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"How do you eat an elephant? One bit at a time..."

 July 09, 2011, 11:56:24 AM

Here's a fun calculation: There are 166,000 tonnes of gold in the world (source: World Gold Council). Each tonne consists of 32,150 troy ounces for a total of 5,336,900,000 ounces. Divide that amount by the eventual total number of bitcoin (21,000,000) and you get 254 ounces of gold per bitcoin. With gold at a US dollar value of \$1,600 that would equate to \$406,400 per bitcoin.

32150 x 166000 = 5,336,900,000 oz / 21,000,000 = 254 oz per 1 BTC or 254 x \$1,600 gold = \$406,400 per BTC
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Bitcoin: An Idea Worth Spending

 July 09, 2011, 12:03:34 PM

Why would you try to buy all the bitcoins from one person, when you can start a new chain?
You may not have the required knowledge.

certainly it would be cheaper to hire someone who has it.

IMO this is a great thread to illustrate the fundamental problem with fiat currency whose only demand is some kind of Keynesian beauty contest.

Note a currency backed by something people actually want does not have this logic problem; if one person had all the corn/oil/rice in the world, people would still be willing to pay for it at a reasonable price.  But if somehow, someone collected all of the USD in circulation... people would just say "um no thanks, we'll just make our own money".

"...fiat currency whose only demand is some kind of Keynesian beauty contest."

I found a country that needs a new currency.

 ⟩ █████           █████        ██████████████▀▄███▄       ▄███▄      ▄▄▄████████▄▄▄        ▄▄███████▄▄         ▄███▄ █████         █████         ██████████████ █████       █████    ████████████████     ▄███████████████▄      █████  █████       █████          ▀▀▀▀▀▀▀▀█████▀▀ ▀▀▀         ▀▀▀    ██████▀▀▀▀▀▀▀▀███   ▄███████████████████▄     ▀▀▀   █████     █████ ▄▄▄▄▄       ▄▄▄▄▄ █████  ▄▄▄▄▄       ▄▄▄▄▄  █████▀              ███████████████████████   █████ ████▄ ▄██████▄    █████   █████  █████       █████ █████  █████       █████ ▐█████              █████████████████████████  █████ ███████████████     █████ █████   █████       █████ █████  █████       █████ ▐████▌             ███████████████████████████ █████ ███████▀▀▀██████      █████████    █████       █████ █████  █████       █████ ▐████▌             ███████████████████████████ █████ █████▀    ▀█████       ███████     █████       █████ █████  █████       █████ ▐████▌             ███████████████████████████ █████ █████      █████        █████      █████       █████ █████  █████       █████ ▐█████              █████████████████████████  █████ █████      █████        █████      █████       █████ █████  █████       █████  █████▄              ███████████████████████   █████ █████      █████        █████      ██████▄▄▄▄▄██████ █████  ██████▄▄▄▄▄██████   ██████▄▄▄▄▄▄▄▄███   ▀███████████████████▀    █████ █████      █████        █████       ████████████████ █████   ████████████████  ▄ ████████████████     ▀███████████████▀  ▄█▄ █████ █████      █████        █████        ▀▀████▀▀  █████ █████    ▀█████▀▀  █████ ▀█▀   ▀▀████████▀▀▀        ▀▀███████▀▀     ▀█▀ █████ █████      █████ ⟨ YTCRe-Monetizing YouTubersYTCThrough Crypto-Commoditization ⟩ ⟨ Announce ⟩
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Revolutionizing Brokerage of Personal Data

 July 09, 2011, 12:27:36 PM

I'm no big fan of Gresham's law but it has some merit. As long as you can pay with fiat currency for everything, you don't have a high incentive to pay with BTC. On the other hand, I really like spending BTC because its so easy and secure compared to other forms of online payment.
I regularly buy a few BTC and spend them on things I would have bought anyway or make some donations.

I know that many merchants who accept BTC today instantly convert them back to fiat again, so one could say it is not really worth the hassle but you have to keep in mind that we're bootstrapping a decentralized global currency here - that's not an easy task! It is a bit like voting for a politician who you think won't win the election - some could say your vote was lost but it is very important for a democracy that everybody votes for the one he believes to be the best.

