I think no matter what, after people have hoarded the amount that enough to support his retirement, he will start to spend, that amount is about 100000BTC at today's price, and I think most of people have less than 1000 BTC, means price have to rise 100 times before people start to spend
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Please hoard it, ECB paper has presented their worry about the BTC entering circulation will increase the actually money supply thus make central bank's job more difficult
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I've worked for a corporation and I've seen massive waste myself, on smaller scales
Agreed, I just left one large corporation, the inefficiency in a big corporation is by no means smaller than those from government Medium sized and small enterprises works much better, but they are inefficient as a whole, they fight each other and eventually someone become bigger and bigger and ends up with higher and higher inefficiency But to the end, the finance crisis has nothing to do with efficiency, the efficiency is already too high, the distribution of money is the problem: Those who working hard get no money, and those who do nothing get more and more money, since they are sitting in a position that give them all that benefit
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I will read it more thorough later today. The greatest thing about this paper is that it shows how ECB is thinking as a central bank when it faces such a new challenge
For example, they mentioned this: "In the classical equation of exchange, the velocity of money (V) is represented in the following terms: V = P x Y / M, where P x Y is the nominal GDP and M is the money supply."
MV=PY is the most simple and sound formula that is taught everywhere in the world's economy school, so central bank's operation actually is consistent with modern economy theories
Currently the EMU is facing big uncertainty, some of the member country might leave it, who knows what's going to happen in such a mess, if bitcoin were picked up by one of the country as backup currency (remember pirate party? they definitely favour BTC), then it will change the landscape
And, virtual economy will sooner or later grow larger than physical economy (For example, I don't want to move to a new house every year due to all the labour involved, but in a good game I'm willing to move to a new top fashioned house every day, this can be only achieved by virtual economy, people's spending on virtual things are growing continuously)
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"–– could have a negative impact on the reputation of central banks, assuming the use of such systems grows considerably and in the event that an incident attracts press coverage, since the public may perceive the incident as being caused, in part, by a central bank not doing its job properly" So they do wonder if they are doing a good job ...
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I have another thought: It could be regarded as a digital asset which is very secure and can hedge against inflation, since it is not issued by any government, the risk of default is zero. But first the exchange should be well regulated and accepted by pension funds
The risk of default may be 0, but the risk that there is a flaw that will reder bitcoins worthless is non-zero. There is also the risk that people will stop using bitcoins, which would drive down the value, which to the hoder works out to about the same thing as a default. As a high end investment target, people will not use BTC at all, it will only be operated by institutions. Buying and selling them in the exchange is their daily work, and why people buy? Since it hedges against inflation, better than a USD saving account I believe the demand for saving is endless, no one will complain if they die with several millions of saving in their account, with extra amount of saving, people will live a very different life: secure and happy every day
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BTC born at a time when people all over the world are eager to save more after financial crisis, so it is right on the spot. Currently people are still save in USD since they feel it is still backed by the most powerful country in the world, but sooner or later they will realize that BTC is as good as USD.
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and money should enter the system as more products/services enter the system
isn't lending money a service? The service of another service, is a derived concept. Just like derivatives, they are based on the basic service, if basic service changed or the relationship broke, the derivatives will be affected heavily I think basic services have nothing to do with money, money is just a tool to facilitate the exchange of services and goods, but unfortunately only people with good economy knowledge realize this, for normal people, money is as good as goods and services, as long as price is stable
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And I don't think interest is a problem, it is just a natural thing
Given same amount of money, if it is utilized and invested in future projects to produce new products, it will generate profit, the interest is a benchmark for the average investment return for the whole society. If the society is poor, even the interest rate is very high, there still will be people taking loans, since any investment will generate higher return than interest. If the society is very wealthy, the interest will get closer and closer to zero, means most of the new investment will normally generate no profit
So it is not the interest caused the continuous increase of money supply, it is the investment return growth require that the money supply to catch up, interest is just an indicator of general investment return
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Another problem with such a system is that people are very dependant on the bank's consumption, (The interest of a mortgage can be as high as the mortgage itself), if they do not consume, no one can payback their interest, and that is the case now, since all the banks got problem with their mortgage backed securities, their asset are deep underwater
We are really very dependant on the banks, I guess it is not very easy to find an alternative, since this banking system has been existed for hundreds of years and it takes TIME to get there, time is the most powerful force in the universe
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In part II, this interest problem has been solved by adding bank comsumption, in my opinion, it still needs some explaination On a small island with only 2 people, if bank only loan out 100$, there is only 100$ in the whole island at any given moment, let's say the interest is 5$, then no matter how it is paid back to bank and consumed, the total amount of money at any time will never reach 105$ So, 105$ never existed at the same time in someone's account, it is just a double count of the same money AT DIFFERENT TIME It's the same as: Although the total consumption of goods and services on the island in one year could reach 100$, the money needed to enable the transaction of these goods and services can be as low as 1$ (100 times transaction happened during one year) Because every economic activity need time to carry out, it is important to include time axis into diagnosis, that added another dimension in all the analysis and it becomes more difficult to see the clear picture, currently animation is the best method, but it is quite difficult to make an animation, these films are good attempt
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difficulty follows price (all else being equal)... it's as simple as that. People thinking it's the other way around must think again.
