stabilizing bitcoin market

[Monster-Ant]

It's down there where the possibility for floating point errors is no longer a maybe but a definite hazard.

As you can probably tell I'm the furthest thing from a bitcoin apologist, but floating point errors are definitely not a hazard. BTC is wholly represented with integers, where 1 BTC is actually 100000000 "satoshis". Many people have suggested moving the decimal place in the user interface so that people don't feel bad about having millibtc. I believe the current UI actually does support it now as an option.

Thank you for this also. I'm reading as fast as possible, making notes, but there's a LOT of data out there now about BTC. I know I'm trying to catch up late so I'm not worried about the amount of information I have to absorb, I'm just worried about missing little details.

So, to put it easier for me to visualize, BTC's are basically the gold in reserve, while "satoshis" are basically what financial transactions will be made on once the amount of purchases begins to pick up?

And regarding the transaction fee, I've read several times that people doing mining will accept a fee in order to prioritize your transaction. That's still correct and has not changed, right?

[1715102693]

1715102693

[1715102693]

1715102693

[Etlase2]

Ok, so they did very well, much better than any of the fly by night currencies we use these days but it's still a 'did' not a 'do', past tense, while gold is still going strong worldwide.

Gold is no longer a currency anywhere on this earth. I'm not sure how you consider that strong. But if you read the history as to how we got to the point we're at now, it all flows to the Rothschilds in the 1700s creating central banks. The reason they had this ability was because their family was massively wealthy in gold and they, simply put, bought governments by financing wars. Gold was the key reason why we have the shitty currencies we have today. It is not a coincidence that the first draft of the Federal Reserve Act of the US was drafted on a private island owned by JP Morgan.

[Etlase2]

The functionality and security will remain though and that's where the true value is.

If this is what you believe, then why do you argue so heavily for deflation? I am so tired of bitcoin proponents switching what it is they believe is what makes bitcoin so great on a fricken dime to derail the argument.

Any cryptocurrency can have the same functionality and security as bitcoin. People will likely flee it when they start getting tired of the manipulation and see other currencies that are much more stable.

I'm sure there are different views on the subject and history teaches many lessons on the danger of a limited amount of currency when a small percentage owns the greater part of it,

Nobody needs to buy up all the bitcoin, 50% was already given away to the first 100k or so people, with the other 7 billion to fight over the second 50%. 10-20% was given to the group that started bitcoin, a group that has since disappeared from the project after retaining complete anonymity. The kings have already been made. It is only a question of how they plan on using that power.

[smickles]

<snip>

Even if BTC jumped to $15,000 a coin, how small the fraction would be to purchase something as necessary as a raw chicken became nerve wracking. It's down there where the possibility for floating point errors is no longer a maybe but a definite hazard.
<snip>

15000 usd per unit calculates out to 7.14285714286e-12 usd each (assuming python didn't fail me in my calculation). That is units being satoshi and the code actually uses satoshi not 100000000 satoshi (1 btc) as units.

so that's 210000000000 for a loaf of bread.

Floating point? It's all stored as an integer as i understand it.

[DannyHamilton]

. . . so that's 210000000000 for a loaf of bread . . .

I think you've got a problem with your math.  The 7.14e-12 is right, but if we assume that the average price of a loaf of bread is $2.30 then I think that works out to the following:

10,000,000 Satoshi / $15,000 * $2.30 = 15,333 BTC (Not 210000000000)

Still 15,333 is quite a bit.

I think it works out to almost 7 Satoshi per $0.01 so bitcoin could still work with amounts that are a fraction of a penny if it needed to.  We reach penny parity (1 Satoshi = 1 Penny) when 1 BTC = $100,000.00, so if it makes you feel better, just think of 1 BTC as a One Hundred Thousand Satoshi coin.  It would be like the U.S. minting a new coin, giving it a name like HectoKilo Coin (HKC) and declaring that it is worth $100,000.  Nobody would be worried that you couldn't buy a loaf of bread with a HKC, or that you'd have to work with tiny fractions of HKC for everyday transactions.

