V is not the rate of transactions, it is the "reuse" of the money supply. If Bitcoin were efficient enough (and modified somewhat), a single satoshi could be enough to support all transactions. Increasing the efficiency of the payment system lowers the demand for the currency, and prices rise as a result.

It's not clear which account was hacked. Did they use your bank account, your credit card, or your coinbase account?

Flourishing in third world or tiny countries won't mean much if Bitcoin in regulated into obscurity in the first world countries.


I think that many companies could be killed by Bitcoin, but many will survive and compete directly, limiting Bitcoin's market share.


I'm not talking about dumping. Even a slow controlled release of bitcoins that doubles or triples the amount in circulation will constrain its rise in value.


Most people don't understand it as well as you do. Fractional reserve banking with Bitcoin is a certainty.


Because Bitcoin is more efficient, less is needed to support a given transaction volume. For example, if a $X is needed to support a certain transaction volume, then only $X/10 worth of bitcoins is needed to support that same transaction volume, so demand for bitcoins won't rise as fast as expected.

Thesis: In a Bitcoin economy, V may increase faster than M/Q decreases in the equation of exchange, MV = PQ, resulting in rising prices.

For the sake of discussion, let's relax the definitions of inflation and deflation as changes to the money supply, an consider prices instead.

It is said, and generally accepted, that bitcoin is a deflationary currency. The argument is that the money supply is constant or falls slowly while the economy grows. In other words, in the equation of exchange, MV = PQ or P = MV/Q, M will be constant or falling and Q will rise, so P must fall.

Notice that one factor is left out: V, the velocity of money. We are assuming that V is constant, but what if it isn't?

Bitcoin is an efficient payment system, and that is its advantage over the status quo. A direct result of Bitcoin's efficiency will be a rise in V. Furthermore, suppose that Bitcoin's efficiency improves at the rate of Moore's Law, which is at least as fast as the economy will grow. If that is the case, then V will increase faster than M/Q will decrease, and prices will rise.

Andreas does a great interview, but I think his view that bitcoin will either take over or it will fail is naive. There are many scenarios where it could just end up limping along as a niche product.

I think the most obvious constraint to its growth will be regulation. Bitcoin is not invulnerable, it could be crippled by regulation.

I also think that it will be challenged by competition in the finance industry. Bitcoin may be good for a lot of things but it isn't necessarily the best choice for everything. It has limitations that other payment systems don't have, and others will take advantage of BItcoin's weaknesses.

Also, consider that other factors will reduce the value of a bitcoin despite its adoption:

2/3 of bitcoins are hoarded (a recent estimate). When the value finally starts leveling out, those hoarded bitcoins are going to be spent, doubling or tripling the bitcoins in circulation.

Also, consider that fractional reserve banking will increase the bitcoin money supply by possibly a factor of 10.

Finally, a major constraint of a bitcoin's value is Bitcoin itself. Bitcoin is much more efficient than other payment systems. Bitcoin's efficiency will increase the velocity of money by many times, perhaps by a factor of 10.

So, keeping these factors in mind, if you come up with a prediction of $X, maybe you should divide X by 200 to 300 to get a more realistic value. The Winklevii predict $40k bitcoins, but that prediction is perhaps really $1500 to $2000.

Wow!!!!! I can earn $0.002 every hour just by going to your website? That's awesome! If I do that all day and all night, I can earn 5 cents every day!

If it did that every day for a whole year, I could earn $20!!!! $20 is a huge amount of money! And all I have to do is visit your site 8,760 times once an hour!

SIGN ME UP!

That guy in the tutu looks awfully familiar. His pass shows a big P and G. I wonder who he could be?

Summary: I don't know much about bitcoin and I don't like it.

The article is full of FUD, myths, misconceptions, and inaccuracies. It says nothing meaningful. It's not worth anyone's time to read.

A paper wallet is basically a piece of paper with a public address and a private key written on it. If there is no application that will create key pairs for you, then here is a roundabout way. Install a wallet on a computer you don't intend to use and then do a dumpprivkey (assuming it is a bitcoin-qt clone). Then print one of the key pairs on a piece of paper. That should work, but there might be an easier way.

Destroying fiat money is pointless. The Fed can (and does) create dollars faster than anyone could possibly destroy them.

The "solving hard math problems" explanation is a stupid analogy. A better analogy is picking lottery numbers, but even that is not really the point. The point of mining is validating transactions.

I was asking about the confirmation number because its inclusion indicates your level of knowledge. Please read this: https://en.bitcoin.it/wiki/Confirmation and this: https://bitcoil.co.il/Doublespend.pdf

http://lmgtfy.com/?q=what+is+bitcoin+mining&l=1

Maybe that's too basic. Here are your answers:

Transactions are added to the block chain a block at a time.
When mining in a pool, a successful hash earns you a share of the next block reward that the pool receives. The difficulty is lower, so many hashes are successful even though they don't solve a block.
Best share is the one with the lowest hash converted to a difficulty value.
You give the mining software the address to receive the reward.
Shares that qualify are accepted. Hashes that are out-of-date or invalid are rejected.
Mining is all about transaction processing and nothing else.

This article isn't even remotely related to bitcoin. I wish people would stop posting articles in this forum that don't mention bitcoin.

Probably the only way to buy with a credit card is to get a cash advance and then buy the bitcoins with cash. Sellers generally don't accept credit cards or paypal because there are too many scammers.

In the U.S., the most convenient sources of bitcoins are Coinbase and LocalBitcoins.

In this case you don't get what you pay for. 1 GH/s is costs 0.0614 right now, and it has not mined 0.0066 BTC since you bought it. You are losing money.

At best, trading these shares is a gamble. The price has dropped 75% in just a few months. A few people may have made some money, but everybody else has lost 75%.

BTW, the graph at cex.io doesn't go back more than a month back because they don't want you to see how much it is dropping.


Hope is a very poor investment strategy.

Miners switch between coins to mine the most profitable ones. If a coin is no longer profitable to mine, then miners will stop mining it and the difficulty goes down. When the coin becomes profitable again, miners start mining it again and the difficulty goes up.

The difficulty determines the probability of "solving" a block. Your hash rate determines how many solutions you can try over a period of time. If the difficulty goes up and your hash rate stays the same, then the number of times you solve a block goes down. The result is that you make less money over that period of time.

I believe Quark and Primecoin are CPU-only.

You can't say that bitcoin isn't money because something might happen. The U.S. dollar would no longer be a store of value if someone at the Fed accidentally (or on purpose) pressed a button and increased the money supply by a factor of 100. Does that mean that the dollar is not money?