You can make a paper wallet. All the addresses and key codes etc are printed out. It's arguably the most secure cold storage, it can't be hacked or wiped accidentally. But then you have to secure it physically and you lose the ability to encrypted as you could with a usb stick.Originally Posted by Kingstepper
Last edited by fornowagain; 1st March 2014 at 03:52.
You could very easily encrypt the data ("gpg -e" for example) and then print a Base64-encoded version of it (due to potentially unprintable characters in the raw encrypted version). Might have to OCR it (unless you like typing) to get it back in but it's all easily done.
For those of you who are about to say "but I have no clue what you're talking about", that's fine. You don't need to. ;-) Pay me enough and I'll create a nice little program to do it for you.
To my laymans eyes,it still looks like a commodity to me , it's very volatile for a currency, it seems it's worth is always compared to $ .... It would be interesting to know what proportion of Bitcoins are spent like a currency, to buy goods or services and not traded against £ or $ or just hoarded . I think the whole Bitcoin thing needs to be simplified for it to have wider appeal .... The strength of a currency is in the confidance and trust in it.
Cheers..
Jase
I think it's a moot point: Broadly speaking as I understand it, a commodity is something that is theoretically worth something in its own right which can be bought or sold whereas a currency is primarily intended to be a medium of value exchange or value storage which may or may not be worth something in its own right (and which can also be bought or sold).
You can trade currency for profit and you can trade commodities for profit. The value of currency goes up and down (in terms of the commodities it can buy as well as in terms of other currencies) as does the value of currencies (in terms of other currencies and in terms of the commodities they can buy).
Thus a currency can be treated as a commodity and a commodity can (often, if people choose to agree) be used as a currency.
At the end of the day, the functionality and intent of Bitcoin is that of currency (i.e. you can directly spend it because people have agreed this) but just like all other currencies it has traits of a commodity too. Thus if you prefer to think of it as a commodity then that's fine. It makes no difference whatsoever in reality. There is no meaningful difference in this context.
It is still in the process of being created and so it is natural that it has yet to find any constancy in comparative value. A lot of people perceive its value to be a bubble but it is no more or less of a bubble than any other currency's value. In fact I suspect that Bitcoin's value is quite the opposite of a bubble: I think its value is currently far, far less[1] (thousands of times less) than its ultimate natural value range in the market.
Just like other currencies, of course. :-) Also, the largest concentration of users of Bitcoin is in the USA so it is not surprising that they would prefer to value it in USD.
Oh, I am sure that very little is spent at the moment although it does appear to be increasing amount, as is natural as it gains traction. The psychological network effect will tend to both increase the value of Bitcoin as well as increase the number of people willing to take it as payment for goods and services.
In what way? And why? The more you learn about nation state-backed fiat currencies (e.g. how supply is managed and generated), the more complicated they become. But no one cares and very, very few people understand it: It just works.
Bitcoin is the same. It is not necessary to understand it in detail to use it: It just works.
The only reason people want to understand Bitcoin in detail is because it is new, and new is always scary. If the concept of fiat currency was invented today by people other than a nation state then no one would take it seriously -- it has even less substantive backing that Bitcoin does! And yet people just accept fiat currency and get on with it.
Admittedly most people don't know where to start with Bitcoin and that does represent a market opportunity for new entrants (if they can avoid the cancer of state 'regulation' or at least work within it) but that doesn't mean that Bitcoin itself needs to be 'simplified'. Don't mess with what is not actually broken.
Exactly. And this is Bitcoin's great strength. It engenders confidence because of its algorithmic certainty, its decentralised nature, its independence from any nation state and, increasingly, because of the network effect. As I said in #57:
The above message also observes how commodity and currency can be effectively interchangeable.So why do people think Bitcoins have any value? Well, it's a complex question. Why do people feel that gold has value way above what it costs to mine it? Why do people feel that a US Dollar or a Pound Sterling have value over and above the near-trivial value of the paper in the note or metal in the coin? If you can answer these questions, you'll know why Bitcoin has a perceived value. In short it's because of an implicit, mutually agreed, shared trust model. Everyone has agreed that Bitcoins can be trusted as a store of value and as a medium of value exchange. Just as with conventional, national currencies, there has to be a reason for this trust. The cryptographic algorithm that underpins Bitcoin provides a very large amount of the trust because it limits how many Bitcoins can be produced in total, it limits how fast they can be produced, and it ensures that they cannot be faked or spent twice. Furthermore, Bitcoin has great utility because it is not based on the successes or failures of any nation state or central bank; it is utterly decentralised and fully independent, totally free (free as in liberty).
