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Why Bitcoin Boomed During the Government Shutdown
Daniel_Stuckey writes "Just two weeks after the Feds shuttered the Silk Road, the notorious online drug bazaar, Bitcoin prices have touched a five-month high — with a single Bitcoin fetching nearly $156 on Tokyo-based exchange Mt. Gox. Bitcoin's resiliency can no longer be denied, especially as the digital currency continued its ascendancy even against the backdrop of a U.S. government in utter disarray. At the 11th hour of the crisis, President Obama signed a bill that ended the partial government shutdown and, more importantly, raised the debt ceiling, an arbitrary limit on the amount of money the country can borrow that would have been surpassed today. If Congress had failed to reach a deal and the U.S. was unable to pay its bills, the results might have been catastrophic, eclipsing the bankruptcy of Lehman Brothers five years ago, the domino that could trigger the worst financial crisis since the Great Depression."
How many people honestly understand the relationship between currency prices and the government shutdown? Very very few I would guess.
Gold dropped when the goverment was down and bounced back after the deal was signed. Why? Gold is supposed to be a safe harbour.
Does the author of TFA see BTC as the opposite of gold, or does he see BTC as filling the same kind of role as gold?
Or is this simply a case of making using hindsight to construct an argument that fits a general argument that BTC is worth investing in?
The recent price of Bitcoin has far more to do with explosive adoption in China than anything happening in the United States.
the domino that could trigger the worst financial crisis since the Great Depression
Since the US is so outrageously in debt and has no way to reduce it without selling the rest of the government assets, there's going to be plenty more opportunities for a global financial catastrophy. Then the knights in shining globalization armour will have the opportunity to save us all from terrible governmental mis-management, handing world power over to a single central body with another currency not backed by anything real or stable. Much in the same way as bitcoin isn't backed by anything real or stable, just demand.
This demand will continue to fluctuate wildly based on the extraction of gold deposits, the bribery of 13 lower house members of the United States congress and ancient religious predictions about the four horsemen of the apocolypse.
If Congress had failed to reach a deal and the U.S. was unable to pay its bills, the results might have been catastrophic, eclipsing the bankruptcy of Lehman Brothers five years ago, the domino that could trigger the worst financial crisis since the Great Depression."
Someone's been watching too much "news". The results wouldn't be catastrophic. They'd be annoying. Like everything else the government has done over the past decade. Catastrophic is the entire government collapses, food shortages and water become scarce, and people start killing one another in open anarchy.
Words. They mean shit, Slashdot. Choose them carefully.
#fuckbeta #iamslashdot #dicemustdie
Are you freaking kidding? Why is it that every half wit thinks that bitcoin is all about drug transactions and prostitution?
Insightful? That's pathetic. This guy is just saying something similar to 'nothing to hide, nothing to fear,' which is a notoriously illogical argument that imbeciles use.
Smart people -> Is the summary impaling the fate of the world rests on the USA forever borrowing money that it can never hope to pay back?
Your first statement is a rather unargumentative (i.e. no persuasiveness to it) comment. At least a few millions in America with millions in Europe and elsewhere nowadays care about currency devaluation and manipulation and that, if not formally declared then in substance that using fiat or legal currencies to store value means that they are slowly robbed. And I mean a few million ordinary people, while economists and businesspeople up-high care even more (short term at least). Plenty of people may care about it to attempt to hide money but given it's an open transactions system, using unmodified Bitcoin protocol is a bad idea for them. On the other hand, your second is quite good.
Intelligent idiots are we. | Evil men do not understand justice.
yeah. also, think of the children!
CLI paste? paste.pr0.tips!
OH well.. if we are in the simple business of making baseless assertions then let me make a contradictory one... i FEEL like you are wrong. Care to back your feelings up with anything that is actually worth refuting?
I use BitCoin to make donations to various Linux projects. That way when I download all those Linux ISOs on BitTorrent, I really feel like I'm sticking it to The Man.
Trolling is a art,
I meant 'implying'! Sorry.
You do not represent everyone's opinion. Bitcoin is booming right now. And the people who have their panties in a bunch are the ones still holding onto fiat thinking "the government will never inflate it that much".
Correction. Threatening not to raise the debt ceiling lead to a credit rating downgrade. Explicitly saying in public that you're thinking about not honoring your financial obligations does that.
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
They aren't even anonymous transactions... if you convert bitcoins to cash, that's a major weakness.
And they have a great use: eliminating payment processing costs. Those costs are distributed among the people who run the mining software.
You liar. The credit rating downgrade wasn't because we raised the ceiling, it was because the Republicans threatened not to.
The ratings agency EXPLICITLY SAID SO:
The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.
Banks made transferring out of MTGOX impossible, MTGOX refunded my $. They are about 8 weeks behind processing withdraws.
