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Author Topic: 6,000,000 BTC  (Read 2410 times)
LZ
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April 24, 2011, 11:20:00 PM
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"Never invest unless you can afford to lose your entire investment." © S3052
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April 24, 2011, 11:21:23 PM
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That's quite a large amount of bitcoin there!  Grin

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April 24, 2011, 11:24:01 PM
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It looks like either a significant bunch of people have moved from Deepbit's pool to Slush's, or there are a good number of new mining machines joining the frenzy; or both.
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April 24, 2011, 11:26:24 PM
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Yay! Fun seeing Bitcoin grow!  Grin

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April 24, 2011, 11:48:38 PM
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An interesting thought I had earlier today: anyone with large gold reserves could singlehandedly peg the exchange rate as high as he likes by putting on the market, say, 10,000 ounces of gold at 600 BTC/oz.

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April 24, 2011, 11:58:20 PM
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Who would come with 10K ounces of gold! D: This is madness.
10K * 1,500 = 15 Million USDs at rounded exchange. It is actually more.


It would be really awesome though. xD

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April 25, 2011, 12:03:07 AM
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Who would come with 10K ounces of gold!

Bill Gates? Scrooge McDuck? Idunno, it's a lot of money but there are a lot of billionaires out there.

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April 25, 2011, 01:15:07 AM
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Who would come with 10K ounces of gold!

Bill Gates? Scrooge McDuck? Idunno, it's a lot of money but there are a lot of billionaires out there.

They just think they are billionaires but mostly it is in unbacked fiat currency valuations held in a bank computer account somewhere, with less security backing than bitcoin. If they ever came to try and buy bitcoin with their funny money they would find out poor they really are.


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April 25, 2011, 01:39:43 AM
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No way, Scrooge McDuck has a vault full of gold that he swims in. I saw it.

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April 25, 2011, 04:08:39 AM
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No way, Scrooge McDuck has a vault full of gold that he swims in. I saw it.

I vouch for that!

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April 25, 2011, 04:30:11 AM
 #11

An interesting thought I had earlier today: anyone with large gold reserves could singlehandedly peg the exchange rate as high as he likes by putting on the market, say, 10,000 ounces of gold at 600 BTC/oz.

Why would anyone want to do that though?  Also, I don't think it would work for long.  Gold is a very large and established market... Bitcoin is far smaller and its use may very well grow at a rate that makes it impossible to hold the price of bitcoin at just 1/600 oz of gold.  A person trying to hold that exchange rate may very soon find themselves holding 10,000 oz of gold and no bitcoins.

(gasteve on IRC) Does your website accept cash? https://bitpay.com
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April 25, 2011, 04:37:13 AM
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An interesting thought I had earlier today: anyone with large gold reserves could singlehandedly peg the exchange rate as high as he likes by putting on the market, say, 10,000 ounces of gold at 600 BTC/oz.

Why would anyone want to do that though?  Also, I don't think it would work for long.  Gold is a very large and established market... Bitcoin is far smaller and its use may very well grow at a rate that makes it impossible to hold the price of bitcoin at just 1/600 oz of gold.  A person trying to hold that exchange rate may very soon find themselves holding 10,000 oz of gold and no bitcoins.

So, they lose nothing and bitcoin takes off as a medium of exchange for subdividing gold, skyrocketing in price at the same time.  Sounds like a good plan for someone with a lot of bitcoins and 10,000 oz of gold.  They are now wealthier and can spend their gold more easily in the form of bitcoins.

As we slide down the banister of life, this is just another splinter in our ass.
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April 26, 2011, 02:53:25 AM
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An interesting thought I had earlier today: anyone with large gold reserves could singlehandedly peg the exchange rate as high as he likes by putting on the market, say, 10,000 ounces of gold at 600 BTC/oz.

Why would anyone want to do that though?  Also, I don't think it would work for long.  Gold is a very large and established market... Bitcoin is far smaller and its use may very well grow at a rate that makes it impossible to hold the price of bitcoin at just 1/600 oz of gold.  A person trying to hold that exchange rate may very soon find themselves holding 10,000 oz of gold and no bitcoins.

So, they lose nothing and bitcoin takes off as a medium of exchange for subdividing gold, skyrocketing in price at the same time.  Sounds like a good plan for someone with a lot of bitcoins and 10,000 oz of gold.  They are now wealthier and can spend their gold more easily in the form of bitcoins.

Wrong...by trying to peg a rate of exchange they'll simply create an arbitrage opportunity for everyone else and quickly go broke.

(gasteve on IRC) Does your website accept cash? https://bitpay.com
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April 26, 2011, 04:03:58 AM
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An interesting thought I had earlier today: anyone with large gold reserves could singlehandedly peg the exchange rate as high as he likes by putting on the market, say, 10,000 ounces of gold at 600 BTC/oz.

Why would anyone want to do that though?  Also, I don't think it would work for long.  Gold is a very large and established market... Bitcoin is far smaller and its use may very well grow at a rate that makes it impossible to hold the price of bitcoin at just 1/600 oz of gold.  A person trying to hold that exchange rate may very soon find themselves holding 10,000 oz of gold and no bitcoins.

So, they lose nothing and bitcoin takes off as a medium of exchange for subdividing gold, skyrocketing in price at the same time.  Sounds like a good plan for someone with a lot of bitcoins and 10,000 oz of gold.  They are now wealthier and can spend their gold more easily in the form of bitcoins.

Wrong...by trying to peg a rate of exchange they'll simply create an arbitrage opportunity for everyone else and quickly go broke.

Yes.

