If Bitcoin were backed by something.

odolvlobo

legendary

Activity: 4354

Merit: 3260

Quote from: pawel7777 on December 05, 2014, 07:15:27 AM

Quote from: Atdhe on December 05, 2014, 04:23:47 AM

How can be bitcoin backed by commodity? Will mighty God Satoshi come once again to computer and change bitcoin code and peg it to gold or barley?
...

1 - you don't need Satoshi to change the protocol
2- you don't need to change the protocol to get bitcoin backed with something

Yes. All that is needed to back Bitcoin is for someone to be willing to buy an unlimited number of bitcoins for a set amount of something. For example, if the Federal Reserve were wiling to buy all the bitcoins at a price of $1 each, then Bitcoin would be backed by the dollar.

Atdhe

sr. member

Activity: 326

Merit: 250

Atdhe Nuhiu

Of course that I do not need it and nobody needs it. Therefore it will not happen. Who would have to back bitcoin and why? How?

This is dadaistic. The main asset of cc, that makes trust in it, is the independence on outer factors. That is why Bitcoin is perspective and eGold is dead.

pawel7777

legendary

Activity: 2436

Merit: 1561

Quote from: Atdhe on December 05, 2014, 04:23:47 AM

How can be bitcoin backed by commodity? Will mighty God Satoshi come once again to computer and change bitcoin code and peg it to gold or barley?
...

1 - you don't need Satoshi to change the protocol
2- you don't need to change the protocol to get bitcoin backed with something

Atdhe

sr. member

Activity: 326

Merit: 250

Atdhe Nuhiu

How can be bitcoin backed by commodity? Will mighty God Satoshi come once again to computer and change bitcoin code and peg it to gold or barley?

Bitcoin is bitcoin, because is backed by trust to blokchain or to algo of the currency. Decentralised cryptocurrency can not be "backed" and for sure not by commodity. (Even normal currency that is told that is backed by something is not backed by anything else but trust, but let's leave it rather aside.)

Fraxinus

legendary

Activity: 1274

Merit: 1000

I don't think it's vital that bitcoin is backed by any sort of other commodity or financial instrument.Sure,good think is it may result in some sort of stability but even then this may hamper bitcoin's growth and potential as an independent currency.

Atdhe

sr. member

Activity: 326

Merit: 250

Atdhe Nuhiu

well it is possible that no cc will become money... maybe google currency will take over the human trust, who knows

but even in that scenario, where cc loses, there will be no more centralised currencies than one, there will not be Gcoin, FBcoin etc. as independent currencies... sooner or later they will peg together at fixed rate like now Bulgarian currency is pegged to Euro and before to Deutsche mark and that means that the two currencies are just one kind of money

devphp

sr. member

Activity: 336

Merit: 250

Quote from: Atdhe on December 05, 2014, 03:50:19 AM

...only one cryptocurrency will become money.

If you say so, there are no other options but to comply Grin

Atdhe

sr. member

Activity: 326

Merit: 250

Atdhe Nuhiu

No, I really did not hear about competition in currency area and how it helps with innovation. Maybe you or some idiot wrote some nonsense, but I suggest to leave idiots aside.

What I read were just theories - and they were prooved - how one currency the strongest kills all other currencies in certain area. Since blokchain has no borders, there is no need for more currencies, because national states donot exist for cc or in other words the Optimum currency area is whole world.

Maybe there is some need for other cc to exist, like extend anonymity through better mixers, but only one cryptocurrency will become money.

It is truly stupid assumption to think that it is good for consumer to own many currencies, when the major one has to be deflationary_stable. Even more idiotic is to think that future highly competitive electronic market will reward merchants who will spend resources on exchange rate fees that are fancy, but do not bring anything good.

Money definitely tend to monopolisation when left to market powers.

devphp

sr. member

Activity: 336

Merit: 250

Quote from: Atdhe on December 04, 2014, 09:00:10 PM

No. Altcoins are not backed by BTC. Altcoins can be exchanged to BTC or some money. That is not backing.

If something is backing altcoins then it is the belief that alcoins will be money one day. Same with BTC. Problems with altcoins is that nobody needs more currencies than 1 in the world without borders. The idiotic assumptions that people will have one currency for bigger payments and another for buying milk and bread are really incredible. They will have 2 or 20 wallets, where will be different amounts of money, but there will be just one global currency (maybe not bitcoin though). People do not want to count more currencies, there is no one advantage of it.

I put the idiotic assumption in bold.
I guess you never heard about the concept of competition and how it helps any industry stay honest and innovating.

Atdhe

sr. member

Activity: 326

Merit: 250

Atdhe Nuhiu

The fiat currency circulating is not help to BTC. It blocks the space, that BTC could easily fill in.
This way BTC is pushed away only to darkmarkets and only because of darkmarkets, moneylaundering, illegal gambling and all this crazy stuff can be BTC counted today as protocurrency. Only at Darkmarkets is real need for BTC. Buying t-shirts or cafe via bitcoin is very cool, but nobody needs BTC for it. If it would not be used at darkmarkets, it would be still a toy. Thank god for the oppression and stupidity of states which still say drugs are illegal. Cheaper transactions itself are not argument big enough to break through monopoly.

Best what could happen for BTC would be some real economical and monetarian doom over planet or at least in some states. Such doom would be perfect for Bitcoin, but very bad for people.

DhaniBoy

sr. member

Activity: 280

Merit: 250

current bitcoin course must be supported by something, because bitcoin can not stand alone, bitcoin is still in need of a fiat currency in circulation in each country, bitcoin is currently valued at US dollar currency, which makes it valuable bitcoin, because of the absence of comparison, bitcoin into stuff that is not its price
when the infrastructure of a country already accept bitcoin as a trading currency and can be used as currency buying and selling goods, then at the same bitcoin does not require backup again ... Roll Eyes

Atdhe

sr. member

Activity: 326

Merit: 250

Atdhe Nuhiu

No. Altcoins are not backed by BTC. Altcoins can be exchanged to BTC or some money. That is not backing.

If something is backing altcoins then it is the belief that alcoins will be money one day. Same with BTC. Problems with altcoins is that nobody needs more currencies than 1 in the world without borders. The idiotic assumptions that people will have one currency for bigger payments and another for buying milk and bread are really incredible. They will have 2 or 20 wallets, where will be different amounts of money, but there will be just one global currency (maybe not bitcoin though). People do not want to count more currencies, there is no one advantage of it.

cellard

legendary

Activity: 1372

Merit: 1252

Quote from: Atdhe on December 04, 2014, 01:13:37 AM

Quote from: Martijnvdc on December 03, 2014, 04:36:57 PM

Quote from: RodeoX on December 03, 2014, 04:23:03 PM

Quote from: Martijnvdc on December 03, 2014, 04:06:39 PM

Quote from: RodeoX on December 03, 2014, 01:26:51 PM

Bitcoin is backed by the exact same backing as gold. Belief in it's value.

Except gold has very rare physical and chemical properties, while also being scarce...
Gold really does have value by itself, as a resource. Bitcoin does not.

It's true that gold does have some special properties. It's non-reactive, great conductor of electricity, etc. But that is not why gold is valuable. There is a long history of gold being considered valuable. This tradition is not connected with electrochemical properties. Gold is simply perceived to be valuable beyond it's utility.

Bitcoin also has utility and special properties. It is the fastest, cheapest, and most secure way to send money to anyone. That is an extremely compelling idea. Like gold, it's supply is limited and unchangeable. But also like gold, the real reason to exchange some wealth for bitcoin is because of a shared belief in it's future value.

Ah, good point. I agree.
But then the next problem is that bitcoin can be replaced by alt-coins with the same properties. Some of them even allow infinite creation of new coins... (meaning it can never become scarce, and therefor more valuable per unit)

That is exactly why altcoins will fall apart. The answer for "What are altcoins backed by?" is: incredible stupidity of hipsters.

Altcoins are backed by Bitcoin. They are tools that allow people to get some Bitcoin from the pump and dumps, thats basically all.

OrientA

sr. member

Activity: 462

Merit: 250

If BTC is backed by something, if that thing is useless, BTC is worthless. BTC is backed by community, us.

cinnamon_carter

legendary

Activity: 1148

Merit: 1018

It's about time -- All merrit accepted !!!

it is , it allows you a system to trust strangers,

read Satoshi's whitepaper

sandykho47

sr. member

Activity: 252

Merit: 251

Knowledge its everything

1. Cryptocurrency or bitcoin won't be 100% anonymous & P2P. Bitcoin / Cryptocurrency lose their original goal
2. Bad thing, they can control bitcoin as they want Sad

Bitcoin for now is already good, it don't need backed by something, but by the user

silverfuture

legendary

Activity: 947

Merit: 1008

central banking = outdated protocol

Quote from: hashman on December 03, 2014, 09:40:25 PM

If I say asset X is backed by asset Y, it means that I personally agree to give you asset Y in exchange for asset X at the agreed upon value.

So, to initiate a "backing" you need a central issuer (in this case me) to make the promise of future exchange between the two assets.

Generally, you should see that I used the word "backed" and realize that I am probably lying to you. The history of this word has only shown that it is used fraudulently leading to defaults. Even when an individual or group fully intends to trade the asset for the paper when asked, often circumstances lead to default.

Well said.

onewiseguy

hero member

Activity: 728

Merit: 500

a ballon holds helium and its cheap, When ballons placed at a party its lots of fun. Grin

Back to the post, if bitcoin was backed by anything but what a buyer wants to pay than its just like fiat so think of it as bitcoin being its own type of gold. well i least i do.

I think a couple of cryptos tried that backing stuff never worked.

Atdhe

sr. member

Activity: 326

Merit: 250

Atdhe Nuhiu

Quote from: Martijnvdc on December 03, 2014, 04:36:57 PM

Quote from: RodeoX on December 03, 2014, 04:23:03 PM

Quote from: Martijnvdc on December 03, 2014, 04:06:39 PM

Quote from: RodeoX on December 03, 2014, 01:26:51 PM

Bitcoin is backed by the exact same backing as gold. Belief in it's value.

Except gold has very rare physical and chemical properties, while also being scarce...
Gold really does have value by itself, as a resource. Bitcoin does not.

It's true that gold does have some special properties. It's non-reactive, great conductor of electricity, etc. But that is not why gold is valuable. There is a long history of gold being considered valuable. This tradition is not connected with electrochemical properties. Gold is simply perceived to be valuable beyond it's utility.

Bitcoin also has utility and special properties. It is the fastest, cheapest, and most secure way to send money to anyone. That is an extremely compelling idea. Like gold, it's supply is limited and unchangeable. But also like gold, the real reason to exchange some wealth for bitcoin is because of a shared belief in it's future value.

Ah, good point. I agree.
But then the next problem is that bitcoin can be replaced by alt-coins with the same properties. Some of them even allow infinite creation of new coins... (meaning it can never become scarce, and therefor more valuable per unit)

That is exactly why altcoins will fall apart. The answer for "What are altcoins backed by?" is: incredible stupidity of hipsters.

Sindelar1938

hero member

Activity: 490

Merit: 500

Bitcoin is backed by something: logic and mathematics
And that's unequivocally a good thing

Topic: If Bitcoin were backed by something. (Read 8115 times)