/biz/ - Business & Finance

https://bitcoin.org/en/how-it-works

>how did bitcoin acquire value
People started trading them for money.
>what makes it continue to grow
Bitcoin has been in decline all year.

>>498548
>people who wanted to make money out of literally nothing

But that's the case with everything. Nothing has value in itself (even money). All value is artificially given through the game of supply and demand, i.e. every asset is a bubble, everything could collapse, everything is, more or less, a scam.

https://hashprofit.com/en/?hp=17333 invest their money (Bitcoins) by 10-30% per month over 2 years. Bitcoin wallet create here https://blockchain.info/.. Bitcoins can be exchanged easily by paypal, Visa, webmoney and other payment systems. with $ 1000 - the day goes for $ 10. Successful earnings!

Price may be going down but adoption is increasing. Eventually the price will find a good stabilization point, then bitcoin and some of its alternatives will finally be used as mainstream money transfer systems.

>>498588
>Price may be going down
Understatement, but yes.
>but adoption is increasing.
Also true. However, what people like you fail to see is that increased adoption is lowering the price. Retailers are instantly converting to fiat, increasing the number of sell orders. The price is gradually being driven to pre-2012 levels and not knowing this shows that you've done almost no research. This is well known.
>Eventually the price will find a good stabilization point,
>Eventually
This point in time is much further into the future than you think. I think with increased volume will come increased stability, but not for a long time and if adoption dies off, maybe not at all.
>then bitcoin and some of its alternatives will finally be used as mainstream money transfer systems.
The delusional cherry on the misinformed pie. This is pure speculation.

>>498548
Always let the market determine value and interest rates = perfect monetary policy
http://nakamotoinstitute.org/mempool/the-bitcoin-central-banks-perfect-monetary-policy/

It is based on the ideal money theory by Dr. John Nash aka mr. beautiful mind genius.
http://sites.stat.psu.edu/~babu/nash/money.pdf

Bitcoin in 10 minutes:
youtu.be/6uvbAlCFMSk

>>498548
You may want to read the original whitepaper.

>>498548
>How did Bitcoin acquired value and what makes it continue to grow?

As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties:
- boring grey in colour
- not a good conductor of electricity
- not particularly strong, but not ductile or easily malleable either
- not useful for any practical or ornamental purpose
and one special, magical property:
- can be transported over a communications channel
If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it.
Maybe it could get an initial value circularly as you’ve suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it.

-Satoshi

>What exactly is (1) Bitcoin?
Internet Gold

>How does cryptocurrency transfers work?
via the encrypted bitcoin network

>what is a crypto wallet?
A program designed to hold your bitcoins.

>Can I store Bitcoin in my computer?
Yes.

>can it be stolen?
Yes.

>Whats the safest way to store Bitcoins?
Something called a 'brainwallet'
Using a multi-signature address, basically you put your bitcoins in wallet that needs three keys to move the coins. Then you give one key out to 2 people and then no one could get the money without 3 of you agreeing to move it.

>>498548
Listen, fuck everything you think you know about Bitcoin. None if it is relevant.

What you need to know is that blockchain technology solves the eternal problem of getting a bunch of niggers to agree on something. Traditionally, we just told the niggers what to agree on and this would be OK in a perfect world. However, humans are faggots so this centralized approach isn't as effective as the decentralized approach which is what the blockchain solves.

Now, Bitcoin (the currency) that you've heard about is just one of the applications possible using the blockchain. It's completely decentralized. It isn't controlled by anyone or anything. The protocol defines how many Bitcoin are generated and how they are distributed.

That, my friend, is what Bitcoin is. It's a proposed alternative to the traditional banking system we have today. No, it isn't perfect but it's a hell of a lot smarter way to do things.

>Bitcoin is an extremely well developed and complex online scam by a/some smart person/people who wanted to make money out of literally nothing.
That's pretty much spot on. It's a get rich pyramid scheme. It's Herbalife but with currency.

>>498838
>unregulated = perfect
keked

>>498931
$0.01 to over $1,000 in 5 years.
I did not say anything about regulation.
Regulation is irrelevant, bitcoin goes around it.

>>499121
Its a good thing that log chart stops in july.

My ignorant opinion on this matter is that FIAT CURRENCY is an extremely well developed and complex scam by a government who wanted to make money out of literally nothing.
How did FIAT CURRENCY aquired value and what makes it continue to grow? What exactly is (1) USD? How does USD transfers work, what is a bank? Can I store USD in my computer? can it be stolen? Whats the safest way to store USD?
I really have a lot of questions but first I need to understand the basics.
ITS JUST LIKE FUCKING FIAT CURRENCY BASED ON NOTHING, ok maybe not nothing, based on promises and peoples trust. In my opinion it is a lot better to trust BTC since computer programs dont just change their fucking mind and fuck you in the ass. Cough cough every fucking governement ever.

