The Future of Money and Historical Perspective

[dmc]

Is there a dollar price for bitcoin below which "mining" becomes a losing proposition?

i don't get the "mining". Is this where you get Bitcoin out of thin air? I just don't understand it, how can something have value with nothing backing it. Why don't others just make up there own currency?

[LDAHL]

i don't get the "mining". Is this where you get Bitcoin out of thin air? I just don't understand it, how can something have value with nothing backing it. Why don't others just make up there own currency?

Marketwatch discusses it here: http://www.marketwatch.com/story/bit...1-14-121034915

I don't know that you can't just make up your own currency. Pre-Civil War, there were any number of currencies backed by banks, local communities, stores, etc. The real limiting factor was how generally accepted it was and how credible the issuer was.

[Xmac]

i don't get the "mining". Is this where you get Bitcoin out of thin air?

The Federal Reserve Note, actually not a dollar, is backed by nothing but acceptance/usage (and possibly military threat). It too is created out of thin air.

I just don't understand it, how can something have value with nothing backing it.

The dollar does not have innovative technology as significant as the internet behind it, Bitcoin does. If you think there's gold backing the dollar, you're mistaken.

Why don't others just make up there own currency?

There is a new cryptocurrency being created, on average, once a day. Local currencies are also being used and are thriving. In my backyard, there is a local currency called BershireBucks (I think that's what they call it) and it is thriving AND beind accepted by BANKS!

[Xmac]

All the latest pronouncements that Bitcoin is dead are quashed here:
https://www.cryptocoinsnews.com/bitcoin-dead-dumb/

It's getting old, these uninformed/misinformed arguments which never hold water.

[ToomuchStuff]

Just now seeing this (been working too much, at least another month to go)

"Traceability is questionable". ???



How is that different than cash? And other currencies?
Have credit card companies fixed fraud and identity theft in that antiquated system?

It isn't and that is the point.

Likening Mt Gox to Bitcoin is like likening a bank with shoddy security to the dollar and shows a profound misunderstanding of what Bitcoin is.

I don't think so, because it has a lot of the same issues. That stolen loot, wasn't able to be traced anymore then bills someone buries in the ground somewhere.



Websites can be hacked, and will be hacked, the de-centralized network that Bitcoin uses has had many hacking attempts, to which none has prevailed and it has only served to make the network more resilient against attack.

One tiny communist country 'shutting down traffic' TEMPORARILY is a mere hiccup as it will be in the future. These shut downs can be easily worked around and you would know that if you watched the video.


More connections, means more durable, and on the flip side means more entry points of attack.
If you don't have the keys, you don't get the Bitcoin. If people haven't been careful with the keys, which is to be expected with a new technology, they will learn digital security the hard way.

Keys can be copied. (Eschelon did 1 to 1 copying of the digital data, now decrypting it is harder, but human intelligence plays a part, as well as advancing tech) Computers now, people choose conveinence over security.

Governmental entities are not able to seize Bitcoin which is properly made secure. They can seize bodies which can be manipulated to give up keys, but governments that do this regularly, as a matter of policy, will expose their own tyranny, usage will become more stealth/underground and the larger Bitcoin commerce will move elsewhere in the world to develop and thrive.
I can think of other scenerio's.



That is not a problem to the millions exchanging it now all over the world.
And million's more don't.

Your statement demonstrates what I've been saying: anything has value and utility as a currency when there is agreement to use and hold it as such. That "problem" is quietly solving itself everyday as startups are launched, adoption spreads and usage grows.

California just passed a law making Bitcoin legal tender...BTW.

Just because something is legal tender, doesn't mean one has to accept it. I've dealt with businesses that won't do cash (medical places/copays, COD drivers, internet retailers), and that is perfectly legal.

Marketwatch discusses it here: http://www.marketwatch.com/story/bit...1-14-121034915

I don't know that you can't just make up your own currency. Pre-Civil War, there were any number of currencies backed by banks, local communities, stores, etc. The real limiting factor was how generally accepted it was and how credible the issuer was.

I've never understood "investing" in currency. It wasn't just pre civil war, look at Confederate money, or German's currency before WWII (there depression, where money was used in wheelbarrows). Currency is a means to an end, a tool. Investing in it, seems like buying more of the same type of tool. Your still limited by other factors (number of hands, time, etc).
dmc "how can something have value with nothing backing it"
Trust is what backs our currency. Not gold or silver, etc. Trust is an intangeable "asset". (can vanish)

[Yossarian]

If you think there's gold backing the dollar, you're mistaken.

