The responses I from Bitcoin discussions.

[Xenland]

I was just in the "Geek" section of this forum and I decided to throw out Bitcoin and i got alot of mixed responses, Makes me wonder how to make people listen... it seems people are really happy with worshiping their green dollars that has absolutely no backing at all...
(Out of respect don't troll their forums, This thread is to promote awareness and maybe open up their minds to something new)

http://jmonkeyengine.org/groups/general/forum/topic/the-first-unregulated-deflationary-peer-to-peer-digital-currency-that-is-more-secure-than-banks/?#post-170596

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[Red Emerald]

I was just in the "Geek" section of this forum and I decided to throw out Bitcoin and i got alot of mixed responses, Makes me wonder how to make people listen... it seems people are really happy with worshiping their green dollars that has absolutely no backing at all...

Money is backed by the economy it is used in.  Bitcoin is backed by the Bitcoin Economy.  USD is backed by the American economy.  Neither of these economies are "absolutely nothing." Also, the American economy is currently WAY LARGER than the bitcoin economy.

Money doesn't need gold or some other arbitrary physical item to back it.  That is a fallacy that people need to move past.

[Xenland]

I was just in the "Geek" section of this forum and I decided to throw out Bitcoin and i got alot of mixed responses, Makes me wonder how to make people listen... it seems people are really happy with worshiping their green dollars that has absolutely no backing at all...

Money is backed by the economy it is used in.  Bitcoin is backed by the Bitcoin Economy.  USD is backed by the American economy.  Neither of these economies are "absolutely nothing." Also, the American economy is currently WAY LARGER than the bitcoin economy.

Money doesn't need gold or some other arbitrary physical item to back it.  That is a fallacy that people need to move past.

Are you sure because I'm almost positive that USD was originally notes for gold back in the day. I could be wrong of course.

[Red Emerald]

I was just in the "Geek" section of this forum and I decided to throw out Bitcoin and i got alot of mixed responses, Makes me wonder how to make people listen... it seems people are really happy with worshiping their green dollars that has absolutely no backing at all...

Money is backed by the economy it is used in.  Bitcoin is backed by the Bitcoin Economy.  USD is backed by the American economy.  Neither of these economies are "absolutely nothing." Also, the American economy is currently WAY LARGER than the bitcoin economy.

Money doesn't need gold or some other arbitrary physical item to back it.  That is a fallacy that people need to move past.

Are you sure because I'm almost positive that USD was originally notes for gold back in the day. I could be wrong of course.

"was originally"

Not anymore.

[LightRider]

Fiat currency is backed by a gun.

[Kettenmonster]

... Makes me wonder how to make people listen ...

Why would you?
Once people are old enough to spend their own money for whatever they like.
Then consider them old enough to spend their own ears/time/etc for whatever they like.
Give them a hint, let them decide. Your answer should be thorough but undogmatic.

The more you preach the gospel the more fools you get hoarded.
Gathering fools there is possibly maybe a bad idea. 

[Xenland]

I was just in the "Geek" section of this forum and I decided to throw out Bitcoin and i got alot of mixed responses, Makes me wonder how to make people listen... it seems people are really happy with worshiping their green dollars that has absolutely no backing at all...

Money is backed by the economy it is used in.  Bitcoin is backed by the Bitcoin Economy.  USD is backed by the American economy.  Neither of these economies are "absolutely nothing." Also, the American economy is currently WAY LARGER than the bitcoin economy.

Money doesn't need gold or some other arbitrary physical item to back it.  That is a fallacy that people need to move past.

Are you sure because I'm almost positive that USD was originally notes for gold back in the day. I could be wrong of course.

"was originally"

Not anymore.

Looks like were going in circles...

[herzmeister]

Fiat currency is backed by a gun.

this is the awareness that must spread. we must transcend from an age of top-down authoritarianism to an age of bottom-up initiatives fueled by passion and the belief in ourselves.

fiat is backed by fear.
bitcoin is backed by love. 

[Xenland]

Fiat currency is backed by a gun.

this is the awareness that must spread. we must transcend from an age of top-down authoritarianism to an age of bottom-up initiatives fueled by passion and the belief in ourselves.

fiat is backed by fear.
bitcoin is backed by love. 

