Dave, the regression theorem is apodictically certain and applies to all money, including bitcoin. your refusal to understand this is willful noncognitivism.
>Market cap has pased $300m, still in its infancy in those terms, so still a good buy if you are willing to risk that it has a long-term future! Gonna be one hell of a payoff if it ends up supplanting fiat currencies the world over.
How is market cap being determined, kind of like a stock? Is it just number of bitcoins times current price in dollars?
I'm still new to the crypto-currency concept. Very fascinating, but not worth my time to get really involved at this point. When Amazon accepts it as a form of payment, you'll know the day of reckoning has come.
Dave, the regression theorem is apodictically certain and applies to all money,
Yes.
including bitcoin.
Yes, it applies to bitcoin, proving [with apodictic certainty] that bitcoin cannot be money, ever.
your refusal to understand this is willful noncognitivism.
Have you even read my articles on bitcoin?
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
Financial "guidance" regarding virtual currencies has been announced by the US FinCEN. This mostly affects Bitcoin exchanges.
http://www.bitcoinmoney.com/post/45771686409/news-roundup-fincens-guidance-re-virtual-currencies
youre upside-down and backwards. if you cared about the truth in this context it would be worthwhile to explain it to you again.
yes, you appear to have forgotten (or wish to have forgotten) my refutation of such, which was the last word on the subject in our exchanges. you admitted that you had no answer and scurried off to your hovel.
"How is market cap being determined, kind of like a stock? Is it just number of bitcoins times current price in dollars?"
Yes, and today it pased $650m, high of $62 settling back down to $58 and subsequently rising to $59+ right now.
http://news.yahoo.com/bitcoin-apps-soar-spain-cyprus-shocker-boost-virtual-124020102.html
Can you trade fractions of a bitcoin? I imagine you can. How small of a percentage?
http://lmgtfy.com/?q=Can+you+trade+fractions+of+a+bitcoin%3F&l=1 says 0.000001% BTC is currently smallest possible.
Would bitcoin raise in value if multitudes of people decided to purchase it in times of high inflation?
"Would bitcoin raise in value if multitudes of people decided to purchase it in times of high inflation?"
Yes. It would raise in value simply if there was inflation, since its supply is limited and your unit of account is inflating, changing the relative ratio and thus forcing a value gain of the supply-limited asset. But if it also drove people into the currency to escape inflation it would accelerate the value increase.
"Can you trade fractions of a bitcoin? I imagine you can. How small of a percentage?"
The smallest unit currently is 100 millionth of one bitcoin, also known as 'one satoshi.' This is actually the unit of account the program uses, as in it equates 1 bitcoin as 100m fractions of a bitcoin, and does all accounting in 100 millionth units, then displays the fraction of 1 bitcoin to make it human-readable.
If deflation ever took off such that 100 millionths was of significant value, the system could be then patched to offer infinite division; one such proposal uses Tonal bitcoin units. Thus, it's expected bitcoin could be used for all future needs of humanity, regardless of GPD or deflation.
In addition to the previous answer, in the affirmative, I'd like to add that it's unlikely that Bitcoin is likely to produce a bubble scenario any time soon. Local currencies are inherently weaker as a form of money than Bitcoin, and so they will likely always lose value over time compared to it. However, a bubble could be artificially created if government regulations made it too difficult for people to use it; then the ratio of Bitcoins to Fiat Currency that people would want to hold would be much much lower, causing a point at which a Bitcoin bubble would form and pop at some later date.
"If deflation ever took off such that 100 millionths was of significant value, the system could be then patched to offer infinite division; one such proposal uses Tonal bitcoin units. Thus, it's expected bitcoin could be used for all future needs of humanity, regardless of GPD or deflation."
Looks like they had amazing foresight in the development of this currency. I'm going to investigate the protocol a little more closely now since it has piqued my interest. However, getting average joe to understand that "deflation" in a sound money economy is not a bad thing is an entirely different story.
