I'd avoid trusting any one source on this, given that blackhatters wanting to crash the value of Bitcoin to buy low have taken to hacking into Russian newspapers and planting false stories:
Yeah, but people are stupid and especially so when greed kicks in! I always explore Internet phenomenons and try to put myself in the shoes of the affected. I've spent days playing Mafia Wars to see what the hell makes people waste so much time with that crap and I think got it. I did everything a Bitcoiner does for a few months, BitcoinWisdom.com charts are now burnt into my retina, I had nightmares about crashes (some were real when I woke up), and I know first-hand how your mindset changes. Anyway, everybody's in for a quick lazy profit! I got totally disgusted by Bitcoin thanks to people like Barry Silbert (this guys is like an open book), the Winklevii, potheads like Chalie Shrem (http://www.vocativ.com/12-2013/night-bitcoin-millionaire-pro...) who some are now trying to turn into a hero, and even Fred Wilson who was totally arrogant and deceitful during the NYDFS hearing.
We, the startupers, of course, like to make money, too, but we know it is not easy, it's actually a lot of work, skills, and luck, and money is almost never top priority - it's just a nice added bonus, a reward if we do good! We want to change the world, but not to change the world so that we get rich from the hoarded coins!
I do like the innovation that Bitcoin brought, I like that it brought the attention to some of the problems it's claiming to solve (almost many are false promises - like micropayments), but I don't think it can be sustained for much longer!
I agree. It wasn't so much a pro Bitcoin statement as it was angst with the world economy at large. People just want to make money, and I know people have to make money, but people don't have to just want to make money. Startupers want to make money, but it's like you say, they want to do so in being innovative, productive, creating valuable things (not to generalize - I'm sure there are some people here just for the money). There are people like this in the cryptocurrency community too, but the accessibility of Bitcoin attracted plenty of asshats as well. It will prove to be a game changing experiment somehow, but if it doesn't become a world-saving currency or whatever, I won't care or be surprised.
They are just freaked out that it would undermine government control. With all kind of draconian censorship laws on the rise there, this isn't surprising.
What most people do not realise is that it does not matter if Russia, China, the US or any country bans or criminalises bitcoin. All it takes is for 1 small country (like Singapore) to embrace bitcoin for it to be worth $1,000,000 a coin. The first country that wises up to bitcoin, starts investing in mining and other bitcoin infrastructure in a big way, and legitimises its mainstream usage as a currency, is going to reap tremendous benefits. And it's only a matter of time before this happens.
> The first country that wises up to bitcoin, starts investing in mining and other bitcoin infrastructure in a big way, and legitimises its mainstream usage as a currency, is going to reap tremendous benefits.
Like what? Being tied to a deflationary currency? Being unable to influence their own monetary supply? Tying the buying power of its citizens to the computational ability to hash numbers really quickly?
Seriously, what benefits possibly favor this approach over creation of an e-currency that the central bank has control over?
The protection of the rights of its citizens, which is the right thing to do, and which results in economic prosperity. What's needed is someone who is long-term greedy, because this is the best way to enable wealth in a country. Who wants to be a Founding Father of the next United States? Who has more power, the leader of a free and prosperous nation, or the ruler of a starving dictatorship?
I'm not saying that Bitcoin is the answer, but that there are awesome reasons why an ambitious country should give its citizens their economic rights.
Property rights; the right to gain, keep, and use material values, like money, based on the right to life. That's taken away when a country controls currency.
Tying the buying power of its citizens to the computational ability to hash numbers really quickly?
I'm not sure how those two things are related. Mining is an entirely optional activity for users of Bitcoin, and indeed, the vast majority of users never have nor ever will mine.
You've got it reversed. Mining activity will be tied to the exchange rate. Total mining rewards (denominated in BTC) are constant no matter how many miners there are, so the higher the exchange rate, the more people mine as it becomes profitable for them to do so. Mining is a zero sum game.
In addition to what tlrobinson said, you only need a small threshold of hash power for a cryptocurrency to function. More hash power reduces susceptibility to 51% attacks for those coins that are at risk for it (including Bitcoin), but it does not impact the functionality of the coin in any practical way.
