Bitcoin - ###Mod Note in 1st Post - Please Read###

Jester252

Its best described as a currency that was made with a PhD in computer science and a preschool level of monetary understanding

alb

Mr. Incognito wrote: »

Ich don't think so - Just because there is a fools gold rush now doesn't mean it'll last.

It's a currency based on ....... nothing only supply and demand.

It's a global pyramid scheme

Early adopters being rewarded isn't unique to Bitcoin and pyramid schemes, many things from Google shares to original gold mining rewarded the early adopters.

Bitcoin is an invention like http or email, as described in the original white paper and implemented by the many Bitcoin clients applications.

Mr. Incognito

Sh1tbag OToole wrote: »

Normal currencies like Euro and Dollar are also based only on supply and demand

Dear. God.

People , well. Wow.

Currency is a tangible that represents the underlying value of units such as labour, production, ores, goods, services.

They are a physical trading currency in lieu of bartering.

Bit coins represent a calculation and do not reflect tangibles.

If you can't understand this then I am certainly not going to teach you.

Look. .... Shiney!

Sh1tbag OToole

Mr. Incognito wrote: »

Dear. God.

People , well. Wow.

Currency is a tangible that represents the underlying value of units such as labour, production, ores, goods, services.

They are a physical trading currency in lieu of bartering.

Bit coins represent a calculation and do not reflect tangibles.

If you can't understand this then I am certainly not going to teach you.

Look. .... Shiney!

In that case currency is only a bit of paper, or not even. Most actual currency these days is just bits on a computer - just a simpler form than bitcoins. When you take out a loan the bank creates some new bits out of nothing and the only thing backing those is your agreement to pay back the loan.

Both bitcoin and paper money get their value from the fact that people are willing to do stuff in return for them. The only edge normal currency has over something like bitcoin is the fact that the government forces people to pay tax in that form and if you go to court the judgement will be in euros and not bitcoins.

AlanS181824

It's an online currency that exists purely online from what I've read.

Side Note: 1,000 Posts... & I'm happy it was on After Hours :DDDDD

KyussBishop

Bitcoin's require wasting power to generate, fiat currencies require no power whatsoever to generate; to give an idea of just how mind-bogglingly stupid this is, consider this fact:

The daily electricity consumption of Ireland: (multiply 1000 divide 365)
73GWh

The daily electricity consumption of total Bitcoin generation (estimated):
76GWh

I've double checked the math a few times, but I'm quite sure that's correct: Bitcoin users use more electricity than Ireland, and that energy is completely wasted. This is only going to get worse and more extremely wasteful, as either 1: The bitcoin economy grows and 2: Bitcoins become more difficult to mine.

Fred Swanson

This post has been deleted.

alb

Fred Swanson wrote: »

This post has been deleted.

Yeah, like that time they shut cash down when it was used to pay for drugs.

Close who down? Bitcoin is not a company, it's a protocol like bittorrent or email? they can try to shut it down in the US, they can make it annoying to change to/from fiat by targeting US based exchanges, but they can't stop people using it.

If the US get hostile it will just drive bitcoin related business abroad, Germany has ruled favorably on it already, it'll be interesting to see which way China goes as adoption there is growing quickly.

alb

KyussBishop wrote: »

Bitcoin's require wasting power to generate, fiat currencies require no power whatsoever to generate; to give an idea of just how mind-bogglingly stupid this is, consider this fact:

The daily electricity consumption of Ireland: (multiply 1000 divide 365)
73GWh

The daily electricity consumption of total Bitcoin generation (estimated):
76GWh

I've double checked the math a few times, but I'm quite sure that's correct: Bitcoin users use more electricity than Ireland, and that energy is completely wasted. This is only going to get worse and more extremely wasteful, as either 1: The bitcoin economy grows and 2: Bitcoins become more difficult to mine.

I disagree that fiat takes no power to create - the physical notes and especially coins definitely require a lot of resources, and even banks need power, as do western union paypal and whatever traditional businesses bitcoin threatens to replace.

It's unfortunate Bitcoin mining is using a lot of power, and I agree it's probably only going to grow, even with mining hardware getting more energy efficient, but that's currently the price of a decentralised system, unless someone invents a better way. Hopefully we can tackle it from the other side by generating more renewable energy.

kowloon

KyussBishop wrote: »

Bitcoin's require wasting power to generate, fiat currencies require no power whatsoever to generate; to give an idea of just how mind-bogglingly stupid this is, consider this fact:

^^ My biggest gripe with the whole concept. The mining operations might try their best to keep their edge by using more efficient machines but in turn the difficulty rises to compensate.

KyussBishop

alb wrote: »

I disagree that fiat takes no power to create - the physical notes and especially coins definitely require a lot of resources, and even banks need power, as do western union paypal and whatever traditional businesses bitcoin threatens to replace.

