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Message Board > Malarkey > Bitcoin

April 22, 2011, 22:34
DTM
Earthling!
811 posts

So, I'm evangelising "Bitcoin" everywhere.

http://bitcoin.org

The more demand there is for them the more my 80 Bitcoins will be worth :yay: (I paid ~£50 at current rates, and it seems to be going up)

But it's probably a bubble that will pop.

Anyway if you like to feel leet and haxor and edgy and like to rage against the system then Bitcoins are where it's at.
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April 25, 2011, 23:28
PB
Defender of the faith
589 posts

I have no idea what Bitcoin is, but thanks for the warning anyway... Sounds like I don't want to know...
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April 26, 2011, 00:45
Rincewind
programmer
1493 posts

Do the creators get rich off this, selling virtual coins? Is anyone crazy enough to take in bitcoins and give real money in return, or does it only happen the other way around?

By the way does anyone want to buy Boolean Soup coins from me? They're like really cheap, you can get 200 BS coins for 1 euro. Much cheaper than bitcoins!
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Weblog: http://www.strictlyrational.com updated 24-7-2012
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April 26, 2011, 15:51
Dennis
どこかにいる
2018 posts

And next week you get a 404 on that site and your £50 went down the drain!

PS: I'd like to buy 11000 BS coins for 80 bitcoins! I don't have my bitcoins yet though. I am trying to buy them using warcraft gold. But I am currently looking for microsoft points to buy the warcraft gold.

[Edited on April 26, 2011 by Dennis]
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Kwakkel
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April 26, 2011, 19:10
DTM
Earthling!
811 posts

:thumbs:

> I have no idea what Bitcoin is, but thanks for the warning anyway... Sounds like I don't want to know...

It's a new currency... and like all currencies can be used for good or bad.

> Is anyone crazy enough to take in bitcoins and give real money in return, or does it only happen the other way around?

It happens both ways. There's trading sites, various currencies to bitcoin and vice versa. And also you can buy stuff with it.

But read up on it please before bashing it. Assuming the algorithms are correct, and there are no flaws (which is not impossible, of course), then it is as "real" a currency as paper money. I.e. there is a defined limit on the amount that exists, so it has value that way. (Unlike your BooleanSoup coins where you can just issue as many as you like). And assuming people are willing to trade in it.

And the creators don't sell the coins. They are created in a peer to peer fashion by expending CPU (up until a limit, with the creation of coins becoming harder and harder). So much like any rare commodity - or shares in some new company - those that get in on it first can possibly make a profit. But that's not the main purpose of it, the purpose is simply an alternative currency.

[ for example: on a desktop PC it would take probably years to generate some free bitcoins. The CPU limited creation thing is just a way to ensure not all bitcoins are created all at once, and a way to distribute them in a manner that means they don't all initially belong to one central owner ]

> And next week you get a 404 on that site and your £50 went down the drain!

No 404, it's peer to peer. It's no more going to disappear than bit torrent is.

Of course, it may fail for various reasons. But at the very least it's a really interesting experiment: to have a currency that is not controlled by any central bank, and to be able to access it in a way that can't be frozen at the whim of your bank or politicians...

[Edited on April 26, 2011 by DTM]
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April 27, 2011, 13:21
Dennis
どこかにいる
2018 posts

I also have money not controlled by any central bank. It's in my Monopoly Board Game.
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Kwakkel
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April 27, 2011, 15:38
Rincewind
programmer
1493 posts

Dennis, when playing Monopoly, one of the players also has to function as bank.
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Weblog: http://www.strictlyrational.com updated 24-7-2012
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April 27, 2011, 17:29
Dennis
どこかにいる
2018 posts

The U.K. didn't want to use EURO because they wanted to keep their central bank. So why being lame and BETRAY your current currency! :groar:



@Rincewind: Dammit! You're right. Now I'm going to need to kill you. :)
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Kwakkel
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April 29, 2011, 00:42
PB
Defender of the faith
589 posts

Ok, I've read verry superficially a bit about it. It seems bitcoin is a rewarding system for trading your CPU power to be used for some distributed calculations that are done via software you download. Apparently people also trade that reward with other people in the assumption that the reward will last as if it where a currency.

The "currency" is limited to 21 million, which is really not much for a currency. This will probably mean
- You can only spend bitcoins at a limited amount of shops which probably have direct relation or affinity with the project.
- Because of this limited market, as long as the currency lasts, it's value is dependant on these shops (which is much worse than a dependancy on a monitoring central bank)
- If the currency will get higher demand (and thus go up in price), it will become more fragmented. People will end up owning a small amount of bitcoins, not caring to spend it, since it's nice to own. And the currency will die of it's success.
- If the currency works as expected, people who traded CPU power will buy their rewards at the shops and move on. Or keep their bitcoins as a reminder. Or better yet, sell their bitcoins to some fool who thinks he can make money out of it...

