gnerd

Because they are sold in different markets. Its just like a fish or vegetable market, supply and demand at the market will set the price. The difference with traditional currency markets is those markets are very deep and competitive so the slightest discrepancy in price between markets is an arbitrage opportunity for someone which then pushes the price in line with other markets.

The more liquidity there is on the BitCoin markets, the less the price will differ. BitCoin just doesn't have that sort of liquidity or market depth yet.

> 1 BTC is worth 1/20000000 th of the entire BTC economy.

There are only about 12 million BTC. The limit of just under 21 million will be hit in 2140.

Well for a reserve currency, deflation is positive as a hedge for inflation. China have bought more gold than anyone else in the world for that reason, to mitigate holding foreign reserve currency (which they limited just last month) or debt priced in foreign currency that inflates beyond their control or liking. One would expect this is the role BitCoin would take, just like gold except a lot more convenient to move around.

It is a solution to the Triffin Dilemma, which in 2009 the Governor of The Bank of China wrote about. That same year Russia proposed a new international reserve currency backed by precious metals and a currency basket to solve the same problem. In South America there have been proposals for a petro dollar, backed by oil for the same reason.

Deflation is good for a reserve currency, in some ways it is fairer than gold because you don't have to rely on the geographical distribution of gold in the ground.

If BTC is to become a reserve currency then it seems to me it would replace/compliment SDR's and precious metals as an international reserve currency and not a national one. In that hypothetical situation BTC solves the Triffin Dilemma for all those who use the USD as a foriegn reserve but the USD would likely still be used in American territory and still backed by confidence (in its ability to be productive and thus pay its debts).

Don't think of it as dollars, think of it as gold (especially when gold was broken down in smaller bits and traded in streets or held in the form of gold bars).

Right but this demand is coming from China (for the last 3 hours) and the other markets are just closing the gap as they catch up (some nice arbitrage opportunities if you have a CNY account).

If the trade spikes were on MtGox for USD I would agree that it is an inaccurate price but as MtGox has more trade volume than CoinBase, I think they just close the gap sooner.

There will be just under 21 million in 2140, but you have to remember many BTC private keys have been destroyed over the last few years so those can never be spent (unless they used a deterministic wallet, in which case they will probably be able to be cracked eventually).

I don't think it will ever be equal to the total world asset value. If it succeeds it will be in the short term as an online currency, in which case if it were to have a market cap the size of APPL, it would be around $36000 per coin. If it were to get long term use as a deflationary reserve currency to mitigate inflation and the Triffin Dilemma (which is what China was pushing for in 2009 when Zhou Xiaochuan released his paper[1]) then the price could easily clear $1000000 but keep in mind that is far from guaranteed as BitCoin still has some major scaling issues to sort out.

Too much growth too soon might be a bad thing.

[1] http://www.bis.org/review/r090402c.pdf

EDIT: In response to your edit, it is 2140, not 2030. The block reward (what miners get for solving a block) halves every 4 years and we are at a 25BTC reward (made every 10 minutes) with about 12 million BitCoins in existence, so it will take longer than this century to hit the 21 million mark.

Also worth noting that the Vetting and Barring Scheme was established in 2002 and the Identity Card Act was from 2006 whereas the SNP only took office for the first time in 2007.

> I am aware of the usage of like in the simile context. Thank you for your concern however.

First off, apologies if you took that as an insult, it wasn't meant that way, I just didn't want my words to be twisted and lose the original meaning that I was making a comparison to a value increase of a given stock or commodity, using an IPO as an example.

> I don't believe that there are any currencies, which when launched, were purely floating without any bands or a peg.

I understand the point and I believe it to be correct, but only to a point (national currencies, BitCoin is not one of those). This is why I was mentioning commodity currencies. See gold isn't backed by anything, we use it because of historical significance. I understand you may say, it has value because of its conductive properties and use in chips but originally we actually used it as a currency because it a) was useless to make tools out of as it is a soft metal b) did not oxidise like other metals at the time c) was scarce.