Bad news, banks and government attacking at same time interfered with each other.
Also, they had this guy, he sold drugs... lots of drugs... but did they bust him? Nope, they did an elaborate sting to bag him for something REALLY REALLY evil... (I hate drugs btw) Why? So he wouldn't be a martyr for free wealth exchange.
Also the whole BTC aren't totally anonymous thing is a good to know.
The mere observation that the bitcoin rose relatively to the dollar in a time of fiscal turmoil in the United States is not enough to establish a causal relationship of the type hinted at in the parent.
Besides, I find your "safe haven" theory questionable because bitcoins are still quite volatile. I simply don't see them as the conservative store of value during a crisis and think something like gold would be more suitable.
Don't blame me. I voted for John Kerry!
How many Bitcoin would it take to put a hit on Ted Cruz and his idiot cronies? Perhaps someone should take up a collection.
> Threatening not to raise the debt ceiling lead to a credit rating downgrade
[insert face palm here] Borrowing more money does not help your credit. The last time the US's credit was downgraded, it was because they did another huge round of borrowing.
No, you are the liar. The agencies that downgraded the US debt (and it is JUNK today, anybody who doesn't understand it has his or her head up their own asshole) were sued by the US gov't.
Of-course they were supposed to downgrade it to junk, the only agency that really downgraded the US bonds (Egan Jones) was stripped of their license to rate US debt. The sequester (cut to the spending) was the condition, the promise, under which the US gov't wouldn't be downgraded further (and eventually the worthless 'rating' agencies brought the US debt rating up again after getting scared of the feds and the SEC, etc.).
The Chinese don't want the US debt to grow, they just don't want the threat of not being paid what they are owed, so that's nonsense and that's why Chinese rating agencies downgraded US debt now, after the so called 'ceiling' was raised again.
The real crisis in USA is the debt, not the fake ceiling. The ceiling would have actually put a lid on ability of USA to continue running this enormous, biggest in history of the world ponzi scam, made up of the US bonds, dollars (the SS and Medicare are second in size ponzi scams after the bonds and the dollars).
USA is bankrupt, it can't pay its debts.
USA did NOT have to default on its creditors, 2300BILLION USD are collected per year by the feds, less than 300BILLION USD need to be paid out as the interest.
Obama, other politicians, the MSM all came out and told the bond holders: you are the low men on the totem pole, we won't pay you if we can't borrow more from you even though we collect almost 10 times the money in taxes that we need to pay you.
Anybody in their sane mind would see this as a direct threat against their assets (US bonds or dollars) if they have any and would immediately start unloading, but then again, this was obvious for a couple of decades now what is going on, specifically after the real default in 1971, when Nixon defaulted on the gold dollar.
The real story of-course is that USA is bankrupt, US bonds are junk, USA will never pay any of its debts and would rather cause massive inflation (maybe even hyper inflation) and the credit agencies are bought and paid for not to report that truth.
GS came out with a recommendation to dump the gold to its muppets^C^C^C^C^C 'investors'. Somebody was dumping large quantities of gold on the market of a few days straight, in an attempt to move the price down, most likely trying to weed out the weak hands so that they could buy much more back at lower prices.
Anyway, enjoy your Marxist/Keynesian ideology, certainly the only thing it will bring you will be a total economic and societal collapse, maybe that's your cup of tea of-course but you desire it so much, you should get to experience it.
You can't handle the truth.
So as new coins become rarer with the diminishing rate, there will be fewer miners, and that means more validating workload dumped on the miners still running, increasing their costs as their expected profit diminishes, right?
I have not paid much attention to the implementation of Bitcoin, rather focusing on the economic implications. What happens as miners drop off the network?
You do not have a moral or legal right to do absolutely anything you want.
The U.S. Government gets somewhere between $200 billion and $225 billion a month in tax payments. I forget the exact figure, but let's say debt payments are around $50 billion a month.
We would only default if we chose to pay our debt with the lowest priority.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
If people stop mining, then the currency stops being created... no matter - that will happen eventually anyway.. More likely, the price of bitcoins will continue to rise as usage does, and this will drive more people to mine. If usage does not increase, then who cares if they are mined or not?
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
If Congress had failed to reach a deal and the U.S. was unable to pay its bills, the results might have been catastrophic ...
While I realize that most /. synopses are just cut and pasted from the referenced article, it would nice if we could avoid clipping one-sided political hype at the same time. While a default might have been bad, there are many who believe that letting a man destroy the value of the dollar and the country by unchecked borrowing is even worse. This latest surrender by the Republicans tells him that there is really no limit to what he can spend. He can even borrow money from China and give it to China as "foreign aid".
I'm an American. I love this country and the freedoms that we used to have.
