●Stories
●Firehose
●All
●Popular
●Polls
●Software
●Thought Leadership
Submit
●
Login
●or
●
Sign up
●Topics:
●Devices
●Build
●Entertainment
●Technology
●Open Source
●Science
●YRO
●Follow us:
●RSS
●Facebook
●LinkedIn
●Twitter
●
Youtube
●
Mastodon
●Bluesky
Slashdot is powered by your submissions, so send in your scoop
Forgot your password?
Close
Re: Bitcoin, I most strongly agree with the following:
Displaying poll results.
I strongly dislike/distrust Bitcoin as a store of value.
6177 votes / 21%
I mildly dislike/distrust Bitcoin as a store of value.
3323 votes / 11%
I am aware of bitcoin, but don't have a strong opinion.
9330 votes / 32%
I mildly favor/trust Bitcoin as a store of value.
2608 votes / 9%
I strongly favor/trust Bitcoin as a store of value.
1378 votes / 4%
My opinion's more complicated than these options allow.
2314 votes / 8%
What's Bitcoin?
3450 votes / 12%
28580 total votes.
voting booth
other polls
Most Votes
Most Comments
This discussion has been archived.
No new comments can be posted.
Load All Comments
Full
Abbreviated
Hidden
/Sea
Score:
5
4
3
2
1
0
-1
More
Login
Forgot your password?
Close
Close
Log In/Create an Account
●
All
●
Insightful
●
Informative
●
Interesting
●
Funny
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
byAnonymous Coward writes:
Like all currencies, it's main use is as a medium of exchange. It's pretty decent as that, but sucks for storing value.
twitter
facebook
byrmdingler ( 1955220 ) writes:
All currency is a medium of exchange AND a way to store wealth. In the principle's simplest example, I can work eight hours today and use the wages to feed my family for a week... thus storing my wealth in an easily carried, widely accepted fiat currency. The ability of a civilization to evolve a middle class from the landowner/sharecropper paradigm is only plausible when a worker can store away the fruits of his labors, rather than eat them every evening.
Parent
twitter
facebook
byhibiki_r ( 649814 ) writes:
Nah, they suck as a medium to store wealth for more than short periods of time. What the OP is missing is that currency is a method of account: A ton of prices are set up with respect to a currency: This is why, say, having oil be priced in dollars and not in Euros was such a big deal a while ago. High demand for currency as a percentage of GDP is telling you that all of the things that are far better stores for wealth than money are just no good (ie, a recession), or that the currency is not really a currency, but a commodity that you are speculating with.
Which is why Bitcoin is not something that really resembles a currency: The supply increases slowly, its value vs anything that you could want to buy with it fluctuates wildly, and most of the inventory is being held by people hoping it will go up, instead of actually being used.
While an electronic coin is theoretically possible, the Bitcoin implementation shares more with a pyramid scheme than with a real currency: Everyone that holds it wants to hype it so that it goes up in price vs actual currencies, but if the usage drops, it's useless, and only the people at the top of the scheme, those that mined very early, get anything that resembles a return.
Parent
twitter
facebook
byMystakaphoros ( 2664209 ) writes:
Thus I love the idea but distrust it immensely.
byGofG ( 1288820 ) writes:
It not only has value as an investment (I personally put about $1000 in when the price hit $14usd/1btc, sold half at $55 and half at $65 and made quite a bit of money), but it also is useful for grey market transactions.
For instance, I purchased some Modafinil, a prescription drug which is hard to acquire in the US but is non-recreational and not of concern to the DEA, and I used bitcoins to do it simply because it was the only way to easily pay in such a way that the vendor didn't know anything about me beyond the wallet ID of the one-time use wallet I generated specifically for this transaction, I don't know anything about the vendor outside of his (probably also one-time-use) wallet ID, and yet I ended up with some Modafinil and he ended up with some cash.
As a long-term investment, Bitcoin is ludicrous; I agree with this. The price is about to crash as the new ASIC miners come out, and this cycle will likely happen again several times before we hit the 22 million hard cap, which makes it the domain of day traders, not investers. But as a currency, it is wildly more useful than USD, or whatever. You can send bitcoins to someone quickly, easily, and without using a third party transfer service. You can easily purchase bitcoins using cash with websites like localbitcoins.com. There are many websites selling legitimate products, things like computer hardware or ebooks, and the list grows every day.
Bitcoin's value is not as an investment. Bitcoin's value is that, even without the backing of a major government or whatever, it has value as a currency simply because of its featureset.
We don't consider the 'featureset' of a currency very often, since most currencies have exactly the same featureset as every other currency; you can take it to a bank and change it into 'electronic' money, deposit it into your paypal, etc. But bitcoin has all of those features built into the actual currency itself, with no reliance on third parties and built-in (relative) privacy.
Parent
twitter
facebook
byTime_Ngler ( 564671 ) writes:
I also agree that it's in a bubble and about to crash.
However, I don't understand what the new ASIC miners have to do with it. I thought that the total bitcoin mined collectively per day stays pretty much constant regardless of the horsepower thrown at it (it self adjusts).
What concerns me more is the cost of collective mining is proportional to the price. So looking at this chart, you can see periods were many bitcoins were gobbled up and calm periods, where I think that the transactions were due mainly to
bypaulsnx2 ( 453081 ) writes:
If Miners leave the system, then the computational complexity goes down for verifying blocks. If the price of Bitcoin goes up (which it must with greater usage), then mining becomes more profitable, and will attract more minors.
Really the system works pretty well to balance itself, and likely has nothing to do with a possible crash in price.
If you look over at LiteCoin, a much less popular crypto currency derived from Bitcoin, they just has a large run up, then dropped over half their value. But in the end, they still didn't fall back to their original run up price. They are likely to continue to rise in price as compared to other options.
Really, I think the fears of Bitcoin crashing are overblown. Right now Bitcoin has a capitalization of almost 800 million. Quite a bit, but nothing like the 68 billion capitalization of eBay (PayPal). At LEAST a billion or two of that can be contributed to PayPal. And people think Bitcoin is over valued at a fraction of that? When Bitcoin arguably better addresses the same problems of facilitating transactions, only better, cheaper, more securely?
Parent
twitter
facebook
bygandhi_2 ( 1108023 ) writes:
Great.
The best way to get bitcoin regulated is when people hear you can use it to attract minors.
