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New internet currency Bitcoin grows in popularity

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Re: Bitcoin reaches $1,000

Unread postby Pops » Tue 03 Dec 2013, 09:16:56

I've heard tulips are a great investment...
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Re: Bitcoin reaches $1,000

Unread postby Quinny » Tue 03 Dec 2013, 11:36:37

Some people might make money out of this but it seems like a whole load of bullshit to me!
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Re: Bitcoin reaches $1,000

Unread postby Sixstrings » Tue 03 Dec 2013, 16:53:41

Quinny wrote:Some people might make money out of this but it seems like a whole load of bullshit to me!


I know, I know, that's what I thought too when this thing had its first big media splash. I think I may have even posted about bitcoin at the time, this was years ago.

What has me fixated is that it's something I looked into, I could have bought the darn things for dollars, and if someone had bought and held them they really could sell them right now for $1100.

I'm going to keep an eye on these things now. Because here is what I'm thinking.. there is clearly a demand out there for a global currency with easy electronic transfer. You can agree or disagree with one world currency, but the demand is there and the market has come up with something to fill that demand. If that's what bitcoin could evolve into, then that's the next Big Thing like an ebay or Paypal or silly Twitter and all these stupid crazy internet things we've seen over the years explode into billions of dollars worth of value.

If you can just know what these next big things will be, if you're shrewd enough to spot that, then you really can make a lot of money.

For whatever reason, people in Japan and China want a currency alternative, they're buying bitcoin, and anything China is into is worth taking notice of -- that's a billion people right there. If it gains acceptance and prominence in Europe and the US then there's a whole new wave of value.

I don't own any, not buying any yet, but I'm gonna watch it. 8O
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Re: Bitcoin reaches $1,000

Unread postby PrestonSturges » Wed 04 Dec 2013, 10:43:52

I think the thing about bitcoins is that they exist as some sort of encrypted file and only a couple hundred thousand were made. That's why the value keeps going up.
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Re: Bitcoin reaches $1,000

Unread postby Sixstrings » Wed 04 Dec 2013, 13:26:12

PrestonSturges wrote:I think the thing about bitcoins is that they exist as some sort of encrypted file and only a couple hundred thousand were made. That's why the value keeps going up.


Here's my understanding of how it works:

There's like 44 million possible bitcoin hash numbers or whatever.

There's a software you use to crunch numbers to discover the bitcoin numbers, this is called "mining."

What's backing up the value of the coin is the electricity and hardware resources needed to discover the bitcoin numbers. And as you say, planned scarcity built in as there are ever fewer numbers left to be found until they are all gone.

So it sounds like ponzi.. beanie babies.. yet.. *if people treat a bitcoin hash number as if it were gold mined from the ground then it's the same thing*

Beanie babies and tulips served no market function other than bubble and passing fancy. Bitcoin, or something like it, would be serving a demand for global electronic currency. So that's huge, if that's where this is going.
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Re: Bitcoin reaches $1,000

Unread postby Quinny » Wed 04 Dec 2013, 17:56:39

Sounds a bit like a Unicorn fart to me!
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Re: Bitcoin reaches $1,000

Unread postby PrestonSturges » Wed 04 Dec 2013, 18:03:40

Well it goes back to the question of "What is money?" which seems to be a philosophical as well as economic question.
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Re: Bitcoin reaches $1,000

Unread postby Gordianus » Thu 05 Dec 2013, 04:59:12

PrestonSturges wrote:Well it goes back to the question of "What is money?" which seems to be a philosophical as well as economic question.


Yes, and for me this is a fascinating side effect of Bitcoin: it raises exactly this question. Talk to any of your friends and family about Bitcoin and you very quickly you discover just how little most people understand about the concept of money.
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Re: Bitcoin reaches $1,000

Unread postby Sixstrings » Thu 05 Dec 2013, 11:29:29

Ok, here's a good example of what goes on with bitcoin. It was at 1200 yesterday, now today dropping almost $200. Probably on some negative news out of China that the government "doesn't consider bitcoin a real currency" and is barring banks from offering bitcoin services.

But they're not forbidding people buying bitcoin, and far as I know using it as payment.

Source: http://online.wsj.com/news/articles/SB10001424052702303497804579239451297424842

So it's like a penny stock or something with potential but so volatile, one piece of bad news sends it plunging, some good news sends it soaring. I think if you wanted some objective analysis what you'd want to look at is volume and look at total numbers, and graphs on that and where that's going, from what I read bitcoin has "intense demand" among the Chinese.

