Bitcoin Mining

Status
Not open for further replies.
Either a physical product or the word of the government that issues it. Or in the case of the dollar...China :mad:
 
G80, if you have no idea about Bitcoins, which you seem not too, stay out of the thread.

Agent Smith, read the OP. That's already what we're discussing.
 
PCunicorn said:
G80, if you have no idea about Bitcoins, which you seem not too, stay out of the thread.

Agent Smith, read the OP. That's already what we're discussing.
Click to expand...

I read pretty much everything there is to read on the subject most of it from their own website, which also directs to wikipedia for more information on them.

It was a currency invented on a PC, with nothing to back it up, its virtual so has NO value (virtual value is just that, virtual meaning not real), it is theoretically a limitless currency because its supposedly limited by "processing power" which as we know gets stronger every day. Now Im sure a point will come when we reach the peak for processing power, and cannot go any further. However, that is lifetimes away and the amount of this virtual currency by then will be far more worthless than it already is.

Thats all basically from their own site, what else do I need to know? That some underdeveloped countries are using it as a currency? That says alot. And in the future they will suffer economically from it.

There is no such thing as a "self regulating" currency. Because a currency is regulated by its society whom determines its values as well. For us it happens to be our government, for the BitCoin, it happens to be its creator. Which is better?

I am just trying to help people from falling into an obvious scam. Its only the right thing to do.
 
Last edited:
It was a currency invented on a PC, with nothing to back it up, its virtual so has NO value (virtual value is just that, virtual meaning not real)
Click to expand...
So it's fiat currency. Just like the money you use, and indeed most of the world.

it is theoretically a limitless currency because its supposedly limited by "processing power" which as we know gets stronger every day. Now Im sure a point will come when we reach the peak for processing power, and cannot go any further. However, that is lifetimes away and the amount of this virtual currency by then will be far more worthless than it already is.
Click to expand...
The rate at which new bitcoins are mined is limited by processing power; as more coins are mined, it becomes harder and harder to discover new blocks. However, there is still an absolute limit to how many bitcoins there can be. No amount of processing power and mathematical working will allow you to generate more than 100 integers in the range [1,100]; the number of bitcoins, similarly, is limited by math.

There is no such thing as a "self regulating" currency. Because a currency is regulated by its society whom determines its values as well. For us it happens to be our government, for the BitCoin, it happens to be its creator. Which is better?
Click to expand...
The creators have very little control over the currency. It's not "centralised" in any way, they can't regulate it.

I am just trying to help people from falling into an obvious scam. Its only the right thing to do.
Click to expand...
It's a scam in the same way all fiat money is, including the US dollar.
 
That's exactly what I would have said but you said it much better. Good job. And the one thing you didn't quite say is that the limit is 21 million. I assume that's what's related to the intergers?
 
And the one thing you didn't quite say is that the limit is 21 million. I assume that's what's related to the intergers?
Click to expand...
The way bitcoins are limited is a fair bit more complicated, I only used the simple integer example to illustrate the point. I don't actually know why that's the exact limit.
 
Something has value if somebody will give you something else for it in exchange. I take a 5 dollar bill in to McDonald's and I'm going to get food. Simple. If I go to the bank and ask for 5 bucks in gold then present it to McDonalds for some food they're going to look at me like I'm nuts. Money has value because people give it value. You trade it for something that you deem valuable, so thus your money is valuable.

Sure it's being devalued and reducing inflation is beneficial but I think the days of needing a currency to be backed by gold or any other limited commodity are over. There's only so many 20 dollar bills so they are a limited commodity in the same sense.


If people accept a bitcoin in exchange for something valuable, it becomes valuable.
 
Denther said:
Something has value if somebody will give you something else for it in exchange. I take a 5 dollar bill in to McDonald's and I'm going to get food. Simple. If I go to the bank and ask for 5 bucks in gold then present it to McDonalds for some food they're going to look at me like I'm nuts. Money has value because people give it value. You trade it for something that you deem valuable, so thus your money is valuable.