>>499121
>I did not say anything about regulation
>Always let the market determine value and interest rates = perfect monetary policy
You're trolling, right?
>bitcoin goes around it
No... it just doesn't have any, which is why it would be a garbage currency. It can be fine as long as it stays a commodity.

P.S. Yeah, now it's coming back down to reality.

>>499131

>In my opinion it is a lot better to trust BTC since computer programs dont just change their fucking mind and fuck you in the ass. Cough cough every fucking governement ever.

Kinda like that one time MtGox stole $450 million in bitcoins and nobody could do anything about it?

woah woah woah, i never told you to trust a giant corporation cus they will also fuck you. the bitcoin wallet itself is completely secure, dont trust people with your shit

>>499140
>completely secure
Unless you're hacked. Once your BTC is stolen it's just gone, like physical cash.

There's a reason banks exist.

>>499142
the bitcoin wallet is secure just dont be a retard and keep that shit on a secure machine, keep it on an offline machine or on a physical wallet. you dont need to have it on the same computer that you use for random crap

>>499145
>just don't keep it where it's conveniently accessible to actually use for it's intended function
k

>>499145
So... buy some and keep it stashed away and never use it. Seems like a useful currency to me!

>>499149
>its

>>499149
if you buy a gold bar you keep it all accessible? probably not. But anyways just because it is on a secure machine does not mean that it isnt accessible. there are plenty of secure wallets that fit in your back pocket
https://en.bitcoin.it/wiki/Hardware_wallet

>>499159
A gold bar also isn't intended as a method of exchange. How often do you see people buying goods and services with gold?
>hardware wallets
keked

>>499164
would anyone srsly use btc daily, nope
and if anyone is going to use it they will buy the btc and instantly buy their illicit services with it and security wont be problem

>>499169
So Bitcoin is good for illicit uses but not great at replacing fiat. Got it.

>>499174
ofc, you cant just go out and buy your mcdonalds or pay the rent with btc

>>499176
Sounds cool but I prefer to buy my drugs and weapons in person so as not to leave a trail.

>>499182
I prefer generating a new btc address that is impossible to trace back to you, hop on tor (even the nsa can't brake tor) and have the stuff shipped to you

>>499192
>new btc address that is impossible to trace back to you
I just don't buy this. When I pull the money out there is a trail. I don't like that the blockchain stores every transaction publicly.

>have the stuff shipped to you
That's even worse. Having drugs shipped to your house or even a p.o. box is risky

No thanks dude. I'll stick to cash.

>>499195
to get btc anonymously just buy a gift card with cash and sell the code on silkroad

>>499199
Too many steps. Sounds like a lot of hassle and risk with something that can be very easy with cash. Thanks anyways man.

>>499132
Thank-you for confirming that the next bubble will start in late December when regulation goes online in New York. You have 2 months to get as many bitcoin as you can. Goodluck.

>>499783
Oh? They found a way to control bitcoin monetary policy? That is indeed good news. Who is in charge and how were they selected? What is the inflation target?

>>499793
>They found a way to control bitcoin monetary policy?
The monetary policy for bitcoin was set at creation and can not be altered.
>Who is in charge and how were they selected?
A group of people who own bitcoin nodes on the bitcoin network, anyone can make a node and join.
> What is the inflation target?
25 coins are created every 10 minutes.
This will change in 2016 to 12.5
Again in 2020 it will change to 6.25
Then again in 2024 to 3.125
The amount of bitcoin allowed to be created by the bitcoin network is cut in half every 4 years.

>>499949
So I was right the first time around. There is no regulatory body to control supply in response to market pressures. Thanks.

>>500024
>regulatory body to control supply
Yes there is. Its called the bitcoin network. They keep supply steady at 25 bitcoins every ten minutes until 2016 when that rate will be halved. Because this network sets supply the inflation rate will be about 10% this year.

>>500038
Exactly, keeping the same supply rate regardless of what the market is doing is retarded. It's one of the main reasons bitcoin can't be an actual currency.

>>500024
regulatory body: A regulatory agency (also regulatory authority, regulatory body or regulator) is a public authority or government agency responsible for exercising autonomous authority
> is a public authority

I'm pretty sure this is where your confusion is.

>>500040
>Deflation argument
https://en.bitcoin.it/wiki/Deflationary_spiral

Deflationary spiral is an economic argument that proposes that runaway deflation can eventually lead to the collapse of the currency given certain conditions and constraints. It is a common criticism made against the viability of Bitcoin. The ‘deflationary spiral’ is a real condition that affects the popular fractional reserve backing system. Bitcoin is not affected by this because it is fundamentally different from popular currency.

>>499136
They used a third party to hold their assets when they were perfectly secure on their own systems. You should only move BTC to an exchange if you ARE GOING TO EXCHANGE IT RIGHT THAT SECOND. Leaving it there to try and game the market punishes you accordingly with the risk that the exchange operator will steal eet.