Footnote:-
1: As long as no systemic problem is found in the currency and unless a better decentralised idea does not come along. The Mt.Gox farce is not a systemic problem as far as I can see.
Last edited by markrlondon; 1st March 2014 at 10:10.
Nothing I've seen so far ensures confidence in whatever it is..
http://www.gizmodo.com.au/2014/02/th...ts-in-history/
Fas est ab hoste doceri
Paper currency is stolen quite commonly too and yet people still have confidence in it in general.
Don't fear Bitcoin's newness. Compare like for like. Bitcoin is in reality considerably more secure than most paper currencies in that it can be and should be backed up and does not need service providers (i.e. banks or similar) to keep it secure.
Note that the Silk Road 'heist' was legalised theft by the US government! Nothing to do with Bitcoin, per se.
In short, everything I have seen about Bitcoin indicates to me that it is doing fine. Millions of people do have confidence in it because it is worthy of such confidence. Do not get taken in my negative hype. At least some of it is intended to discredit Bitcoin.
Last edited by markrlondon; 1st March 2014 at 11:23.
Ok, so why would we need it or want it, just because it isnt controlled by a government ? Is it a 'anti-establishment' thing? Do you see it ever coming out into mainstream use and not confined to the digital underground? By that I mean mr average in the street going into Next and buying a jumper with a Bitcoin debit card.... I guess that is what the ultimate aim is, but surely its value needs to stabilise first...
Cheers..
Jase
It could have solved the electronic micropayment problem, but alas not.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
I hope that it doesn't turn out to be a BitCON
or maybe it will be some kind of Ponzi scheme
It seem crazy to be - let the "early adopters" buy away but an asset is only worth what someone will pay for it ....... and I would think that the price will fluctuate wildly as it would seem that quite a lot of people are treating it as a speculative investment.
Interesting. Having a look around there are programs to create paper wallets with BIP38 encryption based on a pass-phrase.
There are many ways it could be used and reasons why it might be useful, just as with any currency. Choice is never a bad thing (although I note that many people do in fact fear choice because they find it bewildering).
Not being controlled by any state is only one possible advantage, but a potentially significant one (for example, if you're Ukrainian at the moment). Not being controlled by banks is another possible advantage (for example, if you're Cypriot).
It often seems to me that asking "but why do we need it?" in relation to a new technology or a new invention somehow misses the point. When a potentially disruptive new invention comes along it is sometimes better to just accept that it's happening and cannot be uninvented, to see where it leads, and to then make the most of it. Maybe that sounds a bit Silicon Vallery-ish but it's how things are. ;-)
Not specifically. It doesn't have to be.
But it could be used as an anti-establishment tool. It certainly seems to be the case that some nation state 'powers that be' fear its use in this manner although, that said, my impression is that they seem to fear it more because they didn't invent it and cannot realistically now stop its spread[1], even amongst people who have no specific anti-establishment intent. Thus they seem to fear that it could upset the status quo in relation to the political/social influence that they have through control of their national currencies and related 'regulation' and legislation. They may also be concerned that it might render existing tax collection apparatus ineffective.
What is the "digital underground" exactly? You give me the impression of seeing it as a "them and us" situation. As a heavy web forum user there are many people who would still see you as a member of the "digital underground". ;-)
I'd say that Bitcoin is already in 'mainstream use' but it is also true that there are many levels of 'mainstream'. As far as I know you can't yet pay for your gas supply anywhere using Bitcoin, for example.
Not yet, for sure.
I don't think it can be said to have an ultimate aim. It has no de jure ruling body to set specific goals like that (although there is a group of core developers who are de facto leaders) and it can be forked by anyone who wants to start a new currency using the same or similar technology or who wants to do something different with it. This has been done many times so far, with varying levels of success. (N.B. Even though other currencies may use Bitcoin's technology, they are still not Bitcoin).
