The Bubbly Bitcoin Thread -- Merged Threads

[evetsm]

The intrinsic value of gold/silver is actually the gold/silver content of your bar/coin. Even if its nominal/market price go to zero, you can still wear it or use it as an electrical conductor.

The intrinsic value of a currency note is the value of the paper itself.

The intrinsic value of a Bitcoin is zero, because it is stored in a cryptographic key, that has no value outside its electric/digital context.

I never did understand the relevance of intrinsic value to monetary value. I still don't. Monetary value is only what is generally accepted in the economy as a universal medium of exchange, whatever intrinsic value that medium may or may not have is completely separate from its monetary value. If it loses its monetary value it reverts back to its intrinsic value, if any, but that has nothing to do with its monetary value. They are completely separate values. It is unnecessary to have one value in order to obtain the other value.

Edited October 24, 2013 by evetsm

[justthisbloke]

They're all tokens. Btc, gold or five pound notes only have value to the degree that I expect to be able to trade them (maybe with an intermediate step for gold) for useful stuff; food, energy, sex etc.

The token value of all three outweighs any intrinsic value (I suppose there is intrinsic value in a 500 euro note; you could use it as bog roll) to such an extent that the zero intrinsic value of btc is qualitatively the same as the infinitesimal value of gold or paper money.

[miggy]

As people have said, it's a token. It allows trade.

However, it does have an intrinsic value. Firstly, rarity. Secondly, it is the world's most secure system for token ownership, exchange, and trustless contracts. I know that sounds rather amorphous but it's a very big deal indeed. It's a platform to build on. That actually has enormous value even if bitcoin isn't used as a currency. It's an unbelievably powerful piece of technology and we're starting to see leading software engineers talk about it in this way. The press only ever talk about it as a currency.

Yes if the world went offline it'd be screwed but if that happens most of us are probably dead anyway and your bank notes will also be worth sod all. It's a silly argument.

Edited October 24, 2013 by miggy

[Sour Mash]

The intrinsic value of gold/silver is actually the gold/silver content of your bar/coin. Even if its nominal/market price go to zero, you can still wear it or use it as an electrical conductor.

The intrinsic value of a currency note is the value of the paper itself.

The intrinsic value of a Bitcoin is zero, because it is stored in a cryptographic key, that has no value outside its electric/digital context.

Gold doesn't have attraction as a means of currency/investment because of any intrinsic value that it may hold and treated purely as an industrial metal it would be likely to fetch a lot less money than it currently trades at.

Ideally, a currency wouldn't have intrinsic value/other uses at all as its sole purpose is to serve as a token of wealth for means of trade. Having other uses gets in the way of that.

If I was worried about a total systemic collapse, I'd be more inclined to invest in food, a reliable water supply, medicines and a means of defence. However in anything ranging from a slump with unconstrained money printing up to a hyperinflation or severe, protracted financial crisis, it definitely has a use.

[renting til I die]

So, what is the intrinsic value of gold? Please provide a unit of notation and a way to measure it.

After reading this thread (and thinking about bitcoins quite a bit!) it seems the main difference between bitcoins and gold is mass. So, if the unit of notation we use to measure either one is 'kg', gold will kick bitcoins ****!

[renting til I die]

Gold doesn't have attraction as a means of currency/investment because of any intrinsic value that it may hold and treated purely as an industrial metal it would be likely to fetch a lot less money than it currently trades at.

Maybe but gold has rarely been used for industrial uses as its always been too highly valued. If the price of gold was lower than perhaps it would be used for more industrial uses but of course if several industrial uses were found then that would support the price. If you really want to see how golds price would change you only need to look at Silver, Platinum or Palladium. Gold doesn't look than overpriced when compared with these precious and industrially used metals.

Ideally, a currency wouldn't have intrinsic value/other uses at all as its sole purpose is to serve as a token of wealth for means of trade. Having other uses gets in the way of that.

Some sort of intrinsic value is useful for a currency as along with being potable, divisible and fungible, it needs to keep some store of value. Otherwise everyone would be dumping them into anything of any intrinsic value (say, like house)! In fact if everyone thought the currency they were using had absolutely no intrinsic value, they wouldn't accept it!

