A lot of uncertain answers. I am surprised that the backing for bitcoin is not obvious to all.
Bitcoin is backed by the blockchain. (Currently) a 2Gb secure datafile of historical transactions and issuance.
The genius of Satoshi is like a diamond, multi-faceted. He understands the principle of inertia in persistent systems. As the blockchain grows it becomes more important to everyone who relies upon its integrity defining a medium of exchange. If BTC becomes the global currency then the blockchain will be the single most valuable data file in existence. It is already worth $160m. The fact that it is replicated on so many nodes reinforces its value and persistence.
The blockchain is not 'a data file'. It is an ubiquitous piece of information that is copied by every user of bitcoin. The blockchain itself is worthless. Everyone can get the file trivially by using the client. Moreover, you cannot get a single bitcoin from knowing the information in the chain. You would have to interact with the whole system in a particular way to get to any kind of value. In fact i would say that it is the exchanges that actually give bitcoin any real-world value at the moment. How much would you value the blockchain if mtgox said: 0.000 0.000 ? The blockchain is logically a single file, and the fact that it can be copied so easily adds to its value, not reduces it, (by enhancing its utility). The question of valuing the blockchain is to ask "How easy is it to construct another, different one, of similar size, from scratch?"The answer is - nearly impossible. In terms of Information Theory the blockchain is probably the most information dense object in the world. It is so dense that not even a single byte can be changed without it being degraded. Making another requires enormous amounts of computing power, and not only that, a new one would lack the real-world connections to thousands of individual people with discrete personal holdings represented by entries in the blockchain. This is the backing for bitcoin. Mt.Gox provides a mechanism for the valuation of this phenomenon in a "wisdom of the crowd" manner. http://www.youtube.com/watch?v=iOucwX7Z1HU
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A lot of uncertain answers. I am surprised that the backing for bitcoin is not obvious to all.
Bitcoin is backed by the blockchain. (Currently) a 2Gb secure datafile of historical transactions and issuance.
The genius of Satoshi is like a diamond, multi-faceted. He understands the principle of inertia in persistent systems. As the blockchain grows it becomes more important to everyone who relies upon its integrity defining a medium of exchange. If BTC becomes the global currency then the blockchain will be the single most valuable data file in existence. It is already worth $160m. The fact that it is replicated on so many nodes reinforces its value and persistence.
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I was thinking the same thing. Is it 2 purchased at $1.53 each?!
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Absolutely.
I am still reading about the gold-bugs, Austrian economists, and hard money enthusiasts debating about which is better for 2013: gold or silver?
Meanwhile, bitcoin is road-rollering both those relics into the dust...
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There was 2500 sitting for at least a week at 15.99 which I expected to provide major resistance - yet it was wiped out in a blink.
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2am UTC and a speculator on Mt.Gox can't wait to get in...
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No. Bitcoin has to be exchangeable 24/7 if it is to supersede cash. E.g. anyone can agree 24/7 to privately swap Mexican pesos for US$ in cash.
The scheduled downtime for upgrades is the only argument that holds water, and this is up to the individual exchanges. As pointed out, most major websites are 24/7 already.
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Didn't like the movie. Also, if you compare system with bitcoin, in the movie every infant is given one year of life, to spend after he/she turns.. umm 18 was it? or 21?
In bitcoin system nobody, noone, nothing gives infants 1btc for free. Some people might get 0.1/0.01btc for joining from other people. But still not everyone does.
Edit: Actually, in the movie system encourage.. no, wrong word, forces people to spend their "money". While bitcoin is safe to both store and spend. (In the movie every few weeks things get increased in price, overall time - dramatically increased in price.)
Infants getting one year at 25 is a controlled release of new coins - like mining is. True. The deliberate inflation of prices is of course nonsensical, and doesn't represent a real market with prices set by supply/demand. It is not a perfect story by any means!