My impression is that Bitcoin was originally launched as an experiment, albeit an experiment that was very cleverly and thoroughly thought through indeed and which was thus useable in the real world.
How Bitcoin ends up being used is anyone's guess. It is a natural and obvious expectation that it should be used in exactly the same way that conventional currencies are used (e.g. debit card in Next), and that is certainly a likely possibility sooner or later, but it could equally well be the case that Bitcoin, or some other cryptographically-backed currency not yet invented, will change the way that money is used entirely. What might happen in the longer run is not yet imaginable. That is the nature of disruptive technologies: Their outcomes are chaotically unpredictable.
Note that I don't suppose there are any significant technical barriers to the Visa or Mastercard payment authorisation networks being used to authorise payments on a bank account denominated in Bitcoin. From Visa's or Mastercard's perspective it would just be a currency like any other. Exchange rates, just as at present with EFTPOS payments, would be the responsibility of the issuing bank. I'd be amazed if someone wasn't working on just such a thing right now, although I expect the nation state regulatory hurdles would be horrendous. Nevertheless, it's a ripe area for an entrepreneur to exploit (even with variable exchange rates).
Note also that there are some nascent digital payment providers (which are effectively currency agnostic) which will in time potentially compete against the likes of Visa, Mastercard, and PayPal in a perhaps more decentralised fashion.
Lots of "potentially" and "perhaps" but that's how it is. It's all being made up as it goes along.
The market will make of it what it does. As I see it, saying that "its value needs to stabilise first" presupposes that there is a specific goal for it. As I mentioned above, there is no (and can be no) de jure goal. It will become what the market wants it to be, what people imagine it to be, and what the technology allows it to be.
The price is, so far I believe, a very long way indeed from being stable due to the nature of the Bitcoin cryptographic protocol and its built in constraints (in other words, the price will continue to rise for a long time to come with occasional scary drops from which it will recover relatively quickly[2]). Will this actually hold back the progression of the network effect in terms of growth of Bitcoin after a certain level of progress? I don't think so but only time will tell.
Footnotes:-
1: See my thoughts on this in #33.
2: Unless a killer fault that cannot be fixed is found in the protocol or unless a better and cooler idea comes along to replace it.
Last edited by markrlondon; 1st March 2014 at 15:32. Reason: Added information
Thanks Mark, I appreciate you taking the time to reply.....
Cheers..
Jase
There is no con in Bitcoin itself. Everything about it is publicly accessible. It is verifiably not a con. There is no central body to con you.
By all means, someone might use Bitcoins in a way that involves a con but that's not the same as Bitcoin being a con. Con artists and scammers use conventional currency in the same way, of course.
It is not a Ponzi or pyramid scheme. See my earlier message where I addressed this: #57
My pleasure. That was a bit of an essay, wasn't it. :-)
Sorry not read too far back into this thread but how come the block-chain cannot be used to see the transactions out of MtGox?
Everything seems quite quiet giving that this is probably the biggest theft in history.
Potential for avoiding taxation?
Interesting read on that > http://falkvinge.net/2014/02/28/the-...as-inside-job/
Thanks for that, a very interesting read for someone who doesn't know much about bitcoin
It's fascinating the whole Bitcoin story http://www.telegraph.co.uk/technolog...f-Bitcoin.html
Some more evolutionary weeding out as another 'bitcoin bank' closes following an involuntary emptying of its vaults - http://www.theregister.co.uk/2014/03...ackers_strike/
This is worth a read
http://uk.reuters.com/article/2014/0...A2429M20140305... the crypto-currency is a lot more complex than it looks, even to those who believed in it enough to invest their savings, bitcoin experts say, illustrating the scale of the challenge facing investigators trying to unravel the multi-million dollar mess at what was once the world's dominant bitcoin exchange. ...
A European in his late 20s who works in the legal profession and goes by the name of Aquentin ONLINE traced the movement of some of the bitcoin Karpeles had moved from one wallet to another back in 2011 as proof that Mt. Gox was insolvent.
His research, he said in an email interview, showed that these coins were among up to 200,000 moved again recently, in late December and in early February - indicating that not only were there bitcoins still somewhere in the system, but that they seemed to belong to Mt. Gox.
