Skip to comments.The Bitcoin Beat Friday, Apr 12, 2013
Posted on 04/12/2013 11:33:56 PM PDT by djf
In the past two versions of this thread, I have started by posting the current, high, and low price quotes for the two most popular E-coins, BTC (Bitcoin) and LTC (Litecoin).
Things change and today that is not the format.
So what is happening with Bitcoin? How much is it worth?
Depends, in a sense, on who you ask. There are a number of online "exchanges" that are trying to deal with the Bitcoin phenomenon, and all it's counterpart flavors and types.
Problem is, NONE of these exchanges agree on what a Bitcoin is worth. A second, perhaps even bigger problem, is that the exchange that bills itself as the largest Bitcoin exchange in the world, currently processing 80% of the global Bitcoin traffic, has been experiencing down time measured in the hours-per-day range.
Mt. Gox, an exchange based in Japan, is the one that claims to be the biggest.
Now Bitcoin (and all the other "virtual" currencies) go beyond even the idea of fiat. A Bitcoin, unlike a paper dollar you have in your wallet, REQUIRES sophisticated computer networking and software to process. You could, if you like, flash your Bitcoin wallet to a thumb drive and trade it that way, but the recipient could not verify it or process it or redeem it or spend it unless he has an Internet connection.
So determining the "value" of a Bitcoin goes beyond simply two traders deciding between themselves what a bitcoin is worth - it is integrally dependent on the peer-to-peer links and the major Bitcoin exchanges.
In a perfect world, it would be nice if it simply came down to what the traders believed. But Bitcoin is, in a sense afflicted by the same problem Bitcoin is designed to address - finding a safe, secure, and known-value way of making electronic transfers.
The remarkable thing in a sense is that we have not yet seen an obituary for Bitcoin. It fluctuated wildly today, same as yesterday, but MOST current quotes are still within the range of where it "closed" last Friday.
Due, in part no doubt to the sleepless efforts of the developers, service providers, and exchange support teams.
Can they keep up? I don't know.
But I am positive of one thing: Bitcoin, good idea or not, loses it's credibility if the Exchanges can't come to some consensus. Bitcoin especially suffers if the exchanges can't even stay on the air!!
The bitcoin exchanges are trying to do demand transactions... the same type of demand transactions that large data centers have done for years. But these types of transactions do not mesh well with a wild-west internet and open source.
Protocols need to be developed. In that sense, I think it's safe to say that Bitcoin has kinda "jumped the gun". The coin part itself seems secure, but the exchange part is lagging behind very badly.
Will we, in a few years, see a Bitcoin wallet and think of it like we do ancient American currencies? As useless as a Continental?
Hard to say. At this time, I would not bet one way or another. But one thing is for sure. Unless the Bitcoin exchanges can get their collective acts together, no merchant can be blamed for hesitating to use bitcoins.
your credit card may have a $100k limit... but without the ability to contact the credit agencies... it’s just a piece of plastic
Bitcoin trivia: Mt Gox gets its name from "Magic: The Gathering Online Exchange" back from when it used to be a venue for trading cards.
Maybe that's the problem. Crypto-currencies like BTC require the construction of purpose-built exchanges in order to achieve their full potential.
And BTC has potential. It's not a 'printable' currency - the creation of each unit requires non-trivial work. More importantly BTC is not a fiat currency: no-one is forcing anyone to use it.
Also: BTCs have real world value, albeit of a rarified kind. BTCs can be used as cypher-keys or one-time-pads for the secure validation of long-range transactions. Using BTC as money is a subset of that ability.
BTC is an alternative currency with unique properties. Those of us trapped in the global fiat system should support the existance of non-fiat alternatives; even if we don't use them ourselves.
How do I get a bitcoin? Do you just say you have so many bitcoin?
No you need to exchange currency for bitcoin.
Kinda like we have gold and silver to back up dollars.
sounds like a loosing combination to me. Someones getting rich out there.
It’s an interesting situation, and may require a different mindset.
On one hand, Bitcoin as a technology, as a currency, wants to be a simple peer-to-peer trading option.
You have this many Bitcoins, I have an extra wheelbarrow, DEAL!
