3. Mining will always be profitable, for someone. No need for transaction fees.
It is possible (and likely) that enough bitcoins will be mined to make mining for the block reward unprofitable. I believe that the result is that mining will stop completely if there are no transaction fees. If any miners stop mining under the current system, then the remaining miners become more profitable. That feedback doesn't exist in your system. This in a deflationary system there is a positive feedback loop as the remaining miners become more profitable causing a stabilization of the hash. That sort of feedback does not exist in the inflationary loop. If you are mining gold, your result is proportional with the work you deliver. No matter what other miners around the world do. The same for my mechanism. It can be compared to mining gold. Bitcoin mining cannot. There is a limit as to how much gold can be taken from any one gold mine. Eventually it will become more difficult to extract additional gold from a goldmine up until the point that no additional gold can be mined from that specific goldmine. Kind of like how over time it (usually) gets more difficult to mine bitcoin and over time less and less bitcoin will be mined per block |
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I would find it plausible that Chinese exchanges were trading using their own funds for profit and were making a lot of money. I would also say that this practice can be extremely risky and would make holding funds at these exchanges risky as well.
This recent interview with Bobby Lee (CEO of BTC-China) is quite relevant to this question: https://bitcointalk.org/index.php?topic=178336.msg7510644#msg7510644It sounds like they may be using customer funds to trade. This is very risky and unethical as it is not the exchanges money to be risking like this, especially without disclosure. |
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QE would need to be taken away very gradually.
Even with QE Japan has experienced deflation
QE in Japan doesn't work because price level has gone to unrealistic level. Property and security price are governed by yield and return of investment, if they go up to unsustainable level, the cost will of course need to go down. Printing a lot of money will only make smart money leave the country to seek better yield and reasonable ROI business. Japans a bit weird in that their debt is larger than their GDP by a significant amount but people trust that their money will not be lost or stolen in the system or the currency will collapse. Benefits of having your own citizens holding the debt still to get ROI would be a significant challenge for them and they can't really print money to increase their debt so its a bit of a conundrum. Debt larger than GDP is fine. A more meaningful measurement would be the country income vs debt level. So long as the country has good income via export and service, the debt can be expected to be paid back. GDP is essentially the "income" that a country has. It is defined as "the sum of all the goods and services produced by the country in a year" and is as close to income as any measure is. |
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Bitcoin is useful to send money instantly and nearly free.
For example, if I want to buy some software key, I can send the payment and get the key instantly and free.
With credit card or any other way, it's slower and more expensive.
In the future, this will be applied to the normal life too.
We'll be able to take a taxi and pay using Bitcoins, without worrying about carrying CC or cash.
I expect more people will see Bitcoin as currency and less as an investment in the future when it's more widespread.
This is exactly the point of bitcoin. IDK why the OP thinks that anything needs to only be legal if it were purchased with bitcoin. People use the "barter system" all the time |
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The exchanges will never allow transfers directly on another exchanges. They can't because of the law.
This is not necessarily the law, but rather would make it much more difficulty to do AML due diligence so much exchanges would likely prohibit it. One way to get around regulation is to have each exchange have bilateral deal. Each one granting each other certain amount of fiat credit and settle it every few days. Then implement another portal on each exchange to grant user credit. This will by pass all the AML rules in place and not really violating any existing rules. The AML rules are not about the exchanges, they are about the people whose money the exchanges are holding. It would be very difficult for an exchange to verify that when "Person A" is sending fiat to his own account at "exchange2" when he sends fiat to "exchange2" The only way around this would be for an exchange to setup a new bank account for each customer. The problem with this is that it would be very expensive to setup (you cannot automate the setting up of bank accounts) and to audit (there will be a lot of bank statements to check for accuracy) |
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what are average prices when buying coins outside the exchange? +-%? I guess it depends on the amount, lets say i'm looking for 100 coins. M?
Thanks!
