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General discussion (archive)Bitcoin: is anyone here mining or earning it?(83 posts)(83 posts)
(83 posts)
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This is my favourite topic
Posted April 05, 2014
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DarrkPhoenix: Actually bitcoin does somewhat resemble a pyramid scheme. This is because 1) there's a hard limit on the maximum number of bitcoins there can be and 2) the value of a bitcoin is basically the amount of economic activity bitcoin is being used to process (the size of the bitcoin economy) divided by the number of bitcoins. The more people using bitcoin the larger the bitcoin economy, and hence the more each bitcoin is worth (due to the limit on how many there are). The people who see bitcoin as an investment need more people to start using bitcoin to pump more actual money into the system and drive up the value of bitcoins. However, if people stop buying in then the value stagnates or drops, and if people start trying to cash out then the whole thing starts to collapse. Ultimately this can look like either a speculation bubble or a pyramide scheme, depending on how much credit you want to give the people who got in at the very beginning.
To me it looks like speculation bubble.

The idea is not bad though, might be other form of cryptocoin or similar might stick around for longer time. Maybe.

As for the maximum number of BTC, a there is apparently hardcap, but if ive understood it right - its going to take quite awhile to be actually a problem. Also i think it could be change as well. Anyways, its more likely BTC is going to run into far bigger problems than that.

Oh i think BTC are also disappearing all the time as people simple misplace them or whatever.
Posted April 05, 2014
Quite simply, Bitcoins are a joke. There's literally no product in existence that can be bought with Bitcoins and nothing else, so they have no reason to exist as a currency. That right there clinches it for me and most others. However, that's not even the worst of it, they're unstable, easy to steal, every transaction is recorded and made publicly available and cannot be used for anything offline. Mining is also worthless these days as well, since any revenue you get is less than the cost of the power to run your mining rig. In fact, this last one is a lot more significant than people seem to realise. Processing power from Bitcoin miners is the only thing tracking and recording all the transactions and therefore ensuring that people aren't counterfeiting them. Once people realise that it's physically impossible to make money by mining bitcoins, well, needless to say it's going to crash and/or burn.
Posted April 05, 2014
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Hesusio: Once people realise that it's physically impossible to make money by mining bitcoins, well, needless to say it's going to crash and/or burn.
sounds like stocks to me :=)
Posted April 05, 2014
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cmdr_flashheart: GOG should start its own cryptocurrency ^^
DRM-free currency! You can make as many copies as you like! Just don't give the copies to anyone else, please.
Posted April 05, 2014
I just found out monkey coins are real!

http://www.monkey-coin.com/
Posted April 05, 2014
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iippo: I mean who would have thought someone was going to be buying them for hundreds of dollars?
This is the most ridiculous thing anyway! You have 450 US Dollar of which you can buy whatever you want. Why would you want to buy a Bitcoin with your money? To pay for WordPress themes? You can get lots of themes for 450 Dollar! What else can you do with Bitcoins? You can't pay your real life bills with Bitcoins. All you can do is pay for digital "goods". Things that don't have any real value (Not saying that creators of WordPress themes are making worthless crap! But their product is there anyway. They can't make a loss because of people paying with Bitcoins).

Money = Buy whatever you want
Bitcoin = Y gawk.com no accept ma bitcoinz?

Honestly... Every freakin store accepts money. Why would you want to spend your money on something that limits the posibilities on how you can use your "money"? I don't get it.

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iippo: The practical value, well its different thing again. For anyone who has no issues about using credit card the practical value of cryptocurrency isnt atm really huge.
I don't like using my credit card. How many digital stores got hacked in the last years? How often do you hear to check cash dispensers for conspicuous devices (especially in zones with lots of tourists - I live in one, so I hear this a lot)? My card got disabled two times because it was used in a store (physical stores!) where lots of data got stolen. I have no idea how you can grab card details from those machines at the cash register...

