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Author Topic: Bitcoin is blowing UP, please stop it!  (Read 2882 times)
robocop
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October 26, 2011, 08:21:40 AM
 #1

The bitcoin idea is great and it could be an alternative to the current fiat money system.

But since the big rally to the 30$ the bitcoin is loosing their identity and becomes more and more to a similar system as fiat money with all if the weakness.

At first the amount of bitcoins is exploding like the fiat money because there were born a lot of similar bitcoin-currencies for example Ixoin, Litecoin, Solidcoin and more. This movement will damage the bitcoin because the amount will increasy quickly and the new user of bitcoin will confused more and more. And by the way the bitcoin to understand is difficult enough and the difference between the bitcoin and other coins are really too much!

Then the next thing is that the bitcoin becomes more and more to an financial object with funds, derivates, options and margin trading but want we a virtual financial bitcoinmarket like the current market?
Want we that more derivates, funds and options will trade than the bitcoin self? Because this will be the result of the derivates and i don´t believe that the new bitcoin users will hedge their bitcoins to stabilize the volatility, see the fiat money system.

Please STOP the other similar bitcoin-currencies and buy only the bitcoin!
Please STOP the derivates and don´t create a virtual financial bitmarket that nobody need who want a real alternative currency.
Please protect the identity of the bitcoin and the good ideas to make a REAL alternative currency and not to an imaginery currency.
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P4man
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October 26, 2011, 08:28:11 AM
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You might as well ask wallstreet to "please stop". Ask all you want, you know its futile.
For wallstreet at least you can ask politicians to force wallstreet to stop (hey, you can ask at least), for bitcoin however...

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October 26, 2011, 08:34:14 AM
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Robo, do you prefer Bitcoin over the others? For good reason? If yes, then don't worry. Your good reasons will make it the most desired and used. If no, then don't worry about Bitcoin.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
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October 26, 2011, 08:57:17 AM
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It is free world, everyone is free to create their own "ShitCoin" or whatever.

Maybe in the longer run, someone will invent a better cryptocurrency, and I think it is a good thing. Then people will move slowly to the new cryptocurrency.

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October 26, 2011, 08:58:26 AM
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I think the thing with bitcoin is that it will have all the problems of normal currencies except you have the option to bypass them, no more middlemen taking their cut, but you will be able to do that too if you are feeling generous or insecure
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October 26, 2011, 09:37:52 AM
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At first the amount of bitcoins is exploding like the fiat money because there were born a lot of similar bitcoin-currencies for example Ixoin, Litecoin, Solidcoin and more. This movement will damage the bitcoin because the amount will increasy quickly and the new user of bitcoin will confused more and more.
I wouldn't worry about the clones too much - so far, none of them has a really compelling advantage over Bitcoin and they will therefore fade away quickly.

Then the next thing is that the bitcoin becomes more and more to an financial object with funds, derivates, options and margin trading but want we a virtual financial bitcoinmarket like the current market?

Want we that more derivates, funds and options will trade than the bitcoin self? Because this will be the result of the derivates and i don´t believe that the new bitcoin users will hedge their bitcoins to stabilize the volatility, see the fiat money system.
I don't think this will happen with Bitcoin, because it is so easy to transfer and hold Bitcoins all by yourself, there is no real need to accept any Bitcoin-derived financial product instead of Bitcoin as real value. Sure, you can speculate and bet on all kinds of things, but in stark contrast to the current money system, these inflated derivatives can only be converted to real Bitcoins to a very limited degree (you have to find somebody actually valuing them higher than his/her own BTC).

Currently, most of the financial wealth of people is stored in banks, because it is inconvenient to store large amounts of cash at home. Since all banks speculate with the money they have, most of the worlds money is used for speculation.
With Bitcoin, everybody has total control over their own money, because one can easily store BTC safely without a bank. Therefore, only the money of people who really do want to speculate will be used for speculation. This is a significant difference to the current system and therefore I wouldn't worry too much about a financial system based on Bitcoin running out of control.
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October 26, 2011, 09:45:57 AM
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I think the thing with bitcoin is that it will have all the problems of normal currencies except you have the option to bypass them

And you have no way to regulate it or even tax aspects of it to limit speculation to a point where its helpful rather than harmful. No central banks to dampen price volatility.  The libertarians consider all that good, as they believe free markets will regulate themselves, but tbh, I think bitcoin is proving the exact opposite by turning in to a casino rather than a viable alternative currency.


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October 26, 2011, 09:55:41 AM
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It is free world, everyone is free to create their own "ShitCoin" or whatever.

Maybe in the longer run, someone will invent a better cryptocurrency, and I think it is a good thing. Then people will move slowly to the new cryptocurrency.