The good thing with Bitcoin is, that it has enough advantages on its own to flourish regardless of everyone acting for its greater good. Bitcoin's value (ie the demand for them) can come from at least two sources: Bitcoin as a medium of exchange and Bitcoin as a store of value. If they are perceived more as a good store of value then there will be more hoarders and their demand will raise the price. At the same time, less BTC in circulation will limit their usefulness as a medium of exchange which lowers the demand from merchants hence lowering the price again. This in turn will make some hoarders part with some of their coins because they fear that they are not so good a store of value after all -> more BTC in circulation, more attractive to exchange them... Rinse, repeat.

I really see such positive feedback loops built into the foundation of Bitcoin as its greatest quality. Despite all the flaws, imbalances and imperfections of human society and people's motives - they just work!

You probably can tell that I'm in an optimistic mood today

 ▄▄▀▀▄▄    ▄▄▀▀▄▄██▄▄▀▀▄▄▄▄▀▀▄▄█████▄████▄▄▀▀▄▄█ █▀▀█▄█████████████ ██ █▄▄████▀   ▀██████ ██ ███████     █▄████ ██ █████▀█▄   ▄██████ ██ █▄█████▌   ▐██████ ██ █████▀█     ██████ ██ ██▄███████████████ █▀▀▄▄▀▀█████▀████▀▀▄▄▀▀    ▀▀▄▄▀▀██▀▀▄▄▀▀        ▀▀▄▄▀▀ .PDATA...TOKEN.. ██████   ████   ████   ████   ████   ████   ████   ████   ████   ██████ ██████  ████  ████  ████  ████  ████  ████  ████  ████  ██████ ██████   ████   ████   ████   ████   ████   ████   ████   ████   ██████ TELEGRAM     BITCOINTALK     FACEBOOKMEDIUM    SLACK    TWITTER    YOUTUBE▬▬▬▬▬▬▬   E M A I L   ▬▬▬▬▬▬▬ ██████  ████  ████  ████  ████  ████  ████  ████  ████  ██████ PRE-SALE     [ April 10th ]
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"How do you eat an elephant? One bit at a time..."

 July 09, 2011, 12:32:13 PM

This thread reminds me of Francisco's Money Speech by Ayn Rand:

“So you think that money is the root of all evil?” said Francisco d’Anconia. “Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?

“When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears not all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor–your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money, Is this what you consider evil?"

Continued:
http://freedomschool.org/2010/01/17/franciscos-money-speech-by-ayn-rand/
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"How do you eat an elephant? One bit at a time..."

 July 09, 2011, 12:35:16 PM

Quote
The good thing with Bitcoin is, that it has enough advantages on its own to flourish regardless of everyone acting for its greater good. Bitcoin's value (ie the demand for them) can come from at least two sources: Bitcoin as a medium of exchange and Bitcoin as a store of value. If they are perceived more as a good store of value then there will be more hoarders and their demand will raise the price. At the same time, less BTC in circulation will limit their usefulness as a medium of exchange which lowers the demand from merchants hence lowering the price again. This in turn will make some hoarders part with some of their coins because they fear that they are not so good a store of value after all -> more BTC in circulation, more attractive to exchange them... Rinse, repeat.

I really see such positive feedback loops built into the foundation of Bitcoin as its greatest quality. Despite all the flaws, imbalances and imperfections of human society and people's motives - they just work!

You probably can tell that I'm in an optimistic mood today

+1
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 July 09, 2011, 01:02:06 PM

Here's a fun calculation: There are 166,000 tonnes of gold in the world (source: World Gold Council). Each tonne consists of 32,150 troy ounces for a total of 5,336,900,000 ounces. Divide that amount by the eventual total number of bitcoin (21,000,000) and you get 254 ounces of gold per bitcoin. With gold at a US dollar value of \$1,600 that would equate to \$406,400 per bitcoin.