There is definitely staying power now though, you can look at this very website and right next to the paypal there's a donate with bitcoin button.

So that's the deal with these things, it's like a volatile tech stock that you know is going somewhere yet it's going to be rocky, like I said before don't buy at 1,000 watch it for a while there'd be a dip coming -- so here's a dip. Some bad news comes out, that could be time to buy, then good news comes out, it soars, then it's a sell.

Just my take, the main thing to watch with it is CHINA and the numbers of people buying it and use as payment spreading. At this point no government is going to ban these, it's too wide spread now, what will happen is they'll figure out a way to regulate. Regulation actually sends the price higher, as regulation means acceptance and wider use.

As number of bitcoins get mined, the numbers get harder to discover, bigger computing systems needed. Here's a super mining facility in Hong Kong using innovative liquid cooling:

Image

The secret Hong Kong facility that uses boiling goo to mine Bitcoins

The mine is the size of a shipping container, and filled with 1-meter-high glass tanks in which banks of blades are immersed in roiling liquid. Each tank can hold 92 blades; the blades themselves are kept at a temperature of 37 degrees Celsius or below by "open bath immersion" technology. Open bath immersion cools computer components by submersing them in liquid with a particularly low boiling point. The heat the components generate mining for coins boils the liquid, causing it to turn gaseous, rise up to a condenser at the top of the tank, and fall once again, removing heat from the components in the process. The ASICMINER open bath immersion system was reportedly built by Hong Kong-based company Allied Control, and operates at a Power Usage Effectiveness of 1.02, which "would make it one of the most efficient designs in the world."

The cooling system is state of the art, but Cao reports that the mine uses common equipment — including racks and valves — found "in local markets easily." This enabled ASICMINER to build its facility quickly and comparatively cheaply before setting it to its mining task. The tanks, when filled with 92 circuit boards, cooling liquid, and an array of racks and rails, each weigh about 200 kilograms. They're pushed into place by a forklift truck.
http://www.theverge.com/2013/12/2/5165428/bitcoin-mine-in-hong-kong-uses-jelly-to-keep-cool


I also saw a story about a "IT professional" who threw his hard drive out in the trash by accident and it had like 7,500 bitcoins he mined for kicks back in 2009 and forgot about, now they are worth $7.5 million. He didn't have a backup. 8O
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Re: Bitcoin reaches $1,000

Unread postby longpig » Wed 11 Dec 2013, 23:16:29

Bitcoin is stupid to invest in, you are best off buying gold. There are no real gold substitutes for money but for Bitcoin there are hundreds of near to identical types of crypto currencies. Yes Bitcoins are limited in supply but the number of other crypto currencies that are identical or similar to it can be unlimited.

The fact is when people see Bitcoins as too expensive they will move to buy other 'cheaper' crypto currencies instead. I am surprised it hasn't greatly happened yet.

Bitcoin vs Gold boils down to this. There are no real gold substitutes but there are plenty of bitcoin substitutes and the number can be unlimited.

Gold = Toilet paper limited in supply and can not be reproduced.

Bitcoin = Major brand of toilet paper that is very expensive only because people are too stupid to switch to a cheaper brand yet. Other crypto currencies are producing plenty and is only a matter of time before the market place is flooded with crypto's and they all become worthless.
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Re: Bitcoin reaches $1,000

Unread postby Keith_McClary » Thu 12 Dec 2013, 01:18:03

longpig wrote:Bitcoin is stupid to invest in, you are best off buying gold. There are no real gold substitutes for money but for Bitcoin there are hundreds of near to identical types of crypto currencies. Yes Bitcoins are limited in supply but the number of other crypto currencies that are identical or similar to it can be unlimited.

The fact is when people see Bitcoins as too expensive they will move to buy other 'cheaper' crypto currencies instead. I am surprised it hasn't greatly happened yet.

Bitcoin vs Gold boils down to this. There are no real gold substitutes but there are plenty of bitcoin substitutes and the number can be unlimited.

Gold = Toilet paper limited in supply and can not be reproduced.