The algorithm compensates, and delivers bitcoins at a predicable rate, unlike the US government's payments. If miners drop out, those who remain split the spoils.
I sold all my coins and bought my wife a nice silicon-carbide necklace fashioned out of Cree's materials, for about $500. I don't feel good about the use bitcoins are being put to, even if I do support the freedom that untraceable electronic money represents.
Celebrate failure, and then learn from it - Nolan Bushnell
Sure they do. They benefit all of us who want to keep our dealings private or not be hostage of what a credit card company thinks we should be able to buy and where, for example. Yes, you can do all sorts of illegal things with bitcoin, but guess what the preferred currency for doing illegal things in the world? It is the dollar.
>Buying pirated software.
>Buying
>pirated software
ok
Marxist cake-eaters logging mock-panic to cement allegiance to their socialist mafia. Hark nerdary! Bow before your propagandist masters!
sounds like your problem is with all forms of cash
Are you retarded?
I thought this was an interesting take on Bitcoin:
http://ianso.blogspot.com/2013/10/bitcoin-as-law-enforcementnatsec.html
If people stop mining, each miner gets more per time interval. Which makes it very attractive to mine again. Its a self-regulating system.
Luddites control the media?
The internet for example, is for porn - http://www.youtube.com/watch?v=eWEjvCRPrCo
Part of the incentive for mining is also in earning transaction fees for confirming transactions.
USA did NOT have to default on its creditors, 2300BILLION USD are collected per year by the feds, less than 300BILLION USD need to be paid out as the interest.
Obama, other politicians, the MSM all came out and told the bond holders: you are the low men on the totem pole, we won't pay you if we can't borrow more from you even though we collect almost 10 times the money in taxes that we need to pay you.
Anybody in their sane mind would see this as a direct threat against their assets (US bonds or dollars) if they have any and would immediately start unloading, but then again, this was obvious for a couple of decades now what is going on, specifically after the real default in 1971, when Nixon defaulted on the gold dollar.
Apparently you got downmodded for speaking the truth.
Nice username to go with that statement.
In summary, the United States' debt is junk. Also, they have plenty of money to make the payments. Thank you, Roman--you make a compelling argument and in no way sound like a crazy person.
You can't spell "oneiromancy" without "roman".
In 1995, Republicans were almost able to pass a Balanced-Budget Amendment (which would have needed ratification by the states). After passing in the House, it fell one vote short of the two-thirds needed. Senate Republicans voted for it 52-1. Democrats voted against it 33-14. Of course.
Go stuff a fucking gold bar up your ass already. Get that through your tiny fucking brain: no one takes your voodoo Austrian economic crap seriously. No one. It's not real. It's not valid. So just sit there and let some people capable of abstract thought do the thinking.
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The difficulty parameter autoadjusts depending on the number of miners. Less miners = easier difficulty.
There should always be a new block every 10 mins (on average).
Also while the benefits of mining diminish, the 'fees' should increase with the use of bitcoin.
At some point the fees overtake the benefit of finding a new block.
Remember the fees get paid to the block finder.
Why the heck is this summary about 1/3rd's about bitcoin, and 2/3rd yet another reposting of the government shutdown conclusion?
Or maybe because what I buy is my business and my business alone? Without anonymity, it makes it trivial for people to track my purchases. If people can track my purchases, they can target me for their sales campaigns in order to try and manipulate me into giving them more money, Since I'm not terribly fond of being manipulated, nor am I terribly fond of junk mail or spam, I prefer my transactions to be as anonymous as possible.
But yeah, I guess you're right, it's all about the hookers and blow, Couldn't possibly be any other reason I don't want folks up in my business.
Right. China has tight exchange controls - it take special permission from the State Ministry for Foreign Exchange to exchange yuan for dollars, euros, or yen. But at present, China residents can buy Bitcoins with yuan. They can also sell Bitcoins for dollars, bypassing exchange controls. So if you've made money in China and want, say, to buy an apartment in London, Bitcoin provides a way to bypass the government exchange controls.
That seems to be what's pushing up the price of Bitcoin. The volume on exchanges in China is way up, while volume at Mt.Gox is way down.
However, there's no guarantee that this situation will last. The People's Bank of China can change this policy at any time. There's plenty of info available about PBOC policy; it's as least as important as US Fed policy. But that's enough for Slashdot readers.
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16ruGpyLDdD2dHvvgT8nHQt2vZJCj13sJm
you know what to do...
why do I want some hacker to know I bought an e cig just because the gov thinks it needs to track everything?
Blame Silk Road?
As opposed to all of that nice, clean cash in your wallet, which very likely carries only trace amounts of cocaine?
Il n'y a pas de Planet B.
Wut.
