I scanned the OP code perfectly on my iPhone with RedLaser

It's a reasonable assumption given that A) Thiel is an intelligent, tech-focused person and B) his entire business and fortune was built on the online currency industry. For him to have no knowledge of Bitcoin would be, if nothing else, unprofessional.

This needs to go on a billboard... how much do billboard's cost? =)

In America, I can spend $100 on paint and sniff it until I die of toxic overdose, but I am prevented by law from spending $10 on a game of poker.

Bitcoin will be Paypal's biggest speed bump.

One of Paypal's founders, Peter Thiel, is an outspoken libertarian and I have been impressed with many of his statements and commentary. Let's see how true to principle he is as Bitcoin starts competing in an open market with Paypal. When and if he makes a statement about Bitcoin, I expect it will be positive. If not, I will be seriously disappointed in him.

USD are added in multiple ways. From The Fed side, they literally "create" the money in their system, and purchase the debt of the US Government in the form of Treasury bills. Called "quantitative easing," instead of "printing money."  Despite the clever economics-sounding name, the money is very much created out of thin air, at least in this case.

1) Fed creates money in Fed's account (with their keyboard)
2) Fed transfer that money to the Treasury in return for treasury bills (bonds)
3) Treasury spends that new money on a zillion things

Money supply is increased, without any increase in real goods. Prices will tend to rise, and everyone holding dollars is proportionally impoverished. It's both immoral and extremely contrary to the idea of a free market.

OP- see this...

http://forum.bitcoin.org/index.php?topic=30980.0

The concept of "backing" is misplaced.

Commodities do not need to be "backed"... they are in and of themselves valuable because they are useful and scarce. Rice is not backed by anything. Gold is not backed by anything. Copper and pork bellies and sand... none of these are backed by anything. Yet they all have market values based on supply/demand.

Similarly, Bitcoin is a commodity. It is a "digital" commodity, true, but that doesn't make it any less "real" than any software. Photoshop is real. Firefox is real. The digital porn your have on your hard drive is real. (interestingly, it seems Bitcoin is the first true scarce digital commodity, because it can't be replicated by copy and pasting- it is genius for this reason alone if nothing else)

As a scarce commodity, Bitcoin doesn't need to be "backed" by anything. It is valuable as its own thing. Just as with gold and pork bellies, Bitcoin is valuable to the extent people want it.

Where "backing" is required is in a case such as paper money or any kind of "certificate." The paper, or certificate, itself is worthless. But, dollars had value originally because the paper was backed by a real commodity (gold or silver). It has value now because it's "backed" solely by the guns of the US Government. Citizens are forced to pay taxes in Dollars, and forced to accept dollars in trade. Sadly, it is violence and coercion that backs the USD now, instead of valuable metal. If dollars were not backed by the coercion of government, they would be worthless. Thus, their backing is necessary for their value. Not so for gold and butter and bitcoins.

So with Bitcoin, it doesn't need backing of any kind. The Bitcoin protocol is valuable as a commodity. If you think it's worth more than current market price, then buy it. If you think it's worth less, then don't buy it.  But either way, don't spread the silly notion that it requires backing - and that the backing comes from "energy consumption" or "cryptography" or other such nonsense.

There is no backing for Bitcoin, and there needn't be.

That's racist!!!! 

Little confused... as an American, am I able to play purely for BTC if all deposits and withdrawals are in BTC? I'd rather not "cash out" in silly green toilet paper anyway.

Sucks that being an American is a liability. Land of the free my ass.

Your project is noble and needed, but 3.5 btc is a pretty paltry sum for quality work. At $10/hr that's only about 5 hours of work, and I don't know many people who put out quality material at $10/hr.

If you want a real market report that is accurate, informative, and well-presented, then I'd think 10x the price would be more appropriate, and still that'd be on the cheap side.

This would be a great project for one of the wealthy early-adopters to fund - could be a good indirect investment for them if figures are widely cited and it shows the btc economy as more mature.

I think the fees should be voluntary and market-based. I like the idea that transactions are prioritized based on the fees attached to them. I'd imagine it will evolve to where you'll be able to see how long a transaction is likely to take given a certain fee, and you can pay fees according to your time preferences.

This has the double benefit of signalling to payment processors (miners) whether capacity needs to increase or decrease. If the network is getting clogged with transactions, and people are paying increasing fees to get their transaction done faster, then the profit for miners rises and new miners enter. Same if the market slows down, fees will drop and miners can withdraw capacity.

It's all very elegant 

True story.

The dollar has lost over 96% of it's purchasing power in the hundred years since The Fed was created to "stabilize the value of the dollar." In the 150 years prior, the US Dollar actually slightly increased purchasing power. Fail.

OP- you put waaaay to much emphasis on miners and their ability to affect price. Mining will become an increasingly small and specialized subset of the bitcoin economy. Bitcoin's value as an investment will depend purely on it's long term usefulness in trade.

By the time the reward has dropped to 25 btc, one of these scenarios will be true:

1) Bitcoin will have crashed, costing less than $1/each. No real interest in it. Doomed to die.
2) Bitcoin will be trading over $100/each, and vendors will be scrambling to accept it. It'll be on Time Magazine's cover.

In the latter case, the transfer fees will vastly overshadow the 25btc reduction, so blocks will actually be worth more than they are now.

The "debt ceiling" is raised every time the Federal Government gets close to running into it. It has been raised something like 95 times over the past 80 years or something. It has NEVER not been raised. Not once.

One might ask, "so, what's the point?"  And the answer is... to pretend the Government is responsible.

So if Dwolla in July is reaching $1m/day figures, then back in June according to their own chart it was, like, 1/3 of that... or roughly $200-$400k per day in June.

MagicalTux says that in June they were getting $227k per day on average.

In other words, the MAJORITY of Dwolla's business is directly related to Bitcoin, at least in June.

This is pretty fascinating actually! I wonder if they ever talk about it in the office... or if it's kinda a touchy subject that nobody wants to bring up 

I'm willing to sell my iPhone 3G 8GB (black). It's unlocked. Normal scuffs on the back casing, but the screen is in very good condition.

Will sell for 15 btc. Can provide a couple references here on the forum of people who've dealt with me. PM if interested.

Thanks

It must be a very difficult issue for them. Bitcoin will replace the value proposition they offer - Dwolla is made redundant by Bitcoin's success. It's like they're helping to foster a child that will grow up to kill them! Strange relationship.