Someone explain bitcoins to me

[cheezy321]

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.

What if your 'wallet' was destroyed on your hard drive and you had no backups. Would you be able to recover that bitcoin in any way, shape or form? I am genuinely curious...

 

[OverVolt]

What if your 'wallet' was destroyed on your hard drive and you had no backups. Would you be able to recover that bitcoin in any way, shape or form? I am genuinely curious...

Probably the same odds of finding who stole all your money from under the mattress :awe:

The choice is really between bad and worse. Neither one is very good but I guess bitcoins are better than a mattress.

 

[Train]

What if your 'wallet' was destroyed on your hard drive and you had no backups. Would you be able to recover that bitcoin in any way, shape or form? I am genuinely curious...

I *think* it's possible, but it would take a crap ton of computing power to figure out what the key was using the transaction history of that coin in the block chain as a reference.

 

[SphinxnihpS]

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.

And you paid for the bitcoins. What's your gain? You mean you can hold on to them until the value is higher then spend them at a profit? Now they are back in circulation and you had no cash flow for X amount of time. It's still completely driven by the market. That's the idea. You can do the same thing with dollars, essentially betting the value will rise (or fall), but with dollars now you have to look at a slew of factors, not least of which is some suit somewhere that decides to print more, immediately devaluing your holding. There are currency markets. None of your arguments, which I suspect are based mostly on your familiarity with the dollar and suspicion of something you don't fully understand, change these facts: 1. The bitcoin can not be counterfeited. 2. The bitcoin can not be inflated by sources outside the market. 3. All currencies are simply measurements of energy. 4. All currencies are subject to the faith of their acceptance as a measurement of energy.

As far as your hard drive breaking, I do believe they have a system to account for this built in. The bitcoins however can not be destroyed, so if you lose some, and have no recourse to get it back, you will be out the money. I doubt there is no recourse though. I'd have to check.

 

[OverVolt]

Artificial cap on Bitcoins.
Hoarding.
Lost private keys.

The supply isn't artificially reduced. The supply is set and demand drives the price. I can understand lost private keys but don't know much about it. I can see how the rate of lost private keys would outpace the rate of new bitcoins if done wrong.

 

[FallenHero]

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

Economy of Scale

 

[cheezy321]

The supply isn't artificially reduced. The supply is set and demand drives the price. I can understand lost private keys but don't know much about it. I can see how the rate of lost private keys would outpace the rate of new bitcoins if done wrong.

Supply is set but that does not mean it is not constantly changing. There are more bitcoins on the 'market' today than there were 5 months ago. So supply has changed. That does not mean the cap on supply isn't static. The supply is constantly increasing until that static cap on supply is met. The cap on bitcoins wont be hit for another couple decades correct?

And it sounds to me like bitcoins can be destroyed. So supply can dwindle as well.

 

[Crusty]

Supply is set but that does not mean it is not constantly changing. There are more bitcoins on the 'market' today than there were 5 months ago. So supply has changed. That does not mean the cap on supply isn't static. The supply is constantly increasing until that static cap on supply is met. The cap on bitcoins wont be hit for another couple decades correct?

And it sounds to me like bitcoins can be destroyed. So supply can dwindle as well.

Not necessarily destroyed, but if the wallet data is lost and or destroyed then the bitcoins become lost forever, removing it from circulation permanently.

 

[Train]

But the amount of new coins is very well known. Yes, more will come out, but it has been designed that way, and is not a secret to anyone. There is no risk involved when factoring in future supply.

Now compare that to when Ben Bernanke and friends meet each quarter to decide how many new dollars to create out of thin air, and the whole world's financial market holds their breath.

Imagine the stability you could introduce if you knew the EXACT amount they were going to set the Fed rates at for the next 10 years in advance? And then they would remove themselves after that.

 

[SphinxnihpS]

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...

Not everything is relative to gold. Gold was used as a currency because it could not be counterfeited because it's properties were completely known. Hmmmm.

As far as the economics of the dollar go, the dollar is massively weaker than in the past relative to gold (because there is relatively the same amount of gold now as at the turn of the century), but relative to work (energy), it is massively stronger. What used to take a day, now takes a minute. Our production of X is far more efficient, so we can produce X expending far less energy than in the past. This makes X cheaper. This is why most serious economists tend to think about currencies relative to oil.

 

[SphinxnihpS]

Supply is set but that does not mean it is not constantly changing. There are more bitcoins on the 'market' today than there were 5 months ago. So supply has changed. That does not mean the cap on supply isn't static. The supply is constantly increasing until that static cap on supply is met. The cap on bitcoins wont be hit for another couple decades correct?

