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Very well researched paper for an outsider but he made 2 obvious mistakes:
1. He repeated stressed that Bitcoins offers total anonymity and is completely untraceable.
2. Failed to mention GPU mining and failed to realize that CPU mining, even with super computers, is not cost-effective.
It's clear that he has a good grasp of the economics behind Bitcoins, but he has little technical background.
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Please answer a few simple questions for me, mjcmurfy.
Has Bitcoinica ever coerced anyone into using their services?
Has Bitcoinica ever committed fraud against its users or its counter-parties?
If the answers to the first two questions are negative, then why do you feel entitled to Bitcoinica's proprietary data? Do they owe you anything?
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I really don't see how Bitcoins will take business away from banks.
If I have a dollar, and I won't be needing it for while, I could keep it in my wallet. But that would waste away its opportunity value. If instead I put it in a savings account I could receive part of its opportunity value, the interest.
If I have a BTC, and I won't be needing it for while, I could keep it in my wallet.dat. But that would waste away its opportunity value. If instead I put it in a savings account I could receive part of its opportunity value, the interest.
Take a look at "Money illusion": http://en.wikipedia.org/wiki/Money_illusionThe main target of the Fed is economic growth, not inflation. The Fed will adopt inflationary measures to achieve growth, even if that means eroding the savings of American citizens. On the other hand, the main target of the European Central Bank is inflation, which must be below but near 2%. Central banks systematically increase the supply of their currencies like euro and dollar. In dire situations, especially in current times, with high debt levels, central banks may be tempted to expand the money supply well over reasonable limits. Inflation is strongly correlated to money supply. So, most of the time, a savings account in dollars or euros in a bank can not even compensate for inflation. The savers lose real value, i.e. savers lose purchasing power. On the other hand, Bitcoin supply will not expand in the long term (21 million BTC, maximum), so you can keep your purchasing power without the banking system. The more central banks abuse Quantitative Easing, the more Bitcoin will be valuable in relation to those fiat currencies. I completely agree that putting USD in a savings account is retarded, however I said "dollar", not "USD". Not every fiat currency is tumbling into worthless. But I digress, you completely missed the point of my post. It's partly my fault since I used fiat as an example, and obviously this crowd doesn't like fiat that much. I'll rephrase my point in more general terms: "things of value" have a opportunity value associated with it. If my car is sitting in my garage while I go on a vacation, I'm wasting my car's opportunity value while I'm gone. If I shutdown my computer while I'm sleeping, I'm wasting my computer's opportunity value while I slept. If I have 1BTC sitting in my wallet, I'm wasting the opportunity value of that BTC as long as it's in my wallet. The only way to recover that lost opportunity value would be to lend my valuables out whenever I'm not using it. If I lend that 1BTC out from the time I received it to the time that I needed to spend it, someone else could have used that BTC for something productive. This way both the lender and the borrower profits. |
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Hi,
Please whitelist me. Every 10 minutes a new block is added to the blockchain, and with it 50BTC. That means every day 7200BTC is introduced to the bitcoin economy. If $22320 USD (at the time of writing) or more is added to the bitcoin economy daily, the price goes up.
Regards,
John
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This was my personal computer before it was a mining rig. I use it for more than just mining.
Cool. I actually have a 2600k mining as well, among my other low cost CPUs. |
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I'm trying to figure out how loans with cash work. Say I were to give John a loan, how can I be sure that John will pay me back if cash is essentially anonymous? I mean, with regular banks and financial institutions you can either get a secured loan or if it's unsecured and you don't pay them back they'll fuck up your credit. How can loan companies that use cash be confident that they'll get paid back?
Good question, very good question indeed. |
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Last summer? I thought we're still in 2011.
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If you don't mind me asking, why did you choose the top-of-the-line CPU for mining?
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Computer security, or the lack of it, is also my biggest worry. But we can work on that. Look at the credit card companies. They are running a highly insecure system, but it still somehow works. [citation needed] I don't see how you can have a "highly insecure system" without a lot of intrusions. And I don't see how you can have a lot of intrusions without losing billions of dollars every day. Credit card companies can reverse the charges and put the cost of fraud on merchants. Bitcoin is irreversible. We're not talking transaction fraud here. hgmichna claimed that credit card companies have terrible computer security. I'm just asking for some facts to back that claim up. |
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I really don't see how Bitcoins will take business away from banks.
If I have a dollar, and I won't be needing it for while, I could keep it in my wallet. But that would waste away its opportunity value. If instead I put it in a savings account I could receive part of its opportunity value, the interest.
If I have a BTC, and I won't be needing it for while, I could keep it in my wallet.dat. But that would waste away its opportunity value. If instead I put it in a savings account I could receive part of its opportunity value, the interest.
Some bank fees will be gone, but most bank fees will simply be renamed (and possibly reduced). It will still cost money to transfer money (transaction costs), it will still cost money to get physical currency (minting costs of physical bitcoins), it will still cost money to send money instantaneously (mybitcoin and mtgox Instant codes).
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With the entire economy valued at $23 million I'm not sure if there's enough room for a second stock exchange.
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Computer security, or the lack of it, is also my biggest worry. But we can work on that. Look at the credit card companies. They are running a highly insecure system, but it still somehow works. [citation needed] I don't see how you can have a "highly insecure system" without a lot of intrusions. And I don't see how you can have a lot of intrusions without losing billions of dollars every day. |
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That depends on which clients you're using.
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Hi guys, I'm here to learn more about bitcoins.
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