Parent
twitter
facebook
bymortonda ( 5175 ) writes:
Is bitcoin a gateway drug? What's next, ByteCash?
Parent
twitter
facebook
byTime_Ngler ( 564671 ) writes:
Paypal and Bitcoin are apples and oranges, though, although I get what you're saying. When paypal collects a fee, that goes right into the company coffers, and therefore part of the shareholder value. Bitcoin transaction fees just go to the miner that collected them. The investors get nothing. Instead they get to pay around 12% interest per year to the miners (currently, of course this will drop).
Valuing bitcoin is a tricky business, a lot like valuing gold, but different from that also. The weird thing about bitcoin is that, unlike gold, it's value doesn't change with the amount used. For example, 20,999,999 BTC could be locked away by long term investors, leaving 1 BTC for the entire economic side of bitcoin to run on, and the economy would work just as well as if it had all 21M BTC to work with.
However, in the first scenario, if an investor decided to cash out, it's the economy that must support him. So if he sold 1 BTC, then the entire circulation of bitcoin in the economy would double in size in terms of BTC, which would cause the value of all BTC to drop to half. This is really important in understanding bitcoin in my opinion, because compared to a regular stock, where future events can be baked into the price, the price of Bitcoin cannot similarly be.
Why not?
Because the price of bitcoin must equal the amount being circulated, times the amount of currency in regards to intrinsic worth each of the players in the economy need to conduct business. In other words, consider the example where only 1 BTC was used by the economy and the rest tied up with long term investors. Every time a consumer wanted to buy a TV that normally goes for $1199, they'd have to get that amount in Bitcoin, whatever it might be. Similarly, a business would need it's cash flow for it's purchases, and refunds, etc. So, take that amount as valued in USD, and divide it by the amount of Bitcoin available to the economy, and you get the price that USD/BTC has to be. After all, if it wasn't, then consumers would have to adjust their transitory holdings, businesses would have to adjust the amount used for cash flow until it was.
So, in essence the investors are facing a situation somewhat like the prisoners dilemma. Cash out before everyone else to get most of the profit. But if no one cashes out, or more people cash in than cash out, and the price goes higher, because you squeeze the economy into less and less remaining bitcoin. In a normal system with physical goods, eg. gold, the value of the economy decreases as more investors pile in and start locking gold in vaults, which means less rings for sale, so the effect is tempered. But with bitcoin, this steam valve never get released..
Can you guess what happens here? Both forces diverge, when one is strong the other is weak. Investors buy more and more of BTC, so the price of BTC hits the roof, so some investors cash out, and then it hits the floor, because the bitcoin economy has more BTC to work with, and the price of BTC has to match the total intrinsic value amount needed to run the economy divided by the economy's share of the Bitcoin. (The fact that investors can cash out at anytime cannot be baked into the price). And again, in circles. And the nearly unnoticed people trying to work an economy lose and gain and lose and gain. Until they get sick of it, and shops slowly go belly up or refuse to take BTC, until it dwindles to nothing. And the bubbles one after another start to fade, along with the economy, until nothing is left.
Parent
twitter
facebook
byTime_Ngler ( 564671 ) writes:
You're way off. I'll give it a try, but its kind of a complicated system.
First, let me give you the upshot. Imagine miners as a collective unit. Every 10 minutes or so, 25 bitcoins created out of thin air are competed by all miners and then won by a single one. No matter how many miners there are, the number of bitcoins up for grabs doesn't change. Imagine a wealthy person throwing a scrap of bread into a crowd of beggars below, all competing to try and get the next piece, and you'll get the idea.
How does this benefit the system? What is this mysterious work that needs to be done?
The heart of bitcoin is just an electronic order book. It contains every transaction from the beginning of bitcoin written in to it. To find out how many bitcoins you have, you consult the order book which is freely available public information. It's available through P2P sharing, somewhat like bit torrent. Every time someone makes a trade, it's written in this book. (Public key cryptography is used to prevent unauthorized entries. That is, you sign a transaction with a private key of the sender and the public key of the receiver.)
The problem that mining attempts to prevent is as follows. What if a hacker makes a copy of the existing Bitcoin order book and then buys a Ferrari or something for 10,000 BTC in the real account book, and then uses a botnet to try and pass off his copy as real. If other people don't know which is which and start using his copy he made, then he can re-spend the 10,000 BTC on a Lamborghini in his copy. This is know as the double spend attack.
You might think that the order book should just be stored at an official place like bitcoin.com or something, and that's that. However, one of the design goals was to prevent a central authority from being needed, because a central authority can be shut down. If the US government decided one day to seize bitcoin.com, then in that case, Bitcoin would no longer exist.
So, here is how mining works, and prevents the double spend attack. Every time a time a transaction is made, it's given to the miners. Each miner take a number of transactions, and hashes them with the entire order book, the date timestamp, and a random number. (They also add some other information such as the address where the reward goes to). If the final hashcode they get is below a certain value, called the hash target they win. The hash they use is 256 bytes long, and the hash target is very small, ex. 00000000000000000000000000000000000000000000000000007F345334478. If they lose, they have to try again with a different random number. They win very rarely, but since miners have fancy exotic hardware meant to do this operation millions or billion of times a second and there are so many of them, someone does eventually find it. When someone wins, he shares it with everyone in the P2P network who all update their order book and the game starts again. If it took over 10 minutes to find the hash target for the previous block, the hash target is made higher, so it will be easier next time. If it took less, it is made lower. In this way, it balances out, so a miner wins around every 10 minutes, regardless if the total number of miners grow or shrink.
How does this help prove the order book is not a copy? Imagine that miners worked at the Animal Crackers factory, and the factory wasn't perfect, so % 0.01 of the time it would make an animal where its head was upside down. If a miner found that, he would take a picture of it and show it to everyone would then in turn put then put it into their copy of the order book (and the miner would be paid for doing so). Whenever there was confusion about which order book was real and which was not, you'd take a look at the two copies, and simply count the pictures of animals with its head upside down. Whichever had the most pictures would be considered the official order book.
So, if some hacker made a copy, the only way they could pass it off as an official order book is if they also found animals with their head's upside down faster than everyone else. Since there are so many other miners looking, this isn't feasible.
I've left out some details, but that is the general idea. I hope it helps. If you have any questions, I'd be happy to answer them.
Read the rest of this comment...
