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?
You don't need to keep your bitcoins in a bank, you can keep them in a wallet or cold storage. If you do that then banks can't fractionally reserve them and create money from nothing, then the whole BS system that we have now won't be replicated. That might mean a few bankers losing their jobs and no more depressions in the future, but we'll just have to live with that! |
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In the first few years of bitcoin it was only used by uber nerds and crypto anarchists. Then came the web dark drug market. And when you think about it, Bitcon has only been in the realm of "normal" people since it's climb in 2013.
Since then it has attracted numerous investors, corporations and professionals that are not uber nerds, anarchists or online drug-lords. The inflation rate was/is too high to stabilize any sort of consistent growth. Still there is enough interest to absorb the 3,600 new coins per day without causing a major crash. This is how we know bitcoin has already succeeded. There wasn't enough interest to support 3,600 coins per day at $700+ per coin, but we have seem to found an equilibrium around the current price or $800K-$900K per day. If bitcoin were a flop we would have already seen the price back down to the single or low double digits. The "normal" buyers are here and have been here since 2013 and they don't appear to be going anywhere.
So go ahead buy another coin and tuck it away for safe-keeping, because bitcoin is already a success. When the next wave, mainstream, comes along the inflation rate will be lower and the demand will be greater.
Success is relative. If Bitcoin stays at the size it is now for another few years, it will have essentially failed. It is only a matter of time until we enter a cashless society, and an internet currency seems very very likely. I would guess that if bitcoin doesn't really catch on the another system will have instead. If that is the case, Bitcoin won't be looked on as a success. It's a tipping point now, it could go either way imo. This makes no sense. What price does bitcoin have to be at to be a success and not a failure? In 1 year? 2? 5? Now? How many merchants have to be accepting it now? In 1 year? 5? 10? Etc? It isn't really about price, but price will follow adoption. At the current usage level, it is a small niche market. It hasn't exactly made massive waves yet. It will be seen as a success in the future if it grows into a major currency, if it doesn't then this phase won't be seen as a success. Look at minidiscs, they were quite popular for a time, but ultimately weren't adopted and failed. Most people wouldn't say that they were a success now. If mp3 players hadn't come around and minidiscs had taken off big time, it would have been a successful starting point for them. Same with bitcoin now, it could go either way. |
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"Google searches for bitcoin up 102% in past week"
It's been pretty flat for quite a while now, but this week has seen more than double the number of google searches for bitcoin.
A good sign I think.
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I am a European. I cannot understand why Americans want to have so many people owning guns.
The biggest massacre involving guns happened in Europe. It occurred in a country, which is having one of the toughest gun control laws (Norway) in the world. A lunatic called Anders Behring Breivik was single-handedly able to mow down a total of 77 people, and the policemen present at the scene could not do anything, as they were not armed. Ok the biggest might have been in Europe, but the frequency and total number killed is much higher in the US than all of Europe combined. It wasn't that the police present couldn't do anything, he had set off a bomb in the capital city to throw the police off, then he attacked the children on an island that couldn't be quickly reached. The guy was/is a lunatic and it is dreadful that he managed to get a weapon. I would prefer that he wasn't able to get a gun, instead of giving lots of people guns to shoot each other in this kind of case (I doubt it would have made a difference as it was a Political Youth camp he attacked, probably not somewhere where people would be armed anyway) |
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In the first few years of bitcoin it was only used by uber nerds and crypto anarchists. Then came the web dark drug market. And when you think about it, Bitcon has only been in the realm of "normal" people since it's climb in 2013.
Since then it has attracted numerous investors, corporations and professionals that are not uber nerds, anarchists or online drug-lords. The inflation rate was/is too high to stabilize any sort of consistent growth. Still there is enough interest to absorb the 3,600 new coins per day without causing a major crash. This is how we know bitcoin has already succeeded. There wasn't enough interest to support 3,600 coins per day at $700+ per coin, but we have seem to found an equilibrium around the current price or $800K-$900K per day. If bitcoin were a flop we would have already seen the price back down to the single or low double digits. The "normal" buyers are here and have been here since 2013 and they don't appear to be going anywhere.
So go ahead buy another coin and tuck it away for safe-keeping, because bitcoin is already a success. When the next wave, mainstream, comes along the inflation rate will be lower and the demand will be greater.
Success is relative. If Bitcoin stays at the size it is now for another few years, it will have essentially failed. It is only a matter of time until we enter a cashless society, and an internet currency seems very very likely. I would guess that if bitcoin doesn't really catch on the another system will have instead. If that is the case, Bitcoin won't be looked on as a success. It's a tipping point now, it could go either way imo. |
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I am a European. I cannot understand why Americans want to have so many people owning guns. I can see that yu want the freedom to do that, but I don't trust that everyone or even the majority of people can be trusted with a way to easily kill lots of people quickly.
In England people fight and there is knife crime, but generally you can pretty much run away from danger if someone goes crazy. If someone comes with a semi-automatic weapon and starts spraying bullets around, I can run, but bullets are faster.
