Someone explain bitcoins to me

[Train]

 

[cheezy321]

It's a superior currency which can not be manipulated, unlike paper currencies which can be counterfeited and devalued by government printing. It is also not controlled by a government, so no tinkering like our federal reserve bank does.

Cannot be manipulated? You can't be serious. What reason do you have for its meteoric rise in value then?

 

[Rakehellion]

50% loss in a century. That's exactly like a 90% loss in under a year. Mind. Blown.

 

[cheezy321]

This chart makes absolutely no sense whatsoever.

 

[Train]

50% loss in a century. That's exactly like a 90% loss in under a year. Mind. Blown.

I never made a claim that BTC was less volatile than USD. The point is that USD has declined in value, and will *forever* be declining in value. It is actually a PUBLICLY stated GOAL of the Fed to ensure at least a small amount of inflation every year.

Given that the total supply of BTC will increase at a slower and slower rate, and then hit a hard stop at a fixed number, builds in protection against devaluation due to inflation.

The only threat to BTC's value is if people decide to stop using it. But that is also a threat to any currency.

 

[Train]

Cannot be manipulated? You can't be serious. What reason do you have for its meteoric rise in value then?

There's this thing called supply and demand.

Given that supply is growing slowly, and more and more people are using it... well you know the rest.

 

[cheezy321]

There's this thing called supply and demand.

Given that supply is growing slowly, and more and more people are using it... well you know the rest.

So you believe that 100% of the people that are involved with bitcoins are using them and none of them are hoarding them to artificially lower supply?

 

[Clinkster]

http://xkcd.com/833/

 

[OverVolt]

Fiat money is based on belief, same with bitcoin.

Its just that most fiat currencies are shooting themselves in the foot and making bitcoin look good. So long as bitcoin honors its inflation rate of X coins per Y time its actually more genuine than alot of currencies, like the Euro I guess with their banking problems in Cyprus. Bitcoin is the new "under the mattress" that is all.

 

[SphinxnihpS]

Cannot be manipulated? You can't be serious. What reason do you have for its meteoric rise in value then?

Clearly your understanding of market and manipulation are overlapped somewhere. Can you print more of it on a whim? Can you destroy it? Can you arbitrarily change it's value?

no, no, and no. Can not be manipulated.

Can it's value go up and down over time? Of course. That's whole whole god damned idea, a 100% market-driven completely secure currency.

That's what the dollar is supposed to be in theory; but then government!

 

[Train]

So you believe that 100% of the people that are involved with bitcoins are using them and none of them are hoarding them to artificially lower supply?

Motives are irrelevant in supply and demand, are they not? The "manipulation" you were referring to that currencies like the USD and EU are subject to is central banks just handing out new money, artificially increasing the supply. Hoarding doesn't change supply, it only changes circulation.

 

[Rakehellion]

The "manipulation" you were referring to that currencies like the USD and EU are subject to is central banks just handing out new money, artificially increasing the supply.

Unlike Bitcoin, where supply is artificially reduced, facilitating hoarders.

 

[cheezy321]

Clearly your understanding of market and manipulation are overlapped somewhere. Can you print more of it on a whim? Can you destroy it? Can you arbitrarily change it's value?

no, no, and no. Can not be manipulated.

Can it's value go up and down over time? Of course. That's whole whole god damned idea, a 100% market-driven completely secure currency.

That's what the dollar is supposed to be in theory; but then government!

Why do you think a market cannot manipulate things?

Sure you cant print more bitcoins. No arguing that.

I am not fully educated on bitcoins, but I was under the understanding that if the hard drive where your 'wallet' is contained breaks and you have no backups then that bitcoin is destroyed forever. Am I wrong on this?

The value of a bitcoin varies wildly from day to day. If you don't consider that 'arbitrarily changing it's value' then its not worth even discussing it further.

 

[Train]

http://xkcd.com/833/

here's a better one, with some context. Though it only goes up to the beginning of 2009.

The U.S. dollar has lost 97.8% of its value since the creation of the Federal Reserve: In 1913--the year of the creation of the Federal Reserve--one ounce of gold could be purchased for $20.67, whereas now it costs $939.2 (spot price, as of 3/8/09).

as of just a few seconds ago, ounce of gold to USD is $1597

 

[Train]

Unlike Bitcoin, where supply is artificially reduced, facilitating hoarders.

explain how supply is artificially reduced.

 

[cheezy321]

Motives are irrelevant in supply and demand, are they not? The "manipulation" you were referring to that currencies like the USD and EU are subject to is central banks just handing out new money, artificially increasing the supply. Hoarding doesn't change supply, it only changes circulation.

You can change around words but it doesn't make it any different. If I bought 100 bitcoins and essentially buried them in my backyard then supply has been reduced. So has circulation. I artificially decreased the supply and circulation to fit my own goals, hence manipulation.

 

[cheezy321]

here's a better one, with some context. Though it only goes up to the beginning of 2009.

as of just a few seconds ago, ounce of gold to USD is $1597

If you only compare the dollar to an ounce of gold then you are correct. Why dont you look at more durable goods that you purchase on a day to day basis?

I can go out right now and buy a double cheeseburger at McDonalds for $1. Try buying all the ingredients to create a burger back in 1913 and let me know how much it costs all things relative.

 

[Train]

You can change around words but it doesn't make it any different. If I bought 100 bitcoins and essentially buried them in my backyard then supply has been reduced. So has circulation. I artificially decreased the supply and circulation to fit my own goals, hence manipulation.

Sorry, it doesn't work that way. The market knows they exist and can come back at any time.

US history shows that the value of the USD actually decreases the less it is circulated. The whole point of the FDIC was to restore faith in banks so people would get money out of their mattresses and get it circulating again.

 

[Train]

If you only compare the dollar to an ounce of gold then you are correct.

I can go out right now and buy a double cheeseburger at McDonalds for $1. Try buying all the ingredients to create a burger back in 1913 and let me know how much it costs all things relative.

And that was in 1955

Imagine how cheap a cheeseburger would have been if McDonald's was around in 1913

 

[OverVolt]

----

Made me lol

 

[cheezy321]

And that was in the 50's

Imagine how cheap a cheeseburger would have been if McDonald's was around in 1913

McDonalds opened in 1940. I'll compare a single patty burger even though the McDouble is a whole lot more than a 1940 burger.

http://www.dollartimes.com/calculators/inflation.htm

$0.15 in 1955 had the same buying power as $1.29 in 2013.

So a double cheeseburger is actually 30% cheaper than it was in 1955. Thanks for confirming my point. Not everything is relative to gold buddy.

Edit: Changed to 1955...

 

[Rakehellion]

explain how supply is artificially reduced.

Artificial cap on Bitcoins.
Hoarding.
Lost private keys.

 

[Train]

McDonalds opened in 1940. I'll compare a single patty burger even though the McDouble is a whole lot more than a 1940 burger.

http://www.dollartimes.com/calculators/inflation.htm

$0.15 in 1940 had the same buying power as $2.46 in 2013.

So a double cheeseburger is actually 40% cheaper than it was in 1940. Thanks for confirming my point. Not everything is relative to gold buddy.

The menu I posted was 1955, after it was franchised. That, and the burgers are actually shittier and more bulk produced today.

We can compare other products if you wish....

 

[Train]

Artificial cap on Bitcoins.
Hoarding.
Lost private keys.

sigh.

no seriously, sigh.

 

[Rakehellion]

So a double cheeseburger is actually 30% cheaper than it was in 1955.

Probably has something to do with mass production, quality of ingredients, and serving sizes too.