Once we abstracted value to gold (or other precious metals), we used it to solve the coincidence of wants problem and that is what a currency does. Obviously I know you know about the gold standard that followed and how it was subsequently abandoned but it is important to note that I can still a) store value in gold b) exchange gold for goods and services.

Take South Africa (where a third of the gold ever mined comes from). They mint KrugerRands (gold) and they mint their national currency (Rands). Rands might depreciate in value due to low international demand and KrugerRands might appreciate in value due to high international demand (for gold) but both are a currency and South Africans can pay their taxes with those KrugerRands (using the spot price of the gold value converted to Rands). The same applies to Federally minted gold coins, they have value all over the world as a medium of exchange (based on the gold value) and I can pay taxes in the US with them as they are legal tender.

There is no peg for these gold coins, they are worth what the market says they are worth. Should you have gotten in on the ground floor with gold, you would have been a very rich man using something that was considered interesting but ultimately useless some time before. Obviously that wasn't really an option as this story unfolded over a very long time, but we know that is no longer the case in an ever connected world. Changes that once took centuries can happen inside of a decade now (interestingly enough, although valuable at the time, the fortune gained by Mayer Amschel Rothschild with gold in the late 18th century was not the largest fortune ever gained, once the gold standard was adopted in the 19th century, it was probably the largest fortune in the modern world, by far. Something his descendants still benefit from to this day).

> Continuing the question, are there any currencies that are pegged to a basket which includes commodities?

Yes. I think we are confusing currency with national currency though and I have beaten that dead horse already.

> I'm not sure if you were referencing the Kuwaiti Dinar as one of those.

I was referring to the Kuwaiti Dinar being a success in terms of value fluctuation. I used it as an example because I made money with it once and it is regarded as the strongest national currency (although not a major currency). It was pegged to the pound originally and the pound devalued 6 years after. The value appreciation is nothing like BitCoin but to me, BitCoin is closer to gold than a national currency, as I said.

> Very sorry if my English was not clear enough to express my question in the initial format. In the future I'll be sure to elucidate the question better rather then assuming the reader is able to follow along with the simile from the parent comment.

I think you mean "than" :p (just kidding, don't get offended).

All jokes aside, I think one thing that is missing from all these discussions is that the value of BitCoin (at least as it seems to me) isn't that you use it as a primary national currency (although I suppose it could serve that purpose in some places), but rather that it might be a contender for an international currency that mitigates inflation risks (which in recent years is what China[1][2] and Russia[3] have been pushing for, since 2009, year of BitCoin's inception) because right now the USD as a reserve currency seems a bit unfair to people outside of the US (and a few other nations). Say I want to buy barrels of oil, most of the world oil is denominated in USD. That is great for Americans because it keeps the dollar strong but if I am in say, Indonesia, it ultimately decreases demand for my currency, putting me at a disadvantage just to keep my economy running.

All that is not to say I believe the success of BitCoin is guaranteed (far from it), or that this is the role BitCoin will take, but key players have suggested it has been China's intention all along (by buying more gold than any other country on the planet), to create (or at least push) a new supranational currency. This century is almost certain to have a supranational currency adopted as a standard (SDR's don't really satisfy that niche).

[1] http://www.bis.org/review/r090402c.pdf

[2] http://www.vancouversun.com/Business/asia-pacific/China+yuan...

[3] http://www.reuters.com/article/2009/06/16/bric-medvedev-curr...

I'm not sure I follow your logic here.

There is nothing inherently illegal about creating BitCoin but there is something very illegal about facilitating drug trafficking. If they were the same person, wouldn't you practise good OPSEC to keep you out of prison? What is the value of keeping your identity as BitCoin creator a secret when you are in prison?

If they were one and the same, it seems to me, you would just practise good OPSEC across the board or, if need be, make "mistakes" that reveal you as BitCoin creator (and take the credit) and keep your identity as SilkRoad founder a secret.