Embedding every transaction you ever make with bitcoin into the public block chain that everybody in the world has a copy of, forever... is somehow "keeping your dealings private?"
"Hey guys, here's a copy of my check register. Why don't you check out what I've been doing with my money since i started using bit coins?!"
And bitcoin fails to offer you anything resembling anonymity, or proof against tracking.
So why do you have such a raging hardon for bitcoins?
You want untrackable? cash or barter, motherfucker. And even then, you better hope the people you deal with have some sort of memory syndrome that causes them to forget everything about 5 minutes after it happens.
Swiss banks now making financial data available to governments. Switching to bitcoin as an anonymous alternative is inevitable.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Despite your feeble attempts to trivialize the process, it adds considerable difficulties to identify the owner. Depending on the way you acquire it and the transactions you make it goes from very unlikely to be identified, to at least significantly harder to identify than any bank operation.
"with a single Bitcoin fetching nearly $156 on Tokyo-based exchange"
So some idiot bid one up cuz he had to have one.....
At the same time what was the average price?? Ofr disclosing that would make this a NON-story ???
Let me know when 1000s are being traded at that rate.
Hey all you dolts out there, I have a new vaporous currency TURD_COINs ready for you all to buy with lots of lovely real money.
They are self limiting as they deteriorate unless they get encased in plastic so they will definitely keep their rarity....
BitCoins - a swindle the fools are afraid to admit to falling for....
If people stop mining, each miner gets more per time interval. Which makes it very attractive to mine again. Its a self-regulating system.
Unless there are no more coins left, at which point the miners will only do verification. It's probable that the mining network will shrink to a fraction of its current size as miners realise that it's not profitable to run that rig just for a percentage of transactions.
I'm a minority race. Save your vitriol for white people.
its useless to argue with buttcoiners, they are truly drinking that kool aid
That "percentage" is not an actual percentage, but a minimum fee you have to pay for a miner to accept your transaction into their verification process... and each miner can set their own.
When miners become scarce, the remaining ones can rake up higher amounts of transactions with higher fees, set by themselves to be always higher than what they would consider as a profitable minimum.
The dept ceiling is an arbitrary limit. However, there is unfortunately nothing arbitrary about the US rapidly becoming incapable of handling it's depth. While I despise many of the things republicans stand for, I cannot fail to see the irony of how the current democratic presidency (as well as Bush I suspect) overspend ridiculously.
No, but someone who pays for pirated software is.
I note when RIAA went after Napster, they got the US to shut them down, even if they were doing business out of Australia.
There are several nations around the world who unabashedly represent themselves as "tax havens" for the world's wealthy. Yet I note my own government (USA) lets it slide.
There is no way I have any confidence in anything they say about not having money to pay the bills. They just seem to me like a bully running an extortion racket against those who are too small to protect themselves. Besides, the government runs the printing press and can simply legislate whatever they want, unlike the little guy who has to do whatever he has to do in order to survive.
they will have to either change it or relax yuan export controls.
which they just as well might because it would make it simpler to buy material goods and bring them to china.
world was created 5 seconds before this post as it is.
Now I know what "triple-A" means: the sound of falling into the debt abyss: AAA...
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
Wow! Holy confirmation bias batman! The mental gymnastics required to spew that revisionist version of history boggles my mind! That has been your interpretation of the recent episodes of debt ceiling chicken? I was with the Tea Party back when they were underground(back before Glen Beck started wearing glasses and dressing up like a frog-boiling-Nazi). They have completely lost touch with reality in their little isolated echo-chamber of group think. In late 2009 all of the neo-cons started throwing around the acronym "RINO" and dressing up like colonialists. It was really sad to see a movement that was essentially started by Ron Paul hijacked by the same morons who collected Yellow Ribbon bumper-stickers/car magnets in 2003-2006. These retards were all for blowing money out of our collective-ass on cruise missile strikes on tents in the desert and paying survivors benefits to families of the veterans who they enthusiastically pinned targets on when they put them to work as rent-a-cops in the middle of a civil war. The minute O-bummer takes office they're suddenly fiscal conservatives/deficit hawks despite the deficit decelerating from the freefall that GWB set us down.
Here's a crazy idea: next time the Tea Party wants to extort terms from a Debt Ceiling, why don't they offer the Democrats a proposal to cut the F-35, defund "foreign aid"(IE. economic sabotage), close foreign military bases, increase VA benefits, remove tax exemptions for religious organizations, remove mortgage exemptions for 2nd & 3rd houses, increase the federal minimum wage(increasing income tax revenues in the process), and removing oil subsidies?
Oh, that's right! Because ever since faux conservatives like Michelle Bachmann turned the Tea Party in to a circle-jerk of Koch Bros. astroturfing, the Tea Party hasn't stood for anything other than the most regressive aspects of small government that exacerbate the plutocracy and increase the deficit by attacking high ROI social programs while doing little to nothing about tax loop holes or increasing revenues.