Aquentin's research was followed up by others, among them a PhD student in the UK who calls himself Oakpacific. Both declined to give their names or other identifying information.
Their conclusion: the movement of coins they investigated did not square with the explanation given by Mt. Gox that the exchange lost its coins to a malleability attack. Says Aquentin of their findings: "They show that at the very least we have not been told the whole truth."
I quite fancy learning more about this - what's a good starting point for a beginner? I suspect we will see quite a few smaller exchanges go under, either through withdrawl of coins/business or just stealing the money and pointing the finger at the phantom hacker.
Here's a interesting vid on the power required to mine coins now http://www.raspberrypi.org/archives/6437 by my calculations this is hoovering up about 10% of the released bitcoins to keep the chain going.
Tempting to respond with http://en.wikipedia.org/wiki/Tulip_mania but I think a decent and up to date ( important, given events ) starter is http://www.coindesk.com/information/
Paul
So that was that then...
Paul...the Tokyo District Court decided the company, which was a trading platform and storehouse for the bitcoin virtual currency, would not be able to resurrect itself under a business rehabilitation process filed for in February.
An administrator will try to sell the company’s assets and many creditors, including those who had bitcoins with the exchange, are unlikely to get any money back.
Down the back of the settee, presumably? I'd be very interested in seeing an itemised list of the 'assets' that the administrators will be selling off.Later, Mt. Gox found 200,000 of the bitcoins...
Read this with interest
But I still think its a bit like
" the king with no clothes"
Is that the same as "The Emperor's New Clothes"?
It is. But the very same applies to all currencies (e.g. £, $, €, etc.). Currencies, any and all currencies, only work as mediums of exchange or storage because people agree that that is how they will be used (and because they cannot be generated will-nilly (i.e. supply is limited) or faked easily). Bitcoin works in exactly the same way. It is a shared trust model (or shared trust delusion, if you prefer), just like Pounds, Dollars, Euros, or other other currency.
Most currency is a real world demonstration of the 'The Emperor's New Clothes' shared delusion. Bitcoin is causing people to question this delusion in relation to Bitcoin but they are forgetting to apply it to existing national currencies which all have no more reality (and considerable risks of their own) than Bitcoin.
Ironically, currencies that use physical resources in limited supply (conch shells, physical gold, sardine tins, etc.) are more 'real' than any so-called conventional currency such as Pounds, Dollars, etc.
Bored with bitcoins? How about creating your very own virtual currency - teezee coins perhaps?
All the information to get you started available here - http://www.bbc.co.uk/news/technology-27143341
Even better... the TeeZee would be the only acceptable currency on Sales Corner
They are starting to look like the Japanese arm of RBS.
Here there was a huge campain and cash collection by the 'neo' 'who is neo' bitcoin company
NOW THE PERSON INVOLVED IS AWOL WITH ALL THE CASH AND IS WANTED
i would stay away at all costs $$$
US Marshals Service auctions off seized 'assets' from the shut down online drugs market Silk Road:
That's one interpretation I suppose. The rest of the article can be found here - http://uk.reuters.com/article/2014/0...0F719920140702
Say there are 21 million. Now take 1 of them. How finely can it be divided? Since it is digital/virtual rather than physical, I suppose that its division would be limited by the number of rational numbers[1] between 0 and 1. I suspect that there are plenty.
[1] Any number that can be represented by x/y, where x and y are integers and y isn't 0.
Best wishes,
Bob
If there is a colossal amount of rational numbers into which one bitcoin is divisible, is there a chance there could be a proto-Weimar Republic phase which might give way to hyperinflation? (Or even hyperdeflation I suppose if the smallest divisions are fixed and there's a limit on the total number of bitcoins.)
Apologies, I don't think I'm bright enough to understand this.
https://en.bitcoin.it/wiki/FAQHow divisible are bitcoins?
A bitcoin can be divided down to 8 decimal places. Therefore, 0.00000001 BTC is the smallest amount that can be handled in a transaction. If necessary, the protocol and related software can be modified to handle even smaller amounts.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
Fwiw I replied to nr73's message here in December 2013: #65.
To add to my earlier message, each Bitcoin can be divided to 8 decimal places. This is 0.00000001 of a Bitcoin, known as a "satoshi". This in turn means that each Bitcoin contains up to 100 million units of value! This equates to a final total of 2,100,000,000,000,000 units of total available liquidity. This should be adequate to maintain market liquidity.
