Discussion in 'The Thunderdome' started by Indy, Oct 7, 2017.
Every time I come across a bitcoin ore vein I realize I left my pickaxe in Whiterun
The American dollar is a fiat currency. Bitcoin is basically the same. The only thing backing the USD is the full faith and credit of the USGOV. Nixon took us off the gold standard in the 70s because funding the welfare state with a gold backed currency was no longer viable. After WW2 the world got together and made the USD the de facto world currency. After Nixons action we entered into an agreement with Saudi Arabia. We would continue to protect them and they agree to only sell oil in USD. This required every country to maintain a USD reserve. When our printing press goes into overdrive our inflation is spread out to the world and its effects are muted here. The Saudi requirement means that oil backs the currency although its not an official standard.
Now with bitcoin there is a throttle on the "printing." This mining makes it more rare than the USD. So it has a value set against the USD that will fluctuate like any other fiat currency as the USD fluctuates. While the USD is attractive because of world reserve status and oil requirements bitcoin is attractive because of the security of its double ledger block chain system, decentralization of control and rarity.
from the link above:
"On 15 August 1971, the United States unilaterally terminated convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a fiat currency. This action, referred to as the Nixon shock, created the situation in which the US dollar became a reserve currency used by many states. At the same time, many fixed currencies (such as the pound sterling, for example) also became free-floating."
The big boys are now mining with high end computers. The little guy has no chance to mine anything.
I used to use BOINC and donated my free CPU time to running simulations and solving problems to try and cure cancer, hiv and other diseases. In return I got free gigs over at easynews. I imagine bitcoin evolved from similar systems.
Steem seems to be a way for the little guy to earn crypto currency with minimal effort. They are also beginning to challenge Youtube which cant seem to run off a big portions of its creator base fast enough.
Bitcoin is valuable because people are willing to exchange goods and services for it.
The problem with Bitcoin is that only some people are willing to use it as exchange currency for only some goods and services, and it is not entirely clear whether these people will be able or willing to do so in the future.
The same is and has been true for all currencies, though, to different degrees throughout history, both successful and failed.
I heard the Iraqi dinar will explode soon.
Well, that's what I heard back in '04/'05....
I could never invest in Bitcoins. I would be too worried that overnight, everyone would just go "you know, I am getting out" and a big sell off would happen and I would be left holding the bag. And unlike a stock, which is tied to an actual company, there would probably be zero chance of a bounce back.
It would be like having to put a positive balance on your credit card in order to use it. No thanks.
Who actually controls the bitcoins, anyway? Do they have the power to just print more bitcoins? If so, what would stop them from dumping the whole thing? If not, will there always be a static number of bitcoins? Can they be counterfeited?
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