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

PlanIT Computing

alb wrote: »

This guy James D'Angelo has been putting up some great videos lately tackling some common questions.

This one explains why it's possible that a 3000% rise in value this year is not crazy, and may be normal.

This one explains why it's not a Ponzi/pyramid scheme, He gives a fairly balanced view as he also highlights the main threats to Bitcoin:

And this one was the most interesting to me, discussing the issues regarding US gov regulation.

I'm in a good mood today so If any people in the discussion here are still confused and want to see what the fuss is about. grab a wallet (I recommend multi-bit) and paste a receiving address here. I'll send you some.

1DhYYYtMcUKjG5H1N9T3jyvb8WwhkmVt23

Mint Aero

alb wrote: »

This guy James D'Angelo has been putting up some great videos lately tackling some common questions.

This one explains why it's possible that a 3000% rise in value this year is not crazy, and may be normal.

This one explains why it's not a Ponzi/pyramid scheme, He gives a fairly balanced view as he also highlights the main threats to Bitcoin:

And this one was the most interesting to me, discussing the issues regarding US gov regulation.

I'm in a good mood today so If any people in the discussion here are still confused and want to see what the fuss is about. grab a wallet (I recommend multi-bit) and paste a receiving address here. I'll send you some.

1M3UnbjucdJwCXvL9aTunVSoYu1KKVWknE

Technoprisoner

alb wrote: »

This guy James D'Angelo has been putting up some great videos lately tackling some common questions.

This one explains why it's possible that a 3000% rise in value this year is not crazy, and may be normal.

This one explains why it's not a Ponzi/pyramid scheme, He gives a fairly balanced view as he also highlights the main threats to Bitcoin:

And this one was the most interesting to me, discussing the issues regarding US gov regulation.

I'm in a good mood today so If any people in the discussion here are still confused and want to see what the fuss is about. grab a wallet (I recommend multi-bit) and paste a receiving address here. I'll send you some.

1KSTScMJi6TJv1q6kffGw4yVsRfhza3ZWj

Technoprisoner

how does your wallet update? does it do it automatically when the computer connects to the internet? what domination of bitcoin is there?

thunderdog

Has this video been added to the thread yet? quite informative

alb

Technoprisoner wrote: »

how does your wallet update? does it do it automatically when the computer connects to the internet?

any bitcoin client you have installed will update when connected to the internet so you see the up to date balances of your addresses then. But overall, the transactions and balances are shared between all nodes of the bitcoin network, so incoming transactions can still happen even if your own local wallet client is offline.

Technoprisoner wrote: »

what domination of bitcoin is there?

I don't understand this question.

Mint Aero

What about other bitcoin spinoffs, litecoin, peercoin etc they're cheap, worth buying some?

Technoprisoner

what is the smallest amount of bitcoin that can be sent?

thunderdog

Technoprisoner wrote: »

what is the smallest amount of bitcoin that can be sent?

Its 0.00000001 of a bitcoin.

thunderdog

Mint Aero wrote: »

What about other bitcoin spinoffs, litecoin, peercoin etc they're cheap, worth buying some?

They definitely have potential. But they would need to have some sort of significant technological advancement on bitcoins to become more mainstream

Absoluvely

Technoprisoner wrote: »

what domination of bitcoin is there?

Denominations?

How divisible are bitcoins?
A bitcoin can be divided down to 8 decimal places. Therefore, 0.00000001 BTC is the smallest amount that can be handled in a transaction. If necessary, the protocol and related software can be modified to handle even smaller amounts.

What do I call the various denominations of bitcoin?
There is a lot of discussion about the naming of these fractions of bitcoins. The leading candidates are:

• 1 BTC = 1 bitcoin
• 0.01 BTC = 1 cBTC = 1 centibitcoin (also referred to as bitcent)
• 0.001 BTC = 1 mBTC = 1 millibitcoin (also referred to as mbit (pronounced em-bit) or millibit or even bitmill)
• 0.000 001 BTC = 1 μBTC = 1 microbitcoin (also referred to as ubit (pronounced yu-bit) or microbit)

The above follows the accepted international SI prefixes for hundredths, thousandths, and millionths. There are many arguments against the special case of 0.01 BTC since it is unlikely to represent anything meaningful as the Bitcoin economy grows (it certainly won't be the equivalent of 0.01 USD, GBP or EUR). Equally, the inclusion of existing national currency denominations such as "cent", "nickel", "dime", "pence", "pound", "kopek" and so on are to be discouraged; this is a worldwide currency.

One exception is the "satoshi" which is smallest denomination currently possible

• 0.000 000 01 BTC = 1 satoshi (pronounced sa-toh-shee)

which is so named in honour of Satoshi Nakamoto, the pseudonym of the inventor of Bitcoin.

