But there are 2.457 trillion USD, right now: http://www.federalreserve.gov/releases/H6/Current/ So if bitcoin were worth as much as the total USD in circulation, and the same amount of electricity percentage wise was used, it would use :
So if Bitcoin ever became as big as the USD, we'd need 10% USA's worth of power generation to support it 24/7, and given current average prices of 0.15 kilowatt hours, it would cost (91165 megawatts) * 1000 * 0.15 (kilowatt hours) * 24 (hours) = 91165 * 1000 * 0.15 * 24 = 328.2 Million dollars per day or 120 Billion dollars per year. (and miners would be making a revenue of 24*6*25 * 2.457 * 1000* 1000 * 1000 * 1000 / 11027500 = 802 Million dollars a day. I know that the bankers are stealing money from us, but still...)
Bitpay is available in every country in the world. Bitpay charges a flat 0.99% fee, as opposed to the 20% gouge that you seem to find acceptable, and the merchant can elect to receive the payment in their local currency if they wish. But the most important thing is that the buyer can be anywhere in the world and the merchant doesn't have to worry about fraud. How is that not better?
And I wasn't saying that bitcoin is susceptible to buyer's fraud. Quite the opposite, bitcoin protects against buyer fraud and is good at transactions where buyer fraud would otherwise be a problem.
You still didn't explain what you meant by effective medium of exchange. You compare bitcoin to the Turkish Lira, and yet still think bitcoin isn't an effective medium of exchange? Is the Turkish Lira not an effective medium of exchange?
What type of fraud are you talking about here? Due to the nature of Bitcoin it's pretty darn secure against bounced payments. It can't do anything after the transaction has taken place though. Bitpay doesn't seem to offer any kind of buyer's protection so how exactly does fraud come into this equation whatsoever? Moneybookers do the same thing but their fees cap out at 65 cents.
If people were to get their paychecks in bitcoins they might find it convenient, but the whole "use money to buy bitcoins, use bitcoins to buy stuff" model is more complicated than "use money to buy stuff".
Obviously, there are two types of fraud. Buyer fraud and seller fraud. I was talking about fraud by the buyer.
It's hardly a replacement for bitcoin. Here is what I get when I try to calculate fees for sending money from the United States "Due to legal restrictions, our services are not available for residents of United States of America. Please accept our apologies for this inconvenience! "
Here is a transfer of 10 Euro from the UK to Hong Kong:
Transfer Fee: 0.10EUR - Euro Total Payable: 10.10EUR - Euro Received amount : 6.50EUR - Euro
Send 10 Euro, receive 6.50? That's a little more than 65 cents. Moneybookers is just another confusing system with outrageous fees, in which bitcoin is a vast improvement.
I don't know what you mean by "effective medium of exchange" as contrasted with "favored medium of exchange for certain types of goods". And how does this apply to what I said?
And purely as a payment medium, the "low" 0.99% rates that bitpay advertises only look good if you've never looked any further than your credit card.
For the type of transactions that bitcoin is good for, where its difficult to defend against fraud, 1% is pretty darn low. Also, bitpay isn't bitcoin, there are a lot of other ways to acquire and sell bitcoin.
Anyone can start a new block chain, but bitcoin already has a ton of infrastructure and business built around it, which makes it the best choice for the transactions that it excels at, and helps strengthen its niche. A brand new virtual currency wouldn't have this.
You could say the same thing about fiat currencies today. Anyone can start a new physical currency, but it doesn't stop existing currencies from being worth something either.
What you are describing is exactly my point. USD has a transaction niche, you can buy and sell stuff with USD in the USA with no problem, but not so much in China. The transaction niche is what gives it value. In the past, currencies have all developed transaction niches because the governments imposed rules and regulations in the purpose of creating them. Bitcoin is different, since it has a natural transaction niche. No one had to set it up, or enforce it. It's just better at transferring funds around the world then any other currency. There are billion dollar businesses to accomplish this (ex. Western Union) and bitcoin does it faster, easier, and cheaper.
As long as there is a transaction niche (ie. as long as you are able to use a currency to perform a trade much easier and cheaper than using any other currency), someone somewhere will use it. Regardless if they pay $1 or $1000 for a gallon of milk, if that is the by far the easiest way to buy milk, then they'll go buy some dollars to go buy some milk. The same is true for Bitcoin.
Now imagine, millions of people coming to the same conclusion and using bitcoin for transactions where it is better than anything other. Those millions of people need to buy a certain amount of bitcoin to complete their purchases. That is what is referred to by the bitcoin economy.