@Anemome - thank you for answering my question. I am quite new at this bitcoin stuff, and I am thinking about purchasing some. I was looking at Mtgox Exchange, do you think that's reputable and trustworthy? It appears to be the biggest one out there, with the most exchangeable currencies.
Do they have bitcoin ATM cards that can be used around the world (like schwab?)? I am quite a newbie...
Here come the regulations..
Via the Wall Street Journal:
"The U.S. is applying money-laundering rules to "virtual currencies," amid growing concern that new forms of cash bought on the Internet are being used to fund illicit activities."
"...new bookkeeping requirements and mandatory reporting for transactions of more than $10,000."
"The arm of the Treasury Department that fights money laundering said Monday that the standard federal banking rules aimed at suspicious dollar transfers also apply to firms that issue or exchange money that isn't linked to any government and exists only online. "
http://online.wsj.com/article/SB10001424127887324373204578374611351125202.html?mod=djemalertNEWS
rosstaylor: @Anemome - thank you for answering my question.
@Anemome - thank you for answering my question.
Np :)
rosstaylor:I am quite new at this bitcoin stuff, and I am thinking about purchasing some. I was looking at Mtgox Exchange, do you think that's reputable and trustworthy? It appears to be the biggest one out there, with the most exchangeable currencies.
Because of US gov regulations, it's becoming very difficult to open a bank account in a foreign country. Because of this, Mt. Gox, a japanese exchange, has 'sold' all its North American customers to a Silicon Valley startup called Coinlab, partnering with them, providing back-end support.
Coinlab is set to open up in April, and will quickly become the world's largest bitcoin exchange. It will probably be the easiest place to buy bitcoin at that point.
If you want to buy bitcoin immediately, you can open an account at Bitfloor and wire money into that account via Bank of America. I personally have used Coinlab--they're good, also a new Silicon Valley company (Y-Combinator no less), but they've been going through a database upgrade to handle high demand last several days. But news is that's set to end soon. So, I'd recommaned getting started on Coinbase, and then transition to Coinlab when they get up and running next month. But if you had to buy tomorrow, easiest way is probably Bitfloor, but I have not used them.
There's also bitinstant, but I've heard a lot of people having problems with them, orders taking days, various procedural headaches, so I'd stick to Bitfloor and Coinbase.
rosstaylor:Do they have bitcoin ATM cards that can be used around the world (like schwab?)? I am quite a newbie...
Not yet. The first bitcoin ATM was only recently unveiled. It takes dollars and sends bitcoin to your address--it's not quite an ATM, more like a bitcoin vending machine, money only goes one way.
Kim Dotcom has proposed efforts at bitcoin-funded credit cards and the like. It's probably easier to spend and keep bitcoin on a smartphone with a bitcoin app and spend via NFC and QR codes than to use a credit card.
If you want to get money out of bitcoin back into dollars you will used the same exchange or place you originally bought them. Ie: Coinbase will buy your coins, or Coinlab, etc.
Prime:Here come the regulations...
Yes, actually the FinCen ruling was received favorably, and probably one of the reasons for at least part of the recent price rise. Obviously the Feds can go jump in the river as I'm concerned, but lots of non-libertarian people gained confidence in bitcoin with gov sanction essentially, and they're saying this opens the way for more Silicon Valley companies to jump in, for various investment groups to start creating bitcoin funds and make purchases, etc., with some confidence that a position by the US gov has now been established that isn't wholly negative towards it. It's not been criminalized at least.
I get it, other people were wary of what the government was going to do to bitcoin (uncertainty) so they were holding back. Now that they have seen its first real action and that it's not drastic, they're more comfortable putting resources into it and knowing that it won't get wiped out by the government.
BTW, there were 256 posts in this thread before I made this one.
> BTW, there were 256 posts in this thread before I made this one.
What does that mean, no more editing of posts?
*edit: nope, still works.