But there are alternatives to cards. Cash. Yeah, sounds funny, but you can still pay with cash. And on the internet? Use "cash" as well. GOG and Steam are accepting Paysafecard already. Paysafecard is pretty simple. You go in a store/post office/gas station (whoever sells Paysafecard in your country), put your money on the desk and you get a code. You can use this code to pay on websites who accept Paysafecard. Simple. And safe! Go, hack Paysafecard. Steal my code. Have fun with my 6 Euro of remaining balance -.-

Bitcoin has an idealistic value for some people. They love that governments can't control Bitcoins, yes, that Bitcoin isn't part of "the system". But exactly this is the problem. Traders buy Bitcoins, hoard them and artificially increase their value. They'll sell them whenever they think they've reached their maximum. This will evaporate millions of dollars. And there's no government to do anything about it. Bitcoin is the pinnacle of a free market. The wet dream of every speculator. Free money for a few people, gained from the dreams of thousands of enthusiasts. Bitcoin will be killed by its own "advantages". edit - Yes, you'll still have your 10 Bitcoins with a worth of 10 Bitcoins. But you won't get 20 WordPress templates for 1 Bitcoin. You'll get 1 template for 20 Bitcoins xP
Post edited April 05, 2014 by real.geizterfahr
Posted April 05, 2014
As far as I know it's easier (once you know how) to pay for something with bitcoin regardless of where you are as long as you have an internet connection, that might come on in handy in case you're in a country that has trouble with international transactions. It's also possible there's also possible there's no extra fees aside from the one you can optionally add to make the transaction to be completed faster (its priority is increased for miners). I read a page on reddit where an entrepreneur explained why he chose to have bitcoin as a possible payment system and why it was useful both for him as a merchant and for customers. Unfortunately I can't find the URL, I'll post it if I find it.

The point is it's an alternative payment system and yes, anyone who doesn't understand why it's an advantage that a government isn't in control should look up how it actually works instead of assuming an opinion on the matter. I believe the original paper is fairly easy to understand even if you lack technical experience or knowledge.
Posted April 05, 2014
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iippo: I mean who would have thought someone was going to be buying them for hundreds of dollars?
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real.geizterfahr: This is the most ridiculous thing anyway! You have 450 US Dollar of which you can buy whatever you want. Why would you want to buy a Bitcoin with your money?
The people who do this see it as investment and expect their price rise, just as with stock.

So like discussed above, its really atm heading for/is speculative bubble.

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real.geizterfahr: Traders buy Bitcoins, hoard them and artificially increase their value. They'll sell them whenever they think they've reached their maximum. This will evaporate millions of dollars. And there's no government to do anything about it. Bitcoin is the pinnacle of a free market. The wet dream of every speculator. Free money for a few people, gained from the dreams of thousands of enthusiasts.
The same i just wrote, its not exactly stocks - but people (investors) treat them in similar fashion. With hype comes the interest and with interest comes rise in price. Atleast momentarily. Note that even if BTC worth has come "crashingly down" - its still ridiculously high compared to worth near zero when it all started. Although i doubt many have saved those BTC anymore :)

But to actually work, BTC should be and stay +- same value as say USD or some other common currency.
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monkeydelarge: I just found out monkey coins are real!

http://www.monkey-coin.com/
i just read bananas are in danger of becoming extinct. Suppose you ahve to replace them with something -_-
Post edited April 05, 2014 by iippo
Posted April 05, 2014
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Hesusio: Once people realise that it's physically impossible to make money by mining bitcoins, well, needless to say it's going to crash and/or burn.
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iippo: sounds like stocks to me :=)
Oh, but it's so much more potent than a simple stock crash. Loss of investor confidence is one thing and can be recovered from. Loss of infrastructure needed to support basic functionality, on the other hand, is going to make a stock crash look like a minor hiccup.
Posted April 05, 2014
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real.geizterfahr: This is the most ridiculous thing anyway! You have 450 US Dollar of which you can buy whatever you want. Why would you want to buy a Bitcoin with your money?
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iippo: The people who do this see it as investment and expect their price rise, just as with stock.

So like discussed above, its really atm heading for/is speculative bubble.

