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Drone_Fragger
May 9, 2007

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This is a terrible currency because it's so unstable your money could be worth twice as much or half as much overnight (or over the space of a few hours) and theres already so many people bitcoin mining for their pretend money that they had to raise the difficulty of hashing a block by 50% last week.
Also the bouts of hyperinflation and hyperdeflation is hilarious. The value of bitcoins has gone from 1 dollar to 9 dollars, then back down to 5 dollars, then up to 8 dollars in the space of about 2 weeks at this point. And the thing is is that this is solely because the russian mafia used it for money laundering and bought like 50,000 bitcoins.

edit:

kazmeyer posted:

There's a thread in BFC full of people making fun of these guys and their hilarious belief that their internet nerd money is going to survive the coming economic apocalypse.

This reminds me, in yospos it was pointed out that there is literally no accountability in bitcoins whatsoever. If someone sells you something on the line and charges in bitcoins, and you give them the money but then they don't ship you the goods or just vanish completely there is nothing whatsoever you can do about it. You can't even put forward proof that the transaction even occurred because as I understand it the transactions are untraceable unless you are the one making it.

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Drone_Fragger
May 9, 2007

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Also it should be noted that the rate of bitcoin creation is constant, so the more mining you do via massive rigs of CUDA enabled sli card setups to massively (and wastefully) hash blocks the less money you actually make. If everyone on earth suddenly had a pressing need to get bitcoins no one would actually get any.

Oh also the massive bitcoin rigs are enough to get the police knocking on your door with a search warrant for weed, because of the stupidly large electricity bills.

Drone_Fragger
May 9, 2007

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ymgve posted:

I made about $50 by buying when the coins were $1 and selling when they were $6. But I'm 100% certain that this is a bubble and the price will crash down within weeks, so I wouldn't recommend others trying to do the same.

Nah its gonna be kept up by idiotic libertarians and the russian mafia, who need some bullshit untracable online currency to launder money with now that flooz is gone.

Drone_Fragger
May 9, 2007

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ejstheman posted:

I think there's an interesting question, here. On the one hand, US Dollars and other such currency are accepted by more people by several orders of magnitude, and so they're "better" currency at the present, in the sense of being better able to provide the time-shifting and divisibility and so forth that currencies exist to provide. On the other hand, it's kind of frustrating to feel like weird forces you don't understand manipulate the values of currencies in ways that you could not possibly do, even if you did understand (because you are not a government and are not insanely wealthy). So, I can see why people would be willing to put some time into a scrip project, even if it's mostly just for fun.

Perhaps Bitcoins will end up being like a tech version of this.

The US dollar is also good because it's too large to buy up a large majority of the market to manipulate it with. Like what is happening with bitcoins. right now.

Drone_Fragger
May 9, 2007

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ChubbyEmoBabe posted:

http://www.youtube.com/watch?v=5syX-4l51Oc

There's a lesson somewhere here.


Well that seems like a rock solid currency. How can I convert my savings?

Seriously though, this does have it's uses and the best ones are all illegal. I can't believe people are actually "investing" in this. The coins even look like scrooges money bin coins.

Its better if you look back a bit more further back:


ROCK SOLID CURRENCY HERE FOLKS
(note most of those jaggies on the line are where its value drops by 20% or more overnight or over a weekend)

Drone_Fragger
May 9, 2007

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infinity2005 posted:

So how do you launder money with this?

Edit: actually i should point out i'm not serious or i'll probably get banned. The russian mafia thing is interesting though.

I'd imagine same way they were doing it with flooz, Buying a ton of fake internet money, then either selling the fake net money back at a different site or using it to buy goods with resale value from one of the few places that accept it as payment and selling them on.

Drone_Fragger
May 9, 2007

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Vincent Van Goatse posted:

I got a C in Economics and I still know enough that this poo poo is bullshit.

again I'm gonna point to flooz, http://en.wikipedia.org/wiki/Flooz.com, which the russian mafia did legitimately use to launder money and did it in exactly the same way.

Drone_Fragger
May 9, 2007

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Vincent Van Goatse posted:

And since I am not the Russian mafia, there's no loving way I could make bank off this bullshit.

Well yeah since I kinda assumed you weren't money laundering?

Drone_Fragger
May 9, 2007

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Now all we need to do is back up our bitcoins with bitgold backed by the liberty reserve and we'll have our own proper currency!!

Drone_Fragger
May 9, 2007

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Vincent Van Goatse posted:

Ah see I thought you were saying that because of Russian money laundering someone made money off of this poo poo so it wasn't 100.00% bullshit. My apologies.