Technoprisoner

hahah sorry...just woken up from a snooze lol

Mint Aero

Cheers alb transaction popped up

alb

Mint Aero wrote: »

Cheers alb transaction popped up

It did, and I didn't need to know who you are, nor you me. You didn't have to share any personal info like bank account details or your credit card details and neither did I. No 3rd party like paypal or a bank could halt or freeze or control the transfer and the fee was low. You can trust that no one else can counterfeit the value.

There is no other way this transaction could have been done like this. This is why the invention of bitcoin is amazing.

thunderdog

I often wonder how many bitcoin transactions are made at this time on a Saturday night each week

Technoprisoner

but is bit coin vulnerable collapses like any other currency especially when bankers and speculators get their hands on it? sorry for all the questions...im trying to get my head around this currency.

thunderdog

Technoprisoner wrote: »

but is bit coin vulnerable collapses like any other currency especially when bankers and speculators get their hands on it? sorry for all the questions...im trying to get my head around this currency.

Its likely that as banks/governments see bitcoins become more popular that they will be keen to bring legislation with it with regards to taxation etc.

however one of bitcoins biggest threat are majority mining pools

oppenheimer1

Mr. Incognito wrote: »

This is a bubble. It's been repeated over and over and over again in history.

People are stupid. Some will make money. Some will make a lot of money. A LOT more will lose a lot of money.

You're absolutely right, bitcoin is a bubble, because on a fundamental level it is entirely worthless. Whereas modern currencies derive their strength from the governments and economies that use them, only the desire to hold bitcoin gives it its value.


It is important to note that bitcoin has completely failed in its core mission of becoming a currency. The job of a currency is to facilitate trade, but the majority of bitcoin transactions are by people trying to obtain them in order for them to inflate in value relative to real world currency. The other reason bitcoin has failed is that there is no price stability. If bitcoin was the only currency for trade the world would be plunged into an enormous depression as supply is not able to keep up with demand. This would create a deflationary spiral. People would hoard bitcoin, for example why would you buy a car with 10btc when the same might buy you two in a month or ten in six months. In fact this pattern can be seen today.

alb

Technoprisoner wrote: »

but is bit coin vulnerable collapses like any other currency especially when bankers and speculators get their hands on it? sorry for all the questions...im trying to get my head around this currency.

No need to apologise, it's great to see some real curiosity instead of blind skepticism. It's a completely new concept and it's still relatively young (about 5 years old) so there is risk of the unknown.

There is no risk of bitcoin being a scam, the code is open source, there is no company or person controlling it. If the bitcoin foundation who maintain the code for the most popular bitcoin client decided to do something unpopular, the users could reject it and run their own version of the code.

The real risks are:
1) Something replaces bitcoin: this won't happen overnight, I think it's unlikely that anyone adopts a government or bank controlled digital currency when they can use a free one like bitcon. Any free currency will have to be open source (or else it's not free, as in speech) so bitcoin could be adapted to use any improvements it has anyway. It would take something really revolutionary to provide advantages that bitcoin cannot adapt to itself. The cryptography used in Bitcoin is commonly used to secure many things, if it's cracked your online bank balance may be no safer.

2) governments get hostile: they could declare it illegal or try to overpower the network, so far no country has declared it illegal, Germany has explicitly ok'd it. The US had senate hearings last week and they said it's legal, and even that existing regulation may be enough. any gov outlawing risks losing all the benefits and losing the profits the Bitcoin industry is going to create.

3) Bitcoin is comprised on a technical level: The cryptography is cracked so that people can spend other peoples coins, or some entity over powers the whole network to confirm bgous transactions. Bitcoin has been running 5 years and has a market cap now of 10 billion. You can bet every hacker out there has been trying to compromise it - so far so good, and as far as I can tell this is unlikely.

oppenheimer1

Technoprisoner wrote: »

but is bit coin vulnerable collapses like any other currency especially when bankers and speculators get their hands on it? sorry for all the questions...im trying to get my head around this currency.

Bitcoin is more vulnerable to collapse because the only reason to hold it is for it to appreciate relative to real world currency. All it would take for bitcoin to collapse would be for some of the early backers to cash in. These people have relatively large holdings and say if they needed to get out fast could set off a run on the currency.


This is in fact the likely outcome for this glorified ponzi scheme. Some people view central banking as a complete evil, but the regulation of the money supply gives price stability in addition to the incentive to engage in on going economic activity.

alb

oppenheimer1 wrote: »

This is in fact the likely outcome for this glorified ponzi scheme. Some people view central banking as a complete evil, but the regulation of the money supply gives price stability in addition to the incentive to engage in on going economic activity.