Very true, but it will in no way invalidate the original bitcoin. In fact, the original bitcoin may become the "backing" for many other crypto-currencies, like gold once backed USD.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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October 26, 2011, 10:40:41 AM
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And you have no way to regulate it or even tax aspects of it to limit speculation to a point where its helpful rather than harmful.
That's simply not true - what makes you think Bitcoin cannot be regulated? At least businesses can easily be required to comply with regulations when it comes to Bitcoin. Mt. Gox for example does this right now with the AML regulations.

There is no reason why a country could not issue new legislation facing new technical developments. In fact, that's what's happening all the time (albeit rather slowly). It is trivial for a government to implement near perfect tax control with Bitcoin and once Bitcoin commerce becomes widespread, it will be done!

No central banks to dampen price volatility.
Every sufficiently wealthy institution can reduce the price volatility of Bitcoin - so why not (central) banks or governments if they deemed it beneficial?
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October 26, 2011, 10:55:53 AM
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It is free world, everyone is free to create their own "ShitCoin" or whatever.

Maybe in the longer run, someone will invent a better cryptocurrency, and I think it is a good thing. Then people will move slowly to the new cryptocurrency.

Very true, but it will in no way invalidate the original bitcoin. In fact, the original bitcoin may become the "backing" for many other crypto-currencies, like gold once backed USD.

That makes no sense, how can a crypto-currency be backed by anything? It would require a central issuing authority to track the backing, thus defeating the whole purpose of the "crypto" part of it.

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October 26, 2011, 11:16:36 AM
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That's simply not true - what makes you think Bitcoin cannot be regulated? At least businesses can easily be required to comply with regulations when it comes to Bitcoin. Mt. Gox for example does this right now with the AML regulations.

Granted, in theory maybe it could, but first it would require legal "approval" of bitcoin or other electronic currencies, and thats not likely going to happen when the current legislation in most countries explicitly outlaws it. Let me quote from a link I published earlier:

Quote
It is a violation of federal law for individuals, such as von NotHaus, or organizations, such as NORFED, to create private coin or currency systems to compete with the official coinage and currency of the United States.

Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism,” U.S. Attorney Tompkins said in announcing the verdict. “While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country,” she added. “We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.”
http://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency

Particularly the reference to terrorism and what that allows under the patriot act, should worry anyone interested in bitcoin.

Moreover, bitcoin knows no national borders. Since its trivial, and potentially untraceable to send bitcoins abroad, legislation in any single country will likely have very limited, if any, effect on rampant speculation happening everywhere else.

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Every sufficiently wealthy institution can reduce the price volatility of Bitcoin - so why not (central) banks or governments if they deemed it beneficial?

Because it could be  extremely expensive. With fiat currency this is paid for by the taxpayer (or through inflation), who indirectly benefits from a stable currency. I dont see how you would solve this for a nationless currency. Unless you are fantasizing of a future where bitcoins become legal tender. Thats simply not going to happen, but even if it would, how much of the popular attributes of bitcoin would remain then?

robocop
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October 26, 2011, 11:36:07 AM
 #12

Thank you for your answers.

Maybe in the longer run, someone will invent a better cryptocurrency, and I think it is a good thing. Then people will move slowly to the new cryptocurrency.
But the problem what i see is that the user will not invest or change money in a fading currency. He want a solid currency for years.

The next thing is that shops or markets make their prices in BTC, IXC, LTC and more, really horrible imagining for the buyers and sellers.

I wouldn't worry about the clones too much - so far, none of them has a really compelling advantage over Bitcoin and they will therefore fade away quickly.
We will see, i would prefer it.
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October 26, 2011, 12:14:58 PM
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That's simply not true - what makes you think Bitcoin cannot be regulated? At least businesses can easily be required to comply with regulations when it comes to Bitcoin. Mt. Gox for example does this right now with the AML regulations.

Granted, in theory maybe it could, but first it would require legal "approval" of bitcoin or other electronic currencies, and thats not likely going to happen when the current legislation in most countries explicitly outlaws it. Let me quote from a link I published earlier:
Please stop spreading FUD - electronic currencies are very well regulated in the EU and I'm sure you cannot point to a single ruling explicitly outlawing Bitcoin.

Also, from the very same link:
Quote
Von NotHaus designed the Liberty Dollar currency in 1998 and the Liberty coins were marked with the dollar sign ($); the words dollar, USA, Liberty, Trust in God (instead of In God We Trust); and other features associated with legitimate U.S. coinage. Since 1998, NORFED has been issuing, disseminating, and placing into circulation the Liberty Dollar in all its forms throughout the United States and Puerto Rico. NORFED’s purpose was to mix Liberty Dollars into the current money of the United States.
Nothing of that holds true for Bitcoin and there have been many threads and posts explaining exactly why the Liberty Dollar ruling does not apply to Bitcoin - I'm not going to repeat those arguments.