Only if technology didn't improve, if ASIC is available in abundance, then difficulty can double quickly without seeing any movement in price. Doubling, tripling or a a thousandfold increase in difficulty will have no effect on price. Technology improvement or not. Halving of difficulty will have no effect on the price. There is simply no reason for mining difficulty to have any effect on the price. I think difficulty do affect price. People will try many difference approach to get BTC. If the difficulty is too high, then it is not very practical to setup mining rigs, those who want to invest in BTC will simply buy them, this will lift the price of BTC. So it is balanced by itself
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Today my open mining rigs on balcony experienced the first wave of cold snap here: -7c degree at the time when I'm writing now.
My usb stick could not boot successfully if I restart the rig, had to use a hair dryer to help. 5870 card temp will go as low as 15c degree even with overclock (Accelero extreme 5870 cooler)
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shouldn't they be set at least 300mhz?
Tried many different RAM clock combination without luck. I've been running at 150Mhz for months without a problem, I think it is the GPU who start to degrade, but difficult to prove, since raise the voltage does not really help
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Same here, one of my 5970 core now runs with 50% HW error, tried everything: changing voltage, frequency, replace thermal compund, nothing works. I'm running 2.3.3 version of cgminer and never had problem before
After cgminer started, first several minutes it works without problem, but when temperature reached above 40c degrees, this error start to appear, this happened weeks after I changed the heat sink to Accelero xtreme and thermal compund to coolaboratory liquid ultra, so the GPU cooling actually got much better
Maybe as someone said, it is the RAM problem, since I did not put any heatpad on RAM with new cooler, but anyway they stayed at 150Mhz
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Of course people are hoarding, especially when price is much higher than electricity cost now
And the best part: If there is a price crash, there will be more people buying and hoarding, I believe some true BTC belivers are just into this business for LONG TERM, regardless of its exchange value
I have a guess, eventually the BTC price will be decided by the electricity and mining efficiency. For GPU mining rigs, it is around 4$, below this value, many people will shut down their rigs and buy BTC, thus support the exchange rate. For FPGA mining rigs, it could go below 0.5$ before people shutdown rigs and buy BTC. For ASIC mining rigs, even if the price went to 0.01$, ASIC mining still could be profitable, so there will be much less BTC buy order from miners when the ASIC mining is in place
But this reasoning is based on traditional cost model, since the supply is constant, the wide spread of BTC might generate other effect
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Good, learned something new: The banks will spend the interest they earn and that part of money will also go into the circulation
Before, I always thought that the interest must be paid back by new printed money entering the system thus the money printing speed need to accelerate exponentially if interest rate is above zero
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Frankly, I await Giga-networking and superfast SSD's before thinking about Bitcoin taking off. Just started an official client that needed catchin' up (like 100 days). Result: PC freezed and HDD is fighting for its life. No ordinary user would ever touch Bitcoin this way and I cannot recommend it to my mom Ultimately, I think the Bitcoin will require more time before taking off. Just like MBS or CDS, in future, normal people will not be able to touch BTC at all, it will be take cared by institutions All they get is a secured pension or saving account that they can withdraw fiat money with a debit card, they might not even know that their retirement money is invested in an instrument called Bitcoin There is a concept need to change before this happens: Investors must judge the value by supply and demand, not utility Currently the pension funds only invest in top grade securites, those securites' value are backed by a government which have ability to tax the labour of its people to pay back these bonds. From utility point of view, BTC are not backed by any such kind of utility, thus the value is mostly decided by exchange, if everyone decided to dump it, the value of BTC can go very low and you could not buy anything without a huge amount of coins
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The real problem for BTC is that no one cares about it, there are just too many virtual currencies out there and people see no reason to care about it, I don't think people's daily casual use of BTC will bring enough strength for BTC economy
But if the price of BTC rises continuously and steadily, people will care about it a lot, to achieve this, there should be continuously inflow o f fiat currency into BTC market
I believe there are many risk capitals are willing to invest in BTC, but first BTC exchange will have to be more established and regulated, so that serious investors will get enough confident
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Think positively In 2014, BTC is a high end investment vehicle, only those qualified sophisticated investors with deep technology pocket (Asic factories) can touch it, normal people will never understand it, just like most of the people do not understand how MBS and CDS could be bought by banks and funds all over the world and eventually crash the world's economy MBS and CDS crashed because of over production of house. But BTC does not have such weakness, so it can outperform those complicated financial instruments and gain more popularity I think the wall street will be the first place that mass adapt BTC. If BTC start to be accepted as a new saving medium, there will be continuously inflow from fiat currency to this medium, the price will rise steadily, give it more popularity in investment world Today, people's saving in fiat currency have a big problem: There is no investment opportunity, the central bank push the rate to near zero and stimulate investment, thus hurt those saving accounts. But with BTC, there is no such problem, BTC's value will not be affected by central banks, it's a saving heaven. And this in turn give central banks more room to stimulate the economy without worring about inflation and negative impact on people's pension Correct me if this scenario have some fatal flaw... I think gold also act similar to BTC, but now when people put lot's of savings into gold, the gold price just keep flat, due to the production has increased a lot
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