  Deep

[Red Emerald]

Looks like were going in circles...

So you are attacking USD for being backed by nothing at all (and now I'm thinking you want it to be backed by gold), but support Bitcoin which is also backed by nothing...

That's where you lose me. Your given reason for disliking fiat can be also applied to Bitcoin.

Back OT, I support Bitcoin because I think it will kill Paypal.  This is a much shorter term and much more realistic goal than ending world fiat, and it will probably fly better in the geek subforum as well.

[evoorhees]

People need to be more careful when using the term "backing" when referring to money. It has a very specific meaning but is usually perverted and causes lots of confusion.

"Backing" means that a party guarantees to exchange one asset for another upon redemption at a fixed rate. In the case of gold-backed USD, the banks guaranteed to give you gold in redemption for the paper, and this was at a fixed rate. Thus, the dollar was "backed" by gold. That's what backing means - a counterparty specifically promising to exchange one for the other at a certain rate.

Thus, Bitcoin is not backed by anything. Nor is gold backed by anything. Nor are dollars today backed by anything.

It is wrong to say that Bitcoin is "backed" by electricity, or cryptography, or the size of the Bitcoin economy. It is similarly wrong to say the USD is backed by the government, or by violence, etc. To do so is to pervert the term. Bitcoin is not backed by anything, and that is just fine, because it's a commodity unto itself and is valuable for its specific attributes. It needs no "backing" - it is a thing unto itself which we value. Same for gold.

If you find yourself in the position of saying Bitcoin is backed by something, change the term to say "Bitcoin is valuable because..." Or, "the USD is valuable because..." The answer to those sentences will be valid, and you won't be caught in the misnomer of "backing."

[Explodicle]

No offense, I get what you're going for, but you do totally look like a schill on that thread with the Bitcoin avatar and WeUseCoins.com link. It's not just an open-source project - it's an investment and people will view it just as suspiciously as they've learned to. Let them Google it themselves so the information feels more legitimate.

It's surprising to me how even highly technical people can think that Bitcoin has been hacked, or that a government could shut it down.

[Red Emerald]

I wish people would stop calling bitcoin an investment.

While it can be used as an investment and people have invested a lot of money into it, that is not at all the main point and Bitcoin cannot succeed if this is people's main use for it.

If you want bitcoin to succeed, use it as a currency.

[Kettenmonster]

I wish people would stop calling bitcoin an investment.

It is part of the experiment.
So don´t worry about it, it is necessary for its survival.

[Xenland]

People need to be more careful when using the term "backing" when referring to money. It has a very specific meaning but is usually perverted and causes lots of confusion.

"Backing" means that a party guarantees to exchange one asset for another upon redemption at a fixed rate. In the case of gold-backed USD, the banks guaranteed to give you gold in redemption for the paper, and this was at a fixed rate. Thus, the dollar was "backed" by gold. That's what backing means - a counterparty specifically promising to exchange one for the other at a certain rate.

Thus, Bitcoin is not backed by anything. Nor is gold backed by anything. Nor are dollars today backed by anything.

It is wrong to say that Bitcoin is "backed" by electricity, or cryptography, or the size of the Bitcoin economy. It is similarly wrong to say the USD is backed by the government, or by violence, etc. To do so is to pervert the term. Bitcoin is not backed by anything, and that is just fine, because it's a commodity unto itself and is valuable for its specific attributes. It needs no "backing" - it is a thing unto itself which we value. Same for gold.

If you find yourself in the position of saying Bitcoin is backed by something, change the term to say "Bitcoin is valuable because..." Or, "the USD is valuable because..." The answer to those sentences will be valid, and you won't be caught in the misnomer of "backing."

Thank you for clearing that up and your insight on backing I think I shall not loosely throw it around so much anymore.

[Xenland]

Looks like were going in circles...

So you are attacking USD for being backed by nothing at all (and now I'm thinking you want it to be backed by gold), but support Bitcoin which is also backed by nothing...

That's where you lose me. Your given reason for disliking fiat can be also applied to Bitcoin.

Back OT, I support Bitcoin because I think it will kill Paypal.  This is a much shorter term and much more realistic goal than ending world fiat, and it will probably fly better in the geek subforum as well.