32150 x 166000 = 5,336,900,000 oz / 21,000,000 = 254 oz per 1 BTC or 254 x \$1,600 gold = \$406,400 per BTC

if you're going to compare all the Bitcoin there will ever be to gold, you should compare that number to all the gold there will ever be.

the oceans of the world are about 310 M cubic miles.  at 25 tons of gold (in suspension) per cubic mile of seawater, that's 7 3/4 billion tons of gold.  we'll get it someday, too.

but what'll it be worth?

n.b. - that's just the gold in the ocean.  how much is in the crust of the earth, and likewise not yet economically extractable?

also note that there are astronomical bodies - especially in the Oort Cloud, but also meteorites - with known massive, high and easily extractable precious metal content.  PMs tend to bunch up with each other, in space or on the earth.  here's an interesting wager:  how will we first destroy the 'store of value' aspect of PMs?  by mining the oceans or by mining space?  tough call...
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 July 09, 2011, 02:46:11 PM

“So you think that money is the root of all evil?” said Francisco d’Anconia. “Have you ever asked what is the root of money?

I believe the original goes: "the love of money is the root of all evil." From 1 Timothy in the NKJV Bible.

So this d'Anconia guy makes a passionate "man is behind money "speech based on a misquote? Ayn Rand ought to know better.
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Bitcoin: An Idea Worth Spending

 July 09, 2011, 03:02:30 PM

If Ayn Rand were alive today, would she pen "Three Bitcoins in the Fountainhead"?

 ⟩ █████           █████        ██████████████▀▄███▄       ▄███▄      ▄▄▄████████▄▄▄        ▄▄███████▄▄         ▄███▄ █████         █████         ██████████████ █████       █████    ████████████████     ▄███████████████▄      █████  █████       █████          ▀▀▀▀▀▀▀▀█████▀▀ ▀▀▀         ▀▀▀    ██████▀▀▀▀▀▀▀▀███   ▄███████████████████▄     ▀▀▀   █████     █████ ▄▄▄▄▄       ▄▄▄▄▄ █████  ▄▄▄▄▄       ▄▄▄▄▄  █████▀              ███████████████████████   █████ ████▄ ▄██████▄    █████   █████  █████       █████ █████  █████       █████ ▐█████              █████████████████████████  █████ ███████████████     █████ █████   █████       █████ █████  █████       █████ ▐████▌             ███████████████████████████ █████ ███████▀▀▀██████      █████████    █████       █████ █████  █████       █████ ▐████▌             ███████████████████████████ █████ █████▀    ▀█████       ███████     █████       █████ █████  █████       █████ ▐████▌             ███████████████████████████ █████ █████      █████        █████      █████       █████ █████  █████       █████ ▐█████              █████████████████████████  █████ █████      █████        █████      █████       █████ █████  █████       █████  █████▄              ███████████████████████   █████ █████      █████        █████      ██████▄▄▄▄▄██████ █████  ██████▄▄▄▄▄██████   ██████▄▄▄▄▄▄▄▄███   ▀███████████████████▀    █████ █████      █████        █████       ████████████████ █████   ████████████████  ▄ ████████████████     ▀███████████████▀  ▄█▄ █████ █████      █████        █████        ▀▀████▀▀  █████ █████    ▀█████▀▀  █████ ▀█▀   ▀▀████████▀▀▀        ▀▀███████▀▀     ▀█▀ █████ █████      █████ ⟨ YTCRe-Monetizing YouTubersYTCThrough Crypto-Commoditization ⟩ ⟨ Announce ⟩
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"How do you eat an elephant? One bit at a time..."

 July 09, 2011, 03:07:44 PM

“So you think that money is the root of all evil?” said Francisco d’Anconia. “Have you ever asked what is the root of money?

I believe the original goes: "the love of money is the root of all evil." From 1 Timothy in the NKJV Bible.

So this d'Anconia guy makes a passionate "man is behind money "speech based on a misquote? Ayn Rand ought to know better.

FYI: Her character is not quoting the bible therefore there is no misquote.
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 July 09, 2011, 03:30:21 PM

“So you think that money is the root of all evil?” said Francisco d’Anconia. “Have you ever asked what is the root of money?

I believe the original goes: "the love of money is the root of all evil." From 1 Timothy in the NKJV Bible.

So this d'Anconia guy makes a passionate "man is behind money "speech based on a misquote? Ayn Rand ought to know better.

FYI: Her character is not quoting the bible therefore there is no misquote.