Parent
twitter
facebook
bympoulton ( 689851 ) writes:
Modafinil is a Schedule IV controlled substance, and definitely of interest to the DEA. Adrafinil is unregulated, but does the same thing pharmacologically.
bySycraft-fu ( 314770 ) writes:
"But as a currency, it is wildly more useful than USD, or whatever."
That is one of the most moronic things I've read about bitcoins. It is hardly usable as a currency. You've found a few specialty shops that will take it for payment. Good for you. I can find an entire COUNTRY of stores that take USD, and plenty of places around the world. Go have a look at Amazon.com, look at what you can buy there, for US Dollars but NOT for Bitcoins.
You seem to be all caught up on the fact that you can "send" Bitcoins directly to someone else. So what? That is a semantic argument. All currencies are just shuffling bits around in computers anyhow. The details really don't matter, what matters is how easily you can use it to pay for things. Bitcoin is very hard, few people accept it and, surprise, surprise, they convert it to real money as soon as they can. US dollars are very easy, they are accepted all over the place.
Parent
twitter
facebook
byGofG ( 1288820 ) writes:
If I converted all of my USD to Euro, and then all of the problems with Greece, Cypress, and Spain got sorted out and the Euro went up in value, and I turned all my money back into USD, I would say that I had "made quite a bit of money" in the exact same way, and I don't think that anyone thinks that euros aren't "real" money.
bycompro01 ( 777531 ) writes:
I don't think that anyone thinks that euros aren't "real" money.
They're way to colourful to be real money. Just like the Canadian dollar.
byKjella ( 173770 ) writes:
While an electronic coin is theoretically possible, the Bitcoin implementation shares more with a pyramid scheme than with a real currency: Everyone that holds it wants to hype it so that it goes up in price vs actual currencies, but if the usage drops, it's useless, and only the people at the top of the scheme, those that mined very early, get anything that resembles a return.
But the thing is every currency is useless if the usage drops. Ask the people who had plenty Reichmarks or Zimbabwean dollars or Soviet rubles how that worked out, whether it's fiat money or gold standard doesn't matter since they'd never be able to convert all that money to gold if everyone wanted to cash out. That promise is as worthless as the paper money it was written on, sure you could do it in good times when you could have bought gold for it on the commodity market too, but not when you'd actually n
byVintermann ( 400722 ) writes:
only the people at the top of the scheme, those that mined very early, get anything that resembles a return.
Bitcoin doesn't exactly have pyramid scheme dynamics. Rather, it has bubble dynamics. The winners those who jump off right before the bubble bursts, the losers are those who do it too late. I've seen estimates/claims that Satoshi (and possibly his friends) sit on 1.2 million bitcoin, which they never have moved. That is a lot of money, but it could quickly become worthless.
bydreamchaser ( 49529 ) writes:
While an electronic coin is theoretically possible, the Bitcoin implementation shares more with a pyramid scheme than with a real currency: Everyone that holds it wants to hype it so that it goes up in price vs actual currencies, but if the usage drops, it's useless, and only the people at the top of the scheme, those that mined very early, get anything that resembles a return.
You mean like every fiat currency out there as well, including the US dollar?
bybillstewart ( 78916 ) writes:
Its job is to support current transactions, and to circulate. As long as it's vaguely stable for short periods of time, compared to the transaction speed, amount of it available and the willingness of commodity providers to accept it, that's good enough. Immediately after the US occupation of Germany post WW II, cigarettes were the main practical currency, even though they weren't very storable, had a random value, and weren't easy to use in large quantities, because there was enough supply available from
bymoeinvt ( 851793 ) writes:
I have to agree with the OP. The two purposes might not be mutually exclusive, but a currency can certainly be "useful" for one purpose and not the other.
From a USAian perspective, the $US is (for now) a global medium of exchange and easily carried. Unfortunately, the dollar has lost over 90% of its value since the inception of the Federal Reserve. Right now, they are eroding the value with $85 Billion per month in artificial credit expansion. Is the currency really a store of wealth if the purchasing p
byrmdingler ( 1955220 ) writes:
Indeed. If the Bitcoin gains any traction as substitute for coin of the realm, they'll cite it's use on Silk Road and any other nefarious uses as justification to outlaw and abolish. The very last thing the financial powers that be want is a medium of exchange they have no control over. Which brings us to good old untraceable cash money... already increasingly restricted, how long before it's deigned a tool of the underworld?
bymlts ( 1038732 ) * writes:
Bingo. For a medium of exchange, BitCoin has a lot of positive aspects. However, until it becomes a mature currency, one is best moving value into it, doing the buy/sell, then moving out of it as fast as possible.
On the other hand, the best medium of exchange that holds its stored value would be precious metals. Gold is the most popular and with proper assay certificates stored with the medium, the chance of getting a fake bar can be fairly low. However, gold isn't as good for an exchange mechanism as a
byZemran ( 3101 ) writes:
I do not doubt that the US government will try to regulate Bitcoin, fail, and then try to outlaw it. That will still have very little effect on Bitcoin as it does not rely on recognition by the US government. They would have more chance of trying to outlaw the rouble. I think that they should just ignore it and let it dwindle into obscurity instead of giving it constant limelight and coverage.
byazav ( 469988 ) writes:
I store my money in my well fed family.
Parent
twitter
facebook
byTheRaven64 ( 641858 ) writes:
It must be a good store of value over the short term to be useful as a medium of exchange. If the value of your money changes significantly between receiving it and either spending or investing it, then you have a problem.
bybluefoxlucid ( 723572 ) writes:
Oh my god where do you armchair investors come from? Store your value in stock? Bonds? Land? You're nuts.
Do you know how bonds grow? You take a risk in bonds. Bonds are usually sold; they can lose value, and you have to wait out the maturity term, taking small amounts of interest, missing opportunities, to avoid losing value. If you suddenly need the value stored in your bond, you may have to sell it at a loss greater than the loss of inflation--because you have less physical dollars at the same defl
byenrgeeman ( 867240 ) writes:
Seriously, with the number of bitcoin articles here, hardly anyone should be able to honestly vote that.
twitter
facebook
byjkauzlar ( 596349 ) writes:
I kind of know what it is, but I don't really know. it's like those articles about 'raspberry pi'.. they all assume we're supposed to know what it is and that we're supposed to care. At least Bitcoin has a name that gives me some idea of what the product is used for. And I know that it's a virtual currency, but I've never seen an option to pay in bitcoin anywhere.
bycamperdave ( 969942 ) writes:
What's bitcoin? It's sort of a universal currency used in a bunch of mmorpgs (simfarm, simcity, Second life, minecraft etc) that people are trying to use as a substitute for Paypal, right?
bytompaulco ( 629533 ) writes:
I don't think a lottery is the correct description. In a lottery, if you bought every single ticket, your expect return would be about 50 cents for every dollar you invested. In Bitcoin, you invest your hardware and utility costs, and the expected return is greater than $1 for every dollar invested. Otherwise, why would people bother?
