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1  Bitcoin / Bitcoin Discussion / Re: Correlation between mining costs and Bitcoin value and ecological nightmare on: June 28, 2011, 08:00:48 AM
If Bitcoin ever becomes that big, mining will be so competitive that it will use electricity that can can be used for little else but mining.
A new kind of electricity?  Huh
2  Bitcoin / Bitcoin Discussion / Re: BTC up for grabs - a BOTG experiment - just claim the BTC! on: June 28, 2011, 07:46:50 AM

Are you saying that it is possible to generate private bitcoin keys totally offline and only bring them online when ready to recover the funds?

Yep...

Sweet! :-)

You don't even have to bring private keys online to recover the funds. You could sign transactions offline and then publish them from a different computer.
3  Other / Politics & Society / Re: If Bitcoin matures as expected, I think this man will be correct... on: June 28, 2011, 07:16:58 AM
So how exactly will Bitcoin help to "live forever"?

2030 is in just 19 short years. Any radical change would be quite a surprise. Even if he made a few sensible predictions over shorter time frames, "living forever" is in a totally different league from ordinary social progress.
What would be so good about it anyway? You'd just increase you're chances of dying an unnatural death. (Trans)humans cannot beat nature, they're part of it.
4  Bitcoin / Bitcoin Discussion / Re: Down to zero it goes! on: June 26, 2011, 06:23:39 PM
For fun's sake, let's compare dollars to gold

$1.00 in 1800 held in a bank as a CD with, let's say 2.5% continuously compounded interest, would be worth about $178 today.
$1.00's worth of gold in 1800 would be worth $72.66 today. (Sources: "Gold Standard" of $20.67/oz and $1502/oz spot price today)

Clueless OP, what was your point again?

That's not a fair comparison, since most of the time-span, theoretically until 1971, the dollar was pegged to and/or backed by gold.
So these 2.5% interest would have been paid in gold for the majority of years. It's also no secret that gold inflates at ~2% per year because of mining.
5  Economy / Economics / Re: Hoarding == Investing?! on: June 26, 2011, 06:13:06 PM
I was generally referring to any fixed quantity currency, for example gold if gold mining would stop. A market economy and financial system would obviously help a lot.  Wink

I'm still not 100% sure if saving currency is really equivalent to "investing in everything", with "everything" being a basket weighted inverse to relative prices?
Macro-economically the difference is obvious: the former would tend to raise demand for currency and lower demand for goods, thus being price deflationary (bust), while the latter would do the opposite and be inflationary (boom), but because of the fixed money supply and supposed perfect hedge, speculators can always even imbalances out and thus prevent boom and bust.

More realistic examples would have to incorporate cross border trade, which would create dependencies and invalidate conservation laws. Just as in physics, it's much easier to consider isolated systems, like an island or the whole earth, so I'll leave that to somebody else.
6  Economy / Economics / Hoarding == Investing?! on: June 26, 2011, 01:40:05 PM
Let's assume the whole world uses a currency with 100% fixed money supply, e.g. Bitcoin in 2150.

Is saving these Bitcoins exactly the same as investing into a hypothetical basket composed of world stocks + real estate + commodities + ...?

I think yes, because both simply mean storing wealth by forgoing immediate consumption. Then traders should arbitrage away any changes in the demand for money, and this "world wealth index" should flatline. While real wealth increases or decreases, nominal wealth will stay constant. Bubbles in individual markets could still happen, but arguably smaller and/or less often.

Short term credit with negligible risk of default will be available for almost 0% interest rates.
Longer loans will reflect time preferences, which cannot be captured by simply saving cash.

This is an intuitive approach that a fixed monetary base is compatible with optimal economic growth, without redistributive effects.
7  Bitcoin / Bitcoin Discussion / Re: Down to zero it goes! on: June 26, 2011, 05:04:40 AM


What is the chart actually showing? Dollar in $ makes no sense to me.

@unk
I agree with you theoretically, and I always recommend holding only as much currency as needed for monthly expenses. If most people would do that, the central bank had less influence. But I don't think it's as easy as you make it out to be. We get bubble after bubble in things that seem to be good assets, but actually aren't. Gold is the only "hands-off" store of wealth, and in many countries it's legally impossible or expensive to acquire. In case of emergency it will likely get confiscated.

The main problem with central banks, fiat money and government debt is the illusion of wealth they create. When the economic distortions can no longer be hidden/ignored, people always blame scapegoats. For example the Greeks are angry at the prospect of becoming poorer, while, in fact, they were never as rich as they believed to be. Would you argue that there is no "debt supercycle", and that for example the US deficit is no big deal?
8  Bitcoin / Pools / Re: Cooperative mining (1.5Thash/s) on: June 25, 2011, 04:07:43 AM
Ok, fuck this I'm moving somewhere else..it happened again right after I changed the password to the account. This time the address was changed to:

176LRX4WRWD5LWDMbhr94ptb2MW9varCZP

http://blockexplorer.com/address/176LRX4WRWD5LWDMbhr94ptb2MW9varCZP

AND the payout was reset back to 1.



