Bitcoin price tumbles after warning from Chinese central bank
http://www.theguardian.com/technology/2 ... nk-warning
BITCOIN as an alternative to regular currency
Greenspan Says Bitcoin a Bubble Without Intrinsic Currency Value
http://www.bloomberg.com/news/2013-12-0 ... value.html
http://www.bloomberg.com/news/2013-12-0 ... value.html
Banks have a vested interest in opposing Bitcoins, because Bitcoin users can transfer money internationally without paying bank fees. The price hasn't fallen much...still over $US 1000.Euler wrote:Bitcoin price tumbles after warning from Chinese central bank
http://www.theguardian.com/technology/2 ... nk-warning
I think it's hard to say what's going to happen over the long-term. I agree that the current price is ridiculous, I won't buy now, but if the price were to fall back to a more reasonable level in line with the earlier trend (say 1/10th current value - or around $US 100), it might be worth buying some? I do like the idea of a decentralized universal cyber-currency.Euler wrote:The problem with Bitcoins is that they are thin air, they have no really investment value at all. So there is not yield to speak of and over their value of ultility there is not real value at all. But as with all bubbles value goes out the window as people buy them in the hope of offloading them to some other fool for a slightly higher price.
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steven1976
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I don't even understand where these bitcoins come from but surely if something isn't governed it will lead to being massively manipulated as is what is probably happening at the moment. Is it possible for the creator to just instantly create or print a trillion new bitcoins? How many are currently in circulation?
Ultimately that is why bitcoin will fail as it has nothing underwriting it. If you issue a currency you have to back it up somehow. When the US issues debt it has to raise tax to pay off that debt, which is issued as an interchangeable currency. Bitcoins are just a figment of somebodies imagination and are only worth what people will pay for them.
Steven - there's a log of issued bitcoins. The final amount is capped at 21 billion bitcoins, from memory, something finite anyway.steven1976 wrote:I don't even understand where these bitcoins come from but surely if something isn't governed it will lead to being massively manipulated as is what is probably happening at the moment. Is it possible for the creator to just instantly create or print a trillion new bitcoins? How many are currently in circulation?
After they're all issued no more bitcoins will circulate. Therefore bitcoins in circulation value will increase over time.
They come from users completing (ever more difficult) puzzles - ie, you have to put in effort to get bitcoins. Same as real world where you have to put in effort to get money.
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steven1976
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Hi kelpie
Thanks for explanation.
So where do I sign up for these puzzles? Is there a job center as such. If I was to spend say 35 hrs next week working at it would I get half a bit coin?
It just has pump and dump written all over it in my eyes. The only thing that gives it any substance is governments are acknowledging it. However, I'd imagine there will be a lot of people selling bitcoins that don't exisit in the near future at prices they bought in at 100 dollars but want out at 500 dollars even though price is 1000 if they can hold onto them for 3 months. Seems an easy sale.
I am genuinely interested in how and what time of work/puzzles are done to earn them?
Thanks for explanation.
So where do I sign up for these puzzles? Is there a job center as such. If I was to spend say 35 hrs next week working at it would I get half a bit coin?
It just has pump and dump written all over it in my eyes. The only thing that gives it any substance is governments are acknowledging it. However, I'd imagine there will be a lot of people selling bitcoins that don't exisit in the near future at prices they bought in at 100 dollars but want out at 500 dollars even though price is 1000 if they can hold onto them for 3 months. Seems an easy sale.
I am genuinely interested in how and what time of work/puzzles are done to earn them?
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steven1976
- Posts: 1744
- Joined: Tue Jan 19, 2010 6:28 am
Its still got me. I'm sticking with greenbacks for now before sending invoices asking for bitcoins.
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Will Sharpe
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Here's a reasonable non techie attempt
http://blog.zorinaq.com/?e=66
Snippets from the above:
How are the coins created?
With gold, miners have to perform a lot of work to discover gold deposits in the planet's crust. Bitcoin emulates gold here again: "Bitcoin miners" run specialized software on high-powered computers and solve complex mathematical puzzles. The difficulty of the puzzles ensures that coins are slowly introduced in the system over time, and are randomly distributed to its users. (Depending on your electrical costs, mining may be a profitable activity.) However the vast majority of Bitcoin users acquire them by simply purchasing them from other users or from exchange markets, or by trading goods or services with users owning bitcoins.
