What's to stop more and more digital currencies like bitcoin being developed? You can have artificial gold rushes more often. (Apart from the technology barrier).
infrastructure. It would be like asking 'whats to stop someone from creating English 2.0?'. Nobody would learn English 2.0 over English even if it was better because we have thousands of years of books written in English. Bitcoin has far more software integrated with its payment network than litecoin (the 2nd most popular digital currency)
You're probably a bit too late to make a ton of money mining bitcoins. The return in mining now when you factor in hardware and electricity makes it tough to become a millionaire quickly. :grin: Nowadays, slapping a bunch of GPU's together and mining probably isn't going to cut it especially now that ASICs and cloud computing have gotten involved in mining. BTW, any of you read about this guy a few weeks ago? Sad. Kinda ... lol : http://washington.cbslocal.com/2013/11/29/man-throws-away-7500-bitcoins-now-worth-7-5-million/
I never said that it wasn't secure, or that people were manipulating the code. I agree it is a technical marvel but people are manipulating the currency value just like they do with other currencies. I'm well aware of how mining works. The act of mining isn't how it is being manipulated, the currency itself is. The mining market is being manipulated by extreme hardware cards that can mine at 600 MH/s. When BitCoin first came about, it was mined by standard PC CPU/GPU, now they have specialized cards that can mine 10 times faster. Again, the average Joe can't mine and make a profit. That is the point. Companies and people who got in on the ground floor are cornering the mining market by buying up all of the hardware, and the longer they do it the less relevant normal hardware becomes. BitCoin manipulation ≠ the code or premise is insecure. It is a currency, and all currencies are easily manipulated. BitCoin's flaws are not technological, they are economics.
bitcoin is about as stable as tulips. With that said, if your thing is making money by playing with values, there is no better thing then arbitraging cryptocurrencies...one of the few spaces where pure arbitrage exists without too much time lap because 99.9% of people are like wtf digital currency. Look at my above link for how to begin.
Its actually 600 GH/s. so it would be 1000x faster. A CPU only produced a handful of MH/s. A good AMD GPU could produce a few hundred MH/s. But you're right, this is how its manipulated. The first adopters of these hardware miners will make their money back, but those on the tail end will lose out. Its the developers who are making a killing. The question is, did the original engineer of Bitcoin realize this would happen?
having watched others crunch the numbers, the consensus seems to be unless you pre-order the newest miners, you stand to lose money because miners themselves have a huge deprecating value, and an effective life-span of about 6 months for real profitable mining. Moore's law is a b**ch. the original white paper suggests more benign purposes: I don't think anybody really expects mass adoption like this. But it's actually the Winkleviii and Silk Roads of the world that are making huge profits, not the devs themselves (who strike me as the idealistic open-source type) http://bitcoin.org/bitcoin.pdf
So when that point is reached, what is going to protect the currency from counterfeiting, if the miners are the ones doing that now? Agreed - it's funny to see people selling "mining contracts" on eBay - if you do the math, none of them will be profitable relative to the number of bitcoins that they cost now. If you buy a $600 contract (aka about 1 BTC now), you will almost certainly mine less than 1 BTC, so you'd have been better off just buying a bitcoin rather than the mining contract. It's all one big scam taking advantage of people that don't know the math. That said, the other big problem with this currency is the loss rate. There are a finite number of coins (20 million), but they are being "lost" at an alarming rate - either due to people losing their wallets, government seizures, etc. So the currency is functionally defective over time. That said, they will spike every time a major real-world player starts accepting them simply because of the attention they'll get. They spiked during the US Senate hearings because people heard about them. Overstock.com will start accepting them in Q2 next year, so that will likely cause a spike, etc. Money can be made by playing these swings.
As this realm of investing seems new and scary to me, I didn't see the potential real world lessons some people are posting here despite knowing how bitcoins work in theory and operation.
Theoretically, on the first point, counterfeiting per say would be impossible without overwhelming the complete computing chain of bitcoin---and if you could do that, there's better things to do with that processing power then generate false bitcoins. (we're seriously talking about smarter-than-human level processing power at theoretical level). There are security flaws though, but I wouldn't worry too much about the aspect of making new "false" bitcoins...rather than securing the old ones out there. The currency aims to remain relevant through transaction costs increasing for the usage of the more and more valuable currency---so theoretically there would be "inflation" per say in terms of your usage of the currency but it would be expressed in a more stable and innovative form. so goes the theory at least (I'm dubious on the practicalities).
Better get in on dogecoins while they're still hot. http://www.businessinsider.com/what-is-dogecoin-2013-12
Lol - that's why the English 2.0 analogy doesn't quite fit but I get the point. Those that can obtain and re-write those graphics cards for mining purposes can make quick money at the beginning of any new crypto-currency's life. Dogecoin: much insane. Here's a list of alternate coins just for kicks: http://altcoins.com/
the analogy works fine. none of those has even close to the value of bitcoins. They aren't used because they lack the infrastructure. Sure others can make another digital currency (just as some linguist can make English 2.0), but unless they can copy the infrastructure built over 4 years of bitcoins, than they will be worthless (as dogecoins are)
I understand. Just adding that I think the infrastructure idea could well be fickle for this area. China has not acknowledged Bitcoin; hypothetically if China suddenly agreed to acknowledge an alternate coin that was started by a Chinese programmer I'm sure it's popularity would skyrocket and hence the value. I think any of these coins have the chance to suddenly become very big for a myriad of reasons. Probably though, Bitcoin may be the only one that people like got em COACH were actually able to compete in, as mining companies are in great position to dominate any new surges.
China made it illegal to trade by financial institutions. not 'any of these coins'. only bitCoin. the other altcoins don't offer enough to justify ignoring bitCoin's far superior infastructure.
they offer arbitrage opportunities, especially those using scrypt as proof-of-concept...dogecoin is one of those, but because of its' memeness, will probably no longer be profitable. I do find it amusing that cryptocurrency behavior tracks very closely to commodities that are equally speculation-heavy (i.e markets are f**king completely irrational and bonkers). It gives a good primer for what should be happening with gold.
never imagined finding a bitcoin thread here. I invested in these when they were like 12/coin and everyone said i was nuts. sold out at 1050 when the chinese government caused that crash. really volatile market but easy to stay a step ahead of even for an amateur investor like me. When you see big blocks of coins go up for sell it's whales trying to drive the price down just undercut them and buy when they put up a big buy order that drives the price back up. heard overstock.com will be accepting them as payment in 2k14..not going to post the article but the ceo is some kind of government anarchist. Some people look at these coins as a way for the people to take some power out of big bank and overzealous governments. also invested in peercoin if bitcoin dies that should quickly replace it as i think it offers the most improvements. would stay away from litecoin because if bitcoin fails so will that.
