The bitcoin and its alternatives such as litecoin and feathercoin
 

Yes, the bitcoin is an amazing concept, and it does have its advantages but,

If the alternatives keep on coming out,

such as litecoin, feathercoin or dogecoin or peercoin,

Are we going to see the value of all types of digital coins decrease? Because the "supply" of the "supply and demand" increases? When bitcoin was first invented, the creator made an arrangement so only 21 million bitcoins can be produced, in order to prevent the "supply" from increasing forever. But all we have to do is create another type of a digital currency with the same concept as the bitcoin... such as litecoin or feathercoin.

Or am I missing something? Are there any reasons that the value of those virtual currency will keep on increasing? Even if different types of virtual currencies keep on coming out?

Thanks a lot, Linux Questions!!!

tulip bulbs, South Sea bubble, Ohio Company, Ponzi, chain letters, and bitcoins. The next step in the sequence will be decided by human gullibility.

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Steve Stites

If one of the alternatives provide more value over the Bitcoin, they might be valuable to use. Just having a ton of implementations doesn't mean anything if nobody has any reason to use them.

I don't see the case where anyone would be upset that the value of a digital currency is getting too high so they decide to use a lesser valued option. It might be possible that someone might think that Bitcoin is overvalued and thus want to a more stable alternative. I don't know if that case makes sense, but it's certainly a possibility.

But right now, there's a lot more infrastructure to actually use Bitcoins, at least a lot more than exists for the alternatives.

I can't make any predictions on the value of Bitcoin or any of the others: Let the market decide!

There is a fundamental fallacy behind Bitcoin and all of its ilk: that supply should be "limited," that a coin must be "unique," "used once," and that computational difficulty is an advantage or a necessity. In short, they are solving the wrong problem.

Yes, they are using cryptographic technology in an interesting way, and they have broken some important new ground (a fully decentralized "web of trust," for instance), but this isn't a proper application for that technology. "Currency" does not ... cannot ... work like that. Bitcoin and its brethren, therefore, can't function as currency. The concepts and technology would be quite useful for other applications, such as identification or signing-tokens, but they by-design can't do what currency must do.

Currency must be available in a "regulated, but unlimited supply." A modest grocery store chain could easily spend "21 million currency units" on one big order for avocadoes. (I've seen such a transaction myself, and they do the same thing about five times a year.) It must always be possible for the money-system in use to provide the liquidity necessary to broker all of the transactions that anyone anywhere wants to (legitimately) do. Existing EDI technologies already do this extremely well. The grocery-store in question does not use paper invoices, and does not send checks. Neither does anyone else. None of the transactions will fail to be carried-out "because we haven't 'mined' enough 'coins' yet."

A currency-unit is fundamentally "an abstract medium-of-exchange." If you're a stonemason who needs his roof repaired, you don't need to find someone who is in the business of repairing roofs who needs to have a wall built: you give him money, which you earned by building walls, and he uses some of that money to buy the materials and labor and so-forth, keeping some for himself as profit. There always has to be enough liquidity in the system to allow all of those transactions to occur. Those currency-units are not "destroyed in the process." They're not "individually identified." They're only an account balance. A fixed-point number. And this is what "works."

As one person put it: "You can't eat gold." But you can eat avocadoes, and in order for that food to wind up in your mouth, a lot of currency-units have to change hands, freely crossing national borders in some cases, in an accountable and auditable way. No one will ever see or use any form of "paper," until you put them into a paper bag at the grocery store (having probably paid for the goods by swiping your debit-card).

Notice also that the "value" of the currency-unit remains fairly constant. (When it doesn't, we call that "runaway inflation," and the whole system breaks down to the point that German citizens once burned banknotes for stove-fuel.) Currency-units are a proxy object that is used to facilitate trade; they're not a store-of-value at all.