I say why would people bother, but there are people out there who very much believe in bitcoin as a real alternative currency and who have a very low opinion of people who are
bysylvandb ( 308927 ) writes:
I don't think a lottery is the correct description. In a lottery, if you bought every single ticket, your expect return would be about 50 cents for every dollar you invested. In Bitcoin, you invest your hardware and utility costs, and the expected return is greater than $1 for every dollar invested. Otherwise, why would people bother?
I agree with your conclusion. But the lottery comparison is slightly broken.
"expected value" includes probability so there is no need to buy every ticket, just a statistically valid sample. Plus it is even worse than you predicted (at least for the big name lotteries) because it varies with the current prize payout (e.g. typically the jackpot amount is not fixed).
And to add some concrete detail, currently since Powerball was just won the expected value is $0.50 on a $2.00 ticket, where $0.36 is from the f
byDuckDodgers ( 541817 ) writes:
For Bitcoin as a real currency, a nice feature is that government's can't artificially increase the total amount (i.e. cause inflation or hyper-inflation), the hashing algorithm that determines how many new coins are created each month has a fixed progression that adjusts automatically to advances in computer hardware.
But on the bad side, as far as I can tell Bitcoin is a fundamentally deflating currency. The more time passes, the more the rate of new coin creation diminishes. So the longer you hold yo
byDuckDodgers ( 541817 ) writes:
I can't believe I used "government's" instead of "governments". I'm sorry for the grammatical error.
byTheRaven64 ( 641858 ) writes:
It's not a lack of long-term thinking, it's basic game theory. The best strategy is for you to keep all your bitcoins, while everyone else trades theirs. Other currencies aim to have relatively small but predictable inflationary rates. This means that the best strategy is to accept them for payment (because their value is predictable over the time you'd want to hold them), but then to either invest them for long-term wealth storage or spend them on goods or services (because their value will decrease).
bytirefire ( 724526 ) writes:
Here's what I want to know about Bitcoin: What happens when the last bitcoin is mined? I think there's a max of 21 million bitcoins, and currently about half that many have been mined and are in people's hands.
If bitcoin continues long enough to reach the end-game, wouldn't it create a deflationary spiral?
twitter
facebook
byEnry ( 630 ) writes:
Yes, which is the exact same problem as using the gold standard - there's only so much gold out there (and it has way more uses than sitting in a vault backing currency).
Parent
twitter
facebook
byLinsaran ( 728833 ) writes:
Bitcoins are actually only divisible up to 8 decimal places. However that is something built into the Bitcoin spec. Mining serves the purpose of creating new blocks, but it also serves the purpose of verifying transactions. For a transaction to be codified into a 'block' at least 51% of the network has to 'agree' that it's a valid transaction (how exactly they reach that agreement is a separate matter, but involves time stamps and what not). I'm over simplifying things, but this is integral to how bitcoin
by__aaltlg1547 ( 2541114 ) writes:
In what sense do you mean "deflationary?" Do you mean that the price of everything else denominated in bitcoins would decrease (as in ordinary currency deflation) due to scarcity?
I don't think so, because bitcoins are not like an ordinary commodity that people want for its utility, thus there can never be a shortage. If people want to store more value, they have the alternative of using dollars or euros, for example, or physical commodities like gold or real property. Also, new digital currencies with la
bymsauve ( 701917 ) writes:
"What happens when the last bitcoin is mined?"
As opposed to trying to make something with unlimited availability have value?
bymoeinvt ( 851793 ) writes:
If you mean that the prices of goods and services in bitcoins will continue to decline, then yes.
Contrary to the endless propaganda being spewed by central bankers, so-called "mainstream" economists and the media, deflation is a good thing, not the bogeyman. In fact, it should be the natural long-term trend, with periodic short term cycles. Technological advancements and productivity gains should be increasing the purchasing power and increasing standards of living for wage earners.
Eroding the purchasing
bydkleinsc ( 563838 ) writes:
Bitcoins sure seem to have had a goal of making sure that a Bitcoin never loses value. Unfortunately, the real world never works that way: Tools and equipment depreciate and have to be maintained. Arable land loses its fertility. A good house becomes a bad house because drug dealers move into the neighborhood. Business investments can go south. Perishable commodities like food spoil. Countries and their currencies fall as surely as they've risen. And Bitcoins only have value as long as people are willing to
byHentes ( 2461350 ) writes:
Currently, bitcoin transfers don't get validated until a new block is mined. Would mining the last coin mean that no new transactions are possible?
byalphabetsoup ( 953829 ) writes:
Fundamentally, a currency is backed by the resources of a country. The US Dollar is backed by the US GDP, the CNY by Chinese GDP, and so on. If US GDP increases, your USDs go up in value. Bitcoin however is backed by nothing. It has no intrinsic value per se, unlike currencies or stocks. It is valuable only because others think it is valuable. If tomorrow everybody thinks 1 Bitcoin is worth 100 USD, they are worth 100 USD. If everybody thinks they are worthless, they are worthless. It is the ultimate deriva
byCajun Hell ( 725246 ) writes:
If bitcoin continues long enough to reach the end-game, wouldn't it create a deflationary spiral?
Hopefully.
Making artificial inflation become impossible, should be one of the design goals of any currency. It's called "learning from mistakes."
Some people will mention mistakes have been made on both sides. So I guess it's a question of which ones are more recent and relevant. Is boom/bust your bogeyman, or is inflation & unbounded government debt your bogeyman?
Personally, I think volatility and
bymagic maverick ( 2615475 ) writes:
I love the idea of a decentralized, non-controllable, virtually anonymous (and truly anonymous with the use of proper laundries), non-government, non-corporation, currency. I love the idea that I can just send a few coins (or parts or whatever) as a tip to anyone else without an intermediary taking a cut. I love that I can use it for true micropayments, microdonations etc.