If the Tea Party wants to run the Government like a business, then they are clearly modeling their approach on the corporate leadership of Hewlett Packard.
"Republican In Name Only" my ass. The entire party has given itself a lobotomy trying to ignite enthusiasm in their aging and increasingly irrelevant base: xenophobic, morally-conservative, religious nut-jobs with an itchy trigger finger on the money furnace labeled "military intervention". Their obsession with free-markets only extends as far as obstructing government intervention where blatant externalizes are socializing the risk of privatized profits. They are nowhere to be found when it comes to cutting back the portions of military industrial gravy train or special treatments in the tax base.
If the average schmuck was allowed to deduct living expenses in the same way that businesses get away with itemizing every bottle of Dasani they give to clients during a game of golf, the tax base would instantly topple over on to the top 1% of the country that own the majority of all private assets.
It's all bread and circuses to keep us distracted from the fact that the tax codes are deliberately obtuse to create make-work for accountants and lawyers. Hired guns in the process of liquidating public assets and funneling them to the private slush funds of our corporate oligarchs. If the Tea Party had the intellectual honesty to recognize that they were useful idiots buying the GHB being used to fuck them while they're obliviously offering to fetch the lube, they would see that the invisible hand rhetoric is a one-way street that only gets trotted-out when it suits the interests of the wealthy. Small government as it applies to increasing the wealth gap, and a devil-may-care attitude when it comes to policies that increase that same GAP.
But hey: good luck with the costume parties at town halls and that whole Posse Comitatus thing. Let me know if your strawman arguments get you out of any speeding/parkin
Okay, this is bothering me for some time. A friend told me during the shutdown that the government could, as a last resort, create a trillion dollar coin (or some such amount) and start paying their debts without congressional oversight. He also claimed that this method would have had essentially no bad effects on the economy and was just a way to circumvent the debt ceiling. Is that true? Can someone explain to me in layman's terms how it would work?
Obviously, if that was so easy they'd have done it, so there is a catch, isn't there?
I think the reason why GP is currently at "-1 Troll" is that the first line of the post says that US Treasury bonds have junk status. When you lead with an easily verifiable, factually incorrect statement like that, nobody will take you seriously.
But since there is, apparently, a large crowd (including several senators) who believe that the rest of what he wrote is "the truth". I will try to respond.
Yes, it is true that the US, like most other countries, will never pay off its debt. The way fiat currency works is that inflation continously transfers wealth from those who save to those who borrow. This means that if you have the credibiliity to be able to borrow, then you should do so. The federal government has this credibility, and therefore it is more profitable for it to invest in things like infrastructure and education than to pay off debt. (Even feeding the poor can be seen as an investment, because they will likely generate tax revenue in the future.)
I personally dislike the idea of fiat currency. I think it is deeply unfair the way we transfer wealth from those who cannot borrow to those who can. But since those are the rules we play by, I do the best of the situation and borrow to invest. The US government would be stupid not to do the same thing.
The idea that the US could keep paying interest on its debt, without raising the debt cieling (popularly known as "prioritization") is simply false. Even if it were legal (which it is not) it wouldn't work. If the federal government stopped paying any of its bills, then the credibilty that allows it to borrow cheaply would be destroyed. At that point, you get the equvalent of a run on the bank. It would not be a matter of paying $300 billion per year in interest, but instead repaying the principal at a rate of $5 000 billion per year, which would cause bankrupcy in a matter of weeks even if all other payments are halted.
Because, like I said, anonymous transactions do not benefit ANYONE, except those who wish to hide their transactions. Why would they want to hide their transaction? To hide the activities for which such transactions have taken place.
Example: Selling drugs. Buying drugs. Buying guns. Selling guns. Selling pirated software. Buying pirated software. And of course, reaping investments without paying income tax, aka TAX EVASION. As well as building up ponzi schemes, of course.
I guess you want to outlaw cold hard cash too then, eh?
Or maybe because what I buy is my business and my business alone? ... Couldn't possibly be any other reason I don't want folks up in my business.
Well, if you don't want anyone else in your business, and what you buy is your own business, then you're buying from yourself... I imagine the "employee discount" is amazing.
Yes, Hi "gapagos".
"Anonymous transactions do not benefit anyone", hmm? Give me your name and address right now. I will drive over and say hello.
