discovery and confiscation are in for a rude awakening. Even the PM types should all know about 1933 and the bankrupting of Amerika and the theft of Gold by the Banksters and their puppet FDR. They should all know about Federal Asset Forfeiture laws which make their cash very unsafe. It is possible for Bitcoin to circumvent all the current schemes for confiscation and that's why TPTB hate it. The traceability of Bitcoin is something far different than the traceability of your FEDnotes. Cashless is already here in that a vast majority of transaction occur off the FEDnotes block-chain. And, the FEDnotes block-chain is imminently traceable and confiscatable - you just don't have access to their block-chain so you have no idea.
Interestingly, the whole point of bitcoin cold wallets is to have an equivalent better than cash. The biggest holder of cold bitcoin is still largely anonymous as these coins have not moved from the early blockchain. It is possible to trace where a transaction to move cold coins originated on the network, but one would need to be at all possible ingress points of the bitcoin network and have way to instantly trace the originating node. Possible but only a few actors have the will or means necessary.
"It is possible for Bitcoin to circumvent all the current schemes for confiscation and that's why TPTB hate it."
That's odd. I am pretty sure I read recently about the FBI getting ready to auction off the BTC they CONFISCATED from Silk Road 2.0. LOL!!! Sure they are safe in cold storage........just like gold bullion 5,000 feet down in the ground, and yet to be mined, is safe. Problem is, neither is of any use.
Those confiscated bitcoins have obviously not been secured properly, or have been given up. To repeat from another of my posts: If it is an encrypted wallet or a brainwallet you need the memorized password/passphrase to access it. If you take care of your privacy no one will even know how much, if any, bitcoins you have.
Those organizations have clearly not done the right thing to secure their funds. They have now at their disposal the option of multisignature wallets. With those you can secure money with multiple secret keys. For example, 3 different members can hold one key each and every outgoing transaction requires any 2 of the 3 keys to sign it. So if one of the 3 members dies, disappears, gets caught, loses the key, or anything, the others move the money to a new wallet and move on. You can't steal that with only one of the keys.
I didn't say Bitcoin is not confiscatable rather that it can circumvent confiscation.
Ulbricht likely has cold stored bitcoin waiting for him when/if he leaves prison. I cannot imagine he outed all his bitcoin to the feds but who knows.
Somehow I doubt that those who have never had a bank account need access to the 'global economy'!
The DC US killed off the PM backed Liberty Services' Liberty Dollar, and jailed its founder von NotHaus.
They are not only permitting Bitcoin to exist, but to thrive. And Corzine still walks amongst us.
Liberty is a demand. Tyranny is submission..
Should be called Pitcoin.
No one has even mentioned an EMP event yet on this thread. That will pretty much do any crypto currency in. Your shit stored safely will be gone for good and any exchanges will be down.
double post
Any EMP event should be worldwide and be able to destroy every copy of the blockchain everywhere in the world.
If it was able to do so, it would probably destroy every digital bank record existing on the Earth face too.
Then, if the grids do not come up fast, we would be in a Mad Max environment. If they come up fast, all business will return to normal very fast.
Anyway, the Bitcoin network is decentralized, so it has more chances to come back up faster and better than any centralized banking circuit. And would work even with very little infrastructure.
In the event of an EMP Tesla's got your back.
Hey dummy. Unless you have all of your money under your mattress, every bank account you have is also DIGITAL. Do you think your precious bank has all of your $3.50 in a vault with your name on it and a guard with a gun in front of the door? Every bank account is just one and zeros in a computer.
Therefore, just for the fact that it removes these middlemen, Bitcoin is the winner.
Do you think EMPs are effective at erasing data?
The blockchain is stored on thousands of magnetic disks, SSDs (flash), optical, etc all around the world. It would be the one of the last digital things to be erased, by any means.
To pay $ 500M in fees to the miners the bitcoin network need at least 1600 TPS with a men fee of 1 cent or 16.000 with a fee of 0.1 cent.
Given the current trend, doubling the number of transactions every year, this would require from 10 to 14 years.
In the mean time the Bitcoin network would outpace the VISA network (and all major payment networks put together BTW).
The bandwidth needed to run a full node, with 16K TPS, would be around 50 Mbit/s.
A good 100 Mbit/s line should be enough.
Anyway, a DVB-T or DVB-S system could be used to broadcast the transactions and the blocks over large geographical area.
In the next 8-16 years Bitcoin inflation will be around 2% and 1% per year (beat this Fed, ECB and BoJ), a lot lower than now.
The current discussion to increase the block size will be moot in the next few months. As the number of transactions increase, the fork would divide the blockchain in to branches: one with a blocksize limit of 1 MB and one with a blocksize limit of 20. A few months later (if it doesn't happen before) the network will have more transactions than the 1 MB chain can accomodate, so all exceeding transactions will not be included. If you are a payment processor or a vendor would you support the network with less capacity or the network with more capacity?
If you was a miner, would you follow the majority of the vendors or would you mine on a branch without the largest vendors?
For dummies like me, what are the further implications of your last paragraph?
Which one?
The current discussion to increase the block size will be moot in the next few months. As the number of transactions increase, the fork would divide the blockchain in to branches: one with a blocksize limit of 1 MB and one with a blocksize limit of 20. A few months later (if it doesn't happen before) the network will have more transactions than the 1 MB chain can accomodate, so all exceeding transactions will not be included. If you are a payment processor or a vendor would you support the network with less capacity or the network with more capacity?
