Cryto currency and mining

LuckyLloyd

Budawanny wrote: »

For number 1 it will be viable because the increase in difficulty . i.e scarcity will mean a associated increase in value.

Okay, that makes sense as a dependency / assumption.

I'm still struggling to see how this translates from an investment instrument or precious material to an actual working currency though, considering the underpinning parameters. If it plays out as hoped, with ever rising values per coin and ever rising computing power managing the ledger and history of same, surely there are practical issues created from a day to day currency perspective. We'd be using 1/xxxxxx of a coin to make purchases. The grunt force required to interface with the ledger would presumably be impractical when compared to the way ATMs and banking currently works? And how can there ever be full faith in a currency that falls apart as a wealth instrument if:

A) People stop mining it
All coins are mined

While we won't live to see 2140, I struggle to see humans truly embracing time bound instruments of wealth and buying into such a temporary view where money is concerned. We still dream of amassing wealth that is transferable.

Wanderer78

blackwhite wrote:

To be honest - all you seem to be doing is repeating stuff you've seen in a youtube video and confirming that you don't actually understand a word of what you are typing.

My research goes way beyond very useful resources such as YouTube, my main sources would be people such as Ellen Brown, Steve keen, Michael Hudson, Jim Richards, Bill black etc etc

blackwhite wrote:

Fractional reserve banking & lending isn't the arbitrary magicing up of money by banks. It's tighly regulated and controlled by central banks (which are a branch of Govt), and banks are restricted in how much they are allowed lend out by reference to a central bank defined multiple against their desposits and capital reserves.

Not regulated enough in my opinion and according to some, some of our central banks are not entirely public bodies, some claiming that some central banks are actually almost 100% privately owned. Of course banks have limits on the amounts of debt based money they can produce, and rightfully so, but I am sold on the idea of public banking. I do think they would benefit society greatly, of course they would not solve all our financial problems, but would give us more control and input into our financial system

blackwhite wrote:

But I know it's pointless actually explaining any of the detail of it to you, because if it's not a 30 minute youtube video that just re-confirms whatever you want it to say, then you won't pay the slightest bit of attention.

If you have any recommendations of individuals or anything at all that would further my knowledge on these subject matters, please do let me know. Thank you

Permabear

Permabear wrote: »

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Because of the state the Venezuelan government and economy is in.

The fact that the Dollar and Euro are strong, and the Bolivar is weak, proves the point that the value of a currency is ultimately derived from the government that backs it.

Dohnjoe

Wanderer78 wrote: »

some claiming that some central banks are actually almost 100% privately owned.

Some of these are myths and misunderstandings

If you have any recommendations of individuals or anything at all that would further my knowledge on these subject matters, please do let me know. Thank you

"The Ascent of Money", a 6 part from Channel 4 narrated by historian Neil Ferguson (should be available on youtube), objective, easy to understand - won an Emmy I think

If you have the time, Coursera.org and Edx have excellent free online modules and courses from the best universities in the world

Wanderer78

Dohnjoe wrote: »

Some of these are myths and misunderstandings

"The Ascent of Money", a 6 part from Channel 4 narrated by historian Neil Ferguson (should be available on youtube), objective, easy to understand - won an Emmy I think

If you have the time, Coursera.org and Edx have excellent free online modules and courses from the best universities in the world

yea im a little wary of this info to alright but it does seem like theres complex relationships occurring between some governments and their central banks. very interesting though.

im aware of those sites but unfortunately traditional methods of learning dont seem to work for me at all but thank you very much

Dohnjoe

Wanderer78 wrote: »

im aware of those sites but unfortunately traditional methods of learning dont seem to work for me at all but thank you very much

I was daunted at first, but one of the courses ended up being short youtube-style videos with a handful of tickbox questions after. Was a breeze - pretty much just like browsing youtube in an evening

Otherwise the audiobook - "Stress Test", fascinating insight into just how serious the crisis was and how the Fed (and everyone) dealt with it under pressure

Wanderer78

Dohnjoe wrote: »

I was daunted at first, but one of the courses ended up being short youtube-style videos with a handful of tickbox questions after. Was a breeze - pretty much just like browsing youtube in an evening

Otherwise the audiobook - "Stress Test", fascinating insight into just how serious the crisis was and how the Fed (and everyone) dealt with it under pressure

thats fantastic, i ll try that. thanks. im actually dyslexic and find traditional learning techniques simply dont work for me, after spending many years in our third level institutions

Permabear

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Permabear

Permabear wrote: »

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Why on earth not?

