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Bitcoin: A simple mans guide to understanding digital currencies. - Wall Street Journal

by Joe Mobley
31 replies
  • OFF TOPIC
    • |
Owning bitcoin doesn't mean having a digital banknote in a digital pocket; it means having a claim to a bitcoin address, with a secret password, and the right to transfer its balances to someone else.

To understand how it works and why it is more efficient and less expensive than the existing system, let's take a single example:
A good example is in the article.

The privacy aspects are HUGE!

and the personal information of users isn't divulged. This bitcoin feature especially appeals to privacy advocates: Nobody learns where you buy coffee, the name of your doctor or--if you're into that sort of thing--where you buy your illegal drugs.
But the growth of digital-currency technology has even more profound implications. It could reduce financial costs overall and leave more money in people's pockets. At the same time, it could spell job losses--potentially rendering obsolete millions of positions in traditional intermediary services.
This is an excellent article with simple, straightforward illustrations that even I could follow.

Bitcoin and the Digital-Currency Revolution - WSJ

The Internet has disrupted and decentralized much of the world economy, but the centralized world of finance remains stuck in the 15th century. Digital currency can help it adapt and survive.
Joe Mobley
#bitcoin #explanation
  • Profile picture of the author Alexa Smith
    Banned
    Originally Posted by Joe Mobley View Post

    This is an excellent article with simple, straightforward illustrations that even I could follow.
    Thanks very much - I've been looking for a simple, straightforward, non-hysterical, rational "introduction to Bitcoin" article on and off for some months.

    .
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  • Profile picture of the author danielpbarron
    Originally Posted by Joe Mobley View Post

    This is an excellent article
    Hardly. It's another hit-piece. Before it was "bitcoin could never work," and now it's "more than a currency." In either case, the message is clear: "don't buy any."

    Originally Posted by Michael J. Casey

    No digital currency will soon dislodge the dollar, but bitcoin is much more than a currency.
    Bitcoin is strictly money; any other use case that can be derived from it is by coincidence. As money, bitcoin works; it doesn't need to be changed. And yet, Mr. Casey ignorantly publishes this drivel:

    Originally Posted by Michael J. Casey

    Like any young technology, bitcoin is a work in progress, but its groundbreaking core software program is constantly being improved.
    I doubt he's talking about the real improvements currently under development. Bitcoin is here to stay, and opponents have to frame it as something malleable -- something they can subvert to their purposes later.
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    • Profile picture of the author seasoned
      Originally Posted by danielpbarron View Post

      Hardly. It's another hit-piece. Before it was "bitcoin could never work," and now it's "more than a currency." In either case, the message is clear: "don't buy any."



      Bitcoin is strictly money; any other use case that can be derived from it is by coincidence. As money, bitcoin works; it doesn't need to be changed. And yet, Mr. Casey ignorantly publishes this drivel:



      I doubt he's talking about the real improvements currently under development. Bitcoin is here to stay, and opponents have to frame it as something malleable -- something they can subvert to their purposes later.
      Darwin fish? INTERESTING coincidence! Are we supposed to BELIEVE that name? And you spend a LONG time trying to shoot down one part of one religion, and yet try to upport yours through the same means. Interesting.

      As for bitcoin? If you think about it, it really can't offer what it promises. And as it becomes more accepted, that will become more clear. Bitcoin uses PRECISELY those methods that various governments use to track their currency through the internet and some POS devices. Currency now provided through nations physical currency can easily defeat all the POS devices, since it is currently IMPOSSIBLE to use those POS devices for real currency. IRONICALLY, bitcoin MUST use such devices. HECK, the US government created Operation Choke point to shut businesses down through POS devices. They affect ONLY credit cards, and "crypto currency". They can NOT affect regular currency.

      As for its value? It WAS on a minor uptrend. But it started back down on its downtrend! Apparently, it started around 6/8/2014, and is now at 219.73. The last time it was this low was about 11/3/2013. To put this into perspective, it started its meteoric rise that gave it its notoriety 10/7/2013. At the time it was valued at ~130.59. So it is headed down to about $13.30 or so. I wonder, will it go all the way? Will it go farther? YEAH, it COULD rebound, but it seems to be headed lower for now.

