Bitcoin Forum

If we could make a stable market in Bitcoins at a price of 90 cents each, Bitcoins would take off as an alternative currency.

First, regular merchants could advertise that they accept payment for purchases from their store in either Bitcoins or dollars.  This would give customers paying in Bitcoins an automatic 10% discount on their purchases.  This discount for customers paying in Bitcoins, and the fact that the store accepts Bitcoins, would attract additional business to the merchant, and more than cover the cost of giving the discount.

Second, as long as merchants used their Bitcoins to purchase stuff they needed from other merchants also accepting Bitcoins, accepting Bitcoins wouldn't cost them anything at all.  The 10% cost of converting Bitcoins back into dollars would only affect the last guy in the chain.  This would suck dollars into the Bitcoin economy and keep the Bitcoins circulating.

Third, at a price of 90 cents each, early adopters who created and stashed hundreds of thousands of Bitcoins away back when mining was easy, have no chance of becoming Bitcoin Multibillionaires.  They would have to settle for a modest reward for their contributions.

Bitcoins are presently trading at $15.80.  What sorts of things could we do to incentivize them to trend towards their ideal value of 90 cents?

Well, I think that a massive, sustained DDOS against Mt. Gox would reduce the price quite a bit. Basically any reduction of liquidity would drop the price.

We must DDOS Bitcoins to save them from themselves

There actually are people outside the US, you know? I for one would rather have the bitcoin at 90 EUR-cents for your reasons, heck, make that 9 EUR, that would be quite close to the actual price!
 8)

We will make it both 90 EUR-cents and 90 USD cents if you help with the DDOS, since bitcoincharts.com is on the list too. Does anyone have the email for Al Qaeda (Yahoo probably)? I know they have a vested interest in Bitcoin.

WOW !!

So I guess shareholders in other companies who got increases for early buyers/investors of 10000% and far higher, should also simply concede lowering the shareprice because they got in early for cheap and now benefit from the late stage share price?

This kind of logic and suggestions should not be involved in financial industries, otherwise we could debate anything should have a common value essentially making everything the same and worthless at the bitter end.

We don't need to do anything to influence the market.  If that is indeed the ideal price, then the price will drop from where it is due to lack of interest, and when it reached that point, merchants would begin trending towards bitcoins for the reasons you suggested.  If the natural equilibrium is higher, market forces will drive it to that in the long run.

You seem to have no concept of the way a free market functions. A conversion of 1 BTC to .9 USD is advantageous for purely psychological purposes. Even a tiny bitcoin economy could not function at a .9 USD  conversion rate as there simply aren't enough bitcoins available to function at such a value. Merchants looking to facilitate the adoption of bitcoin should offer discounted prices for those using bitcoin.

You mean like the US and European economies are functioning right now?  Or Greece?

You equate the current government mock job economies as free economies?

Its far from that.

Posts like this really annoy me. Do you not understand we will only have 21 million bitcoins ever? So for billions upon dollars of currency out there, this means its impossible to value bitcoin at 90 cents or anything stupidly low like that. As more and more people use bitcoins, the value always HAS to increase.

Do you think if the USA prints double the amount of dollars now, that they could buy euros or any other currency for the same price? NO. They will be paying DOUBLE for all the currency now.

/endthread and beyond stupid OP

That's the way the system works at present, but it could easily be modified to allow Bitcoins to be issued by a central reserve bank in return for dollars, as well as created by mining.

If we fix the value at 90 cents, then of course, we need the ability to supply as many Bitcoins as people wish to purchase.

I would be more than happy to issue imaginary Bitcoins in return for hard currency.  It's the least I can do for the Bitcoin community.  Would you like me to write some patches for the client?

I understand what your trying to do, but thats not how it works, and no one even wants it to work like that. The more "reasonable" thing to do is request that the creator of the program triple everyones amount of Bitcoins until the price is again around $1 vs. the dollar.

This would make it so that no one loses any value on their bitcoins, and like you suggested, would bring more people interested in using bitcoins, even though they still have the same damn value, but to others they may not comprehend why bitcoin is priced so high.. (which you don't seem to comprehend either but whatever)

Currency relates to the stock market and how things work, a lot of times when stocks become too high, they will do what I mentioned, double or tripple everyones stock or whatever to lower the price of each stock retaining everyones value.

Example:
$10 worth of shares = 1 stock
Give everyone double stocks and reduce price by 50%
Now everyone has 2 stocks worth $5 each

The same concept can be used with bitcoins.

This of course, would have to be agreed upon by the community, and I believe one day something like this may have to happen because I see many people turned off at the idea of having a future where we commonly trade 0.00000012 bitcoin at a time if more and more people choose to use this currency with the limit of 21 million.

