The Bitcoin Saga



The forums are pretty hilarious.

Re: BitLaundry re-opens with exciting new security features you can't see!
June 18, 2011, 02:56:50 am

Perhaps you should rename it? Launder I don't think is the best fit. Perhaps Anonymizing Service? It's what you do is allow people to be anonymous. Launder kind of implies funneling ill gained money into businesses to hide it. I know it would be a pain but I bet your service would get better reception!

Oh lol.

Re: Deflation and Bitcoin, the last word on this forum
June 03, 2011, 01:57:08 pm

By the logic of the anti-deflationary crowd:

Gold is deflationary, nobody should buy gold. Roll Eyes


The funniest thing is seeing these forums where people compare and contrast the merits of various video cards for Bitcoin mining. I've seen claims that the price of certain used video cards has gone up because people are buying a ton of them, and shoving them into boxes to just mine Bitcoins 24/7.


I work in account opening/AML in finance and I wouldn't approve banking services to any entity that dealt with bitcoins. I'd also recommend exiting any financial institution that had as its client an exchange or other method of transferring bitcoins to real money. There's a big red flag waving over this. I'd love to know who the various e-currency exchanges bank with.


Of course, the best part of the whole Bitcoin thing is that since the participants are usually engaged in criminal activities, hackers, or delusional idiots there's literally no recourse for people when things go south. And things seem to go kaput quite a lot.

No government cares about any of it other than wanting them all gone, and most of the users wouldn't want to appeal to any official agency anyway.


BitCoin is financial LARPing.


I still don't get it.


I think I've heard this explained before, but how did bitcoins get any value in the first place? Why was anyone initially willing to trade a physical good for some code someone generated on their computer?


The interesting part is watching people taking part in an anti-control money scheme turn around and put all their coins under the control of a third party.

It's like they're saying "I'm not putting money in that bank, which is tied to the world banking system and governments. Fools! You trust THOSE people? However I will put my bitcoins in that bitcoin bank that just popped into existence, because if you can't trust them who can you trust, amirite?".

I see this a lot. People won't trust something that is outside their sphere of interest, but if it is inside then it gets automatic trust.

I read a story about a guy raffling off Ipads or something, to raise money for his sick daughter. Tons of people bought into the raffle, only to have him suspend the raffle and keep the money. Why did they send that money to him? My guess- because these were parents of children with illnesses too, so they saw him as part of the group and therefore automatically trustworthy.


The short answer is that most level-headed people don't accept them.

The long answer is that in a purely artificial sense, they're supposed to represent the amount of work being done on the proof-of-work. Since there is a projected finite amount of Bitcoins (21 million), the idea is that the currency will have worth associated with the automatic devaluation. For example, current Bitcoins require about 500,000 times more "work" to generate than initially. This is supposed to make them more valuable to everyone.

Of course, the reality is that like any money, they are only worth as much as people say. Amongst Bitcoin people, the exchange rate may be $30 to 1 Bitcoin, but to everyone else in the world they are worth zero.


Which means it is effectively no different than buying WoW gold, except that there may be even fewer tangible (or virtual) goods to exchange it for.


"Obstetricians are evil greedy doctors who want to cut me open and give my babies staph infections! Instead i will trust this lady who will refuse to listen to my fetus's heartbeat and has some crystals, even though more low-risk children die in home birth than do in hospital."

But maybe that's another thread.


Clearly creating a pretend-resource to pretend-mine in order to create pretend-coins is much better than fiat money. Clearly.


If that's what's going on, it's pretty funny. We're talking about libertarians who are all for free-market solutions to everything... except when they don't like the solution. No one forces anyone to use PayPal, it's one of those "private enterprise" solutions Libertarians are supposed to like. So many people use it because it offers advantages to both parties: sellers get their money immediately, and buyers don't have to worry about sending off cash and never seeing what they bought.

These people really are demented.


Especially as Peter Theil (paypal guy) is out there on the libertarian/ singularity end of the spectrum (I don't know him, but I know people who do)


It was worse than that. Newegg was flat sold out of many types of cards that the bitcoiners felt were of best use.


So bitcoin is based on the limited video card standard?

Kidding, but I just don't understand how a currency can exist without either sovereign backing or an exchangeable resource base (ie gold, oil, silver).

I can't understand how this is a better currency than say ISK?


You are saying that isk is better than bitcoins and that both are somehow worse than, say, a Zimbabwai pound. Both of the former are probably more reliable than the later.

As for value, they are valuable because people believe them so.


No that doesn't make sense. Zimbabwes currency fluctuates with it's actual value based on things like GDP. Inflation is a way of measuring and managing that no? Saying something has value because people believe it does is fine for pricing but for currency? Maybe I guess. I don't see how it works though.

And ISK does have value!


It seems like in theory you can use anything as currency, so long as you can find someone to accept it in exchange for goods and/or services.

Practically speaking it's better to have the supply of that something be limited (whether it be by a finite supply, e.g., gold or by some other authority, e.g., Federal Reserve) to prevent endless inflation.

Practically speaking, II: The baby sitting coop.