Sure it's being devalued and reducing inflation is beneficial but I think the days of needing a currency to be backed by gold or any other limited commodity are over. There's only so many 20 dollar bills so they are a limited commodity in the same sense.


If people accept a bitcoin in exchange for something valuable, it becomes valuable.
Click to expand...

You are exactly right.

However, I just talked this over with someone who went to college for economics and I will try to explain it like he explained it to me.

The Bitcoin is indeed a currency. HOWEVER, I said before it is not backed by anything except the people who invest into it.

You cant compare the Bitcoin to the US Dollar because these currencies operate completely different while they do have 1 thing in common: Neither has any "true" value to it.

The US Dollar is backed by the federal government, which may not sound like much, however the federal government is backed by gold. So even though the dollar was taken off the gold standard, in a way the money can be still backed by gold. In theory. However that is completely up to the government.

The Bitcoin, being backed by "investors" is a little bit harder to get behind. Because if you think of it in the simplest way, you are investing a currency into another currency whos sole value relies on the investment of other currencies. Other people can give it a value, just like the government gives a value to the dollar, however this is why you see the bitcoin go all over the place in terms of its exchange rate. Its constantly going up and down in value because it is not regulated at all:

http://en.wikipedia.org/wiki/History_of_Bitcoin

If you look at its history, yes its possible to make a profit off of investing into this imaginary currency. However, at the end of the day it will be worth nothing in the future because there is nothing to keep it regulated and give a consistent value other than the people using it. Which is a dangerous type of economy that will be in constant ups and downs with people going crazy.

And no, there is no limit. You cannot put any limit on something that does not exist in reality. Explain to me how this "algorithm" that was created has put a limit on this. And then explain to me how this "algorithm" cannot be modified or manipulated by anyone ever. If its software, it can be modified if the right person gets a hold of it. The bitcoin has in its short history already seen the negative effects of a virtual currency with many people hacking it getting however much they want. Which is easy to do when what your getting is 1s and 0s. The only person who can modify the dollar is the federal government, otherwise it is highly illegal.

Keeping on the terms of legal stuff, its interesting that the bitcoin has been involved in alot of drug trade. And the FBI keeps having to step in. You know why? This "currency" is a drug lords dream come true. And for any black market. Because the currency does not exist, it cannot be traced, there for it makes the exchange of illegal goods much easier without having to clean the money. Since the money only exist in 1s and 0s on a computer screen.

So if the bitcoin does become more popular, I foresee the federal government shutting it down in a heartbeat. And other countries would follow suit. The government does not like having something on the market that they cannot regulate, we already know that. And its highly illegal to make and distribute your own "money" in the US. The only way bitcoin has gotten around that is because its money that does not exist. If it did exist, it would not be legal tender in the US. Which technically the bitcoin is legal tender in the US, because as I said, it does not technically exist. Its value exist only in the minds of those who want to invest a real currency into it.


To put short, its very much the same as buying stock into a company that does not exist. Because that is all you are doing.

Now whether or not you believe in the life of the currency is up to you, like Denther said the more it gets accepted the more chance it has of becoming a real currency, and the far more chance of it becoming corrupted or banned by the worlds governments.

So in the long run, I would say its a worthless investment. And even others have stated in this thread that is a worthless investment, including the all-knowing OkeDokey. I dont see how one can get behind a currency which takes no labor to obtain. That alone, will make it worthless in the mainstream. If there is no labor needed to obtain it, it will quickly loose all value. Money has value because for the most part is given in trade of labor. If you had a currency which was mainly obtained by one sitting on the couch at home how could you put any value on it?