I think more then one currency should exist as it should today but I just want to make everyone aware of Bitcoins advantages. Yes I admit that I threw out the word "backing" ignorantly.

[Xenland]

These academics are starting to annoy me. It's often the little, throw-away comments that they slip into a conversation that reveal certain barriers in their thinking...

For example:

Yes, most governments do have the power to stop inofficial currencies from being used, including yours and mine. I know theres a lot of buzz around bitcoins at the moment but I know just as well that the wise decision is not to invest there.

(bold added)

How does that person know whether something is a wise decision or not, regarding Bitcoin? Wisdom implies experience and learning. Did they have a bad experience with Bitcoin? Based on the small size of the Bitcoin economy, it's quite unlikely for any of them to have encountered Bitcoin first-hand. Unless they have some actual experience with Bitcoin, they don't know whether avoiding it is wise or not. They may think they're being cautious or conservative, but a claim to wisdom is bogus.

Its conversations like these which is the exact reason why I started this thread. Its just amazing how quick everyone has preconceptions of their own perfect lives. They are happy with what they have and don't want to spend the time to even just read 5-10 minutes up on the subject to see if there is something better.

[Xenland]

No offense, I get what you're going for, but you do totally look like a schill on that thread with the Bitcoin avatar and WeUseCoins.com link. It's not just an open-source project - it's an investment and people will view it just as suspiciously as they've learned to. Let them Google it themselves so the information feels more legitimate.

It's surprising to me how even highly technical people can think that Bitcoin has been hacked, or that a government could shut it down.

You haven't even questioned my intentions so I highly doubt you are knowledgeable of them. But i was going for just throwing something out there and collecting reaction & cognitive thinking data -- AKA Psychological research......

With the answers I've gotten in response to people and its threads like the one I linked is a perfect example of how people think about a new idea in relation to Bitcoin. And these types of responses are what I get from everyday conversations with money & Bitcoins solutions in face to face conversations. Its responses and thinking like this that makes me think that Bitcoin will probably take 5-10 years (or USD/fiat collapse) before anyone is open to the idea of using Bitcoins beyond video game currencies and illegal activity which is alot longer then I originally had thought which was in the next 2-3 years

[Maged]

No offense, I get what you're going for, but you do totally look like a schill on that thread with the Bitcoin avatar and WeUseCoins.com link. It's not just an open-source project - it's an investment and people will view it just as suspiciously as they've learned to. Let them Google it themselves so the information feels more legitimate.

It's surprising to me how even highly technical people can think that Bitcoin has been hacked, or that a government could shut it down.

You haven't even questioned my intentions so I highly doubt you are knowledgeable of them. But i was going for just throwing something out there and collecting reaction & cognitive thinking data -- AKA Psychological research......

With the answers I've gotten in response to people and its threads like the one I linked is a perfect example of how people think about a new idea in relation to Bitcoin. And these types of responses are what I get from everyday conversations with money & Bitcoins solutions in face to face conversations. Its responses and thinking like this that makes me think that Bitcoin will probably take 5-10 years (or USD/fiat collapse) before anyone is open to the idea of using Bitcoins beyond video game currencies and illegal activity which is alot longer then I originally had thought which was in the next 2-3 years

Ask yourself: how long did the internet take? That's the best case scenario for Bitcoin. Why you thought 2-3 years was even possible is beyond me. Bitcoin might be commonplace enough for everyday usage in 20 years. Try to stay focused.

[Phinnaeus Gage]

No offense, I get what you're going for, but you do totally look like a schill on that thread with the Bitcoin avatar and WeUseCoins.com link. It's not just an open-source project - it's an investment and people will view it just as suspiciously as they've learned to. Let them Google it themselves so the information feels more legitimate.

It's surprising to me how even highly technical people can think that Bitcoin has been hacked, or that a government could shut it down.

You haven't even questioned my intentions so I highly doubt you are knowledgeable of them. But i was going for just throwing something out there and collecting reaction & cognitive thinking data -- AKA Psychological research......