If the coins are stored on my device, what prevents me from making copies, counterfeiting them?
The entire network uniquely identifies all coins and tracks all transfers. For example a transfer is recorded like this, coming from opaque addresses, going to other opaque addresses. (Note that this makes Bitcoin not fully anonymous, but at least pseudo anonymous, because it can be hard to figure out who owns which addresses as the Bitcoin software creates new addresses for every transfer and users are encouraged to not re-use them.) If you copy coins and attempt to spend them twice, the network will detect the "double-spend" and reject it.
Why do Bitcoins have value? What backs Bitcoin?
Bitcoin is like gold: nothing backs it. The only reason a currency or commodity has value is because people are willing to trade goods or services for it. Initially, Bitcoin was perceived as having no value. Then early-adopters started to grasp its potential and invested in it. For example, one of the first transactions was two pizzas that famously sold for 10000 Bitcoins. This was a risky trade because Bitcoins were worth virtually nothing at the time. Nonetheless, this trade and subsequent ones helped "bootstrap" the currency, because people knew there would be at least one guy willing to trade pizzas for Bitcoins. Trade and value grew step by step over time. Fast-forward to the present and there is today a thriving community of merchants accepting Bitcoin. This community alone is what gives bitcoins value.
http://blog.zorinaq.com/?e=66
Snippets from the above:
How are the coins created?
With gold, miners have to perform a lot of work to discover gold deposits in the planet's crust. Bitcoin emulates gold here again: "Bitcoin miners" run specialized software on high-powered computers and solve complex mathematical puzzles. The difficulty of the puzzles ensures that coins are slowly introduced in the system over time, and are randomly distributed to its users. (Depending on your electrical costs, mining may be a profitable activity.) However the vast majority of Bitcoin users acquire them by simply purchasing them from other users or from exchange markets, or by trading goods or services with users owning bitcoins.
If the coins are stored on my device, what prevents me from making copies, counterfeiting them?
The entire network uniquely identifies all coins and tracks all transfers. For example a transfer is recorded like this, coming from opaque addresses, going to other opaque addresses. (Note that this makes Bitcoin not fully anonymous, but at least pseudo anonymous, because it can be hard to figure out who owns which addresses as the Bitcoin software creates new addresses for every transfer and users are encouraged to not re-use them.) If you copy coins and attempt to spend them twice, the network will detect the "double-spend" and reject it.
Why do Bitcoins have value? What backs Bitcoin?
Bitcoin is like gold: nothing backs it. The only reason a currency or commodity has value is because people are willing to trade goods or services for it. Initially, Bitcoin was perceived as having no value. Then early-adopters started to grasp its potential and invested in it. For example, one of the first transactions was two pizzas that famously sold for 10000 Bitcoins. This was a risky trade because Bitcoins were worth virtually nothing at the time. Nonetheless, this trade and subsequent ones helped "bootstrap" the currency, because people knew there would be at least one guy willing to trade pizzas for Bitcoins. Trade and value grew step by step over time. Fast-forward to the present and there is today a thriving community of merchants accepting Bitcoin. This community alone is what gives bitcoins value.
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Will Sharpe
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- Location: Yes
From the same source:jimrobo wrote:so there is a centralized network centre that tracks and verifies bitcoin ownership and locations.
This is my point though. If this system is compromised the entire system is worthless??
Payments are sent directly from one party to another without going through a financial institution, similarly to how cash or gold can be handed directly to someone.
You do so by sending them from your computer, to the recipient's computer, through the Bitcoin network (which is nothing more than other computers running Bitcoin).
Since no one can realistically prevent a computer from getting Internet access one way or another, no one can regulate or block transactions (eg. oppressive governments financially repressing activists.)
Finally, there is no financial institution, or bank, or company, operating Bitcoin, just like there is no company in charge of "operating gold". There is no Internet server to shut down to terminate Bitcoin. It exists merely as an application running on your computer, which communicates with other Bitcoin users over the Internet.
This "mesh" Bitcoin network is called a peer-to-peer network, and this design makes it effectively indestructible, as long as the medium of communication (Internet) exists.