Bitcoins - digital currency
05-17-2011
, 11:43 AM
05-17-2011
, 06:00 PM
05-17-2011
, 06:04 PM
Quote:
The people who have really profited got in at 7 cents!
It's designed to be similar to Gold. Limited quantity, hard to get, divisible, easy to verify, does not spoil, etc...
Gold has use other than selling it to someone for profit. If Gold's value was constant, it would still be useful as a currency. Currency is good to have because it is almost universally accepted, so it removes the need to barter, and because it's easy to price things and compare alternatives.
If I want alpaca socks, and I can offer computer programming skills, I'll need to find an alpaca farmer who also wants my skills. Pretty rare to find. But perhaps he wants a chicken, and a chicken farmer needs my skills, so I go trade with the chicken guy first, then trade with the alpaca guy. This is expensive even in the simplest case. When I trade through intermediate goods, I need to be sure that they will be accepted when I trade for what I really want. If I use a currency, I can trade my skills to anyone who has currency, then trade my currency for whatever I want. It's much more divisible than many items (I could trade a goat, but I can't easily trade 1/10th of a goat). A goat may die or get sick, whereas currency will always be currency.
Sure, speculation is a part of the market. Bitcoin is not really playing out as a currency *at the present time*. It's still more similar to trading goats, since not everyone will want a goat, and you need to go in and out of transactions. But the economy is growing, so you don't need to do those transactions anymore. As the economy becomes more self-sufficient, you'll see an increase in the usefulness of it and much more stability in the price. You should still see it become more valuable as more people want to get in (as more people contribute to the economy, with the same number of coins, the value must rise to accommodate the growth of the economy).
We are still in the super early stages. It may never reach a bigger economy. There are certain niches that it is incredibly useful for even with transferring difficulties (international transfers that typically have very high fees, and black/grey markets). Right now even those markets are in their infant stages.
The bet really is which leap (if any) Bitcoin makes. If it just becomes a significant currency for black/grey markets and international transfers, it has a huge amount to go up. If it fails completely, it will be worthless. If it becomes the standard for online payments, it goes up even more. There are a lot of longshot scenarios. But it's not just about hoping there are more suckers behind you. Although even in the fail scenario, dumping it off on a sucker could be profitable.
It's designed to be similar to Gold. Limited quantity, hard to get, divisible, easy to verify, does not spoil, etc...
Gold has use other than selling it to someone for profit. If Gold's value was constant, it would still be useful as a currency. Currency is good to have because it is almost universally accepted, so it removes the need to barter, and because it's easy to price things and compare alternatives.
If I want alpaca socks, and I can offer computer programming skills, I'll need to find an alpaca farmer who also wants my skills. Pretty rare to find. But perhaps he wants a chicken, and a chicken farmer needs my skills, so I go trade with the chicken guy first, then trade with the alpaca guy. This is expensive even in the simplest case. When I trade through intermediate goods, I need to be sure that they will be accepted when I trade for what I really want. If I use a currency, I can trade my skills to anyone who has currency, then trade my currency for whatever I want. It's much more divisible than many items (I could trade a goat, but I can't easily trade 1/10th of a goat). A goat may die or get sick, whereas currency will always be currency.
Sure, speculation is a part of the market. Bitcoin is not really playing out as a currency *at the present time*. It's still more similar to trading goats, since not everyone will want a goat, and you need to go in and out of transactions. But the economy is growing, so you don't need to do those transactions anymore. As the economy becomes more self-sufficient, you'll see an increase in the usefulness of it and much more stability in the price. You should still see it become more valuable as more people want to get in (as more people contribute to the economy, with the same number of coins, the value must rise to accommodate the growth of the economy).
We are still in the super early stages. It may never reach a bigger economy. There are certain niches that it is incredibly useful for even with transferring difficulties (international transfers that typically have very high fees, and black/grey markets). Right now even those markets are in their infant stages.
The bet really is which leap (if any) Bitcoin makes. If it just becomes a significant currency for black/grey markets and international transfers, it has a huge amount to go up. If it fails completely, it will be worthless. If it becomes the standard for online payments, it goes up even more. There are a lot of longshot scenarios. But it's not just about hoping there are more suckers behind you. Although even in the fail scenario, dumping it off on a sucker could be profitable.
Would buying bitcoins effectively be an investment in the company/concept itself?
If bitcoins does well, the valuation of bitcoins increases, and vice versa.
I don't really see how this would ever really take off, the whole mining concept seems far to obscure for most people to understand and/or trust.
The volatility in the price will also mean people view it more as a gamble on bitcoins price rising, rather than genuinely using it for transactions.
Though the idea that for international transactions it will be greatly cheaper makes sense, the fees banks charge can be pretty ridiculous when the charge+awful exchange rate are combined, so there is definitely scope to grow there, I just can't see it becoming used for regular transactions like Paypal.
Either way it's very interesting
Thanks again,
john
05-17-2011
, 07:47 PM
Quote:
Great many thanks for that.
Would buying bitcoins effectively be an investment in the company/concept itself?
If bitcoins does well, the valuation of bitcoins increases, and vice versa.
I don't really see how this would ever really take off, the whole mining concept seems far to obscure for most people to understand and/or trust.
The volatility in the price will also mean people view it more as a gamble on bitcoins price rising, rather than genuinely using it for transactions.
Though the idea that for international transactions it will be greatly cheaper makes sense, the fees banks charge can be pretty ridiculous when the charge+awful exchange rate are combined, so there is definitely scope to grow there, I just can't see it becoming used for regular transactions like Paypal.
Either way it's very interesting
Thanks again,
john
Would buying bitcoins effectively be an investment in the company/concept itself?
If bitcoins does well, the valuation of bitcoins increases, and vice versa.
I don't really see how this would ever really take off, the whole mining concept seems far to obscure for most people to understand and/or trust.
The volatility in the price will also mean people view it more as a gamble on bitcoins price rising, rather than genuinely using it for transactions.
Though the idea that for international transactions it will be greatly cheaper makes sense, the fees banks charge can be pretty ridiculous when the charge+awful exchange rate are combined, so there is definitely scope to grow there, I just can't see it becoming used for regular transactions like Paypal.
Either way it's very interesting
Thanks again,
john
Most people don't need to understand mining. Mining's a good way to get a bunch of people involved, though.
Volatility should level off at some point.
PayPal is a bigger thing to try to match. It's pointless to convert to USD and BTC just to pay someone, unless there are no other choices. However, if the conversion process becomes easy, then maybe it takes off better. PayPal is such a pain, there's a big opportunity. But then, why not use something like Dwolla? If it happens, it would be more of a merchant revolt. Merchants hate dealing with PayPal, disputes that are always won by scammers, fees, etc... It might work.
05-18-2011
, 12:48 AM
05-18-2011
, 12:09 PM
05-18-2011
, 12:49 PM
05-18-2011
, 02:18 PM
05-19-2011
, 01:51 PM
05-19-2011
, 02:36 PM
05-19-2011
, 02:40 PM
Quote:
https://en.bitcoin.it/wiki/Mining_hardware_comparison
Your electricity costs on the 260 will likely make it not worth while. You may have a chance in the short term if you can stick it in your existing rig. You may not be able to have nvidia and ATI both running under Windows though (at least you used to not be able to mix the two to extend your desktop), not sure about Linux.
Your electricity costs on the 260 will likely make it not worth while. You may have a chance in the short term if you can stick it in your existing rig. You may not be able to have nvidia and ATI both running under Windows though (at least you used to not be able to mix the two to extend your desktop), not sure about Linux.
Is the difficult factor in this calculator accurate? Is it total number of megahashes?
http://www.alloscomp.com/bitcoin/calculator.php
Seems like picking up a 5870 on ebay for $300 more than pays for itself in a month, excepting electricity costs? That doesn't seem right =/
05-19-2011
, 04:25 PM