Dohnjoe

Permabear wrote: »

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Individual politicians and officials in e.g. Europe can have broken the law and be described as corrupt - but to go on and generalise about a majority of governments and systems as corrupt is populist and very subjective as best

Bitcoin then becomes an attractive alternative for most of the world's 7.5 billion people.

Based on a faulty generalisation above. Bitcoin works well as a good black market type of "money" and speculative store of wealth however in it's current guise would be weak as any form of national currency for a myriad of reasons

If you hold Bitcoin, your wealth can't be wiped out by hyperinflation or a socialist coup. It has intrinsic value because it's not a national currency, is not controlled by government, and some bureaucrats can't just print more of it on a whim.

Money generally isn't printed "on a whim", and when it is, disaster usually follows (Zimbabwe, Germany in the 30's)

Your Bitcoin wealth can be wiped out by market manipulation, hacks, bugs, exchange risk, hardware failure, or a dozen other reasons - and there is little or no recourse, no insurance - which is why you will hear many crypto people advise "never put in more than you can afford to lose"

It's extremely risky

Currency/money used to work in similar ways until society demanded more safeguards, risk mitigation, controls, regulation

Speculators and traders love volatility. Normal people, businesses and governments don't. They demand stability.

Ush1

Isn't linking somethings value to something else sort of the opposite of intrinsic?

alb

Deleted User wrote: »

Why on earth not?

Because the supply is limited and the distribution rate is regulated.

alb

alb wrote: »

Because the supply is limited and the distribution rate is regulated.

Hyperinflation is a rapid increase in the price of goods and services in a given currency. It isn't the same thing as increasing the money supply, although yes the latter does often cause the former.

Bitcoin has already suffered hyperinflation on more than one occasion and can of course do so again, all that has to happen is the value of bitcoins in relation to other currencies goes down rapidly.

Or to look at it another way, all the super-cool businesses that accept payment in bitcoin will suddenly want a lot more bitcoin for your coffee if the price tanks against the dollar and euro. That's hyperinflation.

scopper

JaMarcusHustle wrote: »

Edit: Emphasis on the "creates currency" part. I've seen mining explained in simple terms, and while I don't get the intricacies, I get the broad summary of it. But I just don't understand how that's rewarded with currency. Surely that mean's there's some program out there that generates currency to give to people who are mining? And someone owns that program or created it? And surely that means there's an infinite supply?

There is a defined limit of 21 million bitcoins.

In the simplest possible terms there is a protocol being followed by all the software clients that says, when this happens (someone solves the puzzle) then new coins are released.

Or even simpler: if x (puzzle solved) then y (new coins).

scopper

LuckyLloyd wrote: »

Thanks. So once all coins have been successfully mined, where is that likely to leave the project? Without any chance of reward for continuing to download and verify the ledger and history of same how will the entire thing be maintained?

They will be paid in the transaction fees.

Valmont

Deleted User wrote: »

Why on earth not?

Because Bitcoin is structured so that new coins are 'mined' at a pace that won't allow hyperinflation. The mathematics behind it make it literally impossible. The U.S.A could print ten trillion dollars tomorrow if it wanted to. Gold, silver, bitcoin, ether - trusting these forms of currency to not hyperinflate is more a fact of nature than simply having confidence in the lads running the printing press.

Valmont

Deleted User wrote: »

Hyperinflation is a rapid increase in the price of goods and services in a given currency. It isn't the same thing as increasing the money supply, although yes the latter does often cause the former.

Bitcoin has already suffered hyperinflation on more than one occasion and can of course do so again, all that has to happen is the value of bitcoins in relation to other currencies goes down rapidly.

Or to look at it another way, all the super-cool businesses that accept payment in bitcoin will suddenly want a lot more bitcoin for your coffee if the price tanks against the dollar and euro. That's hyperinflation.

So a downside of bitcoin is the volatility and unreliability of other currencies? Bitcoin is mathematically immune to hyperinflation properly understood as a large increase in its supply. State backed fiat currencies can hyperinflate if the government decides to print enough new units. State backed fiat currencies can inflate slowly, essentially taxing peoples' savings. Bitcoin is volatile, yes, but it is immune from state stupidity and perniciousness; you seem to have trouble understanding this.

Valmont

Valmont wrote: »

So a downside of bitcoin is the volatility and unreliability of other currencies? Bitcoin is mathematically immune to hyperinflation properly understood as a large increase in its supply. State backed fiat currencies can hyperinflate if the government decides to print enough new units. State backed fiat currencies can inflate slowly, essentially taxing peoples' savings. Bitcoin is volatile, yes, but it is immune from state stupidity and perniciousness; you seem to have trouble understanding this.