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real.geizterfahr: Traders buy Bitcoins, hoard them and artificially increase their value. They'll sell them whenever they think they've reached their maximum. This will evaporate millions of dollars. And there's no government to do anything about it. Bitcoin is the pinnacle of a free market. The wet dream of every speculator. Free money for a few people, gained from the dreams of thousands of enthusiasts.
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iippo: The same i just wrote, its not exactly stocks - but people (investors) treat them in similar fashion. With hype comes the interest and with interest comes rise in price. Atleast momentarily. Note that even if BTC worth has come "crashingly down" - its still ridiculously high compared to worth near zero when it all started. Although i doubt many have saved those BTC anymore :)

But to actually work, BTC should be and stay +- same value as say USD or some other common currency.
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monkeydelarge: I just found out monkey coins are real!

http://www.monkey-coin.com/
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iippo: i just read bananas are in danger of becoming extinct. Suppose you ahve to replace them with something -_-
NOOOOOOO!
Post edited April 05, 2014 by monkeydelarge
Posted April 05, 2014
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monkeydelarge: Yes, I see my mistake now. And his(or her) mistake. Intrinsic means real in the English dictionary. But when people speak of intrinsic value, they mean money that isn't backed by a government etc. For example, gold has intrinsic value because it's gold. It doesn't need a government to back it up. So I misused the words "intrinsic value". The author of that article misused these words too. The U.S. dollar is real money unlike crypto currency but has no "intrinsic value". Feel better now? Want an imaginary cookie for pointing out my mistake? How about 100 monkeycoins?
If you have a bitcoin, you can exchange it, right now, for $450. So, right now, it is as valuable as $450.

Price is the only usable assessment of value we have at the moment. What you own is only worth what someone else is willing and able to exchange for it. Certainly, an object like a loaf of bread, unlike currency, has a usefulness as something other than a means of exchange. But still, the only usable value we can assign to it is the price someone will pay for it.

What I think that you (and others) mean when they describe bitcoins as worthless, is that they do not have confidence that bitcoins will maintain this price. The history of the dollar is such that people (understandably) have great confidence that it will maintain its value. But the value of a dollar is no more intrinsic or real than that of a bitcoin.

edit:
I'd like to read a neat answer to HereForTheBeer's question, so "seconded", I guess?
Post edited April 05, 2014 by grimwerk
Posted April 05, 2014
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monkeydelarge: Yes, I see my mistake now. And his(or her) mistake. Intrinsic means real in the English dictionary. But when people speak of intrinsic value, they mean money that isn't backed by a government etc. For example, gold has intrinsic value because it's gold. It doesn't need a government to back it up. So I misused the words "intrinsic value". The author of that article misused these words too. The U.S. dollar is real money unlike crypto currency but has no "intrinsic value". Feel better now? Want an imaginary cookie for pointing out my mistake? How about 100 monkeycoins?
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grimwerk: If you have a bitcoin, you can exchange it, right now, for $450. So, right now, it is as valuable as $450.

Price is the only usable assessment of value we have at the moment. What you own is only worth what someone else is willing and able to exchange for it. Certainly, an object like a loaf of bread, unlike currency, has a usefulness as something other than a means of exchange. But still, the only usable value we can assign to it is the price someone will pay for it.

What I think that you (and others) mean when they describe bitcoins as worthless, is that they do not have confidence that bitcoins will maintain this price. The history of the dollar is such that people (understandably) have great confidence that it will maintain its value. But the value of a dollar is no more intrinsic or real than that of a bitcoin.

edit:
I'd like to read a neat answer to HereForTheBeer's question, so "seconded", I guess?
Yes, what i mean by "worthless" is that it's not real money. I don't have confidence in crypto currency. But I know that it's not worth nothing because you can trade it away for real money. In this world, nothing is really worth nothing. Like I said earlier, if you find the right people, you could probably sell the rocks in your backyard for real money. A long time ago, some people used to make money from selling feces.
Posted April 05, 2014
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HereForTheBeer: I don't know. I always figured that the point of work was to accomplish something useful, for which one is compensated in currency or barter. However, I'm just not seeing the 'useful' part of the bitcoin equation. If I build a fence and you pay me $100, then you get a fence and I get $100. If I "mine" a bitcoin, I get a bitcoin and there's no other side to the equation. Thus, I don't see that there is anything to give it value.
Now that i think of it, when talking about cryptocurrencies people tend to bring up that "something from nothing" argument.

