To all the haters out there

[mashman]

Same people who control our money will be behind the problems that "Bitcoin" are currently experiencing ... they don't like competition y'know!

Not at all unexpected, just took longer than I thought it would!

That would not surprise me in the slightest. Hit it hard, ramp up the price, then dump it harder. A move that should be called, The Soros.

Well from me, I apologise for keeping you waiting.

[bogan]

Same people who control our money will be behind the problems that "Bitcoin" are currently experiencing ... they don't like competition y'know!

Behind just the problems? Who do you think designed bitcoin as a whole? Some liberals who believe the wealth should go to all the people instead of just those at the top of the system

[Indiana_Jones]

Money supply

Growth of the Bitcoin money supply is predefined by the Bitcoin protocol,[28] and in this way inflation is kept in check. Currently there are over twelve million bitcoins in circulation with an approximate creation rate of 25 bitcoins every ten minutes. The total supply is capped at 21 million,[28] and every few years or so the creation rate is halved. This means new bitcoins will continue to be released for more than a hundred years.

Sure it is lol

-Indy

[bogan]

Sure it is lol

-Indy

Mate, that's the problem, it is capped at 21million bitcoins. The first few million were piss easy to get (handy for the inventors and their buddies right), and cheap as chips. But schmucks wanting some of the last few million will take a hell of a lot more effort to get em. So the system is designed to reward early adopters because late adopter increase the value of all bitcoins, not just the ones they get. And of course it is the same with trading them through supply and demand, fixed supply but more demand is bad (didn't debeers cop a lot of flak about supply fixing diamonds?).

It's fucking funny hearing people go on about this being a system better than govt managed ones as it is by the people for the people, because it's just blatantly a pyramid scheme, far more so than your common banks/govt, but because they don't have the suited boogeyman to hate on, it must be fine right

[Indiana_Jones]

What I'm not understanding is how does one actually 'get' a bitcoin?

-Indy

[Banditbandit]

What I'm not understanding is how does one actually 'get' a bitcoin?

-Indy

Through a Bitcon ?

[bogan]

What I'm not understanding is how does one actually 'get' a bitcoin?

-Indy

You can 'mine' them, which is basically farming out the task of encryption and distributed 'banking' where the bitcoin economy is tracked/recorded through user's PC's. This is the bit where they are created, and is capped at 21mil, and it getting way more difficult to mine now, than when it first started.
Or you can buy them using real money from somebody who has mined some, or bought some of one who has mined them.

[Indiana_Jones]

So I'm guessing someone set up the code for it to be 'mined'.

So what if someone 'hacked' it and said 'look I have 4 million of these thingies now'?

-Indy

[mashman]

So what if someone 'hacked' it and said 'look I have 4 million of these thingies now'?

Then they should be revered for being the success that they are and given another 4 million at the expense of those who are still mining.

[bogan]

So I'm guessing someone set up the code for it to be 'mined'.

So what if someone 'hacked' it and said 'look I have 4 million of these thingies now'?

-Indy

Nah, mining is like calculating a bajillion encrypted sum things/record of BC transaction. If you said you had many many of them, it just wouldn't match the encrypted records on other's computers, or something like that.

[SMOKEU]

You know we actually have comic sans as a font right?



Inherent in the system is deflation due to money supply. There is a reason stable economies like to have a healthy level of inflation. Simply put, as more people use it, there is more demand for a fixed number of coins, leading to increases in the coins worth. So later adopters increase the value of early adopters investments, while not actually adding any other function/value to the system; isn't that the basic definition of a pyramid scheme?

Mate, that's the problem, it is capped at 21million bitcoins. The first few million were piss easy to get (handy for the inventors and their buddies right), and cheap as chips. But schmucks wanting some of the last few million will take a hell of a lot more effort to get em. So the system is designed to reward early adopters because late adopter increase the value of all bitcoins, not just the ones they get. And of course it is the same with trading them through supply and demand, fixed supply but more demand is bad (didn't debeers cop a lot of flak about supply fixing diamonds?).

It's fucking funny hearing people go on about this being a system better than govt managed ones as it is by the people for the people, because it's just blatantly a pyramid scheme, far more so than your common banks/govt, but because they don't have the suited boogeyman to hate on, it must be fine right

What I'm not understanding is how does one actually 'get' a bitcoin?

-Indy

The early adopters of Bitcoin didn't always make much money out of it. They took a big risk by buying hardware and spending a lot of money on electricity for an unknown currency that had very little monetary value. It's not much different in that respect with investors buying shares in a high risk startup company early on. In mid 2011 the value of a BTC peaked at around $US30, then dropped down to around $US2. So many of those early adopters actually lost significant sums of money from buying high and selling low, or mining coins and holding on to them for too long, and then panic selling at a low price that didn't even cover the electricity costs of mining.

If you were a late adopter and bought BTC just before the price hike last year, you could have bought coins for $US100 and sold them for $US1000 a couple of months later. Most of the early adopters sold their BTC when the prices were comparatively low, so in fact they didn't always make as much as the later entrants. There is not always a direct correlation between difficulty rate and BTC value, so there's also a lot of luck and simply knowing how to play the markets that are involved.

