Bitcoin Surpasses 20 National Currencies

[Gahars]

Bitcoins were created some time ago to act as a true digital currency. Many at the time were quick to dismiss it as nothing more than a two-bit pipe dream.

Today? Well, as they say, "Follow the money."

More than $1 billion dollars worth of a digital currency known as "bitcoins" now circulate on the web – an amount that exceeds the value of the entire currency stock

of small countries like Liberia (which uses “Liberian dollars”), Bhutan (which uses the “Ngultrum”), and 18 other countries.

So what is a “bitcoin,” and why would anyone use it?

Unlike traditional currency, bitcoins are not issued by a government or even a private company. Instead, the currency is run by computer code that distributes new bitcoins at a set rate to people who devote web servers to keep the code running. The bitcoins are then bought and sold for regular U.S. dollars online.

Bitcoin is in high demand right now -- each bitcoin currently sells for more than $90 U.S. dollars -- which bitcoin insiders say is because of world events that have shaken confidence in government-issued currencies.

Fox News (I know, I know, bear with me)

Needless to say, shit's cash. Also, "Must be the money."

Now, Bitcoin still faces its fair share of criticism. Being a digital currency, security is a huge issue. Beyond that, many claim that the anonymity it provides users facilitates black markets. The discussion is pretty civil, though - I haven't seen anyone use terms like "Shitcoin" yet (and I better not, because I call dibs on that!).

Still, it's interesting to see that a greater acceptance of digital currency is starting to emerge. It's often a staple of science fiction - perhaps it's not so far fetched after all. Of course, that does mean we'll no longer be able to make it rain. Huh.

Weep for the future, ladies and gentlemen.

 

[Janthran]

Why don't people just by a server computer or something and just make it mine 24/7? They're break easy pretty quick with how powerful the things are.

Inflation imminent.

 

[Rydian]

Why don't people just by a server computer or something and just make it mine 24/7? They're break easy pretty quick with how powerful the things are.

Inflation imminent.

Nowadays the electricity bill is more than you get from mining. So it's actually a loss.

 

[Snailface]

Can't wait for the inevitable confusion of people mixing up bitcoins and bytecoins.

 

[Clydefrosch]

well, as long as people accept something as currency, its currency.

doesn't mean they will accept it forever.

 

[Veho]

Nowadays the electricity bill is more than you get from mining. So it's actually a loss.

If you're using a conventional PC, because they're not power-efficient. You can still make a decent profit with dedicated custom processors, but the initial investment is huge. Gone are the days when you could mine with your home PC and have enough system resources left over to surf for porn.

 

[Magsor]

Inflation comes in part by the fact that there's super mining rigs that are being delivered http://www.butterflylabs.com/ and http://launch.avalon-asics.com/ so if you don't have one of those it's very very difficult to mine a bitcoin.
That and speculation. The price does not stop to go up its still time to buy the bitcoins now if you want to make some money.

 

[Taleweaver]

I don't get the meaning of this. Worse: my sense of economy is so bad, I can't even judge whether this is in any way important or not.


Let me see if I understand this explanation (and the one on wikipedia) correct...
(warning: the below is how I THINK this works...feel free to correct me if my thought train goes off the rail somewhere)

So there is this currency called "bitcoins" floating around on the net. As it stands, it's only given out to people hosting servers that actively check the merchandising of it (in other words: where it goes and all the checking of it not being created or deleted in any way).

As with any alternative currency, the value lies solely with what people are willing to give for it. Heck...I could smash a glass on the ground, proclaim all the shards as 'currency' and distribute it around. If I can get everyone to agree on the value of each shard, it'll be fine.

The benefit of bitcoin is that it is not owned by anyone in particular (in other words: no one - usually a government - can just proclaim "we're going to create more money!!!") and strictly monitored by a multitude of servers. That is what makes it secure: you cannot obtain bitcoins without someone else losing them (unless hosting a server...but then it's still strictly monitored).




Thus far, all is fine. But what I don't get...why is there such a demand for bitcoin? I don't get that. I honestly don't. The phrase "more than $1 billion dollar worth of bitcoins" mean that, considering 90$/bitcoin...more than 11111111,11 bitcoins are floating around on the net (more than 111 million, in other words). So...yeah...those bitcoin servers sure have been busy, mining in the numbers. But why the hell would anyone pay 90 real bucks on one?
It's not like there are stores where you can spend your bitcoin money (okay...with perhaps a few geeky electronics stores as exceptions). So basically the only reason people buy the damn things* is for speculation. Either they're thinking bitcoin is still going to rise in value...or the current value of the money used to buy it is going to go down.