The first BitCoins were mined as part of the genesis block in January of 2009 but can not be spent due to a quirk in the system.[1]

From then on more BTC were mined (at a rate of 50 for every block solved, now 25 for every block as it halves every 4 years) and the first transaction was done from Satoshi to Hal Finney at block 170 (just under 2 weeks from the first block mined).[2]

By October of 2009 the first valuation for the purchase of BTC was published (New Liberty Standard) and it used a convoluted pricing scheme to value $1 = 1,309.03 BTC.

The first actual market established was BitCoin Market[3] and they were sold for about $0.008 = 1BTC.

So since January 3rd, 2009, every 10 minutes a block was solved, giving a reward of 50 newly created BTC and in November of last year the block reward halved (so now it is 25 BTC for every block solved). It seems for over a year and a half, if you knew BitCoin existed, you could have mined a lot of them with nothing more than a CPU. Once the first GPU miners were released, that's when it became really competitive.

There is a full run down of the history of BitCoin at bitcoin.it[4]

[1] https://en.bitcoin.it/wiki/Genesis_block

[2] https://blockexplorer.com/block/00000000d1145790a8694403d406...

[3] https://en.bitcoin.it/wiki/Bitcoin_Market

[4] https://en.bitcoin.it/wiki/History

Nobody deserves a billion dollars and if someone was to become a billionaire I feel it is more likely the people holding BitCoin would be more concerned with their own value appreciation than all cooperating to devalue a single entities value. You also have to consider that wide adoption of BTC would mean a diverse set of people with a diverse set of values.

I've often read that in the US (as an example, but I'm sure it applies elsewhere) poorer people are likely to vote against their best interest because they have a belief that one day they will be rich. That sort of scenario makes more sense to me, people will just worry about themselves than burning their own value for some collective 'good'.

In English a simile is a comparison using the words 'like' or 'as'. So using that as a basis it should be fairly obvious that I was definitely not saying this is an IPO but rather comparing getting in early with BitCoin to getting in early with anything with a market value that could appreciate or depreciate (like stocks traded on a stock market, or newly discovered commodities etc.). There is risk and there is reward.

If you are looking for examples of other currencies you could have made money with due to appreciation (if you got in early), then simply look at the developing countries with appreciating currencies, countries who peg their values to a currency basket that includes a rising commodity (like oil). Money is made (and lost) on speculating on forex markets everyday. The Kuwait Dinar springs to mind.

Personally I think its better to compare BitCoin to a commodity that has scarcity and solves the coincidence of wants problem and so it can be used to exchange value for goods or services, like gold, silver, perhaps oil (to a lesser extent).

That hard fork was rolled out over a period of two months, with warning (whilst older clients were sent messages to upgrade) and smaller splits are part of the protocol and happen quite regularly. as expected (like when two miners hit the same block within seconds and they wait for the network to recognise the block).

That is the justification Satoshi Naakamoto gave in the original paper for waiting for 6 blocks for a full confirmation.

Yeah, like every other economic system. That's life, that's nature. If you dumped 10% of your savings into BitCoin in 2010, you took a great risk and this is the reward. Had you been the angel investor dumping $100000 into Google when there was no business plan, the same applies or what about people who bought domain names for common words or phrases or < 3 letter domains in the early 90s, if that was you, you would have made a mint. The early bird catches the worm.

That's the game, and you and I didn't win this round.

> a.) the lack of even distribution of early wealth

Like an IPO? [1]

> b.) the possibility that a great percentage of Bitcoin are currently held by bad actors (criminals, anarchists, use your imagination).

I know you are probably using the term anarchist in the colloquial sense (meaning those black bloc anarchists who smash things and want revolution) conjuring images of a Mad Max like dystopia, but would you consider Noam Chomsky a bad actor? People of that ilk just consider a different structure to organizing society, or as he puts it "a kind of voluntary socialism, that is, as libertarian socialist or anarcho-syndicalist or communist anarchist, in the tradition of, say, Bakunin and Kropotkin and others."[1]

Sometimes its tempting to paint pictures with broad strokes but as someone who can appreciate many different political viewpoints (as long as they are peaceful and productive), it doesn't seem to make your image any more accurate.

bitcoin.it has a page on some myths you should read.[3]

[1] https://en.bitcoin.it/wiki/Myths#Early_adopters_are_unfairly...

