Topic: Do Bitcoins need something REAL to back them? - page 4. (Read 7695 times)

Nah it wouldnt take more than $20 million I´m surprise to see that you seems to know so little although it looks like you have been into bitcoin for a while.
The total tH/s of the bitcoin network is 64 terahashes/s right now. And a minirig from BFL costed $30 000 and produced 1,5 tH/s so to get up over 64 tH/s I would have to get 43 minirigs and that would cost me about 1.3$ million so I was being generous when I said 20$ million, calculating that the hashrate would increase a lot and that goverments usually are cost ineffective.  

I could make alot of money if I had the capital to perform a 51 %-attack because I could short the bitcoin-market before, Actually a big organization dont really have anything to loose in a investment like that. Because they could make a lot of money shorting the market and in the same way getting rid of competition, and if they failed a 51%-attack they still would control a huge amount of the bitcoin market.
I think the bitcoin far from flawless, but that´s just me and I like you to prove me wrong.

Beyond excellent point.

Cryptos will always be see a bubble cause that what people want to believe. It is young it is going to move up and down fast.
The software has yet to be hacked so to say it is far from flawless is not correct. You do know most software ship with ~ 50,000 Bugs known. Bitcoin software is probably one of the most well written pieces of software I have seen.

It would be a lot more than $20 million, if that was true then NSA would have done it a long time ago. NSA does know about bitcoin, the CIA invited Gavin to talk about it so it is on there radar.

I want to own the energy. Like have it in a battery or some other medium for storage (Hydrogen maybe) so I can choose what´s tasks it should perform and when.

You cant deny that bitcoin only have one purpose and it´s for exchange, If I owned the energy itself I could consume it to do other things.

Energy I can only use it for one thing... Are you kidding me?

And yeah bitcoin is mostly based on faith and have only a value as a medium of exchange, you can use dollar, gold, potatos, kittens, stones or energy for that to.
There is nothing that makes bitcoin better than terracoin else than it have more "Belivers".. Actually cryptos kinda remind me of religion and other political views; get enough people to belive in it and value what you offer and you´ll win!

You have big faith in Bitcoin and you will probably go on claiming that it´s the best thing ever like religious and political people. So I dont expect you do change your mind although I like the debate

Gold/fiat do have one advantage over bitcoin...  you can still trade with them when the lights go out.  Don't get me wrong, I think Bitcoin is superior in many ways... but imagine a world that trades exclusively in Bitcoin, and then imagine an EMP strike anywhere.  We are close to this being an issue already with fiat being exchanged almost exclusively electronically, of course.  I believe the smart course of action is "diversify".

This.

And people suggesting that bitcoins aren't "real" cause you can't hold them in your hand, should consider the fact that 99.9% of all euros and dollars in existence (including the ones on their bank account) are just as real. Pretty much ALL the money out there is not coins and bills, but mere bits and bytes in cyberspace.

Welcome to the Information Age. Physical and digital are just as real.

Ah, I'm not sure if the tech for storing large enough value is there yet.

Hey people said the internet wouldn't last, and look at us now.

Bitcoin is that currency you just named 3 properties it has. Bitcoin is portable. Energy is portable, but a lot of energy can be dangerous and thus not portable at a certain amount. Bitcoin is durable, energy is also durable. Bitcoin is fungible. Energy is fungible. Bitcoin you can do stuff with, I just brought a game, I can buy a computer, I can gamble, I can do a lot with it. Energy I can only use it for one thing, to power something. So you yet to see the power of bitcoin yet you have a whole plan of how it will fail. I think you are putting a death sentence on something too young. I agree it could die tomorrow, we don't know is it likely to happen no. I encourage you to research more about bitcoin then come back, cause you start with a math based currency is not possible, and I prove bitcoin is that currency, now your pulling out energy currencies that haven't even been developed. I mean in country they use bubble gum as currency so faith in a human back currency is losing.

I see your point yet it is the same point that can be brought up in every currency. Why does the USA stock pile so much gold in fort knox. There will always be people that sit on a pile of money. Yet that doesn't do anything to bitcoin, how is that hurtful. We have enough people that are willing to trade and sell things for bitcoin that the economy is great in the bitcoin community. As brought up in many times we can still have 1 coin left and we would be able to spilt that over and over again to make it work.

Now to the distribution, how else is it going to be fair? This is the most fair way so no one person can control who can get and who has bitcoins. Remember 4 years ago people were able to use CPUs to mine today it is a little different and I can see your worry but that has nothing to do with bitcoin. That is the fairest way, early adopters had to have a lot of faith in the system so it is only natural they be rewarded the most.

But I mean that I would like to OWN the energy rather than performing a task with energy to perfom a transaction. I would like to store it so i could use it to what ever i wanted to. I would transfer it over a net without anyone having to confirm it because you could see something physical "realworld"-event occur when you recieve your kW/h´s (or how ever you would like to measure it). And Instead of mining bitcoin into existence you would have solar cells/ wind turbine "mining" energy. Do you see where I´m coming from?

Please explain why bitcoin (and other PoW cryptos) are not energy credits. What would meet your definition of an energy credit?

Very interesting question. The answer is no. Bitcoin does not need and should not be "backed" by anything. To really understand the issue, however, we need a little history lesson. Gold used to "back" paper money because everyone knew that gold was money and paper money was just a money substitute. Gold was perfectly good money for thousands of years. Paper money was originally (starting in the middle ages for the sake of argument) just a warehouse receipt given to the owner of gold who chose to store his gold in the goldsmith's safe. The goldsmith gave the customer a receipt. That was the first paper money. That receipt was redeemable on demand for the quantity of gold printed on the receipt. In other words - gold backed the paper.

Over the years, people got used to carrying around and trading paper receipts (which were more convenient than gold) and would use them as a substitute for actual gold. But everyone was acutely aware that the paper was not the money. The gold that backed it was the money. In those days (and before that as well), gold's value was overwhelmingly based on its ability to be money. See my post https://bitcointalksearch.org/topic/m.1871316 on inflation and the properties of money. As time went on, people started to forget about gold and started to believe that the paper receipts were money. The problem with paper money is that it is much easier to debase (inflate) than gold. Governments hate gold (as they will hate bitcoin) because then cannot simple "print it" to fund their welfare/warfare states. There are numerous examples in history of governments (in bed with the goldsmiths) creating paper currency (out of thin air) divorced from any real gold and thereby destroying their own economies. (I include all modern electronic versions of official currency when I say "paper money".)

The reason history and common sense says that paper money needs to be backed by gold is that gold is the market winner (over thousands of years) in the contest of what is the best money. Its money properties were almost single-handedly responsible for the advancement of civilization from barbarism to the modern world.

So, when x backs y, x is money and y is the money substitute. As long as people honor the one-to-one relationship between x and y, it's perfectly ok for gold to back paper money or even for bitcoins to back paper money. So, nothing should back gold because gold is (or was) money. Sadly, society has been so far removed from gold for so long, that gold no longer really qualifies as money. And while Bitcoin doesn't quite qualify as money yet, it may someday, and as such it might back something else (even informally). Something as simple as an IOU on the back of an envelope that says IOU 4BTC qualifies as paper money backed by bitcoin.

Final thought on gold. I read a few years ago that if gold were still commonly understood to be money it would be worth over $20,000 per ounce. The reason for this is that the nominal value of all the goods and services in the world divided by the weight of all the gold in the world comes out to about $20K. I could be way off here, but you get the point.

Shells, pebbles, anything can be "money". As long as there is someone willing to accept it, in trade, for other goods and services it is money.

I´m having really hard deciding what is best to own right now gold, fiat or cryptos they all have their shortfalls. A energybased currency would be one of the best alternatives if you asked me, but thats my point of view.
Fiat could stand this storm and then the gold and cryptos just will be seen as big bubbles, so right now I´m just passively observing. I´m actually still not comfortable putting my savings into a highly speculative currency based on a software that is far from flawless.

If a organization would like to shut down the cryptos they would only have to invest about 20$ millions(this a piss in the sea for a government or bank) into ASICs and then kill it with a 51%-attack. It´s probably not gonna happen, but it isnt totally unlikely either.

Bitcoin is measured in energy... the mining directly ties the value to amount of energy available for processing transactions. It is a self limiting system. The value of transactions cannot sustainably grow beyond some percentage of total energy production.

This.  And transactions occur because there is a disagreement over either what something is valued at currently, or that it will be valued higher or lower in the future.  Bitcoins are worth exact $106.33 right now, IF I chose to buy or sell them on Mt Gox right this second.

PhD = spent a lot of time in, and money on, school.  No more, no less.  They may be more educated on a given subject in theory, but in my experience are often walled in by what they learned on the way.  "I have a PhD in blah, blah."  Some ARE brilliant, talented and do great things, but the label in itself is overrated.

“You dropped a 150 grand on a fucking education that you could’ve got a $1.50 in late charges at the public library” – Good Will Hunting (1997)

Thats totally true, they are backed by laws and to some degree what their centralbanks own in gold. But the rest is temporary and will fail in the long run, how long is hard to tell but I dont expect Fiat-money in its current form or Cryptos in its current form to last another 15 years. The gold will be there, although maybe less subjective valued than now, who knows? But it´s very unlikely it will vanish out of existence.

Fiat currency really doesn't have anything backing them anymore.

It seems like they would but then again a lot of fiat really doesn't have much backing it when you get down to it .

I always get the answer "You just dont understand", but I have studied currencies, economics, finance a lot.. And when youre saying that we will be using it 50 years from now I see your total lack of understanding from my subjective view. 50 years from now I think there is a much greater chance that we will be using some kind of money measured in energy. It is portable, durable, fungible, and you can do shit with it. So no I dont think cryptos like Bitcoin, Litecoin will stand much more than 5-10 maximum 15 years. But I could be wrong, but I have a bunch of ideas that would serve a much better purpose as a medium of exchange than Bitcoin.

I also have big issues with the asymmetric distribution of bitcoin. Some entities are sitting on 1 - 10 % of all Bitcoins just for them self, thats even worse than the Fiat distribution, although this is not an argument for that bitcoin is bad and will fail, I just dont like the asymmetric distribution. Read this: http://eprint.iacr.org/2012/584.pdf Check pg 8 and 9 for distribution of the coins.