I can also put in this, if Rockstar didnt make it illegal in its EULA (which Im actually not entirely sure if it is or isnt) then I could turn around and sell my virtual money in GTAV. Its the exact same kind of money as a bitcoin. It does not exist in reality and has virtually no limit, however I am certain there are people out there who value it to a degree. Then I could start using GTAV money as real money. Then you run into the problem of no one wanting to buy it anymore because everyone has all that they need. Same exact principles apply here. Whats funny is that the currency in GTAV would probably hold a higher value as it is harder to obtain than a bitcoin.

Also, comparing the bitcoin to the US Dollar:

In the past decade, the cost of living (value of the Dollar) has not changed significantly at all. Because it is regulated, which is a good thing. By whom, is a different story. But the bitcoin, in its short life, has been all over the place. If it were to replace the Dollar one day you would be broke the next day you would be rich. Providing it could be a stand alone currency without the investment from other currencies.
 
Last edited:
G80FTW said:
You are exactly right.

However, I just talked this over with someone who went to college for economics and I will try to explain it like he explained it to me.

The Bitcoin is indeed a currency. HOWEVER, I said before it is not backed by anything except the people who invest into it.

You cant compare the Bitcoin to the US Dollar because these currencies operate completely different while they do have 1 thing in common: Neither has any "true" value to it.

The US Dollar is backed by the federal government, which may not sound like much, however the federal government is backed by gold. So even though the dollar was taken off the gold standard, in a way the money can be still backed by gold. In theory. However that is completely up to the government..
Click to expand...

Fail, the U.S. took away the government backing of the dollar with an actual gold supply (known as leaving the gold standard) in 1971, and every major international currency has followed suit.
The obvious question is, "Without gold, what does guarantee the value of our money?" The answer is: nothing at all. Thats how nations like Greece, Portugal and Spain go bankrupt. Its also how there is more dollars in circulation in the US as debt than the whole of the worlds gold on the planet at current market value. Had you considered this for one simple moment, you'd have come to the same conclusion.

Tell your economics major friend to get a refund as he missed a lot of it clearly. Tell him (and you) to look up fiat money... then come back and tell us how thats different to bitcoins. The answer is it isnt.
 
Last edited:
And no, there is no limit. You cannot put any limit on something that does not exist in reality. Explain to me how this "algorithm" that was created has put a limit on this. And then explain to me how this "algorithm" cannot be modified or manipulated by anyone ever. If its software, it can be modified if the right person gets a hold of it. The bitcoin has in its short history already seen the negative effects of a virtual currency with many people hacking it getting however much they want. Which is easy to do when what your getting is 1s and 0s. The only person who can modify the dollar is the federal government, otherwise it is highly illegal.
Click to expand...
Numbers don't exist in reality, they're an abstract construct humans have created. Therefore, there are infinitely many integers between one and hundred.

The protocol works by consensus; most nodes contribute to the "main" block chain. However, you can't just make arbitrary changes to the protocol and still do so; if you do, you essentially fork off a separate chain (this has happened in the past), but if you want nodes mining such blocks, you'll need for them to have a modified client too. There are quite a few "dead end" chains that split off for various reasons, but were abandoned by miners.

If you really want the details of how the protocol works, help yourself.
 
Okedokey said:
Fail, the U.S. took away the government backing of the dollar with an actual gold supply (known as leaving the gold standard) in 1971, and every major international currency has followed suit.
The obvious question is, "Without gold, what does guarantee the value of our money?" The answer is: nothing at all. Thats how nations like Greece, Portugal and Spain go bankrupt. Its also how there is more dollars in circulation in the US as debt than the whole of the worlds gold on the planet at current market value. Had you considered this for one simple moment, you'd have come to the same conclusion.

Tell your economics major friend to get a refund as he missed a lot of it clearly. Tell him (and you) to look up fiat money... then come back and tell us how thats different to bitcoins. The answer is it isnt.
Click to expand...

You really need to stop doing this because you only make yourself look bad everytime you do. You cant just tell me I am wrong and then say the same thing I did but in a different way.