      Steve
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      • Profile picture of the author danielpbarron
        Originally Posted by seasoned View Post

        As for bitcoin? If you think about it, it really can't offer what it promises. And as it becomes more accepted, that will become more clear. Bitcoin uses PRECISELY those methods that various governments use to track their currency through the internet and some POS devices. Currency now provided through nations physical currency can easily defeat all the POS devices, since it is currently IMPOSSIBLE to use those POS devices for real currency. IRONICALLY, bitcoin MUST use such devices. HECK, the US government created Operation Choke point to shut businesses down through POS devices. They affect ONLY credit cards, and "crypto currency". They can NOT affect regular currency.
        What do you suppose bitcoin "promises?" For me it's all about sound money and the fact that bitcoin cannot be manipulated. Gold also serves this purpose, but it is difficult to secure and move. Bitcoin is actually less traceable than all other kinds of money. Try to send millions of dollars worth of gold across the globe and see how untraceable it is. Whereas your bitcoin address need to be associated with your name, and nobody needs to know that it was you who just sent millions of dollars worth.

        And if you want to discuss The Bible, join me here.
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        • Profile picture of the author seasoned
          Originally Posted by danielpbarron View Post

          What do you suppose bitcoin "promises?" For me it's all about sound money and the fact that bitcoin cannot be manipulated.
          But it ISN'T sound, and it CAN be manipulated! The price runup was initially tracked to an exchange that manipulated the price. And that made the currency less sound.


          Gold also serves this purpose, but it is difficult to secure and move.
          IRONICALLY, the difficulty means the price is HARDER to manipulate! If you boost it too high, people may buy, and others may balk, and it could hurt you. If you quote too low, you lose money,
          etc... With bitcoin, the people in control tend to hold things, etc...

          Bitcoin is actually less traceable than all other kinds of money. Try to send millions of dollars worth of gold across the globe and see how untraceable it is.
          I have a few dollars. If you can tell me where I got them from, I will pay you $100!!!!!! GOOD LUCK! GOLD is kind of a special case, because they outlawed movement of some dollar value of it. STILL, it can be done. But we were NOT talking about a generally obviously impossible to trace asset. We were talking about dollars. AGAIN, HOW could you track it? BTW I DID move silver coins into this state. You couldn't even tell me what store I originally bought them from without taking a few man years, and several subpoenas. LUCKILY, I kept good records. If I had not, GOOD LUCK!

          Whereas your bitcoin address need to be associated with your name, and nobody needs to know that it was you who just sent millions of dollars worth.

          And if you want to discuss The Bible, join me here.
          Nobody EVER ****NEEDS**** to know, but what if something goes wrong, etc... Also, there is a chain provided, So the fact is that they *****WILL***** know! If I go to the store, and pay $10 for cookies and a drink, in tangible currency, I could send a girl in to buy them for me. She could disguise her voice, have overalls, and a ski mask. NOBODY would EVER know I bought that stuff. They would have trouble enough figuring out who the girl was, but I promised HER money for the task, and did it on the street, a block away from my car, disguised. So good luck THERE! The ****SECOND**** you move to a POS or exchange, by using credit cards, or bitcoin, that gets fouled up. Even if you never enter your info in the exchange, and always use a wifi hotspot, they can track you. Even if it is a computer at kinkos, or the public library.

          Steve
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          • Profile picture of the author danielpbarron
            Originally Posted by seasoned View Post

            But it ISN'T sound, and it CAN be manipulated! The price runup was initially tracked to an exchange that manipulated the price. And that made the currency less sound.
            'Sound' and 'manipulated' aren't regarding the price; it's in regard to anyone's ability (or lack thereof) to counterfeit it. Think Federal Reserve.

            Originally Posted by seasoned View Post

            BTW I DID move silver coins into this state. You couldn't even tell me what store I originally bought them from without taking a few man years, and several subpoenas. LUCKILY, I kept good records. If I had not, GOOD LUCK!
            Ok, now try moving tens of thousands of dollars worth of silver or Federal Reserve notes across international borders. This task is trivial with bitcoin, and that is why people like you have been hired to slander it.

            Originally Posted by seasoned View Post

            If I go to the store, and pay $10 for cookies and a drink, in tangible currency, I could send a girl in to buy them for me. She could disguise her voice, have overalls, and a ski mask.
            Again, now try this with tens of thousands of dollars worth; it's not possible unless you're already well connected with the mafia.

            Your points are all moot because they presume that the purpose of bitcoin is to convert between various forms of FIAT. If your goal is to remain in bitcoin from start to finish, you will find that it is practically impossible for anybody to track your transactions.