It's unfortunate Bitcoin mining is using a lot of power, and I agree it's probably only going to grow, even with mining hardware getting more energy efficient, but that's currently the price of a decentralised system, unless someone invents a better way. Hopefully we can tackle it from the other side by generating more renewable energy.

Only something like 3% of the money supply is made of physical coins/notes though, and the rest of that power consumption is just the banking infrastructure for transferring money, not creating it.

The actual creating of money, is as easy as the central bank or a private bank tapping numbers into a computer, to the effect of:
Assets | Liabilities
1,000,000 | -1,000,000

That's it - €1 million Euro created. Can even do it the old-fashioned way with a ledger + pen if you like.


The thing is, any decentralized currency based on scarcity through power/expense investment, must waste energy like that, as far as I can see - I'm not sure there's a way around that.

alb

KyussBishop wrote: »

The actual creating of money, is as easy as the central bank or a private bank tapping numbers into a computer, to the effect of:
Assets | Liabilities
1,000,000 | -1,000,000

That's it - €1 million Euro created. Can even do it the old-fashioned way with a ledger + pen if you like.

sure, but mining isn't just creating bitocins, it IS the bitcoin network, it processes the transactions, it does the banking. So any comparison in power used needs to be measured against the total power/resource use of the traditional industries it can replace no?

Filibuster

What can I buy with a bit coin

KyussBishop

alb wrote: »

sure, but mining isn't just creating bitocins, it IS the bitcoin network, it processes the transactions, it does the banking. So any comparison in power used needs to be measured against the total power/resource use of the traditional industries it can replace no?

Ah interesting, I didn't know that about bitcoins - I would think the best measurement would be the efficiency of power usage, and I think whatever way you calculate that, Bitcoin comes out significantly worse

If you rolled out Bitcoin on the scale of the current world financial system for instance (to scale with the number of people it serves), the power requirements would be immensely greater.

Karl Stein

Kyuss, I think the power is used in generating BC's. Any power expended in their use, after they've been mined, is surely no more or less than any other electronic transaction no?

B.A._Baracus

I still can't wrap my head around bitcoin ...

Like paper money is/was backed up by gold or silver over the last few hundred years. I know you could say well how do you define the value of something... even gold or silver. It's what people are willing to pay for something. But both gold and silver are phyiscal and wanted in the real world. Materials to make something.

How can BitCoin be valuable? it's not backed up by anything.

Kikin

B.A._Baracus wrote: »

I still can't wrap my head around bitcoin ...

Like paper money is/was backed up by gold or silver over the last few hundred years. I know you could say well how do you define the value of something... even gold or silver. It's what people are willing to pay for something. But both gold and silver are phyiscal and wanted in the real world. Materials to make something.

How can BitCoin be valuable? it's not backed up by anything.

Eh ya might wanna check how the world's monetary system has been operating in recent times.

B.A._Baracus

Kikin wrote: »

Eh ya might wanna check how the world's monetary system has been operating in recent times.

Eh ... Then what is stopping me from making up my own currency?

Arawn

B.A._Baracus wrote: »

Then what is stopping me from making up my own currency?

nothing once you can get others to adopt it and trade for it

B.A._Baracus

Arawn wrote: »

nothing once you can get others to adopt it and trade for it

True.
And that's the messed up thing. What is bitcoin? it isnt the national currency of any country. It doesnt have a countries economy behind it :P

It almost seems like a fad or trend. I mean if countries can go into recession, even depression, isnt it mad to hold any faith in some sort of new currency? ... that only exists digitally.

Kikin

B.A._Baracus wrote: »

True.
And that's the messed up thing. What is bitcoin? it isnt the national currency of any country. It doesnt have a countries economy behind it :P

It almost seems like a fad or trend. I mean if countries can go into recession, even depression, isnt it mad to hold any faith in some sort of new currency? ... that only exists digitally.

At the moment it's just a bubble fuelled by predictions about it's future usefulness. A bit like the twitter ipo. But it's not that strange to imagine at some point in the future, a decentralized digital currency gaining traction.

Arawn

B.A._Baracus wrote: »

True.
And that's the messed up thing. What is bitcoin? it isnt the national currency of any country. It doesnt have a countries economy behind it :P

It almost seems like a fad or trend. I mean if countries can go into recession, even depression, isnt it mad to hold any faith in some sort of new currency? ... that only exists digitally.

What is paper money?? It's represents gold we have never owned yet we put our faith in it. Salt used to be a currency sher

B.A._Baracus

Arawn wrote: »

What is paper money?? It's represents gold we have never owned yet we put our faith in it. Salt used to be a currency sher

Then go off and buy bitcoin! :pac:
Excuse me for being skeptical about it. But in the last few minutes I did a google search and not only is there bitcoin, there is feathercoin and litecoin too.