Bitcoin = Major brand of toilet paper that is very expensive only because people are too stupid to switch to a cheaper brand yet. Other crypto currencies are producing plenty and is only a matter of time before the market place is flooded with crypto's and they all become worthless.
I think this was posted in another thread on PO.com :
Bitcoin has gone through the roof in the past several months rising from around $200 to over $1000 in November of 2013 alone. This is obviously a speculative bubble, and like all bubbles it will pop. There is a lot of chatter on the internet as to when it will pop, and how low it will fall before stabilizing. Optimists like to compare the current bitcoin bubble to the dot com bubble of the late 90s. After all, the dot com bubble may have burst but the internet survived. Bitcoin could do the same thing right? On the surface it sounds like a reasonable comparison however there is a variable in this equation that almost no one is talking about: Bitcoin has a fundamental design flaw, and fixing that design flaw will require completely changing the way the Bitcoin network operates.

In its current form the Bitcoin system is able to facilitate transactions without a centralized database by requiring each client on the network to download a copy of the blockchain. What's the blockchain? The blockchain is a record of every transaction ever made using bitcoin from 2009 to present. With every transaction this file gets bigger. You can find a record of the blockchain size over time at blockchain.info.

At first the file size was negligible. It stayed below 1 gigabyte until mid 2012. However with increased interest in the currency the blockchain began to grow exponentially. By September of 2012 it had jumped to 2 gigabytes, in September of 2013, just one year later, the file was over 9 gigabytes, and by the end of November it had passed 11 gigabytes. If interest in the currency continues to increase and the number of transactions continues to grow at its current rate the blockchain will easily reach 50 gigabytes within a year and 250 gigabytes within 2 years.
http://stormcloudsgathering.com/bitcoin ... being-told
(video)
Possibly someone could come up with a crypto currency that does not have this scalability issue, in which case it would replace bitcoin and bitcoins would be worthless.

"Bitcoins as too expensive" - If you are just using bitcoins to make an anonymous transaction (immediately converting to/from "regular" currency) it doesn't matter what they are worth.

If you are holding bitcoins as a "store of value", good luck with that. :lol:
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Re: Bitcoin reaches $1,000

Unread postby Sixstrings » Thu 12 Dec 2013, 21:02:31

longpig wrote:The fact is when people see Bitcoins as too expensive they will move to buy other 'cheaper' crypto currencies instead. I am surprised it hasn't greatly happened yet.


The thing to watch is, WHICH crypto currency takes off and gets widespread use.

Then it's like an eBay situation -- sure, a million people can go and make an auction site but the one that got to critical mass first stays #1.

What good is another cryptocurrency if everyone is using bitcoins? So just saying that's the thing to watch here, if it really takes off and you see that pay by bitcoin banner next to every paypal banner.
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Re: Bitcoin reaches $1,000

Unread postby Keith_McClary » Fri 13 Dec 2013, 00:17:01

Sixstrings wrote:The thing to watch is, WHICH crypto currency takes off and gets widespread use.
...
the one that got to critical mass first stays #1.

What good is another cryptocurrency if everyone is using bitcoins? So just saying that's the thing to watch here, if it really takes off and you see that pay by bitcoin banner next to every paypal banner.
If bitcoin "takes off" ...
If interest in the currency continues to increase and the number of transactions continues to grow at its current rate the blockchain will easily reach 50 gigabytes within a year and 250 gigabytes within 2 years.
This will soon be too big for portable devices and even desktops (not to mention the bandwidth required). That means you will have to trust someone else to verify your transactions, meaning it is no longer a distributed peer-to-peer system.

Maybe people will set up sites to do that, but then the gubmint will give them secret orders to hand over all their info on you.

My point was, if another currency is invented, that does not have this problem, then your bitcoins are toast.
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Re: Bitcoin reaches $1,000

Unread postby Keith_McClary » Tue 17 Dec 2013, 00:57:35

Another explanation:
How the Bitcoin protocol actually works
No math required:
To understand the post, you need to be comfortable with public key cryptography, and with the closely related idea of digital signatures. I’ll also assume you’re familiar with cryptographic hashing.
- you just have to know what these do, not their inner workings.
My strategy in the post is to build Bitcoin up in stages. I’ll begin by explaining a very simple digital currency, based on ideas that are almost obvious. We’ll call that currency Infocoin, to distinguish it from Bitcoin. Of course, our first version of Infocoin will have many deficiencies, and so we’ll go through several iterations of Infocoin, with each iteration introducing just one or two simple new ideas. After several such iterations, we’ll arrive at the full Bitcoin protocol. We will have reinvented Bitcoin!
there are some good reader comments and questions.
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Re: Bitcoin reaches $1,000

Unread postby Keith_McClary » Wed 02 Apr 2014, 00:34:07

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Re: New internet currency Bitcoin grows in popularity

Unread postby Tanada » Thu 18 Jun 2015, 12:19:57

I have never used Bitcoin but I am interested in it as a possible replacement for fiat currency so I check up on it from time to time. Here is the newest news, a new update is supposed to alleviate government fears of totally untraceable payments between parties.

