Everyone should read "When Money Dies" by Adam Fergusson. This is about the Weimer inflation period.

Hyperinflation doesn't just happen overnight. It happens over a period of a few years. The rate of inflation slowly increases over a period of months.

There is another good book about a period of great inflation in France. I can't seem to find it anymore though and I forgot the title. While Adam did a good report about the technical aspects of hyperinflation, this other author did a really good job of describing the breakdown of morality that occurs during high inflation.

Think of the media value if Bitcoin announced a 1000 to 1 split...yes, it would be meaningless from a mathematical point of view...but most people would just eat it up.

Most people can't figure out that 10% off of $2 is $1.80. My last boss used a calculator once to figure out $3.10 times 10. Think about how many times you make a small purchase like say for $.77, you hand the cashier $1.02, she looks at you like you are an idiot, hands you back the two pennies, then proceeds to give you $.23 change.

But just like the average person is incompetent in the field of mathematics, I would guess the average Bitcoin developer is ignorant of how really bad the average person is at math.

Nothing will change with Bitcoin.

But don't despair, eventually we will all just start pricing everything in satoshis.

Go over to: http://coinmarketcap.com/ then sort by volume.

Take the market cap and dividing by volume and also sticking to the top four coins by volume, we get:

Bitcoin 7036/34 = 206
Litecoin 413/16 = 25
Dogecoin 43/2 = 21.5
Maxcoin 2.936/1.280 = 2.059

The lower the ratio, the greater the potential I believe.

I would expect the market cap of different cryptocoins to reach some stable ratio to their volume. This would seem to make Maxcoin the greatest potential, followed by Dogecoin, then Litecoin.

I don't know anything about Maxcoin, so avoiding it for now, but maybe later.

I feel that Dogecoin, which appears to be a joke, may have a few good things going for it. First is the fact that the coins are still dirt cheap and could go up a thousand fold and still be worth less than a dollar each. This gives it a great psychological value. Second, the mining rewards drop in half about every 35 days. This means that we won't have miners constantly trying to sell coins just to recoup the cost of mining.

I converted about 1% of my Bitcoin wealth to half in Litecoin & half in Dogecoin.

99% HODLer, 1% Speculator.

I feel that we are still in a slow decline that should turn around within a couple months.

Just Two.

An old cougar that caught me when I was young and naive. As I got older and my SMV went up, I negotiated the right to take a second wife. All three of us lived together in Nairobi for a short time, that was a total disaster. Feminism vs. Femininity...some day I might write an article on it.

Don't get me wrong, I could sit on my computer for 16 hours a day for months at a time. Starcraft, chess, browsing the internet, programming, the fun never has to end. But never leave my home? Bad for my health to do that. Bitcoin allows me to go on a vacation from home (and to forget my computer). Thanks to Bitcoin, I travel all over the world, go hiking, & sleep with beautiful ladies in 3rd world countries (just married one this year).

I love Bitcoin.

I fixed my typo

True, but power in Iceland is still $0.043 per KWHR

Value of BTC may go up, but mining reward is definitely going down every 4 years.

What is the cost of using fiat? I see inflation as a hidden tax equivalent to the amount of money being printed. I lean toward Austrian economics though. If you have a different economic philosophy, we will probably never agree on the cost of using fiat. But here is my take on it: If the USA prints 10^12 dollars per year, then this would be equivalent to 10^13 KWHR (at $0.10/KWHR) per year. This is certainly more than: from your OP statement thread in your signature.

I read part of that thread and my assuptions could actually make things worse. Mining would be done in the areas of the world where energy is the cheapest. At $0.05 per KWHR, then your 7% would become closer to 14%. But that would decrease over the years as the mining reward keeps halving. But even at 14% of world wide energy usage, it seems to me that the cost of Bitcoin would still be less than the cost of using fiat currency.

BTW, I don't think that Bitcoin (or any other cryptocurrency) will ever completely replace fiat currency. I spend a lot of time in Kenya with my youngest wife who uses M-Pesa. M-Pesa is everywhere, you can't walk a block on a business street without seeing a couple signs. She uses it to send money to her parents via text on her phone. She uses it to pay her electric bill. We were in a matatu going past the electric company main office and she was making fun of all the old people (younger than me...but beside the point  ) queing up to pay their electric bill instead of using M-Pesa. And everyone in Kenya (even if they sleep in a cardboard box) has at least one cell phone. One day, she wanted to stop for a coke and I mentioned that I hadn't brought my wallet and she had no money. No problem she said, stopped at the next M-Pesa sign and converted some of her M-Pesa on her phone to 500 shillings. The point being is that Kenyans are already using an ecurrency for all sorts of things, but they don't use it for small transactions. Fiat currency is simply faster and easier.

