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Author Topic: What would happen to Bitcoin if the World Echnomy went over to Bitcoins  (Read 6386 times)
myrkul
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July 26, 2011, 05:35:26 PM
 #61

You say more money in circulation is more money full stop, no?

Particularly when that money is still, technically, in my bank account, as well.

I deposit $1.00. The bank loans out $0.50 of it, but I still have that dollar in my account. That's $1.50.

You don't need a degree in economics to see that they're mucking about with the finances.

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July 26, 2011, 05:36:52 PM
 #62

The dollar is fine, it might have a slight cold but not even the flu, the death of the dollar has been exaggerated.

If bitcoin replaced the worlds currency, a lot of people would be screwed as they have no computers, though we an print bitcoins, it would take time to go over.

there is over 4 trillion dollars in circulation  there are 6842600 bitcoins, so each coin would be would be worth $580,000. Which means miners would find about 1.2billion every week, leading to a soaring crime rate in stolen ATI cards. Satoshi would instantly be the richest man that ever lived.

It's a good thing Bitcoins are divisible to 8 decimal places Smiley

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July 26, 2011, 05:51:54 PM
 #63

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the other half of this same ripoff is evidenced by the "Excess Reserves" which is at about $16 trillion now held by the banks that they were supposed to lend out to the real economy.


One of the many straws that broke the economies back was SEC chairman Cox getting rid of the reserve requirements for banks which before then was set at 15 to 1. This had two effects, it allowed the banks to leverage themselves to the hilt, it also made it harder for interbanking business, as before you knew the bank you were dealing with was pretty much using the 15 to 1 limit, when it went away, you had no clue if they had reserves or not.

Now they are building back up reserves to prevent this from happening again.

You can bitch about them not lending, but you really cant complain about reserve requiments because the lack of reserve requirments is why they had to be bailed out.

what you say about Cox is absolutely true.  except the part that he was a paid lacky for the financial industry and the banks wanted him to remove those constraints so they could gamble recklessly.

the problem is they're using taxpayer money to build up the reserves they need to withstand the next sh*t storm.  i say instead that the Big 5: GS, JPM, WFC, BAC, C get liquidated instead to remove the cancer from the system.
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July 26, 2011, 06:11:31 PM
 #64

You say more money in circulation is more money full stop, no?

Particularly when that money is still, technically, in my bank account, as well.

I deposit $1.00. The bank loans out $0.50 of it, but I still have that dollar in my account. That's $1.50.

You don't need a degree in economics to see that they're mucking about with the finances.

When they loan out 50¢ that isn't there anymore. Your account balance might show you one dollar but it's not money. It's what the bank owes to you, if they have it. There is still only 1 dollar.

I think we have the same understanding, just a different take on terminology.

What I'm wondering is if the commercial banks can get away with adding new electronic money. Maybe the commercial banks have a deal with government to create new money behind the scenes. Maybe there is too much risk of such a scam being revealed so maybe not.

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myrkul
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July 26, 2011, 06:28:17 PM
 #65

You say more money in circulation is more money full stop, no?

Particularly when that money is still, technically, in my bank account, as well.

I deposit $1.00. The bank loans out $0.50 of it, but I still have that dollar in my account. That's $1.50.

You don't need a degree in economics to see that they're mucking about with the finances.

When they loan out 50¢ that isn't there anymore. Your account balance might show you one dollar but it's not money. It's what the bank owes to you, if they have it. There is still only 1 dollar.

True enough, as far as it goes, but I think I have a dollar, and he has the 50 cents, so what the 'market' sees, is a 50% increase in the supply of money.

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July 26, 2011, 06:56:51 PM
 #66


Could this mean that Bitcoin might survive and even thrive in spite of a major global disaster?


I, for one, have some fraction of my net worth hedged on this possibility.

I expect that PM's would serve a similar function and be more reliable, but the proliferation of body scanners, divisibility issues and such render PMs a less flexible form in some scenarios.

I figure I have another 40-ish years left and suspect that it is more likely than not that we will experience a global financial disaster sometime within that time frame.  Or at least one in my country.  I guess I would reserve the term 'disaster' for something which would be unexpected.  In my mind, what I am expecting is more of an 'expected reset event' which is baked into the cake for all debt based monetary systems.