The price is where it is, because many people believe the bitcoin economy will need a lot more BTC than it does today once more and more people start using it. There is the value, that's why its market cap is $1B or so and rising. Many people believe that the BTC economy will grow to this size and larger. There is the underlying basis.
The value of bitcoin is the transaction niche it fills. Same with USD, which is better for transactions such as buying food, gas, paying rent, etc. within the USA, and Argentine Pesos which are good for the same type of transactions in Argentina, Bitcoin is better for international transactions where with other payment instruments you are unable to completely eliminate the potential of fraud.
But instead of artificially creating a transactional niche as governments do, bitcoin has its niche simply because it's better than anything else for its own niche.
The value of a currency is not because you have "faith" in it (whatever that means). It's only valuable because it is the best (sometimes only) way to perform a transaction for something you care about.
Being novel isn't the only reason people buy things with it, however. With bitcoin you can be absolutely positively sure the person purchasing something with bitcoin is authorized to do so with a very minimal cost. With other forms of payment this is a horrendous problem and two people from distant parts of the globe always have to deal with., which comes as extremely high fees, fraud, or not being able to transact at all. So bitcoin opens up a huge market for this case for many businesses, especially those selling digital goods. I can't imagine this novelty purchasing is really responsible for the volume of transactions as you think it does. Mtgox currently trades $82M worth of bitcoin a month. How could this be mostly due to novelty?
Crashes is a bit of a misnomer. There really was only one big crash, and it fully recovered since then. And the crash may not be because it's deflationary. The stock of companies is deflationary, gold is nearly deflationary, yet there are examples of companies whether the volatility is far less than bitcoin, and gold has been valuable for thousands of years. This whole bit where governments prints more and more money and gives it to who they wish just so they can stabilize a currency is somewhat hard to believe.. Name one currency which the government failed to inflate and then which led to a deflationary spiral.
Bitcoin is still in it's infancy, and the market is still small, and just like the price of a small company, there is a lot of volatility, but if it continues to grow, it may reach a point where its fluctuations are much less noticeable. Besides, everything fluctuates to some degree, even currency, and people deal with it.
Would you take your salary or wage in Bitcoin? Keep in mind that you have to be able to pay your rent, taxes, utilities, gas, car maintenance, health care, and credit card bills with it. You could transfer it straight to your national currency, but then what's the point? It's just a really volatile way to get a paycheck. And if you therefore can't afford to live off Bitcoin, then what's the point of a currency?
Would I take my salary in bitcoin and then not convert any of it to my nation's currency? No, not yet. Also, there is a point to take my salary in bitcoin and transfer it to my nation's currency. If I worked for a foreign corporation and it was the cheapest and/or fastest way to send it, I would definitely consider it.
Well, the point is that all the problems with bitcoin were present throughout it's history, yet it still grows. I've read many economic so-called theories explaining how bitcoin will fail do to this or that, but I don't believe you can treat what economists say with the same weight as say a mathematician or physicist. The reason I say that is at heart economic models behavior of people. People who have brains that are so complex we are unable to reproduce even a very crude representation of. So, take a single ever so complex human brain and multiply it by a million, then add culture, history, language, superstitious beliefs, religion, advertising, geography, weather, etc, etc, etc. and you can see why I find it difficult that an economist can model anything with a hundred percent accuracy.
So I guess my point is that if bitcoin has not just survived but prospered over the 2 1/2 years of existence, and nothing significant is coming over the horizon to change this, I think that is better evidence for its continuous survival than some 100 year old economic "theories".
If you could explain why it's survived and grown as it did so far, and then further explained why it would fail from there, IMO your arguments would hold a lot more weight. Otherwise, it just sounds like you are trying to say bitcoin's behavior (past and present) is impossible and therefore it should fail any second now, without explaining the incongruity of that statement.
These sound like reasons why you think bitcoin should lose ground, or why you want it to lose ground, not proof that it is losing ground. Take a look here to see a graph of bitcoin trading activity:
It's obvious from the above that its usage has been increasing. Also, if you have a google alert on bitcoin you'd notice that these have been increasing as well, so the media is picking up on it.
What you are missing is that, as she writes in her blog post, http://butyoureagirl.com/14015/forking-and-dongle-jokes-dont-belong-at-tech-conferences/ she was wearing the hero cap when she outed those attendees on twitter. When she made that joke, she was wearing the naughty girl cap. There is no hypocrisy here, since she was only playing a part of hero in the first case, which is not always would do otherwise, when her desires of what character to be changes. Just like a cop doesn't always exhibit the same behavior when he is on duty and off duty.