By Peter Šurda
"Korda's first argument is that because it is easy to create a new cryptocurency, they will compete each other out of the market, kinda "race to the bottom", ending up with a hyperinflation and a collapse. However, he does not seem to understand the network effect, one of the most important aspects of money... If I said that everyone can create their own language, therefore without barriers to entry, everyone would end up with their own language and the ability to communicate would collapse, you'd surely think that I'm a moron..."
"Korda's first argument is that because it is easy to create a new cryptocurency, they will compete each other out of the market, kinda "race to the bottom", ending up with a hyperinflation and a collapse. However, he does not seem to understand the network effect, one of the most important aspects of money...
If I said that everyone can create their own language, therefore without barriers to entry, everyone would end up with their own language and the ability to communicate would collapse, you'd surely think that I'm a moron..."
In another conversation I'm having on another site about bitcoin's, someone brought up the question about the ability for someone to write a virus or worm to create a coordinated attack on the Bitcoin network. The questions was addressed primarily at the "double spending" problme of the benign network outcomputing the malicious network. Is this a possibility?
Are there any other possible issues with a co-ordinated virus attack?
Also, is it possible to initiate a "malicious transaction" on a wallet you don't own? Meaning, taking a victim's wallet and transferring it to your own with a malicious and co-ordinated attack?
If someone doesn't protect their wallet, real or virtual, others can take money from it. Otherwise, no.
The only thing that ultimately "backs up" currency is not it's weight or chemical composition, but the expectations of both parts in a transaction involving it.
Of course when it has clear physical properties it is easier to form expectations about it, but ultimately the only thing that matters are the expectations.
That's why most transactions today are executed on fiat currency, which are not convertible to any fixed amount of a graded commodity, and are backed only by governments and/or government-like enforcement agencies.
To deny that something widely used in transactions "really is" money, relying on ridiculous criteria for "realness", seems like a self-inflicted episode of cognitive dissonance some people engage when their theories about the world are collapsing.
Are you claiming that bitcoin is widely used? For example, if I attempted to buy 100 random things off craigslist and offered bitcoin, how many would you expect would accept it?
Blargg: Are you claiming that bitcoin is widely used? For example, if I attempted to buy 100 random things off craigslist and offered bitcoin, how many would you expect would accept it?
If you attempt to use Euros (the currency adopted by most European Union countries, like France, Italy and Germany) in America's craigslist you may find it difficult to find willing counterparts as well, because most people there are not willing or able to make currency exchanges themselves.
That criterion of yours (100 random items on craigslist) is perhaps a sufficient condition but doubtfully a requirement for something to be considered currency.
To deny that something widely used in transactions "really is" money
I was just going by what you said. I'm also not sure why your example of using another country's currency is relevant. If you're implying that bitcoin is like the Euro and the USA is not its home country, what country is bitcoin widely used in transactions?
There are millions of dollars worth of bitcoins transactions every day.
Just exchange transactions between dollar and bitcoins by a large broker in the last month amounted to more than 100 million dollars in volume. (see: http://bitcoincharts.com/markets/mtgoxUSD.html )
It's not a geographical country, but a non-local community of internet users.
But in essence it's like a country currency, not in the sense that it is enforced by a government agency or something like that, but in the more practical sense that these people are willing to trade in bitcoins and they can find easily their counterparts in their own market.
And then again, incidentally, they might be numerous in U.S. craigslist if they are that way inclined. Or not.
Bitcoin is backed by watts, its storing facilities need wattage, to utilize the bitcoin market one needs watts. When an indidvidual farms bitcoins (solving incremental rigourous algorithms = more watts) one utilizes wattage. It is not a fictitious currency similar to estatist currencies.
For the none-technical to farm one needs specialized eqiupment which also adds to the expenses which includes glass, gold, heavy metals, lead etc. So yes, for you liberal arts majors, bitcoin has intrisinc value.
*Someone needs to update this website and create a reply button without the need to click on the previous statement. Why can't someone just make a statement?
Bitcoin is backed by watts,...
You don't know what "backed by" means.
...adds to the expenses...has intrisinc value.
You don't know what intrinsic value means.