Can you personally know Ayn Rand's motivations? She was famous for being anti-faith and an atheist.

Perhaps it was not her intention to misquote the bible, but 1 Timothy IS the root source of the paraphrase.

Just being analytical, money is the root of all evil is an obvious fallacy. Rand's character, d'Anconia, does not address this. Instead he goes off on a tangent about how money is a basis of morality. Which I think is as nonsensical as saying it is evil.
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GNU is not UNIX

 July 09, 2011, 03:47:03 PM

If you found my comment useful please express your gratitude by doing an action of similar magnitude towards a better society. Thanks you!.
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 July 09, 2011, 03:54:49 PM

I was thinking the same thing. There's really nothing contradictory there.

Kinda funny how long the thread is, and Ampk is the first one to point out the original post has nothing to do with paradoxes.
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GNU is not UNIX

 July 09, 2011, 04:15:34 PM

Given we're already off-topic. Just because of the curiosity: why did you referred to me as "Ampk"?. Instead of "amp" or "ampkZ"?.

My user name is base64-encoded pseudorandom-generated data, BTW .

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 July 09, 2011, 04:36:53 PM

I'm no big fan of Gresham's law but it has some merit.

What you say next is correct, but its not because of the Gresham law. Gresham law only applies if there is an artificially fixed exchange rate between two currencies. If the currencies float freely Gresham law does not apply. F.e.: The market price of gold is now over \$1540, so it means there are people buying and selling around that price. If the government now sets a price of \$800 by law, nobody will sell it at that price and gold will go into hidding. This is Gresham law. But if the price is freely floating, if you raise the price enough you will find someone willing to sell you gold. When prices are free Gresham law does not apply. It only applies when there is a artificially fixed price.

(Btw, this confussion about the Gresham law is not strange, because the keynesians have tried to misrepresent the Gresham law so they could criticize their mischaracterized version)

The reason what you say is true, is because the government discourages the use of any alternative currency by forcing everyone to pay taxes with the government currency and by legal tender laws, thus creating a monopolly.

But I am with you that Bitcoin has the potential to overcome all this.

Quote
As long as you can pay with fiat currency for everything, you don't have a high incentive to pay with BTC. On the other hand, I really like spending BTC because its so easy and secure compared to other forms of online payment.
I regularly buy a few BTC and spend them on things I would have bought anyway or make some donations.

I know that many merchants who accept BTC today instantly convert them back to fiat again, so one could say it is not really worth the hassle but you have to keep in mind that we're bootstrapping a decentralized global currency here - that's not an easy task! It is a bit like voting for a politician who you think won't win the election - some could say your vote was lost but it is very important for a democracy that everybody votes for the one he believes to be the best.

The good thing with Bitcoin is, that it has enough advantages on its own to flourish regardless of everyone acting for its greater good. Bitcoin's value (ie the demand for them) can come from at least two sources: Bitcoin as a medium of exchange and Bitcoin as a store of value. If they are perceived more as a good store of value then there will be more hoarders and their demand will raise the price. At the same time, less BTC in circulation will limit their usefulness as a medium of exchange which lowers the demand from merchants hence lowering the price again. This in turn will make some hoarders part with some of their coins because they fear that they are not so good a store of value after all -> more BTC in circulation, more attractive to exchange them... Rinse, repeat.

I really see such positive feedback loops built into the foundation of Bitcoin as its greatest quality. Despite all the flaws, imbalances and imperfections of human society and people's motives - they just work!

You probably can tell that I'm in an optimistic mood today

 ▄▄████▄▄        ▄▄██████████████▄▄      ███████████████████████▄▄      ▀▀███████████████████████████▄▄       ▀▀███████████████████████████▄▄        ▀████████████████████████████▄▄       ▀▀███████████████████████████▄▄        ▀████████████████████████████▄▄       ▀▀███ ▀▀██████████████████████▄▄     ▀▀██████████████████████▄▄▄▄        ▀██████████████████████▄████▄▄        ▀▀███████████████████████████▄▄        ▀▀██████████████████████████▄▄        ▀▀███████████████████████████▄▄        ▀▀████▀██████████████████████▄▄  ▀▀████████████████████████      ▀▀█████████████████▀▀           ▀▀███████▀▀ █ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ █ █ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ █ ■  Semux uses .100% original codebase.■  Superfast with .30 seconds instant finality.■  Tested .5000 tx per block. on open network █ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ ██ █
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"How do you eat an elephant? One bit at a time..."

