Fishbone Glover Posted June 3, 2011 Share Posted June 3, 2011 Experts say bumble bees shouldn't be able to fly either, but they do. I don't think supersonic vortices have much bearing on the value of Bitcoins I've read this thread through, and I'm still none the wiser as to what they actually are, or why they should be worth anything! Quote Link to comment Share on other sites More sharing options...
Traktion Posted June 3, 2011 Author Share Posted June 3, 2011 At gunpoint. Bitcoins sit on the back of that. They do so in as much as any commodity does - you sell them, to get government money, to pay government taxes. That doesn't mean they wouldn't exist absent of taxes - there will always a role for anonymous, decentralised currency, which doesn't require a 3rd party to trust. There is no law to make people accept bitcoins though; it is purely voluntary. If someone wants to trade their productivity for bitcoins, that's their business. Each additional person who does the same, gives more places to spend them, which leads to more people offering productivity for them. It's a virtuous circle and that's all that matters in terms of it being adopted. Anyway, enough of this - we've been over it many times before. No matter what you or I say, the market will do as it wants, as it always does. Quote Link to comment Share on other sites More sharing options...
Injin Posted June 3, 2011 Share Posted June 3, 2011 They do so in as much as any commodity does - you sell them, to get government money, to pay government taxes. That doesn't mean they wouldn't exist absent of taxes - there will always a role for anonymous, decentralised currency, which doesn't require a 3rd party to trust. There is no law to make people accept bitcoins though; it is purely voluntary. If someone wants to trade their productivity for bitcoins, that's their business. Each additional person who does the same, gives more places to spend them, which leads to more people offering productivity for them. It's a virtuous circle and that's all that matters in terms of it being adopted. Anyway, enough of this - we've been over it many times before. No matter what you or I say, the market will do as it wants, as it always does. Nope. People buy commodities because (get this, right!) they want the commodity for themselves. No one is ever going to buy a bitcoin because of that - which means no market demand. Quote Link to comment Share on other sites More sharing options...
Traktion Posted June 3, 2011 Author Share Posted June 3, 2011 Nope. People buy commodities because (get this, right!) they want the commodity for themselves. No one is ever going to buy a bitcoin because of that - which means no market demand. Bitcoins are useful in themselves, to enable online trade (gold doesn't fit through the phone socket) - they're a very flexible unit of account. You're not going to make a bitcoin broach, bit it doesn't mean that they don't have their uses. Hell, you might even sell some gold to buy bitcoins, as they better suit your liquidity preference. People generate demand for them by doing work for them. You say they are working for useless ones and zeros, but that's up to them. I reckon they are working for them, because they know they can trade them with someone else. Whether this means that they are collectively deluded is beside the point - they will serve a purpose regardless. Quote Link to comment Share on other sites More sharing options...
Injin Posted June 3, 2011 Share Posted June 3, 2011 Bitcoins are useful in themselves, to enable online trade (gold doesn't fit through the phone socket) - they're a very flexible unit of account. You're not going to make a bitcoin broach, bit it doesn't mean that they don't have their uses. Hell, you might even sell some gold to buy bitcoins, as they better suit your liquidity preference. People generate demand for them by doing work for them. You say they are working for useless ones and zeros, but that's up to them. I reckon they are working for them, because they know they can trade them with someone else. Whether this means that they are collectively deluded is beside the point - they will serve a purpose regardless. You've got a bitcoin - what do you want it for, other than for trade? Please list the uses you have. Next list what someone would use it for if you gave it to them as a gift - in both cases barring passing them on to some other sucker? Quote Link to comment Share on other sites More sharing options...
Traktion Posted June 3, 2011 Author Share Posted June 3, 2011 You've got a bitcoin - what do you want it for, other than for trade? Nothing - it's only useful as a unit of account. Please list the uses you have. Next list what someone would use it for if you gave it to them as a gift - in both cases barring passing them on to some other sucker? I can buy all sorts of stuff, including hosting space, VOIP, clothes, services. What will they do with the bitcoins? The same thing - trade them on. How about shell money? http://en.wikipedia.org/wiki/Shell_money It's not very useful to have a pile of these. I suppose you could make some jewellery with them, but really, they're only useful as money. IMO, something has to have perceived value and scarcity to start off as money, but once people are accustomed to it, the origins are meaningless... as long as others accept them in exchange for what you want, it is an irrelevance. What made bitcoins valuable in the first place? Probably the idea of a free market, distributed, secure, private e-currency. It had an appeal from those who craved this. If it reaches critical mass, those values will still be there, but I should imagine that people wouldn't care either way, as long as they can buy stuff with them. Quote Link to comment Share on other sites More sharing options...
