From numbers, they actually own 200,000 bitcoins, seems that all their coins went into this IPO
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Warren B and friends sey no like bitcoin pumpjobbers~ he say ~> BTC = Rat Poison
>>DO YOU NEED A LINK???*MUST SEE!*
Exactly, Rat = Banks
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Also known as how do you exit an illiquid market without destroying the price...
The beautiful thing with bitcoin is that you may never need to liquidate them, you just simply spend them if the acceptance is enough wide, means only money inflow, no outflow
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Why do you mine bitcoin? To buy USB Block Erupter What is the use of a USB Block Erupter? To mine bitcoin ![Grin](https://bitcointalk.org/Smileys/default/grin.gif)
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The concentration of hash power due to ASIC is a negative thing for the moment, hope that evens out quickly
Before, GPUs are available to everyone, a gamer with 1-2 ATI graphic cards can start mining right away without any investment, and a tiny $1000 investment will get anyone a decent rig of 1GH, which mines half a coin per today for many months, almost no barrier of entry
Most of the people are IT enthusiasts, mining is fun, and most of them don't really looking for a serious income
But now in ASIC era, with more and more manufacturer defined devices, that fun is lost more or less. Many people are looking for quick profit, since miners are the biggest actor in bitcoin economy, without more and more miner join the game due to barrier of entry, the bitcoin popularity will go down
And coin generation halfs every 4 years do not help either, soon at 2016 people will realize that 75% of all the coins are already mined and the game has almost finished its initial distribution of wealth, there will be even less people join the mining game
At that stage, the driven power for bitcoin popularity could be the collapse of fiat money or the huge support from some large enterprise. But I guess any corporation with some serious real economy output during a fiat money crisis would prefer to issue their own money instead of let a bunch of geeks who sitting on the pre-mined coins benefit from their economy significance
So it takes time, those large bitcoin holders must drive the real/virtual economy behind it to further increase its utility. The possible scenario I can think of: Some super popular IT product that is only payable in bitcoin
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The bitcoin is valued at current price just because there are still many uncertainties, if everything has settled well, the price will be magnitudes higher due to very limited amount of coins in circulation
It is very funny, the purchase power of USD is maintained stable by people's belief that FED will follow their mandate to ensure the price stablility, although they know nothing about what FED is doing
Similarly, the purchasing power of bitcoin will always rise in long term, this consensus is also achieved by people's belief that bitcoin's total supply is fixed. As long as that belief do not get shaken, the consensus will not change easily
Current bitcoin investors hope to get as much coin as possible before the majority join the game, regardless of price. They are currently heavily invested in mining equipment instead of buying, because the historical return is higher, but when more mining equipment were made and the per equipment return dropped below the cost, some of them will start to buy coins
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People are ignorant, as long as they get money, they don't care. If you have the right to print money, you could eventually bribe anyone (with printed money)
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Here you can see from ASICMiner's relay of blocks that how many real transactions there are, comparing with the payment transactions from mining pools ![](https://ip.bitcointalk.org/?u=http%3A%2F%2Fphoto.mystisland.org%2Ftransactions.jpg&t=664&c=F3Q6MhQWECXkZg)
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Don't worry, BFL will catch up later with 2PH, so far they just warmed up
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IMO, we should not care too much about real economy, the future is in virtural economy and its size will bypass real economy later
Look at my nephews who are about 13-14 years old, most of their interest is in the internet, not real world. For this generation, the real world is only a support for the physical body, at least half of their enjoyment comes from the virtual world, since many things in virtual world are more perfect than real world and they have much more fun there. The only draw back is that today's virtual reality realisation is still far away from comfortable, 3D TV is a joke and very uncomfortable to use
Another fact is that merchant can handle the bitcoin sales seperately, not like fiat money sales, you can put those bitcoins at a saving account and hold it for a longer time. Because anyway people will not be totally dependant on bitcoin, the fiat sales could be enough to make back their cost, and bitcoin sales will become their capital reserve
Currently there are not so many people spend bitcoins, but that will improve over time, when more exchanges and more miners are willing to sell/spend their coins. Actually miners are the only provider of new coins to the economy, and if the coins they mined worth enough, they will start to spend them. Now daily new spending is maximum 3600 coins. Comparing with FED's daily spending of 2.8 billion new USD, it is obvious not so many people can receive bitcoin as a payment, if its price stayed at current level
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The problem is related to price
For example, a lunch cost 10 euro in some europe country, then most of the time it cost 10 euro, even the exchange rate between euro and USD changed a lot
But for bitcoin it is not like this, the exchange rate decided how much the lunch will cost in bitcoin, it maybe cost 0.1 bitcoin this month and 0.2 bitcoin next month
The reason for this: There is no organization controlling the money supply to stablize the local price.
