Silver Stackers logo

Silver Stackers

Discussion forum for those
who love to stack precious metals

You are not logged in.

#1076 2013-04-10 04:10:21

Rincewind
Member
From: United States
Registered: 2013-03-27
Posts: 28
Trades :   

Re: BITCON... WHY its totally FLAWED

Dirtbikepilot wrote:

One is a figment of yours and others imaginations and the other is a real, tangible thing.

Computer software is a real, tangible thing.

Computer software as an uncopyable commodity is revolutionary, and that's what cryptocurrencies are.

Offline

The following user says thank you for this post: pro$pector

#1077 2013-04-10 04:55:41

southerncross
Silver Stacker
Registered: 2012-07-27
Posts: 2,336

Re: BITCON... WHY its totally FLAWED

Phiber wrote:
southerncross wrote:

So a question for those who actually get the whole phenomena, what percentage would you guess is speculation as opposed to genuine use IE: transfer of funds, buying power etc ?

Hard to say right now, but no doubt there is heaps of speculation.
That being said, plenty of new users coming in, new people jumping on board and not only for the speculative argument.
It has been getting a bit of media attention recently, and there are people who like the idea behind it (maybe even more so in the light of the Cyprus events?) and who want to get started with it, even if not investing much at these prices.
Since this is far from being mainstream, I believe a majority of the new participants like the concept behind it even if they are also drawn by the speculation going on.
Part of the genuine uses would - I believe - also include extracting wealth out of the system, even if only a tiny fraction.

So how if you are/were into Bitcoin big time could you convert it to fiat without notice ?  I'm not trying to poke holes, I am genuinely interested in how one could conceivably convert say X amount (large funds) from somewhere say like Cyprus/wherever and then have it reappear as fiat somewhere else legally with no questions or obligations such as tax or CGT etc or some Gov't organisation asking questions on the other end of the transaction ?
Multiple wallets/accounts/withdrawals/share purchases or such? or would the funds be in some sort of limbo land until you find a personal option, if the latter is the case would such funds also be prone to the rise/subsequent risk in value until they are converted to a perceived solid currency at the other end ?

Also as an aside, could the current rise in value of bitcoins and associated crypto currency's also be seen as a flight from risk that is via the manipulation of precious metals not so obvious to the mainstream markets ? Most see the fall of Gold in the markets as a lack of confidence rather than a conversion to physical from paper while it is obvious much physical is being withdrwan.

This thread is a really interesting juxtaposition of Stackers V Traders v Speculators to me .

Offline

The following user says thank you for this post: markcoinoz

#1078 2013-04-10 06:14:43

Nikon
Member
From: Sweden
Registered: 2013-04-09
Posts: 18
Trades :   

Re: BITCON... WHY its totally FLAWED

pro$pector wrote:
trew wrote:

What you are saying does make sense in relation to working as a currency.  Just trying to get my head around the valuation part.
If there can only ever be 21 million bitcoins then in order for bitcoins to be widely used by a large percentage of the population, a single bitcoin will need to be worth many thousands of dollars so there would be enough bitcoins (or fractions thereof) available for everybody to trade with.

Something else will have to rise up to replace bitcoin.
The built in limit of 21 million may be both the driver of the bubble but also the eventual downfall of bitcoin.

1 BTC is divisible to 8 decimal places, this issue was thought of before hand and addressed when the system was created.

I don't think 8 decimal places is anywhere near enough. Considering that bitcoin value increases by 7500% in a single year.

Today a bitcoin is worth $240, right?
This means the smallest possible unit of bitcoin is worth $0.00000240 today.

Let's assume a "modest" bitcoin value increase of 1000% per year, how much will the smallest possible bitcoin unit be worth in 10 years?
$0.00000240 * 10^10 = $24000

Whoops!
Now that is not gonna work out very well, is it?
Not quite what I would call a sustainable monetary system...

As I see it, there are three factors driving the price of bitcoins at high pace:
1. As bitcoins become more popular, demand for bitcoins increase. Most likely exponentially, since it is a global phenomenon. Much like other global digital phenomenons.
2. The payout to miners decreses over time.
3. Enormous amounts of the theoretical 21M bitcoins are already lost forever, and more bitcoins are lost every day. Lots of people tried mining for fun in the early days of bitcoin, but got tired of it and then forgot where they stored their key to the 50 bitcoins they got. Bitcoins lost forever. Every day people lose their keys for wallets containing small amounts of bitcoins. Why be careful with how you store a key to a wallet cointaining a few cents worth of bitcoins?

