Discussion
Anyone here used bitcoins? As much as it's difficult to trust central banks to look after their currencies I'm not sure I fancying trusting something dreamt up by a bunch of geeks.
"The best performing currency of the past year isn't Brazil's real, up 15% versus the U.S. dollar, or Australia's dollar, up 27%. It's the Bitcoin. A year ago one was worth half a penny. Thursday morning it hit $10.50. That's a gain of more than 200,000%.
What's a Bitcoin? It's a peer-to-peer system of electronic money that allows payments to be sent directly between two parties without the need for a financial institution. It's related to Bit Torrent, a system for sharing large files like movies, but in this case the "movie" is a file with the currency's entire transaction history. And because users themselves all share that history, "it's more secure than even bank transactions," says Donald Norman, a spokesman for the Bitcoin Consultancy, which is seeking to gain wider acceptance for the currency.
As befitting a virtual currency, no one is quite sure who created the Bitcoin. A white paper and software turned up three years ago listing Satoshi Nakamoto as the author. That's presumed to be a pseudonym. All that's known about Nakamoto, based on his paper and message board comments, is that he's fluent in English and has a deep understanding of Internet security.
Dotcom crash veterans might recall failed currencies like Flooz and Beenz, but those were mere means of online payment. Bitcoin is an entire monetary system. It doesn't require a Treasury Department, because there are no bills or coins to mint. It doesn't need a Federal Reserve to create money. An algorithm does that at a rate that slows by half every four years. There are about six million Bitcoins today. The number will approach 21 million beginning in the 2030s but never exceed it"
http://finance.yahoo.com/banking-budgeting/article...
https://en.bitcoin.it/wiki/FAQ
"The best performing currency of the past year isn't Brazil's real, up 15% versus the U.S. dollar, or Australia's dollar, up 27%. It's the Bitcoin. A year ago one was worth half a penny. Thursday morning it hit $10.50. That's a gain of more than 200,000%.
What's a Bitcoin? It's a peer-to-peer system of electronic money that allows payments to be sent directly between two parties without the need for a financial institution. It's related to Bit Torrent, a system for sharing large files like movies, but in this case the "movie" is a file with the currency's entire transaction history. And because users themselves all share that history, "it's more secure than even bank transactions," says Donald Norman, a spokesman for the Bitcoin Consultancy, which is seeking to gain wider acceptance for the currency.
As befitting a virtual currency, no one is quite sure who created the Bitcoin. A white paper and software turned up three years ago listing Satoshi Nakamoto as the author. That's presumed to be a pseudonym. All that's known about Nakamoto, based on his paper and message board comments, is that he's fluent in English and has a deep understanding of Internet security.
Dotcom crash veterans might recall failed currencies like Flooz and Beenz, but those were mere means of online payment. Bitcoin is an entire monetary system. It doesn't require a Treasury Department, because there are no bills or coins to mint. It doesn't need a Federal Reserve to create money. An algorithm does that at a rate that slows by half every four years. There are about six million Bitcoins today. The number will approach 21 million beginning in the 2030s but never exceed it"
http://finance.yahoo.com/banking-budgeting/article...
https://en.bitcoin.it/wiki/FAQ
I had thought about starting a topic on this last week when I herd of them but couldn't really figure out the point of them.
You don't have to buy them you can create them (the currency) yourself if you have a sufficiently powerful graphics card. It seems if you wish to Bitcoin-mine a Graphics card is much faster then even the fastest CPU, and ATI cards are about 10 times faster then Nvidia.
You don't have to buy them you can create them (the currency) yourself if you have a sufficiently powerful graphics card. It seems if you wish to Bitcoin-mine a Graphics card is much faster then even the fastest CPU, and ATI cards are about 10 times faster then Nvidia.
Edited by Mr Sparkle on Friday 3rd June 17:15
Without fully understanding the technology behind it, the idea itself is interesting. A completely decentralised currency outside the control of Government? They're going to love that! Things like WoW and Second Life have evolved their own economies, so not beyond the realms of imagination to think something like this could develop. I guess as long as two or more people are prepared to exchange it for goods or services, it's a currency.
A completely decentralised currency outside the control of Government? They're going to love that!
It has got nothing to do with any government, funnily enough.