What I do think that Bitcoin will do for fiat currency is force governments to stop inflating it so much. There will be a balance between slightly deflationary Bitcoin and slightly inflationary fiat currency. When a government starts inflating fiat to much, people will just use less of it (and at a much higher velocity) and switch to using cryptocurrency more. This will accelerate inflation and force the government to print less fiat(or find themselves unable to operate effectively).

Thank you for the warning. However, I have a few questions.

1) Is any gold atom still the same gold atom from moment to moment? My understanding of one aspect of quantum mechanics is that particles are constantly being created and destroyed in pairs simultaneously. So if an electron-positron pair appeared next to an electron in a gold molecule, the positron could combine with the electron to disintegrate each other, the new electron takes the place of the old electron, the mass/energy of the missing pair being absorbed (to balance everything out). As this happens constantly, every sub-atomic particle would be replace in the gold, and essentially every gold atom has been mixed with every other gold atom in the universe. In other words, every gold atom (of the same isotope) is identical to every other gold atom. NO MIXING REQUIRED.

2) I believe in the multiple universe theory of reality. If there are multiple future universes, then the wave mechanics point to multiple past universes that converge to this moment in time. How can I trust the paperwork trail behind a gold bar if there is a universe that the paperwork is all fraudulent (however unlikely). Isn't the only thing we can be sure of is this moment in time?

I use your calculations to figure the upper boundary on electricity usage. However, I suspect the lower boundary on cost per KWH is about $0.03.

Over 50% are paying less than $.10 per KWH: https://bitcointalk.org/index.php?topic=333720.0

I remember some Indonesian miner guy that was paying $0.03 per KWH.

Cost in Iceland per KWH according to google is $0.043.

I can buy solar panels at $1000 per KW. Assuming a 5 year effective life span at 10 hours of direct sunshine per day = 365 * 5 * 10 = 18,250 KWH. Divide that into $1000 ($1000/18250) and we get $0.054 per KWH.

Personally, I would just use $0.05 per KWH. At around $600 per BTC and assuming 3600 BTC per day, we get:

$600*3600/$.05/KWHR= 43.2*10^6 KWHR for an <b>UPPER BOUND</b> on power usage.

Remember, as BTC usage goes up world wide, power usage will stay about the same. I suspect the cost of using Fiat (especially when factoring in both the hidden and apparent cost of inflation) is much much higher.

I watched some video advertisement that promised some new breakthrough in computers. It went on and on for over 30 minutes (I read other articles while he droned on). Eventually, it got to the point. The breakthrough was that we were going to get rid of computers, go back to terminals, and run all of our software on server farms....LOL.

0100001001101001011101000010000001000011011011000111010101100010001000000101001 101110101011000110110101101110011

I totally disagree and I am sick of hearing people say that brainwallets aren't safe. Sufficient length & randomness should suffice. Create a salt phrase that you use with every password.
Your salt phrase should include something long (can be public) & something private.
Examples:
"Pi=3.14159265358979323846&MyFirstPhoneNumber=800-555-1222"
"10!=3628800(Base10)=375F00(Hex)&I_LOVE_PATTAYA"
"InverseNaturalLogSeven=1096.6331584284585992637202382881&Starcraft>Chess>Checkers"
"Thanks:Danke:Asante:Salamat:ขอบคุณ:Gracias&I_WAS_BORN_ON_A_MONDAY"

You might want to write this part down somewhere safe if you have ever forgotten anything in your life.

Now when you create your brainwallet, just add a password to your standard salt phrase.