Hmm.. thanks, I guess. Is this a stated fact or your personal language?
Is this a stated fact or your personal language?
Do your research. Just pointing you in the right direction.
BTW, do you believe in the labor theory of value?
Curius Dentatus: Bitcoin is backed by watts, its storing facilities need wattage, to utilize the bitcoin market one needs watts. When an indidvidual farms bitcoins (solving incremental rigourous algorithms = more watts) one utilizes wattage. It is not a fictitious currency similar to estatist currencies. For the none-technical to farm one needs specialized eqiupment which also adds to the expenses which includes glass, gold, heavy metals, lead etc. So yes, for you liberal arts majors, bitcoin has intrisinc value. *Someone needs to update this website and create a reply button without the need to click on the previous statement. Why can't someone just make a statement?
It's actually "backed" by hashing operations within parallel cryptographic algorithms.
Of course, to perform these arithmetic operations inside real world computers you need "watts", in terms of electric bills. But you also need the processor itself and the subsidiary computer components, you need internet connection, and you need time.
And the government "backed" currencies need all government infrastructure that serves to the purpose of enforcing its acceptance, detecting counterfeits and stabilizing its perceived value.
The whole point again with "backing" a currency is not the physical property of any incidental commodity being used to create it, but the general expectations of the community of users of such currency.
Yes, thanks for clarifying my point. I guess internet monopolies inflates its value.
"The whole point again with "backing" a currency is not the physical property of any incidental commodity being used to create it, but the general expectations of the community of users of such currency."
Are you stating that bitcoins has no subjective value?
@Similing Dave
You're the one who brought up the subject, so please what "research" are you referring .
...what "research" are you referring .
Find out what "backed by" means.
Find out what "value" means.
Find out what "intrinsic value" means.
Toxic has to do the same research, BTW.
Hints:
"Backed by" does not mean "needed such and such for its creation."
"Backed by" does not mean "protected from counterfeiters by such and such."
"Value" does not mean "needed such and such for its creation."
"Intrinsic value". Search my humble blog.
Hints on what to google:
site:mises.org value
site:mises.org subjective theory of value
You're still haven't answered my question. Whose language are you referring to? Mises? Marx? Bowerk? Keynes? The Dictionary? I'm using the dictionary. Please utilize the ground rules of debate. I'm here to focus on the subject not get into a flowery debate about definitions. Once I figure out who you are referring to I'll gladly rewrite my sentence to meet your needs.
Whose language are you referring to?
What is the name of this website?
I'm here to focus on the subject not get into a flowery debate about definitions.
You are out of focus because you don't have the definitions correct. You are saying, "I want to build a castle on this spot, not get into debates about some quicksand here."
...I'll gladly rewrite my sentence to meet your needs.
I'm doing fine, no need to meet my needs. But if you want to write only true things, you'll have to erase your sentence, not modify it.
Anyway, stimulating as this back and forth has been, I think I have nothing more to gain by it. The horse has beed led to water. I can do no more.
So good luck, Curius and Toxic. You guys are on your own.
Okay Smiling Dave, I still stand by my statement. Point me where I failed at interpreting Mises's Theory of Money and Credit. Chapter and Page number. Tell me your opinion why I'm wrong since it seems you are trolling.
* Okay I will now stop at correcting grammar in my posts and will spam replies.
Curius Dentatus:Yes, thanks for clarifying my point. I guess internet monopolies inflates its value.
I don't know about that. You are apparently confusing value with cost.
The market value of an item is not equal to the cost of its creation.
What happens is that rational people usually don't create things if they expect the costs of doing so to be higher than the market value of that thing, or the price of some other thing of equivalent or higher value.
Curius Dentatus:Are you stating that bitcoins has no subjective value?
All value is subjective. Value is the rank occupied by something given one's priorities.
@Smiling Dave
Yes, value is subjective. Technically you are right in a trollish manner. My point here is to refute the point that Bitcoins backed by nothing. Which many here point out that bitcoins is a fiat currencys.