Am sure they'll all succeed lol :pac:

harryr711

KyussBishop wrote: »

Bitcoin's require wasting power to generate, fiat currencies require no power whatsoever to generate; to give an idea of just how mind-bogglingly stupid this is, consider this fact:

The daily electricity consumption of Ireland: (multiply 1000 divide 365)
73GWh

The daily electricity consumption of total Bitcoin generation (estimated):
76GWh

I've double checked the math a few times, but I'm quite sure that's correct: Bitcoin users use more electricity than Ireland, and that energy is completely wasted. This is only going to get worse and more extremely wasteful, as either 1: The bitcoin economy grows and 2: Bitcoins become more difficult to mine.

That's insane! It has a market cap of around $3b at the moment? There's another 126 years of increasingly difficult mining to generate all the coins, plus processing the transactions. Does processing transactions also involve creating blocks? If so, and bitcoin becomes widely adopted and traded (rather than being held speculatively), the computing requirements and electricity consumption will continue to grow.


The requirement for more powerful and expensive computing creates the risk of the network becoming less decentralised and a small group of powerful miners controlling the currency as described by Eyal and Sirer.


If smaller miners are priced out of the bitcoin market and shift their attentions to the next virtual currency, will the speculative money exit bitcoin and follow them, thereby reducing the value and liquidity of bitcoin and potentially destroying it?

Mr. Incognito

Sh1tbag OToole wrote: »

In that case currency is only a bit of paper, or not even. Most actual currency these days is just bits on a computer - just a simpler form than bitcoins. When you take out a loan the bank creates some new bits out of nothing and the only thing backing those is your agreement to pay back the loan.

Both bitcoin and paper money get their value from the fact that people are willing to do stuff in return for them. The only edge normal currency has over something like bitcoin is the fact that the government forces people to pay tax in that form and if you go to court the judgement will be in euros and not bitcoins.

This gets deeper.

I've seen this crap advanced on conspiracy websites too. That banks "create money" electronically. Unfortunately that's horse.

Every electronic euro has to be backed by a real physical euro. The accounts of the bank have to be balanced against other accounts. So when the bank gives you that loan it has to debit an actual account to do it. That debited account has to have been credited from a tangible external source.

But don't let reality get in the way. Go back to believing whatever you tube channel / taxi driver you pulled that from.

Once again. You believe what you want. It's not rooted in reality however.

Also, we are in the middle of a currency bubble because paper value of underlying land assets is over valued, hence recession or adjustment as a result. For bit coins this adjustment will be to zero as when demand ceases , gone.

Overflow

digme wrote: »

bitcoin owner may own 1.5 million bitcoins.This is the funniest thing I've heard all year.If you are retarded enough to have
some of these I'd sell them right now as you are getting taken for a ride.You can bet your ass he's the one selling them for 30 dollars a pop to gullible idiots. So 30 times 1.6 million is a lot of money,obviously he's not selling them all but he is offloading them at a nice rate for a new yacht or something along those lines.

Oh, how wrong you were

Mr. Incognito

Mr. Incognito wrote: »

This gets deeper.

I've seen this crap advanced on conspiracy websites too. That banks "create money" electronically. Unfortunately that's horse.

Every electronic euro has to be backed by a real physical euro. The accounts of the bank have to be balanced against other accounts. So when the bank gives you that loan it has to debit an actual account to do it. That debited account has to have been credited from a tangible external source.

But don't let reality get in the way. Go back to believing whatever you tube channel / taxi driver you pulled that from.

Once again. You believe what you want. It's not rooted in reality however.

Also, we are in the middle of a currency bubble because paper value of underlying land assets is over valued, hence recession or adjustment as a result. For bit coins this adjustment will be to zero as when demand ceases , gone.

Eh no.. If I give the bank a euro, it can then lend like 9 euro to other people.

They just put 9 euro in the borrower's account and 9 euro in a loan asset account.. Money created with no tangible resource apart from the trust that a bank run won't happen.

A2LUE42

http://www.theregister.co.uk/2013/11/12/bitcoin_gbl_hong_kong_collapse/

KyussBishop

Carlos Roca wrote: »

Kyuss, I think the power is used in generating BC's. Any power expended in their use, after they've been mined, is surely no more or less than any other electronic transaction no?

That's what I thought myself, but alb mentioned that it plays a part in verification of transactions as well.

However, while every user plays a part in verifying transactions, it seems that (after I have read up on it more), the mining and all the energy expenditure is almost entirely down to mining new bitcoins, as I had originally thought, so yes you're right there. That makes it a complete waste of energy.

Grayson

B.A._Baracus wrote: »

How can BitCoin be valuable? it's not backed up by anything.

Diamonds are a lump of carbon. Most money is made from wood pulp.