Injin Posted June 3, 2011 Share Posted June 3, 2011 (edited) Nothing - it's only useful as a unit of account. Account of what? I can buy all sorts of stuff, including hosting space, VOIP, clothes, services. What will they do with the bitcoins? The same thing - trade them on. How about shell money? http://en.wikipedia.org/wiki/Shell_money It's not very useful to have a pile of these. I suppose you could make some jewellery with them, but really, they're only useful as money. IMO, something has to have perceived value and scarcity to start off as money, but once people are accustomed to it, the origins are meaningless... as long as others accept them in exchange for what you want, it is an irrelevance. What made bitcoins valuable in the first place? Probably the idea of a free market, distributed, secure, private e-currency. It had an appeal from those who craved this. If it reaches critical mass, those values will still be there, but I should imagine that people wouldn't care either way, as long as they can buy stuff with them. Shells are pretty. There has to be market demand for money, the market has to dicover what money is - process is everything. Edited June 3, 2011 by Injin Quote Link to comment Share on other sites More sharing options...
Traktion Posted June 3, 2011 Author Share Posted June 3, 2011 Account of what? Work done, services traded, etc. It's just a tally. Shells are pretty. There has to be market demand for money, the market has to dicover what money is - process is everything. They're not that pretty though are they? My local beaches are full of them, yet people don't bother to lift them! The ideal is what is attractive with Bitcoins. Some people passionately think that the government shouldn't be setting monetary policy and see this as an alternative in a modern world. Anything else, even warehouses of gold, can be confiscated and/or shut down by the government. People are giving Bitcoins value as they're willing it to succeed. Hell, the government can't even confiscate bitcoins, even if they take your hardware. If you have the wallet encrypted, it will potentially take them decades to access it. In the mean time, you just use one of your many backups that you spread around the net and/or physical locations (all encrypted too, of course). Quote Link to comment Share on other sites More sharing options...
Injin Posted June 3, 2011 Share Posted June 3, 2011 Work done, services traded, etc. It's just a tally. I said apart from trade what would you use bitcoins for. Lets save time - you've dodged the question because you know they are worthless and the answer is "nothing. Bitcoins are useless, worthless." They're not that pretty though are they? My local beaches are full of them, yet people don't bother to lift them! The ideal is what is attractive with Bitcoins. Some people passionately think that the government shouldn't be setting monetary policy and see this as an alternative in a modern world. Anything else, even warehouses of gold, can be confiscated and/or shut down by the government. People are giving Bitcoins value as they're willing it to succeed. Hell, the government can't even confiscate bitcoins, even if they take your hardware. If you have the wallet encrypted, it will potentially take them decades to access it. In the mean time, you just use one of your many backups that you spread around the net and/or physical locations (all encrypted too, of course). Yes, the attached pipedream is where bitcoins garner their appeal from. They are worthless. Quote Link to comment Share on other sites More sharing options...
Traktion Posted June 3, 2011 Author Share Posted June 3, 2011 I said apart from trade what would you use bitcoins for. Lets save time - you've dodged the question because you know they are worthless and the answer is "nothing. Bitcoins are useless, worthless." I already said 'nothing' two posts ago. It's only use is as a currency, due to its features. Yes, the attached pipedream is where bitcoins garner their appeal from. They are worthless. $65m and counting. Obviously, not everyone shares your opinion. Quote Link to comment Share on other sites More sharing options...
Injin Posted June 3, 2011 Share Posted June 3, 2011 I already said 'nothing' two posts ago. It's only use is as a currency, due to its features. $65m and counting. Obviously, not everyone shares your opinion. $65m worth of pipe dream. A differently named fantasy money is not a solution to to the problems thrown up by having fantasy money. Quote Link to comment Share on other sites More sharing options...
Stay Beautiful Posted June 3, 2011 Share Posted June 3, 2011 A differently named fantasy money is not a solution to to the problems thrown up by having fantasy money. Are bitcoin stating that they are the solution? Quote Link to comment Share on other sites More sharing options...