And that worries me. This is a virtual currency that is, essentially, controlled by nobody in particular. The critics Gahars mentioned in the OP would be reason enough not to prefer it over your real money...so why the hell are people doing it? I know there's an economical crisis going on, but it's not like the dollar, the yen and the euro are going to be royally buttfucked in value, right? Especially compared to this currency I never even heard about until now?


TL;DR: is this the sign that global markets are doomed...sorry: I mean "doooooooooomed"...or is fox busy with scare tactics?


(yeah, I think the latter one as well...but it's worth thinking about)




*this is about the only way it can GET that value

 

[celcodioc]

A widely used virtual currency that has a high real world value (and actually used in some online shops ), and can be mined? And $1 billion worth of those, too! WTF is going on?

Thus far, all is fine. But what I don't get...why is there such a demand for bitcoin? I don't get that. I honestly don't. The phrase "more than $1 billion dollar worth of bitcoins" mean that, considering 90$/bitcoin...more than 11111111,11 bitcoins are floating around on the net (more than 111 million, in other words). So...yeah...those bitcoin servers sure have been busy, mining in the numbers. But why the hell would anyone pay 90 real bucks on one?

It's not like there are stores where you can spend your bitcoin money (okay...with perhaps a few geeky electronics stores as exceptions). So basically the only reason people buy the damn things* is for speculation. Either they're thinking bitcoin is still going to rise in value...or the current value of the money used to buy it is going to go down.

And that worries me. This is a virtual currency that is, essentially, controlled by nobody in particular. The critics Gahars mentioned in the OP would be reason enough not to prefer it over your real money...so why the hell are people doing it? I know there's an economical crisis going on, but it's not like the dollar, the yen and the euro are going to be royally buttfucked in value, right? Especially compared to this currency I never even heard about until now?

Agreed.

 

[Magsor]

The real use of this money is that it can be traded online at no cost. It is mean for online business. No internetz = no bitcoins.
Actually if you were a computer wiz and a mathematical genius you could create your own bitcoin type of money. Yeey for tempcoins...

 

[ThatDudeWithTheFood]

I don't get the meaning of this. Worse: my sense of economy is so bad, I can't even judge whether this is in any way important or not.


Let me see if I understand this explanation (and the one on wikipedia) correct...
(warning: the below is how I THINK this works...feel free to correct me if my thought train goes off the rail somewhere)

So there is this currency called "bitcoins" floating around on the net. As it stands, it's only given out to people hosting servers that actively check the merchandising of it (in other words: where it goes and all the checking of it not being created or deleted in any way).

As with any alternative currency, the value lies solely with what people are willing to give for it. Heck...I could smash a glass on the ground, proclaim all the shards as 'currency' and distribute it around. If I can get everyone to agree on the value of each shard, it'll be fine.

The benefit of bitcoin is that it is not owned by anyone in particular (in other words: no one - usually a government - can just proclaim "we're going to create more money!!!") and strictly monitored by a multitude of servers. That is what makes it secure: you cannot obtain bitcoins without someone else losing them (unless hosting a server...but then it's still strictly monitored).




Thus far, all is fine. But what I don't get...why is there such a demand for bitcoin? I don't get that. I honestly don't. The phrase "more than $1 billion dollar worth of bitcoins" mean that, considering 90$/bitcoin...more than 11111111,11 bitcoins are floating around on the net (more than 111 million, in other words). So...yeah...those bitcoin servers sure have been busy, mining in the numbers. But why the hell would anyone pay 90 real bucks on one?
It's not like there are stores where you can spend your bitcoin money (okay...with perhaps a few geeky electronics stores as exceptions). So basically the only reason people buy the damn things* is for speculation. Either they're thinking bitcoin is still going to rise in value...or the current value of the money used to buy it is going to go down.


And that worries me. This is a virtual currency that is, essentially, controlled by nobody in particular. The critics Gahars mentioned in the OP would be reason enough not to prefer it over your real money...so why the hell are people doing it? I know there's an economical crisis going on, but it's not like the dollar, the yen and the euro are going to be royally buttfucked in value, right? Especially compared to this currency I never even heard about until now?


TL;DR: is this the sign that global markets are doomed...sorry: I mean "doooooooooomed"...or is fox busy with scare tactics?


