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Author Topic: Few Questions  (Read 582 times)
mooseman99
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December 25, 2011, 11:18:38 PM
 #1

Hey guys, I had a few questions about bitcoins that I was curious about.  I appreciate your answer/opinion.

1.  What do people use bitcoin for?  Are most of the activities illegal/sketchy (Silkroad/laundering/blackmarket) or do people really buy stuff with it?  Or do you guys just buy it like gold, to hold and sell because it has value?

2.  Because of the crazy amount of bitcoin volume going around, what's going to happen to all those unused bitcoins when the prices go up?  People on speculation keep saying the price will go above 3 digits but what happens when it hits 20 or so and all these people who forgot about bitcoins when they crashed rush to sell them?

3. Who's in charge of the block difficulty?  How do they manage to keep rolling out so many bitcoins without inflation?  Won't there eventually be infinite bitcoins?
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juggalodarkclow
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December 25, 2011, 11:34:34 PM
 #2

Hey guys, I had a few questions about bitcoins that I was curious about.  I appreciate your answer/opinion.

1.  What do people use bitcoin for?  Are most of the activities illegal/sketchy (Silkroad/laundering/blackmarket) or do people really buy stuff with it?  Or do you guys just buy it like gold, to hold and sell because it has value?

2.  Because of the crazy amount of bitcoin volume going around, what's going to happen to all those unused bitcoins when the prices go up?  People on speculation keep saying the price will go above 3 digits but what happens when it hits 20 or so and all these people who forgot about bitcoins when they crashed rush to sell them?

3. Who's in charge of the block difficulty?  How do they manage to keep rolling out so many bitcoins without inflation?  Won't there eventually be infinite bitcoins?


I can only answer question #1 with this https://bitcointalk.org/index.php?topic=55594.0

Good luck with your search for answers and welcome to the forum

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December 25, 2011, 11:36:53 PM
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1. I have bought a few stuff with bitcoins. Look here or here.

2. No one knows if the price is going up or down...

3. The network controls difficulty and the amount of coins generated. There will be 21 million bitcoins in total. The current reward is 50 bitcoins per block. Next year it will halve to 25 bitcoins per block and so on. Regarding inflation, the price is dictated by the market. Prices will only come down if people sell the coins.
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December 26, 2011, 01:33:25 PM
 #4

Your third question has already been answered pretty well, so i will stick to the first two.

1. Illegal uses like silk road, money laundering etc will always be probably always be a part of bitcoin, due to its anonymous (or pseudoanonymous) nature. But illegal uses represent only a small fraction of bitcoins usage. People do buy things with it, but more than anything else it is used as an investment at the moment.
 
2. As you say, i think bitcoins will take a long time to reach 3 figures - because people will try to cash out long before then. I do think it will eventually get there, but there would be a lot of people who would disagree.
mooseman99
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December 26, 2011, 10:46:25 PM
 #5

Thanks for the answers!
If most people use it to invest, wheres the value behind it?  Is it just based on the principle that many vendors accept bitcoin?
How did it initially get any value?  Gold was valuable because it was shiny and you could make jewelry/art out of it, same for silver
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December 27, 2011, 12:10:02 AM
 #6

If something is limited in supply and can be exchanged, and people want it, then it can have value.

In the case of Bitcoin it is the most pure form of money possible, it has almost no other utility other than as a unit of account.
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