I don't mean to be a dick but what the hell are you on about? I simply stated how the russian mafia was using online money like this to launder money (in this case from fake or stolen credit/debit cards) by buying and selling flooz/bitcoins in order to make it pretty much untraceable and you just seem to be drivelling on about how this makes it a legit currency becuase someone is making money out of it or something I don't know

quote:

And that's why this: Does. Not. Work.

Well this and the system is prone to bouts of both hyper deflation and inflation because someone bought one bitcoin for twice the price of what someone else asked for. If a currency doesn't have a stable value it's worthless as a currency. No one would willingly accept a bitcoin that could at that point in time be totally worthless, and no one would spend any of their bitcoins it if it's price was going to double or triple tomorrow, completely arbitrarily.

Drone_Fragger
May 9, 2007

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sorghum posted:

Or just embed Javascript mining code on a high-traffic website! It could replace ads! (note: not actually feasible)

Imagine how much money lowtax could make if he embedded this on the Something awful forums

Nothing because bitcoins are a worthless commodity and a worthless scam that is backed up not by gold, but by idiots.

Drone_Fragger
May 9, 2007

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lorn Wayne posted:

Step 1: Incorporate a company and give it a professional sounding name. Buy some professional awards and qualifications from various business 'think tanks' to give your company that sweet, sweet air of credibility.

Step 2: Package Bitcoins as an investment vehicle. Create glossy sales brochures, a good website, a basic social media presence (to work on later) and slap some phony award stickers on it. Might I suggest a gold star with the words "Investment Opportunity of the Millenium" on it, with the words "As suggested by highly regarded analysts in the banking sector" underneath it? The analyst? Oh don't worry, your 50 year old aunt who works as a bank teller will suffice.

Step 3: Don your best 80s power suit and slickback hairstyle and sell sell sell! High net worth clients and other investment banks should be a target but they may not be willing to look at you, so focus on your core idiot demographic - nerds with too much disposable income and a fetish for social/economic meltdown scenarios. Remember that social media presence? Now's the time to build and exploit that! Use as many buzzwords as possible, as much as you can when creating your marketing plan - this will gloss over any actual lack of substance.

Step 4: A few months down the line and you will have a sizeable base of investors and the big guns may start to pay attention to you and take out stakes themselves. While this bubble is still building, now's the time to approach Standard & Poor's or Moody's. In return for share options, ask them to slap on a AAA badge on your investment.

Step 5: Now, making sure not to tell your investors, take out a short on your investment using a new shell company in the name of your wife/girlfriend. Oh who am I kidding, just get your mom to do it.

Step 6: When the bubble finally bursts as the market maxes out, people realise what a terrible investment it actually is and the value plummets, you cash in. Pay off your chosen ratings agency, take the rest of your earnings and then retire to your private island.

Enjoy!

This is pretty much what the original creator of bitcoins is doing. He kept bitcoins quiet for ages so that he could mine a gently caress ton of bitcoins with very little effort or time. By the time it was pounced upon by the media as being the "next big thing" followed by that hilarious 1000% hyperdeflation he owned something like 7 million dollars worth of bitcoins.

Drone_Fragger
May 9, 2007

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NOT CONTROLLED BY A BANK = MORE FREEDOM!!!

*price goes down by 400% overnight because someone paid twice as much for a bitcoin, everyone can no longer afford to eay*

Drone_Fragger
May 9, 2007

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Tumble posted:

I'll buy 2000 bitcoins at $6.50 a coin.

sorry dude while you were writing this message they went up to 9 dollars each, and while I was writing this message they've most likely dropped to 3 dollars.

_-~~Stable currency~~-_

Drone_Fragger
May 9, 2007

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ChubbyEmoBabe posted:

Because you are all like "use cash " in response to my hole contention that we need digital currency because there is no possible way for two regular private parties to exchange money without involving private for profit parties electronically. This isn't really a problem until people are kind of forced to use those in place of cash. As the atm machine gets replaced by the debit machine and the bank by an atm people are less likely to have cash and ultimately the payment processors control all of the currency.

Also I don't think you realised this but any transaction that involves blocks you've hashed you can put a transaction fee on, just like some banks might do (mine doesn't). And there might be thousands of blocks in a chain.

Drone_Fragger
May 9, 2007

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ChubbyEmoBabe posted:

I'm not arguing for bitcoin but you really aren't making a reasonable counter argument to what I am saying. Bitcoin isn't bad or stupid because of anonymous or crime or whatever. It's an unregulated psuedo currency ripe for manipulation.