I wouldn't allow any hand guns, or automatic/semi-automatic weapons to be carried on the street or owned by anyone without serious assessment done in advance. Americans will probably disagree, but I don't see these good guys with guns overwhelming the bad guys with guns, as good guys don't want to shoot people!
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Everybody wants to buy whole bitcoins, nobody wants to buy 0.5 bitcoin. Only the big investors can afford to buy whole bitcoins above the 200-300 dollar level but they are smart enough to realise that such an investment would be too risky because of the danger of a 51 attack. Therefore I believe the price of bitcoin will not exceed the 200-300 dollar level  You do know that bitcoin has been as high as $1200, and people still bought in? If you are buying with fiat, then it is irrelevent if you can buy 5 BTC or 0.5BTC, as long as you think the price will rise, or that you can use it more constructively than you can use your fiat. I think there is a higher chance that currency controls are placed on fiat than a 51% attack on Bitcoin. It would take some serious computing to get 51%, and the potiential gain is so low, I don't see it happening. |
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Excellent just what i needed, so you can earn up to £10k and not pay tax, thats actually alright! - you know, alright considering they raping us overall. Thanks  Telling me... Income tax base rate at 20% and VAT at another 20%, 40% of our income is gone to the incompetent government. Only if all of your outgoings are on VAT applicable items. As (from wiki) basic food, water, prescription medications, medical equipment and medical supply, public transport, children's clothing, books and periodicals are VAT free, it will be less than that. Being a bit more pedantic, if you take 80% of your wages home, and pay 20% VAT on everything, you would still be paying 36% tax total, not 40%. Nationals insurance will take it well above that, but then there are lots of other tax breaks and incentives too. Tax being high when services are good is no problem to me, it's when they are used for stupid wars or inefficiently wasted that it annoys me more. |
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Transaction fees Will be the mining reward. High use of the bitcoin network Will be required to adequately pay the miners. On the other hand, You Will probably not live by that Time anymore, so You dont need to worry too much.
So the mining power thrown at bitcoin will be radically reduced at that point but it won't matter as 51% attacks would be useless since no new coins will be produced. no, never radically because coin mining deacrease slowly...and the market will regulate all the existing coins... Thanks for the answers so far. what do you mean by regulate all the existing coins... , will there be certain transaction fees incurred for just holding bitcoin that miners will get to keep things moving along or will it purely be on transaction fees on when you transfer coins for whatever purpose? I plan to pass some coins to my kids, so I know this will be something they will have to deal with in there lifetime. You 'might' be jumping the gun a bit, Bitcoin won't be mined out for another 125 years! I don't know what life expectancy is now, but 125 seems optimistic! A long long time before we get to that point, Bitcoin will either be globally used, or not be used at all. If it is the internet currency, then people will mine for transaction fees, and they cann be pretty big and worth mining for. If not, then people will turn off and the difficulty will fall greatly. We will see at the next halving what happens, a more extreme version can be expected when the jump is from 1 to 0 per mined block. |
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I still remember this fairly clearly. That day, US Senate had a hearing and the price surged all the way to $900 before briefly crashing and China investors started to invest and accept Bitcoin then it surged past $1000. It was truly amazing I must say. Bitcoin was heavily regulated in China and it started to slide gradually. However, a few months later, Mt Gox became insolvent and the price crashed due to it being the largest exchange at that time and loss of confidence.
There definitely had not been a single 'day' that had an insane rise. It took the market almost 2 months to reach that price, before there were 2 huge dumps that brought it down.  The price had risen due to several factors. Bitcoin at that time had insane media hype; another important factor was Willy (the bot from Mt.Gox). The price had bounced back. This is normal due to the fact that bubbles usually collapse. However we survived major hacks over time which kept on pushing the price downwards. We should be seeing a positive trend very soon as we've established a decent price at $200+. Hope, bigger idiot, speculation, bots, Chinese exchanges etc are the reasons give for the rise. It is impossible to say why exactly it went so crazy, it started after Silk Road went down though, so maybe people thought it would legitimize bitcoin and allow it to go mainstream. The fall has been a realization that the market size and growth isn't as big as people thought. Adoption didn't increase enought with the price, so it fell. Some whales also decided to get out at the top, which stopped any further rises. |
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it open the doors, to those who are willing to pay only in bitcoin, still a niche market, but it is growing, but it is not increasing by much, and in the case the increase will be bigger, you will end up with less "fiat customers", because bitcoin is actually steal customers from its competitor, it's not bringing new one on the table
I can see that you gain the bitcoin market, but I don't see why you would lose the Fiat market? I have never been put off by somewhere accepting alternative payment methods! Sometimes a little shop not accepting a debit card is annoying, but if I go to a supermarket that accepts debit cards, but pay with cash, that doesn't negative effect me! |
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what happened? Is that lower/higher/significantly lower than the USD value of the property? And they did sellers just laugh it off or did they consider it at all?
