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

MonaPizza · 12-11-2013 02:33PM

The question is this though.....how do you "buy" a bitcoin?

If I wanted to own one for whatever reason, how do I buy one so I could then buy something with it down the line?

And I suppose ... more importantly...how do you sell one?
To buy shares you simply open a trading account and then transfer in some money. Then you buy some stocks.
Then you sell those stocks and hopefully you have more money now in your account and if you want it you can then
withdraw it into the bank from whence you initially transferred the money. Then you draw it out of the ATM and spend it on drink.

How does the whole process work with bitcoins?

AtomicHorror · 12-11-2013 02:44PM

MonaPizza wrote: »

The question is this though.....how do you "buy" a bitcoin?

If I wanted to own one for whatever reason, how do I buy one so I could then buy something with it down the line?

And I suppose ... more importantly...how do you sell one?
To buy shares you simply open a trading account and then transfer in some money. Then you buy some stocks.
Then you sell those stocks and hopefully you have more money now in your account and if you want it you can then
withdraw it into the bank from whence you initially transferred the money. Then you draw it out of the ATM and spend it on drink.

How does the whole process work with bitcoins?

Either buy them from a person face to face or online (localbitcoins.com is a site that allows this), or purchase from an exchange such as Mt.Gox or BitStamp. Exchanges will require you to verify your identity, probably to deter criminal activity.

Kikin · 12-11-2013 03:23PM

They are trading at $380 today, bitcoin bubble 2.0 here we go

AtomicHorror · 12-11-2013 03:42PM

Kikin wrote: »

They are trading at $380 today, bitcoin bubble 2.0 here we go

Wouldn't be so sure, the price was higher towards the end of last week, peaked a bit and then settled down to about $340. I'm sure that's really volatile compared to most currencies, but it sure wasn't a burst bubble.

I think that many saw the bubble and expected it to kill the currency. When it didn't it actually seems to have increased confidence. Similarly the Silk Road shut down, lots of predictions of a collapse but the outcome was a small wobble that was done with within a few hours.

alb · 12-11-2013 07:34PM

KyussBishop wrote: »

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.

New transactions in bitcoin are broadcast and shared through the network to all miners. The transactions are grouped together into something called a block, think of it as like a ledger page saying who sent coins to who.

The utility of the miners is to verify that the transactions in a block are valid, i.e. anyone sending coins, had that many to send, and also that they are not double spending by sending the same coins twice. If the majority of miners agree a block of transactions is valid, it becomes part of the block chain - the public history of all transactions that effectively keeps track of which addresses own coins.

Therefore if you can control, or pretend to control the majority of miners you could make bogus transactions and you have hacked bitcoin.

This was a problem, how do you verify miners are real in a trustless network? how do you make it difficult for one person/entity to have the majority of miners?

A concept called 'Proof of work' is used to help with this. So, when a miner broadcasts to the network that it has validated a block, it also needs to prove that it has done something difficult that consumes time/energy to do. Therefore if someone wants to simulate fake miners they'll need to have the power to do the work for all of them too. They'll have to be able to do more work than the rest of the network.

So what is this work? Well this is where I have to get technical. It involves a one-way hashing function - a mathematical function where you give it an input value (or multiple inputs) and get a seemingly random output, which changes everytime the input does. And it can't be reverse engineered, so if you know an output you can't work out what input will produce it.

The work the miners have to do is something like provide an input that when combined with the unique hash of the previous block gives an output which ends with 5 zeroes in a row for example. The only way the miners can do this is by trial and error, repeatedly trying the function with different inputs.

The block reward - the creation of new coins, is awarded to the first miner to find such an input to the hash function for that block. The other miners are easily able to check the work by running the hashing function with the same input themselves.

The network aims to solve one block every ten minutes on average. If for example the network doubles in power (e.g. twice as many miners appear, or they got new hardware that can execute hashes twice as fast) now you might be solving blocks every 5 minutes instead of 10, so the difficulty will adjust to make it harder to solve the problem. For example now you may need to find an input that gives an output ending in 7 zeroes or 8 zeroes. The more specific the output required, the less number of possible inputs exist that will give such an output so there's more trial and error each miner needs to do to find one.