Indeed, the fact that someone bought 50,000 bitcoins at 95 cents, which spent the price of the bitcoin spiraling upwards to 9 dollars 50. Should be proof of that. The guy who bought those bitcoins could possibly have made a huge profit even if he didn't sell all the coins he bought.

Drone_Fragger
May 9, 2007

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Three Olives posted:

Yeah, that's why I've downloaded and stored gigabytes of gay pornography on my computer, as a uh, decoy. I swear, it's just sound computer security, it's just to thow people off the scent. Listen, I'm not gay or anything, I mean the fact that I would let people think I was gay as a distraction proves it, it just makes good sense to keep a bunch of gay porn on my computer, to protect my bitcoins.

Your worthless bitcoins!

Drone_Fragger
May 9, 2007

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ClosedBSD posted:

Fiscal libertarians are known for valuing their ideals over any amount of money.

But only if it makes them rich in the process. This is why libertarians would advocate the closing the United states postal service because it's not making money right this second even though it's going to get a lot more income soon as online sales pick up.

edit: some moronic rear end is arguing with me if bitcoins are worthless or not (hint, they are) on yotube. his opening comment was this:

moronic rear end posted:

@DroneFragger So it's the same as every other form of currency. Supply and demand are still in effect, the market will settle on it's own.

Hmmm yes currency should beholden to the laws of supply and demand quick lets cut of the money supply so that we have all the money and it's worth the gdp of a small country and everyone else has nothing LIBERTARIANISM FOR LIFE

Drone_Fragger
May 9, 2007

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UrbanFarmer posted:

When I first got into bitcoins, there was a "bitcoin faucet". Once a day you could go to it and you'd get a bitcoin for free. Who set it up? Who knows, but either a founder or a very early adopter. There are some very smart people behind this system.

There is no need for a founder or early adopter to dump massive amounts of BTC at once. If they're smart (and I REALLY think they are) they will sell some over time and make millions. And they'll also realize that if they don't tank the market and nurture their creation along, they'll be worth billions if it does become a truly alternative currency. Hell, I would wager these math geniuses have an algorithm telling them how much to sell and when based upon a wealth of variables. And when to buy as well...

Which is why this currency is bad. People who mined bitcoins early on got essentially all the money for doing no effort, while people who just started mining when they just started having some value (mainly for buying drugs) are getting gently caress all.

edit: Argument with idiot continues. He states its fine that the value of bitcoins rises to 9.50 since then people will sell them and they'll go back down to 1 dollar. Shame a market filled with idiots doesn't operate like this and currencies should not be effected by supply and demand.

Drone_Fragger
May 9, 2007

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tiananman posted:

Yeah but it's size to value ratio is quite miniscule. You can carry around hundreds of thousands of dollars in a small handbag without breaking a sweat. Or you can carry around a few grand in your pocket. Compare that to how much copper you'd need to carry around, or even the amount of silver you'd need.

This is a completely loving stupid point because for a place to accept gold as payment it needs a whole loving load of equipment to measure it out and check it is actually gold. Not only would it be terribly inconvenient but it'd also be unbelievably stupid because there's only like 0.25 grams of gold to a ten dollar note, which is an incredibly small amount, which is easy as hell to lose and effectively undividable.

Unless you're one of the people who happened to have a stack of gold left over from when your parents had gold reserves (it was fairly common back in the 60s as I recall) and suddenly the value shoots up because it's in demand as currency and you're suddenly extremely well off despite doing nothing whatsoever, and can therefore afford to carry around hundreds of thousands of dollars on you at all times and not get mugged for it.

Drone_Fragger
May 9, 2007

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Imagine designing and printing thousands of Megabux bills. You may claim that they're worth a lot of money but until you can get more people to actively use your megabux they're essentially a worthless trinket.

The reason real money works is because the government mandates that it is worth it's face value. Ie, a dollar bill is worth a dollar and is accepted as payment for something worth one dollar. Bitcoins don't have this and as such hardly anyone uses them for actively buying or selling things, especially since people accepting them as payment will have to change them back into USD or EUR or whatever to pay people further down the supply chain anyway.

edit: http://forum.bitcoin.org/index.php?topic=57.0 This thread is a loving goldmine of crazy I mean people think tobleronetriangular was bad but theres literally people in there saying deflation is good because if people hoard their money then the deflation decreases because no one spends their money (HINT THIS IS WHY THE GREAT DEPRESSION STARTED).

