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You could add this to the command instead of making the links: -datadir=x:\BitCoin
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You cannot assume that difficulty is constant. If miners can produce bitcoins for less than their value, then they will increase their capacity and the difficulty will increase until the cost of mining reaches the value of the mined bitcoins. I suppose there might be shocks that shift the supply curve temporarily, but otherwise, value drives cost and not the other way around.
No kidding you can't, but in scientific inquiry being able to see how things change by holding all else constant gives insight into how the world works! Also cost of production influences price in nearly every market for produced goods, not only commodities. There is a ton of research on this subject in economics. Look up "cost plus pricing" to get an intro. As for miners vs. traders all you need is enough miners to sell close to cost for this to work, you don't need each one to. In fact, many miners hoard or speculate on price. On the other hand, those in the business of mining are producers who sell as soon as they are made. Especially the Chinese mining farms. -- Take the analogy with the oil market. There are many more non-producers involved in the oil market - whether it is traders, consumers etc. and yet the price of oil usually trades around its cost of production (extraction + refinery & transport) The critical difference is that bitcoins are not consumed. That changes everything. Your oil, commodity, and produced goods analogies are all not applicable to the Bitcoin market. In the Bitcoin market, producers have little influence on the supply of bitcoins, so they little influence on the price. |
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The CIA or NSA want to crack passwords. So, instead of simply building a chip that hashes data using various hashing algorithms, the CIA or NSA develops a revolutionary payment system with the hope that four years later some Chinese dudes are motivated to develop chips that do a very specific kind of hashing that might not even be useful for cracking passwords.
Yeah, that makes sense.
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Wouldn't the total yearly budget deficit be destroyed simply by adding a surtax to the incomes of the super mega duper millionaires? Start with those who whine that their rates are too low - change their rates to 70% of their income or something, and disallow all deductions. And to harden social security, make their social security tax to be 15% of their income.
France actually tried something to that effect. Though I don't know how it fared in the long run (I guess we should ask Arthur Laffer), but I heard some celebrities giving up their French citizenship... That's indeed the problem, when you tax the super rich guess what happens... they leave to Switzerland and alike places. The only thing that could stop them is public shame, so those that are public figures (top athletes, actors, etc) are risking that their native fanbase starts hating on them. But the anonymous rich bankers and so on? these guys simply don't give a fuck, they'll just move the money. The U.S. is different. Leaving the U.S. doesn't matter. If you are a U.S. citizen, you must pay income tax no matter where you are in the world. The only way out is to renounce your citizenship, and even then you are handed a hefty tax bill. |
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of course cost determines price. in a market where a large number of producers compete to sell their product, they will undercut each other driving price down to cost of production. ... The one unique difference is that bitcoin has a fixed rate of supply (1 block each 10 minutes) so the elasticity of supply manifests itself in the difficulty instead of changing the rate of supply to meet changes in demand.
so what happens if mining hardware becomes twice as energy efficient? holding difficulty constant, miners will be able to sell each bitcoin at a lower and lower price until it again approaches this new (lower) cost of production. If difficulty increases, this will serve to increase the cost of production (the same hashrate will now find effectively less BTC per day than before the difficulty increased) so it acts as a bit of a stabilizer -- so the question is what will progress faster? The network size (which raises difficulty and cost of production) or technological progress?
You cannot assume that difficulty is constant. If miners can produce bitcoins for less than their value, then they will increase their capacity and the difficulty will increase until the cost of mining reaches the value of the mined bitcoins. I suppose there might be shocks that shift the supply curve temporarily, but otherwise, value drives cost and not the other way around. So what happens when the block reward is halved? Well the marginal product is cut in half while the cost remains the same, or in other words the cost to produce a bitcoin goes up. That means that your personal breakeven market price has just doubled. If the network average also reacts similarly, the market price should also double.
Miners are not the only traders. Newly mined coins are only a small part of the market. Miners have only a small influence, if any. The result of the halving will be that enough miners stop mining that the difficulty and cost adjust to a point where mining is profitable for the rest. There is no mechanism by which mining cost affects the value. |
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thanks for the input. are there dangers with storing btc on your phone?
There are two dangers particular to mobile devices: 1. Losing your bitcoins when you lose, break, or wipe your phone: You must back up your wallet or wallet seed. If you do, then you can always restore your wallet on another phone. 2. Losing your bitcoins through theft of the phone. If your wallet is not encrypted, then somebody can steal your bitcoins by stealing your phone. The wallet must be encrypted and allow access only with a password. If you do that, then nobody can steal your bitcoins. Do not use a wallet that does not protect against either of these dangers. |
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I have bought a lot of bitcoins from Circle. They are very convenient. The drawback is that you give them direct access to your bank account.
I cannot recommend Coinbase because they track you and they will ban you if they don't like what you are doing with your bitcoins.
As for a wallet, Bitcoin Core is not a great choice. Before using it, you have to download the block chain (which can take days). And every time you start it up, it has to validate its database and sync the block chain (which takes several minutes).
I recommend Airbitz on your phone because it is very easy to use and very secure, and Electrum on your computer.
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Well, it is a day later and I was really hoping for an answer to my question: Why would Bitcoin FRB need deposit receipts (or Bitcoin IOUs) that are considered money?
