Topic: Will BTC's umbilical cord to USD eventually throttle it? (Read 2449 times)

Lets not get into this but the total computing power of the network is 0 FLOPS. Unless there is still somebody  cpu mining

My point being it isn't going to be easy for any government to to set up a massive mining ring and try to manipulate Bitcoin. The Bitcoin network already has more processing power than the top 500 supercomputers.

Even if cash is the only option to get Bitcoin now, it's value is purely supply-demand based. How do you know we are too late to the game? It is hard to predict the future demand for something like Bitcoin.

a reparticualist I see

no because the more the try to buy the higher the price gets, until they run out of money,
one_simply_can't_buy_bitcoins_into_submission_boromir.jpg

Yes, ruletheworld and your point being? As my comment states, newcomers don't have an easy time of it. We are too late to mine, don't have shares 'generating' bitcoin as dividends, only have cash/credit-card/PayPal as options to buy. Trying to get large volumes of coins quickly is not easy.

Why did mineforman go out of his way to help people acquire bitcoins for his group buy?

But I have confidence in the currency, especially with seeing protests on the BBC this morning in many parts of the world against government 'austerity' measures. What is austerity anyway... Gov just deciding to work within their budget? Why are so many reliant on government jobs or handouts? Why not get a real job like the rest of us. But that is another topic altogether, and probably not a popular opinion.

Umm, more than half the Bitcoins that will ever go into production are already out there in the hands of people (about 11 million out of 21 million).

Will rice production eventually throttle BTC?

It's clear the world is thinking the same, as of the last few days we are seeing new exchanges and existing online payment processors moving into BTC and avoiding the dollar.

The world's a rapidly-changing place: if Bitcoin makes it will be to a certain point at the expense of the dollar.

Not every dollar has an American behind it and its days as the world's currency are numbered IMHO.

Then clearly you skipped your English classes!

Yes probably

Not really "throttle" I'd say, but there is going to be a big speed bump when the connection is finally broken.

Yes, its a possibility.

Can you provide a reference for this please?

You would also need to back this up by proving most people using BTC are speculators.

I don't think you understand my point as well as other contributors to this thread.

The reason the BTC/USD pair is the most traded is because all of the trade flocks to the pair with the most liquidity. There was a lot more BTC/GBP trading on MtGox before the spike. Are you suggesting there are a lot less British BTC holders now than a month ago?

I think something like that is a very important step that needs to completed very soon. The US Govt is cracking down on Bitcoin already.

Interesting thread. I enjoyed the pronoun anaphora resolution issue for "it" in the title "Will BTC's umbilical cord to USD eventually throttle it?"

This is a very skewed view, to imply that there is a umbilical cord between BTC and USD.

Lemme summarise couple of points to ponder:

1. Although most Bitcoin nodes are in China, the most BTC speculators are from US.

2. What defines the size of a market is not it's location, but the volume of currency-pairs traded on that market.

3. Mt Gox provides the largest number of markets, the one with the highest volume (by far) is the BTC/USD.

4. There are other smaller exchanges, who also offer the most popular pair, but their volumes are not that great.

5. US citizens form the largest group of BTC/USD speculators, no one stops them from trading any other currency-pair, but they have chosen that it is most convenient for them to trade for BTC/USD, deposit and withdraw in USD too.

6. There are myriad of traditional currency exchanges, some of them very good too (XE Forex comes to mind), but obviously people do not want to be bothered to trade currencies in multiple dimensions , example: trade BTC/USD, withdraw in XE wallet in USD, exchange that for EUR, trade EUR/AUD, deposit AUD to MtGox, trade AUD/BTC, profit!

7. Liquidity is king, at least in the speculator's land, hence that's what defines a good market.

8. With the blockage of Dwola, MtGox has found themselves with a challenge on their hands, but nothing so severe that they are not able to address (proven history of problem-solving) in time.

9. So, the real challenge is facing the US based speculators - if they want to trade the BTC/USD pair, the onus is on them to find an exchange that offers great liquidity and transaction volume in their choice of fiat, then they have to find efficient way to deposit and withdraw from that exchange.

10. No speculator cares about centralised/decentralised nature of the market, they are quite used to a centralised/regulated exchanges.

11. It takes time to react to any changes in environment, Rome was not build in one day.

Methinks...

I agree with some of the earlier posts that in the western world we are seeking a skewed view and not taking account the large volume of trade that goes on in China and Russia in their respective currencies. For the rest of us, USD is a solid observation and indicator of health as a majority of the services built are done so in the most liquid market which in our case is USD.

Some great answers, thanks. Food for thought.

Yes at < $1.5B market cap, BTC could be a mere plaything for a malicious government though perhaps one with a sting in its tail.

I'm an avid reader of all things game theory related too and this is a fascinating scenario when seen in that context.

Since posting, I've noted with interest that Canada has had a small change of tact with regards to Bitcoin, backing up my suspicions that BTC could become a political hot potato.

Jaywaka: BTC is linked to USD in that people trade in that pair, regardless of whether they own USD. It represents a disproportionate fraction of the world's BTC trade when BTC/EUR would be a much better fit for millions of traders or those getting paid in BTC. MtGox right now the soft underbelly of Bitcoin and if we had a robust exchange away from US meddling then it would be less susceptible to collapse.

One of the major cons of decentralization is distribution of wealth. In any centralized country, you work and get paid in government money. With Bitcoin, those who can afford the most hardware get the most Bitcoins. Hashing is the ONLY way to get PAID in Bitcoin. Other people buy Bitcoin with dollars, as that is what the seller of Bitcoin is asking for it. The USD does not have an "umbilical cord" to Bitcoin. There are no other ways to acquire Bitcoin as well.

The problem with people predicting this buyout scenario is not only is it not realistic, they clearly don't understand how currencies work, if the federal reserve for instance decided to buy up lots of Bitcoins the price would most likely rise so high that it wouldn't be cost effective to buy anymore to keep competition away. They would also have to print more money in order to buy Bitcoin which would of course drastically affect the value of the dollar even more so it would be like with most hyperinflated currencies where you'd need 10 million dollars to buy 1 Bitcoin.

Adding to that, if they tried to keep Bitcoin out of the markets as much as possible then all people will do is switch to the alternative that is far easier to use and less restrictive and doesn't cost a fortune to transfer across the world, because of the deflationary nature of Bitcoin it seems very unlikely to me that any buyout attempt will succeed. The problem with many of these disaster scenarios is that the people predicting them keep making the mistake of treating Bitcoin as an inflationary currency that there is an infinite supply of which it is not.

The central banks of the world have been rigging the currency markets and artificially fixing prices and now thanks to deflation we're finally seeing just how much damage they've caused.