So the work miners do is not actually related to the creation of coins at all, it's to keep them honest by making it very very difficult to over power the network. The reward of new coins is their incentive (or payment) for validating transactions. It's an ingenious solution.

alb · 12-11-2013 08:15PM

B.A._Baracus wrote: »

True.
And that's the messed up thing. What is bitcoin? it isn't the national currency of any country. It doesn't have a countries economy behind it :P

You say that like it's a bad thing

it has a growing number of globally distributed smart technically literate people behind it who don't want interference by a countries economy. Which government run currency in history has been a success? which has grown in value compared to gold for example? how many have failed even though they were backed by countries? how's the euro doing?

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 physical and wanted in the real world. Materials to make something.

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

Why is gold valuable? what's it backed by? who decided it was money? why do cigarettes work as money in prison?

Society needs money because bartering is not very practical. Man was not capable of inventing something called 'money' specifically designed to serve this purpose so over the years we used things that already existed instead, e.g. seashells.

Gold had some useful properties that made it work better than most other things as money.
It's portable, easily recognisable (hard to counterfeit, easy to verify as real), fungible: any oz of gold nugget is worth the same as another oz of gold nugget, it has limited supply. It's divisible. Money needs to be all of these things, gold isn't perfect (not simple to divide it, but it can be done) but it was the best they had.

Then government issued fiat paper money replaced gold, as it was even more portable, easier to divide and even more recognisable. And of course it was backed by gold anyway so it was perfect! you could go get your scarce gold whenever you wanted. Until one day it wasn't backed by gold any more, and now the governments can print as much as they like. So these days it's a terrible store of value.

Then we get all kinds of hacks to try and make fiat money work in the online world, credit cards that were only designed to be used in person being used online - you need to provide your private credit card details to make a payment!

Now we have digital crypto currencies, the first digital purpose built money system. It fills all the needs that gold did, which I mentioned above while also providing the ability for digital payments on or offline. It doesn't need a government to control it.

Mr. Incognito · 12-11-2013 10:00PM

Deleted User wrote: »

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.

This is not correct and is the nonsense perpetrated by nut websites.

If you put a euro in the bank, it can lend a euro. It can take eight euro from another source and lend nine and must have reserves but cannot create money.

They really need to teach economics in school.

KyussBishop · 12-11-2013 10:27PM

harryr711 wrote: »

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?

All good questions, though I do not currently know enough about Bitcoin to be able to answer any of them well

(what I know of Bitcoin, is more from the economics side, less the technical side)

KyussBishop · 12-11-2013 10:33PM

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.

Yes, from conspiracy theorists like Sir Mervyn King, former governor of the Bank of England (UK central bank):
"When banks extend loans to their customers, they create money by crediting their customers’ accounts"

Or Martin Wolf, who is the leading editor of the Financial Times:
"The essence of the contemporary monetary system is creation of money, out of nothing, by private banks’ often foolish lending."
http://www.positivemoney.org/how-money-works/proof-that-banks-create-money/ (among many more)

One of my favourites, from the (in past decades, before passing) famed economist John Kenneth Galbraith:
"The process by which banks create money is so simple that the mind is repelled."

That quote accurately sums up the cognitive dissonance found in any debate, where people are confronted with the fact, that banks create money.

Also, only 3-5% of the money supply is actual physical currency - the rest is electronic.

Mr. Incognito · 12-11-2013 10:42PM

KyussBishop wrote: »

Yes, from conspiracy theorists like Sir Mervyn King, former governor of the Bank of England (UK central bank):
"When banks extend loans to their customers, they create money by crediting their customers’ accounts"

Or Martin Wolf, who is the leading editor of the Financial Times:
"The essence of the contemporary monetary system is creation of money, out of nothing, by private banks’ often foolish lending."
http://www.positivemoney.org/how-money-works/proof-that-banks-create-money/ (among many more)

One of my favourites, from the (in past decades, before passing) famed economist John Kenneth Galbraith:
"The process by which banks create money is so simple that the mind is repelled."