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If anyone wants to get an idea of the future where fiat currency is dead and buried, and bitcoin rules, then it is worth seeing the movie "In Time". It is very watchable and Timberlake's acting is pretty decent. However, for bitcoin fans, there is a visual metaphor showing a universal peer-to-peer currency system in action. These substitutions can be considered: a) The units of time which can be exchanged, lengthening lives, could be instead be bitcoin. 1 second = 3 satoshis. 1 year = 1 bitcoin. (The vault at the end is Mt.Gox :-) b) Implanted graphene sheets in each person's forearm are a digital wallet enabling proximity transfers (say by RFID bluetooth) c) Discount the dysfunctional future society. It is worth being an optimist about the future - especially one which is founded on a robust monetary system instead of the fiat madhouse we have today. http://www.imdb.com/title/tt1637688/Enjoy.
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After the price spike a few days ago I quickly checked out the ebay sellers. And not one of them was cheaper than the mtgox ask. Unfortunately bitinstant is not cheap either.
Anyone building up a speculative position must go through mtgox or one of the small exchanges reflecting true market prices. Paying even 10% extra now will amount to thousand$ lost through having less BTC in the future.
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I use firefox, and also noticed an unexpected red warning message yesterday (not sure of the exact text) when checking my wallet balance. All seems ok through. Also, yesterday, I had just upgraded firefox to version 12. So perhaps this is significant.
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Today (Jan 19th) there was a 1 hour delay between blocks 217134 and 217135. Should the frequency of deviation from the ideal 10 minutes decease over time - or could this happen at any point in the future...? It may matter a lot if/when BTC is widely used in global commerce.
Block Elapsed trans Value 217135 3 minutes 777 48480.28491324 BTC BTC Guild 243 217134 1 hour 3 minutes 405 10,197.86 BTC 76.112.4.167 159.00 217133 1 hour 16 minutes 109 425.40 BTC BitMinter 37.38 217132 1 hour 17 minutes 594 5,399.05 BTC 82.72.179.204 255.34 217131 1 hour 14 minutes 11 5,843.06 BTC Deepbit 3.46 217130 1 hour 33 minutes 236 12,299.30 BTC EclipseMC 115.76 217129 1 hour 53 minutes 570 7,370.18 BTC BTC Guild 220.05
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I'm seeing a lot of horror stories from paypal but it seems like mostly people selling. They seem to be pretty buyer oriented when it comes to chargebacks etc, is my assumption right?
In any market it is the buyer that ultimately pays. When sellers get screwed by paypal then they add a premium to their prices to cover this "overhead" of doing business. Some more than others, but it averages out to a percentage. So all buyers pay this percentage more to have "intermediaries" like paypal in the loop, I will be nice to see paypal join the typewriter on the scrapheap of history.
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After the (brief) price spike to $31 in 2011 the best retrace it could manage on the way down was $17. So, the rally this week could touch that level before a consolidation period.
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Linden Labs should do themselves a favor and phase out Linden$ for BTC. Second Life would get a massive boost by using a real-world currency...
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In a perfect world the BFL ASIC products are a no-brainer. Consider the mining pool "ozcoin" (I have no connection with it) As of the time of writing their site https://ozcoin.net/ shows pool metrics of: Pool: [ 1,511.46 GHash/s | 273 Users | 616 Workers ] Server Time: [ 2013-01-13 04:17:16 CET ] Their 1511 GH/s is almost the same as one BFL ASIC mini-rig which costs US$29.9k http://www.butterflylabs.com/products/Checking out http://blockorigin.pfoe.be/top.php shows ozcoin hashing 120 of the last 2016 blocks (basically during the first fortnight of 2013). So: 120 x 25 BTC x 13.50 (avg fx rate) = US$40.5k in two weeks! Assuming no downtime, but fees would probably cover electricity. So a BFL mini-rig is a money-printer - in a perfect world. The challenge is obtaining one first, before they become "widespread". The decay in profitability is proportionate to the rate at which similar machines enter the market and become actively mining. The landscape for bitcoin mining will be completely different at the end of 2013 than the beginning.
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