            Originally Posted by Joe Mobley View Post

            Again, your opinion is at variance with the facts
            Your "facts" are from the article that I have disputed; obviously there is variance.

            Bitcoin is a "haven for drug dealers" (not really, USD is still the #1 currency for that) because it is the most liquid currency. Not all dollars are worth the same amount; a dollar in your bank account is worth more than a dollar hidden under your mattress. Whereas every bitcoin is worth the same amount; there is no need to launder it. You can spin this as a negative all you want; people will still flock to this superior form of money.

            As for the easy-to-hack wallets: your security will only be as strong as you make it. If you're the kind who needs a help-line to recover a lost password, bitcoin isn't for you. There are countless implementations of bitcoin software, and nobody who matters is using the "official" one.
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            • Profile picture of the author Kay King
              On CNN, Morgan Spurlock had a one hour program this week dedicated to "living on Bitcoin" where he worked with the currentcy and explained it in ways even I could comprehend.

              Definitely worth looking up that show and watching it online.

              CNN Money has added a Bitcoin ticker accord to BitCoin News. Got a popup on that site for any writers who fully understand digital currencies (that would not be me):

              Are you a skilled writer with interest in bitcoin, altcoins, and cryptocurrency in general? NEWSBTC is looking for writers to continue with our mission of fast and reliable reporting. Individuals interested may email contact@newsbtc.com with previous writing samples.
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              Dear April: I don't want any trouble from you.
              January was long, February was iffy, March was a freaking dumpster fire.
              So sit down, be quiet, and don't touch anything.
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              • Profile picture of the author danielpbarron
                Originally Posted by Kay King View Post

                CNN Money has added a Bitcoin ticker accord to BitCoin News. Got a popup on that site for any writers who fully understand digital currencies (that would not be me):
                If you're any good at writing and want to make some real money (bitcoin), try submitting something to Qntra. You can get paid in bitcoin-denominated shares of the site itself.
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                • Profile picture of the author BigFrank
                  Banned
                  Bitcoin is one of the easiest concepts in the digital world to understand.

                  Avoid at all costs.

                  Cheers. - Frank
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                • Profile picture of the author sbucciarel
                  Banned
                  Originally Posted by danielpbarron View Post

                  If you're any good at writing and want to make some real money (bitcoin), try submitting something to Qntra. You can get paid in bitcoin-denominated shares of the site itself.
                  I'll consider bitcoin real money when I can pay bills with it and take it to the grocery store and buy food with it and pay for gas at a gas pump with it ....
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                  • Profile picture of the author BigFrank
                    Banned
                    Originally Posted by sbucciarel View Post

                    I'll consider bitcoin real money when I can pay bills with it and take it to the grocery store and buy food with it and pay for gas at a gas pump with it ....
                    When my hooker/girlfriend takes it, we'll have a winner. :-)

                    Cheers. - Frank
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    • Profile picture of the author Joe Mobley
      Originally Posted by danielpbarron View Post

      Hardly. It's another hit-piece.
      No, it's not.

      Originally Posted by danielpbarron View Post

      the message is clear: "don't buy any."
      Wrong again. The article neither encourages or discourages any foray into bitcoin-dom.

      Originally Posted by danielpbarron View Post

      As money, bitcoin works; it doesn't need to be changed.
      Bitcoin has some indisputable flaws, at least in its current iteration. Its price fluctuates too wildly. (Who wants the cost of their groceries to vary by 10% from week to week?) Its anonymity has made it a haven for drug dealers. "Wallets" (as the individual software applications that manage bitcoin holdings are known) have proven vulnerable to cyberattack and pillaging, including the wallets of big exchanges such as Tokyo's Mt. Gox and Slovenia's Bitstamp.
      Again, your opinion is at variance with the facts.

      Originally Posted by danielpbarron View Post

      Hardly. It's another hit-piece.
      It seems like the only "hit" is to your credibility.


      Joe Mobley
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  • Profile picture of the author seasoned
    OK, time for a status update! Bitcoin broke through all downside support. It is currently on a little respite in what appears to be a head and shoulders. This is the 4th in a pattern and ALL others ended up going to the down side. Current value? ~234.11

    BTW I haven't been hired to hit on bitcoin. I'm just telling you the truth. I haven't been wrong here yet, and I am on a winning streak! If i were to do such things, and could, I would be encouraged to sell short. It could easily go as low as $13, but let's see. 12/8/13, it was ~973.78 2/25/2015 it is ~234.11 Approx 444 days. So let's see where it is around 7/25/2015! How far will it drop? It DID spike as much as 265 one week, so don't get too excited with spikes. Of course subsequent spikes on the way down TEND to be smaller and so far HAVE been. The biggest spike THIS year has been about $25!