I understand that perfectly.

It doesn't prevent hyperinflation affecting bitcoin. If the value of bitcoin falls relative to the dollar or euro, people who go about their business in bitcoin will suffer hyperinflation, because the sellers of goods and services, if they accept bitcoin, will only do so on the basis of its exchange rate into the regular local currency they pay their suppliers, employees and taxes in.

So if you'd got paid in bitcoin on April the 9th 2013, and you were the sort of person who spent bitcoin to buy your bread and milk, you'd suddenly discover the next day that you were paying 200% more for your food. Hyperinflation. It isn't a theory, it's a historical fact disguised by the fact that nobody DOES use bitcoin to buy bread and milk.

BTW the dollar isn't volatile. The euro isn't volatile. Bitcoin IS volatile. It may be mostly volatile up for the time being but that means nothing when considering the medium or long term.

Permabear

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Dohnjoe

Permabear wrote: »

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Oh I do agree with the relative perception of corruption on a global scale and am a keen advocate of these indices but at no point does the graph claim that any government is "corrupt", it just points to more or less. The definition is subjective.

Not a huge amount of cases whereby a majority of hundreds/thousands of members of a government and the monetary systems behind could be described as "corrupt", but a good example would be Gaddafi's Libya, where taxes and national oil revenue were majority used to fund investment vehicles that squirreled away wealth for the family and elites - which they could privately access and siphon.

It happens, but it's not exactly common.

It's not totally fail-safe or perfect but it's a far safer and more stable system than e.g. adopting Bitcoin - the value of which is based on nothing but the speculation of a rabid free market with no rules/regulation.

Want to buy black market goods, launder cash, collect ransomware, make untraceable anonymous payments, speculate on a "Wild West" market, join 4chan mass insider trading pump n dumps - cryptos are fantastic

But as a replacement national currency or alternative to fractional reserve banking and central banking - they wouldn't work in that capacity

Almost everything in our lives is centralised for common sense reasons; from laws, rights, workplace, lifestyle, all the way to this forum. It's unlikely many sane people would want to risk their livelihoods, pensions, mortgages and stability to a decentralised glorified roulette wheel

paleoperson

Permabear wrote: »

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lol, because if it's in chart form and "according to expert research" then it must be true?

Those indexes and "corruption indexes" are infamous for being prejudicial, subjective and biased. They are known to be heavily influenced to show data favourable to some, it's no coincidence that they make all western and western-allied nations to be clean as a whistle and those against their interested are shown to be mired in controversy.

Your chart provides no evidence that it's not "populist and very subjective", which it is generally accepted that it is. At the bottom of the wikipedia page is a list of all the controversies and known misuses of it.

scopper

Deleted User wrote: »

I understand that perfectly.

It doesn't prevent hyperinflation affecting bitcoin. If the value of bitcoin falls relative to the dollar or euro, people who go about their business in bitcoin will suffer hyperinflation, because the sellers of goods and services, if they accept bitcoin, will only do so on the basis of its exchange rate into the regular local currency they pay their suppliers, employees and taxes in.

So if you'd got paid in bitcoin on April the 9th 2013, and you were the sort of person who spent bitcoin to buy your bread and milk, you'd suddenly discover the next day that you were paying 200% more for your food. Hyperinflation. It isn't a theory, it's a historical fact disguised by the fact that nobody DOES use bitcoin to buy bread and milk.

BTW the dollar isn't volatile. The euro isn't volatile. Bitcoin IS volatile. It may be mostly volatile up for the time being but that means nothing when considering the medium or long term.

I would say these days there are not many people who see Bitcoin as cash for daily purposes. At this point - for various reasons, including volatility - it's closer to an asset or a commodity like gold ("digital gold"), but one that has the property where you could, if you so wished, buy this or that from a relatively small number of merchants (so, those merchants who are happy to accept the volatility).

If you remove the hype and more ardent followers what you have is a super clever new addition to your portfolio that you might pick up beside more sensible investments. I doubt we will see it replace any fiat currency, but I do think it has a chance as a kind of interesting 'internet money that lots of people do own and will accept.' The more muted visions for Bitcoin are quite good.

Capt'n Midnight

Deleted User wrote: »

The intrinsic value of dollars is that it is the official currency of the USA as mandated by the US government.

The value is that oil is traded in dollars.


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