That quote accurately sums up the cognitive dissonance found in any debate, where people are confronted with the fact, that banks create money.

Also, only 3-5% of the money supply is actual physical currency - the rest is electronic.

Links to tin foil hat websites with made up academics.......and we're done.

I have some magical beans you might be interested in. The grow vines to giant land. Says so here in this book. Want some?

KyussBishop · 12-11-2013 10:44PM

Deleted User wrote: »

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.

Nearly there, but it's actually even less restricted than that: In practice, banks aren't restricted by reserves, they are restricted by capital requirements instead - central banks will always ensure the demand for loans/money is met, regardless of reserves, and banks don't even check with reserves first: banks give out loans first, then fix their reserves later (with the central bank supplying them if need be).

Mr. Incognito wrote: »

This is not correct and is the nonsense perpetrated by nut websites.

If you put a euro in the bank, it can lend a euro. It can take eight euro from another source and lend nine and must have reserves but cannot create money.

They really need to teach economics in school.

You can always spot when someone is spouting bollocks about economics, by the way they try to condescend down to others that they need to 'learn basic economics' and crap like that - these people like to hold their own study of economics, as an investment/club over others, to try and intimidate them into aligning with their view.

Economics is not a science, it is not a field of study that has reached a universal set of solid truths about the economy yet, and there are very few real 'laws' of economics - very little, in fact, is not in question about todays standard teaching of economics.

A little less of the arrogance, and more humility - your knowledge of economics is not accurate, and is open to question.

KyussBishop · 12-11-2013 10:46PM

Mr. Incognito wrote: »

Links to tin foil hat websites with made up academics.......and we're done.

I have some magical beans you might be interested in. The grow vines to giant land. Says so here in this book. Want some?

Have you even bothered your arse with the 5 seconds it takes to to search and verify these quotes on Google?

Ace2007 · 12-11-2013 10:49PM

Mr. Incognito wrote: »

I have some magical beans you might be interested in. The grow vines to giant land. Says so here in this book. Want some?

How much? are you selling individual beans or in a tin:rolleyes:

Sh1tbag OToole · 12-11-2013 10:49PM

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.

Fractional reserve banking is hardly conspiracy loon territory now is it. I thought this stuff was well known.

This system also has many more wasted megawatts to its name than any bitcoin or litecoin or similar online currency that needs to be "mined" will ever have because of the constant requirements for bigger loans to be issued to pay back the interest + capital on existing loans and the resulting economic activity / resource extraction.

http://en.wikipedia.org/wiki/Fractional_reserve_banking#Money_creation_process

KyussBishop · 12-11-2013 10:54PM

alb wrote: »

New transactions in bitcoin are broadcast and shared through the network to all miners. The transactions are grouped together into something called a block, think of it as like a ledger page saying who sent coins to who.

...

That's a very good explanation, thanks - while I do still think the energy used for this makes the currency inherently wasteful, that makes sense of exactly why it is needed for the currency to function well.

KyussBishop · 12-11-2013 10:59PM

Sh1tbag OToole wrote: »

Fractional reserve banking is hardly conspiracy loon territory now is it. I thought this stuff was well known.

This system also has many more wasted megawatts to its name than any bitcoin or litecoin or similar online currency that needs to be "mined" will ever have because of the constant requirements for bigger loans to be issued to pay back the interest + capital on existing loans and the resulting economic activity / resource extraction.

http://en.wikipedia.org/wiki/Fractional_reserve_banking#Money_creation_process

While fractional reserve gets closer to the explanation, that's still not quite it: The banks (despite what the fractional reserve theory says) aren't, in practice, constrained by reserves - central banks will work to accomodate the demand for loans, regardless of bank reserves, and banks give out loans first, and fix their reserves later (going to the central bank to do this, if need be).