I was lucky more than anything else, I started mining at a comparitively low difficulty, made a few thousand $, lost a few thousand $, then made all that money back, with a few extra thousand $ on top. I just made the right choices at the right time, although I was a bit gutted when I sold BTC for around $US500, then a week later they were over $US1000, so I sold more at near the peak price. Still, it worked out well for me. Winning!

[SMOKEU]

Here's some information about pyramid and ponzi schemes:


"Pyramid schemes and Ponzi schemes share many similar characteristics in which unsuspecting individuals are fooled by unscrupulous investors who promise extraordinary returns. However, in contrast to a regular investment, these types of schemes can offer consistent "profits" only as long as the number of investors continues to increase. Ponzi and pyramid schemes are self sustaining as long as cash outflows can be matched by monetary inflows. The basic difference arises in the type of products that schemers offer their clients and the structure of the two ploys. Ponzi schemes are based on fraudulent investment management services – basically investors contribute money to the "portfolio manager" who promises them a high return, and then when those investors want their money back they are paid out with the incoming funds contributed by later investors. The person organizing this type of fraud is in charge of controlling the entire operation; they merely transfer funds from one client to another and forgo any real investment activities.

On the other hand, a pyramid scheme is structured so that the initial schemer must recruit other investors who will continue to recruit other investors and those investors will then continue to recruit additional investors and so on. Sometimes there will be an incentive that is presented as an investment opportunity, such as the right to sell a particular product. Each investor pays the person who recruited them for the chance to sell this item. The recipient must share the proceeds with those at the higher levels of the pyramid structure.

There are two additional important factors to consider: the only guilty party in the Ponzi and pyramid scheme is the originator of the corrupt business practice, not the participants (as long as they are unaware of the illegal business practices). Secondly, a pyramid scheme differs from a multi-level marketing campaign which offers legitimate products."

http://www.investopedia.com/ask/answ...vs-pyramid.asp

[bogan]

The early adopters of Bitcoin didn't always make much money out of it. They took a big risk by buying hardware and spending a lot of money on electricity for an unknown currency that had very little monetary value. It's not much different in that respect with investors buying shares in a high risk startup company early on. In mid 2011 the value of a BTC peaked at around $US30, then dropped down to around $US2. So many of those early adopters actually lost significant sums of money from buying high and selling low, or mining coins and holding on to them for too long, and then panic selling at a low price that didn't even cover the electricity costs of mining.

If you were a late adopter and bought BTC just before the price hike last year, you could have bought coins for $US100 and sold them for $US1000 a couple of months later. Most of the early adopters sold their BTC when the prices were comparatively low, so in fact they didn't always make as much as the later entrants. There is not always a direct correlation between difficulty rate and BTC value, so there's also a lot of luck and simply knowing how to play the markets that are involved.

I was lucky more than anything else, I started mining at a comparitively low difficulty, made a few thousand $, lost a few thousand $, then made all that money back, with a few extra thousand $ on top. I just made the right choices at the right time, although I was a bit gutted when I sold BTC for around $US500, then a week later they were over $US1000, so I sold more at near the peak price. Still, it worked out well for me. Winning!

It's more like pyramid scheme risk than startup risk, in that other investors coming in give you returns. High risk startups are not often publically listed, and there is little option to sell shares, so you have to have faith in the product/service to get your investment returns.

The big question is, why cap it at 21million coins? Why build in supply side deflation? I can't think of an answer to those questions which doesn't involve a pyramid.

[SMOKEU]

It's more like pyramid scheme risk than startup risk, in that other investors coming in give you returns. High risk startups are not often publically listed, and there is little option to sell shares, so you have to have faith in the product/service to get your investment returns.

The big question is, why cap it at 21million coins? Why build in supply side deflation? I can't think of an answer to those questions which doesn't involve a pyramid.

"Bitcoin is nearly opposite of a pyramid scheme in a mathematical sense. Because Bitcoins are algorithmically made scarce, no exponential benefit is derived from introducing new users to use of it. There is a quantitative benefit in having additional interest or demand, but this is in no way exponential."

I don't really understand the 21 (ish) million BTC cap enough to comment on it. It's pretty mathematically complicated, and shit like that is too much of a buzz kill to think about in depth, or at all.

[bogan]

"Bitcoin is nearly opposite of a pyramid scheme in a mathematical sense. Because Bitcoins are algorithmically made scarce, no exponential benefit is derived from introducing new users to use of it. There is a quantitative benefit in having additional interest or demand, but this is in no way exponential."

I don't really understand the 21 (ish) million BTC cap enough to comment on it. It's pretty mathematically complicated, and shit like that is too much of a buzz kill to think about in depth, or at all.

"There is a quantitative benefit in having additional interest or demand, but this is in no way exponential." So it is a linear pyramid instead of an exponential one. Still means increasing demand increases value of a limited supply.