Why Bitcoin changed the world... and its price will crash - page 3.

BigJohn

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Quote from: marcus_of_augustus on December 26, 2013, 02:32:43 PM

Quote

But why would it have to be decentralized?

Now we know you are just trolling.

Oh okay, I was saying that for wide adoption a coin doesn't have to be decentralized. Obviously I'm wrong, so for a coin to have wide adoption it must be decentralized. Explains why the USD is so widely in use. [/sarcasm]

marcus_of_augustus

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Eadem mutata resurgo

Quote

But why would it have to be decentralized?

Now we know you are just trolling.

pening

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Quote from: toknormal on December 26, 2013, 07:02:58 AM

...Bitcoin has intrinsic value because it works as a unique token of value with a high resistance to counterfeiting. Cryptocurrencies which have to be "backed" by something are by definition of far less value than ones that are not ...

The resistance to counterfeiting as you put it well is a property of all cryptocurrencies. If one is "backed" by something else, that is an additional property, it does not by definition reduce the value.

Valerian77

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Quote from: theecoinomist on December 26, 2013, 01:40:18 PM

Quote from: CryptoPhilanthropist on December 25, 2013, 12:25:01 AM

Having a trusted bank issue individual coins representing actual assets will allow them to be more valuable than BTC is today, making them more attractive to mine.[/b]

The question is whether they'd name it Debtcoin or Derivativecoin?

lol

theecoinomist

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Quote from: CryptoPhilanthropist on December 25, 2013, 12:25:01 AM

I foresee a collapse of BTC value when the first large financial institutions release cryptocurrencies of their own, which are actually backed by tangible assets like gold or by fiat currencies. Those will not be ideologically appealing to most people who post here, but the business model makes perfect sense. The fear that the public and media have about BTC is that it is an attempt to create wealth out of thin air. Having a trusted bank issue individual coins representing actual assets will allow them to be more valuable than BTC is today, making them more attractive to mine. These bank-backed cryptocurrencies would look to many like the 'best of both worlds': the guaranteed value of a traditional bank note with the transparency and irreversibility of distributed block-chain logs.

The question is whether they'd name it Debtcoin or Derivativecoin?

BigJohn

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But why would it have to be decentralized? The USD is very much centralized, and it's also the most widely adopted currency in the world.

I don't think that The Powers That Be really care if their currency "works" in the long run. As long as it gets adopted, it works well enough for them. If Bitcoin proves to be something the public wants, so much so that it endangers other currencies, then what's stopping them from making a centralized (and backed) crypto-coin of their own?

The point is that if they make such a coin, it will likely get adopted much easier than Bitcoin has.

HeliKopterBen

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A gold-backed money will not work without centralization and a money sponsored by a bank or other large business will not work unless it is completely decentralized and open-source. Sure a business or government could create a completely decentralized, open-source money but then you are left with just another alt-coin.

Valerian77

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Quote from: CryptoPhilanthropist on December 25, 2013, 12:25:01 AM

I foresee a collapse of BTC value when the first large financial institutions release cryptocurrencies of their own, which are actually backed by tangible assets like gold or by fiat currencies.

That is the single point which @CryptoPhilanthropist has not catched - there is no intrinsic value. And the senseless try to back a currency by gold or anything else is just a naive imagination of gold having an intrinsic value which is even not true - it is the coherent believe of the owners into yellow metal. As we see in Bitcoin no bounding to gold is needed to create a coherent believe in the value of Bitcoin. The creation of BTC is genius in an emergent way which is without precedence but comparable to gold, internet, email etc

The speculation that some bank will create its own cryptocurrency may become true but will not affect Bitcoin. That will just be another altcoin like all the other 60 or so ones. If the bank keeps the control over this currency it will be no more than any other fiat just as electronic currency.

johnyj

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Beyond Imagination

The alt-coins will never become big, because they don't have the corresponding infrastructure. You can copy the source code, but you can never copy the hardware infrastructure and the operating cost

If not because of the large scale ASIC mining equipment roll out and raised level of investment in infrastructure, the bitcoin's value would still stay at $10 range, because the cost of each coin was roughly that level

Now, if you want to mine 1 bitcoin, at least you should invest $1000 in latest generation mining rigs, that's the reason the price will never go much below that level

Of course J.P. Morgan can start a special cryptocurrency with large amount of infrastructure investment, but currently most of the IT talents were attracted by bitcoin and without them not so many people left will support a new coin

toknormal

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Good points, up til this paragraph which is way off in my opinion...

Quote from: CryptoPhilanthropist on December 25, 2013, 12:25:01 AM

I foresee a collapse of BTC value when the first large financial institutions release cryptocurrencies of their own, which are actually backed by tangible assets like gold or by fiat currencies. Those will not be ideologically appealing to most people who post here, but the business model makes perfect sense. The fear that the public and media have about BTC is that it is an attempt to create wealth out of thin air. Having a trusted bank issue individual coins representing actual assets will allow them to be more valuable than BTC is today, making them more attractive to mine. These bank-backed cryptocurrencies would look to many like the 'best of both worlds': the guaranteed value of a traditional bank note with the transparency and irreversibility of distributed block-chain logs.

Bitcoin has a value at the moment because it is "base money". That's to say, it is at the end of a chain of trust (i.e. not 'backed' by anything).

Money which has to be 'backed' by something, by definition, is not base money and so has no intrinsic value of its own. Bitcoin has intrinsic value because it works as a unique token of value with a high resistance to counterfeiting. Cryptocurrencies which have to be "backed" by something are by definition of far less value than ones that are not and so I think its unlikelt that banks will start to do this.

BigJohn

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I'm starting to think you guys may just be trolling

Peter R

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Quote from: marcus_of_augustus on December 25, 2013, 05:37:41 PM

Quote from: BigJohn on December 25, 2013, 05:15:22 PM

Quote from: TTBit on December 25, 2013, 04:28:43 PM

When people were connecting computers together in the 1980's, they didn't have the goal of the internet as we know it now, much less websites such as Facebook or Twitter. It was clear that the value of two computers connected together was greater than two computers not connected, so it was done. Protocols were written which are still in use today. Today, there appears to be a value in a public ledger, otherwise it wouldn't be done. The early adopters of the internet failed to see Facebook.com and Twitter.com, but that doesn't mean they didn't see value at the time.

But this is exactly the point the OP was making.

Essentially the internet we have today is not the internet of two computers connected together back in the 1980s. Remember a few years ago when they started calling it Web2.0? That was when sites came up where the users themselves were the content. Youtube and whatnot. Even though the fundamental technology hasn't changed all that much since the 80s, the nature of the internet itself changed significantly, to the point where it's really not the same thing anymore.

All the OP is saying, and I've been saying the same thing, is that the tech itself is amazing, but Bitcoin itself will probably not be the currency of the future. Much like connecting two computers together in the 80s is awesome, but those two specific computers connected together aren't the internet of today per-se.

Some other public ledger will likely come up, either an Alt-coin, or something backed by the 1% through a bank, that will do what Bitcoin itself is trying to do. Essentially Bitcoin is just a proof-of-concept. The examples of Litecoin and Peercoin aren't to say that those two specific ones will dethrone Bitcoin. Just that they manage to offer something similar, yet different enough, that it seems likely that something of the sort will come up in the future.

People who are not that technically aware often make this mistake that the Internet now is somehow different than it was 'back then' ... it isn't, some of the the layers above, the facade that the users know is different, underneath it is still TCP/IP (or UDP) and packet technology. Bitcoin, the network is the TCP/IP for internet money.

You are saying that someone will come along with something so different to bitcoin, the network protocol, and it will be banks and governments and it will make bitcoin obsolete? That's just simply ignorant of how network technology works and how it is developed. Frankly, it sounds like wishful thinking or stupidity masquerading as informed commentary.

+1

Thanks marcus_of_augustus for writing the post I was about to write. I guess unless you are involved/interested in the technical details, it's hard to understand that the backbone protocol of the internet is the same as it was in the 80s and 90s. A quick Wikipedia search reveals that "TCP is a complex protocol...its most basic operation has not changed significantly since its first specification RFC 675 in 1974." This shows how low-level flexible protocols (like bitcoin) have much longer lifespans than things like software GUIs, iPhones, or website designs.

But bitcoin is largely mathematical too. Mathematical results have even longer lifespans. The math still used to infer 3-D structures in X-ray computed tomography was actually invented in 1917 by an Austrian mathematician Johann Radon. The physics (still used to this very day) that describe all electrical and magnetic phenomenon is unchanged since James Clerk Maxwell put the finishing touches on the four equations of electrodyanmics in 1862!

undeadbitcoiner

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Undeadbitcoiner Will not DIE until 1BTC=50K

Quote from: BTCisthefuture on December 25, 2013, 02:21:19 AM

Only read the first couple sentences but 1) I would agree that right now bitcoin is overvalued in comparssion to how much adoption and usage it currently has .... however...... 2) Bitcoin has a ton of potential in the future and it's still in such it's early stages that I don't think it's unreasonable to think in coming years bitcoin could be more properly valued and still be quite a bit higher than it is currently.

So even if it is overvalued currently, a lot of people would argue they don't care because they are investing based on it's valued 5-20 years down the road.

+1

The More Demand in Current Future and the Less Supply Capacity will raise price much more.

proton

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Any institution can create a form of cryptocurrency. It does not have to be a large financial institution. Amazoncoin is one example. All of these new currencies would require trust in that institution. These might work with their customers, but it is hard to see they would develop a universal appeal. For example, why would you go and buy, say AliBaba's Alicoins, JP Morgan's JPcoins or Sumimoto's Sumicoins, which you can't use elsewhere? If they are backed by something like gold, it is still a claim, you would not know if they are actually backed or not. You are still taking the counterparty risk in financial lingo.

The real threat to universal adoption of a decentralized cryptocurrency comes from the States. Each State might develop its own currency, may rule it as fungible with their paper currency. Such as ChinaCoin, Ruscoin, USAcoin....They have the power to enforce the use of these while ruling Bitcoin etc. illegal.

BigJohn

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Are you seriously comparing neurosurgery to TCP/IP? Really?

And how do you know what I do and do not know?

It's amazing how humans are always certain that if the person they're talking to disagrees with them, then surely that person must be stupid. It's unimaginable that you may just be slightly wrong.

The funny thing is that the point of disagreement is actually a relatively minor one. I wasn't even saying someone is fundamentally wrong about some major thing. Just a minor point that I happen to disagree with. But it's so unimaginable to you that you could be wrong on even the slightest point, that surely you must be talking to a complete retard. So much so that I'm asking for him to just try and explain to my feeble mind why I'm wrong, but that's too much of a bother to such an intelligence that can grasp BOTH neurosurgery and TCP/IP. Two of the most complicated notions humanity has ever come up with.

justusranvier

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Quote from: BigJohn on December 25, 2013, 05:51:53 PM

Ok so I'm wrong because... I just am?

Good argument old chap.

Try having a discussion with experienced neurosurgeons about the pros and cons of different techniques without even having gone through medical school and I bet you'd get the same response.

leeo

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If the argument against Bitcoin is that there is no physical backing to the rare numbers, consider the following:

I can envision a Distributed Autonomous Corporation [ ref www.letstalkbitcoin.com/bitcoin-and-the-three-laws-of-robotics ] that permits holders of slabbed gold or silver coins [ ref http://coins.about.com/od/coinsglossary/g/slabbeddefined.htm ] to sell covered calls on these assets, denominated in BTC.

One of the arguments against holding gold coins is that the money in this form, though it has no counterparty risk, has no associated income other than capital gains. This would provide the holder of the gold or silver asset an interest income that is genuinely market set.

To the argument that there is no physical backing to BTC, simply purchase a few covered calls to guard against a BTC crash. A critical mass of BTC to Au or Ag coins in the form of enforceable options would serve as a ballast, the way a genuine gold backing has to United States Dollars before the Federal Reserve Act. --LeeO

frito

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Quote from: CryptoPhilanthropist on December 25, 2013, 12:25:01 AM

All of us are tired of hearing the same weak arguments made against Bitcoin by reporters and mainstream economists who don't understand the fundamentals of cryptocurrency. Two weeks ago, I beg.......
.....yadaya...
These are realities that people on Wall Street know and believe. But they aren't being priced into BTC right now because there is no real way to short the currency's value, at least not with the scale and reliability that hedge funds demand. If there were, I guarantee there would be a significant amount of money willing to take the opposite side of bets against the BTC community's true believers.

Ultimately, the entire Bitcoin story will reinforce the truest aphorism of all: "Nothing is ever as good or as bad as it seems."

Mining fiat or gold based crypro currency?! really?!

BittBurger

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It's funny how *everyone* talking trash, is a new registrant here. Fewer than 100 posts.

My estimation: They "discovered" bitcoin a few months ago, googled for "Bitcoin Forums".

Found this one, signed up, and felt motivated to share their pearls of wisdom with this community.

So here they are, all with 11 posts, 38 posts, 85 posts ... telling us why Bitcoin will fail.

My guess is its a bunch of self proclaimed economic experts, stock guys, and others in the old school obsolete finance world.

Just something I've noticed. Obviously there are exceptions.

-Burger-

marcus_of_augustus

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Eadem mutata resurgo

Quote from: BigJohn on December 25, 2013, 05:51:53 PM

Ok so I'm wrong because... I just am?

Good argument old chap.

No, you are wrong because you don't have a clue Cheesy

That much is obvious, chap.

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