I'm willing to bet that once Bitcoin gets used widely, there will be a legal classification and it will definitely not be outlawed (the principles of Bitcoin are too generic for that). In fact, there is already the case of Mt. Gox running in France and if I may quote tetra4c from Tradehill:
Quote from: tetra4c
France wasn't the first. Holding depo's was already in 'the books'.

The first decision from a Central Bank was made a few weeks ago. Everyone will find out in a public release within 3 to 5 weeks.

Its positive.

One country in Europe has 'classified' Bitcoin. Other countries will follow, albiet slowly.

Particularly the reference to terrorism and what that allows under the patriot act, should worry anyone interested in bitcoin.
Yeah, terrorists were used as excuse for all kinds of bad laws, but at least the patriot act only covers the US. I'm not that worried though - Bitcoin is still below the radar of most politicians and it will be classified for practical reasons like taxation or basic anti money laundering regulations before anyone will bother to lobby for a legal attack with the war-on-terrorism club.

Moreover, bitcoin knows no national borders. Since its trivial, and potentially untraceable to send bitcoins abroad, legislation in any single country will likely have very limited, if any, effect on rampant speculation happening everywhere else.
True, but then again, there will simply never be that much Bitcoins available for speculation as there are Dollars or Euros now - see my post above.

Quote
Every sufficiently wealthy institution can reduce the price volatility of Bitcoin - so why not (central) banks or governments if they deemed it beneficial?

Because it could be  extremely expensive. With fiat currency this is paid for by the taxpayer (or through inflation), who indirectly benefits from a stable currency. I dont see how you would solve this for a nationless currency. Unless you are fantasizing of a future where bitcoins become legal tender. Thats simply not going to happen, but even if it would, how much of the popular attributes of bitcoin would remain then?
I'm certainly not fantasizing about Bitcoins becoming legal tender - I was just pointing out that stabilizing Bitcoin could be done in principle by large institutions/governments. On the other hand I don't think volatility will be that much of an issue once Bitcoin is widely accepted. With enough volume, the price will stabilize.
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October 26, 2011, 12:24:10 PM
 #14

Fine, give me a way to earn enough bitcoin to participate in the economy in a meaningful way.
The current average is about 140bitcoin, I will not buy those at these prices (go fuck yourself if you think that's fair) and mining them is no longer possible.

With alternatives it is easy getting an average amount of the pie. With bitcoin you'd have to pay someone elses greed which I am not willing to do.

And if we play this game: I think if bitcoin is ever successful enough to be relevant early adopters will be found out and lynched, sooner or later.
Disclaimer: Not a threat, merely an observation about how things went in history....

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October 26, 2011, 01:28:50 PM
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Fine, give me a way to earn enough bitcoin to participate in the economy in a meaningful way.
The current average is about 140bitcoin, I will not buy those at these prices (go fuck yourself if you think that's fair) and mining them is no longer possible.

With alternatives it is easy getting an average amount of the pie. With bitcoin you'd have to pay someone elses greed which I am not willing to do.
You won't solve the distribution problem with a decentralized cryptocurrency - no matter how you design it.
Hashing power is highly centralized and no matter which coin you choose, eventually a large part of the pie will be held by a few players. The only alternative scenario is, that the coin is only ever used by all the people mining since the beginning (which is in fact pretty much what is happening with all the other coins).

Bitcoin is probably even better in that regard, because there was a long period of time when mining technology was very immature.

Also, I don't quite understand your reasoning - on what grounds do you expect to be given an average share of an economy without doing something for it? Why do you think it is unfair that somebody has to pay 400 USD for 1/50000th of a pie valued 20 million USD?

If you think Bitcoins are overvalued right now, then you can wait and see if the price drops lower, otherwise the only fair thing would be for everybody to contribute something worth about the corresponding share of the pie to get his/her piece. Of course you are free to sell something other than USD in order to get BTC.

Mining is not supposed to get you something for nothing - that's the same with Bitcoin as with every other coin. Buying Bitcoin is not feeding someone's greed, but giving him something which he values more than his Bitcoins. If you don't value Bitcoins more than the current price in USD, then don't buy.
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October 26, 2011, 01:33:43 PM
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Also, from the very same link:
Quote
Von NotHaus designed the Liberty Dollar currency in 1998 and the Liberty coins were marked with the dollar sign ($); the words dollar, USA, Liberty, Trust in God (instead of In God We Trust); and other features associated with legitimate U.S. coinage. Since 1998, NORFED has been issuing, disseminating, and placing into circulation the Liberty Dollar in all its forms throughout the United States and Puerto Rico. NORFED’s purpose was to mix Liberty Dollars into the current money of the United States.
Nothing of that holds true for Bitcoin and there have been many threads and posts explaining exactly why the Liberty Dollar ruling does not apply to Bitcoin - I'm not going to repeat those arguments.