And by the way, in 1971 when Nixon announced the Dollar to be taken off the gold standard he then said the Dollar would be backed by the credit of the federal government. And what backs up the government? Gold. Thats alot more than is backed by the bitcoin.

I have already explained to you the difference between a fiat currency and a cryptocurrency. Because you dont understand it, dont complain to me.

Just please think before you post.


hackapelite said:
Numbers don't exist in reality, they're an abstract construct humans have created. Therefore, there are infinitely many integers between one and hundred.

The protocol works by consensus; most nodes contribute to the "main" block chain. However, you can't just make arbitrary changes to the protocol and still do so; if you do, you essentially fork off a separate chain (this has happened in the past), but if you want nodes mining such blocks, you'll need for them to have a modified client too. There are quite a few "dead end" chains that split off for various reasons, but were abandoned by miners.

If you really want the details of how the protocol works, help yourself.
Click to expand...

And I have already posted a link pointing out the many flaws in this system that allow people to hack the system and get whatever they want out of it. In that link I posted, it said someone was able to get 18 BILLION bitcoins from one "block". Explain to me how they are limited.
 
Last edited:
Oh wow...

The U.S. has approximately 260 million ounces of gold, more than any other country by a wide margin. The total of gold reserves held by all countries is approximately 1 billion ounces. On the currency side of the equation, there are several measures of USD money supply, known as M, M1, M2 and M3. M3 is the broadest measure of the total amount of money (USDs) available in the economy. It is noteworthy that in 2006, the Fed made a decision to discontinue publication of M3. The latest figures available from the Fed show M1 and M2 at approximately $2 trillion and $9.5 trillion, respectively.

At a current market price of $1,800 per ounce of gold, the U.S.’s gold reserves are worth $468 billion (260 X $1,800). Gold reserves held by central banks around the world are currently worth $1.8 trillion. There appears to be just over 4 times more USDs (based on a narrow measure of money supply, M1) in the economy than there is gold held by the Fed (M1: $2 trillion; U.S. Gold: $468 billion). Based on the broadest measure available of money supply, M2, there are just over 20 times more USDs in the economy than there is gold (M2: $9.5 trillion; U.S. Gold $468 billion).
 
Okedokey said:
Oh wow...

The U.S. has approximately 260 million ounces of gold, more than any other country by a wide margin. The total of gold reserves held by all countries is approximately 1 billion ounces. On the currency side of the equation, there are several measures of USD money supply, known as M, M1, M2 and M3. M3 is the broadest measure of the total amount of money (USDs) available in the economy. It is noteworthy that in 2006, the Fed made a decision to discontinue publication of M3. The latest figures available from the Fed show M1 and M2 at approximately $2 trillion and $9.5 trillion, respectively.

At a current market price of $1,800 per ounce of gold, the U.S.’s gold reserves are worth $468 billion (260 X $1,800). Gold reserves held by central banks around the world are currently worth $1.8 trillion. There appears to be just over 4 times more USDs (based on a narrow measure of money supply, M1) in the economy than there is gold held by the Fed (M1: $2 trillion; U.S. Gold: $468 billion). Based on the broadest measure available of money supply, M2, there are just over 20 times more USDs in the economy than there is gold (M2: $9.5 trillion; U.S. Gold $468 billion).
Click to expand...

Nice. Your point?
 
I don't really plan to use bit coins as my primary currency, I just want to mine them and convert them into U.S dollars.
 
ABenz99 said:
I don't really plan to use bit coins as my primary currency, I just want to mine them and convert them into U.S dollars.
Click to expand...

Well of course not, because you couldnt :D

Id say if you ALREADY had the hardware to do it then go for it. But I would certainly not invest any money into the whole ordeal.
 
Actually you could. It might not be extremely efficient but its very possible to use it, except for grocery shopping or eating out.
 
Status
Not open for further replies.
Back
Top