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Bitcoin Circulation Hits Record High Of $14 Billion (theguardian.com)
Bitcoin, the digital currency that most people have never actually used, has hit a record value of $14 billion after jumping 5 percent on Thursday. From a report on The Guardian: The price of one bitcoin reached $875 on the Europe-based Bitstamp exchange, its strongest level since January 2014, putting the cryptocurrency on track for its best daily performance in six months. That compared with levels around $435 at the start of the year, with many experts linking bitcoin's rise with the steady depreciation of the Chinese yuan, which has slid almost 7% in 2016. Data shows the majority of bitcoin trading is done in China, so any increase in demand from there tends to have a significant impact on the price.
I'm still waiting for a government or national-bank to issue blockchain-based currency that is backed by a familiar, tangible asset such as gold, silver, or the local fiat currency.
Unlike bitcoin, this would be a "captive" coin and it would not have many of the benefits of bitcoin and the like.
But here is what it would have:
* Stable value: Like currency or metal, a "bit-buck" is worth $1 and it always will be and a "bit-troy-ounce of gold" is worth 1 troy ounce of gold and it always will be.
* Built-in: In most industrialized countries, most people trust the national bank and the government when it comes to currency issues. I'm not saying they should, only that they typically do.
* Like bitcoin, you can trade with it without having a bank account or having to carry cash.
* You can trade "whole wallets" many times in a way that is free of any record-keeping except by the final recipient, who will want to transfer the money to his own wallet and at the same time verify that the wallet he received is legit.
* It's a backdoor to increased use of BitCoin etc.: It would encourage people to install software that make using it easy. Presumably, this software would also work with BitCoin and other non-backed coins, so their use will also presumably increase.
* As "Novelty use local currency" it can boost local pride. Think "college campus bucks" or "state fair dollars."
There is one major disadvantage:
To work right, there must be excess dollars or gold or whatever to cover newly-mined coins, or the coins must be "pre-mined" which means someone will have to cover the transaction costs. To be acceptable to the general public, there must not be any transaction fees. This means that in practice, the state or bank holding the reserves will need to pay the transaction fees or be constanty adding to the "backing reserve" until the coin is fully mined.
Yes, I know there are strong arguments why backing the blockchain with assets helps rather than hurts, but for applications where you need stability, it's a big win.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Beanie-babies would work just as well for currency. (maybe better).
game points that currently can be converted to currency, value of which might drop to zero by various state actions suddenly, yes
Kinda like anything other currency. Like the Deutchmark in the 30s, or currently the Venezuelan Bolivar?
All currency (including gold) is an agreement between people that something has value. Bitcoin is no different. You're under the illusion that money is real, which it isn't. It's all a collective, convenient illusion.
Con artists and marks (of various varieties).
The exchanges fake transactions, fake liquidity, then claim to have been hacked while they take off with your real money. (SFYL)
The middlemen pretend to use Bitcoin but are actually more like unregulated online payment processors (these exist mostly because Bitcoin itself doesn't work well and most users are clueless enough that pretending to use Bitcoin is good enough for them)
The 'whales' who actually have enough Bitcoin they can move the market around. They don't have to predict the market, they ARE the market, and by cycling the price they can milk cash out of a lot of idiots.
There's the enthusiasts who have just discovered the concept but haven't dug deep enough into to figure out why it doesn't work.
There are all sorts of political weirdos who think it'll survive as the currency that remains after the global economic system fails. Because after a complete global meltdown, there will still be a functioning, undivided Internet.
The greedy folk who think they can avoid taxes. Or predict the market and get rich (see 'whales' above as to why this would require a lot of luck).
It soars because people are stupid, selfish, self-deluding, and greedy. But it does not soar in a way that anyone not in at the top level of it will make any money on any real scale except by the wildest of luck.
There is little point in using bitcoins for normal everyday business-to-consumer transactions. So most people do not, and maybe never will, use them. But there are still uses for bitcoins. My company employs a graphic artist living in Karachi. The transaction costs of transferring and converting dollars to pak-rupees are exorbitant. So we pay her in bitcoins. It works well, and, since it is below the radar, we don't have to worry about the 35% tax that our soon-to-be-president will impose on offshoring.
Gold is also going up, and trust in currency is going way down.
I keep hearing about how trust in currency is going "way down." I'd really, honestly like to see a study showing how many people pay their mortgages, gas, and grocery bills entirely with Bitcoin (or gold bars). If those people (if they exist) truly don't trust the currency, then their day-to-day lives must be terrifying.
Breakfast served all day!
What if your bank or government decides to freeze your funds and then sue you?
Lol, like they wouldn't be able to prevent you from fiddling around with your bitcoins?
Better yet, can you buy a plane ticket with bitcoins to flee the country or make your house payment? Can you go to the grocery store and buy food with bitcoins? Can you buy a gun or gasoline with bitcoins? Will your lawyer accept bitcoins? No, no, no, no, no, and probably no.
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With Bitcoin, your security is in your own hands.
As we've seen, with Bitcoin, your security is in anything but your own hands.
Mt. Gox, Bitstamp, Bter, Mycoin, Gatecoin, Exco.in, Poloniex, Justcoin, Cavirtex, Cryptsy, Bitfinex, Neo & Bee, BIPS, Flexcoin, PicoStocks, Kipcoin, CryptoRush, ShapeShift, Blockchain.info, Moolah, MintPal, bitXoin...tell me again how the security was in the hands of the owners of those bitcoins?
Just cruising through this digital world at 33 1/3 rpm...