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Can someone real quick post the investment calculations concerning mining-rigs and statistical pay off. Please tell me someone actually did this.
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| # ¿ May 30, 2011 21:23 |
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| # ¿ May 24, 2013 16:51 |
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The interesting thing about Bitcoins is that apparently it can be broken down into smaller and smaller "coins", right? So it has unlimited liquidity? I mean the issue is that the deflationary aspect of this is required to reach acceptable money velocity, but at the same time the deflationary aspect certainly hinders money velocity. So it's pretty doubtful that the coins will reach a value where literally everyone who is "investing" now will be rich, or the coins will be used in day-to-day transactions. The investment thing is mostly not very well calculated. The risk is very high, especially when a couple of people hold almost all of the current liquidity (poo poo can happen here). You'd expect investors to want very high and safe yield to even buy a single GPU. Otherwise you are indeed gambling. That some people just aquired coins at the start of the currency is also not really fair. This runs counter some ideas of currency, mainly that there is a connection between real value aquisition and aquisition of money. If, like here, money and real value are so divided one would at least expect a high volatility of this thing until it is the case. This also would lead an investor to demand greater yield. Now, if you think that Bitcoins stay stable and become the standard "illegal thing" trading instrument on the internet, you could probably use an econometric model to calculate which worth the coins are going to have in the end, using the ceiling of minting and the corresponding real value of the illegal businesses.
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| # ¿ Jun 4, 2011 10:23 |
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Nagato posted:If it became impossible to exchange Bitcoins in bulk, wouldn't they become more valuable? I guess the main problem is that they have no inherent value/backing. If you can not exchange the coins for nearly all commodities, they will not replace real currency despite their advantages. They will then become speculation papers that also happen to be illegal in many countries. Very bad and risky investment without much yield. So yeah.
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| # ¿ Jun 4, 2011 23:59 |
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I'm going to go through the textbook definition of currency because y'all retarded arguing about this. There are two textbook definitions: A. Functions of money: 1. Unit of account Money is used to compare the worth of goods. The price may be set in any which way. This is debated in literature. Other definitions are: If you can calculate with it, it works as unit of account. Bitcoints does this but currently not for all goods. 2. Deposit of value We can't always use the potential value we have earned right on the spot, so we use money to deposit it. Functionally Bitcoin does this, however currently it doesn't do it very well. There is a certain point when consumers hold their wealth in a currency and that is when it assumed to be relatively safe to hold that value. Otherwise they stop doing that and the currency stops beeing money. Bitcoin is much too volatile for anyone to deposit all their assets in Bitcoins. So while it theoretically works as mean of deposit, it practically does not. At this point. 3. Means of Payment This is obvious. Bitcoins are limited means of payment. B. Absolute Liquidity Money is the good of highest liquidity for any group of people. The good of highest liquidity is the good that enables the person with money to exchange that money for the greatest variety of different goods at a constant value. For any person living in Europe or America or Asia, Bitcoins is not the good of highest liquidity (it is their legal tender). So: BY TEXTBOOK ECONOMIC DEFINITION BITCOINS ARE NOT YET MONEY, HOWEVER THEY THEORETICALLY COULD BE. Hope this solves this poo poo
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| # ¿ Jun 5, 2011 11:38 |
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Lumberjack Bonanza posted:I hope you can appreciate the irony of trying to add some certainty to the discussion, then essentially saying that you have no definitive answer. But this is a definitive answer? If you are asking if and when Bitcoins will become money according to liquidity preference theory, my answer would be "never". According to money function "theory", I'd say it doesn't matter much except when you already have a reason to use Bitcoins right now. I don't see a single reason why it should spread beyond its current boundaries according to functions of money. But I didn't want to post my opinion, I wanted to post a definition. No one can look into the future with certainty. There's the definition. Bitcoins is at this point not money. The End.
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| # ¿ Jun 5, 2011 13:10 |
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xdrquinnx posted:Now, I'm not an fancy economics professor or anything like that, but doesn't the combination of "lots of something for sale" and "little demand for that thing" usually result in the value of that thing declining pretty quickly? Or does supply/demand work differently in the Bitcoiniverse? That will probably happen eventually. Remember that Bitcoins aren't (yet) money. Because of the deflationary nature of the coins, people like to hold the Bitcoins at this point. With the option to immediately exchange them into dollars, it seems smarter to keep them as investment. If, however, the actual transaction will become more expensive for me than the return, for example when I have to buy weed via coins to trade into dollars to buy food, the coins will have lost their value as investment and they will devalue to almost zero very quickly. This risk has to be outweight by the current yield. Since the yield is unknown, the uncertainty is very high. Ie. People investing in Bitcoins aren't probably thinking very hard about this.