Because of these factors, the price of bitcoins will HAVE to rise very quickly, which causes bitcoin to hit the solid brick wall problem of only 8 decimal places quite soon.
When enough people realize that bitcoin will die a horrible death in just a few years, the bubble will burst big time.


Bitcoins have another problem: It is a fiat currency, like any other. It is not based on a limited resource.
Yes, we have heard it a thousand times: "There can be only 21M bitcoins".
That is actually not quite right.
Yes, the current bitcoin software restricts payouts to miners, and has a top limit of 21M bitcoins.
The bitcoin network is based on democracy. If a majority of the bitcoin miners in the world decide that they want to change the payouts and raise the top limit, they can. It is democracy.
And the decision becomes real easy in a few years when the 21M limit is approached. At that time the miners will no longer be payed for keeping up the bitcoin network. Instead they will start asking for transaction fees from the bitcoin users.
If the bitcoin miners at this time tells the users that they will have to pay for each transaction, OR download a new bitcoin software which raises the 21M limit. Will the majority chose to raise the limit? Of course they will. and when the majority has updated their software, the rest will have to follow, or they will be unable to use their bitcoins.

It is just like any other fiat currency. Our democratically elected poticians have the power to print as much money as they want.

Offline

The following 2 users say thank you for this post: leo25, Slam

#1079 2013-04-10 06:53:27

mr-dead
Member+
From: UK
Registered: 2012-02-12
Posts: 209
Trades :   

Re: BITCON... WHY its totally FLAWED

If you have got your hands on some litecoins and are wondering what to do with them try this game and see if you can win some more, I ended up 0.5 litecoins up smile

http://kamikaze.litecoinland.com/ref/5275

p.s. the game has nothing to do with me

Offline

#1080 2013-04-10 07:58:52

dreaming555
Silver Stacker
From: Australia
Registered: 2010-10-12
Posts: 85
Trades :   

Re: BITCON... WHY its totally FLAWED

dreaming555 wrote:
dreaming555 wrote:

Your Position in the Verification Queue 4640

I bought through Bitinnovate - and was not happy about 7.9% commission at $40 AUD - so the wall of buyers must be massive

Your Position in the Verification Queue 4160


Your Position in the Verification Queue 2800  - 1300 new MT GOX verified customers coming on board a day - wonder if you got in verification queue today what position would you be.

Offline

#1081 2013-04-10 08:29:55

Nikon
Member
From: Sweden
Registered: 2013-04-09
Posts: 18
Trades :   

Re: BITCON... WHY its totally FLAWED

What about war or other disasters? The Internet can easily experience a "split". If such a split persists for an extended period of time, the bitcoin network will also bli splitted quite seriously. When the problem is solved, thousands or millions of verified transactions will be reversed.

Offline

The following user says thank you for this post: leo25

#1082 2013-04-10 08:35:27

RetardedMonkey
Silver Stacker
From: Brisbane, Australia
Registered: 2011-04-13
Posts: 4,083
Trades :   75 

Re: BITCON... WHY its totally FLAWED

And PPC is down slightly again.

Le sigh

Offline

#1083 2013-04-10 08:35:29

Nikon
Member
From: Sweden
Registered: 2013-04-09
Posts: 18
Trades :   

Re: BITCON... WHY its totally FLAWED

dreaming555 wrote:
dreaming555 wrote:
dreaming555 wrote:

Your Position in the Verification Queue 4640

I bought through Bitinnovate - and was not happy about 7.9% commission at $40 AUD - so the wall of buyers must be massive

Your Position in the Verification Queue 4160


Your Position in the Verification Queue 2800  - 1300 new MT GOX verified customers coming on board a day - wonder if you got in verification queue today what position would you be.

Do you think the commission fee is higher or lower than bitcoin deflation over the verification queue waiting time? :-)

Offline

#1084 2013-04-10 08:54:06

pro$pector
Member+
From: Perth, WA
Registered: 2012-03-14
Posts: 741
Trades :   59 

Re: BITCON... WHY its totally FLAWED

Nikon wrote:

The bitcoin network is based on democracy. If a majority of the bitcoin miners in the world decide that they want to change the payouts and raise the top limit, they can. It is democracy.

100% wrong, the limit can't be increased.

$230 AUD today, I'm not going to argue with you though, I might go shopping instead. lol

Offline

#1085 2013-04-10 09:29:22

willrocks
Silver Stacker
From: Yesterday
Registered: 2012-05-11
Posts: 3,930
Trades :   24 

Re: BITCON... WHY its totally FLAWED

Nikon wrote:

I don't think 8 decimal places is anywhere near enough. Considering that bitcoin value increases by 7500% in a single year.

