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Author Topic: please explain the exchange rate for me  (Read 1517 times)
Sitarow
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June 17, 2011, 07:45:08 AM
 #21

Wish we had more spots to buy / sell goods Smiley
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Bitcoin mining is now a specialized and very risky industry, just like gold mining. Amateur miners are unlikely to make much money, and may even lose money. Bitcoin is much more than just mining, though!
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dewman
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June 17, 2011, 08:03:20 AM
 #22

It's fairly close to direct supply-and-demand right now, yes.  If someone were to dump $500 million USD into MtGox right now, offering to buy for $30 per coin, he would dominate the market.  All the "sell" orders up to $30 would be instantly bought up, and within a few hours people would begin listing new sell orders for $30 minimum.

As someone before said however, you can't buy something that isn't for sale.  MtGox is the largest exchange right now, and it processed ~72,000 coins in the past 24 hours (if I'm reading that number correctly).  You'd have to clear out the marketplace multiple times before you could control that much of the market.  Possible perhaps, but I don't know how likely it would be.

If some one is dominating over the distributed system, isn't it something l can put that he/orshe owns the market and can shut it down without any other effort then money? And if the system is technically cannot be shut down by the government it can be shut down by a couple of rich individuals and then it makes no sense to participate the system where major share of the currency is frozen and even though people are willing to sell something in most cases nobody can buy it because there is no money available?

Is not it considered unsafe for the market?
bluemoon23
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April 13, 2012, 11:19:35 AM
 #23

f some one is dominating over the distributed system, isn't it something l can put that he/orshe owns the market and can shut it down without any other effort then money? And if the system is technically cannot be shut down by the government it can be shut down by a couple of rich individuals and then it makes no sense to participate the system where major share of the currency is frozen and even though people are willing to sell something in most cases nobody can buy it because there is no money available?

Is not it considered unsafe for the market?"


What he said Tongue
DeathAndTaxes
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April 13, 2012, 12:50:10 PM
 #24

I can't tell if you are serious?

Also can't figure out why you decided to necro a 9 month old thread.

Still let me get this straight someone will "destroy" Bitcoin by trading hundreds of millions of dollars (or other currency) to acquire Bitcoins.  The very same Bitcoins which would be worthless if/when they destroyed Bitcoin.  Essentially a one way transfer of wealth worth from "Bitcon destroyer" to current Bitcoin users.

Pretty much the same as trying to destroy the gold trade by buying up all the Gold or putting drug cartels out of business by spending billions to buy all the drugs.

DEA: "So we are really going to stick it to the drug cartels.  We have just been authorized to buy their cocaine wholesale for $20B.  So we give the cartels $20B, buy the cocaine and then destroy it.   This has to destroy the drug cartel.  I mean by showing people how much value drugs have that is bound to make everyone stop selling drugs".
Foxpup
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April 13, 2012, 12:56:33 PM
 #25

f some one is dominating over the distributed system, isn't it something l can put that he/orshe owns the market and can shut it down without any other effort then money? And if the system is technically cannot be shut down by the government it can be shut down by a couple of rich individuals and then it makes no sense to participate the system where major share of the currency is frozen and even though people are willing to sell something in most cases nobody can buy it because there is no money available?

Is not it considered unsafe for the market?"


What he said Tongue

There are currently about 9 million bitcoins in existence today, and the current exchange rate is about $5 per bitcoin. So someone could just buy all the bitcoins in existence for around $45 million, right? Wrong! First of all, not all of the bitcoins in existence are for sale on the markets. If you offered to buy everyone's bitcoins for $5 each, you'd only end up with a tiny fraction of the bitcoins in circulation, because most people just aren't interested in selling their bitcoins. At least not for $5. If you want to buy more bitcoins, you'll need to offer a higher price to convince the more stubborn sellers to part with their precious coins. So the more you want to buy, the higher the price becomes. Looking at it another way, if someone buys some bitcoins, the bitcoins still in circulation become rarer (because there are less of them) and therefore more valuable. That's just supply and demand. There's just no way anyone could buy all the bitcoins.

The other thing to keep in mind is that bitcoins can be divided into as small units as you like. Even if you own the very last bitcoin on the planet (the other bitcoins having been bought by an insane trillionaire with apparently nothing better to do with his money than to try to collapse an economy), and that single remaining bitcoin is worth (say) a billion dollars (but you're not going to sell it to that evil trillionaire, oh no, not even for a billion dollars), you'll still be able to buy a burrito for 0.00000001 bitcoins, no problem (if for no other reason than that the seller does want to sell his small piece of the billion-dollar bitcoin).

One last thing: not all of the bitcoins that are going to exist, exist yet. Even if someone did manage to buy all the bitcoins currently in existence, new bitcoins are constantly being mined, and miners are under no obligation to sell their coins, for any price.

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
Dan The Man
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April 13, 2012, 12:59:43 PM
 #26

Example: You can't trade Euros(e.u.) for Pesos(mx) in Antartica..because no one there uses pesos for currency.
So..to sell find someone who wants to buy.
I would imagine that because of the diversity of the international research presence in Antarctica, and the type of people that kind of research attracts, you would probably have a pretty easy time finding someone to convert your Euros to Pesos there.

SixthEnigma
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April 13, 2012, 03:25:43 PM
 #27

f75dec
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