 July 09, 2011, 04:44:37 PM

Quote

Just being analytical, money is the root of all evil is an obvious fallacy. Rand's character, d'Anconia, does not address this. Instead he goes off on a tangent about how money is a basis of morality. Which I think is as nonsensical as saying it is evil.

True, money is neutral. The way that it is used (or abused) is what gives it color. I like Francisco's speech because it gives the extreme counter-punch to the "money is evil" crowd. Especially to some of those on these forums who, like the moochers, are envious of those who have acquired bitcoin and they keep begging the bitcoin holders ( or trying to "guilt" them) to "share the wealth" and "don't hoard" - which is another fallacy.
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 July 09, 2011, 05:12:28 PM

If you look at the number of US Dollars in circulation, and you imagine that those are replaced by Bitcoins, you get a value in the order of \$50k per BTC.

New York FED says: \$829 billion in circulation.

There will be 20999999.9769 BTC (if the decimal point does not change - else it may be a little closer to 21M).

This makes \$39,476.19 per BTC. And this means current USD! As the USD will inflate, the value per Bitcoin will rise alike.

Man, you are WAY out of date    those were 2007 numbers.

there is 2.9 TRILLION USD in circulation:  http://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab9

now do the math!
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 July 09, 2011, 05:27:25 PM

you guys are also forgetting one dynamic in Satoshi's brilliant scheme in theorizing the one owner owns all btc.

the protocol is slowly bleeding out btc at a steady rate.  so even if someone were to gain control of all btc at this point in time, hows he gonna buy up all the remaining btc yet to be introduced?  first of all he'd drive the price UP accumulating all btc now.  secondly, everyone would notice this and the next round of btc mined would bring in speculators bidding the price up even further.

a great example of this is the US Treasury market.  everyone know the Fed will be in the market buying up UST's in an attempt to keep interest rates capped.  so what do all the Primary Dealers do?  they front run the Fed by buying up every UST in sight and then flipping them to the Fed at an even HIGHER price.  great work if you can get it.  this is the great paradox of the the Feds printing campaign that has so many market players confused.  the UST bears just can't believe interest rates haven't spiked yet given all the money printing and they keep getting dragged off the trading floors bleeding as interest rates have continued down and stayed down over the years.  you see the same thing happening with Japanese bonds over 3 decades now.
wareen
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Revolutionizing Brokerage of Personal Data

 July 09, 2011, 05:44:21 PM

Gresham law only applies if there is an artificially fixed exchange rate between two currencies. If the currencies float freely Gresham law does not apply.
Thanks for pointing that out - you are of course correct, my apologies.

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 July 09, 2011, 05:58:08 PM

I know that many merchants who accept BTC today instantly convert them back to fiat again, so one could say it is not really worth the hassle but you have to keep in mind that we're bootstrapping a decentralized global currency here - that's not an easy task!

i don't see it that way.  i think you're providing a great service to btc by helping them circulate!   this only helps the btc economy by providing reinforcing feedback.
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Democracy is the original 51% attack

 July 09, 2011, 06:41:29 PM

It would be impossible for one person to accumulate all bitcoins unless they had dropped to essentially zero due to a devastating flaw/security issue.

Why impossible? Because every marginal bitcoin which is purchased from some other owner will increase in value up to infinity. Imagine if one man started buying all the bitcoins now... the price would rise and rise and rise. Perhaps he could get half the bitcoins. Maybe 80% of them. But as he approached 100% ownership, those with the remaining coins would only sell at higher prices. A bitcoin would become so expensive that not even Warren Buffet could purchase the last few.

Note: this same economic concept is why the world will never "run out" of oil, or trees, or any resource. If the last barrel of oil were found... at what price would it sell? Infinity. And long before that last barrel, alternatives would be used.

So cheer up all, we'll never run out of oil, and Bitcoins will never all be owned by one person
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