With the answers I've gotten in response to people and its threads like the one I linked is a perfect example of how people think about a new idea in relation to Bitcoin. And these types of responses are what I get from everyday conversations with money & Bitcoins solutions in face to face conversations. Its responses and thinking like this that makes me think that Bitcoin will probably take 5-10 years (or USD/fiat collapse) before anyone is open to the idea of using Bitcoins beyond video game currencies and illegal activity which is alot longer then I originally had thought which was in the next 2-3 years

Ask yourself: how long did the internet take? That's the best case scenario for Bitcoin. Why you thought 2-3 years was even possible is beyond me. Bitcoin might be commonplace enough for everyday usage in 20 years. Try to stay focused.

As if I wanted to hear that upon seeing this:

[Explodicle]

I wish people would stop calling bitcoin an investment.

It is part of the experiment.
So don´t worry about it, it is necessary for its survival.

Indeed. More investors -> more market liquidity -> more price stability -> better currency.

You haven't even questioned my intentions so I highly doubt you are knowledgeable of them. But i was going for just throwing something out there and collecting reaction & cognitive thinking data -- AKA Psychological research......

With the answers I've gotten in response to people and its threads like the one I linked is a perfect example of how people think about a new idea in relation to Bitcoin. And these types of responses are what I get from everyday conversations with money & Bitcoins solutions in face to face conversations. Its responses and thinking like this that makes me think that Bitcoin will probably take 5-10 years (or USD/fiat collapse) before anyone is open to the idea of using Bitcoins beyond video game currencies and illegal activity which is alot longer then I originally had thought which was in the next 2-3 years

My apologies, it seemed to me that you were trying to promote Bitcoin awareness. I think your 5-10 year estimate seems probable.

[Gabi]

Looks like were going in circles...

So you are attacking USD for being backed by nothing at all (and now I'm thinking you want it to be backed by gold), but support Bitcoin which is also backed by nothing...

That's where you lose me. Your given reason for disliking fiat can be also applied to Bitcoin.

Back OT, I support Bitcoin because I think it will kill Paypal.  This is a much shorter term and much more realistic goal than ending world fiat, and it will probably fly better in the geek subforum as well.

Hold on, there is a huge difference between fiat and bitcoin

Governments can print as much fiat they want and inflationate it like hell

Bitcoin is limited to 21million maximum bitcoins, and no more. No inflation. No governments printing money as they wish.

[Remember remember the 5th of November]

Whoever posted that, should really review what he is typing as it's full of mispelled words.

[Portnoy]

People need to be more careful when using the term "backing" when referring to money. It has a very specific meaning but is usually perverted and causes lots of confusion.

"Backing" means that a party guarantees to exchange one asset for another upon redemption at a fixed rate. In the case of gold-backed USD, the banks guaranteed to give you gold in redemption for the paper, and this was at a fixed rate. Thus, the dollar was "backed" by gold. That's what backing means - a counterparty specifically promising to exchange one for the other at a certain rate.

Thus, Bitcoin is not backed by anything. Nor is gold backed by anything. Nor are dollars today backed by anything.

It is wrong to say that Bitcoin is "backed" by electricity, or cryptography, or the size of the Bitcoin economy. It is similarly wrong to say the USD is backed by the government, or by violence, etc. To do so is to pervert the term. Bitcoin is not backed by anything, and that is just fine, because it's a commodity unto itself and is valuable for its specific attributes. It needs no "backing" - it is a thing unto itself which we value. Same for gold.

If you find yourself in the position of saying Bitcoin is backed by something, change the term to say "Bitcoin is valuable because..." Or, "the USD is valuable because..." The answer to those sentences will be valid, and you won't be caught in the misnomer of "backing."

Yes... 'but'... or 'and'... instead of getting into narrow technical definitions of the words people use in their questions and concerns, about something like
bitcoin, it is perhaps best to get to the essence of what they are looking for. Confidence in the value of something. When someone wonders if bitcoin
is backed by something they are really wondering that if they get some today, will it have value tomorrow. Can they use it to buy things and services
that they need? Do they have the support of their society to use it in the ways they have to come to rely on with other currencies they use?

With dollars even though you say it isn't technically backed by anything it is taken by, for example, utility companies so one can pay to heat their
homes. And while one may say that there are no guarantees that anyone should accept this or that currency in exchange for their goods or
services that utility company would need a good reason to refuse to accept dollars from someone looking to pay their heating bill. There would be
legal recourse, and if the utility company didn't want to follow the courts decisions they would have to face government law enforcement. And so
I don't see that it is entirely wrong to say that dollars are backed by the Government... by society.  This gives many, if not most, people confidence
( a misplaced confidence perhaps but important to them just the same ), and so it these types of concerns of average ( non-techie ) people that
we want to address. 