If you use Bitcoin what has been your experience? Do you think this is a good or bad change?

Elliptic says its tool, built by 4 PhD holders, can make a hugely accurate guess as to who each wallet belongs to — and it can do so in real-time. Using machine-learning, its software crunches through the web and dark web, skimming references to wallets and other digital clues to build up a picture of the owner.

Tom Robinson, Elliptic's cofounder, told Business Insider the tool could be a "game changer for the institutionalisation of bitcoin." If banks can satisfy anti-money laundering regulation then they can start to think about handling bitcoin. The tool was created after conversations with dozens of lenders.

Elliptic has today released a visualisation tool showing the flow of bitcoin between entities over the entire six- year history of bitcoin, naming the 250 largest entities where bitcoins are sent to and from.


http://www.businessinsider.com/bitcoin- ... ncy-2015-6
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Re: New internet currency Bitcoin grows in popularity

Unread postby Outcast_Searcher » Thu 18 Jun 2015, 14:49:10

Even though first world fiat currencies have inflation erosion and precious metals (the actual metal) has storage cost and volatility risk -- until stories like the following stop appearing in the news -- I'd rather not GAMBLE on the crypto-currency "store of wealth", thank you very much.

http://www.usatoday.com/story/money/201 ... /21351737/

BitStamp, which runs the world's third largest bitcoin exchange, announced on Tuesday that $5.4 million worth of the cyber currency had been lost to a security "breach."
(1/8/2015)

http://www.forbes.com/fdc/welcome_mjx.shtml

Bitcoin's Mt. Gox Goes Offline, Loses $409M
(2/25/2014)

Despite how debt-doomed and fiat first world currencies like the dollar are -- at least there are reliable protections like the FDIC for those who want to hold dollars "safely".

Crypto-currencies are a nice theory. With human error, greed, hackers, technology issues, internet issues, etc. -- thinking Bitcoin or any crypto-currency magically solves the problems of currency UNTIL well proven is more than a little delusional -- especially on a risk-adjusted basis.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: New internet currency Bitcoin grows in popularity

Unread postby Tanada » Thu 18 Jun 2015, 17:00:42

I was hoping out of the hundreds of people who lurk and post regularly around here at least one or two would have some actual experience with the product. Seems like years ago there was a bitcoin donation box on the side menu for this corner of the internet.
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Re: New internet currency Bitcoin grows in popularity

Unread postby careinke » Sat 20 Jun 2015, 03:24:48

Tanada wrote:I was hoping out of the hundreds of people who lurk and post regularly around here at least one or two would have some actual experience with the product. Seems like years ago there was a bitcoin donation box on the side menu for this corner of the internet.


I've bought, and used bitcoin, to see how it works. I've even donated to this site with some. At the time it was a pain in the but to actually get bitcoin. When I wanted to buy some, it would take up to three days just to get the transaction through the bank.

That said, once you had some it was very fast to make a completed transaction using bitcoin. The thing you have to remember is there are no mulligans in bitcoin, if you lose your wallet (code), no one can get that money back for you. You are your own bank, and your money is always with you. If you send the bitcoin to the wrong wallet, the money is for all intents lost, because even though you know the wallet address, and can see the bitcoin in the wallet, you don't have the key to that address. I suppose you could guess at the key, but there are more keys than atoms in the universe so your chances are small.

Advantages of bitcoin:

1. There is only a finite amount of a crypto currency and the amount is known.

2. It's fungible

3. It is divisible (in bitcoins case, up to 8 decimal places)

4. Money can be transferred cross borders quickly and very inexpensively. (sending money back to your family is very cheap, quick and secure).

5. It eliminates the need for central banks as the whole system is based on decentralization.

Disadvantages:

1. You need to be responsible for your own currency there is no bank to help you.

2. You are responsible for protecting your own keys.

3. All transactions are final and cannot be undone.

I predict a sovereign nation will adopt a crypto currency (probably their own) within 10 years.
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Re: New internet currency Bitcoin grows in popularity

Unread postby Strummer » Sat 20 Jun 2015, 03:55:22

careinke wrote:1. There is only a finite amount of a crypto currency and the amount is known.


Yeah, except it takes about 10 seconds to create a brand-new cryptocurrency from a template.
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