Why does that matter? The only relevance to the gold standard that I can see is the check on expansion of the money supply. Since gold has limited intrinsic value you are really just substituting one arbitrary medium for another. Maybe someone should establish a currency exchangeable for something useful (water, chickens, sushi, vodka, orgasms or whatever) so that we there is intrinsic value in the currency.

[dmc]

The dollar is still backed on the faith to the US government, who still has a sizable military to help back it. I don't see it going away anytime soon. And if it does there are going to many more things to worry about. So far everyone that I have dealt with take dollars in one form or another. Now it's getting more the norm to transfer numbers from one account to another, but it's still in dollars.

Arnt we even pricing Bitcoin in dollars? And how do you purchase them if not with dollars.

[Xmac]

The dollar is still backed on the faith to the US government, who still has a sizable military to help back it. I don't see it going away anytime soon.

The criticism, as I understand it, that's at issue here is that Bitcoin can't be money, or is somehow illegitimate, because it is not backed by anything. If this is referring to substance redeemable assets, Bitcoin can: cryptobullion, because this is the flexibility of a decentralized open source ledger. The Federal Reserve Note, strike one.

If there is no substance, the issuing entity of fiat must demonstrate reliable and trustworthy stewardship. A fiat currency can work if it is tightly controlled without any corrupting influences. Strike two for the FRN.

When (not if) the U.S. "dollar" crashes as result of excessive money printing via Quantitative Easing and/or the decoupling of oil from the dollar and dumping by other nations (which has started already), with what currency is the military to be paid in? Strike three.

Besides, a military can back dollar hegemony only against single sovereign states. Its use is very limited as countries form alliances favoring other currencies and it's useless against a cryptocurrency possibly displacing the dollar's reserve status.

Bitcoin may be the best alternative (though not the only) for international trade because many other fiat currencies will go down with, or before the dollar.

And if it does there are going to many more things to worry about. So far everyone that I have dealt with take dollars in one form or another. Now it's getting more the norm to transfer numbers from one account to another, but it's still in dollars.

Arnt we even pricing Bitcoin in dollars? And how do you purchase them if not with dollars.

Bitcoin is priced in most currencies, for now. They can be bought with many currencies, earned or mined.

[Xmac]

Why does that matter?

The question was, "how can something have value with nothing backing it?" My answer was in reference to substance redeemable currency. That the FRN has no tangible value backing it, which is what is always touted as a valid criticism of Bitcoin.

Actually, anything can have value if two or more agree it does.

The only relevance to the gold standard that I can see is the check on expansion of the money supply.

Gold provides no such check. Trustworthy people can, as long as they do but history has shown, they eventually don't. Unless, there is a system in which there is an open accounting for all to see: Bitcoin. This is how the block chain technology could create gold backed currencies that are tamper proof.

Since gold has limited intrinsic value you are really just substituting one arbitrary medium for another.

As I said many times on this thread, if you think Bitcoin the currency, is the only innovation, you're not paying attention. Bitcoin the currency is to the block chain as email was to the internet, just the beginning.

Intrinsic value is a myth. If gold was as plentiful as granite, it would be taken for granted Seriously though, where's the intrinsic value then? What if people in the digital age didn't want it anymore because it was too cumbersome, too much difficulty distinguishing
authentic purity, too difficult to divide etc. etc., where's the intrinsic value then?

Maybe someone should establish a currency exchangeable for something useful (water, chickens, sushi, vodka, orgasms

Hahaha, I think that is the oldest form of currency, right?

[Xmac]

Me:
Likening Mt Gox to Bitcoin is like likening a bank with shoddy security to the dollar and shows a profound misunderstanding of what Bitcoin is.

Toomuchstuff:
I don't think so, because it has a lot of the same issues. That stolen loot, wasn't able to be traced anymore then bills someone buries in the ground somewhere.

Me:
The same issues, yes. Those issues are PEOPLE. People steal money, people are not careful with their money.

How does one take people out of the equation of currency...ever?

The difference with all traditional money and Bitcoin is that if I memorize my private key, no one can steal it from me unless they drug me or torture me and they would have to assume or know, I had memorized a private key.