And it sounds to me like bitcoins can be destroyed. So supply can dwindle as well.

This will help answer all your tough questions.

Also, the cap on bitcoins could be be reached sooner, or never depending on their value. As they become more valuable, then they become more worth mining at the expense of your computer expenses. When the energy it takes to find a coin costs more than the coin is worth, mining decreases.

 

[cheezy321]

Is the mining of bitcoins linear? IE is it easy to know how many bitcoins will be mined today, tomorrow and some random date 3 months from now? From what Ive read bitcoins were much easier to mine in the beginning and become much harder to mine as time goes on.

So wouldn't that mean the mining of bitcoins is pegged to current computing power? As long as computing power continues to increase at the same rate it has in the past the mining of bitcoins will stay linear (if it currently is)?

 

[Train]

This assumes Hardware will get faster and more people will participate. But overall, it is pretty accurate representation of what the total supply will look like.

http://en.wikipedia.org/wiki/File:Total_bitcoins_over_time.png

 

[Rakehellion]

And you paid for the bitcoins. What's your gain? You mean you can hold on to them until the value is higher then spend them at a profit? Now they are back in circulation and you had no cash flow for X amount of time.

What if the owner loses his wallet or is deceased?

 

[Rakehellion]

Not necessarily destroyed, but if the wallet data is lost and or destroyed then the bitcoins become lost forever, removing it from circulation permanently.

And this is almost certain to happen to every wallet eventually with hard drive crashes and human mortality. Bitcoins can be destroyed and there is a hard limit. What happens in the distant future when only one Bitcoin remains?

 

[Train]

And this is almost certain to happen to every wallet eventually with hard drive crashes and human mortality. Bitcoins can be destroyed and there is a hard limit. What happens in the distant future when only one Bitcoin remains?

I think the more pressing issue would be the ongoing supernova of our sun.

 

[SphinxnihpS]

What if the owner loses his wallet or is deceased?

What if you have no imagination or desire to actually discover these things. What if you're just here to make arguments that all have answers?

 

[SphinxnihpS]

Is the mining of bitcoins linear? IE is it easy to know how many bitcoins will be mined today, tomorrow and some random date 3 months from now? From what Ive read bitcoins were much easier to mine in the beginning and become much harder to mine as time goes on.

So wouldn't that mean the mining of bitcoins is pegged to current computing power? As long as computing power continues to increase at the same rate it has in the past the mining of bitcoins will stay linear (if it currently is)?

God damn it, just go read the fucking wiki.

 

[Crusty]

And this is almost certain to happen to every wallet eventually with hard drive crashes and human mortality. Bitcoins can be destroyed and there is a hard limit. What happens in the distant future when only one Bitcoin remains?

I already answered that above. Bitcoins are infinitely divisible, it doesn't matter if there is 1 BTC or .0000000000000000000000000000000001 BTC. You will simply make transactions in units you can manage.

 

[IronWing]

So rather than being an ass, I went in search of businesses that accept bitcoins. Google yielded a a ton of sites telling me how to use bitcoins and how to get the bitcoin logo. One soccer shirt store said they accepted bitcoins. Unfortunately, bitcoin.it's own interactive map of real world stores that accept bitcoins is broken however the list of website stores accepting them is there. I did not see any names I recognized which I guess is okay. Have any bitcoin miners or buyers posting in this thread actually used bitcoins to purchase and receive physical goods from an established business whose primary business is selling goods?

 

[ultimatebob]

So rather than being an ass, I went in search of businesses that accept bitcoins. Google yielded a a ton of sites telling me how to use bitcoins and how to get the bitcoin logo. One soccer shirt store said they accepted bitcoins. Unfortunately, bitcoin.it's own interactive map of real world stores that accept bitcoins is broken however the list of website stores accepting them is there. I did not see any names I recognized which I guess is okay. Have any bitcoin miners or buyers posting in this thread actually used bitcoins to purchase and receive physical goods from an established business whose primary business is selling goods?

I've been selling them to btcbuy.info, who gives me amazon.com giftcards for them.

Seriously, though... if you were a brick and mortar merchant, would you want to accept purchases with bitcoins? Their value can still vary as much as 20% in a given day. That could be your entire profit margin on a product.

 

[Spungo]

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.

I'm pretty sure gold is still the Oh Shit backup currency. The value of gold shoots up when people lose faith in the economy. The price of gold drops when things get better. Why would someone switch from gold to bitcoins? Nobody knows.

 

[MonKENy]

how many are there total? 21,000,000? how many have been found?