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Author Topic: Bitcoins: designed to fail  (Read 5648 times)
kloinko1n
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June 04, 2011, 09:48:29 AM
 #1

The world's wealth in 2007 was more or less 150 trillion $ (USD 1.5 * 10^+12) [1]
The number of people living on earth is more or less 7 billion (7 * 10^+9) [2]
The maximum number of bitcoins is 21 million (2.1 * 10^+7) [3]

This means there is 21*10^7/7*10^9 = 0.03 BTC for every world citizen.
And the current wealth, expressed in the total available number of bitcoins in USD/BTC is 1.5*10^12/2.1*1+7 = 0.5*10^12/0.7*10^7 = 0.7 *10^5 = USD 70,000 / BTC.
With inflation going like it's going now, USD 1 might be (I'm speculating here) worth only 1 UBC (micro Bitcoin) by the time all 21 million Bitcoins are created.
Does this make the bitcoin ultimately usable as a worldwide currency, replacing current currencies?

I think not, and it's built-in.


References:
[1] http://www.stockmarketfunding.com/getfile/343e5d94-2871-48a5-9aa6-550c3da0bbd2/World-Wealth-vs-World-Derivatives-1998-2007.aspx , http://upload.wikimedia.org/wikipedia/commons/thumb/2/24/US_derivatives_and_US_wealth_vs_total_world_wealth_1995-2007.gif/800px-US_derivatives_and_US_wealth_vs_total_world_wealth_1995-2007.gif

[2] http://en.wikipedia.org/wiki/World_population ,
http://www.google.com/chart?cht=lxy&chd=s:ABCDEGHIJLMNOQRSTVWXYabcdfghiklmnpqrsuvwxz01245679,XXXYYZZaabccddeffgghhijjkklmmnoopqqrrsttuuvwwxxyzz&chds=0.0,1.0&chs=160x101&chco=287bf5ff&chls=2.0,1.0,0.0&chxt=x,r,x,r&chxs=0,333333,0,0,tl,333333|1,333333,0,-1,tl,333333|2,000000,11.5,-1,tl,333333|3,000000,11.5,-1,tl,333333&chxtc=0,2|1,2|2,0|3,0&chm=h,cccccc,0,1,1,1|h,cccccc,0,0.5,1,-1&chxp=2,0,82|3,5,50,95&chxl=0:|1960|2009|1:|0|4B|8B|2:|1960|2009|3:|0|4B|8B

[3] Mentioned many times here in this forum  Grin
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June 04, 2011, 09:51:28 AM
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Damnit.

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June 04, 2011, 09:51:36 AM
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You realise you can spend tiny fractions of a Bitcoin right?

It's not like a dollar, you can't only break it 100 ways.

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June 04, 2011, 09:52:42 AM
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June 04, 2011, 09:54:36 AM
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You realise you can spend tiny fractions of a Bitcoin right?

It's not like a dollar, you can't only break it 100 ways.

Oh, thank god.

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June 04, 2011, 09:55:45 AM
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Damn guys, shut 'er down!  We've finally found the Achilles heel we didn't think of..

Oh wait.. no
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June 04, 2011, 10:00:22 AM
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Does this make the bitcoin ultimately usable as a worldwide currency, replacing current currencies?
I think not, and it's built-in.
lol, question talker...nobody likes them.

also...get your facts straight.... read: http://bitcoin.org/bitcoin.pdf

secret hint: each bitcoin can be devided by 10^8 ....now please do some more fancy calculations
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June 04, 2011, 10:05:57 AM
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secret hint: each bitcoin can be devided by 10^8 ....now please do some more fancy calculations

And it can be changed to divide further.

http://forum.bitcoin.org/index.php?topic=2150.0

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June 04, 2011, 10:07:12 AM
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The maximum number of bitcoins is 21 million (2.1 * 10^+7) [3]
[...]
This means there is 21*10^7/7*10^9 = 0.03 BTC for every world citizen.
You do realize that what we call 1 BTC is pretty subjective. There will technically be more than 21 million BITS(pieces) of coins, the number of discrete units will be ~2.1*1015 I believe.
So the actual number of potential base units pr world citizen is (2.1 * (10^15)) / (7 * (10^9)) = 300 000 (correct me if I'm wrong here)
Of course I see where you're heading, but when the world gets to a point where every citizen uses bitcoins, there will probably something new, maybe something backed by bitcoins, since bitcoins are too valuable to be practical for daily use.



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June 04, 2011, 10:08:39 AM
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June 04, 2011, 10:10:25 AM
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Bitcoins will fail because no government on earth will let it be legal with something that they cannot control or get taxes from.

I think they will create something similar except that it will let all transactions be recorded.

But I still think bitcoins will be used as a black market for trading illegal things and for avoiding taxes.

Druglords and mafia can use bitcoins and only the italian mafia is extremly big, than you got the triads, the yakuza the mexicans etc.

So it will probably have some value.






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kloinko1n
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June 04, 2011, 10:15:26 AM
 #12

Does this make the bitcoin ultimately usable as a worldwide currency, replacing current currencies?
I think not, and it's built-in.
lol, question talker...nobody likes them.

also...get your facts straight.... read: http://bitcoin.org/bitcoin.pdf

secret hint: each bitcoin can be devided by 10^8 ....now please do some more fancy calculations


Just teasing  Grin  ... No, actually I was just worried to death that a bigtime failure was built in.
But let's get back to the facts indeed: then 1 micro bitcoin / USD makes BTC 1 / 10^8 = 1 dollar cent.

That means... yehey!, you're right.

Doom and destruction aren't neigh!