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| # ¿ Jun 5, 2011 14:19 |
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One should be aware that Bitcoins are nothing more than a dollar-rated commodity that can be traded anonymously. A currency has an underlying value, which is the net production of an economy. The "naive" formula for this is Y*p=M*v where Y is the stuff you can buy (real), p is the price level, M is the amount of money and v is the velocity. There is a certain dynamic between price level and intercurrency trade. With Bitcoins no one can identify the values that are underlying, so the whole concept of price-level is moot. The "price level" as is is completely governed by BTC-Dollar speculation. This makes the whole thing very volatile. There are no actual "earned" dollars in the market. Until we get values that are inherit to Bitcoin-country, there is no economically sound reason for those BTC-Dollar rates (as a currency). The whole deal is still a zero-sum game. This is obviously the definition of a bubble. The reason why this works and might still work is that Bitcoins are not traded as a currency but rather as a commodity with a certain percieved value. This value is dependend on the assumptions that BTC can be traded for dollars and that BTCs will grow in value. The interesting question is if and when this demand bubble will burst if BTCs can still be traded for dollars. As BTCs are essentially very volatile Bonds (rated in Dollars) the acceptance depends on the rate at which people are willing to waive the advantages of owning real currency (dollars). As soon as the generation of BTCs becomes uneconomical, a great deal of market liquidity will be lost. This will result in slightly less demand for BTCs. Sooner or later the expected return, coupled with the inherit risk, will decline and people will start to prefer holding real currency (dollars). Since the actual demand for BTC "Bonds" is also the determining factor for their return and value, this sets in motion a downward crash in pretty much the same way we see this upward motion right now, only backwards. This is when the bubble will burst. If you still hold BTCs as actual currency, as opposed to as Bond, you will now still have a variable price-level at which you can buy your drugs. So if you hold BTCs as currency in the first place, you don't "lose" anything. On the other hand you don't exist because 100% of BTC owners are speculating. Sorry. So yeah. Bottomline: BTCs are Bonds with a volatile return The dollars you think you own in BTC now are dollars that have to be "lost" by some other market entity If you hold BTCs as currency the value of BTCs doesn't matter
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| # ¿ Jun 9, 2011 23:54 |
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Rockybar posted:Can the people who know nothing about currency stop mocking the people who know nothing about currency. Durr I can hold a dollar therefore it has value So what do you know about currency? edit: I mean what level do I have to have to talk about currency here? Is a Bsc in Economics enough, or is this a masters+ discussion?
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| # ¿ Jun 20, 2011 15:18 |
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Agreed posted:rand.. I am not American so I didn't know who Ayn Rand was when I read the Fountainhead. I liked the book, though it was also "that time" in my life when I needed to read something inspiring. Sure, it wasn't written too well but I liked the little spikes of motivation I got out of it. Sure, it was rather shallow, repetitive and the protagonists and antagonists are caricatures but the concept has stuck with me. It's a book about creating something you have passion for and not giving a gently caress about people who bother you. What did bother me was that apparently women should literally be raped, which they also enjoy (what the gently caress). Then I read Atlas Shrugged. I didn't make it to the end. It's terrible. Then I read something about Ayn Rand. What a shame. Then I got internet and started reading things from people who actually believe in that crap.
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| # ¿ Jun 20, 2011 16:12 |
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If only the currency was half as professional as this show
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| # ¿ Jun 20, 2011 18:15 |
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If you need a logo... with color
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| # ¿ Jun 20, 2011 18:39 |
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Step 1: Create an unregulated currency, which premise is specifically: It itself is safe but if you lose your wallet files it's gone, sorry no policing Step 2: Start regulating it, compare it to a real stock exchange Holy poo poo are they retarded
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| # ¿ Jun 20, 2011 18:43 |
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Nuclearmonkee posted:Buttcoin_Value = -(Cost_of_Rig + Buttcoin_Power_Bill+value added by growing weed) / num_Buttcoins fixed
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| # ¿ Jun 20, 2011 18:57 |
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So if you make your own exchange you have to really, um, make sure it's secure and you can't just take other peoples Bitcoins and run because... because..
