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Cyptocurrency: BitCoin (BTC) / LiteCoin (LTC)


NattyLight

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I think that tere is some chance that (in the absense of outright fraud, which is a big "if") these will maintain value some level of value, but more in the manner that inhently worthless pictures of Honus Wagner and Ty Cobb do than in the manner that US dollars and Japanese Yen do.

 

Yea, while Predicto was comparing these to Beanie Babies (which makes sense because Predicto is a 58-year-old woman in a theme sweater), I was thinking in terms of Baseball Cards.

 

The baseball card market collapsed largely because a million companies got into the business and flooded the market. So, when 126 different versions of a Ken Griffey Jr card hit the market, the value was depressed because, well, there were 126 different versions of a Ken Griffey Jr card. Now, if the US Government had said that all Ken Griffey cards are worth X dollars, I suppose that those Ken Griffey cards would be worth X dollars on some level.

 

Honus Wagner and Mickey Mantle cards are still valuable because there is a limit to them.

 

I'm still having my trouble wrapping my brain around this concept, but I got a B- in Econ 101 so that's not surprising. It seems that part of the value of bitcoins currently has to do with scarcity. And scarcity seems to be a strange thing to base a currency on.

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Why does Gold/Silver have value?

 

Gold historically has value because it was very useful because it is a metal that is also very malleable and resists corrosion and oxidation better than most metals and so could be used to make things without having them weather as much as other metals, and while that is also still true today, it is also used today in many electronics.

 

Silver is similar to gold and so found uses.  It also is a good conductor of heat (which almost certainly helped its early use) and electricity, which drives many of its uses today.

 

People found gold and silver and found uses for them.  That drove demand.  That drove value.  Over time they were used in and for currency and that certainly drove more demand and more value.

 

But the practical uses drove the vaule originally and at least somewhat still today.

 

I don't think bit coins compare.

 

Somebody didn't wake up one day and say, hey let's "mine" these things and use them for currency just because we can assign some value for them and people will give us things for them.

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Problems with cryptocurrency:  

 

- Some genius could discover a fast algorithm for breaking the encryption algorithm and ruin everyones day overnight

 

- Even assuming the encryption algorithm is never broken, its possible for someone to control > 50% of the trust network (through worms/viruses/etc.) and ruin everyones day overnight

 

- Governments could start to feel threatened and ruin everyones day overnight

 

As for the "inherent value" argument, with modern fiat currency that ship sailed along time ago.   And assuming the algorithm isn't broken,  its impossible to have a single party decide to arbitrarily print money, so there is a form of scarcity.

 

If it hasn't already been mentioned, here's the original paper describing bitcoin

 

https://bitcoin.org/bitcoin.pdf

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This is really intelligent. Plus Joe Rogan is the man.

 

Starts after the websites he plugs.

 

What in particular do you find really intelligent about it?

 

For anyone interested in watching, the sponsorship plugs at the beginning are over eight minutes long, so you're better off trying to click ahead than just listening through them.

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What in particular do you find really intelligent about it?

 

For anyone interested in watching, the sponsorship plugs at the beginning are over eight minutes long, so you're better off trying to click ahead than just listening through them.

 

The thing is 3 hours long. I'm not sure I have enough time to listen to one libertarian interview another libertarian who happens to be a bitcoin evangelist for 3 hours.  

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The thing is 3 hours long. I'm not sure I have enough time to listen to one libertarian interview another libertarian who happens to be a bitcoin evangelist for 3 hours.

I only listened to about 20 minutes in one sitting. I assumed there was more to the show than just that interview, but maybe I was wrong.
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So, reading up a bit on this (not the political aspect, just functionality).  Taking this to its logical conclusion, in the next 40 years or so, the final bitcoin will be issued, and that will make about 20 million floating around in the "market."  There will never be any more or any less.  They cannot be destroyed, copied, etc.

 

So of the 20,000,000 bitcoins, and assuming there are 7 billion people in the world, with even distribution each person would own .0028571 bitcoins. (or is it "bitcoin").  Of course, it will not be evenly distributed, but let's assume that it is.  As the population grows (which we assume it will), the distribution of bitcoin will follow that growth, so that once the population reaches 10 Billion, each person would then hold .00200 bitcoin(s).  So instead of inflation, you would have deflation of currency.  So if you own property that is valued at 1 bitcoin in 2040, it may only be valued at .8 bitcoin in 2080.  Wouldn't it make sense to issue more bitcoin to stabilize the market?

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"When the Last Tree is Cut Down, the Last Fish Eaten, and the Last Stream Poisoned, You Will Realize that You Cannot Eat Bitcoin."

 

-Anonymous

 

A paraphrasing of the Cree Indian proverb where they use "money" instead of "Bitcoin."

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"(Reuters) - Prominent bitcoin exchange Mt. Gox posted an update on its website on Tuesday, saying a "decision was taken to close all transactions for the time being," citing "recent news reports and the potential repercussions on MtGox's operations."

 

http://news.yahoo.com/bitcoin-exchange-mt-gox-39-website-down-053727771--sector.html

 

Is the end near?

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Yessir, and I'm not all in my friend, just wading in the waters. And any news is good news, right? The best thing that can happen is the death of Mt. Gox be quick. Once this hashes out, it will be back.

 

Im shocked.

This reminds me of playing "got your nose". with my little kids.

In a way you're not far off from the truth. The people who had the money in Gox (or any online broker) to the tune of >$100K is are f'in morons. In fact, some have actually admitted that they were idiots during interviews throughout the day and personal responsibility. There had been telltale signs of it failing for months; it was a poorly ran exchange and people chose to take the risk by keeping not some, but all of their BTC in a place that they literally had no control of its movement...these are risky people, not a flawed technology in the slightest (malleability issu was found and addressed years ago).

 

Oh look, BTC is up 25% in the last 24 hours...it's not going anywhere people. Whether it's "worth" $1000 or $1 it will still have intrinsic value. 

 

http://bitcoinwisdom.com/

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Tell him should buy as the panic sellers sell. It will be over 600 by tomorrow morning.


I do not think the words "intrinsic value" mean what you think they mean.

Transmittability, scarcity, and purpose (with respect to strengthening the block chain and exchange for good, services, and CASH of the major countries on the planet).

 

Maybe you're right.

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Another bitcoin site bites the dust

 

Just a week after one of bitcoin's major exchanges, Mt.Gox, went offline—and then filed for bankruptcy—a bitcoin bank was forced to close after hackers stole 896 bitcoins, worth over $600,000.

 

The bitcoin bank Flexcoin posted a note on its site stating: "On March 2, 2014 Flexcoin was attacked and robbed of all coins in the hot wallet. ... As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately."

The term "hot wallet" refers to bitcoins stored in an online wallet connected to the Internet.

 

Click on the link for the full article

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