The value of Bitcoin

….it’s most certainly been interesting watching every single scam, fraud and oopsie! moment in humanity’s monetary history being played out at warp speed.

35 thoughts on “The value of Bitcoin”

  1. With out central banks any virtual currency is inherently inflationary because your giving a printing presses to everyone and no way to control their output (“mining” is not the same as forced limited money supply”). Just think what will happen when everyone has their own personal virtual currency (which is where the virtual currency world is heading).

  2. The issue isn’t whether you can create a currency. It’s getting other people to accept it that’s the problem.

  3. @ian that’s why it is inflationary because there is always competition on who will accept it so you have offer more of the currency in trade for an other currency. It is the same problem the Ruble faced in the early 90’s or the Mark did in the 20’s. The problem here though is since there is no regulation on a floor or ceiling on the exchange rate it will get worse and worse. Yet people who have already bought bitcoins will need to off load them and then again creating the inflationary pressure. There are already people who will accept bitcoin only (they will really be screwed, but in their attempt to get value for the bitcoin they will devalue the currencies they trade with). I am sure Tim can explain more.

  4. What happens if you get your free toaster and crack it open to disconnect the bitcoin miner? It could be CueCat all over again.

  5. @matt no need for that just get a free account at AWS or Google cloud and mine to your hearts content on their dime, if it is not going fast enough create some sock puppets.

  6. I haven’t been keeping up with Bitcoin recently. Is it still unspendable on anything but internet drugs and nonce porn?

  7. Here is a list of people that accept it that do not fall into that catagory:

    Tesla (the car company)
    Victoria’s Secret
    The IRS (for everything but taxes)
    The republican national committee

    The funniest one on the list is Amazon because you can use bitcoins to pay for your mining rig on AWS and actually make a profit on it due to the price war between AWS, RatShit (aka RackSpace) [indirect competitor of my company since they use OpenStack as their cloud platform and we are he makers of a competiting one PetiteCloud]) and Google cloud.

  8. @Aryeh – I thought that a “feature” of bitcoin was that it became more difficult to mine as more and more are mined, and there is an upper limit to the number of bitcoins that can exist.

  9. Actually it doesn’t and thus there is no upper limit on what you can mine…. have fun though convincing the bitcoin fanatics of that fact (it is a flaw in how the authentication works and there is no way to fix it with a decentralized scheme)

  10. @gunker let me be more specific in there might be a limit on the “currency” known as “bitcoin” but there is no limit on how many such currencies can exist and if they all use the same decenteralized scheme I just make a new currency and convince some idiot to accept it (call it something like “bytcoin” so to confuse people [in reality you need to make it a little crafter becuase your fooling a machine not a person but using a cryptographic hash that is very close to bitcoin you can inject fake coins and before anyone catches on you close up shop and leave no trace of where that came from…. I have now counterfeited bitcoin instead of making a seperate currency)…. that is only one method an other method is use the amount of time it takes to verify the coin (not instant) to inject many copies of the same coin to different people and same result because you take delivery of your purchase before they can reject it

  11. There is absolutely a limit to the number of Bitcoins. 21 Million in total if memory serves, over a 20 year mining life.

    Are there any exchanges left now or did they all turn out to be scammers?

  12. There are still plenty of exchanges left and like I said since bitcoin is based on secure hashes only they can always be faked (look up one time pad vs. public key for why). You see new exchanges everyday for example Goldman Sachs just invested in/started one

  13. Since Tim has this setup not to allow links take a look my twitter account for a tweet showing two links that explain the problem in more detail (@sarek1024)

  14. I don’t want to mine bitcoins. I’m talking about getting the free toaster, disconnecting and throwing away the asic part and keeping the toaster.

  15. “@gunker let me be more specific in there might be a limit on the “currency” known as “bitcoin” but there is no limit on how many such currencies can exist and if they all use the same decenteralized scheme I just make a new currency and convince some idiot to accept it (call it something like “bytcoin” so to confuse people”

    And what is the difference between that and what the political shite do? Apart from the extra added violence and intimidation.

  16. @ecks the difference is that there is at least some centralized control on the amount of money with a decentralized thing like bitcoin there is effectively none… anyone can make a new currency and inject it into the money supply… in the US that was tried before the Fed and the result was so messed up the Fed had to be created… perhaps you forget this because you have had the BoE for so long there is no memory of what happens without a central bank

  17. That didn’t happen before the Fed. In fact, there was slight deflation prior to the Fed being created.

  18. You said before the fed you didn’t specify the time frame so I used the widest one and remember that is also during our industrial revolution here goes a graph for the same type of economic growth in the UK (your industrial revolution):

  19. This is actually a great application for solar panels. All the usual arguments for why they are a bloody useless waste of money (unreliable output, don’t work at night, need massive storage if you’re going to maintain a normal lifestyle) go away. What the hell do you care if your Bitcoin mining rig shuts down because the battery runs out? It’s not like not being able to switch a light on or run the washing machine. In the meantime, you’re not paying for the electricity aside from the capital (and maintenance) cost, And for a couple of dinky little ASICs that could be made quite small.

    Hmmm, I have a couple of panels not doing anything right now. Might be worth a try.

  20. Inflation is a feature and consequence of central banking systems. The inflationary 20th Century is the Central Bank century.

  21. Aryeh Friedman, you are Keith Hudson and I claim my £5!

    (Yes I do know that a know-nothing septic teenager will not get either reference!)

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