Assuming that pennies and nickels are still in widespread use in the future (which may be unlikely depending on inflation), if the exchange rate gets up around $500,000 = 1 BTC, then the protocol might need to change to increase the number of decimal places a BTC can be split into.  On the other hand, if inflation drives the cost of a loaf of bread up to $230.00, then bitcoin should be just fine all the way up to $50,000,000 = 1 BTC.

[Jermainé]

is it ever possible? market is so small (100mil usd) Talked to wellsfargo broker who told me that if market is so little stabilization will never happend.

I agree.

[Capital One Corporation]

Investing the bitcoin capital into the real economy, and bitcoin capital get paid back from the real economy. This will help stabilizing bitcoin market.

[maqifrnswa]

So, if there were 2,100,000,000,000,000 bitcoins instead of 21,000,000 - you'd be happy? Because there are...

Capitalization does not depend on number of bitcoins the same way market cap doesn't depend on the number of shares outstanding. If I offer a 2-for-1 split, my market cap doesn't double.

Formal education teaches economics from the point of view of our current system. The US, and most world governments, follow Keynesian economics where inflation is good and deflation is bad. So, as we are currently living in the US (with the current system as of 2012), we teach our students inflation is good and deflation is bad. There's no point teaching students otherwise, but if you go to graduate school in economics you will learn the bigger picture and that inflation isn't necessarily good - only if you're following a Keynesian system.

Bitcoin is not a Keynesian economy or system, so everything you learned from school (macroeconomics) on global monetary policy does not apply. If you had Austrian training or education beyond our current system, then you might have learned the inflation isn't necessarily good in some monetary systems.

[bitcoinbear]

Thank you for this also. I'm reading as fast as possible, making notes, but there's a LOT of data out there now about BTC. I know I'm trying to catch up late so I'm not worried about the amount of information I have to absorb, I'm just worried about missing little details.

So, to put it easier for me to visualize, BTC's are basically the gold in reserve, while "satoshis" are basically what financial transactions will be made on once the amount of purchases begins to pick up?

And regarding the transaction fee, I've read several times that people doing mining will accept a fee in order to prioritize your transaction. That's still correct and has not changed, right?

This was talked about plenty last year as the price suddenly jumped from 1 UDS/BTC to 30 USD/BTC. People will just use smaller units so that they do not have to deal with so many decimal points, but the underlying code does not change.

1 BTC = 1000 mBTC
1 mBTC = 1000 uBTC (microbitcoin, uses prefix mu or alternately u because it is easier to type)
1 uBTC = 100 satoshi

As it has been pointed out, the actual code stores things in satoshis, which are just really small units so we lump them together into bitcoins. Kind of like dollars are made of 100 cents, bitcoins are made of 100 000 000 satoshis.

You can add as much fee as you want to help the system continue. (All fees in a block go to the miner who finds the block). A higher fee puts your transaction higher on the list of transactions to be processed.

[lebing]

is it ever possible? market is so small (100mil usd) Talked to wellsfargo broker who told me that if market is so little stabilization will never happend.

I agree.

While the market is small, it will not happen, but as it gets larger, it gets progressively more stable. Never is a strong word.

[dotcom]

I'm no economist, but if bitcoin mining reaches the cap, and there's therefore no new currency entering into the btc market, holding
on to money could present a serious problem.

If 1 guy held on to like a million btc in hopes that the value would rise as a result of there being less in circulation, that could
potentially be disastrous to the economy right?

[lebing]

I'm no economist, but if bitcoin mining reaches the cap, and there's therefore no new currency entering into the btc market, holding
on to money could present a serious problem.

If 1 guy held on to like a million btc in hopes that the value would rise as a result of there being less in circulation, that could
potentially be disastrous to the economy right?

bitcoin is infinitely divisible, if that is what your question refers to.

One problem with someone holding 1mm bitcoins is the potential for market manipulation.

[Foxpup]

If 1 guy held on to like a million btc in hopes that the value would rise as a result of there being less in circulation, that could
potentially be disastrous to the economy right?

Only if he starves to death waiting for the price of bread to go down.