I support Bitcoins because, while it's not the best possible option, it's the best existing option.
But, I don't like that early adopters are massively rich. I don't like that the current chain is 2GB and rising (hard to download when your Internet connection is rubbish). And there are a few other minor issues with it.
But ultimately, I think that, as a tool to remove power from governments and corporations, it's a good one. It's a good currency to use to be paid in, and to spend, and to save for a rainy day. But, like any other store of wealth or capital, don't put all your eggs in one basket. Just like you don't put all your savings into stocks or gold, don't put them all into Bitcoins.
twitter
facebook
byAnonymous Coward writes:
I don't like that the current chain is 2GB and rising
That was last year. It's 6GB now. [blockchain.info]
byType44Q ( 1233630 ) writes:
It's a good currency to use to be paid in
Perhaps.
and to spend
Definitely!
and to save for a rainy day
Most assuredly not.
bymagic maverick ( 2615475 ) writes:
Why do you think that Bitcoins are not a good currency to save? I have an amount that, while the value against fiat currencies has varied, has generally increased in value. Sounds like a good investment to me. Better than certain stocks at least. And people do put their life savings into stocks. I've only got a small amount of capital in Bitcoins, but that's mainly because I don't want to hand over my details to an exchange. I would rather receive the BTC in exchange for labor done. Which is how I got most
byType44Q ( 1233630 ) writes:
Why do you think that Bitcoins are not a good currency to save?
Because it's yet another fiat currency not based on or backed by anything of actual, tangible value.
Sounds like a good investment to me. Better than certain stocks at least.
I realize that's what all the lemmings have been conditioned by the media and Wall Street to compare things to: "Sir, where would you like this hot poker inserted; down your throat or up your ass?" :p
As part of a varied bundle, I can't see anything wrong with investing in, and using BTC.
It's all relative. Yes, I suppose I'd rather keep my wealth in BTC form, if for no other reason than its deflationary nature, than in stocks or rapidly-dying government fiat... but this baby, [kitco.com] despite T.P.T.B. sup
byyurtinus ( 1590157 ) writes:
Because it's yet another fiat currency not based on or backed by anything of actual, tangible value.
I hear this a lot, but I've yet to be convinced that shiny metals themselves are of actual, tangible value. Speculation and perceived value is what keeps gold prices where they are.
byType44Q ( 1233630 ) writes:
I've yet to be convinced that shiny metals themselves are of actual, tangible value.
LOL! To tell you the truth, I wouldn't be convinced, either... unless, that is, I'd formed my opinions not on the insane silliness spouted by the media but rather on some actual knowledge of history... :p
bypaulsnx2 ( 453081 ) writes:
The value of a Bitcoin (unique to anything not patterned after Bitcoin) is the ability to engage in a transaction without the aid of any centralized third parties.
That is an intrinsic property of Bitcoin. And relatively unique to Bitcoin (and other crypto currencies).
You may not value that property, but it does exist, and some people do value it.
bymeustrus ( 1588597 ) writes:
The only reason a pyramid scheme is bad is because when people realize it's a pyramid scheme, there isn't actually enough money to pay everyone back. Although it's possible to describe bitcoins as a pyramid scheme, the money doesn't disappear the moment people decide to take it back. Although it's also possible to describe Social Security as a pyramid scheme, everybody already knows how it works so there's no surprise and the beneficiaries are poor old people instead of a handful of already-rich bankers. A
byElectricity Likes Me ( 1098643 ) writes:
The only reason a pyramid scheme is bad is because when people realize it's a pyramid scheme, there isn't actually enough money to pay everyone back. Although it's possible to describe bitcoins as a pyramid scheme, the money doesn't disappear the moment people decide to take it back. Although it's also possible to describe Social Security as a pyramid scheme, everybody already knows how it works so there's no surprise and the beneficiaries are poor old people instead of a handful of already-rich bankers. A Ponzi scheme is only bad because it will inevitably come crashing down on the poor fools who fell for it.
This is not how social security works. Social security works on the observation that people should make long-term investments so we don't have the elderly dying in the streets. Social security savings are supposed to be responsibly invested in long term securities, and guaranteed by the government so they give a predictable return (and being the government it means you can negotiate deals which are impossible for any smaller player). The US has simply managed to fuck the concept up since for some reason scr
bymagic maverick ( 2615475 ) writes:
It's not quite anonymous, but it's incredibly easy to make it truly anonymous. And even if it's not truly anonymous, it's still worth an enormous amount.
It prevents corporations from blocking donations to undesirables (e.g. Wikileaks). It allows those who can't otherwise (e.g. if your poor in a third-world country, without a credit card or even a bank account) give microdonations, pay micro-amounts and receive donations and payments (through the use of an online wallet service, at an Internet cafe).
Just as
byNoryungi ( 70322 ) writes:
I have a very conflicting view of Bitcoin. Here are a few of my thoughts on the subject:
1- Crypto: how do we know the bitcoin crypto is really good/really secure? Who has done an audit of the code?
Implications: Cryptography is a very hard subject to tackle. Many an encryption scheme has been cracked and left in tatters, that seemed formidable enough at first sight. If the bitcoin cryptography is cracked, then fake bitcoins can be ''mined'' (meaning: created out of thin air) and the whole currency disappears in a puff of smoke (so to speak).
2- Security: how do we know the bitcoin P2P client is really secure? Who had done an audit of the code? What about the currency transmission protocol?
Implications: if you can't "fake" bitcoins, at least you can intercept them out of thin air between Alice and Bob. What then? The same bitcoin exists twice and that cannot be good for bitcoins.
3- Obscurity: who is *really* the creator of Bitcoin? Why is he hiding behind a pseudonym?
Implications: Yes, being paranoid here - but, really, who is this "Satoshi Nakamoto"? Please read more here: https://en.bitcoin.it/wiki/Satoshi_Nakamoto [bitcoin.it] before criticizing this position. Essentially, and as long as we do not know who "he" is, the whole bitcoin-is-a-secure-digital-currency could be some very elaborate scam... Also, see point #1 and #2 above: I would feel a lot more confident in Bitcoin if the currency had been created by a recognized researcher in cryptography and digital currencies.
4- Economics: Bitcoin is essentially a ''fixed size'' currency... As someone has already pointed out, this has ''interesting'' properties, for various values of ''interesting''. If all bitcoins are mined then what?