(yeah, I think the latter one as well...but it's worth thinking about)




*this is about the only way it can GET that value

The main use I have heard of for Bitcoins is anonymity(even though it's not truly anonymous).
You can buy drugs and other illegal stuff on it through the internet and have it delivered to your own home(Silk Road).
Not much other use for it though.

 

[marksteele]

A lot of places are starting to take bitcoin, for example wordpress, reddit and 4chan. It's getting really popular with anything internet based.

 

[Dimensional]

I look at this and think of it as a step towards the Credit System seen in games and movies, a universal currency between every nation. Reminds me of Star Trek.

 

[AlanJohn]

Am I the only one who sees the bubble/financial pyramid here?

 

[The Real Jdbye]

Inflation comes in part by the fact that theres super mining rig that are being delivered http://www.butterflylabs.com/ and http://launch.avalon-asics.com/ so if you don't have one of those its very very difficult to mine a bitcoin.
That and speculation. The price does not stop to go up its still time to buy the bitcoins now if you want to make some money.

I didn't even know those existed. Now I want one badly. If it's really as efficient as it says, and has those hash rates, it's really easy money.

 

[Veho]

Am I the only one who sees the bubble/financial pyramid here?

Bubble, yes, but I don't see the pyramid.

 

[Bobbyloujo]

I started watching bitcoins when they were trading for $30. I really wish I woulda bought some considering they're selling for $90 now and it grew to that point rather quickly. They've grown by about a dollar per day.

 

[FAST6191]

I saw the spike these last few weeks, at one point I did consider investing in them (had money to lose) but laziness overtook me and then I could not be bothered to figure out how to explain it to the tax man (it would probably just be basic capital gains around here but damned if I am going to bother having to explain it). Would have been a killer return though ( http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25 ).

Can't wait for the inevitable confusion of people mixing up bitcoins and bytecoins.

Well there was the time I confused a gold sovereign for gold chocolate money.

@Taleweaver not quite. No server "gives" them out- there is a mathematical construction underpinning it all and so people can generate new coins out of thin air if they are either lucky or have a lot of computing power.
However it was designed so that there is an effective upper limit to how many could ever be made, at the risk of oversimplifying a concept if you say I use the numbers from 0 to 10^9 and then anybody with a prime number can exchange it (obviously here it was made so a measure of ownership could be determined and people can not spend the same money twice). I am sure you could see how you could make the first few hundred and nowadays the computer power required to generate them is considerable (time was simple multicore processors could do it, later graphics cards and things like cuda got tapped for it, now it seems proper FPGA type devices and more are being used and who knows where it goes from here- rather amusingly this appears to mirror some of the low latency stuff in regular stock trading).
There are an awful lot of potential problems (not least of all vanishing currency- you have some and do not tell anybody your passwords and you die or an equivalent and they are effectively no more), I am not the best person to explain it but as the hacker set has been keeping an eye on them for years it seems some great little presentations have occurred should you be interested in the matter.
Some things have changed in the subsequent years but the underlying logic is born of proper economics.

More
http://www.youtube.com/user/ChRiStIaAn008/search?query=bitcoin

Re trading them out- as others mentioned there are places that use them as a medium of exchange (though not many are inclined to at this point) and there have long been methods to change them for other forms of currency.

P.S. Anybody got anything on anybody doing latency based speculation- most exchanges just seem to copy mt gox and that could make for some interesting way given other high frequency stuff is rubbing up against physics these days.

 

[Justin121994]

Bubble, yes, but I don't see the pyramid.

Still a bubble?

Bitcoins were created some time ago to act as a true digital currency. Many at the time were quick to dismiss it as nothing more than a two-bit pipe dream.

Today? Well, as they say, "Follow the money."

Fox News (I know, I know, bear with me)

Needless to say, shit's cash. Also, "Must be the money."

Now, Bitcoin still faces its fair share of criticism. Being a digital currency, security is a huge issue. Beyond that, many claim that the anonymity it provides users facilitates black markets. The discussion is pretty civil, though - I haven't seen anyone use terms like "Shitcoin" yet (and I better not, because I call dibs on that!).

Still, it's interesting to see that a greater acceptance of digital currency is starting to emerge. It's often a staple of science fiction - perhaps it's not so far fetched after all. Of course, that does mean we'll no longer be able to make it rain. Huh.

Weep for the future, ladies and gentlemen.

I used to frequent gbatemp a lot a few years back. I'm sad I wasn't able to read this post and get into bitcoin much earlier.. Damn!

 

[Psycho]

it happened later than i expected but it happened nonetheless :>

i'm just sad that i never got into the community (tbh, i have no idea how mining works)