Ok, so the dollar cent is hiding inside the smallest possible denomination of the BTC.
Now, either this is an ingenious hint of premonition regarding the utmost stability of the BTC's value, or still 1 or 2 orders of magnitude short.
In my opinion it is the latter.
ledskof
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June 04, 2011, 10:18:37 AM
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Well, you might as well toss some more wikipedia stats in there and come up with how many bitcoins the distribution of wealth will leave people with;

1% of the world population own 40% of the global assets.
The richest 2% of the world population own more than 51% of the global assets
The richest 10% own 85% of the global assets.
50% of the world population own less than 1% of the global assets.
The whole global assets volume is about 125 trillion US$.
1.125 Dollar-Billionaires own 4,4 trillion US$. They own 4 times more than the 50% poor people of the world.
Over 80% of the world population lives on less than 10 US$/day.;
Over 50% of the world population lives on less than 2 US$/day;
Over 20% of the world population lives on less than 1.25 US-Dollar/day

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June 04, 2011, 10:20:40 AM
 #14

Bitcoins will fail because no government on earth will let it be legal with something that they cannot control or get taxes from.

I think they will create something similar except that it will let all transactions be recorded.

But I still think bitcoins will be used as a black market for trading illegal things and for avoiding taxes.

Druglords and mafia can use bitcoins and only the italian mafia is extremly big, than you got the triads, the yakuza the mexicans etc.

So it will probably have some value.


iirc there was some discussion around keeping a complete log of transactions. I think the upside was that it was the only way for Bitcoin to function at all. Wait, I just found a complete record on my computer.

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kloinko1n
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June 04, 2011, 11:05:24 AM
 #15

And it can be changed to divide further.
Great to see that! Thanks for setting things straight.

And for the rest of respondents like FreeMoney, mewantsbitcoins, mintaka, proudhon: I had a good laugh with your replies  Grin

Still, I don't see why you'd want to design a currency of which 1 coin would ultimately be worth +/- 1 million dollar?
proudhon
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June 04, 2011, 11:08:39 AM
 #16

And it can be changed to divide further.
Great to see that! Thanks for setting things straight.

And for the rest of respondents like FreeMoney, mewantsbitcoins, mintaka, proudhon: I had a good laugh with your replies  Grin

Still, I don't see why you'd want to design a currency of which 1 coin would ultimately be worth +/- 1 million dollar?

I don't think the creator's intention was to design a currency of which 1 coin would ultimately be worth +/- 1 million dollars.  I think his intention was to design a digital currency that is distributed, decentralized, and pseudonymous/anonymous.
kloinko1n
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June 04, 2011, 11:22:49 AM
 #17

Bitcoins will fail because no government on earth will let it be legal with something that they cannot control or get taxes from.

I think they will create something similar except that it will let all transactions be recorded.

But I still think bitcoins will be used as a black market for trading illegal things and for avoiding taxes.

Druglords and mafia can use bitcoins and only the italian mafia is extremly big, than you got the triads, the yakuza the mexicans etc.

So it will probably have some value.

Yes, I agree with that one. Bitcoins are too great a threat to the interests of the banking cabal for them to just let it take over their business. And not only business, as one Rothschild bankster already has said: 'Let me control the issue of money in a country, and I do not care who writes its laws. Because he who has control over the issuance of money, has control over the country. And I control the issuance of money.' or something close to that. We are talking here about taking control over the world out of the hands of the biggest and wealthiest (banker) families on the world, who have shown not to be shy of (having countries) starting wars to protect their interests (in two meanings) and wealth.
No doubt, as bitcoin will grow, governments, controlled by the banks -- and that includes much like all countries, except (what a coincidence) those on the 'axis of evil': Venezuela, Libia, Iran, Afghanistan (oh no, we 'solved' that one), Syria, North-Korea -- will crack down with full force on the network.
First demonising it: "Used for laundring money, drug traficking (of course the CIA is a big user of bitcoin), weapons dealing and child porn." as if the USD isn't used for this.
Then by demonising everybody who dares to use it.
This will be combined with encroaching legislation: forbidding the exchanges to keep it a virtual currency, then forbidding the network traffic of it (deep packet inspection), forbidding TOR, restricting access to internet until everybody HAS to connect every service through an ISP portal (this will be combined with a total monopoly of the big ISP corporations).
Then SWAT-team like crackdowns on the exchanges and ultimately on the private households that are using the bitcoin network (and are listed now 'as we speak') and will continue to use it after the legislation has been passed that outlaws the use of it.
Then it will be a black market thing, with high fines and imprisonment for 'perpetrators of economic crimes'.

kloinko1n
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June 04, 2011, 11:25:14 AM
 #18


I don't think the creator's intention was to design a currency of which 1 coin would ultimately be worth +/- 1 million dollars.  I think his intention was to design a digital currency that is distributed, decentralized, and pseudonymous/anonymous.

Not to take over all the other currencies?
It's a little bit a pity that 'they' didn't do some 'back of the envelope' calculations like this.
But hey, they did a great job anyway  Cool
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June 04, 2011, 11:56:50 AM
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And it can be changed to divide further.

http://forum.bitcoin.org/index.php?topic=2150.0


Kind of like a reversion from the new back to the old Turkish Lira.

I was in financial software back then and glad they did it, because some of the banking transactions in the old turkish Lira had so many zeros behind them that were at risk of overflowing the variables we used in our softwre to store them. (We only could use fixed decimal datatypes to avoid round off errors).
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September 26, 2014, 01:06:27 PM
 #20

The more things change, the more FUD stays the same.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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