Bitcoin is currently in inflationary mode.
The current inflation rate of Bitcoin is around 17%, far beyond what the dollar's inflation is.
And yet it is attacked for its "deflation".
Keynesians should be loving Bitcoin right now.
If nobody new were buying bitcoins, you would be losing 17% of your wealth by keeping your funds in bitcoins.
But new people are buying...at a rate faster than inflation.
Last I checked we were down to about 11% inflation. Essentially the $324000 going to the miners is how much we are inflating every day. |
|
|
|
The miners are currently being paid an equivalent of about $324000 per day through the block reward. (about 90 USD per BTC, 25 BTC per block, 144 blocks per day)
Do you think this amount is a reasonable amount to keep the network going?
The Federal Reserve is currently pumping $1 billion into the Federal Reserve Note per day. Is this a reasonable amount? No, I do not think what the Federal Reserve is doing is reasonable. How is that relevant to the current discussion? It's a distribution method too. If you think it is more pay than the effort is worth go get your own piece of that free money.
Good point. But the profits from mining and the revenue for miners are not quite the same thing. If the price remains the same, but 10x the people start mining, then mining would not be profitable but we would still be paying the same $324000 per day to uphold the network (I guess you could also add in the losses of the miners as more money going into upholding the network?). |
|
|
|
Looks like a dream combination.... There has to be a crash coming!
Or, more likely, the difficulty will go up quite a bit in the near future. |
|
|
|
It's obviously way more than enough to prevent double spends. But the inflation schedule is not debatable, and the exchange rate is not controllable, so go be windbags about something else.
The inflation schedule is not debatable, and the exchange rate is not controllable, but if the amount given to miners is not sustainable then the price will trend downward (or upward if the amount is to low) until it reaches a point that is sustainable. The point of the discussion is to try to figure out what amount is sustainable. Litecoin is $16,000 per day  If litecoin can do $16,000 / day, bitcoin can do $1M / day, no problem! 1 Million/day is a dream came true  1 million/day would only be 3x where we are now. At the rate we are going the past few weeks we could hit that in the next month. |
|
|
|
|
I am sorry if this might have been covered at some point already, but I think it is important:
The problem of a depreciating currency is that it's value goes down, and people who earn the money today will be able to buy less with it tomorrow. This is basically a scam perpetrated against the people using the depreciating currency. For a long time the people running these scams have managed to keep the populace blissfully unaware of the trick, and making everybody think this was the natural outcome of an economy.
The obvious solution is to reject the scammy currencies and move our economic activities into currencies wich will be worth the same tomorrow as they are today. Like bitcoin.
|
|
|
|
that is a huge rip-off !
they are far too greedy !
STOP IT !
encourage "bitcoin free transaction relay policy"
This has nothing to do with the transaction fee. This is about the 25 btc block reward. The transaction fees are added on top of that. |
|
|
|
Just to give us something to compare to, I looked up the financial statement of Visa: If I am reading it right, in 2012 they had expenses of 2.47 billion dollars, revenue of 10.42 billion dollars, leaving 7.95 billion dollars profits. http://www.marketwatch.com/investing/stock/v/financialsThe 118 million per year to miners seems like a lot for a network so much smaller than Visa? I would be surprised if bitcoin was 1% as big as the Visa network, anybody know a good way to measure it? |
|
|
|
Okay, adding bitcoin to the spelling dictionary is not what's going to do anything. It will be added once bitcoin is considered a legitimate word by enough people.
This is like complaining that a Google search is bringing up what most people expect it to bring up but a small minority of people disagree with the results. While we're at it lets get them to add crypto-anarchists and [insert archaic/net-yet-well-known term here]...
Not really the same thing. I would assume that there is some default dictionary that comes with Google chrome? All we would need is for somebody to add "bitcoin" to the default dictionary and then it would be fixed for everybody. Not really the same as doing a websearch. Unless Google chrome is somehow searching the web to decide weather a word is spelled wrong? Seeing how people actually spell things on the web would be a disaster, have you seen how people spell things on any comments around the web? |
|
|
|
It doesn't matter if it is "reasonable" or not it can't be changed. It is what it is. Today the amount of economic activity on the network likely doesn't warrant that level of security (like buying a $5K safe to protect $1K in gold) but the move to ASICS is essential.
The high reward paid to miners indirectly funds the R&D necessary to make the move the transition to ASICs. Hopefully mining will be a large enough "pie" that we will see 4 to 6 well capitalized ASIC suppliers. 2013 is going to be an interesting year. If the network has moved to ASICs by the end of the year it permanently removes that "cheat card" vulnerability. Sure an attacker can still use ASICs to attack Bitcoin (but they always could) however they wouldn't be able to gain a massive economic advantage (i.e. $2M in ASICS 51% attacking $20M in GPUs).
I like your point about the mining reward funding ASIC development. The thing about ASICs is they have a higher efficiency than GPUs. So they will be able to continue mining even when the GPUs are no longer profitable to run. This means that the overall power use of the network could go down while the security of the network continues to rise. Good for bitcoin, good for the environment. One way to look at it: the price goes up as more people save money using bitcoins. As they save more money, the cost to keep that money safe goes up. |
|
|
|
Most Americans don't understand the concept of metric prefixes.