[2] https://en.wikipedia.org/wiki/Noam_Chomsky%27s_political_vie...

[3] https://en.bitcoin.it/wiki/Myths#The_Bitcoin_community_consi...

> The assumption is that bitcoins must be sold immediately to cover operating expenses. If the shopkeeper's back-end expenses were transacted in bitcoins as well, then the exchange rate would be irrelevant. Larger adoption of Bitcoin would make prices sticky. Future volatility is expected to decrease, as the size and depth of the market grows.

> In the meantime, many merchants simply regularly pull the latest market rates from the exchanges and automatically update the prices on their websites. Also you might be able to buy a put option in order to sell at a fixed rate for a given amount of time. This would protect you from drops in price and simplify your operations for that time period.

https://en.bitcoin.it/wiki/Myths#Shopkeepers_can.27t_serious...

There have been more than one block chain splits. I think you are talking about the hard fork that happened in May, which was planned for and not an unexpected accident. If you conduct a transaction and it is included in the shorter block chain, then by definition the network doesn't recognize the transaction and you keep your money and just send again.

What I conclude from this is you don't know what a proper noun is in English and you are offended at conclusions drawn from my experience in Sweden, which are of course anecdotal and therefor not applicable to everyone in Sweden, why would you assume I was asserting the opposite?

I guess you didn't do much searching if you couldn't find this study[1] from Lund University or this study[2] from Gothenburg University.

From your sophmoric questioning and pedantic ramblings it seems your mind was made up before you even heard the answer.

> Perfectly fine for you do to that, but it's not the conversation I wanted, or want, to have.

Well to be fair I wasn't trying to have a conversation with you, and again, to be fair, you didn't do anything to add something to the general conversation besides your mild nationalism. Classy.

[1] http://www.research.med.lu.se/en_projektdetaljer.php?Proj=65...

[2] http://www.psy.gu.se/english/current/news/newsdetail//gene-i...

This was around 2.5 years ago and even then it was impractical as people were mining with GPUs which pushed the difficulty up too much. Now we have had ASIC devices for most of this year and the difficulty has gone up an insane amount, so the practicality of using this is even less.

It is important to note that the JS method on that website will use CPU only, so it will be a) noticeable (especially on laptops and mobile devices) b) several orders of magnitude too slow c) not worth the 2 minutes to implement

Yes, puritanical is an adjective but the Puritan movement is a proper noun as it is the name of a movement. That is the point I was making. In English the phrase 'proper noun' does not mean I was implying the word puritanical was a noun, it means I was saying it is not a name (which we capitalize and call proper nouns), and therefore I was using it as an adjective. I hope that clears up your confusion.

As for the "addict gene", again, this was supposed to be a synonym phrase for a notion of hereditary weakness, I was not implying it has a genetic basis or that genetics was known before Crick. The phrase "addict gene" was quoted because I have heard it in Sweden (in modern times) when discussing these issues.

I'm hardly an expert on Swedish history, just a person who asks questions when I travel. What I know of Swedish history could be written on the back of a postage stamp. I'm afraid I wasted more time on Roman history in school (as you can imagine, Swedish history doesn't come up very often).

As the other poster mentioned, I was using puritanical to mean strict religious ideas and not the Puritan movement. You will notice I capitalised Sweden but not the word puritanical as it was not a proper noun.

Very much the opposite. In Sweden, even alcohol is a controlled substance and you may recall pressure being put on NL for allowing foreign people to consume cannabis in coffee shops (mainly in Amsterdam), well that pressure was from Sweden who saw the practise as a way for Swedes to get around their laws by flying to Amsterdam for a weekend (although just across the border in Copenhagen, a Swede can buy cannabis at Christiana, it isn't legalized or officially decriminalized, but the police only enforce a few arrests every few years as long as there is no violence or other drugs, no such pressure was placed on Denmark).