So you're on the right track, but even fractional reserve isn't true

The banks are actually limited by capital constraints, which are more complicated.

Mr. Incognito · 12-11-2013 11:01PM

http://www.businessspectator.com.au/article/2012/10/22/commodities/myth-money-multiplier?OpenDocument=&emcontent_spectators=

http://dailycapitalist.com/2011/03/22/fractional-reserve-banking-the-real-story/

http://webskeptic.wikidot.com/fractional-reserve

http://www.themeister.co.uk/economics/mike_king_creating_money_out_of_nothing_draft_one.pdf

These aren't a wiki site.

Look, you believe whatever you want. If you want to equate economics with theology go right ahead. Heck, I'm neither religious or a supporter of economists who were lapdogs of the banks. There were economists out there that predicted the bust and the Taoiseach said they should commit suicide.

Maybe you think you and your six angry friends are against the magic money but in the real world it won't wash. It was tragically advanced in the high court by a lay litigant recently. He was laughed out of court.

It's nonsense. You pedal whatever you like my friend. Don't expect the unicycle to become a tandem.

KyussBishop · 12-11-2013 11:10PM

Mr. Incognito wrote: »

http://www.businessspectator.com.au/article/2012/10/22/commodities/myth-money-multiplier?OpenDocument=&emcontent_spectators=

http://dailycapitalist.com/2011/03/22/fractional-reserve-banking-the-real-story/

http://webskeptic.wikidot.com/fractional-reserve

http://www.themeister.co.uk/economics/mike_king_creating_money_out_of_nothing_draft_one.pdf

These aren't a wiki site.

Is this some lame attempt at an argument-free straw-man/retort?

If you had bothered putting in even just the first quote I listed into Google, you would have come up with this, right in second place:
http://www.bankofengland.co.uk/publications/Documents/speeches/2012/speech613.pdf

Quote:
"When banks extend loans to their customers, they create money by crediting their customers’ accounts" ~ Sir Mervyn King

Kikin · 12-11-2013 11:13PM

http://activerain.com/image_store/uploads/1/8/6/3/6/ar118945826163681.jpg

If you look at a graph of bitcoin value over the last 12 months it's so similar that it's spooky. (Ignoring the steep rise in last few weeks of course)

I have no reason to believe this recent jump to $380 is anything but a bubble fuelled by shortage of supply (silk road being shut down and the subsequent FBI seizure of millions worth of bitcoin,and now this Chinese site disappearing with more millions worth). Or possibly just standard pyramid scheme type investment mentality.

Pretty much the only 2 reasons people are buying them at the moment is
1) illegal activity online
2) to make a quick buck

And then there's others who are in for long term (like the winklevoss twins) on them becoming popular for mainstream online payments. Like an alternative to paypal and credit cards. This would need large sites like eBay and Amazon to start accepting them as a form of payment.

This is the huge fundamental difference between cash and bitcoins currently. Cash may not necessarily be backed by gold or other assets, but at least you can buy food and clothes with it. Can't really say the same for bitcoins at the moment.

KyussBishop · 12-11-2013 11:21PM

Kikin wrote: »

http://activerain.com/image_store/uploads/1/8/6/3/6/ar118945826163681.jpg

If you look at a graph of bitcoin value over the last 12 months it's so similar that it's spooky. (Ignoring the steep rise in last few weeks of course)

I have no reason to believe this recent jump to $380 is anything but a bubble fuelled by shortage of supply (silk road being shut down and the subsequent FBI seizure of millions worth of bitcoin,and now this Chinese site disappearing with more millions worth). Or possibly just standard pyramid scheme type investment mentality.

Pretty much the only 2 reasons people are buying them at the moment is
1) illegal activity online
2) to make a quick buck

And then there's others who are in for long term (like the winklevoss twins) on them becoming popular for mainstream online payments. Like an alternative to paypal and credit cards. This would need large sites like eBay and Amazon to start accepting them as a form of payment.