Perhaps Bitcoin will become the 'Gold' of crypto currencies, with the more plentiful variants being used for transacting. Similar concept to real gold and silver.


Want change? Use Bitcoin!

Offline

#1086 2013-04-10 09:29:23

Nikon
Member
From: Sweden
Registered: 2013-04-09
Posts: 18
Trades :   

Re: BITCON... WHY its totally FLAWED

pro$pector wrote:
Nikon wrote:

The bitcoin network is based on democracy. If a majority of the bitcoin miners in the world decide that they want to change the payouts and raise the top limit, they can. It is democracy.

100% wrong, the limit can't be increased.

Could you back that statement up with some facts please?

When a new block is created in the bitcoin network, it is verified for correctness by all other participants in the network. Majority vote decides if the new block is correct or not.

So if the block includes a payout to the miner, despite the 21M limit already beeing reached, and the majority of bitcoin participants have updated software which accepts payouts exceeding 21M, then the block will be accepted by then bitcoin network.

Therese is no cryptogtaphy or math involved in the 21M limit. It is just an arbitrary limit set in bitcoin software, and enforced only by majority vote.

Offline

#1087 2013-04-10 09:47:51

Nikon
Member
From: Sweden
Registered: 2013-04-09
Posts: 18
Trades :   

Re: BITCON... WHY its totally FLAWED

willrocks wrote:
Nikon wrote:

I don't think 8 decimal places is anywhere near enough. Considering that bitcoin value increases by 7500% in a single year.

Perhaps Bitcoin will become the 'Gold' of crypto currencies, with the more plentiful variants being used for transacting. Similar concept to real gold and silver.

Something is accellerating at a completely unsustainable rate, quickly approaching a solid wall.
Yeah, it will probably be OK!

Just like the accellerating debt of USA. It will probably be OK...

What is an optimist like you doing on a bullion forum? ;-)


Maybe "bitcoin mining" in the future will be about digging trough thousands of discarded computers searching their harddrives for forgotten bitcoin keys. If you find a forgotten 50 BTC key from some early miner, then you can retire for life.

Or maybe, just maybe, the mathematically unsustainable bitcoin bubble will burst within a few years.

Bitcoins are based completely on math. And pure math says that bitcoin is unsustainable.

Offline

#1088 2013-04-10 09:51:04

Load of Bullion
Member++
From: Sydney
Registered: 2009-07-10
Posts: 1,322
Trades :   

Re: BITCON... WHY its totally FLAWED

willrocks wrote:
Nikon wrote:

I don't think 8 decimal places is anywhere near enough. Considering that bitcoin value increases by 7500% in a single year.

Perhaps Bitcoin will become the 'Gold' of crypto currencies, with the more plentiful variants being used for transacting. Similar concept to real gold and silver.

Some suggest Bitcoin is the gold (the dollars) and Litecoin is the silver (the cents) of crypto currencies, these days at least.


Reminder to self: Buy Ag <$20 & Au <$1100 only           Bitcoin is not perfect, nor is it competing with perfect……don't cha know.

Offline

#1089 2013-04-10 09:51:27

willrocks
Silver Stacker
From: Yesterday
Registered: 2012-05-11
Posts: 3,930
Trades :   24 

Re: BITCON... WHY its totally FLAWED

^^^ Don't take it too serious. I was just rattling your chain. smile

Last edited by willrocks (2013-04-10 09:51:41)


Want change? Use Bitcoin!

Offline

#1090 2013-04-10 10:09:36

pro$pector
Member+
From: Perth, WA
Registered: 2012-03-14
Posts: 741
Trades :   59 

Re: BITCON... WHY its totally FLAWED

Nikon wrote:

Or maybe, just maybe, the mathematically unsustainable bitcoin bubble will burst within a few years.

I hope it does, I'm cashing out this year!

Offline

#1091 2013-04-10 10:14:49

rbaggio
Silver Stacker
From: Australia
Registered: 2010-08-05
Posts: 4,356

Re: BITCON... WHY its totally FLAWED

Difficulty creeping up on litecoins too, I'm guessing as miners move from BTC and others into it.

Offline

#1092 2013-04-10 10:19:20

Noppy
Member+
Registered: 2012-10-10
Posts: 167
Trades :   

Re: BITCON... WHY its totally FLAWED

rbaggio wrote:

Difficulty creeping up on litecoins too, I'm guessing as miners move from BTC and others into it.

Creeping the bloody thing has shot through the roof. Wish it had stayed lower till about next month tongue

Offline

#1093 2013-04-10 10:21:44

RetardedMonkey
Silver Stacker
From: Brisbane, Australia
Registered: 2011-04-13
Posts: 4,083
Trades :   75 

Re: BITCON... WHY its totally FLAWED

rbaggio wrote:

Difficulty creeping up on litecoins too, I'm guessing as miners move from BTC and others into it.

