Author: gork

Bitcoin will Revolutionise FX/International Xfer Market   [Copy link] 中文

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Post time 2013-12-6 01:28:41 |Display all floors
Whereas conventional money transfer systems are linked to paper money and e-gold was linked to gold, BitCoins aren't linked to anything.

Paper money is forced on retailers in cancellation of a debt by legal tender laws, which has led to everything being priced in paper currency including gold and BitCoins.

Gold is universally accepted and unlike BitCoins and paper (aside from in the W.C.) has industrial uses too. Central banks still use gold as a store of value in preference to paper.

This makes BitCoin dangerous as a medium of exchange and a store of value. Imagine you exchange $1m for transfer back to the old country, but by the time the recipient receives it, the exchange rate has fallen 50%. Recently PhoenixCoin fell 68% and LiteCoin by 51%. BitCoin has had a bear market all in one day this week.
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Post time 2013-12-6 16:46:56 |Display all floors
Since BitCoin et al are dangerous, I would never try to use them as a store of value. Their volatility might make them profitable for traders though.

As I said above, BitCoins may be limited but the competition, such as LiteCoin, is unlimited. Furthermore, the goons & thugs will tax retailers in the end.

Here's another issue: What if you accidentally sent a large sum of cash to the wrong wallet?
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Post time 2013-12-6 22:13:07 |Display all floors
More Flaws in BitCoin
- will it collapse?

The general consensus, says Mike Hearn, one of the volunteers who maintain the Bitcoin software, is that with this new generation of ASICs, mining will have approached a point where only those with access to free or cheap electricity will continue operations, and even they will produce a relatively marginal return on investment, rather than the huge multiples (when exchanged into traditional currency) possible even earlier this year.
. . .
But as part of Bitcoin's design, the reward for mining a block halves every 210,000 blocks, or roughly every four years. Sometime in 2017, at the current rate, it will drop to 12.5 Bitcoins. If the returns from mining decline, who will verify the integrity of the block chain?

To head off this problem, a market-based mechanism is in the works which will raise the current voluntary fees paid by users (around five cents per transaction) in return for verification. "Nodes in the peer-to-peer network will try to estimate the minimum fee needed to get the transaction confirmed," says Mr Hearn.

- twisted by the pool

As I wrote above, LiteCoins can still be reasonably mined using ordinary hardware. As BitCoins become more and more difficult to mine, arbitrage suggests everyone would move to LiteCoin or other alternatives. Who, then, would be doing the mining (which is really transaction verification) for BitCoin? Sure, there would be legacy miners who won't bother switching to alternatives, but won't BitCoin's exchange rate have collapsed? Increasing fees mean that BitCoin becomes less attractive for retailers and consumers and it will migrate toward the services provided by the banksters.

Bitcoin's growing popularity is having other ripple effects. Every participant in the system must keep a copy of the block chain, which now exceeds 11 gigabytes in size and continues to grow steadily. This alone deters casual use. Bitcoin's designer proposed a method of pruning the chain to include only unspent amounts, but it has not been implemented.
. . .
These nodes relay transactions and transmit updates to the block chain. But, says Matthew Green, a security researcher at Johns Hopkins University, the ecosystem provides no compensation for maintaining these nodes—only for mining. The rising cost of operating nodes could jeopardise Bitcoin's ability to scale.


This is a problem inherent in the cryptocurrency. Gold has no such burden and registering of paper money transactions is controlled by the banksters computers in a much simpler fashion.

As well as the existing flaws, the indeterminate nature of future changes to the protocol (like Monsanto's meddling with GMOs) risks mistakes being made and the system collapsing: The protocol, like the currency, is a fiction they accept as real, because rejection by a large proportion of users—be they banks, exchanges, speculators or miners — could cause the whole system to collapse. Mr Hearn notes that he and other programmers who work on Bitcoin's software have no special authority in the system. Instead, proposals are floated, implemented in software, and must then be taken up by 80% of nodes before becoming permanent — at which point blocks from other nodes are rejected. "The rules of the system are not set in stone," he says. The adoption of improvements is up to the community. Bitcoin is thus both flexible and fragile.
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Post time 2013-12-6 22:47:51 |Display all floors
anythin 'bout dotkom just have to be careful  {:soso_e114:}{:soso_e113:}
a man who uses his hands is a laborer. one who uses his hands and his mind is a craftsman. but he who uses his hands, his mind, and his heart, is an artist...

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Post time 2013-12-7 05:04:25 |Display all floors
BitCoin has fallen below $900 on Mt.Gox. Ouch!

Will Max Kiester's BitCoin Liberation Army be baying for his blood too?
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Post time 2013-12-8 00:29:31 |Display all floors
More Woe For BitCoin Promoters

Bitcoin exchanges, payment processors and other startups say they need banks to connect them to the existing payments system and provide basic services like checking accounts. To do that, the fledgling companies must convince the regulators who police the banks that Bitcoins aren’t being used to conceal illicit activity.
- Bankers Balking at Bitcoin in U.S. as Real-World Obstacles Mount

Although BitCoin has considerable acceptance, the world is still dominated by national fiat currencies which everyone has to accept as part of legal tender laws. It stands to reason that the authorities will get upset if they lose consumption taxes and the banks if they lose transaction fees. If banks refuse to accept deposits from cryptocurrency related businesses, then the currencies risk being limited in use to those retailers which accept them, a catch-22 situation.

With BitCoin below $900 (when last I looked) and LiteCoin being about $50, speculators would be mad to bet on BitCoin. LiteCoin is currently easier to mine and cheaper to buy with much less downside potential. But then there are myriad other cryptocurrencies too.
Compounding is the magic ingredient.

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Post time 2013-12-8 00:35:12 |Display all floors
Ouch $700 on Mt.Gox.

Lookout for the guillotine Kiester!
Compounding is the magic ingredient.

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