Unless you decide that "anonymous" has its uses.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
that i may abandon all trade the US Federal Reserve Notes and do all my buying & selling in BitCoin,
fuck the govt, they are a bunch of mooching criminals, and i dont approve of what they spend the tax revenue they collect,
Politics is Treachery, Religion is Brainwashing
How did we get from
And they have a great use: eliminating payment processing costs. Those costs are distributed among the people who run the mining software.
to
That "percentage" is not an actual percentage, but a minimum fee you have to pay for a miner to accept your transaction into their verification process... and each miner can set their own.
in just 5 posts?
No wonder I haven't grokked bitcoin yet.
The algorithm compensates, and delivers bitcoins at a predicable rate, unlike the US government's payments.
Really? Because it seems to me that until the government actually does default, their payments will be on the exact schedule they set.
Actually, miner workload stays the same while profit increases, due to collecting transaction fees from more transactions.
Well, as we're demonstrating here, you can't predict the economic implications of a thing without having at least some idea of how the thing functions. So maybe you should start researching the things you want to make predictions about, be they Bitcoin or anything else.
If miners drop off the network, the total hash rate of the network goes down and blocks start taking longer to find, causing their difficulty to drop, making it easier for a blockchain fork to supplant the current one, making cancellation of transactions with many confirmations somewhat less implausible. But not so much that scammers would bother - it still makes more economic sense to try to collect transaction fees through honest mining even when coinbase reaches zero.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
They should be careful though. Bitcoin transactions aren't that anonymous - assuming the typical competency of most people at hiding their tracks in practice...
They are analogous to email addresses in anonymity. Keep using the same address in certain ways at certain places at certain times for certain things and someone really interested might be able to figure out who you are.
I am not sure what the issue is. You can send an unlimited amount of bitcoin for a fee of .0005 BTC which is less then 10cents. Pay 10k with Mastercard and they take a 3% cut. ($300)
Nobody uses cold hard cash anymore, except people who have a reason to hide where their money goes. E.g. drug dealers and pirates.
See how easy that is to turn around? There is a need for a currency that can be used without giving a cut to major payment processors, I am surprised that you cannot understand that.
Bitcoin value as an anonymous way to pay for things is dubious at best. Every transaction is logged in the blockchain. It is easier to trace then cash. The real advantage is in frictionless payments (i.e. cutting out money processors like visa, paypal or even western union). You should take the time to learn about something rather then spewing out your nonsense. The bitcoin protocol itself can even be leveraged for other uses besides currency. There are many many legit uses of bitcoin. You can buy all kinds of legal goods with it and is not diminished because criminals use it. With that line of thinking we should outlaw cash which is ridiculous.
I would be scared if I didn't have some Bitcoins right now. If they go to zero, oh well.. If they get adopted as a major international currency, then I completely miss out by not having them now.
There will never be enough Bitcoins for everyone to have one. If they do catch on, each one will be worth a fortune. So far, no government has been able to figure out a way to shut them down. Large governments such as China and Germany have announced no intentions against Bitcoin. It makes me believe the people that are Bitcoins' biggest detractors are the ones that don't own any yet.
The media tries to associate Bitcoin with lawbreakers and it calls it an insanely risky bet. But, the media does everything it can to preserve the status quo. Then, limit your risks.. You cannot risk more than the price you pay for the Bitcoins. I think it is a bigger risk to decide you will completely ignore the obvious next form of currency.
--- We need more Ron Paul!
Grow dope and mine Bitcoins, fuck the feds.
"If any question why we died, Tell them because our fathers lied."
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Bingo. My children owe $50K each in debt, which my generation will not pay.
I wish someone would stop propagating this lie.
Not raising the debt ceiling means that the government would have to do something many of us do all the time; live within its means. On a monthly basis we bring in 10 times more revenue than necessary to service the debt. Another 10% of the monthly revenue would service pensions and other such obligations. There's plenty of money for the basics including granny's Social Security, Medicare, Medicaid, etc. But there won't be enough money for all the less-than-essential bureaucracy, subsidies to political allies, government-backed loans for this or that, the gaggle of entitlements, ad nauseum. That's why we saw the political equivalent of the tantrum when an addict sees all the people in the room and knows he's in for an intervention.
Only if the President instructs the Treasury Department NOT to service the debt do we ACTUALLY go into default. At which point he runs afoul of this 14th Amendment, at which point he could very well be impeached. Again, we only go into default if the President wants to.
"Now, I doubt any of you would prefer a rolled up newspaper as a weapon against a dictator or a criminal intruder."
I'm waiting for a big-name, trusted bank, insurance company, or sovereign state to print "Bitcoin Certificates" that are designed to be used as spending money (i.e. not just as a stuff-in-the-mattress currency) backed by BC, similar to the Gold and Silver certificates of days gone by.