Anyway, that's my two cents, it's probably not a complete list of weaknesses and I've not studied the thing in depth. I could be wrong, but at least I'd say it's a higher risk investment. If you play your cards right and all goes well, you might make profit out of it anyway...

[Edited on April 29, 2011 by PB]
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April 29, 2011, 16:12
Dennis
どこかにいる
2018 posts

it's not even worth the risk.
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Kwakkel
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May 1, 2011, 20:12
DTM
Earthling!
811 posts

> bitcoin is a rewarding system for trading your CPU power to be used for some distributed calculations that are done via software you download

That's just a blind and somewhat fair way to initially distribute the coins... There's no central bank to dish out the money so it has to be spread in another way. Eventually all coins will be created, or it will be so difficult to create them that few people will bother.

> The "currency" is limited to 21 million, which is really not much for a currency

However, it can also be subdivided to many decimal places. (about 5 I think, and I think there are plans to increase it). So the amount of 1 bitcoin might have far greater value than a dollar, so people will use fractional amounts. Which is a bit awkward, but presumably different denominations e.g. "microbits" can be invented to give a more usable metaphor.

> You can only spend bitcoins at a limited amount of shops
> it's value is dependant on these shops (which is much worse than a dependancy on a monitoring central bank)

Well, this would apply to any new currency... it can only be solved by it getting more popular.

Some people may hoard, but others will trade... since it does have other benefits to regular currencies.

I think most things that can be said about bitcoin can be said about any other currency... since that is what it is trying to be...

Really though, I don't know much about economics or anything ;) Only what I've read up about Bitcoin. So I've no idea if it will succeed or fail. I only know that the idea of it all is interesting.

Quoting Dennis:
it's not even worth the risk.


Well, if I could buy DennisCoins, I wouldn't, because they wouldn't be worth the risk. Seriously, who would buy DennisCoins? Nobody. Bitcoins are infinitely superior simply by not being DennisCoins.
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May 2, 2011, 21:05
PB
Defender of the faith
589 posts

>> That's just a blind and somewhat fair way to initially distribute the coins... There's no central bank to dish out the money so it has to be spread in another way.<<

The amount of money/effort it takes to gain any currency should be in ballance with the goods and services you can buy for it. That's why I label the bitcoins a reward for trading your CPU cycles (which cost money and time).

>>However, it can also be subdivided to many decimal places.<<
Well it's normal that a currency is dividable (usually by 100). However, normally a currency is linked to a certain economy and any healthy economy has a minor inflation. This will mean that normal money by economic standards is worth less over time. So for normal currencies, it's verry uncommon to have to add another decimal to a currency. Usually it's the other way around.

However, BitCoins are not linked to any economy as far as I know. That's also what makes me doubt if you cán call it a currency. But it can give weird side effects.

For instance in the Euro zone, a shop hás to accept euro's as a payment. I seriously doubt that any shop has the legal obligation to accept BitCoins. And even if a shop has the legal obligation though contract, it would have to compete against shops without that obligation. This is quite a risk to take for the mentioned possibillity for deflation without serious economic harm.

And also, it makes a lot of differece where you live to what kind of reward you get for goods or services, in terms of money. Having a currency not area related, means that different people in the same "currency zone" can live by totally different standards.

>> Well, this would apply to any new currency... it can only be solved by it getting more popular.

As explained, normally a currency is not a choice. It's the system you live with. And if you have money left, you could speculate on changes between the linked economic systems.

BitCoins are not part of an authoritive economic system, as far as I know. As long as no one can make a law that there are shops to take BitCoins for a payment, it's by far not the same as a normal currency.

>>Bitcoins are infinitely superior simply by not being DennisCoins.

Only, and just only, as long as nobody is willing to pay for DennisCoins. As soon as someone is willing to pay for it, the difference it not infinite anymore.


IN CONCLUSION:

I might be bashing BitCoins in your eyes now, but that's not my intention. If you find it enjoyable to own bitcoins, to trade in them and to "mine" them, who am I to stop you?

However in my opinion, you should not buy BitCoins driven by economic reasons, in my opinion. And I am highly doubtfull if it's valid to call it a real currency. Only if you're in it for the fun of it, and you do not put all your life savings into it, I supose it's fine...

>>I don't know much about economics or anything<<
I only know what I was teached on the Havo (up till the age of 17, which is quite a while ago)...
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May 3, 2011, 13:21
DTM
Earthling!
811 posts

> BitCoins are not part of an authoritive economic system, as far as I know. As long as no one can make a law that there are shops to take BitCoins for a payment, it's by far not the same as a normal currency.

Ok, I do see what you mean.

> Only, and just only, as long as nobody is willing to pay for DennisCoins. As soon as someone is willing to pay for it, the difference it not infinite anymore.

Well, I was just spouting nonsense to Dennis there... but true.

> And I am highly doubtfull if it's valid to call it a real currency

It fulfils the very basic dictionary definition - a medium of exchange. It is different from conventional currencies though, sure.