Well, i hope everyone know "real money" is also created from nothing by banks.. One could say that for example BTC's creation is far more transparent and systematic than any "real" currency.

Gold standard of USD ended in 1976.
Posted April 05, 2014
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cmdr_flashheart: GOG should start its own cryptocurrency ^^

edit: as for the OP, I haven't had any dealings with bitcoin, so can't say.
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ktchong: You're missing out a coming boom that's gonna make a lot of people very rich. It'll likely crash in the end, but then you will already have cashed out.

As it is now, seems like most people are still unfamiliar with Bitcoin.
I've got some nice property down in Florida for you.
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HereForTheBeer: I don't know. I always figured that the point of work was to accomplish something useful, for which one is compensated in currency or barter. However, I'm just not seeing the 'useful' part of the bitcoin equation. If I build a fence and you pay me $100, then you get a fence and I get $100. If I "mine" a bitcoin, I get a bitcoin and there's no other side to the equation. Thus, I don't see that there is anything to give it value.
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iippo: Now that i think of it, when talking about cryptocurrencies people tend to bring up that "something from nothing" argument.

Well, i hope everyone know "real money" is also created from nothing by banks.. One could say that for example BTC's creation is far more transparent and systematic than any "real" currency.

Gold standard of USD ended in 1976.
The gold standard worked fine until the rate at which the economy started growing greatly outstripped our ability to mine more of it. If we hadn't abandoned the gold standard we would have had serious issues with deflationary pressure. The problem here is that cryptop currencies aren't guaranteed to be taken by anybody. If I have USD, then I know that I can settle an debt in the US using it without having to convert to something else. I can also pay my taxes with it, so I know that I will be able to spend it.

Crypto currencies are even less useful to me than euro or RMB are, because at least Euro and RMB can be converted at the bank, assuming the note isn't counterfeit.

In the future, crypto currencies may become more popular, but they are heavily dependent on shady exchanges at this point and mainly a form of Ponzi scheme.
Post edited April 05, 2014 by hedwards
Posted April 05, 2014
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ktchong: You're missing out a coming boom that's gonna make a lot of people very rich. It'll likely crash in the end, but then you will already have cashed out.

As it is now, seems like most people are still unfamiliar with Bitcoin.
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hedwards: I've got some nice property down in Florida for you.
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iippo: Now that i think of it, when talking about cryptocurrencies people tend to bring up that "something from nothing" argument.

Well, i hope everyone know "real money" is also created from nothing by banks.. One could say that for example BTC's creation is far more transparent and systematic than any "real" currency.

Gold standard of USD ended in 1976.
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hedwards: The gold standard worked fine until the rate at which the economy started growing greatly outstripped our ability to mine more of it. If we hadn't abandoned the gold standard we would have had serious issues with deflationary pressure. The problem here is that cryptop currencies aren't guaranteed to be taken by anybody. If I have USD, then I know that I can settle an debt in the US using it without having to convert to something else. I can also pay my taxes with it, so I know that I will be able to spend it.

Crypto currencies are even less useful to me than euro or RMB are, because at least Euro and RMB can be converted at the bank, assuming the note isn't counterfeit.

In the future, crypto currencies may become more popular, but they are heavily dependent on shady exchanges at this point and mainly a form of Ponzi scheme.
yeah i agree with you on all the points here.

Just want to say it out loud, that at the very core the "real" money isnt all that different. We are simply using them because enough people trust in them. If people believed in squirrel skins id be buying my milk and bread using them, that would however make buying GOG games rather tricky.

"Trust" is the keyword here, for both current real currencies and crypto as well.

btw it would be interesting to know, that if the gold standard was still here, would the world economy have such debt problems as we have today. ...they are result of cheap loan after all.
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This is my favourite topic
Community
General discussion (archive)Bitcoin: is anyone here mining or earning it?(83 posts)(83 posts)
(83 posts)