One benefit, out of a multitude, is the removal of the centralized control of the banks. Done correctly, decentralized control is predictable, transparent, and trustworthy.
Governments choose and maintain currencies with low, stable inflation because it's good for the economy and the people at large. Individuals choose currencies with stable supplies to maintain the value of their wealth.
In nations where cryptocurrencies aren't outlawed, they will prosper, and those governments will have to figure out how to manage an economy with a popular deflationary currency.
> Governments choose and maintain currencies with low, stable inflation because it's good for the economy and the people at large.
Yes.
> Individuals choose currencies with stable supplies to maintain the value of their wealth.
Individuals are far wiser to invest the majority of their wealth instead of keeping it bundled up in any commodity that has no inherent value. This includes bitcoins, dollars, yen, tulips, pog caps, and gold. Arguably gold has more inherent value than anything else on that list, but again tying capital up in nonproductive activities (commodities) is not only a poor investment, it makes no larger economic sense.
> In nations where cryptocurrencies aren't outlawed, they will prosper, and those governments will have to figure out how to manage an economy with a popular deflationary currency.
This is an argument advanced without any support. Not all cryptocurrencies are deflationary. And no proof is offered that deflationary currency has any advantages whatsoever. Only hand-wavy "citizens prefer stable supply" is advanced, and I'd argue that the majority of citizens that know what they're doing prefer to invest in productive activities anyway.
Sure, investing makes tons of sense, but does that mean checking and savings accounts shouldn't exist? Individuals are better off with the bank accounts denominated in a currency with a fixed supply. That's so clearly true to me that I don't understand why you disagree.
A widely adopted currency with a fixed supply will slowly increase in value as the demand to perform transactions in that currency increases. The whole point of central bank currencies is to make sure the value slowly decreases over time. Sure, it's good for the economy, but individuals don't make choices based on what's good for the economy. They look out for number one.
"Not all cryptocurrencies are deflationary."
Inflationary cryptocurrencies will not succeed. Imagine there was no dominant currency in your country today. You gave goods or services to someone, and in return, they give you a choice of payment in two currencies: one with an increasing supply and one with a fixed supply. Which would you choose?
"You gave goods or services to someone, and in return, they give you a choice of payment in two currencies: one with an increasing supply and one with a fixed supply. Which would you choose?"
Other things being equal you choose the fixed supply, but other things are rarely equal. For one thing, why aren't they going to price in the expected future change in value?
Why would a country invest in expensive & power-hungry infrastructure in order to produce a currency that it can't create or destroy at-will? In the unlikely event that any sovereign nation did adopt a cryptocurrency, it would be far more likely to produce its own that it could manage more directly and which would provide all the benefits of BTC that a nation-state would be interested in (infinite traceability, impossible to use anonymously, remote destruction, etc).
As an "outsider" to Bitcoin-mania, I have to point out how absurd a post like this reads. Or maybe absurd isn't the right word, but it reads like so many manic "to-the-moon" bubbles we've seen before -- tulips, dot-com stocks, housing prices, etc.
>This time? You're using something invented the LAST time around: The Internet.
And how well did that turn out for the people who invested in it? The dot com bubble is perhaps the perfect example to demonstrate that even something with real potential can still suffer a speculative bubble.
Bitcoin is unique in that it's a currency bubble. Any currency that isn't imposed by a government will have to have a growth rate that looks like a bubble on its path to becoming widely adopted.
The way that currencies collapse is by people losing faith in them en masse. Either something will happen to make people lose faith in Bitcoin, or it will continue to be adopted and it's value will increase.
It sounds absurd because the upside potential for Bitcoin is absurd. It could also be worth zero one day. Time will tell.
And the moment they do that, the US and the other anti Bitcoin governments will impose economic and trading sanctions against that country to they change their stance
Can you explain to me exactly why BTC would need to increase in value at all for it to be the basis for an economy? BTC is for all practically infinitely divisible, so you could theoretically run the world's economy on a fraction of the bitcoins we have today. So where is the upward price pressure coming from aside from speculation/greater-fools?
