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Author Topic: I am very confused.  (Read 9337 times)
Ragnar
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Ragnar Redbeard


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October 18, 2011, 12:17:48 AM
 #1

I found out about this currency two weeks ago. I acted on it because it will meet the needs of an idea of mine and now I am coming to realize it challenges the powers that be. I never expected much out of its current form since it is so young.

What is confusing is that people are declaring it dead because it can't maintain a constant price after an increase over 1000 times? I really don't understand this. Somebody please tell me how Bitcoin is suffering right now? From what I am seeing it has had great progress. I don't see anything to complain about.

"Dare to liberate your mind, from all things, old and new."
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danman87
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October 18, 2011, 12:19:35 AM
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Everything eventually comes to an end. Some sooner than others.
jamesg
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October 18, 2011, 12:21:39 AM
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I found out about this currency two weeks ago. I acted on it because it will meet the needs of an idea of mine and now I am coming to realize it challenges the powers that be. I never expected much out of its current form since it is so young.

What is confusing is that people are declaring it dead because it can't maintain a constant price after an increase over 1000 times? I really don't understand this. Somebody please tell me how Bitcoin is suffering right now? From what I am seeing it has had great progress. I don't see anything to complain about.

Most get caught up in the noise instead of looking at the big picture.
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Democracy is vulnerable to a 51% attack.


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October 18, 2011, 12:22:58 AM
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What is confusing is that people are declaring it dead because it can't maintain a constant price after an increase over 1000 times? I really don't understand this. Somebody please tell me how Bitcoin is suffering right now? From what I am seeing it has had great progress. I don't see anything to complain about.
The volatility makes it less useful as a medium of exchange. If you accept 100 bitcoins in exchange for some hardware and the next day those 100 bitcoins are worth 15% less, you may wind up taking a loss on the transaction. This matters because you typically can't pay your employees, pay your utility bills, pay your rent, or pay your suppliers in bitcoins.

Otherwise, the price of a bitcoin measures a whole bunch of things mixed together. One of the things it measures is the collective opinion of the long-term viability of bitcoins as a medium of exchange. But that's mixed in with so many other factors that you really draw too many conclusions.

I think a lot of people just assume that a high price is good and a low price is bad without really thinking too much about it. They confuse the price of a bitcoin with things like the price of a company's stock.

I am an employee of Ripple.
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danman87
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October 18, 2011, 12:25:36 AM
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The price of a companies stock is investors confidence in future earnings.

Is the low price, and lowering of price, the Bitcoin's economy's confidence in the viability of it's future?
c_k
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October 18, 2011, 12:34:58 AM
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Whoever says bitcoin is dead is an idiot Smiley

DeathAndTaxes
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October 18, 2011, 01:00:15 AM
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The price of a companies stock is investors confidence in future earnings.

Is the low price, and lowering of price, the Bitcoin's economy's confidence in the viability of it's future?

No isn't.  The price of the stock is a reflection of projected earnings and growth.

For example investors can have EXTREME confidence that a company will make $1 next year growing roughly 1% and the stock price will be very low.

The price of bitcoin is more like any other currency.  It's value is based on supply relative to demand.  Demand is based on transaction volume and supply is based on minting.  At the current rate of minting and transactions the market (which may be wrong) is saying that Bitcoin warrants a price ~$3.00 not $30.00.  If the block reward was 5 instead of 50 likely Bitcoin would be at $30.00.  Alternatively if transaction volume declines significantly (due to volatility making it too risky to use for exchange) then price of Bitcoin will fall (as supply is increasing and demand is falling).
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October 18, 2011, 01:01:37 AM
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Ragnar, don't mind them too much. It's a common reaction at the end of a speculative bubble.

Nobody knows whether Bitcoin will live, neither now nor did anyone five months ago. You will hear hundreds of short-sighted arguments why it "must fail". I'll name a few in the order they appeared.

"Deflation will make price rise over 9000 but then nobody can use it because everyone will only hoard"
"It was all a ponzi scheme, now the inventors are taking their money and running"
"Volatility is so high, nobody will ever use them for trade"

If you pay attention, you will see that these arguments aim at short time-scales. Nobody will hoard forever, initial distribution is unimportant once coins have moved around, and volatility is paid by bad speculators, which means it will decrease over time.

There are some problems with Bitcoin, but they can be fixed, and have nothing to do with the things the doomsayers name.
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October 18, 2011, 01:06:48 AM
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The people declaring it dead are (for the most part) the same people that have been declaring it dead for a long time. They declared it dead during the skyrocket bubble because it meant people will hoard it and never use it for currency. They declared it dead during large swings, because it was too volatile to use as currency. They've been declaring it dead every time it drops in price, because they assume it will drop forever.

Certainly, the falling price has shaken confidence. Those who are least confident in the technology have gotten scared. Some of us aren't so easily shaken. If you understand it as a payment system, instead of a speculative investment, then the price swings won't bother you as much.

plastic.elastic
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October 18, 2011, 01:35:23 AM
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The people declaring it dead are (for the most part) the same people that have been declaring it dead for a long time. They declared it dead during the skyrocket bubble because it meant people will hoard it and never use it for currency. They declared it dead during large swings, because it was too volatile to use as currency. They've been declaring it dead every time it drops in price, because they assume it will drop forever.

Certainly, the falling price has shaken confidence. Those who are least confident in the technology have gotten scared. Some of us aren't so easily shaken. If you understand it as a payment system, instead of a speculative investment, then the price swings won't bother you as much.



how so if we cant even trade with such volatility? what does a payment system do without a transaction?
 

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October 18, 2011, 01:42:22 AM
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Whoever says bitcoin is dead is an idiot Smiley

I would not say that at all.  Whoever believes someone who says that Bitcoin is dead may be.  Or not.  Time will tell.