Stability? which bank controlled currency buys as much bread now as it did 20 years ago? They constantly inflate, your money is always worth less over time. Do I really need to explain in 2013 why Irish people need not have faith in banks or the euro?

The US is printing 86 Billion dollars per month, does this make the average american richer, or does it just dilute their dollar savings and move wealth to the bankers?

Why is bitcoin rising in value relative to the dollar? if the dollar is so great why aren't people happy to save it instead?

oppenheimer1

alb wrote: »

Stability? which bank controlled currency buys as much bread now as it did 20 years ago? They constantly inflate, your money is always worth less over time. Do I really need to explain in 2013 why Irish people need not have faith in banks or the euro?

The US is printing 86 Billion dollars per month, does this make the average american richer, or does it just dilute their dollar savings and move wealth to the bankers?

Why is bitcoin rising in value relative to the dollar? if the dollar is so great why aren't people happy to save it instead?

You're missing the fundamental point. A currency must lose value over time to encourage economic activity. Low inflation is not a bad thing.


If you can't understand that a currency that perfectly holds its value or even worse appreciates in value is a bad thing, then you are not informed enough to be investing in anything. Would a bitcoin buy the same amount of bread it could six months ago, let alone 5 years, never mind your twenty.

alb

oppenheimer1 wrote: »

You're missing the fundamental point. A currency must lose value over time to encourage economic activity. Low inflation is not a bad thing.


If you can't understand that a currency that perfectly holds its value or even worse appreciates in value is a bad thing, then you are not informed enough to be investing in anything. Would a bitcoin buy the same amount of bread it could six months ago, let alone 5 years, never mind your twenty.

I guess we disagree on this fundamental then, and that's ok. I believe people spend money for reasons other than because they believe the money will be worth less tomorrow. Any money, including bitcoin, only has value because it can be exchanged for things, and people will always to do this.

KyussBishop

Deflation = bad, for a whole variety of reasons - primarily, in the way it gives creditors even greater advantages over debtors, i.e. the wealthy at the expense of the less well off.

Deflation also makes business more expensive, because when you spend money today for producing a good, the amount of money you get back tomorrow (and every day that passes) by selling the good, is reduced by deflation - this eats into your profits.

As oppenheimer1 says, a low level of inflation is a good thing.

oppenheimer1

alb wrote: »

I guess we disagree on this fundamental then, and that's ok. I believe people spend money for reasons other than because they believe the money will be worth less tomorrow. Any money, including bitcoin, only has value because it can be exchanged for things, and people will always to do this.

Apart from absolute staples of life, such as shelter, medicine and food - people absolutely make spending decisions based on the expected value of currency. Do you think someone would buy property this week if they could have it for ten per cent less next week? Falling prices destroys discretionary spending, especially if you know prices are going to fall further. Anyone who has observed the Irish property market in the last few years knows this to be true.

alb

oppenheimer1 wrote: »

Apart from absolute staples of life, such as shelter, medicine and food - people absolutely make spending decisions based on the expected value of currency. Do you think someone would buy property this week if they could have it for ten per cent less next week? Falling prices destroys discretionary spending, especially if you know prices are going to fall further. Anyone who has observed the Irish property market in the last few years knows this to be true.

People bought property all the way through the crash, who knows why. People buy cars knowing they'll be worth significantly less 6 months later. People buy release day video games for full price knowing they'll be half the price in a few months.

There are crypto currencies such as Primecoin that do not have an absolute limit on the number of coins. Time will tell whether bitcoin, or a crypto with different inflation/deflation or plain old fiat will rule over time, this is part of the exciting discovery, the people may choose

JONJO THE MISER

Just signed up to bitcoin there, downloaded a wallet, now how do i buy bitcoins?

oppenheimer1

JONJO THE MISER wrote: »

Just signed up to bitcoin there, downloaded a wallet, now how do i buy bitcoins?

Why did you sign up? Is it to purchase with the coins, or to speculate on their value increasing?


When the shoeshine boys talk stocks, its time to sell...

Kikin

oppenheimer1 wrote: »

Why did you sign up? Is it to purchase with the coins, or to speculate on their value increasing?


When the shoeshine boys talk stocks, its time to sell...

Or when your taxi driver tells you about the 2nd home he's just bought for an investment

JONJO THE MISER

oppenheimer1 wrote: »

Why did you sign up? Is it to purchase with the coins, or to speculate on their value increasing?


When the shoeshine boys talk stocks, its time to sell...

To speculate, a lot of people who never heard of bitcoin before are talking about it, i was thinking of buying a few and hoping that they will rise another bit and then sell.