Speaking of which, it would be nice to have Gold and Silver Certificates redeemable for a specific quantity of gold as well.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
It's happening again. Americans are bailing out and buying property in Canada to save their life-time investments from falling through the floor. Prince Edward Island is the place they are flocking to. Almost half of all properties, and most of the waterfront, is owned by Americans already. Not necessarily as places to live but just vacation homes and places to go when the end arrives south of the border. It's just a matter of time. How much longer can Americans keep borrowing and not paying back? It doesn't matter which government is in power, there's nothing that can be done to save that country.
Right. China has tight exchange controls - it take special permission from the State Ministry for Foreign Exchange to exchange yuan for dollars, euros, or yen. But at present, China residents can buy Bitcoins with yuan. They can also sell Bitcoins for dollars, bypassing exchange controls. So if you've made money in China and want, say, to buy an apartment in London, Bitcoin provides a way to bypass the government exchange controls.
Once again, Bticoin's main use seems to be money laundering. One problem with your scenario. For every trade there must be someone on the other side of the trade. People willing to take what in your estimation is a very bad deal. Trades don't usually work like that, so who is ending up with yuan instead of dollars?
The amount of currency in an economy is a political issue. The amount of value in an economy is an economic issue.
In particular, the millionaires are not being slowly robbed by governments. They are being slowly robbed by the devaluation of economies as objects of value break down. This would happen whether they hold cash or not. Whether governments respond by printing money or not. Government action is simply the most efficacious form of correcting what the market cannot. The market cannot correct for scarcity rent.
Let's say your dad worked at a Ford plant in the 1950s. And he made thousands of cars and saved thousands of dollars. Notionally, the value of those dollars is backed by the cars he made. And those cars don't exist anymore. The nominal dollars are not backed by value, which has been removed from the economy by the physical force of decay.
*Reading Reading Reading* Cunnilingus! My what a surprise.
Also, they had this guy, he sold drugs... lots of drugs... but did they bust him? Nope, they did an elaborate sting to bag him for something REALLY REALLY evil... (I hate drugs btw) Why? So he wouldn't be a martyr for free wealth exchange.
Police/prosecutors commonly initially charge someone with crimes they think they have a high chance of conviction on, to keep them locked up, enable search warrants where additional evidence is collected, stings are set up, etc.
The case on more complex charges gets built in the meantime, further investigation happens, etc. If they charge him with drug crimes now, they might have to expose evidence that tips their hat to a number of people. They're probably much more interested in the people distributing/dealing, and more serious crimes (like if anyone was offering explosives, killing, etc.)
Please help metamoderate.
so who is ending up with yuan instead of dollars?
People who want to buy goods priced in yuan. China's exchange-control scheme allows flows of yuan for sales of goods. But "capital flows" and external debts in yuan are tightly controlled. It's possible to try to evade the exchange controls by selling goods in exchange for something else, like real estate. But trading a container load of manufactured goods for a house in London is difficult to arrange and involves high conversion costs if you're not in the export business. Bitcoins are more portable.
Whether the People's Bank of China will do something about this remains to be seen. So far, the CNY/USD rates on the Bitcoin exchanges remain close to the official exchange rate. So this isn't a strain on official exchange rates, which is their top priority. Bitcoin is just too tiny to affect exchange rates between the two biggest economies on the planet.
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You mean just like cash, at least in amounts > $10,000, in the U.S.?
"the domino that could trigger the worst financial crisis since the Great Depression"
Huh, we're getting a surprising number of these 'worst financial crisis since the Great Depression' things lately. I know, let's spend more money. That's what I keep hearing will solve the problem.
Lets see if I understand it correctly. I can wait until there are no more unmined btc. At that point the miner's only reason to continue mining is to get his fixed fee for verification. I can then spend a few thousand on mining rigs and provide the lowest fee (or for free) for verification, thus making it financially unfeasible for the existing miners to continue. In a few months of running at a loss I *should* be controlling more than 51% of the network because all the other miners have quit.
At that point the entire btc concept breaks down. I can seize coins (by never verifying them), transfer coins to myself, reverse verified transactions and possibly even "magically" create new bitcoins that I then proceed to verify.
I'm a minority race. Save your vitriol for white people.
Which helps your credit less?
A) Borrowing money.
B) Saying that you are not going to repay your creditors.
I'm pretty sure the answer is (B).
Holy crap, did you read S&P statement on the reason for the downgrade? They explicitly wrote that threatening not to raise the debt ceiling was the reason for the downgrade.
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
I always love this line of reasoning. "Every fiat currency in history has failed. Except for the ones that haven't. Therefore, all of the currencies that haven't failed will eventually fail." I suppose it's trivially true that everything we build will fail sometime before the heat death of the universe.
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
Except you don't get to set what transaction fee you charge for processing them. The fee per transaction is defined here: https://en.bitcoin.it/wiki/Transaction_fees
If patriotism is racist, is racism patriotic?