Implications: once all bitcoins have been "mined", the only result can be a very serious "inflation" in the value of bitcoins if demand for this currency helds up - the only way to maintain a sustainable level of economic activity would be to raise the price of bitcoins by using it sub-division properties (yes, you can split a Bitcoin into smaller values). So right now 1 BT is, say = US$ 1. But what happens when 0.1 BT = US$1? This would imply staggering inflation in the implied value of Bitcoins and a Ponzi-like scheme, where the very first "miners" of BT would reap a staggering reward, leaving everyone else holding the bag. This could potentially bring a crisis of confidence in Bitcoin, and crash the entire currency, tulip-mania style.
You think I am going too far? There is now a cottage industry dedicated to selling you computing platforms (usually using Nvidia/ATI and OpenCL) to mine more Bitcoins. This, to me, smells of a ''mania'' phase, since, lest we forget, Bitcoins are completely immaterial and are not recognized anywhere except within circles of a dubious nature (Silk Road, anyone?).
In other words, yes, Bitcoin is fascinating in many ways... But I am not 100% sure this thing has been thought out in all of its aspects...
twitter
facebook
byOmnifarious ( 11933 ) writes:
(一)1. Crypto - It has been casually audited by several people. I know several people who've been closely associated with the cypherpunks crown who have looked the protocol over and found it fairly secure. Dan Kaminsky is one of these people. I have also personally audited it. Though I think my opinion is worth far less than the other people I've mentioned. The problem here, of course, is who do you trust to do the audit? Why?
(二)2. Security - This is a good point. They are Open Source projects, so they are available to anyone's inspection. Some flaws have been found in the code, though none that are network breakingly serious (the block size flaw introduced in 0.8.0 is the most notorious here, but that was fairly trivial for the network to handle once it was found). More effort could go on in this area. Again though, who do you trust to do the audit? And why?
(三)3. Obscurity - Who cares who created it? Why does it matter at all? Everything is up for public inspection. There are no hidden secrets here. For all you know, it was created by a respected cryptographer. I can well understand why someone who created a system like Bitcoin would want to remain anonymous. Phil Zimmer was certainly treated extremely poorly for having created PGP.
(四)4. Economics - The deflation (Do not mix that up with inflation. The two effects are opposites and have a very different effect on the economy.) problem is interesting. I have not seen any convincing arguments for whether it's a blessing or a disaster. Everybody is expecting it though, and I suspect that will make it better. And while I think it will significantly hamper the availability of credit, I don't necessarily think it will stamp out investment. But those are questions that are pretty hard to answer a priori. One interesting thing is that if enough people think that deflation is really bad, the protocol can easily be altered to allow for currency creation again. But all the participants have to agree.
Parent
twitter
facebook
byKjella ( 173770 ) writes:
3- Obscurity: who is *really* the creator of Bitcoin? Why is he hiding behind a pseudonym?
Implications: Yes, being paranoid here - but, really, who is this "Satoshi Nakamoto"? Please read more here: https://en.bitcoin.it/wiki/Satoshi_Nakamoto [bitcoin.it] before criticizing this position. Essentially, and as long as we do not know who "he" is, the whole bitcoin-is-a-secure-digital-currency could be some very elaborate scam
Not more "scam" than the person who created the first 1000x1000 all ad, no content page, sold it for $1/pixel and made almost a million dollars in the dotcom age. Assuming he created it I also assume he mined lots of the early BitCoins which would, if it became a huge economy, be worth lots of money. At least, it wouldn't have to be more of a scam than BitCoin already is ;)
byMarrow ( 195242 ) writes:
It is ONLY a medium of exchange. Its considered good or bad depending on whether it can be counterfeited. While I find it an interesting idea to create a monetary system that is independent of any national power, I will not consider "another" unbacked currency. Especially a virtual one.
If you really want to make something, create a currency based on labor contracts. Offer your time for sale: I promise to work 10 hours on whatever legal project you would have me work on. And sell that. The
bydkleinsc ( 563838 ) writes:
Offer your time for sale: I promise to work 10 hours on whatever legal project you would have me work on.
This is basically the Labor Theory of Value, which argues that only work creates value. This formed the basis of the theory of capitalism created by one Karl Marx: The idea was that money was simply one kind of commodity that everyone had collectively decided can be exchanged for the results of other people's work.
For example, if I want a cheese sandwich, I can grow the wheat, thresh it, grind it into flour, add some oats and such that I've also grown, pull up some water from the well, bake some kind of bre
byImprov ( 2467 ) writes:
I am opposed to bitcoin based on reasons other than trust, and those reasons are more important to me.
bymcvos ( 645701 ) writes:
It's basically a kind of pyramid scheme. The people who got in early win if more people enter later. They want us to believe in their virtual coin so that they can be rich.
byErrol backfiring ( 1280012 ) writes:
I just don't understand how anyone can see value in a number. Even if the number is difficult or rare. I mean, the first rock I pick up is likely more unique and more difficult to make, but has it any monetary value? No. For me, Bitcoin is an exercise in economics, and economic theory is the most widely believed fairy tale ever. If economics are involved, nothing makes sense anymore. Hell, even quantum mechanics is logical compared to economics.
byEightbitgnosis ( 1571875 ) writes:
Value in a Crypto Currency comes from the community behind it. The people who mine coins have a strong want to see them used, so the miners readily support fledgling coin based businesses and deals. Further demand comes when a crypto currency becomes available to trade on an exchange it has a chance to gain money from traders and investors.
If this process can grow then the currency will increase in value.
byBCW2 ( 168187 ) writes:
There will be an exchange rate like with any other currency. In every country I have ever been to there is a an "official" exchange rate" and an under the table one that is much better. Why would this be any different? Just another scam in the making.
byEightbitgnosis ( 1571875 ) writes:
https://www.aurumxchange.com/rates [aurumxchange.com]
The exchange rates may not be negligible, but they aren't outrageous
bytom229 ( 1640685 ) writes:
The only medium of exchange that will work is one that is controlled by the government, and audited by the people. So far we haven't had this. We've had various delicate systems controlled by private interests that all go through an ebb and flow of success and failure and I see no reason bitcoin will be any different.
Fixing the monetary issues of today isn't complicated. It doesn't require knee jerk completely polar opposite ideas like bitcoin. It only requires regulation and reform.