It is a throwback to notions from the 19th century, puritanical christian Sweden where the notion was that Swedes have an 'addict gene'.

You can legally have sex with animals though, it isn't even seen as cruel, the thinking back in 1945 when bestiality was legalized with sodomy was why should an otherwise good man be plagued because he has sex with animals (or homosexual sex). Obviously this thinking wouldn't fly in other western nations as the concept of cruelty and consent are very different. I think they are in the process of changing this now, so maybe in a few years they will fall in line with other aspects of international policy as well.

Also important to note is in Sweden there is no drug scheduling system like there would be in the Anglo countries. If one were to sell or move a lot of cannabis, it would be the same as selling or moving a lot or heroin or crystal meth.

For small amounts of anything, there are no custodial sentences but the fine will be about half of your monthly salary (or approximately £50 if you have no job).

I have heard anecdotal cases of houses/flats being raided on nothing more than simple suspicion because someone seemed sleepy or had red eyes.

I said filing the smooth surface of the nails, not filing all the way through the nail. It is the same as what woman do when they stick fake nails over their real nails... they simply rough up the surface for adhesive purposes, not file the entire nail away.

There are other, more logical, reasons to be outraged if that is your position on this.

> If they wouldn't grow back (no idea whether that applies to the cockroaches or not), I'd feel much worse.

The waxy surface will not grow back, well not if they do the more ethical approach as they would only perform this on mature cockroaches who will not shed any longer.

Again, not supporting or attacking their approach. I think the purpose seems to be the ethical grey area for me. For instance, the black rhino is considered extinct (last I checked) and how we save the white rhinos is by removing their keratin horns to stop poachers. Am I happy we have to do that? Certainly not, however, I'd rather have that then no white rhinos.

It is on the head, but it isn't a hole. I imagined it to be more like filing the smooth surface of one of your nails at there are no nerve endings located in the exoskeleton (which is why insects shed their chitin exoskeletons until maturity).

Chitin is the arthropods version of keratin (the stuff your hair and nails are made of).

Paranoid overkill really. Suppose you didn't have access to a locked lead box and stored your extremely large sum in an envelope, you would feel silly in 10 years when you realized someone was able to steam the envelope and use the raised letters from the pressure when writing to reveal the key without removing the tamper proof seal.

There are better, more modern methods of applying a seal or printing but it increases the attack surface so for the truly paranoid, they should probably be avoided (unless using something like Shamirs Secret Sharing Algorithm).

I am torn about medical experiments on animals but I think the distinction needs to be made between what happens in a lab (with ethical frameworks) and what happens in civilian life for entertainment.

You can find the information on the product website[1] and the instructions[2]. Effectively it just replaces the antennae with electrodes that provide stimulation at 55Hz. So it can just make the cockroach go left or right (assuming it is moving).

There doesn't seem to be any other control, so you (presumably) cannot make the cockroach go forward, backward, up, down, faster or slower. I imaging to get that sort of control they would need to hijack more sense organs or the brain itself.

I guess the human analogy would be like overriding the inner-ear mechanisms (Vestibular system) to control balance (left and right).

[1] https://backyardbrains.com/products/roboroach

[2] http://wiki.backyardbrains.com/RoboRoach_Surgery

According to the website [1], it is fairly debatable that they "feel pain" and if they do, they are anaesthetised.

> Criticism: This enables and encourages kids to harm animals

> The cockroach is anesthetized during the surgery to avoid the risk of the cockroach experiencing pain (though it is debatable whether they experience pain at all), and the cockroach adapts to the stimulation rapidly. The 55 Hz stimulation we use is the same frequency used in electrical stimulation to treat human diseases such as Parkinson's.

[1] https://backyardbrains.com/products/roboroach

> Boring a hole in the head, and then another hole in the chest

According to the article and the instructions[1] there is only one hole and it is in the thorax (through the exoskeleton), which is the middle section and not the head at all (remember from primary school biology, insects have a head, thorax and abdomen).

Not making a case for or against this method or product, just saying.

[1] http://wiki.backyardbrains.com/RoboRoach_Surgery