>>500045
It's not just deflation (in the future), it's inflation as well (right now).
>bitcoin is not affected by this
As long as bitcoin isn't used as a unit of account (i.e. continues to be a commodity rather than a currency), sure. It doesn't really matter what the value of bitcoin is doing. Things change dramatically if you try to have an actual bitcoin based economy.

>>500058
The Ideal Money theory by Dr.John Nash argues that it is more efficient to let the market set interest rates and value. After bitcoin's performance so far, I tend to agree.

The bitcoin economy is doing just fine without interference. In fact I would say it is doing excellent despite interference being run by the existing system.

>>500066
Well, unsurprisingly, I don't agree.
>the bitcoin economy
There isn't really a bitcoin economy though. Goods and services are priced in USD / EUR / whatever and an equivalent amount of BTC is simply accepted. In that role it's fine.

>>500040
>>500045
Unless you're bad at counting small numbers deflation is not a problem per se.

Economists generally say its bad because people aren't going to buy stuff (because the govt is not going to steal you) and the economy roll stop but that is simple a logical mistake, forgetting about humans: With lower prices, poorer people can buy more, and they SURELY WILL (look at those apple store waiting lines, now imagine the mobile is cheaper and more accessible).

The economy slows down for a while to sell and replace old products and gery the life ready to build newer/more expensive products, but people surely will invest, just sure a reason: More money = good.

A inflated currency its the prime example of austrian economics at work: Bubbles (like 1 coin for $1000) readjust back to normal, and the economy works by people wanting to get rich and selling products cheaper and better.

>>500068

There are two parts to the bitcoin economy. Bitcoins that are used to trade to other currencies and then bitcoins that are used in the bitcoin economy.

There is a nice balance that takes place. As more bitcoins are used to trade bitcoins value goes down. The further down the value goes the more bitcoins that will be used in the bitcoin economy. As more bitcoins are used in the bitcoin economy, transaction volume goes up and it attracts more speculators. The increase in demand leads to higher bitcoin value. The higher the value the more bitcoins that are used to trade.

No central authority will be needed. Increases in demand or as you put it "market pressures" will only fuel bitcoins feedback loops.

Bitcoins sorta remind me of when bonds were first developed in Italy.

>>500073
>deflation is not a problem
>poorer people will drive the economy
>austrian economics
So I can safely ignore you, thanks.
>>500085
Again, that's fine for bitcoin itself. It becomes a problem when the economy at large becomes subject to it. If the U.S. economy had been based on BTC rather than USD over this past year, it would have collapsed.

>>500097
Right. See bitcoin doesn't care if the corrupt american banking industry goes the way of the titanic though. We all know its going to fail sooner or later. If bitcoin helps it along then that's just another reason to buy. The bitcoin economy will continue on more than fine.

However sizable economies like the superpowers will not be susceptible to bitcoin's influence for a few more years.

>>500104
>bitcoin doesn't care if the economy collapses
Bitcoin is a thing with no capability to reason. The ones who care are us, the people who actually have to live here. It would be a disaster.

>>500114
>It would be a disaster.
It is going to happen weather bitcoin was here or not. So not having bitcoin to escape to would be the net negative. You can thank your greedy politicians and bankers, they introduced the systemic risk into the system. They are the ones who are responsible.

>>500118
k, you have fun with that then.

>>500121
http://www.zerohedge.com/news/2014-09-30/rick-santelli-slams-central-bank-intervention-taking-voters-out-game

"the 'spread' between central-bank-inspired "stability" and real-world fiscal-policy-inspired "growth" has never been wider."

Enjoy your 'stable' currencies while they last anon.

>>500132
>zerohedge
No thanks.

>>498838
>Always let the market determine value and interest rates = perfect monetary policy

hahahahahahahahahahahahahahahahahahahaha

Shitcoiners confirmed for knowing nothing about monetary policy. Milton Friedman would be laughing his ass off at you idiots.

>>500139
>anon confirmed about not knowing anything about classical economics

http://sites.stat.psu.edu/~babu/nash/money.pdf

>>500141
>classical economics

Yes. Nobody cares much about classical economists because we know they're wrong. Your comment is equivalent to going to a doctor and going "LOLOLOLOL CONFIRMED FOR KNOWING NOTHING ABOUT PARACELSUS". We now have a much better understanding of how a market economy functions, and literally no major economists of any political leaning think that a interest rate set by the market would be a god idea- it would lead to ridiculously low rates during bubbles and extremely tight money during recessions, a pattern that is evident in late-19th century USA, which had a depression roughly every decade and a recession every few years.

Also, a schizophrenic mathematician with no formal economic training is not exactly the end-all authority on matters of monetary policy.

>>500151
I'm gonna go with the nobel prize winner.

Goodluck to you anon.