It will only go up a set amount every couple of days. Depending on the amount of blocks being found and how quick etc.

At moment, it's only 234. When I started it was closer to 100 lol.

Last edited by RetardedMonkey (2013-04-10 10:22:12)

Offline

#1094 2013-04-10 10:28:39

rbaggio
Silver Stacker
From: Australia
Registered: 2010-08-05
Posts: 4,356

Re: BITCON... WHY its totally FLAWED

I am seeing a lot of parallels with physical mining.

If it becomes unprofitable to do so (your power costs exceed the potential selling costs of what you are 'mining', 'difficulty' keeps increasing as all of the easy stuff has already been dug up), then people will move into mining something else.

EDIT: Intrinsic value is another topic smile

Last edited by rbaggio (2013-04-10 10:29:51)

Offline

#1095 2013-04-10 10:32:09

hawkeye
Silver Stacker
From: Perth, Australia
Registered: 2010-11-10
Posts: 2,567
Trades :   20 

Re: BITCON... WHY its totally FLAWED

southerncross wrote:

So how if you are/were into Bitcoin big time could you convert it to fiat without notice ?  I'm not trying to poke holes, I am genuinely interested in how one could conceivably convert say X amount (large funds) from somewhere say like Cyprus/wherever and then have it reappear as fiat somewhere else legally with no questions or obligations such as tax or CGT etc or some Gov't organisation asking questions on the other end of the transaction ?
Multiple wallets/accounts/withdrawals/share purchases or such? or would the funds be in some sort of limbo land until you find a personal option, if the latter is the case would such funds also be prone to the rise/subsequent risk in value until they are converted to a perceived solid currency at the other end ?
.

You could as easily ask the same question about physical silver.  Btc is a fledgling currency.  You can buy more things all the time but it's not there yet as a viable currency.

southerncross wrote:

This thread is a really interesting juxtaposition of Stackers V Traders v Speculators to me .

Those are all just broad collectivisations and don't mean much in reality.   Despite many stackers claim to some high moral ground, imo most are speculators.  And there is nothing wrong with that.

Ultimately, when it comes to an alternative to the current banking system, this is the only game in town atm.  I don't know why there are so many people opposed to it.  We aren't going back to gold and silver as currency.  That was the past, not the future.


"The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it. And even if he is not romantic personally he is very apt to spread discontent among those who are."   - H. L. Mencken

Offline

The following 2 users say thank you for this post: pro$pector, RetardedMonkey

#1096 2013-04-10 10:35:22

hiho
Silver Stacker
From: SEQLD
Registered: 2011-04-04
Posts: 7,430

Re: BITCON... WHY its totally FLAWED

waiting for the "back up the wallet" moment


Last edited by hiho (Today)

Offline

The following user says thank you for this post: rbaggio

#1097 2013-04-10 10:52:18

RetardedMonkey
Silver Stacker
From: Brisbane, Australia
Registered: 2011-04-13
Posts: 4,083
Trades :   75 

Re: BITCON... WHY its totally FLAWED

So this is News.com.au today:
1482_publicphase.png

Is this the "media" part of this chart? Or are we past that?
stages_bubble.png

Offline

#1098 2013-04-10 10:53:39

willrocks
Silver Stacker
From: Yesterday
Registered: 2012-05-11
Posts: 3,930
Trades :   24 

Re: BITCON... WHY its totally FLAWED

We're just at the media attention stage now. I'm hoping to sell during the 'Greed' stage. And buy back in at 'Despair'.

Last edited by willrocks (2013-04-10 10:54:50)


Want change? Use Bitcoin!

Offline

#1099 2013-04-10 10:55:19

pro$pector
Member+
From: Perth, WA
Registered: 2012-03-14
Posts: 741
Trades :   59 

Re: BITCON... WHY its totally FLAWED

RetardedMonkey wrote:

So this is News.com.au today:
Is this the "media" part of this chart? Or are we past that?

I've stated many times over the past few days that we have just entered the media attention part of that chart, the parabolic rise is yet to come!

Offline

#1100 2013-04-10 10:57:24

willrocks
Silver Stacker
From: Yesterday
Registered: 2012-05-11
Posts: 3,930
Trades :   24 

Re: BITCON... WHY its totally FLAWED

hiho wrote:

waiting for the "back up the wallet" moment

What about the "back up the hard drive" moment?


Want change? Use Bitcoin!

Offline

Board footer

Powered by FluxBB