Bitcoins

JohnRo

Old news but worth documenting here for those interested in the thread.

Dell now accepting Tulip Bulbs..

http://www.coindesk.com/computer-giant-dell-now-accepts-bitcoin/

Anthorn

BobbyBaggins wrote: »

Each to their own I suppose. Its the way money is going in the future, fully decentralised instant transmission worldwide. Iam not saying the future will be Bitcoin but it will look something very similar.

And as its not run or controlled by anyone, I dont see how it can be designed to part anyone from their money. There is noone to benefit!

It's already here and has been here for many years: It's called Paper Gold. Yes, I can hear the objections and the preferences for physical gold but we must consider that most gold bought and sold is in fact Paper Gold: Countries which buy gold don't get the physical gold but instead are the owners of it. The actual gold doesn't move anywhere. The proverbial fan will be hit when everyone demands their physical gold.

Like Bitcoins the value of Paper Gold is related to demand for it but at least Paper Gold has an international price (fixing) standard.

According to The Keiser Report (RT) today, in or around October 2014 there is to be a gold-backed cryptocurrency called "Goldfish" launched by therealasset.co.uk The question is whether it will affect the price of Bitcoins which are not backed up by anything at all? The other question is who else will also launch such a cryptocurrency?

JohnRo

The question is whether it will affect the price of Bitcoins which are not backed up by anything at all?

The bitcoin protocol is backed by an incorruptible, decentralised, unrestricted, all inclusive ledger called the blockchain. A few lumps of shiny metal bolted on don't add anything to the infallibility or integrity of that equation.

It will however do a hell of a lot for the corruption and manipulation in the paper gold markets.

edit: the problem will be who and how that link to the blockchain is established and independently audited.

Anthorn

JohnRo wrote: »

The bitcoin protocol is backed by an incorruptible, decentralised, unrestricted, all inclusive ledger called the blockchain. A few lumps of shiny metal bolted on don't add anything to the infallibility or integrity of that equation.

It will however do a hell of a lot for the corruption and manipulation in the paper gold markets.

edit: the problem will be who and how that link to the blockchain is established and independently audited.

My point is that the price of Bitcoin is purely dictated by supply and demand. When everyone wants them the price goes up and when no-one wants them the price plummets. On the other hand the price of gold (and silver) being fixed implies stability. However I concede that there are those who would prefer the price of gold to be similarly dictated by supply and demand.

My other point is of course that there will soon be competition for Bitcoins.

Re. my previous post: For "paper gold" read "allocated gold". There is a difference.

JohnRo

It's easy to harp on about the gold market, much like the rest of the bank controlled market, manipulated by privileged key players committing and hiding fraud to various degrees. It's also easy to dismiss it as conspiracy until the evidence becomes overwhelming and can't be ignored.

The key is how and more importantly who administers the direct link and more importantly still who conducts the audit, between something physical and an electronic ledger. The bottom line is banks can't be trusted to do any of that with any integrity.

Until the systems are decentralised, transparent and universally accessible, you're simply trying to integrate a cryto layer, as some sort of pseudo reassurance, on top of an already established fraud.

grifferz

Anthorn wrote: »

On the other hand the price of gold (and silver) being fixed implies stability.

The price of gold and silver isn't fixed and is dictated by supply and demand. It just changes a lot less frequently than the price of bitcoin.

It's also a lot more difficult to decentralise a currency that is backed by heavy physical items.

So I don't rate the chances of this new currency at capturing anyone's imagination.

Anthorn

grifferz wrote: »

The price of gold and silver isn't fixed and is dictated by supply and demand. It just changes a lot less frequently than the price of bitcoin.

It's also a lot more difficult to decentralise a currency that is backed by heavy physical items.

So I don't rate the chances of this new currency at capturing anyone's imagination.

If that's the case then how is it that the price didn't move when China bought 140 tonnes of the stuff? The gold price is in fact fixed twice a day on the London Bullion Market and provides a benchmark price used internationally. Go to for example, London, Singapore and Zurich and you'll find the gold price very similar if not identical.

There are several other cryptocurrencies besides Bitcoin but all are tarred with the same brush: i.e. What's the difference between a cryptocurrency which is not backed up with anything and a Fiat currency? The answer as far as I'm concerned is, "Not a lot".

JohnRo

Anthorn wrote: »

There are several other cryptocurrencies besides Bitcoin but all are tarred with the same brush: i.e. What's the difference between a cryptocurrency which is not backed up with anything and a Fiat currency? The answer as far as I'm concerned is, "Not a lot".

The difference is crystal clear and significant. All you're saying there is that you don't know much about crypto currency, btc specifically, or how it works.

lvader

JohnRo wrote: »

The difference is crystal clear and significant. All you're saying there is that you don't know much about crypto currency, btc specifically, or how it works.

That is why it will ultimately fail, it's too complex for people to understand.

grifferz

lvader wrote: »

That is why it will ultimately fail, it's too complex for people to understand.

There is no way to put the genie back in the bottle and uninvent decentralised financial instruments now. I don't know if Bitcoin specifically will succeed or fail but that doesn't mean a lot for the whole technology.

It's like saying that ecommerce will fail because people can't factor massive prime numbers in their head in order to set up a secure web connection and take credit card details, or that there will be no more cars once engines become too complex for an amateur with a reference manual to disassemble and reassemble. You need a laptop and USB cable to debug a modern car engine now.

Financial instruments are already for the most part too complicated for the average person to deal with, yet for better or worse our whole economy depends on them.