I'm confused by your question. It's true that Bitcoin can be infinitely divided, but that doesn't help unless the original unit is valuable enough to make those divisions useful. The current market capital of Bitcoin is pretty big, but no where near enough to run a real economy.
Market capitalization. Basically the amount of outstanding shares (bitcoins) multiplied by the value of each share. The current bitcoin market cap is around 10 billion USD. The reason why this is not enough is pretty simple; first of all it won't allow you to make BIG payments (if you need to transfer more than 10 billion dollars you can't do that), second of all: no company is going to like having half the total amount of 'money' of the entire economy, it's only useful when everyone has some. If one or a few players control the majority of the bitcoins, nobody else is going to want it. We're not talking about gold which has intrinsic value, we're talking about bits and bytes that only have value because some people agreed that it has value. But it will only have value as long as it's somewhat distributed, if only Satoshi would have had bitcoins, nobody would have been interested.
Thanks. My question was ill-conceived in my head. Market cap was the concept I was missing. For a fixed amount of bitcoin, the value of each goes up as the total share of the economy of BTC increases.
Thanks. My question was ill-conceived in my head. Market cap was the concept I was missing. For a fixed amount of bitcoin, the value of each goes up as the total share of the economy of BTC increases.
Maybe not quite that much. With about ten million coins in existence, that would make Bitcoin as big as the U.S. dollar, just because Singapore adopted it.
> The first country that wises up to bitcoin, starts investing in mining and other bitcoin infrastructure in a big way, and legitimises its mainstream usage as a currency, is going to reap tremendous benefits.
I think it would be far more likely for a country to invest in their own digital currency: DollarCoin, SterlingCoin, EuroCoin, YuanCoin, etc.
Whether this would be through mining, or simply transaction verification, could be interesting (and desirable simply to close one loophole cash has - it is extremely hard to trace, therefore some transactions remain untaxed). When monetary policy changes, a change in the specification is deployed. CountryCoins would likely be fungible with physical cash (of that country).
I have mixed feelings about this situation. On one hand, I can understand the advantages of banning Bitcoin in Russia. On the other hand, there are also disadvantages of banning Bitcoin in Russia. Overall, I feel that this is a trade-off, and I'm not sure whether they made the right choice in their decision. I know there are people who will disagree with me about this, but honestly, I have to respectfully disagree.
All that happened is Russia's central bank issued a warning about bitcoin there is no ban. Localbitcoins Russia still has plenty of listings, plus many Russian fixed rate exchange sites are open for business.
At the same time Russia allows existence of virtual currencies like Yandex Money and WebMoney. Which really makes me think the whole BTC prohibition in Russia was lobbied by existing russian virtual currency holders. Because I do not want to believe that Obama called Putin and asked to prohibit BTC in exchange of his presence in Sochi.
I went to the website for the General Prosecutor's Office of the Russian Federation and nowhere can I find the document that is circulating in all these news posts.
This link, which you maybe shouldn't click, because who knows what's going on here, [http://www.genproc.gov.ru/smi/news/genproc/news-86432/] indicates that it should be in the news section. But when I go there directly, I can't find it.
Has anyone been able to even verify the authenticity of the original announcement, let alone interpret what it means? If so, can you share where on the official website you found it?
63 comments
[ 3.5 ms ] story [ 134 ms ] threadhttp://www.bitlegal.io/nation/RU.php
http://www.coindesk.com/russian-prosecutors-office-btc-e-inv...
We, the startupers, of course, like to make money, too, but we know it is not easy, it's actually a lot of work, skills, and luck, and money is almost never top priority - it's just a nice added bonus, a reward if we do good! We want to change the world, but not to change the world so that we get rich from the hoarded coins!
I do like the innovation that Bitcoin brought, I like that it brought the attention to some of the problems it's claiming to solve (almost many are false promises - like micropayments), but I don't think it can be sustained for much longer!