Drone_Fragger
May 9, 2007

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fishmech posted:

Ah yes just go through the intermediary of:
PATH A:
Buy a lot of computer equipment, wait a few months to get a decent amount of Bitcoins, pay using those bitcoins
PATH B:
Use existing computer equipment, wait a year to get a decent amount of bitcoins, pay using those bitcoins
PATH C:
Buy Bitcoins by putting your money through several intermediaries from real world money to bitcoins, pay using those bitcoins

Indeed. The only way to get bitcoins is either to mine them or pay for them using actual tangible currency. Bitcoins would be a much more reasonable system (and I could see it actually taking off) if there was one decentralised bitcoin bank who would issue bitcoins to people based on actual exchange rates instead of bullshit "who can make the most bitcoins before they become impossible to mine with a server room full of ATI cards" as it is now.

However this is libertarians and a central bank making the currency tangible would make them think the CIA was watching their house right now.

Drone_Fragger
May 9, 2007

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The Brown Menace posted:

So the endgame here is to purchase every last Bitcoin to do what exactly? The only way you can go from there is to sell them back, which won't yield much of a profit.

Also, due to the way Bitcoins are distributed, it is almost impossible to hold all of them.

The first 10% of adopters currently hold 90% of the existing bitcoins as I recall, due to the difficulty shifts over time. They can sell those and be pretty much rich for life without doing any real work or effort at all, making their money entirely of the people who bought into the scheme late and need to buy bitcoins.

Also no one needs to hold anywhere near all of them. The recent 900% inflation was caused entirely by a single party purchasing 50,000 bitcoins at a marginally inflated price over the average, which suddenly made the value of bitcoins shoot up to nine dollars fifty. And this is all because only something like 1% of existing bitcoins have ever changed wallets in any form.

Drone_Fragger
May 9, 2007

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Baddog posted:

Until the US government declares it illegal to buy bitcoins and starts seizing the accounts of everyone who facilitates the exchange, then path C is perfectly safe.

We're seeing more and more the government trying to enforce the morality of the majority of its citizens by seizing electronic accounts. This offers a way around that.

Care to back this up? The only time I've ever heard of online monetary accounts being seized in any form is back when pay al was corrupt as poo poo and would seize high value accounts because people would have an extremely hard time reclaiming them. Paypal being a buisness in this case who's sole purpose is to make money.

Also the online poker drama I guess but that can hardly be called "trying to enforce morality onto people" because it was specifically against the law.

quote:

However this thread is just full of people going "lol its not backed by anything!" and "a dollar is worth a dollar!" as if dollars are backed by anything, or as if the value of a dollar didn't fluctuate every day.

The value of the dollar fluctuates but because it's such a huge currency it doesn't fluctuate enough to say, 1 dollar going from purchasing a litre of petrol to going to purchasing ten litres in less than 2 weeks.

Drone_Fragger
May 9, 2007

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fishmech posted:

National currencies are backed by national economies and to a somewhat smaller extent national militaries.

Indeed, and as I understand it the reason more money is printed in countries is because the economies are getting bigger.

Drone_Fragger
May 9, 2007

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Baddog posted:

There are no intermediaries for whatever "sensitive" activity you want to use them for, which is the important stage. And if it catches on, you might never need to convert them to another currency.

Why are you so angry about fake money?

Yes there is, As I understand it when a transaction takes place it scans all the way back through the blocks to the creation of those coins (to confirm their authenticity) and if the transaction goes through a block you own, you can charge a transaction fee on it if it's of a large enough size (bytewise).

edit: https://en.bitcoin.it/wiki/Transaction_fee heres the proof of that.

Drone_Fragger
May 9, 2007

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randombattle posted:

Who needs rent when you have slim jims?

Nice charts but they don't show what you want them to.

Note that the dollar fluctuates around 1-2 cents over several years where as bitcoints fluctuate 10 dollars in the span of a month. Any currency that goes up in value 1000% in a month is not ever going to be a stable currency.

that was the exact point he was trying to show, actually. No one is going to use a currency that arbitary goes up and down in price by such huge margins on a daily basis.

Drone_Fragger
May 9, 2007

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Baddog posted:

Haha I haven't bought any bitcoins, that's urbanfarmer. I'm kind of tempted to though. If a large gambling site starts accepting them, they will really take off. I'm not sure you all realize the global demand for being able to move money anonymously. And not even just for drugs or money laundering. Also I don't care about someone charging me .01 for being able to move the money, its the anonymity and inability to freeze accounts that is the selling point. Just a few larger adopters will really get that market to take off. I just wish it wasn't deflationary, it should keep up with demand or optimally a little more.

And I'm not sure where all the rage is coming from about "libertarian pyramid scheme". Apparently there are only about 5-6 million bitcoins out there right now. Even if the founder is sitting on half of them and could actually sell them all without crashing the market (he can't), its only about 20 million worth. Not peanuts, but hardly big boy money (yet).