    Steve
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    • Profile picture of the author BigFrank
      Banned
      Originally Posted by seasoned View Post

      OK, time for a status update! Bitcoin broke through all downside support. It is currently on a little respite in what appears to be a head and shoulders. This is the 4th in a pattern and ALL others ended up going to the down side. Current value? ~234.11

      BTW I haven't been hired to hit on bitcoin. I'm just telling you the truth. I haven't been wrong here yet, and I am on a winning streak! If i were to do such things, and could, I would be encouraged to sell short. It could easily go as low as $13, but let's see. 12/8/13, it was ~973.78 2/25/2015 it is ~234.11 Approx 444 days. So let's see where it is around 7/25/2015! How far will it drop? It DID spike as much as 265 one week, so don't get too excited with spikes. Of course subsequent spikes on the way down TEND to be smaller and so far HAVE been. The biggest spike THIS year has been about $25!

      Steve
      Extremely sorry that I overlooked one more subject in which you are an undisputed expert. The list is endless.

      Cheers. - Frank
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      • Profile picture of the author seasoned
        Originally Posted by BigFrank View Post

        Extremely sorry that I overlooked one more subject in which you are an undisputed expert. The list is endless.

        Cheers. - Frank
        I never have to even claim I know a portion of a subject. Others claim I am an expert in them. If only that were money.

        Steve
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        • Profile picture of the author BigFrank
          Banned
          Originally Posted by seasoned View Post

          I never have to even claim I know a portion of a subject. Others claim I am an expert in them. If only that were money.

          Steve
          I thought you had me on ignore? Admit it. You can't live without me. lol

          Cheers. - Frank

          P.S. If your expertise on everything combined was money, you'd have a dollar-fifty-eleven.
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          • Profile picture of the author seasoned
            Originally Posted by BigFrank View Post

            I thought you had me on ignore? Admit it. You can't live without me. lol

            Cheers. - Frank

            P.S. If your expertise on everything combined was money, you'd have a dollar-fifty-eleven.
            NOPE! I just didn't want to put myself outside of whatever you guys were talking about, so I didn't use ignore. as for the 50-11 comment? Interesting! I don't think I've heard that before. ODD

            Steve
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            • Profile picture of the author BigFrank
              Banned
              Originally Posted by seasoned View Post

              NOPE! I just didn't want to put myself outside of whatever you guys were talking about, so I didn't use ignore.
              That's great, Steve. I believe that you'll find your life to be infinitely richer by allowing me to be a part of it. :-)
              as for the 50-11 comment? Interesting! I don't think I've heard that before. ODD Steve
              Well, just keep up the good work. You're well on your way to a nickle-two-ninety-eight.

              Cheers. - Frank
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      • Profile picture of the author seasoned
        Originally Posted by BigFrank View Post

        Extremely sorry that I overlooked one more subject in which you are an undisputed expert. The list is endless.

        Cheers. - Frank
        For the record, I didn't say would, only could. So far, it seems to WANT to go lower. If it DOES stabilize around $13, I might buy it. We'll see. But you can look at the history, and current value, at oanda.com. And the 7/25/2015 is just an approximate estimate based on its current average trajectory.

        You can say I am all wet, but it you listened to the OP, you would have invested, and lost about 70% of your money, so far. If you listened to me, you'd have the money, and be waiting.

        Steve
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        • Profile picture of the author BigFrank
          Banned
          Originally Posted by seasoned View Post

          For the record, I didn't say would, only could. So far, it seems to WANT to go lower. If it DOES stabilize around $13, I might buy it. We'll see. But you can look at the history, and current value, at oanda.com. And the 7/25/2015 is just an approximate estimate based on its current average trajectory.

          You can say I am all wet, but it you listened to the OP, you would have invested, and lost about 70% of your money, so far. If you listened to me, you'd have the money, and be waiting.

          Steve
          Honestly Steve - the only person I listen to for investment advice is the voice of Steve Jobs, from the grave. That dude is 'spot on.'

          On the day that they start referring to it as, iBitcoin - you can count me in.