Well, i don't know what exchange are you talking about, there are many wich has many prices. In localBitcoins you can find prices from 10-12% cheaper to 15-20% overpriced (based with average prices: Bitstamp, btc-e, coinbase). Localbitcoin usually carry premium. I have never seen discount. Traders will sometimes offer a discount if they want to get rid of their coins quickly. You can also make an offer to buy at a discount. |
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Try buying casino chips to play poker with a credit card... my local establishment won't allow it. Sure, they'll let you withdraw cash and then turn that cash into chips, but they're not allowed to convert card to chips directly. Anyway, if I want to play poker I don't want a nice undeniable paper trail showing where I was and what I was doing.
I think the issue with buying casino chips with a credit card directly has to do with the issue with credit card reversals. If a gambler were to lose all of the money he took from his credit card then he could simply dispute the charge. I have also seen ATMs at casinos (I haven't used one) but it looks like they all have phones attached to them, so I would speculate that you cannot simply use your pin to takeout cash but instead need to call your bank to authorize the transaction along with answering a number of questions to verify that you are in fact you |
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Mining is only profitable for hardware sellers - always.
That's not true. I got ROI and a 30% from my mining contract from e-pickaxe. I find that very hard to believe. Right now, they are charging about 8.3 BTC for 1 TH/s, and 1 TH/s is likely to mine less than 6 BTC. I assume your deal was equally as bad. Can you show us your numbers (in BTC)? In November and December I bought 266GH for $8000. That was 10.12BTC at the time. Right now I've got 11.5BTC payed out from them. And they still pay me. 30% was a bit more than the reality I'm about 15% profit. Sorry about that mistake. Right now they would maybe not go break even and there is better deals available. PBmining was they cheapest/GH when I last checked. PBMining is the cheapest, but there are certain people who aren't trusting it yet. I don't like how PBMining locks you in to a 4-5 year contract, even at the low GH/s price. I prefer to keep trading and the like as much as possible. Plus PBMining hasn't shown any pictures of their mining locations to my knowledge, so that's another downer. PBmining is likely some kind of ponzi sceme. I would not at all recommend "investing" with them I don't think pbmining is a ponzi do you have anything to support your claim, cex.io probably best fits that title the only people making money are its owners. Simply because the only people who are making money are it's owners does not make something a ponzi scheme. The issue with cex (and all cloud mining services) is that their hashes are overpriced as well as the fact that you cannot easily predict the difficulty of the network in the future |
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Make it easier to use secure and store
Also to purchase should be as simple as go to exchange skip the verification process purchase and done
Or a direct debit from the account converted to Bitcoins.
Still a way away from that though
This. I believe the future of bitcoin is as a back end system to transfer IOUs of cash. For instance: a customer pays in $ with debit card, but the money transfer is the equivalent amount in bitcoin from the customer's bank to the merchant's. The merchant bank debits the merchant's account with $. Should the bank have liquidity problems, it should have a right to instantly sell those bitcoin to the customer's bank for $ This type of system would ultimately lead to centralization and is really not what bitcoin was designed to do. I think that the reason bitcoin is not more widely used is due to the fact that there are not many places to spend it and that there are semi-high barriers to purchase bitcoin. Bitcoin ATMs are solving this problem, but they are not widespread enough so that a huge difference can be made. (excluding ATMs) In order for a person to buy bitcoin they need to sign up for an account on an exchange, go through the AML process, deposit fiat at the exchange then buy the bitcoin. Alternatively they could go on local bitcoins, find a face to face trader, find a place that is mutually convenient for both of you, find a time that is good for both of you, meet, and trade fiat for bitcoin. |
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Hedging strategy doesn't work on highly volatile underlining asset. A 50-100% price movement will wipe out just about anyone using leverage.
If you had put options (a hedging strategy) and the underlying went to zero then you would be protected from the strike price of the put all the way down to zero less the premium (cost) that you paid for the put. |
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The researchers from the Carnegie Mellon University CyLab who carried out this work, tempted users into downloading and, in many cases, actually running a Windows application on their computer. After they had agreed to take part, they were told that it was for an academic study but were given very little other information about the application. The application pretended to run a series of computational tasks and paid those who installed it one cent for every hour it was left running.
If something is for "academic" use people are generally more trusting then they otherwise should be. The same goes for noble causes like the SETI project that lets people use their computer to look for possible signals from outer space. I think that the acceptance rate would be much lower if participants were told that the application was for "for-profit research" without a specific cause. |
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I deposit $1000 into the Bank
Bank Clerk types "+$10,000" on the keyboard and then the clerk lends out $9000 in mortgages and loans to other customers, which then goes towards other recipients who then spend this made up money on consumer goods, services and luxuries. Withdrawal limits and other measures are brought in to prevent customers from withdrawing more money than the bank actually has. Meanwhile, since there is all this extra money in society, people realize it's becoming worthless and therefore prices go up (inflation).
The only people who benefit from this are those who have the license to print money, the bankers. Bankers are the same ones, for years, who have requested we move away from a cash society because it would make their evil work easier. After all if there's no paper money then the bankers have complete control over everything.
Fractional reserve banking has to go. Why do we need bankers? How can they necessarily be any better at banking than the average university math graduate? If you're telling me you need to be born into a generational banking family to do risk assessments ("should I loan $300K to a guy who hasn't worked in 15 years?") then you must be "bright".
If you were to "turn off" fractional reserve banking then how would anyone be able to borrow money? For the most part they could not as there would not be any to lend by banks. You would still have sites like prosper and BTCJam, but these sites charge much higher interest rates then what you would expect for loans that are secured by something other then your signature. These sites also rely partly on the banking system in that they base your risk level off of your prior payment history of debts that was possible by a fractional reserve system. Deflation is usually the result of major banking collapses as people no longer have access to money that they once had so they are forced to spend less not more money. |
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So in reality having a solid options market would actually increase the liquidity of bitcoin but not necessarily decrease the volatility. But it's unlikely to increase the volatility, correct?
Correct Think of options as side bets. Traders use options because of leverage. So they are not buying or selling bitcoin they are trading contracts on the side betting if bitcoin goes up or down by a certain date. But options market makers are mostly writing the options. Its really risky for them to do this so in order to hedge these bets they buy or sell the underlying. Its called delta hedging. Delta us how much the option mives w the stock. The stock is one delta. The more "in the money" the higher the delta. Market makers don't care about direction. They make money on premium and the premium is priced using volatility When a product has options it gets traded a lot. But its the same shares being passed back and forth by the same group of market makers. This is why liquidity increase. If you need to buy or sell the market maker takes your order. You don't need to wait for a buyer or seller on other side. Seems like it would be a net positive for bitcoin. I wonder why there is so much resistance to the idea of bitcoin options. Misinformation maybe? I dont trade bitcoins but I looked on coinbase and the bid ask spread is $2. That is crazy wide. When AAPL was $600 the bid ask spread was still only 10c. If there were options on bitcoin that increased liquidity the bid ask spread might go down to about 30c. The spread is that wide because Coinbase needs to earn a profit and they need to manage risk when buyers are buying from them. The spread on most exchanges is usually much lower but you do need to pay trading fees (~.2% usually - for most customers). If you were to buy AAPL you would still need to pay some kind of commission which would make your "spread" higher. I don't think that bitcoin has a liquid enough of a market yet to have options and other derivatives based on it's price. Trading volume is high enough so that most people can easily buy or sell the amount of bitcoin they need but is still low when compared to most stocks with similar market caps, and tiny when compared to currencies. ForEX trade volume is measured in the trillions of dollars per day while bitcoin exchange trade is measured in the tens of millions of dollars worth per day. Options and basic derivatives can reduce volatility on the underlying instrument in general as people who are afraid that the price will go down would not be forced to sell, but instead could purchase put options which would have a lower effect on the market (it would still have some effect as the seller of the put option would need to hedge his risk). When you have derivatives that are complex and that are measured in frequent time periods then they can add to volatility in times of high volatility. One example of this are the ETFs that are designed to get 2x (and 3x) the daily return of the Dow Jones Industrial Average. When volatility was already high the market would have swings in price in the last 30 minutes of trading that would be several time of the swings of prices that occurred for the rest of the trading day. Since these ETFs had to rebalanced their holdings every day so they can get 2x the return of the underlying the following day they were the cause of these huge price swings. |
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I think comparing bitcoin to facebook is kind of like comparing apples to oranges. Bitcoin is a P2P "currency" while Facebook is a social network. The uses of the two platforms are just too different
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bitcoinmania.eu/paypal-bitcoin-integration-coming-very-soon-says-ebay-ceo-international-business-times-uk.htmlNo one in their right mind would use BTC to pay for anything on PayPal. The credit card chargeback protection has always been the front lines of consumer protection from seller fraud on PayPal. Buyer wins 99% of the time. Most likely there's no way to tell how the buyer is paying. However if there was a way to require BTC payment, that would be a game changer for sure. Because PayPal's policy is not to interfere with intangible goods. Buyer is basically out of luck. Scamming will go the other way as sellers receiving PayPal payments will be secure from chargebacks. Then there's the issue about withdrawls in BTC and having your PayPal account hacked. Who will receive BTC payments? PayPal or the seller? It will be interesting to see how this will work at the end. Either way there's probably going to be scamming as usual. I think paypal will act like an escrow service. Paypal acts like an escrow service now and it almost always rules in favor of the buyer. It would be impossible for paypal to integrate bitcoin into their platform as they will always have the need to reverse transactions after the fact |
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He may of made it as a little side project just to have fun with or show his friends,
Or maybe he developed it to show off to huge multinational companies so he could make a profit.
But... Do you think satoshi expected bitcoin to have this much of a following?
he didnt make it just for fun he didnt do it to show of a profit. he did it because he hated th whole government financial status.. (see the quote in the genesis block) thats his inspiraction. and with less then 0.02% of population using it.. this is not the exiting day to ask such a question, bitcoin is still small.. ask again in a couple years you can say it's small, but it's not.. almost everyone you know probably knows about it in some form. maybe it's still early, or maybe it's not.. you don't know if bitcoin will still even be here in the years to come. it's not for certain. Even with this few of people using it, the bitcoin market cap is still measured in billiions of dollars, the amount invested in ASICs that secure the network is measured in hundreds of millions of dollars, several bitcoin related companies have valuations that are measured in the billions of dollars. Where we are now with how big bitcoin has become is no small accomplishment |
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China is never going to ban bitcoin....
That's the equivalent to China trying to ban gold possession. Someone will always have some access to have it or buy it. Who gives a crap if China wants to shun bitcoin. Bitcoin doesn't give a crap. Banning bitcoin is kind of like banning the internet. It simply cannot be done. |
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$10 per node per month is excessive and is a cashgrab by the supplier. you can get a full node for $19 a monthyear. It is a non-profit that is offering this "service" so in theory they are not profiting from this. They also likely want to diversify their suppliers of instances of cloud computing as having them all on amazon EC2 would lead to centralization |
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Yeah, you might be able to spend your coins to book a vacation but you probably be hard pressed to spend bitcoins whilst you're on it.
well i guess you could use bitcoin atm if there exist one there. i know its not realy the general idea, but its close enough. You would need to pick your vacation spot based on how widely bitcoin is accepted. If you were to go to San Francisco or New York then you could almost certainly find enough places that accept bitcoin |
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TBH not sure how far $100k will go to pay developers to maintain and add features to a site like this, if that's his bankroll he needs to be making money pretty quick off the bat.
Good point. Even if he does make that million by 18, he should still go to college. 1 million at that age isn't a lot of money considering how long he has to live. Kid seems pretty damn smart though, so I'm sure he will figure it out. I'd still head to college though, who knows the valuable connections he could make while there. 1,000,000$ well invested at 18 is huge but if he is using it to live, it isn't that much anymore He will meet friends and learn things on life in college He has invested it in his business. If his business survives for 5 years, chances are that it will allow him to live off of the business's earnings, if it fails within 5 years then he would not be too old to go to college then and finish school and still have most of his life ahead of him |
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