To say that bitcoin is backed by math and cryptography ( and robust networks etc. ) is, in a way, of saying that there 'are' laws that one can have
confidence in. A different kind of law that doesn't need to be interpreted by lawyers and judges, but rather mathematical axioms etc., that are
politically neutral and beyond manipulation and coercion.  2 + 2 will still = 4 even if you point a gun at their heads.

But of course that doesn't make it easier to instill confidence in non-techie people. While they may have a reasonable confidence that they can
use their dollars and they will be backed-up by the rules and laws of the society they live in they may not be as comfortable trusting, what they
may see as, a bunch of nerds or hackers and the incomprehensible math and science they play with in their dark basements. 

I am not sure what is the best way forward. Educate people to help them understand and learn to trust the bitcoin protocol/network? Show them
how existing systems are untrustworthy?  Of course it isn't an either/or equation and many approaches can be used at the same time... including
individuals and groups helping to build and nurture a new type of fair, sharing and caring society... 

"Remember, I'm pulling for you. We're all in this together." - Red Green

[Red Emerald]

Looks like were going in circles...

So you are attacking USD for being backed by nothing at all (and now I'm thinking you want it to be backed by gold), but support Bitcoin which is also backed by nothing...

That's where you lose me. Your given reason for disliking fiat can be also applied to Bitcoin.

Back OT, I support Bitcoin because I think it will kill Paypal.  This is a much shorter term and much more realistic goal than ending world fiat, and it will probably fly better in the geek subforum as well.

Hold on, there is a huge difference between fiat and bitcoin

Governments can print as much fiat they want and inflationate it like hell

Bitcoin is limited to 21million maximum bitcoins, and no more. No inflation. No governments printing money as they wish.

I didn't say there were no differences...  I was saying his argument against a currency not being backed by anything was simplistic and wrong.

[Red Emerald]

I wish people would stop calling bitcoin an investment.

It is part of the experiment.
So don´t worry about it, it is necessary for its survival.

Indeed. More investors -> more market liquidity -> more price stability -> better currency.

But if those investors don't actually use the currency for anything, then we won't actually have a better currency.  We will just have a bunch of speculators who will want large price swings because that is how they make their money.

[ptshamrock]

Fiat currency is backed by a gun.

this is the awareness that must spread. we must transcend from an age of top-down authoritarianism to an age of bottom-up initiatives fueled by passion and the belief in ourselves.

fiat is backed by fear.
bitcoin is backed by love. 

+1

[Explodicle]

I wish people would stop calling bitcoin an investment.

It is part of the experiment.
So don´t worry about it, it is necessary for its survival.

Indeed. More investors -> more market liquidity -> more price stability -> better currency.

But if those investors don't actually use the currency for anything, then we won't actually have a better currency.  We will just have a bunch of speculators who will want large price swings because that is how they make their money.

Why do their desires matter if they can't effectively collude? Each investor is self-interested and very few will have enough capital to single-handedly manipulate the market. I don't think we can safely assume they're all momentum investors. So they'll all be waiting for "someone else" to make a wishful bet, and many will wait out the volatility anyways.

[Red Emerald]

Can't effectively collude? You are kidding right? At least with fiat there is an infrastructure for trying to stop it.

What do you think people will do with something like Bitcoin where there are no regulatory bodies by design?

[Explodicle]

Can't effectively collude? You are kidding right? At least with fiat there is an infrastructure for trying to stop it.

What do you think people will do with something like Bitcoin where there are no regulatory bodies by design?

How exactly could multiple parties manipulate the exchange price without losing money on average? It's hard enough doing it on your own without having to worry about being double-crossed. The fiat infrastructure has just been corrupted because of its centralized supply weakness, doing more harm than good.

This doesn't prove me right, but as of this moment there are no regulators, MtGox volume is still strong, and the price IMHO has been more stable ever since Bitcoinica entered the scene.

[DeathAndTaxes]

Can't effectively collude? You are kidding right? At least with fiat there is an infrastructure for trying to stop it.