Like what? Being tied to a deflationary currency? Being unable to influence their own monetary supply? Tying the buying power of its citizens to the computational ability to hash numbers really quickly?
Seriously, what benefits possibly favor this approach over creation of an e-currency that the central bank has control over?
I'm not saying that Bitcoin is the answer, but that there are awesome reasons why an ambitious country should give its citizens their economic rights.
In other words, they'd have to know that giving up control would be good for them long-term, and they'd have to want good things for themselves.
I'm not sure how those two things are related. Mining is an entirely optional activity for users of Bitcoin, and indeed, the vast majority of users never have nor ever will mine.
One benefit, out of a multitude, is the removal of the centralized control of the banks. Done correctly, decentralized control is predictable, transparent, and trustworthy.
In nations where cryptocurrencies aren't outlawed, they will prosper, and those governments will have to figure out how to manage an economy with a popular deflationary currency.
Yes.
> Individuals choose currencies with stable supplies to maintain the value of their wealth.
Individuals are far wiser to invest the majority of their wealth instead of keeping it bundled up in any commodity that has no inherent value. This includes bitcoins, dollars, yen, tulips, pog caps, and gold. Arguably gold has more inherent value than anything else on that list, but again tying capital up in nonproductive activities (commodities) is not only a poor investment, it makes no larger economic sense.
> In nations where cryptocurrencies aren't outlawed, they will prosper, and those governments will have to figure out how to manage an economy with a popular deflationary currency.
This is an argument advanced without any support. Not all cryptocurrencies are deflationary. And no proof is offered that deflationary currency has any advantages whatsoever. Only hand-wavy "citizens prefer stable supply" is advanced, and I'd argue that the majority of citizens that know what they're doing prefer to invest in productive activities anyway.
A widely adopted currency with a fixed supply will slowly increase in value as the demand to perform transactions in that currency increases. The whole point of central bank currencies is to make sure the value slowly decreases over time. Sure, it's good for the economy, but individuals don't make choices based on what's good for the economy. They look out for number one.
"Not all cryptocurrencies are deflationary."
Inflationary cryptocurrencies will not succeed. Imagine there was no dominant currency in your country today. You gave goods or services to someone, and in return, they give you a choice of payment in two currencies: one with an increasing supply and one with a fixed supply. Which would you choose?
Other things being equal you choose the fixed supply, but other things are rarely equal. For one thing, why aren't they going to price in the expected future change in value?
I know, I know, this time it's different.
BTW, "To the moon" comments are designed to inspire and raise interest. It's called marketing.
And how well did that turn out for the people who invested in it? The dot com bubble is perhaps the perfect example to demonstrate that even something with real potential can still suffer a speculative bubble.
Pretty damn well... no?
The way that currencies collapse is by people losing faith in them en masse. Either something will happen to make people lose faith in Bitcoin, or it will continue to be adopted and it's value will increase.
It sounds absurd because the upside potential for Bitcoin is absurd. It could also be worth zero one day. Time will tell.
Once they've all been mined there will be 21 million Bitcoins (and assume none have been lost)
There are approximately $10.5 trillion US dollars in the world (http://money.howstuffworks.com/how-much-money-is-in-the-worl...)
10,500,000,000,000 USD / 21,000,000 BTC = $500,000 per Bitcoin
I think it would be far more likely for a country to invest in their own digital currency: DollarCoin, SterlingCoin, EuroCoin, YuanCoin, etc.
Whether this would be through mining, or simply transaction verification, could be interesting (and desirable simply to close one loophole cash has - it is extremely hard to trace, therefore some transactions remain untaxed). When monetary policy changes, a change in the specification is deployed. CountryCoins would likely be fungible with physical cash (of that country).
As opposed to what, a fiat currency like the ruble?
This link, which you maybe shouldn't click, because who knows what's going on here, [http://www.genproc.gov.ru/smi/news/genproc/news-86432/] indicates that it should be in the news section. But when I go there directly, I can't find it.
Has anyone been able to even verify the authenticity of the original announcement, let alone interpret what it means? If so, can you share where on the official website you found it?
Thanks.