This is the huge fundamental difference between cash and bitcoins currently. Cash may not necessarily be backed by gold or other assets, but at least you can buy food and clothes with it. Can't really say the same for bitcoins at the moment.

Ya I was chatting to a few guys knowledgeable about Bitcoin earlier today (who corrected my knowledge of Bitcoin mining, though less accurately than alb), and the knowledgeable few among them are publicly encouraging people to dump all their money into Bitcoin, and (when I pointed out detailed arguments of how it's a bubble etc.) a couple of them chatted to me privately about how they were really just keeping an eye on where the bubble is going, keeping on top of available information, so they can get out early once it starts popping.

It's pretty much pyramid-scheme level stuff (and totally unethical for them to knowingly participate in profiting from that, in my view), but I reckon Bitcoin has a very long lifetime of bubbles/pops left.

Mr. Incognito · 12-11-2013 11:21PM

KyussBishop wrote: »

Is this some lame attempt at an argument-free straw-man/retort?

If you had bothered putting in even just the first quote I listed into Google, you would have come up with this, right in second place:
http://www.bankofengland.co.uk/publications/Documents/speeches/2012/speech613.pdf

Quote:
"When banks extend loans to their customers, they create money by crediting their customers’ accounts" ~ Sir Mervyn King

I read the rest. Thank you. He doesn't mean that they literally create money out of thin air but it regulates the amount of capital in the economy and should be driven by fiscal requirements and monetary policy. You entirely miss the point of the paper

Bogger Prince · 12-11-2013 11:22PM

Looking to buy a few of dem with a few spare quids. Dunno how to do it dough

KyussBishop · 12-11-2013 11:47PM

Mr. Incognito wrote: »

I read the rest. Thank you. He doesn't mean that they literally create money out of thin air but it regulates the amount of capital in the economy and should be driven by fiscal requirements and monetary policy. You entirely miss the point of the paper

He says it plain as day:
"When banks extend loans to their customers, they create money by crediting their customers’ accounts. The usual role of a central bank is to limit this rate of money creation, so that an excessive expansion of money spending does not lead to inflation."

He clearly explains, that banks create money, when crediting customers accounts (i.e. creating loans), and that the central banks role is to limit this rate of money creation - he does not say central banks control money creation, but that they limit it (which they do, with interest rates controlling demand for loans, and capital requirements restricting banks).

Not only that, but you have other notable people like Martin Wolf saying exactly the same thing, even more explicitly:
"The essence of the contemporary monetary system is creation of money, out of nothing, by private banks’ often foolish lending."

He's the leading editor of the Financial Times - no random academic or conspiracy theorist - and he has even interviewed Sir Mervyn King, and Mervyn said this:
"...for the past few years, the banking system, which is normally responsible for creating 95 per cent of broad money has been contracting its part of the money supply. And since we at the bank only supply about 5 per cent of it, the proportional increase in our bit has to be massive to offset the contraction of the rest.”"
www.ft.com/intl/cms/s/2/350a10a2-d284-11e2-88ed-00144feab7de.html#ixzz2WT9bjPpd

Pointing out there, that the Bank of England, the central bank, only supplies 5% of the money supply (i.e. the physical currency, versus the other 95% created by private bank loans).

alb · 13-11-2013 12:03AM

Kikin wrote: »

http://activerain.com/image_store/uploads/1/8/6/3/6/ar118945826163681.jpg

If you look at a graph of bitcoin value over the last 12 months it's so similar that it's spooky. (Ignoring the steep rise in last few weeks of course)

hmm it looks like it if you ignore the bit that doesn't? which stage do you think we're at?
If you think we're at the mania stage do you think the public knows about bitcoin yet? Most of my techy friends didn't even know much about it when I asked them lately?

If it follows that bubble pattern I think we're at the smart money to early adopter stage. but if Bitcoin succeeds I would bet more on an S curve adoption.

