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Of course that doesn't take into account external events like Bitcoin being made illegal to have or something
Tuesday, 08-Oct-13 19:45:05 UTC from web-
@ceruleanspark true, but if that happened and you'd only been reinvesting the yeild then you'd have lots of hardware to recycle for profit possibly. xD
Tuesday, 08-Oct-13 19:48:55 UTC from web-
@pony If the war on drugs is anything to go by making bitcoin illegal will just make it more valuable.
Tuesday, 08-Oct-13 19:50:30 UTC from web-
@ceruleanspark I still have difficulty wrapping my head around what actual resource bitcoins are backed by. The USD is backed by the "full faith and credit" of the government, others are backed by precious metals. I don't get BTC
Tuesday, 08-Oct-13 19:56:16 UTC from web-
@pony In shorthand. You trade equal values, right ? So lets say I trade you 8 eggs for a loaf of bread. One day someone invented money, so nowadays we all trade goods and services for money. Around this time someone just like you said "I do not understand why we are trading for money, where does the value come from ?" The value comes from the ability to esteem worth a certain good or service in money. After all, you can not possibly equate the formula "If 1200 chickens can be traded for a lambourgini, and a lambourgini can be traded for ten thousand full peanutbutter jars, howmany peanutbutter jars is a chicken" . Why ? Because the market fluctuates TOO MUCH in large numbers. Now let us look at diffrent countries, they also have a valuta right, and their own money. Because they wanted to trade someone started a buisness exchanging currencies, and got rich doing so. In the end of the story however, we the individual, decides to work with, or not with someone when using money ( cont. )
Tuesday, 08-Oct-13 20:10:03 UTC from web -
@pony Bitcoins are backed by the fact that they're computationally complex to make. It's the digital equivelant of gold being valuable because of its scarcity
Tuesday, 08-Oct-13 20:17:19 UTC from web-
@ceruleanspark @critialcloudkicker So BTC require computations to make, but what useful, worthwhile purpose do those computations serve if any? I suppose it could be like snake oil. There's no real purpose, but people still pay for it, and the money they pay is just as valuable whether or not the good they spent it on did any good.
Tuesday, 08-Oct-13 20:26:56 UTC from web-
@pony I do not know snake-oil. But I guess there are similarities. Also Bitcoins do not require computations to make, but rather, it is a decentralized currency, so "someone" needs to keep tabs on the transactions. This is where the miners come in. These miners are basically the people who are checking every transaction and digitalize it into a database. They are rewarded by getting bitcoin themselves. ( And then there are group of people who decide to mine together and split the profit ). Since the amount of Bitcoin availible in the world at any time is a known fixxed number ( snake-oil is not ) the worth is easier to determine
Tuesday, 08-Oct-13 20:32:22 UTC from web-
@critialcloudkicker snake oil is the classical scammer's product.
Tuesday, 08-Oct-13 20:34:11 UTC from web-
@pony Well, if it is a scammer's product I doubt it would ever have any value. Bitcoin on the other hand is worth 90 EUR per piece at this very moment
Tuesday, 08-Oct-13 20:36:27 UTC from web-
@critialcloudkicker 'classical' as in it was sold as a miracle cure back in the frontier days, not now. >.>
Tuesday, 08-Oct-13 20:37:56 UTC from web
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@critialcloudkicker *BOOM*
Tuesday, 08-Oct-13 20:34:19 UTC from web-
@derpy128 Your mind ?
Tuesday, 08-Oct-13 20:34:45 UTC from web
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@critialcloudkicker @ceruleanspark Ah. If the compuations/mining I'm thinking of are in fact the services used to propagate bitcoins, then what happens if everybody stops mining and just wants to keep what's been earned? Will there then be no more decentralized tracking?
Tuesday, 08-Oct-13 20:46:26 UTC from web-
@pony Bitcoin /ends/ if people stop mining. They can't send their money and can thus never send it anywhere to cash out. Instant crash
Tuesday, 08-Oct-13 20:52:12 UTC from web-
@ceruleanspark now I get it! this makes sense and thank you. Considering how technology keeps improving, I'm guessing that mining will continue. It sounds like if technology were to take a huge leap somehow, though, that bitcoins would inflate. It that about right?
Tuesday, 08-Oct-13 20:57:36 UTC from web-
@pony Only a finite number of bitcoins will ever exist. 22million.
Tuesday, 08-Oct-13 21:02:05 UTC from web-
@ceruleanspark but if that max is ever reached then there's no more mining so I'm guessing that the max is (excuse my rusty terminology) like the asymptote on the graph of log(x) right? Or, if not, then how will the currency persist when mining is no longer profitable?
Tuesday, 08-Oct-13 21:05:59 UTC from web-
@pony Mining will be funded by (mandatory) transaction fees from coins being sent from person to person, rather than from block rewards.
Tuesday, 08-Oct-13 21:09:04 UTC from web-
@ceruleanspark does that mean the value of the bit coin will raise slightly with every transaction (as it deflates) until mining is again profitable? Or does the fee get paid to miners?
Tuesday, 08-Oct-13 21:13:54 UTC from web-
@pony The fee is split by all the miners, yes. Larger transactions yield larger fees, and priority transactions can optionally pay higher fees for faster confirmation.
Tuesday, 08-Oct-13 21:22:37 UTC from web-
@ceruleanspark ooh smart. I'm convinced now that the system really does work
Tuesday, 08-Oct-13 21:24:08 UTC from web -
@ceruleanspark for a de-centralized currency it seems to have a lot of enforced central rules (not that that looks like it will be a bad thing at this point)
Tuesday, 08-Oct-13 21:24:35 UTC from web-
@vcgriffin The transaction fee and production caps are part of the protocol, rather than "rules"
Tuesday, 08-Oct-13 21:26:20 UTC from web-
@ceruleanspark protocols / rules same thing no? Kinda like how debt is built into the running of the (other) banking system.
Tuesday, 08-Oct-13 21:29:58 UTC from web
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@ceruleanspark or some other possibility
Tuesday, 08-Oct-13 21:14:21 UTC from web
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Tuesday, 08-Oct-13 19:56:06 UTC from web
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@ceruleanspark Lots to consider :|
Tuesday, 08-Oct-13 19:58:59 UTC from web
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@snowcone That is ( sadly ) only partially true
Tuesday, 08-Oct-13 20:20:24 UTC from web -
Tuesday, 08-Oct-13 20:20:33 UTC from web
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@derpy128 That is not how banking was made at all :o . Well, except for the part where they said "I'll keep your gold safe, here is an I.O.U."
Tuesday, 08-Oct-13 20:22:38 UTC from web
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