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| # ¿ Jun 20, 2011 19:09 |
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haha people are going to be pissed when it opens back up. Someone just gained 5 million buttes in a zero-sum game of buttes. No biggie
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| # ¿ Jun 20, 2011 19:12 |
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Toffile posted:I have no clue, he's starting up some internet TV station or something. Can someone photoshop a live bitcoin/usd graph into this?
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| # ¿ Jun 20, 2011 21:48 |
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Devian666 posted:the buttcoin animated gif would be better in the screen. doesn't matter, do it and embded it into this page and play yakety sax in the background.
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| # ¿ Jun 20, 2011 21:56 |
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All in all this has been a great experience and a great opportunity to feel smug as hell. "Told you so".
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| # ¿ Jun 24, 2011 10:11 |
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Can some lawyer goon maybe analyze if there really is any obligation to pay the money back at all? I mean did MtGox in any way promise to always return all deposits or something? Especially considering the whole deal is probably illegal for most participants anyways? Because MtGox must have several millions banked now. I would just post a page saying "We can't recover the funds or bitcoins. Sorry. Bye".
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| # ¿ Jun 24, 2011 10:16 |
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Martin Random posted:And the terrifying thing is that our own monetary system operates the same way, but with a central authority. 1) Our money is our money because of its superior liquidity (preference theory) 2) This is backed by laws that guarantee this liquidity (you have to take money if you sell goods) e: note the difference between currency an money. The state enforces that currency is money. That's all the security you need. Bitcoins will probably never be money. Whatever you actually trust in doesn't matter. It also doesn't matter how the currency is backed. It is, by the way, essentially backed by chunks of the economic output in terms of activa that are either bought or taken in by the central banks. This is the backing of the money. What can be deposited is regulated by law. At least the Eurozone does it this way. Once again, I think the monetary system is the most misunderstood thing ever, especially by internet economists and conspiracy nuts. I would encourage everyone to read a good economic textbook on the matter.
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| # ¿ Jun 24, 2011 15:57 |
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evilweasel posted:No you don't, you can insist on only being paid in wooden nickles if you so choose. yeah but that is bartering. What I mean that the top liquidity is guaranteed by the state by disallowing other currencies and making the divisions of the money universally worth (to a degree you have to take every kind of coin/bill etc), even if otherwise certain coins would probably not have much liquidity at all.
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| # ¿ Jun 24, 2011 16:09 |
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Volute posted:http://www.snopes.com/business/money/pennies.asp In the Eurozone there is a set limit (§3 MünzG in Germany for example) You can pay any debt with any coin you like, which is the important factor. The fact that it is legal tender almost guarantees that it will be money. See above.
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| # ¿ Jun 24, 2011 17:25 |
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LOLOLOLLOLLOL THE PRICE OF BITCOINS HAS NOT CHANGED AT ALL LOLOL BITCOINS ARE REALLY SECURE
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| # ¿ Jun 24, 2011 18:12 |
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Ask him why he thinks that liquidity means that one can sell BITCOINS for dollars? (liquidity means that you can exchange bitcoins for other goods quickly, ie without changing it into dollars first) Edit: Confirmed that now markets will freeze upon large sell orders wohooooo freedom
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| # ¿ Jun 24, 2011 18:13 |
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God drat is he defensive, and wrong
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| # ¿ Jun 24, 2011 18:16 |
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Can someone tape this or put it up later so that we or I can debunk all the poo poo he is spouting? Because the majority of it is just bullshit.
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| # ¿ Jun 24, 2011 18:17 |
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ahaha he is one of those money-debt-slavery nuts who don't understand economy. Shiiiiiiit
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| # ¿ Jun 24, 2011 18:19 |
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"The only people that sell a) need to pay their rent right now b) want to test the system" why a)? Bitcoins are liquid! Just pay rent with Bitcoins. Problem solved!
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| # ¿ Jun 24, 2011 18:21 |
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he is going to cry, isn't he edit ALL THOSE ARTICLES WERE FULL OFF INNACURACIES First off, our sponsor doesn't sell Burritos. It's not Mexican food they are selling  "AHAHAHA AHOLY poo poo
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| # ¿ Jun 24, 2011 18:24 |
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this is literally the best thing I have ever seen
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| # ¿ Jun 24, 2011 18:25 |
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I call it "vibration" holy poo poo how can you be so clueless about basic economics holy poo poo edit: hahaha look, here is how finance theory works. THATS WHEN YOU BUY. gently caress YOUR SCIENCE
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| # ¿ Jun 24, 2011 18:29 |
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Stupid sheeple. If you just sell the peaks, you don't lose money. And people study for this? Idiots. 