What do you think people will do with something like Bitcoin where there are no regulatory bodies by design?

They won't collude because someone has to lose to win.  Look at the Forex market.  Trillions of dollars change hands every day.  With millions of participants and trillions of dollars manipulating the market is nearly impossible.

Thus fiat:fiat exchange rates are relatively stable.  Now the speculators would love for daily fiat swings to be +/-5% but the market is so deep that nobody has the amount of money (literally trillions of dollars) to move it in any significant fashion.

More speculators (even driven for nothing but zero sum profits) will make the Bitcoin markets deeper.  Hopefully someday dropping 100K coins will barely cause a ripple.

Regulation has nothing to do with stable markets.  If anything the barriers to entry caused by many regulations often destabilize markets.

[Red Emerald]

Can't effectively collude? You are kidding right? At least with fiat there is an infrastructure for trying to stop it.

What do you think people will do with something like Bitcoin where there are no regulatory bodies by design?

How exactly could multiple parties manipulate the exchange price without losing money on average? It's hard enough doing it on your own without having to worry about being double-crossed.

How can you be double crossed if you are on your own? That makes no sense to me.

Also, haven't you heard of the Manipulator?

And are you saying that if a bunch of people got together and put a bunch of money into bitcoin, they couldn't play the market or fux with the price?  I don't see how that makes any sense considering lots of people with smallish amounts of money have made money so far.

They won't collude because someone has to lose to win.  Look at the Forex market.  Trillions of dollars change hands every day.  With millions of participants and trillions of dollars manipulating the market is nearly impossible.

If we get to the point of "millions of participants and trillions of dollars" then there are plenty of people available to take advantage of.  However, using markets that are incredibly large to defend how market manipulation is impossible in our tiny market doesn't make much sense to me.

While on the road to that beautiful world where everyone uses Bitcoin, I believe we have to be careful of pushing/using Bitcoin solely as an investment vehicle.  This is totally new ground and thinking that because it worked for Forex, it will work with Bitcoin is too simplistic.  Also, lots of people LOSE money on Forex since there are such small profit margins compared to other markets and because there are huge banks playing arbitrage to cut those margins smaller.

More speculators (even driven for nothing but zero sum profits) will make the Bitcoin markets deeper.  Hopefully someday dropping 100K coins will barely cause a ripple.

Agreed, but that isn't now.  People can manipulate the price right now.  A 100k coin snowball would hurt really bad right now. 


tl;dr I am talking about bitcoin now, not in some hypothetical future, and Bitcoin is not yet big enough to stop people from manipulating the price.  If you really believe in Bitcoin, use it (and get others to use it) as more than an investment vehicle.

If you want bitcoin to succeed, use it as a currency.

[Red Emerald]

[snip] ....Bitcoin where there are no regulatory bodies by design?

Why do people keep saying that there are no regulatory bodies to back Bitcoin? Even I've been here long enough to hear about police, courts of law and so forth, interacting with Bitcoin users to catch thieves for example, and I haven't even been here that long. If Bitcoin one day grows to such a degree that it literally starves a government of essential tax funding, then society can start worrying about instituting workable means of compensating public servants.

Once again, I'm talking about bitcoin right now, not in some hypothetical future.  I think getting investors NOW by telling them that legal protections will be here eventually is a pretty tough sell.

I'd love to read some links about the police returning some stolen coins. Got any? Did the linode coins get returned?  What about that first major theft back in June? Mybitcoin?

[Explodicle]

Can't effectively collude? You are kidding right? At least with fiat there is an infrastructure for trying to stop it.

What do you think people will do with something like Bitcoin where there are no regulatory bodies by design?

How exactly could multiple parties manipulate the exchange price without losing money on average? It's hard enough doing it on your own without having to worry about being double-crossed.

How can you be double crossed if you are on your own? That makes no sense to me.

You can't. What I'm saying that a large entity like the Manipulator still has a tough time. If he had co-conspirators he would THEN have the additional trust problem.

Also, haven't you heard of the Manipulator?

Yes, but I'm still not convinced he's real. I'm talking about large groups of potential speculators, not the Bill Brasky of Bitcoin.