Bullshit. Every American learns about metric prefixes in school. We know the difference between a milliliter and a liter, and the difference between a millimeter (about 25 to an inch), a meter (about a yard) and a kilometer (about half a mile). We use M and B and T when talking about large amounts of money (million and billion and trillions), while they are not the same as the metric abbreviations it still works the same. We also state memory amounts for computers using a sort of modified metric prefixing system. Just use millibits, mB, and people will get used to it. |
|
|
|
|
The miners are currently being paid an equivalent of about $324000 per day through the block reward. (about 90 USD per BTC, 25 BTC per block, 144 blocks per day)
Do you think this amount is a reasonable amount to keep the network going?
Edit: Changed title due to increased price.
|
|
|
|
Absolute minimum floor right now is $50. Even self-confessed bears will be buying at $50 or above. Remember that BTC is a currency, not a stock.
I think most would be happy to just hold on to $50 too. Those who don't -- no big loss.
I would say the absolute floor is more like 12 USD. according to history it stops where it started The 2011 bubble started at 1 usd stopped at 2x or 5x where it started, depending on if you end it at 2 usd or call that the bear trap and the actual end was when it leveled off at 5 usd. I would say it looks like this bubble started at about 12 usd, is the price going to go back to that level, or will it again level off at a point higher than it started, like 24 usd or 50 usd? |
|
|
|
The philosophical paradigm of Bitcoin, is that the early adopters from first 4 years will have 50% of the money supply. That is insane and will never be allowed in a meritocracy. The free market will never allow this. Yes people should profit on their innovations, but they should not have 50% of all future production. Society will go to world war if necessary to remove those chains.
The early adopters have 50% of the money supply ... until they spend it. You seem to completely miss how bitcoin is actually a currency, it is transferred around to help generate wealth. Say there is Joe, who has some bitcoins he mined a long time ago. Joe pays some bitcoins to Bob to do some work and create some value, Bob would otherwise just be sitting on his couch watching TV. Joe the early adopter has now cashed out his bitcoins, but because of bitcoins the total value of the system was able to increase. |
|
|
|
This "growth shares" nonsense has to go.
We keep saying that, but I don't think Ian is listening. |
|
|
|
Absolute minimum floor right now is $50. Even self-confessed bears will be buying at $50 or above. Remember that BTC is a currency, not a stock.
I think most would be happy to just hold on to $50 too. Those who don't -- no big loss.
I would say the absolute floor is more like 12 USD. |
|
|
|
Total receipt of taxes in the USA is about $3 trillion a year.
The number of citizens in the USA is about 300 million.
That means if you simply, gave all the money from taxes to each, equally:
Each citizen would get $10k from taxes, apart from their private earnings.
This would free people from having silly jobs, coming up with a highly productive and liberated society.
The problem with your wonderful fantasy land is that the US government already spends twice as much money as it takes in. If you just redistribute all the revenue, then you will run the national debt up through the roof even more than it already is going. Cut the government spending by a couple orders of magnitude, then you can do gimicky things like this. Maybe a more fair proposal would be to just lower the percentage of income taxed, that way people would just get to keep what they earn? Isn't this the wrong board for this topic?
This thread should be moved to "politics" or just plain "off-topic". There is absolutely no redeming reason for the idiot of an OP to put it in the general discusion forum. Come, learn how to post things where they belong. |
|
|
|
Where is the profit of Bitcoin?
If Joe buys a bitcoin for 10 dollars, and then sells it to Steve for 15 dollars, Joe has made 5 dollars profit, but that was not 5 dollars from bitcoins, it was 5 dollars from trading bitcoins. Trading bitcoins is more like trading a commodity than trading a stock. You do not get dividends from holding oil, you make money by selling the oil for more than you paid for it. Is oil a ponzi scheme? |
|
|
|
Except bitcoin does not pay any returns. Therefore, it does not fall under the definition of a ponzi scheme you are trying to shoehorn it into.
I already refuted that. Go back up thread and read. You didn't refute it though. Ponzi schemes pay out some amount to those invested in the fund, like a dividend type payment. Bitcoin does not do anything like that. Buying bitcoin is only a ponzi in the same way that buying gold is a ponzi. |
|
|
|
It has all of the attributes of a ponzi scheme as defined by wikipedia. http://en.wikipedia.org/wiki/Ponzi_schemeA Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going. Except bitcoin does not pay any returns. Therefore, it does not fall under the definition of a ponzi scheme you are trying to shoehorn it into. Edit: Just noticed Korbman already said this farhter up in the thread, sorry. |
|
|
|
I see links to two very unscientific, self-selecting polls with small sample sizes. Basically useless. The short term and long term expected value of bitcoins is currently 75 USD per BTC. That is what the market is telling us. Some people may be overexcited and expect to make 1000% returns, but if the overall consensus was that the price would be over $1000 in a couple years, then the price would quickly correct to over $1000 now. |
|
|
|
|
Show Posts