- Each miner or person running a full node (a miner doesn't have to be a full node) makes their own decision as to which verison of the Bitcoin software they want to run. Next March, Gavin stated that the block size will be increased from 1MB to 20MB. If miners don't upgrade to the new software, they will be supporting 1MB blocks. If most transactions are taking place on the 20MB/block blockchain, it would make no sense for the existing miners to use the old software which only supports 1MB blocks.
If you was a miner, would you follow the majority of the vendors or would you mine on a branch without the largest vendors?
I think the above answers this.
It is difficult to predict the behavior of the Bitcoin mining network but you can assume one factor overrides all others. Bitcoin miners will not support any change that destroys the short or long term value of their property.
Any "bad actors" that choose to 51% attack the network or fork the network will be strongly disincentivized by the destruction of their property. Agencies that think their quantum computer that lets them mint all the bitcoin will be strongly disincented by the forking of their blockchain. The network is incentivized to destroy anything that interferes with the prime directive. This has already happened twice in the bitcoin network and once in the viacoin network when one bad actor stole 30% of the float.
How many bitcoins does the federal reserve now own?
Who owns and controls the filters on every single keystroke and controls the info at mass data storage in Utah?
You probably can't change the world from your parents basement.
I would think that Bitcoin's transactional elements would be of use to transfer value when carrying gold/pms is inconvenient.
I would also expect that the far east places that are trying to build gold/pm marketplaces would work toward providing change of ownership methods.
I doubt that Bitcoin is going to save the world but I have also been very wrong on Bitcoin before. I choose to have some just incase, don't want to miss out on any action down the road. Besides, it's one thing you can sell the second it goes parabolic whithout any hesitation. Gold and Silver are hard to get rid of even when one knows they should.
I would be a very rich person if had purchased Bitcoin when my Canadian friend implored me to do so. I laughed at him. Oopsy.
Much of what is written about Bitcoin is second-hand fluff and pablum. Hardcore Bitcoiners really don't give a rats-ass about what the mainstream think about it and we are happy to slowly accumulate Bitcoin via mining or direct purchase. There is peak mental-illness around Bitcoin.
Bitcoin Reality
1) 3600 bitcoin are minted every single day and each one of these are minted by miners that need to pay electric bills, rent or mortages, taxes and upkeep of their mining gear. This means a large fraction of the 3600 bitcoin mined daily need to be converted to fiat or traded to pay for bills. This means nearly 1M USD needs to flow into Bitcoin every day to pay mining bills. It is no surprise that after the run-up to 1000 USD per Bitcoin we witnesssed an enormous expansion of the bitcoin network. The ride from $1000 down to $240 today is about paying off all that new CAPEX and ongoing OPEX. Miners control the market.
2) Given that the newest mining gear is still minting Bitcoin at ~150 USD / bitcoin assuming .05 USD/kWh and some variable overhead due to particular circumstance, we can assume a floor of around 200 USD / BTC. We have witnessed strong resistance at 200 USD / BTC precisely because miners are not willing to part with BTC below cost. Miners run this market not "whales" or traders. When the miners have ROI'ed their gear and are less desparate to sell their cheaply minted Bitcoin, we will witness the next rise in price back to 1000 USD / BTC and beyond. Do not expect the price to stay high for long as the whole cycle of investing in the latest and greatest gear will repeat to drive down the price.
3) Bitcoin is a horrible short-term store of value but a spectacular long-term store of value. The prior stability point for Bitcoin was 120 USD / BTC and this trend stayed for nearly a year. Prior to that Bitcoin could be had for less than 50 USD and prior to that for less than 1 USD. The price is strongly correlated to the size of the mining network and the efficiency of the average node. The current price of 240 USD per Bitcoin today is a terrific bargain given its long-term potential. Most people here will kick themselves 10 years from now when one Bitcoin will be equivalent to an average annual American wage.
4) Bitcoin is totally subversive precisely because it is programmable. The potential for bitcoin goes far beyond use as a medium of exchange or long-term store of value. Its greatest value will be in the ability to programmatically create contracts and to mediate the exchange of any asset.
5) Mental illness about Transactions-Per-Second of the Bitcoin network are based on twentieth century thinking. The Bitcoin network is *software* meaning it is completely fungible in its outcomes. A few lines of code will enable a network that is 1000x faster and yes all major Bitcoin miners will enjoin the new system as it is the only way to assure the continuing value of their holdings.
Bitcoin scales easily:
Change MAX_BLOCK_SIZE from 1MB to 20MB , then to 200MB , then 2GB , that will give a capability of 14,000 transactions per second. Way above MasterCard , VISA and bank transfers combined. Each upgrade is a Hard Fork. The argument about storage is a red herring. In 1956 a IBM 3.6MB Hard Drive cost 75,000 US$ , today a 3TB drive cost 80 bucks , in a decade 1000TB of storage will be 100 bucks or less. People forget what exponential actually means.
Anyone who knows anything about crypto knows its the blockchain that's the real amazing part in all this and that's where the real technological and monetary shifts will evolve from.
Nothing "back" bitcoin like nothing "back" gold.
What make gold a good for of money is scarcity. Scarcity is due to the cost of mining new gold.
Bitcoin is scarce because the algorithms prevent. Any bitcoin created outside the rules would not be recognized as a bitcoin and just ignored.