> Only if you're in it for the fun of it, and you do not put all your life savings into it, I supose it's fine...

Yeah, I'm certainly not putting my life savings into it....

But I do think any strong opinion on Bitcoin's success either way is only speculation.

I want it to succeed for a usability point of view too: for online purchases it is usable in a similar manner as PayPal - except with the benefits of no transaction fees (excluding possible initial exchanging from another currency) - and the simple benefit of not being PayPal, since they are quite notorious for bad customer service and shutting down accounts etc. With Bitcoin I can give any other Bitcoin user my bitcoin "address" and they can send me bitcoins with just a couple of clicks.

I'll be paying a freelance guy in Brazil with Bitcoin probably. So in the short term, at least, ignoring possible failures down the line, I am using it as an actual currency... and paying for real services with it, not just hoarding it. And in the short term, it does have value, simply because people are willing to do work in exchange for it, or pay in a "real" currency to buy some of it. Of course, this might change in the long term... but that's speculation.... and for all we know, America might go bust and the USD could hyperinflate or whatever, no currency is absolutely reliable.

Short version: You're probably right, but it would be nice if it succeeds anyway :)
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:o
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May 4, 2011, 01:44
PB
Defender of the faith
589 posts

Ok, first of all, my remark on DennisCoins was not as serious as the rest of my remarks, as you probably did notice ;-).

In addition, having a practical side to BitCoins transactions being easier than other transactions (as long as they are safe enough), is definately an added value above DennisCoins :-).

From my perspective, this experiment would succeed if banks would make international online transactions even easier because of the results of this experiment.

On the positive side. I speculate that, if users really keep all accepting BitCoins as a payment in trade of services and such, there wouldn't be a "run on the bank", because of the small scale of the project and the emotions involved. But that's purely a hunch.

DISCLAIMER:
Anything I wrote in this tread should not be taken as an advice of any kind. Please do read into the matter from better sources yourself and make educated decisions. I did not study the situation in detail.

No claims can be made in my direction in case of:
- Missed opertunities
- Financial loss of any kind
- Damage to the value of the BitCoin currency
- Desire for compensation
- A dent in the rear right door of your black audi which was parked between 9:00 am and 11:00 am.

Even in case of evidence of direct influence of my statements.

[Edited on May 4, 2011 by PB]
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May 5, 2011, 00:33
DTM
Earthling!
811 posts

:-)

Interestingly, since I bought my bitcoins about two weeks ago it's doubled in value... :D

eh, it's a bit like gambling though, I could exchange it back to £ now and would have made a profit... But the temptation is not to in the hope it will increase more...

Just remember, when it overtakes the dollar and euro, you heard it here first...
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:o
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May 5, 2011, 17:00
Dennis
どこかにいる
2018 posts

I had it with the lottery (euro millions) I played for 10 eur and won 16 eur, then I played for 10 eur again and won nothing so I lost 4 euro in total.

Mind gaaaaaaaaaames
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Kwakkel
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May 5, 2011, 23:49
PB
Defender of the faith
589 posts

Well Dennis, just remember, it's the journey that counts... Clearly you've had your highs and lows regarding your financial situation, but at least you can say: I've been there! I've had won 16 euro's once. And that is something no one can take away from you... ;-)
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May 17, 2011, 08:20
Dennis
どこかにいる
2018 posts

In Soviet Russia, Bitcoin buys YOU.
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Kwakkel
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May 21, 2011, 16:56
PB
Defender of the faith
589 posts

In Soviet Russia, moms are so fat because they eat light bulbs which needed to be changed...
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May 23, 2011, 13:22
Dennis
どこかにいる
2018 posts

No PB, you got it all wrong

[Edited on May 23, 2011 by Dennis]
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Kwakkel
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June 29, 2011, 15:48
Zosma
Senior Procrastinator
99 posts

The project is interesting to me because I know nothing about economics.

Anyway... I think PB has a good point when describing one of the main reasons a 'normal' currency 'works'; because of the fact that law forces people to accept it? At least that was my first hunch too.

I have one concrete question: what happens if a central bank issues more money? To whom does that money go?

[Edited on June 29, 2011 by Zosma]
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Fuck a duck
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June 29, 2011, 16:38
Dennis
どこかにいる
2018 posts

afaik the more money created causes the value of the money drop, which is called inflation.
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Kwakkel
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June 30, 2011, 15:22
Zosma
Senior Procrastinator
99 posts

Mmm yes you're right about that, I just wondered where the 'actual' money went. But it's probably used to pay off loans somewhere eh.

Anyway in the meantime I want real money to buy an inflatable sheep.
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Fuck a duck
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July 1, 2011, 11:29
Dennis
どこかにいる
2018 posts

And what will you use the sheep for?
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Kwakkel
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July 4, 2011, 21:22
Zosma
Senior Procrastinator
99 posts

Cough. Mmm... Inflatable FarmVille?
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Fuck a duck
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Message Board > Malarkey > Bitcoin

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