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October 18, 2011, 01:49:47 AM
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how so if we cant even trade with such volatility? what does a payment system do without a transaction?
 

You've had problems sending Bitcoins from one client to another?

You know exactly what i meant, can you use bitcoin to put food on the table?

If not, you will have to fall back to fiat currency.

Bitcoin isnt a curreny, its a mean for transferring money which isnt gonna happen if the exchange is so volatile.

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evoorhees
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October 18, 2011, 02:21:55 AM
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You know exactly what i meant, can you use bitcoin to put food on the table?


Yes.

BitMunchies.com

That doesn't prove anything though. Bitcoin's usefulness and value does not derive from it's proximity to the acquisition of food.
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October 18, 2011, 02:25:04 AM
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Everything eventually comes to an end. Some sooner than others.

That was deep.
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October 18, 2011, 02:30:36 AM
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You know exactly what i meant, can you use bitcoin to put food on the table?


Yes.

BitMunchies.com

That doesn't prove anything though. Bitcoin's usefulness and value does not derive from it's proximity to the acquisition of food.

You cant be serious. Why do you refuse to see my point? Are you holding a large number of bitcoins? Yes we all know its usefulness, that is ability to send money anonymously. If you expect ppl to use bitcoin as a currency, you're dreaming.

Assume you have the payment system ready, convince me as a merchant to use your system without me exchange the coins back to fiat currency.


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evoorhees
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October 18, 2011, 02:55:04 AM
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You cant be serious. Why do you refuse to see my point? Are you holding a large number of bitcoins? Yes we all know its usefulness, that is ability to send money anonymously. If you expect ppl to use bitcoin as a currency, you're dreaming.


Dude, I use it as a currency almost daily.

You seem to think that just because many receivers of the coins will desire dollars instead, that such will always be the case. You assume it's static, not realizing that as the economy matures the need to "convert back" lessens over time.

Bitcoin becomes a common currency gradually, and for some of us it is already very much a currency now. And no I'm not a large holder of coins, only about 200... I had more yesterday but I paid someone, and in fact I received most of them by doing work for other people. It's almost like... a currency! And no fees + transferable instantly around the world.
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October 18, 2011, 03:16:15 AM
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You cant be serious. Why do you refuse to see my point? Are you holding a large number of bitcoins? Yes we all know its usefulness, that is ability to send money anonymously. If you expect ppl to use bitcoin as a currency, you're dreaming.


Dude, I use it as a currency almost daily.

You seem to think that just because many receivers of the coins will desire dollars instead, that such will always be the case. You assume it's static, not realizing that as the economy matures the need to "convert back" lessens over time.

Bitcoin becomes a common currency gradually, and for some of us it is already very much a currency now. And no I'm not a large holder of coins, only about 200... I had more yesterday but I paid someone, and in fact I received most of them by doing work for other people. It's almost like... a currency! And no fees + transferable instantly around the world.

Sure you may be using to exchange goods or services online. That does not change the fact that in real life, you must use fiat currency to buy goods for living.

Like i said, convince me as a merchant to use your payment system while all my business expenses are in fiat currency.


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Gavin Andresen
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October 18, 2011, 03:45:31 AM
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Like i said, convince me as a merchant to use your payment system while all my business expenses are in fiat currency.

So... what would convince you?  What if you could pay 10% of your expenses using bitcoin, and it cost you 1% less if you used bitcoin?

There are lots of chicken-and-egg problems that bitcoin has to overcome to compete with the dollars or euros we're all using now; I see two paths to bitcoin's success:

Maybe there are enough ideologically motivated people to form a self-sustaining economy. If even 1% of people find the idea of bitcoin attractive and started using it for 1% of their transactions that would still be huge.

Or maybe one or more 'killer apps' for bitcoin will emerge, giving it a foothold in certain markets. Maybe it will never expand beyond those markets, or maybe it'll slowly grow beyond them because of lower cost and higher tech.

If you're not excited by the idea of being an early adopter for what could be a massively influential idea, then you should probably come back in three or four years and either tell us "Told you it'd never work!" or join what should, by then, be a much more stable and easier-to-use system.

How often do you get the chance to work on a potentially world-changing project?
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October 18, 2011, 03:55:25 AM
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Like i said, convince me as a merchant to use your payment system while all my business expenses are in fiat currency.

So... what would convince you?  What if you could pay 10% of your expenses using bitcoin, and it cost you 1% less if you used bitcoin?

There are lots of chicken-and-egg problems that bitcoin has to overcome to compete with the dollars or euros we're all using now; I see two paths to bitcoin's success:

Maybe there are enough ideologically motivated people to form a self-sustaining economy. If even 1% of people find the idea of bitcoin attractive and started using it for 1% of their transactions that would still be huge.

Or maybe one or more 'killer apps' for bitcoin will emerge, giving it a foothold in certain markets. Maybe it will never expand beyond those markets, or maybe it'll slowly grow beyond them because of lower cost and higher tech.

If you're not excited by the idea of being an early adopter for what could be a massively influential idea, then you should probably come back in three or four years and either tell us "Told you it'd never work!" or join what should, by then, be a much more stable and easier-to-use system.


+1

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October 18, 2011, 03:55:46 AM
 #20

Quote
Maybe there are enough ideologically motivated people to form a self-sustaining economy.

This is the key, I've been doing everything I can to urge other leftist ideologues to adopt Bitcoin to create an egalitarian economy, it will take a few years to catch on but the ability of Bitcoin to ease redistribution of wealth will make it the inevitable choice once people tire of trying to work inside the same old broken system.

"Money is like manure: Spread around, it helps things grow. Piled up in one place, it just stinks."
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