"Thanks:Danke:Asante:Salamat:ขอบคุณ:Gracias&I_WAS_BORN_ON_A_MONDAY"Alpha
Public Key:1EXLETbRDmwsB4gJimQhprvktZDXLkoDWT
Private Key:5KPgmne3z4vo8uPwKHDF6gZbDJpiXALLY9fipEuKtMLH9pbdbi7

"Thanks:Danke:Asante:Salamat:ขอบคุณ:Gracias&I_WAS_BORN_ON_A_MONDAY"Bravo
Public Key:1AxTsiWDsMu3ijy2s3NTF6kk1zJRUGjNyh
Private Key:5KEcUhqeSP4WAvaRRytXD3ChcnLUheaUX5yVLen244q8wHtGmxR

I keep a list of passwords with their public keys. The salt portion is only in my head and I mentally review fairly often. I never store the private keys. I actually store my public keys in a HTML file online so that I can easily access them from anywhere in the world with internet.

Alpha:1EXLETbRDmwsB4gJimQhprvktZDXLkoDWT
Bravo:1AxTsiWDsMu3ijy2s3NTF6kk1zJRUGjNyh

In summary, create your own system (including punctuation) that involves a long complex phrase (but possibly public) with a simple private phrase to make a consistant salt phrase (you can even write it down & store it somewhere safe). Now you just add different passwords to your salt phrase to create a safe list of addresses & public keys. I keep a bunch of brainwallets this way so that I can use one without compromising the rest.

If I need some more bitcoins, I just use brainwallet offline (and in safe mode) to re-create my private key, save that, then restart my computer, go online and add it to my blockchain.info account.

Yes to all the top 3

Free is good
Mostly a HODLer
but I use 1% to play with altcoins, BTC.SX and other strategies that invariable make me lose tiny sums of money.

If they plan to taper, they (Fed board and their friends) can short some bonds. Regardless, they can make money either way. The point is: they have (actually create) the important information to make money and we don't.

Another reason to stick to cryptocurrencies. Everyone has the same available information.

Number of google hits for craigslist: https://www.google.com/search?q=site%3Acraigslist.org+bitcoin

Oct 15, 2013 = 45800
Dec 19, 2013 = 1990
Mar 13, 2014 = 3380

Bitcoin requires some use to be a store of value. Without that use, I believe that it would be unstable. Even if the only use was for silk road, that would create some stability. But the remittance market alone should be enough to eventually stabilize the valule of Bitcoin.

Note that the stability doesn't need to be that great, as long as it returns to an arbitrary value (or slight growth). Some instability can be dealt with by cost-average buying over time. The value could be also be recovered by cost-average selling over time.

Even is every bitcoin was basically worth $1 for sending funds around the world, this would also allow it to serve as a store of value. To store a $1000, I would just get a 1000 BTC. If bitcoins are $1M each, I only need 0.001 BTC. Even at a penny each, I would just get 100k BTC to store a $1000.

I personally use several brain wallets to store the majority of my bitcoins. My wealth is safe from governments, creditors, family, ect. It travels with me all over the world. The only way I can lose it is if I am brain damaged, and then I won't care anymore.

I think the value of bitcoin (and brain wallets) as a store of value is truly underappreciated at this time in history.

Just to prove a point (nobody is going to loan me or any other random stranger):

I will accept a .001 BTC Loan, will pay back with 50% interest.

1M8QuYgCUv6WamZkJhyUJ7NhxcNNDxR1F2

Warren Buffet may be a genius when it comes to buying, renovating, and selling property. He is good at these things and it has made him very rich.

It does not mean that he knows shit about technology, much less cryptocurrency.

I consider his opinion to be somewhat interesting (like watching a train wreck), but ultimately worthless.

I just spent a couple months in Kenya. I can see how popular M-Pesa is there. I was walking with my youngest wife and she said that she wanted a coke, so I mentioned that neither of us had brought no money. She said no problem, walked into the nearest store with an M-Pesa sign (there are a couple every block on the main streets), did something with her phone, and they handed her 500 shillings.

People in Kenya are already using electronic currency everywhere. My wife pays her electric bill with it. She sends money to her parents using it. Some of the buses even use it. My wife is even using her phone as a wallet.

Bitcoin will work so much better here (and the rest of Africa - everyone has a cell phone) in place of M-Pesa. It is the future.

Whee....at least for a bit. Just a HODLer anyway.

I sent 1 BTC to Bitstamp and played with it. I was up to 1.05 BTC, then managed to turn it into 0.9 BTC.

I found the experience (even though it was only a couple of % of my BTC) to be more stress than I cared for. I am sure that I would get better with time and research, but I have decided that my temperament is much better for just HODLing.