          Cheers. - Frank
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    • Profile picture of the author danielpbarron
      Originally Posted by seasoned View Post

      It could easily go as low as $13, but let's see.
      It cannot go that low; it costs much more than 13 USD to mine 1 bitcoin. Miners don't work for free, and the hashing power is still hitting all time highs. So take your half-assed economic theories back to wall st, and stop pretending like you know anything about bitcoin.

      P.S.: your spammy back and forth with big frank looks suspiciously like an attempt to bury my informative posts -- the kind of thing USG pays muppets to do in the interest of subverting the truth about bitcoin.
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      • Profile picture of the author BigFrank
        Banned
        Originally Posted by danielpbarron View Post

        It cannot go that low; it costs much more than 13 USD to mine 1 bitcoin. Miners don't work for free, and the hashing power is still hitting all time highs. So take your half-assed economic theories back to wall st, and stop pretending like you know anything about bitcoin.

        P.S.: your spammy back and forth with big frank looks suspiciously like an attempt to bury my informative posts -- the kind of thing USG pays muppets to do in the interest of subverting the truth about bitcoin.
        Greetings Daniel,

        That's funny, but understandable for you to think that way.

        You're rather new here, so are not fully cognizant of the inner workings of the OT. While threads do get hijacked on rare occasion, they have a tendency to get sidetracked, often. Don't take it personally.

        We now return you to our regularly scheduled programming on the scam that is Bitcoin.

        Cheers. - Frank
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      • Profile picture of the author sbucciarel
        Banned
        Originally Posted by danielpbarron View Post

        It cannot go that low; it costs much more than 13 USD to mine 1 bitcoin. Miners don't work for free, and the hashing power is still hitting all time highs. So take your half-assed economic theories back to wall st, and stop pretending like you know anything about bitcoin.

        P.S.: your spammy back and forth with big frank looks suspiciously like an attempt to bury my informative posts -- the kind of thing USG pays muppets to do in the interest of subverting the truth about bitcoin.
        Apparently, you don't know people here or where exactly you are. This is Off Topic and we don't really consider your posts to be all that informative and any thread that doesn't completely derail, go off topic and become totally worthless is not a good fit for Off Topic. So get ready for the ride or take your "informative posts" to where they will be truly appreciated for the gems that they are.

        Yeah, we get it. You're a Bitcoin Aficionado. Yada yada yada.
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        • Profile picture of the author Steve B
          This is how Joe's WSJ article begins . . .
          "About a half-billion dollars worth of it vanished from an online exchange in Tokyo. A prosecutor in Manhattan arrested the 24-year-old vice chairman of its most prominent trading body on drug-related charges of money laundering. Its founder's identity remains a mystery, and last year, it shed two-thirds of its value, losing an additional 44% in just the first two weeks of January. In his year-end letter to investors, Warren Buffett's advice about it was emphatic: 'Stay away.'"
          Sounds like a wonderful investment to me . . .

          Bit-Coin is pure speculation. Like other similar fads, a few of the early adopters will make a killing at the expense of all the masses that dream of easy riches. There may come a day in the future when an alternative currency can work . . . but Bit-Coin today is not that vehicle.

          Steve
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          SteveBrowneDirect

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          • Profile picture of the author danielpbarron
            Originally Posted by Steve B View Post

            This is how Joe's WSJ article begins . . .
            "About a half-billion dollars worth of it vanished from an online exchange in Tokyo. A prosecutor in Manhattan arrested the 24-year-old vice chairman of its most prominent trading body on drug-related charges of money laundering. Its founder's identity remains a mystery, and last year, it shed two-thirds of its value, losing an additional 44% in just the first two weeks of January. In his year-end letter to investors, Warren Buffett's advice about it was emphatic: 'Stay away.'"
            Sounds like a wonderful investment to me . . .
            Sure, the scams get all the news. The fall of Mt. Gox was predicted, and it will not be missed.

            Originally Posted by seasoned View Post

            You seriously think the cost of electricity or a slow processor is going to have any bearing on what a person pays for it? So if California decides to charge $1000 a watt for electricity the cost will go up?
            Bitcoin mining isn't done on personal computers anymore, and I doubt much of it goes on in California. If a jurisdiction were to jack up prices, that would just drive mining out of that one particular area. If the cost of electricity throughout the entire world were to go up, then yes bitcoin would also become more expensive. Mining has not gotten less expensive, although it has gotten more efficient. The network readjusts the difficulty every two weeks so that no matter how much more electricity is spent, the same amount of coins will be minted per unit of time.