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July 26, 2011, 08:29:18 PM
 #67

So thats each coin worth $2300,000.

So the miners will be mining $690,000,000 per hour, and spending a good proportion of that on power.

I am under the impression that when the price rises, more people get into mining. But at some point there is a limit to mining, since there is a finite amount of computational power available. At what point will we see the price of bitcoins grow faster than the hashing power due to a shortage of mining hardware?


What limits the computational power? The number of GPUs available, or the power available to drive them?
myrkul
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July 26, 2011, 09:27:39 PM
 #68

So thats each coin worth $2300,000.

So the miners will be mining $690,000,000 per hour, and spending a good proportion of that on power.

I am under the impression that when the price rises, more people get into mining. But at some point there is a limit to mining, since there is a finite amount of computational power available. At what point will we see the price of bitcoins grow faster than the hashing power due to a shortage of mining hardware?


What limits the computational power? The number of GPUs available, or the power available to drive them?

Swing by newegg and see for yourself. Wink

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July 26, 2011, 09:47:55 PM
 #69

You say more money in circulation is more money full stop, no?

Particularly when that money is still, technically, in my bank account, as well.

I deposit $1.00. The bank loans out $0.50 of it, but I still have that dollar in my account. That's $1.50.

You don't need a degree in economics to see that they're mucking about with the finances.

When they loan out 50¢ that isn't there anymore. Your account balance might show you one dollar but it's not money. It's what the bank owes to you, if they have it. There is still only 1 dollar.

I think we have the same understanding, just a different take on terminology.

What I'm wondering is if the commercial banks can get away with adding new electronic money. Maybe the commercial banks have a deal with government to create new money behind the scenes. Maybe there is too much risk of such a scam being revealed so maybe not.

I think the key is even though the $1 is just a debt the bank owes you, you can spend it as if it were money. All those bank transfers to BTC exchanges are just monopoly money  Grin

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July 26, 2011, 10:36:23 PM
 #70

If you tried to transfer more than the bank had, you couldn't unless banks really are creating new money.

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myrkul
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July 26, 2011, 10:38:36 PM
 #71

If you tried to transfer more than the bank had, you couldn't unless banks really are creating new money.

Exactly....

Though in practice it's more of a juggling act than actually creating more money.

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July 26, 2011, 11:12:33 PM
 #72

You could transfer bank balances across the bank but not from one bank to another without having money behind it and especially not withdraw it.

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myrkul
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July 26, 2011, 11:21:45 PM
 #73

You could transfer bank balances across the bank but not from one bank to another without having money behind it and especially not withdraw it.

Yup, more juggling.

Though, when you're just shifting numbers around, it's relatively easy to allow negative numbers.

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July 26, 2011, 11:52:10 PM
 #74

The world could easily run on bitcoins for major transactions. We could go back to using precious metal coins for quick everyday spending.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
myrkul
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July 26, 2011, 11:54:37 PM
 #75

The world could easily run on bitcoins for major transactions. We could go back to using precious metal coins for quick everyday spending.

You do know how to get a man's heart fluttering.  Wink

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July 27, 2011, 12:12:23 AM
 #76

You could transfer bank balances across the bank but not from one bank to another without having money behind it and especially not withdraw it.

Yup, more juggling.

Though, when you're just shifting numbers around, it's relatively easy to allow negative numbers.

Taking money from an account with zero and giving it to another account, thereby creating new electronic money from an account with nothing (Now is negative). Or rather taking from an account more than is there so it is negative.

Well, while this would be illegal (Unless it is allowed by law to a great surprise) I wouldn't be surprised if banks did do this since it's just electronic money. Clever bankers could find loopholes in the system to generate new money without anyone finding out. New money which could go into bank profits.

Or would they risk counterfeiting money? If they got found out, wouldn't it be really bad? Especially in the eyes of the public.

But the system od electronic fiat money is so screwed up, that I'm sure at least someone has abused or is at least trying or tried to abuse the system.

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