And are you saying that if a bunch of people got together and put a bunch of money into bitcoin, they couldn't play the market or fux with the price?  I don't see how that makes any sense considering lots of people with smallish amounts of money have made money so far.

They could try, but on average they will lose money. It would be generally ineffective.

[Red Emerald]

And are you saying that if a bunch of people got together and put a bunch of money into bitcoin, they couldn't play the market or fux with the price?  I don't see how that makes any sense considering lots of people with smallish amounts of money have made money so far.

They could try, but on average they will lose money. It would be generally ineffective.

What makes you say they would lose money and be ineffective?  I'm an engineer, not an economist (although I may have enjoyed college more as the latter), and am curious.  It seems to me someone with a large % of the market should be able to profit, otherwise monopolies wouldn't be a thing, right?

[Red Emerald]

Once again, I'm talking about bitcoin right now, not in some hypothetical future.  I think getting investors NOW by telling them that legal protections will be here eventually is a pretty tough sell.

I'd love to read some links about the police returning some stolen coins. Got any? Did the linode coins get returned?  What about that first major theft back in June? Mybitcoin?

Well let's not jump too far in the other direction. I haven't heard about returned coins -- it's a bit like cash and thieves surely just hide it somewhere. Since it's not illegal, I don't see why law enforcement wouldn't at least try to investigate thefts.

Jump too far? You said you had heard about "police, courts of law and so forth, interacting with Bitcoin users to catch thieves" and I asked for links...

[Dutch Merganser]

Can't effectively collude? You are kidding right? At least with fiat there is an infrastructure for trying to stop it.

What do you think people will do with something like Bitcoin where there are no regulatory bodies by design?

How exactly could multiple parties manipulate the exchange price without losing money on average? It's hard enough doing it on your own without having to worry about being double-crossed.

How can you be double crossed if you are on your own? That makes no sense to me.

You can't. What I'm saying that a large entity like the Manipulator still has a tough time. If he had co-conspirators he would THEN have the additional trust problem.

Also, haven't you heard of the Manipulator?

Yes, but I'm still not convinced he's real. I'm talking about large groups of potential speculators, not the Bill Brasky of Bitcoin.

And are you saying that if a bunch of people got together and put a bunch of money into bitcoin, they couldn't play the market or fux with the price?  I don't see how that makes any sense considering lots of people with smallish amounts of money have made money so far.

They could try, but on average they will lose money. It would be generally ineffective.

Are you kidding? Think penny stocks, manipulation is the only reason they exist. This has been discussed elsewhere, really all it takes is a 500 lb gorilla. People make whole careers out of scamming pennies, some even using their real names to do it

[Red Emerald]

Once again, I'm talking about bitcoin right now, not in some hypothetical future.  I think getting investors NOW by telling them that legal protections will be here eventually is a pretty tough sell.

I'd love to read some links about the police returning some stolen coins. Got any? Did the linode coins get returned?  What about that first major theft back in June? Mybitcoin?

Well let's not jump too far in the other direction. I haven't heard about returned coins -- it's a bit like cash and thieves surely just hide it somewhere. Since it's not illegal, I don't see why law enforcement wouldn't at least try to investigate thefts.

Jump too far? You said you had heard about "police, courts of law and so forth, interacting with Bitcoin users to catch thieves" and I asked for links...

https://bitcointalk.org/index.php?topic=55191.0
And there's the "legal" subforum, so you're not alone in asking these questions.

So it looks like you are the one who jumped too far...

[Explodicle]

And are you saying that if a bunch of people got together and put a bunch of money into bitcoin, they couldn't play the market or fux with the price?  I don't see how that makes any sense considering lots of people with smallish amounts of money have made money so far.

They could try, but on average they will lose money. It would be generally ineffective.

What makes you say they would lose money and be ineffective?  I'm an engineer, not an economist (although I may have enjoyed college more as the latter), and am curious.  It seems to me someone with a large % of the market should be able to profit, otherwise monopolies wouldn't be a thing, right?

Excellent, I'm an engineer too. so don't take my word for it...
They would lose money on average because the market has more "depth" when moving away from what was a stable equilibrium towards an artificial price than vice versa. So even if I buy a lot of Bitcoins and raise the price, there will be fewer people who want to buy them back at that high price than sold them. By the time I sell them all off, I have a net loss.