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| # ¿ Jun 24, 2011 18:32 |
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holy poo poo is he an idiot if you have to exchange bitcoins to usd to buy on amazon, YOU ARE NOT BUYING WITH BITCOINS. god drat it there is a loving important difference
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| # ¿ Jun 24, 2011 18:35 |
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I Greyhound posted:So people removing bitcoins from the strategic bitcoin repository at Mount Gox is bad for Mt. Gox, but doesn't itself have an effect on the bitconomy as a whole. Where the crash will occur is when those users decide to get out of the market entirely, and put the coins up for sale. But none of the other sites can handle huge volumes (A large spike for trade hill is 1600 coins), so it may be a slow, steady decline even if there's a mass sell-off as the limited capacity throttles the rate of exchange. If you can't exhange them to usd, they are literally worthless. It's identical to a bursting bubble. Right now people with Bitcoins think they are holding a lot of dollars. However, when it becomes more risky and harder to exchange them into dollars quickly, not only will the price drop but the usefulness of Bitcoins will drop dramatically because you need to exchange them into USD before you can buy anything but internet drugs. The only currency function they do have is for poo poo that can be natively bought in Bitcoins at a constant rate, which is also produced using Bitcoins. If you are holding Bitcoins, this is the only thing you should consider as value behind BTC, not their exchange value. Sadly, the amount of items that fall in that category is literally zero. Which is also the true BTC value.
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| # ¿ Jun 26, 2011 14:35 |
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Their exchange value is based on their value as currency which is based on their exchange value. If that is not the definition of unbased bubble then I don't know what is.
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| # ¿ Jun 26, 2011 14:40 |
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Considering the limitations I don't expect a huge burst but it's not beyond possibility
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| # ¿ Jun 26, 2011 14:55 |
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In economic theory, a misinformed decision to sell at 100$ instead of 1000$ is under normal assumptions not efficient for general welfare. In aggregated welfare it would be better to sell at 1000$ if it is worth 1000$ (the simpelst explanation is diminishing return in utility of money earned by the "scamming" dude). So bottomline there is an interest to combat those market failures with information policy. Wether or not it is moral, the society has an interest to minimize those trades. This could be a moral foundation of that sort.
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| # ¿ Jun 28, 2011 16:51 |
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bewbies posted:What "economic theory" is this? Regular information deficiencies, found in new institutional economics but pretty much everywhere else as well today. edit: here, a link http://en.wikipedia.org/wiki/New_in...ional_economics
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| # ¿ Jun 28, 2011 17:19 |
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bewbies posted:Perhaps you can walk the dog on this for me because I don't know of any actual theory that supports your argument (which was something about the scammer not having as much utility for the money as the scammee or something). I used scammer in "" so you would understand that I don't actually give a gently caress about whether or not there is an information deficiency (there always is) IN THIS SPECIFIC CASE. My point was that it is usually beneficial to do something against transactions with information deficincies. The utility of the payment is one way to explain it with traditional diminishing return in utility: The scammer ends up with more money and a relative lower utility earning than the scammee would have, since both value the product at the original price. The optimal distribution would then obviously be at that price point. This is really just the consequence of the idea of an pareto-efficient market and how an information deficity changes that market to something else - which then by definition pareto inferior. However the theory is not about scamming but about information. What kind of scam could be going on is dependend on what information is missing. You have things like hidden characteristics, actions and intentions, insecurity about price or utility etc. etc. It's a whole field of science. All in all the end result is always inferior to a market solution, which is the mathematically ideal solution. So up to a certain ideal point it is efficient for a society to try to combat information deficencies because it does not conform with the idea of a market solution edit: To further this a bit. Just uncertainty about utility in the long run can lead to some really irrational behaviour of the market subjects. This is also where the free market idea immediately falls apart. So really, Bitcoin fans should have a strong interest in combating uncertainty and information issues!
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| # ¿ Jun 28, 2011 18:31 |
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| # ¿ May 24, 2013 16:51 |
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What are the limits MtGox is having right now? Because looking at the volatility it should have it sure looks like MtGox is somehow limiting the trading somewhat? In that case we are probably in for a steady decline
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| # ¿ Jul 4, 2011 20:21 |
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