As we slide down the banister of life, this is just another splinter in our ass.
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April 26, 2011, 07:21:55 AM
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Well I'm going to celebrate 6 million bitcoins in existence and no signs of the network weakening yet with a bitter, dark, cold ale ...!

Hurrah.

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April 26, 2011, 09:37:21 AM
 #16

An interesting thought I had earlier today: anyone with large gold reserves could singlehandedly peg the exchange rate as high as he likes by putting on the market, say, 10,000 ounces of gold at 600 BTC/oz.

Why would anyone want to do that though?  Also, I don't think it would work for long.  Gold is a very large and established market... Bitcoin is far smaller and its use may very well grow at a rate that makes it impossible to hold the price of bitcoin at just 1/600 oz of gold.  A person trying to hold that exchange rate may very soon find themselves holding 10,000 oz of gold and no bitcoins.

So, they lose nothing and bitcoin takes off as a medium of exchange for subdividing gold, skyrocketing in price at the same time.  Sounds like a good plan for someone with a lot of bitcoins and 10,000 oz of gold.  They are now wealthier and can spend their gold more easily in the form of bitcoins.

Wrong...by trying to peg a rate of exchange they'll simply create an arbitrage opportunity for everyone else and quickly go broke.

Yes.

He would end up with 6,000,000 btc and no gold.
Well, maybe not, but with a lot of bitcoins and very few gold.

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
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April 26, 2011, 03:57:22 PM
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An interesting thought I had earlier today: anyone with large gold reserves could singlehandedly peg the exchange rate as high as he likes by putting on the market, say, 10,000 ounces of gold at 600 BTC/oz.

Why would anyone want to do that though?  Also, I don't think it would work for long.  Gold is a very large and established market... Bitcoin is far smaller and its use may very well grow at a rate that makes it impossible to hold the price of bitcoin at just 1/600 oz of gold.  A person trying to hold that exchange rate may very soon find themselves holding 10,000 oz of gold and no bitcoins.

So, they lose nothing and bitcoin takes off as a medium of exchange for subdividing gold, skyrocketing in price at the same time.  Sounds like a good plan for someone with a lot of bitcoins and 10,000 oz of gold.  They are now wealthier and can spend their gold more easily in the form of bitcoins.

Wrong...by trying to peg a rate of exchange they'll simply create an arbitrage opportunity for everyone else and quickly go broke.

Yes.

He would end up with 6,000,000 btc and no gold.
Well, maybe not, but with a lot of bitcoins and very few gold.


The market price for BTC would rapidly respond as soon as the first few successful trades with the gold seller.  If he was well invested in bitcoin before the gold offer, he could sell off and then retract his offer.  The price would drop and he could walk away with a nice profit or reinvest.  If he actually wants to sell it all instead of just selling a few ounces to convince people it's legit, he may well end up with quite a few bitcoins and no gold.  After the gold was gone, the price would move toward what the market sans gold can support, and he would be at a loss.  If he has a very large portion of the bitcoins, that value might be very low.

So, if he follows through he goes broke.  If he takes advantage of people's assumption of continuity he could profit.  Arbitrage opportunities that are too good to be true usually are.  It may only work long enough to get people to invest in it, and not long enough for them to even get back what they put in.

As we slide down the banister of life, this is just another splinter in our ass.
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April 27, 2011, 01:57:09 AM
 #18

An interesting thought I had earlier today: anyone with large gold reserves could singlehandedly peg the exchange rate as high as he likes by putting on the market, say, 10,000 ounces of gold at 600 BTC/oz.

Why would anyone want to do that though?  Also, I don't think it would work for long.  Gold is a very large and established market... Bitcoin is far smaller and its use may very well grow at a rate that makes it impossible to hold the price of bitcoin at just 1/600 oz of gold.  A person trying to hold that exchange rate may very soon find themselves holding 10,000 oz of gold and no bitcoins.

So, they lose nothing and bitcoin takes off as a medium of exchange for subdividing gold, skyrocketing in price at the same time.  Sounds like a good plan for someone with a lot of bitcoins and 10,000 oz of gold.  They are now wealthier and can spend their gold more easily in the form of bitcoins.

Wrong...by trying to peg a rate of exchange they'll simply create an arbitrage opportunity for everyone else and quickly go broke.

Yes.

He would end up with 6,000,000 btc and no gold.
Well, maybe not, but with a lot of bitcoins and very few gold.


The market price for BTC would rapidly respond as soon as the first few successful trades with the gold seller.  If he was well invested in bitcoin before the gold offer, he could sell off and then retract his offer.  The price would drop and he could walk away with a nice profit or reinvest.  If he actually wants to sell it all instead of just selling a few ounces to convince people it's legit, he may well end up with quite a few bitcoins and no gold.  After the gold was gone, the price would move toward what the market sans gold can support, and he would be at a loss.  If he has a very large portion of the bitcoins, that value might be very low.

So, if he follows through he goes broke.  If he takes advantage of people's assumption of continuity he could profit.  Arbitrage opportunities that are too good to be true usually are.  It may only work long enough to get people to invest in it, and not long enough for them to even get back what they put in.

Then that isn't really backing bitcoins.  Backing bitcoins by anything is really a silly idea.  With gold and bitcoins, you're dealing with two currencies whose quantity is fixed.  So attempting to peg the value of one to the other is like trying to mandate how everyone should value one vs the other.  It can only work on a short timescale (until you lose all of your bitcoins, all of your gold, or both).  Pegging or backing a currency can only be done if you control the supply of that currency (like the way mtgox backs mtgusd with bank deposit usd redeemable via wire transfer).

(gasteve on IRC) Does your website accept cash? https://bitpay.com
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