Bitcoin Forum

My exchange rate (http://newlibertystandard.wetpaint.com/page/Exchange+Rate) is now influenced by supply and demand in addition to production costs. Bitcoin value will rise and fall in relation to their availability. 8)

Nice math....

But why would someone buy your bitcoins?

Because they want them?

Edit: Some more specific answers (http://newlibertystandard.wetpaint.com/thread/3392772/why%3F).

Let me note that, market imperfections aside, the exchange price has to fluctuate very close to the generation cost. If it's lower, people will buy from you until it's equal to the cost. If it's higher, it would be cheaper to generate than to buy from you, so they will sell you until they're equal. That's out main problem. This will cause the price to inevitably increase by at least 19% annually as explained in the other thread.

The post I made a moment ago in another thread (http://bitcointalk.org/index.php?topic=20.msg653#msg653) is also in reply to the previous post in this thread (http://bitcointalk.org/index.php?topic=70.msg650#msg650).

Yes but why would they, unlike precious metal specie, bitcoin has no use other than a medium of exchange....

but there is nothing to exchange...

The ability to transfer stored value is extremely valuable in and of itself. Bitcoin can be used by anyone and everyone who has an operable x86 computer and Internet access. The same can not be said for any other currency of which I am aware. Creative children could go into business for themselves. They can raise capital just by running Bitcoin on their computer. They can exchange their bitcoins for a local currency by exchanging with someone who has a PayPal account. They can accept payments from anyone around the world and ship their crafts around the world using the postal system. I can just imagine a child trying to get a $5.00 business loan from their local bank. Hahaha!

So long as the illusory value is propagated, but what you state but ignore, is there is a commodity exchange that occurs...

We need the businesses which deal in Bitcoin before you can have a coherent value system for bitcoin...

Without any true buying power, any currency will eventually fail. Without true buying power, no exchanges can flourish, nor will it be very profitable to run an exchange, if profitable at all. Currently, Bitcoins have very little to no buying power.

Btw NewLibertyStandard, in your discussion forums, it says:


This is a fast route to being shutdown by the law, just by mentioning it. Knowledge of potential illegal activity is what ultimately has gotten e-gold and other e-currencies shutdown in the past. E-gold made notations of potential illegal activities on accounts and it was used to make claims against them enough to shut them down.

"In 2007 the proprietors of the e-gold service were indicted by the United States Department of Justice on four counts of violating money laundering regulations. In July 2008 the company and its three directors pled guilty to charges of "conspiracy to engage in money laundering" and the "operation of an unlicensed money transmitting business" in the U.S. District Court for D.C. The company faces fines of $3.7 million."

Because criminals were using their services and they were either unable or unwilling to prevent it. They were brought up on charges of money laundering. As far as currency exchanges go, they all must be licensed and conform to strict regulations and standards. The more negative attention drawn to this currency and the exchanges, the faster they will be fired upon metaphorically by the US government.

So by the same reasoning should the Federal Reserve be charged when a criminal sells drugs with FRNs? :D

You misunderstand my position. I am not saying the government should be doing this. They shouldnt. But they do. A fact no one can change.

The fact is, if you are linked to potential criminal activity as a citizen, you're going to be investigated or taken down. Its a sad fact of american life.

Criminals use all sorts of means, but any business or project seen as enabling criminals to be anonymous or seen as to be catering to criminals in any ways shape or form or even just useful to criminals, tends to get shut down. Period. Sooner or later it happens.

The government doesnt like crime, anonymous actions or a combination of the two. This is evident throughout the history of all world powers let alone the US gov which tends to violate the worst.

They have shut down e-gold and other companies for merely being useful to criminals or seen as a threat to their way of doing business as a government. There are many cases of this sort of activity. Charges are manufactured, laws are bent and another well meaning person goes to jail that shouldnt.

I empathize with the concerns of those who feel otherwise, but I think not drawing the attention of the powerful entity that wants to step on you is a valid strategy, especially while the project is still in its incubatory period and still gathering critical mass.

No one promoting discretion is talking about taking any actions to restrict the use of bitcoins, and we all know that ideally can't and shouldn't happen anyway. We are only advising a strategy for survival until the point when it doesn't matter any longer.

We are all on the same team, and a diversity of opinions makes us stronger.

Danny,

The only point where it won't matter would be after the state has ended....

We may never see this day...

I believe DannyM is referring to the point when Bitcoin, like the Internet, is unstoppable.

I maintain my assertion....

Your remedy supposedly lies in finding out what a "US Citizen" really is and what your obligations are.

I have read a lot of court transcripts of trials in the USA regarding money transmitting, and (so-called) laundering, and I'd have to conclude that the US Government seems to do whatever the hell it wants. And that is really unfortunate. I don't see any freedom in that country (as an outsider looking in) until there is another civil war. :/ (Although I REALLY hope it would be a peaceful resistance.)

I really wouldn't want to run an exchanger from the USA. If you do live in the US and want to run an exchanger, setup a foreign corporation and run business that way. Get nominee directors and shareholders. Deny that you own it. Don't even tell your family. (Everyone has something to lose; and those rats will use that as leverage.)

As for stopping bitcoin, our government has been trying to stop file sharing and P2P for many years. They can't seem to. I'm not worried at all. The point of attack for them is going to be the exchangers.

E-Gold failed because they were SLOPPY and NIEVE.

They had "E-Gold Ltd." setup in Nevis+St. Kitts, forgot to renew the corporate charter, held the reserves (contracts with brinks/via mat) with a US corporation (G&SR INC) (where the US DOJ has jurisdiction). They reached a point where they started to realized that they could make even more money if they ran their own exchanger. So they started OmniPay in the USA (another bad move) without any licenses, and poor KYC compliance. They were asking for it.

When they appeared in court and started to pull the whole "E-Gold is out of your jurisdiction" crap it didn't matter. (Only the website and book entries were "without US"). The "crimes" were pulled by G&SR+OmniPay and that really is all that matters. OmniPay was a US corporation and it dealt with FRNs. We know how that went. The US DOJ could also seize the physical gold and silver because G&SR was under their jurisdiction as well.

Lessons learned: the US has shoddy property rights (if you are a corporation), they don't follow their own laws (corruption), and Jackson needed to structure his business better (sloppy). He thought the US Government would work with him and not against him if he cooperated with investigations (nieve).

Peace and good luck! ;)

the changes in exchange rates affect everyone either directly or indirectly, activity in the foreign exchange market leading to the rise and fail in bitcoin currency value.