Hey I'm a bitcoin enthusiast and I was wondering how many people here embrace this awesome technology?
Who here uses bitcoin?
- Thread starter maplesyrupghost
- Start date
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Precious metals have commercial uses and are in jewellery.
What's a bitcoin? It doesn't even exist.
Bitcoin is backed by cryptography. It's a complex argument, but a supply/demand system of having something that someone else wants, creates value in bitcoin because you cannot forge or counterfeit it.
Bitcoin is backed by the community, the US currency is fake and they can print an endless amount at any time.
The future production of the United States? Tell me now, how the currency promotes production when every dollar in the US is loaned to the USA at interest by the Federal Reserve? It promotes DEBT. A debt the younger generations have to deal with.
How will younger generations deal with this debt?
Bitcoin.
Does that mean bitcoins value is going to decrease as computing power increases?
There's a finite number. So once they're all mined that's it you can't mine anymore. If the currency lasts that long then I'd guess that would only cause the value to increase.
Basically, there are 50 bitcoins created on average every 10 minutes. It's like a luck-of-the-draw system of your computer trying to guess the next solution to the puzzle. When more people start hashing, the system will automatically adjust itself every 2016 blocks, making the next block more/less difficult to solve. Some are solved in like 10 seconds, some take a couple hours, but the average is almost exactly 10 minutes.
Every 210,000 blocks, or roughly 3 years, the block reward will half.
Which means mid-December this year, the block reward becomes 25 BTC/block. 3 years from then, it becomes 12.5 BTC/block. The system keeps halving over the course of time until the reward is 0.00000001 BTC per block (1 "satoshi"), and after that point (50 years from now) the miners will receive transaction fees as payment for mining.
Today, when you send a payment, you attach a fee to the transaction to make sure your transaction gets put in the next block. Right now the fee is about 0.0005 BTC, but I asked the question on bitcointalk about fees recently.. I would link to it but I'm not sure why some of my posts go through and some are awaiting moderation, so I'll copy/paste my question here:
Q: Regarding transaction fees, right now the fee is pretty reasonable at the price of a bitcoin... But if transaction fees go up (more sites like SatoshiDice flooding the network?) and the price of a bitcoin goes up (eventually, to like $100+ theoretically), then the transaction fees might get really high. To send a BTC right now, you might pay like 0.0005 BTC I think, doesn't seem like much, but what if you wanted to send someone a really small integer, like 0.0005, you would pay like double in fees. If a BTC is trading for $1000, that makes 0.0005 tx fee cost $0.50... That's not much either, but you pay that on tiny transactions. Sometimes I go to send a BTC, and I guess if there are multiple small bitcoin addresses that it needs to send from, and I pay a 0.01 fee. If the network gets very congested and the BTC price goes up (like it's destined to do), won't it be unaffordable to send small amounts of money?
A:
1) The 0.0005 BTC fee is a spam prevention mechanism. You could use Bitcoin everyday for your entire life and never pay a fee.
2) The spam prevention fee only applies to low priority transaction. Period. If your transaction is high priority then there is no fee. I could send you a single satoshi right now without a fee. The input not output size/age is what determines priority.
3) The spam prevention fee can be adjusted. It was adjusted downward from 0.01 BTC when Bitcoin went above $20 USD. If necessary it could lowered again to sub cent range as BTC continues to gain value. I would say at >$100 USD:BTC it might be worthwhile to consider lowering the spam prevention fee to 0.0001 BTC but not until then. Someday the spam prevention fee may be a single satoshi
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So basically the idea is that there is a finite amount of bitcoin in the world, and if you want some you have to buy it off someone. The absolute maximum the protocol will produce is 21,000,000 BTC, but some of those bitcoins may become "lost" over the course of time. If you put bitcoins on your laptop (and don't have a backup of your wallet.dat file), and drop your laptop into the ocean.. Those bitcoins are gone FOREVER. Totally unspendable. There are lots of cases where bitcoins have become lost, and in the next 50+ years we will see more losing of bitcoins.
Let's see how long their attention span lasts.
I'm guessing this fad will be over in 5 years tops.
Right now each bitcoin is "worth" about $9 USD.
What happens if everyone suddenly decides they're worth $0.10 each?
They're riding up and down based on artificial supply and demand. People don't demand bitcoins to go and buy the produce of bitcoinville...
Every currency is valuable only to the extent that people demand that countries products or services. Hence why when a country becomes less competitive their currency slides in value.
What happens if everyone suddenly decides they're worth $0.10 each?
They're riding up and down based on artificial supply and demand. People don't demand bitcoins to go and buy the produce of bitcoinville...
Every currency is valuable only to the extent that people demand that countries products or services. Hence why when a country becomes less competitive their currency slides in value.
If bitcoins were worth ten cents, I would buy them all. So would everyone else. Bitcoin does have a lot of advantages above other currencies, it's not like everyone is just leaving their computers running and getting rich for no reason.
The demand for bitcoin is driven by so many different areas.
There are a lot of countries in the world, and all of them benefit from bitcoin. The total market cap right now (Bitcoins x exchange rate) is around $81 million (bitcoinwatch dot com). There are so many millionaires and billionaires out there that even if one of them invest heavily in bitcoin, the exchange rate will go bananas. Is it possible that the price could go up artificially? Very possible.. right now bitcointalk user pirate@40 has rumored $4,000,000 worth of bitcoin and is trying to do just that, but since we know about his scheme, we're just profiting from his big bitcoin "dumps" on the exchange. He places a 'sell' of like $600,000 worth of bitcoin on the exchange and it drops the exchange rate by $1 or $2, but then the price goes back up to normal a few hours later. He claims to be making like $20,000 per dump because he "buys them back at a lower rate", but it shows how one millionaire can influence the market. I am pretty sure he is just funneling black market into the bitcoin economy, it is largely assumed that he is laundering millions of dollars when he does this.
In the grand scheme of things, people just want a safe, reliable, medium of currency exchange. Today's world is the internet.
China is just starting to get into bitcoin. There was one of the first bitcoin China meetup groups awhile back (bitcointalk thread 80322) and it was found that "Chinese are not allowed to bring more than $6,000 USD worth of currency to Macau." & they like how a user can bring an infinite amount with them wherever they go. I thought they would have first thought of the import/export reasons to get into the currency... The Chinese are basically the export capital of the world, and if they could get their payment in like a minute or two, and it's sent to them in a completely irreversible manor, they can ship out their goods immediately. It reduces all scam risk for them when they send the goods out.
The global gambling market is absolutely massive. In 2011 it was a $30 billion market. Did you know it's illegal to gamble online in the US? Lots of casinos do not accept US players for this reason, and in 2011 Full Tilt Poker, Pokerstars and Absolute Poker charged with illegal gambling. Assets seized, domains taken away, criminal charges... What a nightmare! Bitcoin makes gambling so much better, there are no bank transfers, paper trail, or anything. Totally anonymous.
The black market is enormous. I hate to bring a conversation to the dark side but Silk Road is responsible for a large part of bitcoin's value.
There's simply too many reasons for bitcoin to ever fail. Columbia just opened up their first bitcoin exchange, and now a month later Columbia brings more traffic to my website than other countries. They have a LOT of money in Columbia, for all the wrong reasons, and if they can dump those stacks of bills into an anonymous currency they can send around the world in a millisecond, they'll do it.
Did you see that credit cards can now add "swipe fees" to your purchase? More money in their pocket. And have you been hearing about places where the debit/credit card network was down, and it left millions without a way to pay for things? The bitcoin network CANNOT be taken down.