If you actually read his paper, its not like he didn't do anything, there is some serious work put in. I dunno, coming up with a scheme to use P2P computing to create a workable alternate currency is probably worth a lot more than using it to pirate music. Putting him in the same category as someone who sells amway is a little ridiculous.

But the thing is it's not a workable currency. It's inheriently deflationary (Bad) and the people who get into it first end up with all the money (which they do). Online casinos will never accept it either, because theres a whole host of legal issues involving it with taxes and suchlike.

Drone_Fragger
May 9, 2007

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Also power companies are likely to report you to the cops if you're drawing that much power because it's usually a sign of growing weed under those 1000 watt halogen bulbs.

Drone_Fragger
May 9, 2007

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I go on holiday for a week and when I get back I found out the online currency I was going to pay for it with is now worthless and I'm declaring bankruptcy, thanks bitcoin!! thread that I was arguing with people online in somehow got even more hilarious.

Drone_Fragger
May 9, 2007

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trashcanman posted:

Would it really take much more than what we already use in our current currency system though?

I mean, assuming you need a modern electronic currency system of some kind which ours is (partly electronic anyway), does the use of paper currency save energy compared to the all digital alternative?

I think that's a fairer question.

Hmm a system in which everyone on earth must leave their PC on at 100% CPU and GPU in order to operate the system or use their money, nah this won't cost money at all.

Drone_Fragger
May 9, 2007

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ChubbyEmoBabe posted:

I'd bet the costs would be comparable if not a lot less once the initial spend was through, the technology aspect would kick the governments rear end, though.

Printing millions of bills every year isn't cheap. I think they cost like 30-40cents each. So your in the billions just in printing/minting.

Mass production is loving dirt cheap. once you've got plates set up and the right paper you can print that poo poo out for basically nothing. I think I read somewhere it was closer to 6 cents per bill, regardless of denomination. Also, This Gives the number of bills printed per day on average as 38 million. at 6 cents a bill this gives a grand total of just over 800 million in printing costs per year, which is almost 1/80th f the USAs annual "lets invade browns" budget.

Drone_Fragger
May 9, 2007

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JakeP posted:

Its backed by the US government.

And the government mandates that a dollar is worth a dollar and can be uesd to settle a debt worth a dollar, effectively.

Drone_Fragger
May 9, 2007

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Salt Fish posted:

What does the US government "back" the us dollar with? Hint; it used to be backed by gold.


The US mandates that a dollar is worth a dollar? What does that even mean? 1 bitcoin is worth 1 bitcoin too.

If you want to purchase a good that someone has priced at 100 bux, if you offered to pay with US dollars in the USA, They cannot legally refuse to accept that as payment because you offered to pay in USD, unlike japanese yen, which they could turn down since it's not legal as currency in the USA.

Drone_Fragger
May 9, 2007

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so would someone mind posting the current price graph for bitcoin, I keep reading its gone up to something stupid like 35 dollars a coin but the mtgox site is terrible and says I don't have flash when really I do.

Drone_Fragger
May 9, 2007

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Maarak posted:



Yep, also thanks to Lutha Mahtin who made this much more hilarious chart:


THE SKIES THE LIMIT HERE FOLKS

Bitcoin: currency of the year 2011.

Drone_Fragger
May 9, 2007

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So yeah the dark pool seems to exist so the founder can cash his quarter million bitcoins out for as much money as possible. No this isn't a scam, not at all.

Drone_Fragger
May 9, 2007

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man thats gross posted:

Yes but the same system exists on Wall Street, therefore,

The difference being that on wall street the guy who founded it didn't magically control a signifigant percentage of the money being moved around on it.

Drone_Fragger
May 9, 2007

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Bolian Blues posted:

That graph you quoted only seems to be the last two days - probably just a small section of the "mania" part of the bubble rather than the whole thing.

yeah if you look at the whole graph it's far more hilarious:



WORLDS STABLEST CURRENCY FOLKS, NO PRICE CHANGES OF AN ORDER OF MAGNITUDE ON A DAILY BASIS HERE NOSIREE

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Drone_Fragger
May 9, 2007

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http://forum.bitcoin.org/index.php?topic=13623.0 Someone has a moment of sanity and points out that this is loving absurd and theres no way this is permanant, and everyone just laughs at him and tells him to look at the same graph except using a log of both axes, which proves exactly the same fuckin point except in a more difficult way for idiots to understand it.

Are libertarians born retarded or does it come with the title "libertarian"?

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