But someone's already out there offering "Bitcoin mining computers," which cost several thousand dollars apiece. (Notice that you can't buy one with bitcoin ... heh.) They're selling you the dream of a "magical money-machine." There's a sucker born every minute, and that sucker ... his "mark" ... is you. Be aware. (One unit sells for $14,500.00 and "ooh, hurry up hurry up and buy one before they all get sold-out!") You should know better. But they're counting on you having gold-fever.

Remember: the folks who made the most money from the California Gold Rush were people like Leland Stanford, who sold shovels at his hardware store before going on into the transcontinental railroad business, and the photographers and saloon-keepers and the ladies of the evening.

sundialsvcs, great post.

Here's what George Smith, who elsewhere blogs about computer security and related topics, has to say about bitcoin and it's cousins. http://dickdestiny.com/blog1/?p=14505 (He's said more, but that pretty much sums up his opinion.)

Another element is this, which George pointed out to me: to have access to bitcoins, you have to be well-off enough to afford mining rigs, high-speed connections, and all that other geeky stuff. Ipso facto persons who are not reasonably well-off are cut out of the game; it is inherently an exclusionary toy for the haves, and useless to the have-littles and have-nots.

The well-to-do über-trusting geeks are the "marks" of this scam. And it's as old as mankind itself: Rumpelstiltskin maybe did it first. "All that glitters is not ..."

Like I said, there is some very interesting and useful technology here. But "money" is not an appropriate use for it.

That was a fun-read article ... thanks for the link. (I won't pass judgment here about the Winklevossholes. ;) )

I think that "it says everything" that you can't pay for bitcoin-gear with bitcoin. No one's "grubstaking" anyone here, as they might with a genuine gold-mine covered by a valid and properly-registered mineral claim. In the end, the perpetrators and the hangers-on know better.

It is a con, and a very clever and sophisticated one, as any con aimed at computer-geeks would be. It relies upon the fact that (a) they generally have quite a lot of disposable (US Dollar...) income; (b) they are very much in-love with technology; and (c) they are trusting, to the point of naïvité, e.g. blithely accepting a "fellow geek" (although never identified ...) who says that the supply of the things is "limited."

A working-man would narrow his eyes and say, "bullsh*t," doing so in such a way that the thought might pop into your head all of the sudden that now might be a very-good time to get back into your car and drive away very fast... :eek:

But ... a geek with gold-bug fever wouldn't think like that. (Wouldn't "think," period.) :rolleyes: And that's why he's the "mark." It's sad to watch, but technically speaking, no laws are being broken.

As much as I would like for bitcoin to last and be successful and want to support it, I wouldn't use it for money I can't afford to lose.

In my mind, its like gambling, or investing stock in a company, which as I understand, there are two working theories; buy low, sell high; or invest early and hang on for the long haul. Either way, its not my savings or the kids college fund thats going into this.

Let's say you got $5,000 in bitcoins, and your computer dies, and the dog ate the backups on flash drive. Or a bug gets introduced into the software in a new version, and it completely corupts your wallet. Or how about if everyone gets bored and stops using bitcoins, you try to trade them back for cash, but all you can get is a few pennies. Or a government decides they are illegal (not a matter of if, but when (governments despise what they cannot control, though sometimes they can be appeased with just the ability to monitor)). Too many things can go wrong for money you work hard for.

True, some of these things can happen if you have your money in a bank, economies can collapse, but everyone around you is in the same boat as you if it does, and if an economy collapses and you need to buy food, bitcoins won't help you.

"In my mind, its like gambling, or investing stock in a company"

Bitcoins are not gambling such as poker. Bitcoins are gambling like Three-card Monte where the mark is guaranteed to lose to a crooked dealer.

Bitcoins are not like investing in a company's stock on the NYSE. They are like investing in a gold mine fraud on the Vancouver Stock Exchange even down to the misinformation spread as "news items" by the con men who started bitcoins.

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Steve Stites

HA HA HA HA HA HA HA


http://www.forbes.com/sites/jasperha...-own-currency/