If I was worried about a total systemic collapse, I'd be more inclined to invest in food, a reliable water supply, medicines and a means of defence. However in anything ranging from a slump with unconstrained money printing up to a hyperinflation or severe, protracted financial crisis, it definitely has a use.

I agree.

[Traktion]

After reading this thread (and thinking about bitcoins quite a bit!) it seems the main difference between bitcoins and gold is mass. So, if the unit of notation we use to measure either one is 'kg', gold will kick bitcoins ****!

'kg' isn't a measurement of intrinsic value. It is just a metric used to measure weight.

If value is intrinsic, you should be able to give me an objective and uniform way to measure it. If you can't, then the value is subjective and saying that something has intrinsic value is just a tautology.

[miggy]

Matthew, I pointed out the intrinsic value already. It's actually a really big deal even if you don't see it.

I missed off the fact that it's distributed rather then centralised, which is the other important part of the tech.

Does that mean it's worth $180 I don't know, but it does have value in digital usage just as gold has value in industrial usage. If is a limited and useful resource, the fact that it isn't physical doesn't matter.

[miggy]

New UK exchange coinfloor is taking registrations this week and opening in a few days. This will require full KYC but hopefully it will resolve the UK bank issues for traders.

https://coinfloor.co.uk

[NatterJackToad]

New UK exchange coinfloor is taking registrations this week and opening in a few days. This will require full KYC but hopefully it will resolve the UK bank issues for traders.

https://coinfloor.co.uk

what is currently the cheapest way to buy BTC living in the UK?

will this site be the best going forward?

i currently transfer money to OKPAY (costs me £10), and then transfer out of that to btc-e (can't remember the cost - not much!).

i've also bought on Gox, but the price at btc-e is always significantly cheaper.

Edited October 29, 2013 by NatterJackToad

[LetsGetReadyToTumble]

New UK exchange coinfloor is taking registrations this week and opening in a few days. This will require full KYC but hopefully it will resolve the UK bank issues for traders.

https://coinfloor.co.uk

Anyone used these people yet?

I use Bitstamp at present.

I guess the advantage to use coinfloor would be

1) I get charged £4 for a foreign SEPA, so this should be free

2) I have to change to Euros first before sending, so the bank gives a crap exchange rate

3) Bitstamp change Euros to USDollars, so another exchange rate, but I believe the fees for this are very low.

So more of my allocated money should get converted to bitcoins.

[Eddie_George]

Anyone used these people yet?

I use Bitstamp at present.

I guess the advantage to use coinfloor would be

1) I get charged £4 for a foreign SEPA, so this should be free

2) I have to change to Euros first before sending, so the bank gives a crap exchange rate

3) Bitstamp change Euros to USDollars, so another exchange rate, but I believe the fees for this are very low.

So more of my allocated money should get converted to bitcoins.

Why not use Bittylicious, BitBargain or Localbitcoins? All you need is a bank account that can send Faster Payments. No need to change currencies. Perhaps you get a slightly better rate doing it via Bitstamp, but hassle is much greater.

[LetsGetReadyToTumble]

Why not use Bittylicious, BitBargain or Localbitcoins? All you need is a bank account that can send Faster Payments. No need to change currencies. Perhaps you get a slightly better rate doing it via Bitstamp, but hassle is much greater.

Thanks. They all seem a bit pricey and I'm still better off with Bitstamp. Be interesting to see Coinfloor's prices.

EDIT

Watch the latest Max Keiser show,

http://rt.com/shows/keiser-report/episode-516-max-keiser-890/

Well worth a watch.

Edited October 30, 2013 by LetsGetReadyToTumble

[Caius]

A Bitcoin is now currently valued at well over a £100. What I don't understand is if you want to use it as a medium of exchange and want to buy someting costing £40, what do you get in change? Would you get £ or $ in change? Or can you get a fraction of a Bitcoin in change? Thanks.

[Eddie_George]

A Bitcoin is now currently valued at well over a £100. What I don't understand is if you want to use it as a medium of exchange and want to buy someting costing £40, what do you get in change? Would you get £ or $ in change? Or can you get a fraction of a Bitcoin in change? Thanks.

A bit coin can be divided up into 100 million pieces. The smallest piece being 0.00000001 of a bitcoin.

We like to call this an ittiest-bit, but others call it a satoshi, after Satoshi Yakamoto, the creator of bitcoin.