Nobody mentioned that this is LulzSecs public donation address?
Doesn't prove anything, but still interesting, no?
9  Bitcoin / Bitcoin Discussion / Re: MtGox Dead to me forever - Delayed AGAIN! on: June 25, 2011, 03:22:04 AM
So if you're lucky, your account might contain a few hundred extra Bitcoins or dollars?
10  Bitcoin / Bitcoin Discussion / Re: I just got "account claim successful" from Mt Gox - anyone else? on: June 25, 2011, 01:26:22 AM
Finally nice to see this train moving for people, I was lucky enough to be verified on the first attempt, but I did use two forms of verification to get it done. any countdown on when the market is going back up?
Site will open today at 3:00 GMT and trading starts at 4:00 GMT, that is in ~2,5 hours.
11  Bitcoin / Bitcoin Discussion / Re: What are the odds to never mine a block with 500Mh/s solo? on: June 25, 2011, 01:14:13 AM
My result: 70% to never mine a single block ever.
If you take "ever" as in "in eternity", you have a probability of 100% to mine a block, hell, you're even 100% likely to mine 1000 blocks with only 1 hash per second!

Please specify a REAL timeframe like "within the next 5 years", not infinity!

Not true as there's a finite number of bitcoins.

Not true, as the 8 decimal places are just a convention but can easily be extended, so mili-Satoshis etc. are being mined and probably even generated. There will never be 21 Million BTC (or more) in not-infinite time frames, only 20999999.999.....

Not completely true, either.
At least according to the current code, the first block which does no longer award even a single satoshi, will be block 6930000 = 210000 * 33, mined in ~2140.
12  Bitcoin / Bitcoin Discussion / Re: Where was Bitcoin in 2010? on: June 24, 2011, 07:17:22 PM
Where was Bitcoin in 2009?
13  Other / Beginners & Help / Re: What Value do YOU think bitcoins will be worth once all coins are mined? on: June 24, 2011, 06:12:50 PM
Anyone that knows stocks and how the market works may know the answer to this, I sure would like to know a guesstamate.lol
The standard answer is that the most probable future value is todays value (efficient market hypothesis). However the market for Bitcoins is somewhat illiquid, and the EMH is controversial, anyway.
In Bitcoins case the random variable dominating all others is future adoption.
Current market prices imply lots of future growth, I would say about 100x. If people believe this growth will not be realized, prices will fall and if it looks like this growth will be exceeded, prices will rise.
14  Bitcoin / Bitcoin Discussion / Re: Place your bets: the price of bitcoin after Mt.gox opens on: June 22, 2011, 04:17:50 AM
I predict the Mt. Gox trading starts at the roll-back price of around $17.5 BTC and tons of people who have lost faith in BTC over the incident attempt to sell their bitcoins at the new price (which is about $7 higher than bitcoins are currently selling for). The market will quickly self-correct, however, and within 2 hours, my prediction is that the price will be:

$12.72

They've reset the order book, and bitcoincharts show's the best bid/ask at 12.50/13.00, but no trade, yet.
15  Bitcoin / Development & Technical Discussion / Re: Securing contingent claims on: June 21, 2011, 10:53:51 PM
The value of bitcoin is inversely proportional to its velocity. If merchants are constantly exchanging BTC for USD after every transaction, the velocity will be high and BTC value will be low.
Money Supply * Velocity = Currency Price * Real Value of Transactions Per Unit Time

As you can see, velocity is directly proportional to price. Velocity is the rate at which transactions occur per unit time.  Velocity will be high if businesses sell bitcoin as soon as they get it.

So which is it? Of course it's neither proportional nor inversely proportional, at best it's loosely correlated.

But your main proposal seems to have merit. Simply said, there would be several "built in" derivatives, denominated in Bitcoin, which could be traded at different prices.

I just believe the complexity could put people off, as it makes Bitcoin even more difficult to understand. Why buy a financial system, if you want a currency? After all the things gone wrong in the traditional financial system, it would increase suspicions.
Also keeping the money supply predictable will be difficult: If an option might expire worthless based on a future difficulty, will it count towards the final 21 million or not?
16  Economy / Economics / Re: How we could "back" bitcoins with something of value on: June 20, 2011, 11:35:18 PM
@Richard Andreassen

The problem with modifying supply based on an exchange rate is:
Which exchange rate to use? For example, when Bitcoin was created, there were no exchanges around.
It would introduce a lot of uncertainty in the design.

People could just use whatever exchange rate they wanted by putting a url to a service that provided an exchange rate into their client. Then the network would have to agree by majority rule or something.

I think there are bigger challenges to my suggestion than this.

You do realize that means, at least theoretically, complete user discretion over inflation?
It may even work, but it does feel kind of fragile.
17  Other / Beginners & Help / Re: Different Prices don't make sense/MT Gox hack on: June 20, 2011, 03:35:11 PM
Differences between exchanges are usually minimal because of arbitrage.
As to how MtGox will reset the price to 17.50, I have no idea.
If they intend to restore all bids and asks from before the crash, there will be a huge rush from people trying to change their orders and/or make a quick bug.
18  Bitcoin / Bitcoin Discussion / Re: Place your bets: the price of bitcoin after Mt.gox opens on: June 20, 2011, 12:54:39 PM
13.37
19  Economy / Economics / Re: How we could "back" bitcoins with something of value on: June 20, 2011, 12:31:53 PM
@Richard Andreassen

The problem with modifying supply based on an exchange rate is:
Which exchange rate to use? For example, when Bitcoin was created, there were no exchanges around.
It would introduce a lot of uncertainty in the design.

@BitCoinsForGold

Unfortunately you are in no position to control a peg. I can guarantee that you either won't sell anything or make a heavy loss.
20  Economy / Economics / Re: Rollback is BS on: June 20, 2011, 12:06:33 PM
Yeah, if they roll back trades, they also have to cancel all bids and asks.
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