Ill see if I can find those threads, but I think the text is pretty clear that its not only because LDs resembled US legal tender. The paragraph I quoted clearly goes way further than that and calls the creation of any private currency competing with legal tender a crime under US federal law.

Quote
True, but then again, there will simply never be that much Bitcoins available for speculation as there are Dollars or Euros now - see my post above.

That makes no sense whatsoever. Its the % of currency used for speculation that is the problem, and if anything, since btc is not -and probably never will be- legal tender, the share of bitcoins available for speculation is 100%.  Thats pretty much where it is today anyway.

Quote
I'm certainly not fantasizing about Bitcoins becoming legal tender - I was just pointing out that stabilizing Bitcoin could be done in principle by large institutions/governments. On the other hand I don't think volatility will be that much of an issue once Bitcoin is widely accepted. With enough volume, the price will stabilize.

Yeah, like oil, gold ? Commodity markets? Not all that much price stability there, despite there being regulatory constraints on speculation and a relatively constant supply and demand for trade and industrial purposes. Imagine our currency fluctuating that much, or more likely, much more. Scale isnt going to solve the problem Im afraid, if you can not limit the % of speculation vs trade.

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October 26, 2011, 01:52:16 PM
 #17

Mining is not supposed to get you something for nothing - that's the same with Bitcoin as with every other coin. Buying Bitcoin is not feeding someone's greed, but giving him something which he values more than his Bitcoins. If you don't value Bitcoins more than the current price in USD, then don't buy.

I realize that, problem being the alternative is selling something I can make for btc, and I probably will be doing that once I get the feeling that the bubble is over.
Lots of people think the same way, the only thing problematic are that there are people who have so many bitcoins that they could buy up all my stock and those of competitors and then corner the market.

I think the fact that bitcoins popularity stalled in the beginning is a problem now. I have no problem with someone being 10-100+ times richer than me, but I view the current situation as problematic where about some dozen people each own more than 0.5% of all currency ever to be in existence.

Currently only 3% ever went though an exchange and each of those people own 1/6 of that so they could basically do whatever they want with the market. That's a huge bummer and actually worse than todays fiat economy... I have no problem if they go and buy themselves a nice house now but I don't see that happening from my observation they are going after that kind of power, which I find problematic to build a system upon.

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October 26, 2011, 02:10:41 PM
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True, but then again, there will simply never be that much Bitcoins available for speculation as there are Dollars or Euros now - see my post above.
That makes no sense whatsoever. Its the % of currency used for speculation that is the problem, and if anything, since btc is not -and probably never will be- legal tender, the share of bitcoins available for speculation is 100%.  Thats pretty much where it is today anyway.
Maybe it makes more sense if you read my post above: currently all the fiat money I have deposited at my bank is inflated and being speculated with to some extent. I cannot do much about that because it's the bank's job to give out loans and to generate profit. Therefore I'd consider pretty much all the fiat money on the banks as available for speculation.

The Bitcoins I have in my savings wallet on the other hand are surely not available for speculation. I am sure many people around here have a BTC savings wallet they do not speculate with and the blockchain proves that there is a sizable portion of coins which did not get moved even once, so how do you justify your 100%?

Anyway, my point is: with Bitcoin _you_ alone have control over what they are used for and there is no need to entrust some third party with your money. That's a game changer and I'm pretty sure that this will eventually limit speculation.
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October 26, 2011, 02:24:49 PM
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Ok I missed that post; and its a fair point; but the money you hoard, while not available to speculators, is also not setting nor stabilizing an exchange rate, if its not participating in the bitcoin economy it does nothing to stop the volatility of the BTC price on exchanges. Even if 99% of the btcs where being hoarded, if anything the remaining 1% would cause even more price bubbles and bursts then we have now.  The issue is actually not the amount of btc's thats being speculated with, its the volume those trades represent compared to the volume of transactions that represent economic activity. Hoarded btc's dont make  a difference on either.

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October 26, 2011, 02:35:23 PM
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When the products come that people actually desire or need, that come from the markets of one of the digital currencies, expect it to be unique and to draw actual users who wish to use the currency.   All of these are still possibilities to grab a large market imo, I fear that SolidCoin will be the one to do it first, grab the first big business' that is willing to take a jump in and help draw in new users by the shitload.    It is one of the positive sides to that centralized coin, full control, that no doubt a larger business wants to hear, they don't want to be affected by exchange rates.

As far as Bitcoin itself, more people need to back Bit-Pay and every single company they are marketing to.  Those are the people who could give a shit less about the exchange rates and are still taking the risk to incorporate BTC into their revenue.   That is going to make differences, when people who don't care are profiting from Bitcoin.

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