On the other hand, everyone wants (or at least most want) there to be some kind of exchange, to buy/redeem Bitcoins in whatever currency, and to use as a reliable “source” to say what exactly bitcoins are worth at any particular moment.
But an exchange that does that is little different than having a bank that tells you if/when you can have your money and how much it is worth, etc. An “exchange” is more of just the same... seems to me to be exactly NOT what the Bitcoin developers were trying to come up with in the first place!
As long as people chase “dollars”, then bitcoin doesn’t stand a chance. But if people chased Bitcoins, it could become wildly successful. Then folks wouldn’t worry so much if an “exchange” was involved.
If you think about it, an exchange is just a middleman.
“Kinda like we have gold and silver to back up dollars.
sounds like a loosing combination to me.”
Not if you DO have gold and silver.
>> the creation of each unit requires non-trivial work.
Yeah, computer busywork that constitutes no real wealth created.
There is nothing of value in a bitcoin. Its “price” is whatever some trendy idiot will pay for it, but it holds no intrinsic value — nor is it BACKED by any intrinsic value.
Doomed to fail.
If you looked at the actual amount of dollar bills (and tens, and twenties, etc.) and looked at the amount of all bank deposits denominated in dollars, you would soon find that 97% of the “money” in existence is just digits in a computer. ALL BANKS are insolvent. They don’t have the Federal Reserve Notes to cover their deposits.
So it amounts to digits in a computer. Bank deposits and Bitcoin. What the H is the difference?
It's only to make everything fair for all.
Bitcoins are an example of THE WORST kind of fiat currency. The creation of these useless pieces of electronic vapor is actually an overwhelming burden on computers. The electricity and processing time wasted could be used more productively for something like Folding at Home.
At least the fiat currency our government passes around is backed by law and force of government. Bitcoins are backed by nothing... And that’s why the creators of this joke currency like it.
WAKE UP FREEPERS. The people who proposed bit coins are the same anarchists who violently demonstrate against G20, capitalism, and the United States. These are socialist asshats who envision a New World Order brought on by a currency they created to crash our system.
Consider carefully what bandwagon you jump on.
Hell, I got ammo. Looks like it’s value rose faster than gold or silver in the last few months. LOL! Of course if I were to dump it I’d have to buy replacements at today’s cost. Example. 500 rds .22lr purchased for $24.95 in January now goes for $149.50. Yikes. Saw .223 advertised for “ONLY $1.49/rd!” ONLY? As far as the bitcoin thing, at first I thought, “How stupid”. I quickly thought again and “Hey, my dollars aren’t backed by anything either.” Gonna go to walmart and see if I can pick up some bitcoins today. LOL!
gold and silver do not back up dollars. not for a very long time.
the point of bitcoins is a mathematically assured currency that cannot be forged or counterfeited. therefore, it cannot be diluted even by those that invented it. they simply cannot create new bitcoins as all bitcoins are ‘minted’ by locking them to a newly found ‘block’ that itself is tied to all previous blocks. to created new coins, they’d need to created a new block that somehow connected to all other previous blocks. the chain is a single strand and you cannot have a block that shares the same previous blocks... that would imply the two blocks overlap... therefore invalid.
the result is a coin that you can be assured is there and not fake. that is all.
gold has value not because you can use it for really nice electrical connectors... but because it cannot be duplicated therefore is not diluted or faked.
same with bitcoins... minus the physical weight
So are these bitcoin zeros on a computer screen?
Who’s to say you have “ this many”
If they are zeros in some computer what backs up those zeros?
Who is the main subject that tells me how many
bitcoin I have and lastly how do I get them? Do I have to trade something ie. gold, silver, cash, soap?
what says the paper in your wallet is any different from the paper in the toilet stall? the scribblings? that’s funny.
when you go to spend those scribblings on paper, how does the person you’re giving them to know they’re the ‘approved’ scribblings? do they ever check?
meanwhile, if you put some of your bitcoins, obtained through ‘mining’ or in exchange for services/other currency, on your smartphone... then you can exchange them with someone else... who will verify with the p2p network that the coins you’re giving them are yours / valid. once they’ve been approved, they can be assure the coins are theirs and are authentic.
if you’re actually interested, it’s explained in great detail on various sites.
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