All you have to do is pursuade sufficient suckers that your means of tender is worth something, at least for long enough for your to recoup yer inital investment ++. And these days, a vast number of idiots will apparently believe anything must be worth something, at least for long enough - indeed, this is the very basis of 'web v2'
I've an inexhaustible supply of grains of sand..shall we say £1 each?
Thought not. ah bigger.
It has got nothing to do with any government, funnily enough.
All you have to do is pursuade sufficient suckers that your means of tender is worth something, at least for long enough for your to recoup yer inital investment ++. And these days, a vast number of idiots will apparently believe anything must be worth something, at least for long enough - indeed, this is the very basis of 'web v2'
I've an inexhaustible supply of grains of sand..shall we say £1 each?
Thought not. ah bigger.
Edited by Huff on Saturday 4th June 01:25
They can and have (last week) been stolen $500K worth.
There is only a set number that can be created, and hence the last batch are getting harder (read longer) to mine (create).
Value.. well anything has value if someone wants it, there are already exchanges that deal with cash to bc.
What will they be used for.. lots up underground stuff I would suspect, and hence the price is only going to go up and up, people will not be trading in bc, but 0.001 of a bitcoin.
Its a sound idea, and bound to piss some people off (even though i suspect the same people will try and get them).
As for storage, well you can store multiple copies of the same coin, and put it on a truecrypt drive if you are that worried.
It is an interesting time for sure.
There is only a set number that can be created, and hence the last batch are getting harder (read longer) to mine (create).
Value.. well anything has value if someone wants it, there are already exchanges that deal with cash to bc.
What will they be used for.. lots up underground stuff I would suspect, and hence the price is only going to go up and up, people will not be trading in bc, but 0.001 of a bitcoin.
Its a sound idea, and bound to piss some people off (even though i suspect the same people will try and get them).
As for storage, well you can store multiple copies of the same coin, and put it on a truecrypt drive if you are that worried.
It is an interesting time for sure.
You may be counting chickens though - let's see how it all pans out.
Can anyone tell me how Bitcoins actually have value though - the FAQ on the home site says that:
That doesn't explain anything for me though - why would a merchant accept Bitcoins as a payment, without there being a guarantee that they could trade them for the value of the merchandise sold?
I understand that they can trade the Bitcoins for other products with other merchants that also accept Bitcoins, but there's no guarantee that the Bitcoins will be worth as much at the time of the purchase as at the time of the previous sale, or even that the other merchants will honour their promise to accept them in the future. Not to mention the fact that the ability to use Bitcoins is much more limited than an official currency.
Clearly many established fiat currencies function today have no inherent value in the same way that Britcoins do not, but this is only after the official currencies have gone through centuries of being backed by gold (which has an inherent value as a commodity in its own right) and reached the point that the government backing them is generally trusted to have the ability and reliability to stand behind the currency in the absence of it being backed by gold. Bitcoins do not have this crucial characteristic, as far as I can see?
Can anyone tell me how Bitcoins actually have value though - the FAQ on the home site says that:
Bitcoin.org said:
Bitcoins have value because they are accepted as payment by many...In a sense, you could say that Bitcoin is "backed up" by the price tags of merchants – a price tag is a promise to exchange goods for a specified amount of currency.
https://en.bitcoin.it/wiki/FAQ#Where_does_the_value_of_Bitcoin_stem_from?_What_backs_up_Bitcoin?That doesn't explain anything for me though - why would a merchant accept Bitcoins as a payment, without there being a guarantee that they could trade them for the value of the merchandise sold?
I understand that they can trade the Bitcoins for other products with other merchants that also accept Bitcoins, but there's no guarantee that the Bitcoins will be worth as much at the time of the purchase as at the time of the previous sale, or even that the other merchants will honour their promise to accept them in the future. Not to mention the fact that the ability to use Bitcoins is much more limited than an official currency.
Clearly many established fiat currencies function today have no inherent value in the same way that Britcoins do not, but this is only after the official currencies have gone through centuries of being backed by gold (which has an inherent value as a commodity in its own right) and reached the point that the government backing them is generally trusted to have the ability and reliability to stand behind the currency in the absence of it being backed by gold. Bitcoins do not have this crucial characteristic, as far as I can see?
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff