# The Bitcoin phenomenon.



## Inveniet (Aug 21, 2009)

So I stumbled over the Bitcoin world while reading Slashdot today. roud:

I immediately downloaded it and tried it out.
https://en.bitcoin.it/wiki/Main_Page
(Main page is down because of the slashdot effect! www.bitcoin.org)

I then went to the Bitcoin Faucet to get my first taste of the virtual currency.
0.05฿ YAY!!!
Bitcoin Faucet

What do you guys think about this phenomenon?
Do you feel that it has a future or is it just a fart in the wind?

Send all your thanks for pointing out this glorious tech to...

189VirMaMXjSTZDtEMvB9o6uoA8PJqgmkn

Hahaha now I will get soooooo rich...:crazy:


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## 23r098fnc (Mar 17, 2011)

Yep, bitcoin is friggin' awesome! I expect great things will come of it. Governments will lose much of their stranglehold on the economy.


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## Agile (Sep 27, 2010)

I've heard rumors that the founder owned 25% of all bitcoins, if this is true I think it is a pump and dump.


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## Bote (Jun 16, 2010)

I really couldn't believe the currency value (1 bitcoin is worth 8$!) so I wanted to try it out. For some reason I couldn't mine even close to 1.00 coin in 8 hours (and my graphic card is 1GB). Later I found out that they made it much more difficult to mine them with your processor or graphic card. In the beginning people could generate a few coins a day with a normal PC. Now you need like 4 combined beastly ATI Radeons to make bit coin mining exceed the price of wasted electricity and thus become profitable. WTF! It turned from free market to serfdom. Which young adult would pay 800$ for graphic cards to mine coins profitably and still need to have his PC on for long hours? Ugh. I heard the programmer who designed BitCoin and had the vision for a non paper currency which anyone can acquire left it entirely, as he noticed potential abuses and people's selfishness. It tires me whenever I think about shit like this - there's hyenas everywhere.

Good thing however is that you can get Bitcoins for your skills (e.g. get paid to write something, or design a logo etc.) which is cool, but pisses me off that the program was redesigned to make it harder for most computer users - reeks of corruption.


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## 23r098fnc (Mar 17, 2011)

BassClef said:


> I've heard rumors that the founder owned 25% of all bitcoins, if this is true I think it is a pump and dump.


 Non sequitur

With respect, you guys are making conclusions about bitcoin from a perspective of ignorance. I suggest you check out the forums (forum.bitcoin.org) where pretty much any question you have has probably already been answered.

Bitcoin will very likely be ubiquitous in the near future. It will make visa, mastercard, paypal, central banks and income tax and many government regulations redundant. This is BIG!


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## Bote (Jun 16, 2010)

23r098fnc said:


> Non sequitur
> 
> With respect, you guys are making conclusions about bitcoin from a perspective of ignorance. I suggest you check out the forums (forum.bitcoin.org) where pretty much any question you have has probably already been answered.
> 
> Bitcoin will very likely be ubiquitous in the near future. It will make visa, mastercard, paypal, central banks and income tax and many government regulations redundant. This is BIG!


Enlighten us then how to get bit coins while not wasting electricity, while not having to buy extra hardware. And I think you're a bit irrational with potential bit coin benefits. The only thing of tangible economic value in the world are natural resources. Paper has no real value, its value lies in agreement of people. Virtual currency in that respect is in an even weaker position. And this particular currency (BitCoin) will disappear over night if a new sort of machine based on different technology gets invented.


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## Agile (Sep 27, 2010)

23r098fnc said:


> Non sequitur
> 
> With respect, you guys are making conclusions about bitcoin from a perspective of ignorance. I suggest you check out the forums (forum.bitcoin.org) where pretty much any question you have has probably already been answered.
> 
> Bitcoin will very likely be ubiquitous in the near future. It will make visa, mastercard, paypal, central banks and income tax and many government regulations redundant. This is BIG!


I'm sorry, I meant no disrepect, and I was upfront with the fact it was a rumor (i heard it from my brother). If it could be proven wrong - great. 

But relating to the topic, my arguments against bitcoin are more around what I consider to be money, than if there are any concentrations. In my opinion, only a couple of elements on the periodic table could serve as money since they best serve these principles 

- a store of value (rare), It must have value on its own merits than value by decree)
- fungible. Each unit of weight is equal to another equal unit of weight. 
- divisible. It must be divisible into smaller parts and easily tradeable 
- act as a medium of exchange. 
- easily recognizable and difficult to counterfeit.


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## 23r098fnc (Mar 17, 2011)

BassClef said:


> I'm sorry, I meant no disrepect, and I was upfront with the fact it was a rumor (i heard it from my brother). If it could be proven wrong - great.
> 
> But relating to the topic, my arguments against bitcoin are more around what I consider to be money, than if there are any concentrations. In my opinion, only a couple of elements on the periodic table could serve as money since they best serve these principles
> 
> ...


bitcoin satisfies all these points.


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## 23r098fnc (Mar 17, 2011)

Bote said:


> Enlighten us then how to get bit coins while not wasting electricity, while not having to buy extra hardware. And I think you're a bit irrational with potential bit coin benefits. The only thing of tangible economic value in the world are natural resources. Paper has no real value, its value lies in agreement of people. Virtual currency in that respect is in an even weaker position. And this particular currency (BitCoin) will disappear over night if a new sort of machine based on different technology gets invented.


Offer goods and services in exchange for bitcoins. It's a currency 

Bitcoin will dominate the market for money transfers because fees are tiny. bye bye papal and visa. Governments can't tax people trough inflation and won't be able to tax individual incomes under a bitcoin system due to it's anonymous nature. The inability to monitor peoples transactions make it very difficult for the government to regulate trade, resulting in freer markets. Some may dissagree, but I think this is a big plus. If my claims of bitcoins benefits are irrational, then you will have an easy time explaining why.

As for the rest of your post, what are you arguing? That bitcoin has no value because it's intangible? Value is purely subjective, isn't it? How valuable is gold or wood if there are no people?

Sure if a better currency comes around, then it would probably make bitcoin fast redundant, but for now, bitcoin is the superior medium of exchange. Also, keep in mind that the technical innovation that enabled bitcoin was in the making for a good 20 years or so. This stuff isn't trivial. In 2 years, no one has improved on it.


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## Agile (Sep 27, 2010)

23r098fnc said:


> bitcoin satisfies all these points.


It has all the points except for being easily recognizable, which I acknowledge could be shortlived if it continues to grow organically. However, this currency will still compete with gold as dollars do now. I'm different from many people that think we actually left the gold standard. While we left the fixed gold standard, we haven't gone off of it the fact that gold is traded at a floated exchange. The fact that gold has gone up 120% in three years should highlight the fact that gold is money and always has been.

When dealing with competing currencies there is Gresham's Law, where when faced with the competition the people will hoard the valuable money and spend least valuable. I think the fact that metals are tangible adds an intrinsic value factor that bitcoin cannot manufacture.

I am more curious than I am sure, so I am eager to see how bitcoin will unfold, however if I was to invest in the money of the future, my dollars are going into physical gold and silver. 

The fact that gold is so internationally recognizable, and served as the best reference point for a storage of wealth over thousands of years that it is in my view to be the ultimate money.


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## 23r098fnc (Mar 17, 2011)

BassClef said:


> I think the fact that metals are tangible adds an intrinsic value factor that bitcoin cannot manufacture.


True, but then the fact that bitcoin can be transfered over the internet anonymously adds an intrinsic value factor that gold cannot imitate.



BassClef said:


> The fact that gold is so internationally recognizable, and served as the best reference point for a storage of wealth over thousands of years that it is in my view to be the ultimate money.


I don't mean to dismiss the virtues of gold, but considering how fast society is evolving, I put less and less weight into historical precedents such as this.


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## Agile (Sep 27, 2010)

Actually there is an interesting service called GoldMoney, which is equivalent to BitCoin from a gold perspective (with regards to anonymous distribution). But really I think at the end of the day it's splitting hairs, both are sound money of they satisfy the principles of money. Since it's the people's confidence to determine the value of the money, my opinion is irrelevant.


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## Yardiff Bey (Jun 5, 2011)

A pyramid scam that benefits the early adopters.

1/ Limited to 21 million bitcoins maximum
2/ Early adopters generated bitcoins easier than the latecomers
3/ Not easy to convert to something you can spend in a shop

Also being used for criminal activities (Silk Road). Will probably be shut down.


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## Khar (May 21, 2011)

I must disagree with you on some points, @_23r098fnc_ .

The bitcoin system is not user friendly, and that has in fact hindered development of the system and it's use a bit as a medium of exchange (less technical minded people will find it a barrier to entry). It has a whole new coding system and has several steps for each use of the bitcoin system. Secondly, it has been noted that security for the bitcoin system is poor, from malware attacks on through. The ease of stealing of other people's bitcoins (encryption is supposedly weak) and the use of automated methods to mine bitcoins are significant barriers to an effective monetary structure, and hence the bitcoin does lag in some definitions as a form of money. The bitcoin system is unfortunately limited in enforcement. It is currently a young currency, and hence is comparatively illiquid as well. 

The prices also tend not to be sticky, and hence it's use to exchange for goods is at times questionable. Previous instances have included massive value changes, by four digits for percentages, and some economists are concerned about the risk of future deflation. While some more libertarian economists no doubt approve, they tend to support constant monetary growth rather than decreasing levels. Indeed, the variances in pricing in recent months even puts into question whether or not the bitcoin system would be an effective method to store value, which is another important aspect of the bitcoin system. There is a significant lack of arbitrage to correct monetary imbalances between the various services. 

I'd also like to point out that the idea that it sidesteps government regulations is slowly becoming incorrect, and in fact they are seeking a relationship with regulators. Already bitcoins are treated as a traded resource, and transactions of a certain amount must be reported to governments. Regulation requests of the industry following aforementioned criminal issues means that sooner or later this form of currency will come under the scrutiny of government bodies, and hence can be influenced by them. In fact, that case effectively demonstrated how easy it is to track Bitcoins, and how much transactions are followed in the system through the block-chain set up. The difference is that with modern fiat money, transactions tend to be kept private, while in the Bitcoin world, the transacters tend to be kept private. Everything in the system is known and traceable -- even those bitcoins kept in banks, which have already popped up for the Bitcoin system. 

The problems here is that the bitcoin is already failing to match standards as a currency compared to already accessible mediums. It is not a very stable or safe system, is influenced more easily by speculation, and even though governments are not entirely involved at the moment, both governments and the creators of the bitcoin system are attempting to follow regulations, and as this is a form of income, it does have to be reported in places like the US because it is a traded commodity -- in fact, that thread from the bitcoin forum shows that he will be trying to write of his massive amount of stolen bitcoins as a loss, showing that it is not as seperate from the government as has been described. Indeed, the government already used the system to regulate what goods were sent -- namely, drugs. 

While incentivizing early adopters does make sense, the incentivization was 500,000:1 as a work ratio between the first and current bitcoins is a concerning degree of incentivization, especially with the explosion of market value and the length of growth for the bitcoin count. I would also agree with UBC economist Werner Antweiler -- without status as fiat currency, no one is obliged to take it, and hopefully it provides encouragement to reduce transaction fees through other services as it's most positive feature. 

Now, *could* it become a more successful currency in the future than what mediums we have? It's always a possibility as the system evolves, as this is an innovative and very interesting idea. However, there are many real concerns with the bitcoin system which must be addressed first. Right now, it does not satisfy all of @_BassClef_ 's points to the same level as some current fiat currencies (typically those in the developed world), and does need several levels of improvement to function as a long-term, viable currency system, some of which would develop with time but some which will need active alterations. It *does* have some advantages, and the strength of something like the bitcoin would be best represented in nations lacking a viable currency. It also has some important weaknesses, and some of the percieved advantages, including separation from the governments and their control, are tenuous going forward.


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## RobynC (Jun 10, 2011)

Strikes me as some kind of ponzi scheme


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## Yardiff Bey (Jun 5, 2011)

Apparantly it's not even that anonymous.

An Analysis of Anonymity in the Bitcoin System: Bitcoin is not Anonymous

At least that will turn criminals off, once law enforcement figures that out and starts tracking.


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## RobynC (Jun 10, 2011)

It's like creating money with an RFID chip, except in this case, you can't put it in a nice little pouch to prevent RFID theft/tracking


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## Decay153 (Dec 31, 2009)

I guess people are using it to order in illicit drugs through the dark webs.
That's kind of hilarious. I'm not sure why...

Probably because a "bit coin" can order you DMT from Europe on the "secret anonymous internet" sent through US mail.

This is what I gather.


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## RobynC (Jun 10, 2011)

Decay153,

DMT's a really interesting substance. When taken with an MAOI it induces near-death like experiences. Not all are pleasant...


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## Decay153 (Dec 31, 2009)

To be frank, I don't particularly care about DMT itself. 
I was using it as an example of something people trade through proxies these days because it's notoriously illegal. 

But that's interesting nonetheless.

The worlds developing through these hacker cultures (bitcoins etc.) are both revolutionary with their freedoms, and frightening with their rampant black market.


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## RobynC (Jun 10, 2011)

*Decay153*



> To be frank, I don't particularly care about DMT itself.
> I was using it as an example of something people trade through proxies these days because it's notoriously illegal.


I understand what you were trying to say actually.


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## Yardiff Bey (Jun 5, 2011)

Decay153 said:


> The worlds developing through these hacker cultures (bitcoins etc.) are both revolutionary with their freedoms, and frightening with their rampant black market.


It's like Rule 34: If it exists, there is porn of it. No exceptions.

I hereby propose Rule 35: If it exists, there is a black market for it. No exceptions. :laughing:


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## Decay153 (Dec 31, 2009)

RobynC said:


> *Decay153*
> I understand what you were trying to say actually.


Oh, sorry for assuming you hadn't. 



Yardiff Bey said:


> It's like Rule 34: If it exists, there is porn of it. No exceptions.
> 
> I hereby propose Rule 35: If it exists, there is a black market for it. No exceptions. :laughing:


That definitely sounds right.


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## 23r098fnc (Mar 17, 2011)

Khar said:


> I must disagree with you on some points, @_23r098fnc_ .
> 
> The bitcoin system is not user friendly, and that has in fact hindered development of the system and it's use a bit as a medium of exchange (less technical minded people will find it a barrier to entry). It has a whole new coding system and has several steps for each use of the bitcoin system. Secondly, it has been noted that security for the bitcoin system is poor, from malware attacks on through. The ease of stealing of other people's bitcoins (encryption is supposedly weak) and the use of automated methods to mine bitcoins are significant barriers to an effective monetary structure, and hence the bitcoin does lag in some definitions as a form of money. The bitcoin system is unfortunately limited in enforcement. It is currently a young currency, and hence is comparatively illiquid as well.
> 
> ...


Phew! really long post...

Most of your points are actually criticisms of the, admittedly immature, bitcoin infrastructure/economy and not the bitcoin technology itself. I fully expect issues of security, anonymity, volatility, government oppression, etc. to be overcome as better software tools, services and more users come about in the near future.

Your post is just way too long to for me to address all those issues in detail. I opt to let time settle the matter. Unless you'd like to argue one specific point?


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## orni (Sep 19, 2012)

so...it's at $90 now


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## Wulfyn (May 22, 2010)

23r098fnc said:


> Non sequitur
> 
> With respect, you guys are making conclusions about bitcoin from a perspective of ignorance. I suggest you check out the forums (forum.bitcoin.org) where pretty much any question you have has probably already been answered.
> 
> Bitcoin will very likely be ubiquitous in the near future. It will make visa, mastercard, paypal, central banks and income tax and many government regulations redundant. This is BIG!



I'm a big fan of bitcoin so don't take it as argument from ignorance when I say that you are massively over-reaching here. There will be a hard cap of 21 million bitcoins, so even at $1,000 dollars each (about 10 times what they have traded for) the total currency value will be $21 billion. The US spends 10 times that amount just on interest payments of their debt.

Even if you looked to conduct all online payments with bitcoin you still need a way to convert the currency you get paid in, and this will likely make visa / mastercard / paypal more necessary. This new currency (which is a taxable asset) will not prevent income tax, and unless you are proposing that people are paid in bitcoins I don't see what it even has to do with income tax. It is already subject to government regulations, and the more people take notice of alternative currencies the more they will get the attention of governments.

The interesting point is how will a currency without a central bank and lacking in a fractional reserve system function. It will not be subject to inflation, and like a hard commodity (e.g. gold) will rise in price over time against the $ due to the change in ratio of the money supply. I wouldn't say that it is a sound investment strategy, but it is interesting. What it won't be is ubiquitous any time soon.



edit:


> True, but then the fact that bitcoin can be transfered over the internet anonymously adds an intrinsic value factor that gold cannot imitate.


Almost all hard commodity transactions are done via ETFs (Exchange Traded Funds) or stocks. This is where you don't buy the gold itself as a physical item but just a portion of a fund that owns gold (and likely other hard commodities to diversify). These can be easily sold online. The reason for this is that it is very costly to keep moving gold around to different places, so it's better to keep it all in one place and then just trade bits of electronic paper.

For what it's worth the gold price has just dropped a lot (proving that the volatility of bitcoin makes it look a lot like other hard assets), so now might be a good time to invest!


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## Death Persuades (Feb 17, 2012)

What is the point of this? Do you have to give actual currency to get this fake currency? I feel bad for people if the company suddenly vanishes from the face of this planet..


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## FlightsOfFancy (Dec 30, 2012)

in b4 the hack


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## 23r098fnc (Mar 17, 2011)

Wulfyn said:


> I'm a big fan of bitcoin so don't take it as argument from ignorance when I say that you are massively over-reaching here. There will be a hard cap of 21 million bitcoins, so even at $1,000 dollars each (about 10 times what they have traded for) the total currency value will be $21 billion. The US spends 10 times that amount just on interest payments of their debt.


I don't know what your point is. How am I "overreaching"?



Wulfyn said:


> Even if you looked to conduct all online payments with bitcoin you still need a way to convert the currency you get paid in, and this will likely make visa / mastercard / paypal more necessary. This new currency (which is a taxable asset) will not prevent income tax, and unless you are proposing that people are paid in bitcoins I don't see what it even has to do with income tax. It is already subject to government regulations, and the more people take notice of alternative currencies the more they will get the attention of governments.


No, because eventually, you'll be paid in bitcoins and you'll purchase goods and services with bitcoins. No need for paypal, visa, etc. This is already happening.

As for tax, it's allot easier for the black (untaxed) market to function with payment system that the government can't easily monitor. It's also impossible to steal savings by printing money. Bitcoin serverly hurts government revenue streams.



Wulfyn said:


> The interesting point is how will a currency without a central bank and lacking in a fractional reserve system function. It will not be subject to inflation, and like a hard commodity (e.g. gold) will rise in price over time against the $ due to the change in ratio of the money supply. I wouldn't say that it is a sound investment strategy, but it is interesting. What it won't be is ubiquitous any time soon.


It's risky, but so far so good.


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## 23r098fnc (Mar 17, 2011)

ISFjosue0098 said:


> What is the point of this? Do you have to give actual currency to get this fake currency? I feel bad for people if the company suddenly vanishes from the face of this planet..


A currency that isn't controlled by the state. Very important.

What's the difference between "actual" and "fake" currency? What are you talking about?

There is no "company" to vanish. It's a decentralised payment network.


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## Death Persuades (Feb 17, 2012)

hornet said:


> So I stumbled over the Bitcoin world while reading Slashdot today. roud:
> 
> I immediately downloaded it and tried it out.
> https://en.bitcoin.it/wiki/Main_Page
> ...


I found out about this just today o.o I looked into it and holy fuck today I made an extra 93 USD  Yeah... I made one bit coin. :3


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## aus2020 (Jun 29, 2011)

Yardiff Bey said:


> A pyramid scam that benefits the early adopters.
> 
> 1/ Limited to 21 million bitcoins maximum
> 2/ Early adopters generated bitcoins easier than the latecomers
> ...


Yes, the first words I would associate with bitcoin are pyramid scam. A system open to fraud and hacking. Could end up like the tulip mania of the 1600's.


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## anna111 (Jun 18, 2014)

As on me cryptocurrency it is the future. I most like Bitkoin, here in detail all mining-profit.com/bitcoin In fact this currency, so quickly grows and fully possibly to begin to work a great money.


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