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The purpose of randomness (entropy) in cryptography is unpredictability. If everyone uses the same stream of random bits, then it is not secure because it is predictable. It's like always setting the seed of a PRNG to 0.
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Please help me understand why Fractional-Reserve Banking with Bitcoin would require deposit receipts that are treated as money. I don't think that is the case, but people (including economists) that I believe should know the answer do.
My understanding of Fractional-Reserve Banking is that it basically (though not actually) works like this:
Assuming a 10% reserve ratio, banks take in deposits and then loan out 90% of those deposits. The loaned money is deposited back into banks, which then loan out 90% of those deposits, and so on. Eventually, the apparent money supply is 10 times the base money supply.
This scenario does not require deposit receipts that are treated as money, so what am I not getting?
FRB actually works more like virtual particles on the event horizon of a black hole, where a bank creates money by creating a loan. It can't work that way with Bitcoin because banks can't create bitcoins, but wouldn't the basic scenario that I outlined above work?
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The best method from start to finish:
1. Plug a Mycelium Entropy into the USB port of your printer.
2. Print.
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I just found out that you can't withdraw a designated amount of Bitcoin from paper wallets, you can only sweep or import them.
This seems kind of weird to me. What is the point of a paper wallet if its sole purpose is to later on be swept clean of its coins? If security is an issue, wouldn't it make more sense to have a software bitcoin wallet that runs off an encrypted usb drive?
Paper wallets are used for storing bitcoins in an address that has never been exposed to the internet. It is not necessarily the best way to store bitcoins. Being on paper means that it is not susceptible to electronic failure or degradation. A properly protected paper wallet has a much longer lifetime than a USB stick or hard disk. There is also no danger that the device that the keys are stored on becomes obsolete. Imagine that you stored valuable information on an 8 inch floppy disk 30 years ago! |
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The number of bitcoins has no effect on the viability or sustainability of Bitcoin. There are 21 million bitcoins. There could be 21 quadrillion or just 21. It is an arbitrary number. It doesn't make a difference.
However, as pointed out by Amph, the bitcoins are not gone forever. They will be spent eventually. Otherwise, what is the point of saving them? The question is moot.
The difference between an interest-bearing loan and buying a share of a company is just the structure of the investment, primarily in the assignment of risk. In the end, the results are the same for the investor: they give some money to someone and they get it back later with a bonus.
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It seems to me that there needs to be a distinction between "running a full node" and running Bitcoin Core.
There may have been 370k people running Bitcoin Core, but how much benefit were they providing to the network? Running Bitcoin Core long enough to sync the block chain and send some bitcoins or view your balance provides very little benefit, especially if you haven't opened port 8333.
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There have 2 party which can feel the effect:
-if bitcoin in lower price it's good for some people who buy bitcoin( I called buyer).
-if bitcoin in lower price is bad for some people who earned , they need wait till buyer rise the price.
Exactly the lower price of bitcoin is good news for the actual investors who are looking to buy bitcoins at present... That is a common fallacy. Consider this: Price lower, then buythen price goes lower: bad for buyers then price goes higher: good for buyers Price higher, then buy:then price goes lower: bad for buyers then price goes higher: good for buyers As you can see, whether it is good for buyers has nothing to do with the price before the bitcoins are bought. It is completely dependent on what happens after the bitcoins are bought. A common response is that the price is expected to rise in the long run, so waiting for a lower price is better. But, assuming that you expect the price to rise, waiting for a price drop means betting against your own expectation as well as believing that you can predict short-term price fluctuations. |
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The obvious common sense thing to think when demand is same as now but the supply has halved, the price should go up, so buy your bitcoins now and hold until the halvening  The supply will not be halved. The supply of new bitcoins will be halved, but that is not the same as the money supply or the supply of bitcoins for sale, which is more accurately described as the supply curve w.r.t. supply and demand. |
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Selection bias.
What about 1990 (recession), 1997 (Asian crisis) and 1998 (Russian crisis)?
1990s recession was the lingering effects of black Monday (87) which continued on to the early 90s Also, as far as I know, the FED doesn't directly control Russian and the Asian markets. The FED also does not directly control the American stock markets (1973 and 1987), Just the money supply! Which has nothing to do with stock markets! nothing at all! Got it! Go buy stocks man! go buy buy buy!!! It's a perfect time for you! My point is that there is no 7-year pattern. You chose the events that fit a 7-year pattern and ignored the rest. That's called selection bias. |
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Well it's obvious for the receiver to want the price to be as low as it can so they increase the amount of Bitcoin they receive. For those that hold and pay in Bitcoin, they clearly disagree.
That's not quite true. They want the price to go down before buying and then to go up after buying. It is one thing to hope that it goes down, or to hope that it goes up, but hoping that it goes down and then it goes up ... that sounds more like wishful thinking. |
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Selection bias.
What about 1990 (recession), 1997 (Asian crisis) and 1998 (Russian crisis)?
1990s recession was the lingering effects of black Monday (87) which continued on to the early 90s Also, as far as I know, the FED doesn't directly control Russian and the Asian markets. The FED also does not directly control the American stock markets (1973 and 1987), |
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