Actually, I normally don't like BitCoin, but for microtransactions, it is the only currency that can be broken up finely up for sub-cent items. The fact that block chains are public also helps because if there is any issues with the IRS, the info is there and auditable.
The main importance of alternative currencies is to allow economic exchange to proceed, even if things go wrong with the official currencies. And what could possibly go wrong with them?
Are you sure you have this right ?
My understanding is the difficulty increases as the limited block range pool gets exhausted, kind of like a quadratic, it just so happens over time that the number of folks mining and the mining performance has also increased.
The fee's get paid to parties involved in signing a transaction. The longer the transaction history of the block the more computationally expensive it is to assist signing. Multiple nodes need to sign a transaction before a systemic consensus is reached that the bitcoin did change possession (i.e. proof of spending) and also ensure double spending is difficult. So over time no one will sign transactions for free, since they become computationally expensive.
The original block finder simply got to spend that block first, he needed other nodes to sign this spending and he may have needed to pay fees to those signing nodes as well as the bulk to the receiving node.
There is no situation that all fees for the infinite lifetime of the block get paid to the original finder. (This is my interpretation of your comment).
My knowledge of bitcoin is very limited and it has been a while since I first looked up on what it is. Please feel free to correct me.
Because it's the propaganda spread by Federal law enforcement to get people "not to care" about something that is only used for such. That way, they have far more freedom trample on rights w/o the public at large being shocked or as upset...
I'm sure the ""Federated"-LargeBankClub (sometimes called the Federal Reserve Board, or "the Fed", like it has anything to do with the Federal government) is also trying to manipulate public perception. If they lost control of both issuing and constantly devaluing the currency -- and a currency like Bitcoin was perceived as not devaluing, (relative to other currencies), then deliberately devalued currencies (like the dollar -- usually only 2-3%/year, but, since Bush handed over ~ 50% of a years budget to his finance buds, it's been closer to double that (~6%/year).
The standard of living in the US as a whole continues to drop as we are told that a shrinking dollar is really "flat" inflation... yeah, right.
Now try to buy foreign-made products that would normally have gotten cheaper over the past 6-7 years as tech ages and becomes cheaper to produce. Instead of that -- prices have remained flat or gone up in areas where before there were about 15-20% price drops/year (as measured in $$/constant unit, where constant unit= things like CPU seconds (of some fixed generation), or $$/processor, or $$/diskspace unit, or memory... you name it, hasn't dropped nearly as much as before we were Bush-Wacked!
Unlike printing dollars.
I can then spend a few thousand on mining rigs and provide the lowest fee (or for free) for verification, thus making it financially unfeasible for the existing miners to continue.
That's probably closer to "a few million", plus ongoing costs, if you want to have enough mining capacity for your fee schedule to make any difference. Keep in mind that if you only control 1% of the network, you will only solve 1% of the blocks and your users would have to be willing to wait 100x as long, on average, for verification. The transactions don't automatically go to the miners with the lowest fees. To ensure inclusion in the next block or two, users would still need to attach a fee acceptable to >=50% of the mining network.
In a few months of running at a loss I *should* be controlling more than 51% of the network because all the other miners have quit.
At that point the entire btc concept breaks down. I can seize coins (by never verifying them), transfer coins to myself, reverse verified transactions and possibly even "magically" create new bitcoins that I then proceed to verify.
A 51% attack doesn't let you do most of those things. You can choose not to include specific transactions in the blocks you mine, but others can still include them and you would have to spend extra resources to replace those blocks with your own. Reversing verified transactions, while possible, still requires resources which increase exponentially with the depth of the transaction in the block chain. You can't transfer anyone else's coins to yourself without their private keys, regardless of how much of the mining network you control, and if you fail to adhere to the coin-creation schedule specified in the protocol then no one else will recognize your blocks, rendering them worthless.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
My understanding is the difficulty increases as the limited block range pool gets exhausted, kind of like a quadratic, it just so happens over time that the number of folks mining and the mining performance has also increased.
No, the GP is correct. The difficulty is adjusted every 2016 blocks based on the difference between the actual time and expected time (two weeks), targeting an average of 10 minutes per block. More miners mean this checkpoint is reached sooner, causing the difficulty to increase, and vice-versa for fewer miners. The quadratic decay, and the limit on the total number of bitcoins, come from the block reward dividing in half every 210,000 blocks (about four years).
There is no situation that all fees for the infinite lifetime of the block get paid to the original finder.
All the fees "for the infinite lifetime of the block" are determined from the transactions in the block when it's solved; all these fees immediately go to the original finder. Any fees for later transactions which build on the transactions in a block (including the coinbase transaction with the reward for solving the block) will go to the finder of the later block which includes those transactions, not the finder of the original block.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat