It's not a solution. One cornerstone of Bitcoin is it's decentralized nature which is where a lot of it's strength and appeal comes from. The fact that one pool operator in theory can carry out malicious transactions (double spending for example) puts the whole network in jeopardy especially when a large percentage of Bitcoins utility comes from gambling. Reduction of pool hashing power to a smaller percentage from good natured miners isn't a solution because two pool operators or x operators can join forces, it puts a lot of control into a small group of unknowns hands.

It's not in the pool operators interest you could argue to do this, but humans are irrational so that's a risk in itself, and theoretically powerful third parties could coerce them into damaging the network, or hack them and seize control with the objective to harm the network and introduce large levels of unconfidence. Large pools are potential weapons against Bitcoin. Ideally we want 10,000 pools, each with equal percentage market share of hashing power and each with no ties to one another.

Consolidation of hashing power into bigger and bigger mining pools is inevitable, in a set of pools one will objectively be better than the others and attract the hashing power, this is a strong market force. I don't see any easy way to mitigate against this. I think it's the first thing I've seen with Bitcoin that I think is pretty bad, potentially unsolvable.

P2Pool (https://en.bitcoin.it/wiki/P2Pool) mining offers a solution. The problem at the moment is that it's quite complicated to set up and requires a full running node, but it does decentralise mining.

It's also unknown if it can offer comparable efficiency and reliability. If it can't, people will still gravitate towards the centralised pools.

Using this calculator:

http://www.ivolatility.com/custom/pbc/

along with an estimated annualized volatility of 130%, per this page:

http://www.businessinsider.com/bitco...tility-2013-12

gives a 71% chance of btc touching 1000 within 24 hours of reaching 975.

In reality it was probably a little better than that. The data used for calculating the volatility was 1/1/13-11/29/13. I would guess the December data would raise the volatility estimate.

Anybody consider buying a GPU stock like AMD? They have the best mining cards for scrypt and are selling out like crazy at top dollar. I don't know if they get the extra mark-up or if the distributors are getting it. They also have a 20% short interest. You'd think they'd ramp up production on the best mining cards and keep a supply out there while it's hot.

They also release earnings Jan 21

AMD has quarterly revenues of $1.5B. How much of that do you think is related to Litecoin mining?

$1.4B!

Obviously I am expecting $100M in Litecoin mining revenue.

Overstock.com did 124,000 USD in bitcoin sales in first 21 hours http://www.coindesk.com/overstock-opens-bitcoin-sales/

Repeating this doesn't make it true. Although, if it's true then you're not doing yourself any favor. Quite opposite.

The way I understand this Overstock situation is that they have some sort of agreement with Coinbase, where Coinbase basically changes the Bitcoins instantly to USD for Overstock.

The thing that it seems people maybe aren't considering is that unless Coinbase wants to just constantly collect Bitcoins, $121,000 worth just yesterday, they are gonna have to sell some.

Now I have no clue how big Coinbase is or how much they are interested building up the Bitcoin holdings. But let's say Overstock does $2 million/ month in Bitcoin business. However Coinbase only wants to grow their holding by $1m, so they are gonna have to offer the other $1m on exchanges.

Now I also don't have much idea on the liquidity, depth, or volume that Bitcoin trades but seems like if Overstock's Bitcoin business takes off it could create quite a bit of selling pressure in the Bitcoin market. Some % of all overstock sales are basically just people selling bitcoins.

Am I way off?

I explained where Mises was confused.

Retailers accepting Bitcoins is pretty much identical to someone selling on an exchange in most cases and will by itself push the prices down. That being said, I don't think it changes much because people who are spending on Overstock aren't going to drastically change their Bitcoin holdings compared to if they had to cash out to fiat and spend on crap. These guys are cashing out regardless, or they are going to replenish on exchanges by buying.

Coinbase has a strategic part in that their core business is selling Bitcoins to people, and taking a fee. One of their costs is buying them for customers on an exchange. I'm pretty confident they also are fairly bullish on Bitcoins, so if they get Overstock's Bitcoins immediately and have an "inventory" where they control them rather than buying on an exchange, they are fine with that. So this basically gets them cheap access to coins to resell for a fee (they probably are getting a small % from Overstock, or maybe even not), which is better than buying on the exchange. Then they resell, and more profit. My guess is Coinbase is dealing with more people buying in than getting out on average, so this essentially removes their dependence on exchanges somewhat.

If people who buy stuff on Overstock with bitcoin are just gonna buy more bitcoin with USD, why not just use USD on Overstock?

1. Show support for overstock and future companies considering accepting btc
2. Paying with Bitcoin is a fun novelty for some
3. It's more convenient to pay for something in Bitcoin than credit card, and there's no fraudulent risk

This part is wrong. It is more convenient to pay with credit card by far. Additionally unless you have awful credit and no credit card benefits you actually get a percentage of cashback by spending with your credit card, thus making it cheaper to use over bitcoin.

i read that did 120k sales in btc 1st day. hopefully other vendors will follow suit. to the moon!

@nxtworldchamp

-what you are saying may be true, but it completely ignores the people that pay with btc. If they want to sustain the number of btc they have they have to buy more which offsets whatever they sell. Obviously hoarding creates upward pressure on the price.. but a largely successful bitcoin integration via overstock is extremely bullish (especially as the CEO has tweeted that almost all the BTC purchasers were new customers). That will not go unnoticed to large retailers as the volume overstock did accounts for around 4-5% of their daily volume + whatever % they are saving by using coinbase to process btc opposed to whatever they pay for credit card processing- and yes I realize it probably wont sustain at 4-5% of their daily volume, but for a first day with fairly minimal press outside of bitcoin news sites I think its a fantastic start

The average person won't even know where to start in purchasing bitcoins.

Even if they've read about coinbase, you really think they are going to set up an account, buy coins, pay a transaction fee, and then hope they can figure out how to get them to Overstock correctly?

Oh and if you somehow send to the wrong address, the coins are gone forever.

This is true in the short run, but not in the long run. It's like saying that the average person won't get on the internet back in the early 1990's because you have to get a modem, find a provider, etc, etc.

We are still in the nascent stages of digital currencies which makes this very interesting. The more people hear about it and are exposed to it, the more will move in that direction.

The main question is: Is it a better product, and how?

It's probably easier and faster to buy Bitcoins than to sign up for a first time credit card. There's a site that can connect you to someone who will sell them to you locally, www.localbitcoins.com . Also where I live there's now a brick and mortar Bitcoin store, not to mention BTC ATMS popping up everywhere. I read that an estimated 500 of those ATMs will be implemented by 2015. Credit card might take a couple months to receive after filling out all the paper work.

When a person has both a credit card and Bitcoins, it's easier and faster to buy something with Bitcoins at a merchant that accepts both.

I've had bitcoins for a couple of years now and I also have a coinbase account. So I am aware how btcs work.

I have looked at localbitcoins and there is a premium over coinbase for getting them. You are paying > 2% premium to get them via localbitcoins. People aren't going make a trip and deposit cash into a stranger's bank account so they can get coins and use them at Overstock. They might do this if they needed the coins for another reason.

Besides most people already have credit cards/debit cards and they have consumer friendly attributes that aren't in place yet with bitcoins.

That aside, I wonder if anyone knows how bitcoin returns will be handled? Let's say 1 BTC = $1000 USD at the time of order, If I order something that costs 1 BTC. Find out a week later it is out of stock and bitcoins are now worth $800. Am I refunded 1 BTC or $1000 equivalent of BTC. Either way, someone is not going to be happy with the refund transaction since someone will be out $200 due to price fluctuations.

http://www.reddit.com/r/Bitcoin/comm..._is_sooo_easy/

I've seen at least a couple threads on reddit saying how easy it is to use bitcoin on overstock.

That's the key point.

Using your internet analogy, people learned it since it was a breakthrough technology. There really isn't an alternative.

The question is why would someone use btc instead of credit card or cash? I've heard arguments about lower transaction costs, non-reversible, and anonymity. However those things aren't very important to the average consumer. Those attributes are mainly important when you want to do transactions that you want hidden from the government. I don't know of a killer application that would make people rush out to acquire bitcoins.

People in this thread want coins to do well since they are speculating in them. I think few people here actually use them for goods or services.

I have a number of coins. I would never use them at overstock or for day to day purchases. I reserve them for different internet gambling sites.

This is subjective, but if you already have Bitcoins, paying with Bitcoins is almost always easier than a credit card. Though it's probably close if you have to type the address rather than scan a QR code on a phone.

Sure, there are benefits on paying with a CC too, but I expect Bitcoin merchants to pass on some of the savings they get to you to even it out.