1) The central bank
byDogDude ( 805747 ) writes:
The central bank needs to be government controlled and not for profit. It should try to realize a profit like any well run organisation,
You're confused about the purpose of government. Government is not in business to make a profit. That's what private entities do. Government exists to maintain fairness between people and groups, not to profit from them.
byJustNiz ( 692889 ) writes:
>> The only medium of exchange that will work is one that is controlled by the government
Not true unless you are specifically talking about a fiat currency (i.e. one that governments can make out of thin air because it isn't backed by anything, so has no intrinsic value, such as the US dollar).
If you switch to a currency with or based on intrinsic value such as gold, silver, livestock etc. you dont need a government to control it. Such systems have already worked reasonably well for thousands of years
bytom229 ( 1640685 ) writes:
Not true. Nobody said all loans have to come from the government.. just all new money loans. If a brokering organisation with a good relationship with the central bank decides to take a risk on you... that's their decision. They just have to have the money before they lend it to you.
byfemtobyte ( 710429 ) writes:
I think that long-term, unlimited accumulation of wealth is a terrible thing for society. Thus, the better Bitcoin is for this purpose, the less I like it. Ability to save some wealth is useful --- savings for a rainy day, a college fund for the kids, a nest-egg set aside for retirement. But, the ability for a tiny number of people to end up with thousands of lifetimes of others' wages (and the ability to throw that money around to assure that thousands more lifetimes will be spent serving their self-enrich
byHentes ( 2461350 ) writes:
I wouldn't keep any money in bitcoins, but they can be useful for money transfer.
byGameboyRMH ( 1153867 ) writes:
As a store of value: Terrible.
As a medium of exchange: Great!
byPapa Legba ( 192550 ) writes:
If I had a beef with bitcoin is its lack of portability. Now I know many of us a technical bent and in your head you went "what do you mean crazy man?!? I can use it on linux or windows or android! " well you don't understand the larger meta portability I am talking about.
I cannot put a dozen bitcoins into my pocket, hike into some remote area and trade them to the locals for goods and services. I cannot physically move a bitcoin and control who has access to it. I look at things like the bank seizures bei
bySkimTony ( 245337 ) writes:
My biggest complaint about BitCoin is that it could very easily be used as a way for BotNet operators to monetize their exploits. The whole idea behind BitCoins' value (as I understand it) is that they should be worth the same amount as the processing power used to compute them would have cost. However, since the BotNet operators don't pay the costs of processing (those costs, in terms of electricity to run the processors are paid by the owners of the compromised machines), they basically get to steal money
byfahrbot-bot ( 874524 ) writes:
... at eight times the value of Bitcoin.
twitter
facebook
byCaptain_Chaos ( 103843 ) writes:
One thing I'm noticing in this discussion is the fact that apparently in America the concept of sending money directly from one person to the next is considered alien and revolutionary by many, even though you can do that with good old USD too. It's called a bank transfer. I think it's because the use of cheques is still so widespread in the US.
I've never understood that strange preference for paying by cheque. I did an internship in the US, and I could choose between receiving my wages as a cheque, or having it directly deposited into my bank account. I chose the latter, as I am used to that and it makes much more sense. I think I was the only one in the entire company.
I don't get it. Really, a piece of paper? That you can lose? That can be stolen? That's a hassle because you have to physically bring it somewhere to get your money? That can bounce (a really weird concept to me)?
Here in the Netherlands (and certainly most of Europe as well, I don't know about the rest of the world) it's extremely common to pay each other by direct bank transfer. It's how everybody receives their wages and pays their bills. If you go out to dinner together it's common for one person to pay the bill and everybody else to transfer their share to their bank account. It's fast, easy, safe, and secure. With the phone apps every bank has these days it's a matter of seconds to do. There is no "bouncing", once you receive the money it's yours. Very odd that it just doesn't seem to want to catch on in the US.
twitter
facebook
byaccount_deleted ( 4530225 ) writes:
Comment removed based on user account deletion
twitter
facebook
byRob the Bold ( 788862 ) writes:
Including the Euro and the modern Dollar, by the way.
Either the stuff you pay me with is backed by something real... not just belief... or GTFO.
And I believe that if I offered you 1000 USD or EUR, that you would not tell me to GTFO and to come back when I had some zinc or hog bellies.
Parent
twitter
facebook
bytompaulco ( 629533 ) writes:
Including the Euro and the modern Dollar, by the way.
Either the stuff you pay me with is backed by something real... not just belief... or GTFO.
The only thing that matters to you is what YOU believe. You believe in the USD and so do people that you trade with. There are plenty of people out there who do not believe in the USD, believe me, and they won't take it if you offer.
Bitcoin has a not insignificant following, but there are plenty of people who won't take it, and the most important of those people to your decision being you.
bymaxwell demon ( 590494 ) writes:
The only thing that matters to you is what YOU believe.
No. The most important is what the people I want something from believe. If I believe that maple leafs are worthless, but my baker thinks they are worth a lot, and offers me bread for a few of them, then the maple leafs will get a value for me, namely the value that I can get bread for them. And if I don't have a maple tree, and I'm sure the baker will continue to accept them, I'll even be willing to give some things for maple leaves too, as long as I c
byyurtinus ( 1590157 ) writes:
So... how exactly do you get paid?
bysideslash ( 1865434 ) writes:
When you get right down to it, even gold is valuable (to some degree) by convention. It's shiny, scarce, and you can make pretty stuff with it. Whoop-de-doo.
bydanbert8 ( 1024253 ) writes:
It's valuable because you can't make more of it. You can find more, but it's a long, expensive process, and it get longer and more expensive the more you find. Kind of like Bitcoins actually...
byV for Vendetta ( 1204898 ) writes:
It's valuable because you can't make more of it.
Stars 'make gold' all the time. Where do you think our gold stems from?
bydanbert8 ( 1024253 ) writes:
Are you a star? I didn't say it wasn't possible to make more of it, but that we currently can't. If modern alchemy becomes possible, gold will be worthless as a currency.
byhedwards ( 940851 ) writes:
Gold is already worthless as a currency. It's prone to speculation and the additional supply you have coming onto the market at any given time is minimal.
What's more, the industrial applications for it is somewhat limited and most of the value presently comes from people hoarding it. In other words, gold has very little real value to it, and when times change and it goes out of fashion again, it will be right back where it was prior to the recent run up.