I'm pretty sure he's trolling guys, he just wants attention.

A split is very hard to pull off, in a currency like bitcoin. Well, no, but there are two ways it could be done. One would be UI based, but not add any granularity, the other is based in the blockchain and would potentially break compatibility and require everyone to upgrade.

More likely everyone will rebase their clients to use microbtc or something.

Sure, and he already got mine  ;D

But the basic idea of promoting bitcoins by a "built-in" 10% discount is intriguing.

Won't happen, but it's a nice idea after all  :)

That would make much better sense.. either trolling or he is just an idiot.

If you look at his posting history he writes about some pretty technical things, dating back to May, so he's not some newbie. I think he's just starting a hypothetical conversation in a trolling manner.

Life is more fun if you're never 100% serious.

I do think, however, that ever increasing Bitcoin prices and price volatility are disincentives to the wider adoption of Bitcoin for Network commerce.

There are a number of community-based alternative currencies in circulation right now, and their success revolves largely around the type of incentives I mentioned in my original post.

If the Bitcoin community doesn't address these challenges, then it is likely that some commercial fork of Bitcoin which eliminates things like mining will be the successful version of the digital currency ideas that Bitcoin embodies.

Kind of like Altavista and Google.  Or the Apple Lisa and Windows 7.

Or how about stores accept bitcoin at a lower going rate than they go for in USD? Because afterall, if bitcoins are to succeed as a currency, this means the value of bitcoins will always generally go upwords, just like gold and silver.

So they actually don't lose anything, and people using bitcoins earn somewhat of a interest overtime just for holding onto them.

Again, for stores to trust bitcoin means they trust it will last, for bitcoin to last, this means the value will always go up over time.

All of your logics fail miserably.

They are paper currencies, and therefore somewhat difficult to send over a wire.

If you made them digital, and employed a published transaction block chain and the cryptographic methods of Bitcoin, you would have something along the lines of what I am suggesting.

Mining seems to me to be a bit of a distraction, in that it seems to attract peoples attention out of proportion to its importance.  The most important parts of Bitcoin, in my opinion, are how it prevents double spending without a central mint, and the cryptography employed to keep coins secure and transfer them between users.

WHat?  I thought the only thing outside of the US was the deep dark cold of space.... At least that's what they've been telling us.

I for one am all in favor of a Bretton Woods II setting fixed parity for BTC and USD.


 ;)

This is completely wrong.  Double spending is prevented by the published hashed block chain which requires a "proof of work" for each valid block.

Mining coins has absolutely nothing to do with preventing double spending.  After all 21 million bitcoins have been mined, Bitcoin will still work fine and prevent double spending.  The only change is that the incentive for block generation will change from creating coins to redeeming transaction fees.

I see that the Wiki defines "mining" as the generation of blocks, rather than the generation of coins.

In that context, your prior post is less wrong.

I was about to yell "TRROOLL ALERTT!"
But i think OP seriously doesn't get it...

I can't agree with any exact number Bitcoin should be. The market will determine that. However, I do agree that it would be easier to spend if they were less "valuable".

From a consumer point of view, I wouldn't think twice about spending digital money worth a dollar. When it starts getting on the $20-$30 level, it doesn't seem like something I want to spend impulsively.

As Richard Feynmann observed, learning the name of a bird doesn't tell you anything about the bird.

I understand Bitcoin thoroughly, minor differences in terminology notwithstanding.

It was "coin generation" I meant to suggest attracted peoples attention out of proportion to its actual importance.

However, we digress from the original theme, which is how to we make Bitcoin easier for people to use, and easier for traditional merchants to accept for transactions.

Yes, I understand Bitcoin thoroughly.  I've coded my own client, including all the crypto.  I've been hacking Bitcoin for months.

Please don't confuse my slight misunderstanding of the terminology you employ to describe Bitcoin with a misunderstanding of the inner workings of the protocol.

They are two completely different things.

Yes.  Mining generally refers to the production of something of value, and I had not looked at the Wiki page which specifically defines it as the production of blocks.  The client code is sparsely documented, and I therefore incorrectly inferred that folks were employing the term to describe the creation of new coins, particularly in light of all the analogies to gold mining.

Now can we move on?

Now it makes sense that everything you've said is stupid.

You didn't even understand the very basic concepts of how bitcoin worked.

/endthread

For most goods and services, the government regulates neither price nor supply, and transactions take place between parties at mutually agreed upon prices, with neither party employing threats or fraud.  This results in the aggregate market operating according to the laws of supply and demand.  According to proponents of free markets, such markets are the most efficient markets.

Of course, there are exceptions, but quite a few goods and services are freely traded in the markets of the US and Europe.