In real life it's a lot more complicated than that and you can trick other speculators sometimes, but this gets harder when more people are participating. Penny stocks are easy to manipulate because there is so little depth. Having more people speculate on Bitcoin will increase its depth.

http://en.wikipedia.org/wiki/Market_depth

Monopolies are kinda different and are usually caused by some other problem, like Standard Oil using "barriers to entry" to squash out competition.


So I'm not 100% disagreeing with you guys, manipulation does work sometimes, but we ought to encourage speculation, investment, and manipulation attempts now while Bitcoin is new so that it's more stable later.

[phillipsjk]

People need to be more careful when using the term "backing" when referring to money. It has a very specific meaning but is usually perverted and causes lots of confusion.

"Backing" means that a party guarantees to exchange one asset for another upon redemption at a fixed rate. In the case of gold-backed USD, the banks guaranteed to give you gold in redemption for the paper, and this was at a fixed rate. Thus, the dollar was "backed" by gold. That's what backing means - a counterparty specifically promising to exchange one for the other at a certain rate.

Thus, Bitcoin is not backed by anything. Nor is gold backed by anything. Nor are dollars today backed by anything.

It is wrong to say that Bitcoin is "backed" by electricity, or cryptography, or the size of the Bitcoin economy. It is similarly wrong to say the USD is backed by the government, or by violence, etc. To do so is to pervert the term. Bitcoin is not backed by anything, and that is just fine, because it's a commodity unto itself and is valuable for its specific attributes. It needs no "backing" - it is a thing unto itself which we value. Same for gold.

If you find yourself in the position of saying Bitcoin is backed by something, change the term to say "Bitcoin is valuable because..." Or, "the USD is valuable because..." The answer to those sentences will be valid, and you won't be caught in the misnomer of "backing."

IMO, even with your more precise definition of "backing", Bitcoin is still backed by "(statistical) proof of work" and a public transaction record. If all of the miners decide to stop offering this "proof of work" or "puiblic transaction record" when it becomes time to redeem your coins: they are worthless.  This worthlessness would be despite the past "proof of work" and "public transaction record" used to generate those coins. The advantage Bitcoin has over fiat in this case, is that a group of people can get together and start building the block-chain again; in the unlikely event that the network shuts down for an extended period of time.

Sorry, for the run-on sentances

[Red Emerald]

People need to be more careful when using the term "backing" when referring to money. It has a very specific meaning but is usually perverted and causes lots of confusion.

"Backing" means that a party guarantees to exchange one asset for another upon redemption at a fixed rate. In the case of gold-backed USD, the banks guaranteed to give you gold in redemption for the paper, and this was at a fixed rate. Thus, the dollar was "backed" by gold. That's what backing means - a counterparty specifically promising to exchange one for the other at a certain rate.

Thus, Bitcoin is not backed by anything. Nor is gold backed by anything. Nor are dollars today backed by anything.

It is wrong to say that Bitcoin is "backed" by electricity, or cryptography, or the size of the Bitcoin economy. It is similarly wrong to say the USD is backed by the government, or by violence, etc. To do so is to pervert the term. Bitcoin is not backed by anything, and that is just fine, because it's a commodity unto itself and is valuable for its specific attributes. It needs no "backing" - it is a thing unto itself which we value. Same for gold.

If you find yourself in the position of saying Bitcoin is backed by something, change the term to say "Bitcoin is valuable because..." Or, "the USD is valuable because..." The answer to those sentences will be valid, and you won't be caught in the misnomer of "backing."

IMO, even with your more precise definition of "backing", Bitcoin is still backed by "(statistical) proof of work" and a public transaction record. If all of the miners decide to stop offering this "proof of work" or "puiblic transaction record" when it becomes time to redeem your coins: they are worthless.  This worthlessness would be despite the past "proof of work" and "public transaction record" used to generate those coins. The advantage Bitcoin has over fiat in this case, is that a group of people can get together and start building the block-chain again; in the unlikely event that the network shuts down for an extended period of time.

Sorry, for the run-on sentances

No, I think evoorhees was right.  Bitcoin is backed by "(statistical) proof of work." It has PoW, but that isn't worth something of value.  I'm not going to go someone and trade my bitcoins for a double sha256...