Then there's the issue of the assaying you need to do
byTheRaven64 ( 641858 ) writes:
That doesn't make it valuable. There are lots of things more scarce than gold that are less valuable. Someone has to actually want it for it to have value. In the case of gold, there is demand from jewellery makers for it, but also from electronics because it is good for electrical contacts (conductive, doesn't corrode).
bymcvos ( 645701 ) writes:
Its intrinsic scarcity makes it suitable for legal tender, but it doesn't give it intrinsic value. It's still only as valuable as people believe it to be.
byDuckDodgers ( 541817 ) writes:
It's only valuable if people want it, though. If chalk became the next great thing in jewelry, and gold was declared tacky and hideous, you'd be left with a worthless pile of yellow rocks.
bymcvos ( 645701 ) writes:
Gold is just a shiny metal. Currencies are backed by economies, by work, labour, products, wealth. I think the latter has more intrinsic value than the former.
Parent
twitter
facebook
bysideslash ( 1865434 ) writes:
Which would you rather own when your economy is experiencing hyperinflation? At that point your fallacy becomes obvious: gold _is_ something, whereas fiat currencies are merely temporarily _backed by_ something. I agree with you in dissing gold as a mere "shiny metal"; however as long as most of the world disagrees, both of us would be wise to respect gold's highly superior intrinsic value.
bymcvos ( 645701 ) writes:
Which would you rather own when your economy is experiencing hyperinflation? At that point your fallacy becomes obvious: gold _is_ something, whereas fiat currencies are merely temporarily _backed by_ something. I agree with you in dissing gold as a mere "shiny metal"; however as long as most of the world disagrees, both of us would be wise to respect gold's highly superior intrinsic value.
That value is not intrinsic, because as you say, it's only because most of the most believes it has value, that it does have that value. When people stop believing that, it stops having value.
When society collapses completely, which would you rather own: gold, or a piece of land? Land has intrinsic value. Gold doesn't.
bygeekoid ( 135745 ) writes:
"Which would you rather own when your economy is experiencing hyperinflation? "
a good regulatory body is what In would rather have.
regardless of the currency base.
Of course currency based o gold is high subjective to other forces. It also limits growth. It's called the "Gilded cage" for a reason.
bykenaaker ( 774785 ) writes:
If I have food, water, a warm place to sleep, toilet paper, whiskey, and a means of defense and you have your stack of gold and nothing else who has actual wealth? Gold is worth less than toilet paper in most circumstances. Currency is just a way to make bartering easier and less confusing.
bykenaaker ( 774785 ) writes:
Fine, eat your gold, burn it to keep warm, use it to wipe your bottom. 'Cause I'm not willing to trade anything I have for your heavy, shiny, junk.
byElectricity Likes Me ( 1098643 ) writes:
And in a desert gold a liter of water is worth more then all the gold you have after 3 days.
In fact if I have a big functioning economy, and all you have is a gold mine, then your gold is actually worthless. And you'll be really screwed if my people's culture say, viewed shiny things as senseless opulence.
It's a commodity.
Parent
twitter
facebook
bysylvandb ( 308927 ) writes:
read like the crap from political campaigns or HR consultants?.... opinions, not the basis for an academic study.
Actually that's the point. Opinions are very suitable for academic study, and discovering opinions is the primary purpose of polling.
You wouldn't do a poll to discover facts of physics or any other natural law. You poll to discover what people think, i.e. their opinions.
bypaulsnx2 ( 453081 ) writes:
If I could demonstrate a Magic Spell to you, would that Spell have worth? What if it could allow you to moving any number (or fraction) of coins from your possession to anyone else in the world without the help of any centralized third party?
Would that have value?
Because that is what Bitcoin is. The ability to engage in transactions without involving any centralized third party. You might not consider that important, but some people do. What is Paypal worth? VISA? MasterCard? American Express? Hint:
byDanielRavenNest ( 107550 ) writes:
Since I am mining right now with my graphics card in the background, I will try to explain.
The bitcoin system has at it's core a database that records transactions between accounts. Transactions are grouped into sets called blocks, and they are chained together by using the hash of the previous block as part of generating the next block. We want the history of transactions to be hard to tamper with, including adding new, possibly spurious, transactions. Therefore to record a new block and have it be accepted by the network, a difficult condition needs to be met. Specifically, a set of new transactions, the hash of the previous block, and an unknown number (nonce) must result in a hash value below a value set by the software
Here's a recent block: http://blockexplorer.com/b/228196 [blockexplorer.com] You can see the hash value has a bunch of leading zeroes, and the Nonce (834654508) is a fairly high number. The only known way to generate a suitably low hash is to try different nonces till you find one that works. Anyone wanting to include a spurious transaction would have to find the right number faster than the whole rest of the network. This is extremely difficult. You will notice the first transaction listed says "Generation: 25 + 0.37485 total fees". Whoever found the right nonce for this block gets to send 25 newly created bitcoins to themselves, plus whatever transaction fees the other transactions in the block included. This is payment for the work done in maintaining a collectively hard to forge account history for everyone.
The Top500 supercomputer list (http://www.top500.org/statistics/perfdevel/) has a combined power of 162 Petaflops. The bitcoin network hash rate (http://bitcoinwatch.com/) is 630 Petaflops, about 4 times more. It's that massive level of computing power that makes the transaction history tamper-proof. The security of the accounts history, in turn, gives people confidence to use the bitcoin network to buy and sell stuff.
So to answer your questions directly,
1) They are not "pulled from the air", they are a reward for the difficult task of securing the database, which collectively other people are willing to grant to get the security. The validity of a hash is that it meets a difficult mathematical test, but is easy for anyone to check once found, by simply doing a hash of the raw block data and seeing it matches the announced value. If a block fails that check, it gets rejected by everyone and not added to the copies of the block chain.
2) It's not cheating, it's payment for useful and necessary work.
Parent
twitter
facebook
There may be more comments in this discussion. Without JavaScript enabled, you might want to turn on Classic Discussion System in your preferences instead.
Slashdot
on
●
●
of loaded
●
Submit Story
If A = B and B = C, then A = C, except where void or prohibited by law.
-- Roy Santoro
●FAQ
●Story Archive
●Hall of Fame
●Advertising
●Terms
●Privacy Statement
●About
●Feedback
●Mobile View
●Blog
Do Not Sell or Share My Personal Information
Copyright © 2026 Slashdot Media. All Rights Reserved.
×
Close
Working...
Working...