You are so full of fail, stop posting. ::)

Your counterintuitive use of the term "mining" has absolutely nothing to do with my understanding of how Bitcoin works.

I prize working code over quibbling about what things are called.

Wow, triple epic fail.

Yes they do, but tax collection, enforcement of contracts, and protection of private property rights are the three things the role of government is limited to in a free market.

Taxation doesn't automatically exclude something from being a free market, although obviously it has some potential to be used to that end, particularly along the tariff and subsidy axis.

 

And that goes double for trying to wade through buggy badly documented bloatware.

Maybe you and others whom agree with you could create an exchange and subsidize bitcoins with your own money from the market price down to ninety cents.

Just tell me when the site launches, I want to be the first one there.

Today no one believes in either totally unregulated free market capitalism, nor complete central control.  Most economic systems in the world today are amalgamations of lots of things from a variety of sources.

So of course, the US and Europe aren't completely free markets.  But neither are they North Korea.

The driving economic forces in the world today are Globalization, and the desire on the part of less developed nations to elevate a critical mass of their population to the middle class.

Then you are confused. Central planning does not work because of the calculation problem (http://en.wikipedia.org/wiki/Socialist_calculation_debate).
Government's can't allocate resources in any rational way, no matter how intelligent and good intentioned you think the government planners are or can be. And lets face it, the political system is like a filter, only amoral sociopaths climb their way in to seats of power. The system is such that you have to lie to, pander to, and bribe voters with other peoples money in order to get elected. Complete central control is inherently total power, no moral person would want that power, no wise person would think they could use that power to make the world a better place. Only the moral/psychologically corrupt want that power, its like the smell of death attracting buzzards, they are drawn to power because of their especially flawed natures. So only the bad want to be in positions of power ("central planners"), and for the most part only the bad can succeed in becoming a part of the ruling class because they have to lie to the voters and exploit their ignorance in order to get the job. And then once they become central planners, they have very very little incentive to do a good job or pursue what is right.

The best form of government is a Good King.  The worst form of government is a Bad King.  All other forms of government lie somewhere in-between.

Or value them at $900, usd and move the decimal

I'm the good king for me. Everyone else is a bad king for me. I guess I agree with you.

So can anyone or any group easily modify the client to establish a custum made blockchain at any time, market it better and establish a crypto currency for their own purpose? I have asked this question here many times but never seem to get a suitable response. I am not trolling or trying to agitate. I just want to gage the value of these bitcoins as an investment, short term or long term. Why can't I ask this question here without getting iced  ???

90 cents as the ultimate stable value is dumb. So 2 million people can hold enough for a meal or 50 people can hold enough to buy a nice house? Awesome money  ::)

what are these united states dollars and euros you speak of?

Damn that Icy- guy is a retard.

Anyway the OP hurts alot of people's feelings on this forum stating that 90 cents is the best price for Bitcoin to be of use. That's the reason for all the negative comments.

Sure. If you use another client you start a new blockchain. But you would have to convince people to pump over 100 mio USD into your system and get enough miners and clients online to propagate the blocks. On top of that you have to convince everybody, why your approach is superior to Bitcoin. Possible, but unlikely imho.

However, it has been suggested that the US govt could establish such a "US" chain and make trades in Bitcoin illegal while using the same features for easy online currency but still with the central control that they love. Whether saving 5% credit card fee is enough incentive for that plan to succeed is a different story.

OP, could please explain to me again, why we should abandon all the good features of Bitcoin (no central control over how many coins can be in circulation, no fixed price setting / exchange rates, much less incentive for block generation) just so that you don't have to make simple arithmetics when you shop online?

This is a very US-centric position, as others have already pointed out. Why 0.90 USD and not 900 PLN or 90 JPY? I guess we in Europe are just more used to the idea of "funny" exchange rates, I still remember the pre-Euro time where prices in Belgium were 20 times "higher". And still today it seems that everything in the UK is so much "cheaper" (if you do not in fact have access to a calculator or rule-of-thumb).

How can you make the value a constant when it is a limited currency?

Binding bitcoin value to any currency destroys half the point with bitcoins.

What is so wrong with the current system?

Why the dollar? The dollar is doomed. We should link bitcoins to the euro. Or the chilenan peso. :D

Pegging one currency to another requires heavy intervention and market manipulation by a central bank, like how China pegs their currency to the dollar.  They have trillions of dollars of US currency so whenever their currency falls by more than a percent or so against the dollar they can prop it up by buying yuan with dollars.  Conversely when their currency rises vs. the dollar (which is definitely what it would be doing in a free market) they can just buy more US dollars with yuan and cause it to drop back down.  But even they can't keep their currency down forever, and they've had to gradually let it rise.  Bitcoins would of course do the same thing in the very long run, so it would be impossible to peg it any currency.