bit¢oin$

the supply is limited by the fact of what a bitcoin is -- a value that can only be found by an intensive algorithmic process that takes a lot of computing power to complete. The bitcoins that "exist" aren't all found, yet, but due to the nature of the algorithm it's known how many will be found.

Imagine there's a mineral that we know for sure only exists in one mountain on the planet, and we know how it's distributed within the mountain, and the exact amount of it in there. Instead of abstract quantities, it's found in exact units that can't be broken down. The computers crunching numbers are like excavators, slowly strip mining the mountain. There's no shortcut to get directly to the mineral, and a particular amount of land has to be moved each time. The amount of land is greater, but the excavators will get more efficient over time, so there's somewhat of a balance.

And yeah, 11m bitcoins is rather limited

most of them are held by criminals, though

would it be correct to compare it to seeders in a torrent network? except that unlike torrents, you're not copying files but exchanging them?

oh noes criminals

yeah, the currency exchange is somewhat like that

http://maxkeiser.com/wp-content/uploads/2013/04/Screen-shot-2013-04-04-at-17.40.44.png

"pretty cool" - al gore

coinbase leaks users name and email: https://encrypted.google.com/search?q=site:https://coinbase.com/checkouts/

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There is a limited number of bit coins but that's not an issue as they can be used in decimal values. If it becomes huge you'll see prices or whatever like .00013 bit coins

OMG SO CHEAP ONLY POINT OH OH OH OH OH OH OH OH OH OH OH THIRTEEN OF A BITCOIN

Yeah, I think at the moment you've got 8 decimal places ('satoshis') to play with (even though some places aren't set up to take small fractions as payment). If it gets below that the protocol's got to be changed to allow it, as far as I can tell. Since ฿ is modelled on the way gold works, it attracts goldbug types, but it's essentially a speculative investment vehicle rather than a 'real' currency

The major problem as I see it is fractional reserve banking - if you can't create ฿s you can't loan them easily. So loans would have to be strictly transfers, unlike how it works now

Not a very noise post but I find this whole thing so fascinating

so loaning now isn't a transfer based business?

WE DO NOT INVEST IN OUTDATED FINANCIAL INSTRUMENTS: REAL ESTATE, COMMODITIES, BONDS, STOCKS

As far as I know, fractional reserve lending actually *creates* money which is then loaned - so I have cash in the bank at the same time that cash is travelling around. Some good comment threads around this

Here's a 'lender' right here - which I'd imagine is a transfer house rather than an actual lender

Just a reminder, fellas: Mother's Day is May 12.

lots of loans aren't fractional reserve actually! if i'm a private lender funding some business with a private loan, there's no fractional reserve component. fractional reserve isn't about loans (which involve actual cash transfer one way, then back the other) at all.

fractional reserve is about bank deposits and that's it. i deposit $100 in a bank. that bank then loans out e.g 90$. I still account for myself as having 100$, and the person that borrowed 90$ also now has 90$. They also have an obligation to pay that back in the future, but that doesn't net out from total money supply. So now there are $190 dollars circulating, effectively, since I can spend my money at any time, and the person with the 90$ can spend it too. This works because not everyone with deposits in a bank will be spending them at once. (sorry, econ 101 here). The same effect happens with any loan in fact. The difference is that if I hold a $90 IOU we don't count that as circulating currency, but my 90$ in the bank does count as such (because it is more fungible) even though effectively in both cases I don't have the actual physical cash but some financial obligation representing it. If I leant to a party whose IOU scrip was as good as currency, and freely exchangeable, then the same effect would occur with or without any government intervention or magic or anything. The crazies mystify the process so much that lots of misconceptions fly around regarding it.

There's no reason bitcoin is better or worse than dollars or gold or w/e else in being able to be banked fractional-reserve style.

Anyone could start a fractional reserve bitcoin bank tomorrow. The only problem is that people would have to trust them.

http://i.imgur.com/WYNgcYP.png

http://2.bp.blogspot.com/-NMag6mhoh90/Te7LUEniH8I/AAAAAAAAfcg/WFAey0N8FBA/s640/BitCoin+vs.+Future+of+Online+Currency+1.jpg

http://cdn.arstechnica.net/wp-content/uploads/2012/08/Layout_BitInstant_Card-640x787.png

http://printcoins.com/images/gallery/ron_paul_bill.jpg

back on track

http://www.listentobitcoin.com/

Felix Salmon on the bitcoin bubble: says bitcoin's effectively a commodity, not really a currency

https://medium.com/money-banking/2b5ef79482cb

"Early last week the value of Bitcoins soared past $100 each. This week, it went past $200. If you want a Bitcoin today, it will cost you about $235, and if you wait till tomorrow, it will be more."

http://bitcoinpride.com/media/queldorei/shopper/logo.png

http://i.imgur.com/b2w7tzR.png

buh-oh

the 10,000 BTC pizza order

print edition header of the chicago tribune business section today has a huge bitcoin symbol on it, will try and snap a pic

1.4 million dollar pizza order in today's bitcoin: http://blockchain.info/address/17SkEw2md5avVNyYgj6RiXuQKNwkXaxFyQ

Financial Times calls this '#000000 Wednesday'

that is really funny

so, what caused this crash? i know there was a programming hiccup that caused a slump some time ago

Rory R. O'Rourke ‏@Mejwell 1h

YO DUDES major bitcoin traders are attempting to stabilize market by buying huge swaths of bitcoin, like that FILTHY FED #bitcoin #btc

DDOS apparently
http://techcrunch.com/2013/04/10/bitcoin-crash/

The Tokyo-based exchange said last week that hackers are engaging in a strategy to manipulate the price of the currency: “Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit.”

"hackers"

im not sure that explanation makes any sense

sounds like basically just the shit that happens when you have a relatively liquidity but overcapitalized commodity. stockpiling, manipulation, etc.

not even necessarily intentional. price hits a certain amount and some big holders decide to take profits. maybe the downturn causes a few other people to act more quickly and dump their coins too. typically in a major market there are lots of other orders and algos and bots that tend to even things out and take advantage of these moves before they just throw everything around so wildly (which works until those algos all line up and multiply effects instead of mitigating them). but this isn't a major market with all those institutions trying to bleed out arbitrage and regulate movements and etc, and so when people act, it has sharp and catastrophic affects on the market.

noted leet haxor George Soros

It's really not a "hack" at all, it's more like penny stock manipulation

im not sure that explanation makes any sense
― lag∞n, Wednesday, April 10, 2013 5:43 PM

this should clear things up

http://siliconangle.com/files/2011/08/bitcoin-crash.png

http://www.naturalnews.com/gallery/300x250/Money/Coins-Crash-Money.jpg

http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2013/4/10/1365626013983/Bitcoin-010.jpg

problem is you can hold it imho

http://siliconangle.com/files/2013/01/bitcoin-hand-drop.jpg

that seems like a pretty good scam, brb, buying a few grand in bitcoins

buy low sell high breh

then dump enough of your stock to tank the market considerably and make people rush, then buy up more of them. rinse, repeat