My favourite chart is the long term logarithmic scale graph

Kikin wrote: »

I have no reason to believe this recent jump to $380 is anything but a bubble fuelled by shortage of supply (silk road being shut down and the subsequent FBI seizure of millions worth of bitcoin,and now this Chinese site disappearing with more millions worth). Or possibly just standard pyramid scheme type investment mentality.

It has been driven by new demand from China, btcchina.com - which has led most of the price increases, lots of positive news stories about new services and adoption (the dutch guy buying an apartment with bitcoin profits), and the Bitcoin investment Trust which took in 15 million from new institutional investors, among other things.

Kikin wrote: »

Pretty much the only 2 reasons people are buying them at the moment is
1) illegal activity online
2) to make a quick buck

And then there's others who are in for long term (like the winklevoss twins) on them becoming popular for mainstream online payments. Like an alternative to paypal and credit cards. This would need large sites like eBay and Amazon to start accepting them as a form of payment.

Kikin wrote: »

This is the huge fundamental difference between cash and bitcoins currently. Cash may not necessarily be backed by gold or other assets, but at least you can buy food and clothes with it. Can't really say the same for bitcoins at the moment.

We're day by day seeing the beginning of buying food and clothes with bitcoin already, just not in Ireland.. because as I said we're only entering the early adopter phase.

Bitcoin has mostly behaved as a speculative commodity and store of wealth until now, but we're seeing the beginnings of bitcoin as a direct payment method too.

AtomicHorror · 13-11-2013 12:20AM

Kikin wrote: »

http://activerain.com/image_store/uploads/1/8/6/3/6/ar118945826163681.jpg

If you look at a graph of bitcoin value over the last 12 months it's so similar that it's spooky. (Ignoring the steep rise in last few weeks of course)

What good is a model system if you have to ignore some of your data to make it fit? Either the data is wrong or the model is.

ringadingding · 13-11-2013 12:31AM

I was reading this last week,
That'd be a nice little surprise huh
http://www.theguardian.com/technology/2013/oct/29/bitcoin-forgotten-currency-norway-oslo-home

alb · 13-11-2013 12:44AM

Imagine that as well as thanking a post, you could easily send a micropayment of a few satoshis to a useful post. imagine the added incentive it would give boards users to help others and contribute useful posts. Something like this would be really difficult to do using traditional payment system, but pretty easy with bitcoin, which is why Reddit already has some kind of similar functionality via the bitcoin tipbot.

Btw if anyone's interested in more advanced uses of bitcoin, this talk by Mike Hearn will blow your mind https://www.youtube.com/watch?v=mD4L7xDNCmA

Kikin · 13-11-2013 12:51AM

The $27 to $800,000+ guy..that transfer of wealth means someone somewhere has lost $800,000. That "person" who lost is whoever is buying bitcoins now for $380 in the hope of making money from the next wave of purchasers. The whole thing has pyramid scheme written all over it, which is an unfortunate consequence of something which has the potential to cause a mini revolution by removing government control of currencies.

alb · 13-11-2013 12:58AM

Kikin wrote: »

The $27 to $800,000+ guy..that transfer of wealth means someone somewhere has lost $800,000. That "person" who lost is whoever is buying bitcoins now for $380 in the hope of making money from the next wave of purchasers. The whole thing has pyramid scheme written all over it, which is an unfortunate consequence of something which has the potential to cause a mini revolution by removing government control of currencies.

This applies to anything that anyone ever bought from someone else which then appreciated in value? It applies when houses doubled in value in the Irish property market or when bank of ireland shares doubled this year. Someone wins someone loses, welcome to markets.

EDIT: the US creates 86 BILLION new dollars a month, so it's possible that he got 800k of those, and everyone that had dollars before has even more now, so everyone wins eh?

Kikin · 13-11-2013 01:02AM

alb wrote: »

This applies to anything that anyone ever bought from someone else which then appreciated in value? It applies when houses doubled in value in the Irish property market or when bank of ireland shares doubled this year. Someone wins someone loses, welcome to markets.

Fair enough but that level of appreciation is unprecedented, particularly over such a short timeframe.

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

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