People forget, money has a price just like any other commodity and that price is called interest rates.
And it's through the interest rates that Bitcoin will deal with fluctuations in demand. The higher the demand the higher the price of money will be the more lucrative it will be for people to lend. More lending will mean more money will be available.
Why is this so hard to understand?
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Just like in a real world flea market people will have to learn how to recognize scammers through their mistakes.
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Standard volatility of such a shallow market..
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In such a super shallow market it's super hard to tell what's going on. We have 6.053mio BTC in existence atm and only around 100k are being traded on a daily basis. Because the market is so shallow I'd imagine it is super susceptible to manipulation and speculation. Who knows what the real price is right now, only time will tell.
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Sorry but this thread is just pure fail.
Governments primary source of control and power comes from their monopoly on money. If they didn't have that, no one would care what they do and they'd simply get ignored.
"Give me control of a nation's money and I care not who makes her laws." -Mayer Amschel Rothschild
BitCoins is a technology that will eventually threaten their power and ultimately relevance. Do you really believe they're interested in learning what good it can do for the people?! The only reason I can think of why the CIA wants to learn more about it so that they can better figure out how to control it. That's all they're interested in. Control.
I just hope Gavin knows what he's doing.
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Doesn't Gavin already live on the east cost of the US? I thought he was only originally from Australia.
Yep, I live in Amherst, Massachusetts; my family moved to the US when I was 5 years old. I will be visiting Australia (Sydney for a couple of days then Tasmania for a couple weeks then Cairns for a week or two) in July. Just one advice. Triple read anything they'd want you to sign and don't sign it.
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Awww and I wanted to post this!
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These type of posts are really really frequent so forgive me but I didn't read past the 3rd row.
It's really simple. BitCoins are backed by the trust people have in the technology behind it and they are worth what ever the supply and demand determines.
Anything passed that is just semantics.
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http://answers.yahoo.com/question/index?qid=20080827115251AAYDgdWQ: What world currencies are actually backed by gold? A: None Im no economist, but what would it take for bitcoins to be "backed by gold"? Possible, Plausible or Impossible? I see two possibilities either a wealthy person puts up some gold to back the whole currency, or a bitcoin wallet provider purchases gold and its customers wallets are backed by the gold standard. P.S. I have no gold. Just thinking out loud. You are asking the wrong question. Gold didn't back money, gold was the money. And when people started to warehouse it in bank vaults they got receipt which they started trading as if it was gold itself. Later governments through laws and enforcement through force established a monopoly on these paper receipts, gave them names and proclaimed how much weight is represented with a certain number. For instance in the beginning of the 19th century $20 was redeemable for 1oz of gold. So the phrase "backed by gold" was miss-used ever since the governments grabbed the monopoly on money. The last country where this happened was the USA in 1913 when the FED was created. Before the FED dollars were basically although government issued receipts for gold. But with the FED it soon changed to legal tender which it is today. Basically the important point to take away from post is that gold is money. And that paper money was just suppose to have made it's trade easier. So when you're looking at BitCoins you cannot have it "backed by gold" because they are two different commodities and the most that you can have is open free trade between the two. Eventually I suspect will get to a very stable and constant price of gold in BitCoins and vice versa.
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Although almost every if not every central bank has some gold reserves but not one fiat currency on the whole planet is backed by gold anymore. The last was the Swiss Franc which was backed 40% by gold up until 2000 where they had a referendum and the people voted to go off of it.
So what we have now is a global monetary system of monopoly money backed up by mostly what countries produce and how powerful of an army they have while all the population is getting robbed left and right through artificial low interest rates.
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No no no and one more fking time no. NO inflation after the 21mio. PERIOD. You don't need to have more money to experience growth. Growth through money is not about how much you have but how much goods and services you command. And if you have the same amount of money but the goods and services you command increases because the prices drop you also experience growth just as you would if the prices stay the same and you got more money and that's not to even mention the fact that inflation is theft! The moment the majority agrees to inflate BitCoins I'm out and gone and will never be back.p.s.: do you even realize how horrible the 1% inflation is??! If not I suggest you watch: http://www.youtube.com/watch?v=F-QA2rkpBSY
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People don't bang your heads too hard against the wall. Why? Because in the end the market will make all of these decisions.
Wherever the BitCoin concept is going to be recognized by the market as viable, the market will use it. No one person is capable of the knowledge of where exactly that is, only the market as a whole is. So just buckle up and enjoy the ride we're on.
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What we really need is a bootstrapping mechanism to ease of exchange.
That's what the OP is talking about...
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Hi folks, My name is Jerry Brito and I'm the author of the TIME piece. I'm glad you guys seem to like it. I'd appreciate any other feedback you may have. I've also blogged about Bitcoin in relation to yesterday's poker domain seizures here: http://techliberation.com/2011/04/16/bitcoin-imagine-a-net-without-intermediaries/Let me know what you think. Also, I host a podcast called Surprisingly Free ( http://surprisinglyfree.com) and on next week's show Gavin Andresen will be my guest. Anyhow, I just wanted to introduce myself and tell you that since I heard about Bitcoin a couple of months ago, I've been very excited about it. I'm an academic researcher focusing on tech policy and I teach at GMU Law. I'm hoping to begin to dedicate some of my research time to the legal issues around bitcoin, so you'll hopefully see me around these parts more often. Cheers, Jerry Major props for a very good article. I really liked the fact that you didn't focus too deeply on the technicalities and instead went for explaining the principles which IMO are way more important. n1
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The bitcoin network as we know it, when transaction volume picks up, will only be suitable for large transactions or interchanges between Bitcoin "banks" (not banks in the usual sense, but rather, sites like MyBitcoin.com, who privately handles small transactions so they don't consume resources in the block chain). What? Are you serious? So it's going to be a decentralized currency but in the hands of "banks" and normal ordinary users wont even have their own wallets?! If that's the future of BitCoins I'm sorry but I don't like it and I wont use it. I mean the way I envisioned BitCoins being used way down the road is that maybe at an exchange rate of $50k/BTC millions of users would constantly create very small transactions of no more then say 0.00005BTC. If that's not going to be possible by design then I can't really see it every getting that big.
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It's invisible transfer of wealth from savers to those who get to use the new money first which is theft pure and simple.
In my opinion it's the biggest evil known to mankind besides central banking and fractional reserve banking.
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I would call the idea doomed for one reason only: won't be long before transfers of 0.02 BTC are infeasible because there's no space in blocks for them. Even if there was, why would I and every other BTC user want to download 1 KB of permanent cruft in our block chain for a very long time just so one person could to avoid reading 1KB of spam.
Bitcoin microtransfers are unsustainable with the current design - it just so happens they're feasible for the moment due to a lack of other activity. It would be safe to assume they are pretty much infeasible for long-term purposes now.
If that's the case then BitCoins has such a huge flaw from the get-go that it'll never see any major success. I hope you are wrong though.
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