            I may be a "bitcoin aficionado," but I'm no "pump and dumper." I don't day-trade on the FIAT markets, although I do trade on MPEx And to tie this all together, the owner of MPEx predicted in 2012 that his exchange was worth more than Mt. Gox. That sounded totally insane at the time, and now in retrospect makes perfect sense.
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            • Profile picture of the author seasoned
              Originally Posted by danielpbarron View Post

              Sure, the scams get all the news. The fall of Mt. Gox was predicted, and it will not be missed.



              Bitcoin mining isn't done on personal computers anymore, and I doubt much of it goes on in California. If a jurisdiction were to jack up prices, that would just drive mining out of that one particular area. If the cost of electricity throughout the entire world were to go up, then yes bitcoin would also become more expensive. Mining has not gotten less expensive, although it has gotten more efficient. The network readjusts the difficulty every two weeks so that no matter how much more electricity is spent, the same amount of coins will be minted per unit of time.
              Call it what you want! APU, CPU, GPU, ASIC etc.... It processes! STILL, I found some interesting articles! ENJOY!

              Bitcoin Price Decline Sparks Rare Mining Difficulty Drop

              Butterfly Labs Resumes Shipping, Sets Timetable for Refunds

              Dutch Scrypt Mining Company Declared Bankrupt

              OOOOO! That last one is my favorite! HEY WAIT A SECOND! This means the cost is SKYROCKETING! A company may have just thrown 2 MILLION dollars AWAY! That means the cost is going UP! But history, oanda, and that first article say the price is going DOWN! OOOPS! I guess your economic theory needs a little work.

              Steve
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              • Profile picture of the author danielpbarron
                Originally Posted by seasoned View Post

                HEY WAIT A SECOND! This means the cost is SKYROCKETING! A company may have just thrown 2 MILLION dollars AWAY! That means the cost is going UP! But history, oanda, and that first article say the price is going DOWN! OOOPS! I guess your economic theory needs a little work.
                Your links are all from Coindesk, which is a news outlet like a prostitute is a date. Not only that, but the quoted headlines aren't even relevant to the discussion at hand. For example: the one claiming that hashing rate dropped. Although there were a couple time periods in which the hashing power dropped, the most recent adjustment reflected an all time high. That means it's never been stronger than it is today.

                As for the price, yes it has gone down over the last year, but that is because it was over-valued. Estimates put the cost of mining bitcoin at around 150 to 200 dollars; not a thousand. It should come as no surprise that the price had to come closer to the actual cost of production. I'm taking issue with your argument that the price should continue to decline into the double digit range. This prediction of yours is contrary to the rising mining hash rate. Please try to include more facts, and less sarcasm in your replies; the internet has more than enough of the latter, and not enough of the former. Future readers will thank you.
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      • Profile picture of the author seasoned
        Originally Posted by danielpbarron View Post

        It cannot go that low; it costs much more than 13 USD to mine 1 bitcoin. Miners don't work for free, and the hashing power is still hitting all time highs. So take your half-assed economic theories back to wall st, and stop pretending like you know anything about bitcoin.
        And miners apparently mine diamonds for a pittance. You seriously think the cost of electricity or a slow processor is going to have any bearing on what a person pays for it? So if California decides to charge $1000 a watt for electricity the cost will go up? It didn't work for tangible currency! It doesn't work for stock or bonds. It doesn't work for nails, etc.... WHY should it work for bitcoins?

        BTW It cost MORE earlier, and yet it was then even LESS than $13!

        P.S.: your spammy back and forth with big frank looks suspiciously like an attempt to bury my informative posts -- the kind of thing USG pays muppets to do in the interest of subverting the truth about bitcoin.
        OK, so you are a pump and dumper! I GET IT!

        Steve
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  • Profile picture of the author whateverpedia
    Wow.

    I just realised why Alexa hasn't been around for a while - she's banned. I hope it's a self imposed ban so she can focus on something important.
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    So that blind people can hate them as well.
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  • Profile picture of the author seasoned
    GOLD is selling at a price HIGHER than production. WHY? Because in art, heirlooms, chemistry, electronics, etc... it has VALUE! COINS are being made of cheaper and cheaper things. WHY? Because the value can NOT increase! It has, in fact, gone DOWN, even as the cost has gone UP!
    Do you REALLY think the Zimbabwean currency costs SO much less than the US dollar to make? If so, why are they so poor? I mean their paper, ink, and printing technology must be LIGHT YEARS ahead of ours!