Furthermore, although not perfect, Adria Richards is a much better arbitrator than the randomness of the universe. For example, if an animal was caught in a trap, the universe wouldn't do anything to prevent it from slowing starving to death. However, Adria Richards would release the animal, or at least kill it quickly with a rock (or communicate to someone about it to have it done by someone else), which is a much more compassionate outcome them leaving the animal to be judged by the randomness of the chaotic happenings in our world. Having Adria Richards judging and ruling and taking action on perceived crimes and injustice in a compassionate and from her perspective, a fair way, is better than the utter randomness and chaos of the universe, where one man can be a king, and his neighbor a beggar out of per happenstance.
Adria Richards is not perfect, of course, but the alternative is to live as beasts.
May Adria Richards always see you in a positive light. Adria Richards bless.
Considering the parabolic rise in price, and the ever increasing announcements of new businesses based around it, and existing businesses accepting it, how are bitcoins "losing ground"?
In the "move through space" sense, aren't we all circling the earth while stationary? Besides air resistance I don't really see a difference between a treadmill and walking on unmoving earth.
The reason for all that was because too many people bought it and it crashed their servers! All EA has to do is turn on the hype machine, and people will come flocking regardless of whatever happened in the past.
The problem is that can transactions can happen faster than the information that fraud occurred. If the coins are marked hot after the thieves already traded them, then the merchants they traded with are out of luck. This would cause merchants in general to be wary of accepting bitcoins, and bring up all the same problems we have with credit cards and other financial instruments today.
Slashdot Mirror
But there are 2.457 trillion USD, right now: http://www.federalreserve.gov/releases/H6/Current/
So if bitcoin were worth as much as the total USD in circulation, and the same amount of electricity percentage wise was used, it would use :
(2.457 Trillion USD in circulation) * 1000* 1000 * 1000 * 1000 / (11027500 total mined bitcoins) / (100 USD per bitcoin) * (982 / 24 megawatts) = /100 * 982/24 = 91,165 megawatts or 91.2 gigawatts!
2.457 * 1000* 1000 * 1000 * 1000 / 11027500
To put that in perspective, according to wikipedia: http://en.wikipedia.org/wiki/Electricity_sector_of_the_United_States
the total generative capacity for the USA is 1050 Gigawatts.
So if Bitcoin ever became as big as the USD, we'd need 10% USA's worth of power generation to support it 24/7, and given current average prices of 0.15 kilowatt hours, it would cost (91165 megawatts) * 1000 * 0.15 (kilowatt hours) * 24 (hours) = 91165 * 1000 * 0.15 * 24 = 328.2 Million dollars per day or 120 Billion dollars per year. (and miners would be making a revenue of 24*6*25 * 2.457 * 1000* 1000 * 1000 * 1000 / 11027500 = 802 Million dollars a day. I know that the bankers are stealing money from us, but still...)
Bitpay is available in every country in the world. Bitpay charges a flat 0.99% fee, as opposed to the 20% gouge that you seem to find acceptable, and the merchant can elect to receive the payment in their local currency if they wish. But the most important thing is that the buyer can be anywhere in the world and the merchant doesn't have to worry about fraud. How is that not better?
And I wasn't saying that bitcoin is susceptible to buyer's fraud. Quite the opposite, bitcoin protects against buyer fraud and is good at transactions where buyer fraud would otherwise be a problem.
I know him. He puts in a lot of effort. This is one of the few things that he is able in doing and he can feel an accomplishment about.
Nice attempt, keep trying!
You're wrong about the box cutters. Specifically called out and still banned.
http://www.tsa.gov/pil-sharpobjects
You still didn't explain what you meant by effective medium of exchange. You compare bitcoin to the Turkish Lira, and yet still think bitcoin isn't an effective medium of exchange? Is the Turkish Lira not an effective medium of exchange?
What type of fraud are you talking about here? Due to the nature of Bitcoin it's pretty darn secure against bounced payments. It can't do anything after the transaction has taken place though. Bitpay doesn't seem to offer any kind of buyer's protection so how exactly does fraud come into this equation whatsoever? Moneybookers do the same thing but their fees cap out at 65 cents.
If people were to get their paychecks in bitcoins they might find it convenient, but the whole "use money to buy bitcoins, use bitcoins to buy stuff" model is more complicated than "use money to buy stuff".
Obviously, there are two types of fraud. Buyer fraud and seller fraud. I was talking about fraud by the buyer.