Injin Posted June 3, 2011 Share Posted June 3, 2011 Are bitcoin stating that they are the solution? Nope. Quote Link to comment Share on other sites More sharing options...
jonb Posted June 3, 2011 Share Posted June 3, 2011 Work done, services traded, etc. It's just a tally. They're not that pretty though are they? My local beaches are full of them, yet people don't bother to lift them! The ideal is what is attractive with Bitcoins. Some people passionately think that the government shouldn't be setting monetary policy and see this as an alternative in a modern world. Anything else, even warehouses of gold, can be confiscated and/or shut down by the government. People are giving Bitcoins value as they're willing it to succeed. Hell, the government can't even confiscate bitcoins, even if they take your hardware. If you have the wallet encrypted, it will potentially take them decades to access it. In the mean time, you just use one of your many backups that you spread around the net and/or physical locations (all encrypted too, of course). And what measures exist to stop you spending the bitcoins, restoring the backup and spending them again? Quote Link to comment Share on other sites More sharing options...
Traktion Posted June 3, 2011 Author Share Posted June 3, 2011 (edited) And what measures exist to stop you spending the bitcoins, restoring the backup and spending them again? How about reading up on how they work before criticising? You can't double spend them. EDIT: sp Edited June 3, 2011 by Traktion Quote Link to comment Share on other sites More sharing options...
Optobear Posted June 3, 2011 Share Posted June 3, 2011 How about reading up on how they work before criticising? You can't double spend them. EDIT: sp I think that is a fallacy. The key question is whether you can create a separate contract to lend them to someone at interest independent of bitcoin. So someone with bitcoins offers to lend them to someone, and the borrower agrees that they will pay them back with interest. Unless the bitcoin system prevents that process usury exists and you get inevitable inflation. With currencies that are regulated by government that process is limited by government regulation (requirements to be a licensed bank, hold reserves with central banks). Without those limitations on usury the bitcoins will simply inflate in the same way as money as debt, but with no regulation the inflation would go Weimar... Bitcoins are a clever idea but without an understanding of the money multiplier of usury they will be worthless. Set aside that they won't be adopted, and even if they were they'd be regulated. Another obvious point, although maybe not to bitcoin fans, is we've already got loads of currencies, eg sterling, dollars, gold, picasso painting, model T fords, BP shares, or myriad others, so why bother with bitcoins? Quote Link to comment Share on other sites More sharing options...
Bear Goggles Posted June 3, 2011 Share Posted June 3, 2011 I think it's fascinating. Traktion is right it is the first true virtual commodity, and it is very clever how it works. But it is also a bubble and it will be interesting to see how far it goes before it bursts. If it goes viral it has the potential to be absolutely massive. $100 per bitcoin? $1000? I wouldn't rule it out. It's also interesting how the gold bugs are conspicuous by their absence. Of course a virtual commodity doesn't work well in a mad max type situation - this commodity is useless without the internet. You could also argue that gold is pretty useless in a mad max situation so I'm surprised the gold bugs aren't diving in. The fundamental idea of a decentralised p2p currency is great though. I hope a more sensible non-deflationary alternative is developed, preferably before this whole thing blows up in their stupid faces. Quote Link to comment Share on other sites More sharing options...
AteMoose Posted June 3, 2011 Share Posted June 3, 2011 (edited) Looks like a bubble, smells like a bubble... having said that, wish I had know about it before, could have paid off the mortgage! dont wait too long before you get out.... Edited June 3, 2011 by AteMoose Quote Link to comment Share on other sites More sharing options...
scepticus Posted June 3, 2011 Share Posted June 3, 2011 Looks like a bubble, smells like a bubble... having said that, wish I had know about it before, could have paid off the mortgage! dont wait too long before you get out.... just need the other shoulder to form now then we should be good to go. Quote Link to comment Share on other sites More sharing options...