    OK, so maybe you see zimbabwa as a POOR country! FAIR ENOUGH! What about post WWI Germany? They had SIMILAR problems! And you speak of FIAT currency. To listen to you, the US dollar has value merely because it exists. Even if it were merely inkdrops on a paper in a report, it has value. I mean that took EFFORT! Tracking, protecting, storing, recording, printing, etc.... My mother was an accountant. My father spent most of his time with computers doing mainly accounting. Do you think THAT came cheap? NOPE!

    Gold used to cost virtually NOTHING to get! People would pan, or pick, at lunch and get several ounces. It had value, and trying to get large amounts was complicated, so people got a good return on their free time hobby. It was SO popular that when they had a "gold strike" people would FLOCK there! Look at the sutters mill incident! Sutter's Mill - Wikipedia, the free encyclopedia California Gold Rush - Wikipedia, the free encyclopedia When the price went up, it was due primarily to INFLATION, so you wouldn't really care that the value went up, because it wouldn't buy any more, as the prices there ALSO went up.

    Eventually, they came up with EXPENSIVE ways to mine gold. The cost went from FREE to perhaps MILLIONS of dollars. People didn't care, because they used geologist reports, and CURRENT prices to determine risk/reward. Did that drive the price UP? HECK NO! The price tended to DROP, as supply went up. Did it have a floor? NOPE! So what did they do? OFTEN they moved, or SHUT DOWN!

    OK, how does ALL that fit with your idea that the cost of production dictates the value of the currency? The whole idea against FIAT currency is that production cost alone DOES NOT determine value. HECK, cars used to cost MORE in real dollars, and sometimes even in CURRENT dollars, to make. The drawing boards have been LITTERED with great cars that everyone liked and wanted! They were never made SIMPLY because they were too expensive. Even in the 1950s they had homes that even THEN could mostly be created. TODAY, even the craziest things they thought up could be done! They mostly aren't. WHY? TOO EXPENSIVE!

    Steve
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    • Profile picture of the author danielpbarron
      Originally Posted by seasoned View Post

      GOLD is selling at a price HIGHER than production. WHY? Because in art, heirlooms, chemistry, electronics, etc... it has VALUE! COINS are being made of cheaper and cheaper things. WHY? Because the value can NOT increase! It has, in fact, gone DOWN, even as the cost has gone UP!
      Do you REALLY think the Zimbabwean currency costs SO much less than the US dollar to make? If so, why are they so poor? I mean their paper, ink, and printing technology must be LIGHT YEARS ahead of ours!
      Exactly my point. Bitcoin is like digital gold; it has to be mined, and its value relates to the cost of mining and the fact that supply is finite. Bitcoin is not like dollars which have value because armies threaten to kill you if you say otherwise. FIAT currencies like those used by the U.S. and Zimbabwe are problematic for exactly these reasons; the issuing authority has an economic incentive to debase the unit of account by creating an ever increasing supply of notes and coins.

      Originally Posted by seasoned View Post

      Gold used to cost virtually NOTHING to get! People would pan, or pick, at lunch and get several ounces. It had value, and trying to get large amounts was complicated, so people got a good return on their free time hobby.
      This is just wrong. The people who made the most money during the gold rush were those selling the equipment; some people probably got lucky, but most worked hard for very little. Also, the value of gold has not changed much over the course of the several thousand years it has been used as money.

      Originally Posted by Genesis 24

      ...
      22 So it was, when the camels had finished drinking, that the man took a golden nose ring weighing half a shekel, and two bracelets for her wrists weighing ten shekels of gold, 23 and said, "Whose daughter are you? Tell me, please, is there room in your father's house for us to lodge?"
      ...
      52 And it came to pass, when Abraham's servant heard their words, that he worshiped the Lord, bowing himself to the earth. 53 Then the servant brought out jewelry of silver, jewelry of gold, and clothing, and gave them to Rebekah. He also gave precious things to her brother and to her mother.
      ...
      I did a little research on the price of a dowry these days, and in my estimation it's about 30 shekels of gold. So the nose ring and two bracelets plus the other jewelry and clothing seems fairly comparable.

      I couldn't make sense of the rest of your post. That is all.
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      Daniel P. Barron
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