I suppose you've used moneybookers. I checked it out: https://www.moneybookers.com/p2p/en/calculator/fees.pl
It's hardly a replacement for bitcoin. Here is what I get when I try to calculate fees for sending money from the United States "Due to legal restrictions, our services are not available for residents of United States of America. Please accept our apologies for this inconvenience! "
Here is a transfer of 10 Euro from the UK to Hong Kong:
Transfer Fee: 0.10EUR - Euro
Total Payable: 10.10EUR - Euro
Received amount : 6.50EUR - Euro
Send 10 Euro, receive 6.50? That's a little more than 65 cents. Moneybookers is just another confusing system with outrageous fees, in which bitcoin is a vast improvement.
Don't forget the SkyMall...
Why would you need a plane to fly at all, then?
I don't know what you mean by "effective medium of exchange" as contrasted with "favored medium of exchange for certain types of goods". And how does this apply to what I said?
And purely as a payment medium, the "low" 0.99% rates that bitpay advertises only look good if you've never looked any further than your credit card.
For the type of transactions that bitcoin is good for, where its difficult to defend against fraud, 1% is pretty darn low. Also, bitpay isn't bitcoin, there are a lot of other ways to acquire and sell bitcoin.
Didn't Einstein help develop the most devastating weapon mankind has ever known which has already killed millions of people? Doesn't seem so ethical.
Anyone can start a new block chain, but bitcoin already has a ton of infrastructure and business built around it, which makes it the best choice for the transactions that it excels at, and helps strengthen its niche. A brand new virtual currency wouldn't have this.
You could say the same thing about fiat currencies today. Anyone can start a new physical currency, but it doesn't stop existing currencies from being worth something either.
What you are describing is exactly my point. USD has a transaction niche, you can buy and sell stuff with USD in the USA with no problem, but not so much in China. The transaction niche is what gives it value. In the past, currencies have all developed transaction niches because the governments imposed rules and regulations in the purpose of creating them. Bitcoin is different, since it has a natural transaction niche. No one had to set it up, or enforce it. It's just better at transferring funds around the world then any other currency. There are billion dollar businesses to accomplish this (ex. Western Union) and bitcoin does it faster, easier, and cheaper.
As long as there is a transaction niche (ie. as long as you are able to use a currency to perform a trade much easier and cheaper than using any other currency), someone somewhere will use it. Regardless if they pay $1 or $1000 for a gallon of milk, if that is the by far the easiest way to buy milk, then they'll go buy some dollars to go buy some milk. The same is true for Bitcoin.
Now imagine, millions of people coming to the same conclusion and using bitcoin for transactions where it is better than anything other. Those millions of people need to buy a certain amount of bitcoin to complete their purchases. That is what is referred to by the bitcoin economy.
The price is where it is, because many people believe the bitcoin economy will need a lot more BTC than it does today once more and more people start using it. There is the value, that's why its market cap is $1B or so and rising. Many people believe that the BTC economy will grow to this size and larger. There is the underlying basis.
The value of bitcoin is the transaction niche it fills. Same with USD, which is better for transactions such as buying food, gas, paying rent, etc. within the USA, and Argentine Pesos which are good for the same type of transactions in Argentina, Bitcoin is better for international transactions where with other payment instruments you are unable to completely eliminate the potential of fraud.
But instead of artificially creating a transactional niche as governments do, bitcoin has its niche simply because it's better than anything else for its own niche.
The value of a currency is not because you have "faith" in it (whatever that means). It's only valuable because it is the best (sometimes only) way to perform a transaction for something you care about.
I agree, but I don't know why you wrote this as a reply to my post.
It's straight from the article. Take it up with the NYT
That was copied directly from TFA. Why don't you take it up with the New York Times?
Being novel isn't the only reason people buy things with it, however. With bitcoin you can be absolutely positively sure the person purchasing something with bitcoin is authorized to do so with a very minimal cost. With other forms of payment this is a horrendous problem and two people from distant parts of the globe always have to deal with., which comes as extremely high fees, fraud, or not being able to transact at all. So bitcoin opens up a huge market for this case for many businesses, especially those selling digital goods. I can't imagine this novelty purchasing is really responsible for the volume of transactions as you think it does. Mtgox currently trades $82M worth of bitcoin a month. How could this be mostly due to novelty?
Crashes is a bit of a misnomer. There really was only one big crash, and it fully recovered since then. And the crash may not be because it's deflationary. The stock of companies is deflationary, gold is nearly deflationary, yet there are examples of companies whether the volatility is far less than bitcoin, and gold has been valuable for thousands of years. This whole bit where governments prints more and more money and gives it to who they wish just so they can stabilize a currency is somewhat hard to believe.. Name one currency which the government failed to inflate and then which led to a deflationary spiral.