So, bitcoin is not really suitable to be used as a daily payment medium, it just stores value in long term and later when you need to spend it, you have the possibility to directly spend it at merchant sites. And I guess you would still mortgage bitcoin and get fiat loan to spend due to wider acceptance
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I read sometimes ago that a chinese banking officer expressed interest of controlling part of the hashing power to build bitcoin reserve, and even build reserve hash power in case a 51% attack hit the network (I guess he is using the typical reserve = stability theory from central banks culture)
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It doesn't matter if FED is privately owned or publicly owned, it's the way they create money problematic
In principle, anyone who is trustworthy and own some valuable things can create money. If you have lots of gold, you can issue money (backed by gold), if you have several house, you can also issue money (backed by assets). People can use those money to exchange things, because it has value, anyone can come to you to redeem gold or house, it is perfectly working
In such case, you can spend the money created by you but you must keep corresponding assets as mortgage. If you spend the underlying assets (gold or house), your money might worth nothing if someone come to you to redeem those assets
But the problem with central banks' money creation is: They don't have any asset back the money they created
For example, FED is creating 80 billion dollar a month to buy government bond and MBS, when they create those 80 billion dollar, these money are backed by nothing. But after they purchased government bond and MBS with these money, they have some corresponding items in the FED's balance sheet: The government bonds and MBS are FED's asset and those newly created money are FED's liability
This is quite absurd. Imagine that anyone doing this: He created money by copying and use those money to buy several hundred houses. And his balance sheet record those money as his liability and record those houses as his asset. Although he has good accounting discipline, but that still counterfeiting, in any kind of law in any country, this is illegal. Why it becomes legal when central banks are doing this?
Ok, even central banks get the permission to do this through some complicated political work, it still created some problem: Now everyone in society will become very dependant on their relationship with central banks. The closer you get to those big money printed out from central banks, the better you are. This will create a twisted structure of the society that most of the rich people are banking/financial related workers who actually contribute very little to the production of real goods/services
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When bitcoin's price dropped from 266 to 50, many bitcoiner's wealth disappeared, but that is not real wealth, lots of fictive wealth
Same goes for market cap, if you cash out all those paper gains, you will crash the market price. The only way to maintain those fictive wealth is hold a near zero interest rate and keep printing new money to buy those assets to keep price from falling. But, without increase in real income, sooner or later those asset have to be sold to support the living expense no matter the price, and eventually they will fall into FED's balance sheet, and FED ends up bought all those assets
In fact FED through printing money claimed many assets, and people have to work hard to create those assets. But people are so ignorant that they only care about their earnings, so if someone come with money and buy their product, they will be happy, they never questioned where are those money come from.
This clearly proved that money's value is decided by a consensus, not supply and demand. As long as the consensus of POUND and DOLLAR's value holds, their value will not change too much
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The worldwide economy is worse than the numbers suggest and people need fiat to pay the bills.
If they use fiat, they could never payback the bills Each fiat dollar is backed by a equal amount of debt, when they get 100 dollar to pay the bill, they created a 100 dollar's debt to be paid somewhere else in the society, plus interest. So someone else might get a 103 dollar bill to pay, society as a whole become more and more debt laiden
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If one large online merchant like Amazon accept bitcoin, then issentially you could buy anything use bitcoin, never need to convert back to fiat again. That day is not so far
And the reason you use bitcoin instead of USD: When you don't spend them, their value will be on the rise, so your purchase power is always higher every year
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Just like central banks' operation, many things have become so complex and no one really understand how it works, eventually everyone is gambling (from long term point of view)
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@elasticband: If you can still flash firmware, maybe it's a good try to flash 0225 firmware, I had been running that firmware for months without restart of the machine, it has minimum overhead and the web interface is very responsive
And you should check the power and data cable on each module, sometimes they get loose
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In a way you could say that it is backed by Fiat Currencies... Think about it you can buy and sell things with bitcoins and what do people do with those bitcoins when they have them? Buy things with them ? Maybe, but the majority of them will eventually exchange it for Fiat. Because lets face it in the physical world there's not alot of places where you can use Bitcoin. Even though i think it's backed by Fiat I personally believe imho that this is still great. Because even though Bitcoin can not replace fiat it provides so many great features for E-Commerce. Bitcoin to me is Virtual Cash and I will be very happy to use in when it stabilizes in the end because of that. All it takes is one or two supermarket accept bitcoin payment, nowadays large supermarket almost has everything people want in daily life. And the supermarket can pay their employee and sub-contractors with bitcoin Fiat money has been existing for a long time, so most of people don't ask why it still has value after the gold that used to back them were removed 1971 If you are a merchant and everyone have both bitcoin and fiat, you will definitely welcome bitcoin over fiat, but people might want to spend inflative fiat and save deflative bitcoin, so anyway bitcoin will not be used at large scale, it's like some kind of high powered money which seldom used to do the payment, although it has the payment function If bitcoin value always double each year, who will spend them? They will more likely to mortgage them and get a fiat loan to spend
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Or millions. Don't underestimate the downward pressure that Bitcoin expansion would have on the dollar's value. Runaway inflation is a real possibility in the wake of the continuing banking crisis and steady, massive increase in dollar supply.
True, in 2 years, the real problem might comes from the governments being insolvent, and the collapsing of goverment bonds. To keep that amount of huge pile of bonds afloat, 10x more money must be printed, when that happens, the only safe heaven is bitcoin
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