Traktion Posted June 3, 2011 Author Share Posted June 3, 2011 I think that is a fallacy. The key question is whether you can create a separate contract to lend them to someone at interest independent of bitcoin. So someone with bitcoins offers to lend them to someone, and the borrower agrees that they will pay them back with interest. Unless the bitcoin system prevents that process usury exists and you get inevitable inflation. With currencies that are regulated by government that process is limited by government regulation (requirements to be a licensed bank, hold reserves with central banks). Without those limitations on usury the bitcoins will simply inflate in the same way as money as debt, but with no regulation the inflation would go Weimar... Bitcoins are a clever idea but without an understanding of the money multiplier of usury they will be worthless. Set aside that they won't be adopted, and even if they were they'd be regulated. Another obvious point, although maybe not to bitcoin fans, is we've already got loads of currencies, eg sterling, dollars, gold, picasso painting, model T fords, BP shares, or myriad others, so why bother with bitcoins? That reply doesn't seem to match my response. I was merely stating that you can't spend the same Bitcoin twice - once for the backup, once for the original. As for credit - that's external to Bitcoin, in the same way as credit is compared to notes and coins of Sterling. In other words, it is nothing to do with the Bitcoins as such - credit is just promises for them. That said, the levels of leverage are up to any credit clearing mechanisms (be them like ripple or mainstream banks). Either way, credit can only expand so far before the system becomes too fragile. Weimer is about printing the currency, not expanding credit - with Bitcoins, there can only be a maximum of 21m coins, so no Weimer here. As for other currencies, they have different advantages. Bitcoins exist and thrive in a digital state. There is no central mint or single point of failure. It offers something different. Quote Link to comment Share on other sites More sharing options...
Traktion Posted June 3, 2011 Author Share Posted June 3, 2011 (edited) Looks like a bubble, smells like a bubble... having said that, wish I had know about it before, could have paid off the mortgage! dont wait too long before you get out.... Compare and contrast with this: http://www.google.com/trends?q=bitcoin What does that suggest to you? IMO, the increase in price is due to it recently going a bit viral. It's still a small economy with plenty more potential. I wouldn't be surprised if it corrects, but then it is up over 50% on the day. I think it is far too early to be calling an implosion when the world is just starting to wake up to it. That's just my opinion though. (EDIT: FYI, it's about $14 per Bitcoin at the time of writing this: http://bitcoincharts.com/charts/mtgoxUSD#vztgSzm1g10zm2g25) Edited June 3, 2011 by Traktion Quote Link to comment Share on other sites More sharing options...
jonb Posted June 4, 2011 Share Posted June 4, 2011 Well, that link above has a number of merchants who accept them, including some useful shops. This list is much more comprehensive than a year ago and tbh Bitcoins didn't go very far until the last month or two, when interest seemed to explode. Re the store of value, if it's doubled in value, I'd say it had managed to store it and some! As a unit of account, it's clearly fluctuating a lot at the moment, but if you overlay the price chart with the Google Trends chart, they correlate very well. If interest continues to gather pace, then merchants will have to adjust their prices downwards as required, but it will probably also encourage them to accept the Bitcoins in the first place. Who knows where it is going to go? Nothing quite like Bitcoins has ever been invented before, which is why I find it so interesting. If I want to agree a contract to take place in a few weeks time, how many bitcoins to I agree to pay? How many should the other party agree to accept? Hyper-deflation is just as bad as hyper-inflation. Quote Link to comment Share on other sites More sharing options...
Guest eight Posted June 4, 2011 Share Posted June 4, 2011 I said apart from trade what would you use bitcoins for. Lets save time - you've dodged the question because you know they are worthless and the answer is "nothing. Bitcoins are useless, worthless." Yes, the attached pipedream is where bitcoins garner their appeal from. They are worthless. If I gave you a few, and the bubble propelled them to $1000000 dollars per coin, what would you do with them? eight Quote Link to comment Share on other sites More sharing options...
newbonic Posted June 4, 2011 Share Posted June 4, 2011 FYI - there was an article in the New Scientist yesterday that discussed alternatives to currencies not issued and controlled by central banks, such as bitcoin: Future of money: Virtual cash gets real ...The currency is created and distributed over a P2P network, and the developers hope to attract users by exploiting some people's disaffection with the government-controlled central banks that control conventional money.... Unfortunately its behind a paywall, so most people can't access the full article. Quote Link to comment Share on other sites More sharing options...
Injin Posted June 4, 2011 Share Posted June 4, 2011 If I gave you a few, and the bubble propelled them to $1000000 dollars per coin, what would you do with them? eight Get rid of them for something I actually wanted asap. Quote Link to comment Share on other sites More sharing options...
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