Last edited by markrlondon; 3rd July 2014 at 13:25.
^Thanks chaps.
I think we are in this phase. The increase in value of Bitcoin since it came to mainstream attention could be described as hyperinflationary.
However, two points are relevant here:-
1) The design of the Bitcoin protocol (combined with human psychology, of which the protocol designers demonstrated a masterful understanding) both encourages and limits inflation. Indeed, inflation in the value of Bitcoin is a natural and normal process.
2) Hyperinflation (indeed, inflation of any kind) is usually of concern either because
a) trust in a currency is reducing, thus in turn reducing its buying value and so making goods in effect much more expensive when measured in that currency (this is the Weimar Republic or Zimbabwe problem), OR
b) when the value of a commodity (measured in term of currencies or other commodities) is increasing rapidly and people feel that it is increasing beyond its natural level (i.e. a 'bubble').
However, it could be argued (and indeed I think this is the case) that Bitcoin has not yet reached its natural value (in fact nowhere near it!). In other words, Bitcoin is not experiencing a bubble; it is merely experiencing a natural and normal progress towards its real value in the market.
By the way, for more on the currency-commodity duality of Bitcoin (which applies as well as any other currency, for that matter), and why it doesn't matter a fig in reality, see #57 and #156.
Very few people are but it doesn't matter. Extraordinarily few people fully understand fractional reserve banking and yet everyone relies on it without a second thought. People just take it for granted. The only reason that people worry about understanding Bitcoin is because it's new, and thus scary. But there is no more reason to understand every intricacy of Bitcoin in order to use it than there is to understand every intricacy of fractional reserve banking to use conventional currencies.
Last edited by markrlondon; 3rd July 2014 at 19:11. Reason: Fixed typos
Thanks, Mark. Yes, I think you're right.
There's no real need for us to understand everything in order to be able to use it. That would be a challenging world in which to live.
However, I like to try at least - and your posts have helped.
I'm reminded of a question my son asked me last week. He'd just finished playing football at the local club with some other children and was sat near to a glass door as he drank some Ribena. As the door opened and closed, the sun shone through it. He could see the glass was causing the rays to disperse into a variety of colours.
He said: "Daddy, why is there a rainbow there every time the door opens?"
My friend was there with his son, too. My friend looked at me and said "You're on your own."
I said: "Well, I'm glad you asked that." I always say that when I'm stalling. I learned it from Jim Hacker.
"Darling, it's because the glass is causing the rays to slow down. It takes the sunlight longer to go through the glass than it does the air. It's also bending the light. Some colours come out at different angles. That means we can see them. All the colours are in the light already - we can't see them normally."
My boy thought about this and then asked me why the red gets bent more than the blue.
I couldn't answer this.
Now, I know my boy isn't about to ask me about bitcoins (yet) but I'd like to be able to explain it in simple terms.
I'll read through this thread and the links again.
<grin>I said: "Well, I'm glad you asked that." I always say that when I'm stalling. I learned it from Jim Hacker.
[...]
My boy thought about this and then asked me why the red gets bent more than the blue.
I couldn't answer this.
Now, I know my boy isn't about to ask me about bitcoins (yet) but I'd like to be able to explain it in simple terms.
I'll read through this thread and the links again.
Bored with sudoku, freecell and writing long posts in the tz-uk forums. Why not try mining bitcoins with just a pencil and some paper instead?
Here's how - http://www.theregister.co.uk/2014/09...cil_and_paper/
Shock horror. Bitcoin banker (allegedly) caught with his hands in the till:
http://www.bbc.co.uk/news/world-asia-33745611
http://www.nytimes.com/2015/08/02/bu...sted.html?_r=0
Whatever next?
Last edited by petethegeek; 1st August 2015 at 07:59. Reason: added second link
wrong thread - nothing to see here :0
Who’s watching bitcoin activity? Fair surge in price going on, hold on it’s gonna be a bumpy ride.
Possibly this rather posh chap who already has lots of money but seems to think it's "a very interesting development".
Why did you regret making a fortune ( was that 1M bitcoin, 10M bitcoin profit?).
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