Bitcoin is still in it's infancy, and the market is still small, and just like the price of a small company, there is a lot of volatility, but if it continues to grow, it may reach a point where its fluctuations are much less noticeable. Besides, everything fluctuates to some degree, even currency, and people deal with it.
Would you take your salary or wage in Bitcoin? Keep in mind that you have to be able to pay your rent, taxes, utilities, gas, car maintenance, health care, and credit card bills with it. You could transfer it straight to your national currency, but then what's the point? It's just a really volatile way to get a paycheck. And if you therefore can't afford to live off Bitcoin, then what's the point of a currency?
Would I take my salary in bitcoin and then not convert any of it to my nation's currency? No, not yet. Also, there is a point to take my salary in bitcoin and transfer it to my nation's currency. If I worked for a foreign corporation and it was the cheapest and/or fastest way to send it, I would definitely consider it.
Well, the point is that all the problems with bitcoin were present throughout it's history, yet it still grows. I've read many economic so-called theories explaining how bitcoin will fail do to this or that, but I don't believe you can treat what economists say with the same weight as say a mathematician or physicist. The reason I say that is at heart economic models behavior of people. People who have brains that are so complex we are unable to reproduce even a very crude representation of. So, take a single ever so complex human brain and multiply it by a million, then add culture, history, language, superstitious beliefs, religion, advertising, geography, weather, etc, etc, etc. and you can see why I find it difficult that an economist can model anything with a hundred percent accuracy.
So I guess my point is that if bitcoin has not just survived but prospered over the 2 1/2 years of existence, and nothing significant is coming over the horizon to change this, I think that is better evidence for its continuous survival than some 100 year old economic "theories".
If you could explain why it's survived and grown as it did so far, and then further explained why it would fail from there, IMO your arguments would hold a lot more weight. Otherwise, it just sounds like you are trying to say bitcoin's behavior (past and present) is impossible and therefore it should fail any second now, without explaining the incongruity of that statement.
These sound like reasons why you think bitcoin should lose ground, or why you want it to lose ground, not proof that it is losing ground. Take a look here to see a graph of bitcoin trading activity:
http://blockchain.info/charts/bitcoin-days-destroyed-min-week?showDataPoints=false×pan=&daysAverageString=7&scale=0
And here is a graph of volume and price:
http://bitcoincharts.com/charts/mtgoxUSD#tgTzm1g10zm2g25zvzcv
It's obvious from the above that its usage has been increasing. Also, if you have a google alert on bitcoin you'd notice that these have been increasing as well, so the media is picking up on it.
What you are missing is that, as she writes in her blog post, http://butyoureagirl.com/14015/forking-and-dongle-jokes-dont-belong-at-tech-conferences/ she was wearing the hero cap when she outed those attendees on twitter. When she made that joke, she was wearing the naughty girl cap. There is no hypocrisy here, since she was only playing a part of hero in the first case, which is not always would do otherwise, when her desires of what character to be changes. Just like a cop doesn't always exhibit the same behavior when he is on duty and off duty.
Furthermore, although not perfect, Adria Richards is a much better arbitrator than the randomness of the universe. For example, if an animal was caught in a trap, the universe wouldn't do anything to prevent it from slowing starving to death. However, Adria Richards would release the animal, or at least kill it quickly with a rock (or communicate to someone about it to have it done by someone else), which is a much more compassionate outcome them leaving the animal to be judged by the randomness of the chaotic happenings in our world. Having Adria Richards judging and ruling and taking action on perceived crimes and injustice in a compassionate and from her perspective, a fair way, is better than the utter randomness and chaos of the universe, where one man can be a king, and his neighbor a beggar out of per happenstance.
Adria Richards is not perfect, of course, but the alternative is to live as beasts.
May Adria Richards always see you in a positive light. Adria Richards bless.
Considering the parabolic rise in price, and the ever increasing announcements of new businesses based around it, and existing businesses accepting it, how are bitcoins "losing ground"?
If a fiat currency ends, then it has become worthless. How else would that occur except through hyperinflation?
In the "move through space" sense, aren't we all circling the earth while stationary? Besides air resistance I don't really see a difference between a treadmill and walking on unmoving earth.
The reason for all that was because too many people bought it and it crashed their servers! All EA has to do is turn on the hype machine, and people will come flocking regardless of whatever happened in the past.
The problem is that can transactions can happen faster than the information that fraud occurred. If the coins are marked hot after the thieves already traded them, then the merchants they traded with are out of luck. This would cause merchants in general to be wary of accepting bitcoins, and bring up all the same problems we have with credit cards and other financial instruments today.