It was $1 million dollars under their price. The owners lawyer said they were going to rent it to a friend for $50,000 a month rather than sell. Mind you it's a TV show. Still good to have bitcoin on mainstream TV like that. I reckon if the bid was $1mill over in Bitcoin, it would have been classed as suspicious and probably said to be drug money or something! This way it just drips into peoples sub-conscious. |
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Are the peoplw who suggest that we solve this once and for all not being a bit over the top here?
America doesn't start printing $1mill bills because at some point in the future they might be required. The also raise the debt ceiling little by little, rather than just getting rid or maiking it $9999 trillion to get rid of the problem forever!
I think a practical response for the next 10 years or so would be the 8mb block size. That is doable at the moment, if a bit big for downloading, but it will become ever more manageable over time.
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I'd keep an eye on Greece. It seems like the next week should bring some fireworks for Greece. If they leave the EU and/or there are currency controls, Bitcoin is going to fly again, like when Cyprus had their financial issues.
It would be a shame if the Greeks moved into Bitcoin at a time when a Hard Fork is performed. We need stability to get the masses involved. I think they should get it done ASAP, then it can be forgotten about and the next crisis and resulting rise can be more sustained, rather than followed by news of internal Bitcoin squabbling! |
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it's not all about money but punishment. greece has to suffer because left wing is getting stronger in south europe.
a second greece in spain (podemos) would be a nightmare for brussels and elections are end this year.
SYRIZA came in to power in Greece, because it was the mainstream parties who destroyed the Greek economy. Now they are left with $350 billion in net debt, and a ruined economy. And regarding Spain, Podemos is not leading the polls right now. Currently, they are at 3rd or 4th position. However, there is a small chance that they will be able to form a coalition government with one of the mainstream parties. if you take a closer look to this graph you can see how fragil the situation in spain is. podemos jumped from off in no-time to pp level. i wouldn't call this a small chance. https://upload.wikimedia.org/wikipedia/commons/7/7d/ElectionMonthlyAverageGraphSpain2015.pngand greece is much higher in debt if you add target2, not talking about the 4T in derivates. It could get very interesting in Spain, Portugal and Italy if Greece leaves. Would you want to hold bonds in those countries? Greece has been a lost cause for a long time, Germany can't control the situation, because if they try, Greece will leave! Interesting times ahead, and I say that as a resident of Germany! |
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Greece will exit. It is the correct solution for both parties.Just a bit bizarre how they have no apparent currency in waiting.
It's about time that they left, the can has been kicked, maybe they have reached the end of the street now! Bitcoin might get some influx from this situation, but Greece will NOT adopt bitcoin, so I wouldn't get my hopes up too much. I will be happy if Grexit happens, short term pain instead of long term misery! |
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Why should you refuse to pay your student loan bills?
If you agreed to take out a loan, you received the expected good that the loan was issued for, you should honor the deal - your obligation to pay the loan!
This story is about fraud. 99% of student loan holders did not become so through fraud...if you don't pay your student loans then you are just as bad as those that fraud others.
The real estate bubble burst, in part, because people bought homes they couldn't afford and when rates went up they couldn't afford to pay their loan. Instead of paying up they walked away from them. Those people, I hope, are kept from getting a home loan for a very, very long time.
Student loans, at least in the UK, aren't like normal loans though. They are incentivised so that people are willing to take them and enter higher education. I am still paying off mine, and I don't think there is a bubble in the UK, but I would assume that America does it like a normal loan, thus screwing over anyone who wants to go to college without rich parents especially those who graduated after the recession so can't find a job! |
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altcoins have no serious market cap. it's easy to realize such gains if you have a few spare bitcoins to work with. but don't compare them with btc.
Haha so funny to read this ignorance. Market cap of bitcoin is an illusion anyway. Many altcoins are being used as money more than bitcoin. Bitcoin is just 90% speculation. There is no real value. Even worse. 90% of all the funny internet bitcoins are owned by about 5 people. If that is the future of money we have not done well. Altcoins are the real revolution, offering rigid, fair and scalable systems. if this is a troll attempt, it's not funny enough altcoin can be controlled 100% by any random users that decide to invest few penny in it, how this is better than bitcoin? their network security is a one hell of a joke, not minimally comparable with bitcoin, and again any random dude can breach it, with 1 asic or small gpu rig basically 99,99 are a P&D scheme, maybe i should say all of them, with some of them, be a tool for infecting others poor innocent machines add to all this the fact that besides monero, they don't offer nothing new compared to bitcoin, just pure clone, and you can see clearly the whole point of those alt... It's worked well in the past for those that were involved early, but got out early enough. There are organised groups who pump these coins and then dump when the crowds join in. That some Alts are way up doesn't say a lot. If the good alts are up, then a recovery could be happening, if all sorts of crap is up, then it's P&D! |
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What do you think? a 100% return sounds reasonable...  Anywhere from 10% to 100% sounds like you can't lose. Anything that says that you cannot lose is a fantasy and/or a scam. Easy to spot really! |
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