You just pay whatever the item costs. Of course, at the moment, a satoshi is worth a fraction of a penny.

Edited October 30, 2013 by Eddie_George

[GeordieAndy]

"Satoshi Yakamoto"

Yes, I imagine that wasn't his / their real name but I also am not sure that with such unclear beginnings I could ever fully trust it

Conspiracy / tin foil hat on...

If I was a large banking institution and / or spy agency with the resources to get the people who maybe created the likes of the Stuxnet virus to create a virtual currency that they can somehow track flows of hot money directly to people's computing devices I would create something exactly like Bitcoin.

Yes I know Bitcoin is open source and meant to be impossible to crack but so was / is SSL and similar secure encryption methods recently mentioned in Snowden's documents and with such strange beginnings can anyone really say it's 100% secure?

[Caius]

You just pay whatever the item costs. Of course, at the moment, a satoshi is worth a fraction of a penny.

Thanks. I have a couple. If the price falls back a lot, I'll stock up on some more. :-)

I wonder if my holding will in a few years time allow me to purchase a central London 2 bedroom flat?

Edited October 30, 2013 by Caius

[GloomMonger]

http://uk.finance.yahoo.com/news/bitcoin-man-buys-flat-forgotten-010203850.html

Can but dream!

[Caius]

Yes - put a rumour out that it was in fact created by the NSA in order to crash the price and then buy in.

It looks like you are enthusiastic about it.

[Eddie_George]

One of the downsides to Bitcoin is that there will be a fixed number of them and this will lead to hoarding. But would people do this? There's always the chance of a security flaw that could wipe out people's holdings (and we've had a few scares already), so they may get the urge to spend them and liquidate their earnings - I know I did with some of the fractions-of-a-BTC that I earned a few years back.

More likely the deflation will come from people losing passwords or forgetting about their coins. Perhaps a system whereby you have to move coins to a new address every so often could become mandatory. It wouldn't cost much (if anything) to do for the holder and those coins that have been dormant could be blacklisted and replaced with new ones. Although I'm not sure how feasible this would be though.

[VeryMeanReversion]

I've designed scalable encryption products before based on DES/3-DES using multi-million gate FPGAs. (Xilinx XCV6000). One had 32 of these FPGAs (got a bit hot).

A full chassis of our boards could brute force a DES key in 2 seconds. (much simpler than AES). It was designed for VPN use rather than code cracking.

I still have a couple of boards with StratixIIs (Altera Multi-million gate FPGAs). Hashing is pretty easy, I can probably find some old VHDL to do it.

Note to self: When time machine invented, nip back a year or two.

[GeordieAndy]

I've designed scalable encryption products before based on DES/3-DES using multi-million gate FPGAs. (Xilinx XCV6000). One had 32 of these FPGAs (got a bit hot).

....

Note to self: When time machine invented, nip back a year or two.

Are you also saying you don't fully trust Bitcoin then or you do

[Gigantic Purple Slug]

I've designed scalable encryption products before based on DES/3-DES using multi-million gate FPGAs. (Xilinx XCV6000). One had 32 of these FPGAs (got a bit hot).

A full chassis of our boards could brute force a DES key in 2 seconds. (much simpler than AES). It was designed for VPN use rather than code cracking.

I still have a couple of boards with StratixIIs (Altera Multi-million gate FPGAs). Hashing is pretty easy, I can probably find some old VHDL to do it.

Note to self: When time machine invented, nip back a year or two.

My latest board has a single Virtex 5. I would like to do one with 32 on but the prototyping phase would scare me to death (well it would do if I was paying for it).

I have a lot of stock tied up in these IC's. I was thinking of making them earn their keep before I ship them. Too much hassle though.

[VeryMeanReversion]

Are you also saying you don't fully trust Bitcoin then or you do

No trust. I would make one then turn it into cash, then turn that into something real.

[VeryMeanReversion]

My latest board has a single Virtex 5. I would like to do one with 32 on but the prototyping phase would scare me to death (well it would do if I was paying for it).

I have a lot of stock tied up in these IC's. I was thinking of making them earn their keep before I ship them. Too much hassle though.

I'm sitting next to a chassis that could take 24 FPGAs with no new hardware effort. Just need to write some code and dump out any results to a register for software to read.