Why is bitcoin deflationary? There is this easy explanation

Anyone think this is possible?

Anyone think this is possible?

Bitcoin hitting $10 trillion market cap is “easily achievable”

Raoul Pal — chief executive of Real Vision and a former Goldman Sachs executive — recently sat down with one of Bitcoin’s earliest public bulls, Max Keiser, to talk about the outlook for cryptocurrencies.
Responding to an inquiry from Keiser regarding Bitcoin’s potential to begin to rival gold, which has approximately a $9 trillion market capitalization.
“If it becomes an ecosystem, and we believe it will be and it will take the whole ecosystem with it as well, then yes, I think a $10 trillion number is easily achievable within that process.”
https://preview.redd.it/rge9cx3go5z41.png?width=824&format=png&auto=webp&s=17d5beef2015d7a67852ee4b3d036aa1371227e3
A $10 trillion market capitalization corresponds with more than $500,000 per coin.

The timelines are accelerating

While Pal held the belief that Bitcoin could skyrocket to trillions long before the COVID-19 outbreak, the ongoing macroeconomic conditions are increasing the chances crypto performs well, he has suggested.
Per previous reports from CryptoSlate, he postulated in the April edition of his research newsletter “Global Macro Investor” that due to the economic and monetary fallout of the COVID-19 outbreak, there’s a genuine risk “of the failure of our very system of money” or at least a collapse of the “current financial architecture.”
Pal has specifically cited a potential deflationary spiral caused by the lack of spending, which he believes will cause the value of the U.S. dollar to shoot up while individuals, corporations, and governments will have to default on their record levels of debt.
submitted by rayd8or178 to Bitcoin [link] [comments]

30+ Reasons Why Cryptocurrencies Are Worthless

1)It is possible to change the code through a miner vote or a fork and change the total supply or anything. DASH did it : they reduced the total supply from 84M to 18.9M a few years ago. They could also increase it to 999 Trillions if they wanted to so that millions of DASH are mined every week.

2)You can also fork bitcoin anytime , start over from 0 and claim it's the real bitcoin. (BCH , BSV , BTG , LTC , BCD etc)

3)Why would you pay $10,000 for a digital collectible unit called BTC when you can use BCH or TRX or LTC .. you name it. They work just as fine and cost less. There is no rarity like in gold.

4)Think of any amount you hold in ethereum as a gift card to use smart contracts on the ETH blockchain. Ridiculous. You’d rather hold a wal mart gift card or even simply cash.

5)Private keys may be bruteforced as we speak. Quintillions entries a second. When they’ll have enough bitcoins under control , they could move them all at once instantly.(At least 45,000 ETH have been stolen this way for now through ethereum bandit)SHA 256 is too old , bitcoin is 10 years old , it is not secure enough , quantum computing could potentially break it.

6)And that’s if people don’t find a way to create an infinite amount of coins to sell on exchanges.. it happened with monero , stellar , bitcoin , zcash , zcoin , eos , etc..

proofs :

“Bitcoin , Coindesk : “The Latest Bitcoin Bug Was So Bad, Developers Kept Its Full Details a Secret”an attacker could have actually used it to create new Bitcoin — above the 21 million hard-cap of coin creation — thereby inflating the supply and devaluing current bitcoins.”

Stellar : “Stellar Inflation: Glitch Leads to 2.25 Billion Extra XLM Printed”

Monero : “A bug in the Monero (XMR) wallet software that could enable fake deposits to exchanges has been recently brought to public attention through a Medium post”

Zcoin : Forged coins were created, but not exceeding 1% of the circulating supply. We will release further details on exact numbers when Sigma is released.

EOS : “Hackers Forge Billion EOS Coins to Steal Real Crypto From DEX “

Zcash : “Zcash Team Reveals It Fixed a Catastrophic Coin Counterfeiting Bug” etc..

7)Segwit , and especially Lightning network is a very complex technology and it will inevitably have flaws , bugs , it will be exploited and people will lose money. That alone can cause bitcoin to drop very low levels.

8)Then miners may be losing millions so they will stop mining , blocks may be so slow , almost no transaction will come though , and bitcoin may not have enough time to reach the next difficulty adjustement. This is reffered to as a death spiral. Then every crypto even those with no mining involved may crash hard.

9)Many crypto wallets are unsafe and have already caused people to lose all their investment , including the infamous “parity wallet”.

10)It is NOT trustless. you have to trust the wallet you’re using is not just generating an address controlled by the developper , you have to trust the node the wallet connects to is an honest node , you have to trust a Rogue state or organization with enough computing power will not 51% attack the network. etc..

11)Bitcoin is NOT deflationary. Bitcoins are created every blocks (roughly every 10 minutes) and you wil be dead by the time we reach the 21 million current hard cap.

12)Bitcoin price may artificially be inflated by Tether.

13)It’s an energy waste , an environmental catastrophy.

14)The only usecases are money laundering , tax evasion , gambling , buying on the dark net , evading sanctions and speculation.

15)Governments will ban it if it gets too big , and they have a big incentive to do so , not only for the obscure usecases but also because it threatens the stability of sovereign currencies. Trump could kill bitcoin with one tweet , force fiat exchanges to cease activity.

16)Most cryptos are scams , the rest are just crazy speculative casino investments.

17)It is pyramidal : early adopters intend to profit massively while last comers get crushed. That's not how money works. The overwhelming majority of crypto holders are buying it because they think they will be able to sell it to a higher price later. Money is supposed to be rather stable. That's why the best cryptocurrencies are USDT USDC etc..

18)The very few stores accepting bitcoin always have the real price in the local currency , not in bitcoin. And prices like 0.00456329 BTC are ridiculous !

19)About famous brokers listing bitcoin : they have to meet the demand in order to make money , it doesn't mean they approve it , some even short it (see interactive broker's CEO opinion on bitcoin)

20)People say cash is backed by nothing and losing value slowly , and yes it is very flawed , but there is a whole nation behind it , it's accepted everywhere , you can buy more things with it.

21)Everybody in crypto thinks that there will be a new bullrun and that then , they will sell. But because everybody thinks it will happen , it might not happen. The truth is past performance doesn’t indicate future performance and it is absolutely not guaranteed that there will ever be another bullrun. The markets are unpredictable.

22)Also BTC went from about $0.003 to the price it is today , so don’t think it’s cheap now.

23)There is no recourse if you’re scammed/hacked/made a mistake in the address etc. No chargebacks. But it might be possible to do a rollback (blockchain reorganization) to reverse some transactions. BSV did it.

24)In case of a financial crisis , the speculative assets would crash the most and bitcoin is far from being a non speculative safe heaven ; and governments might ban it to prevent fiat inflation to worsen.

25) Having to write down the private key somewhere or memorize it is a security flaw ! It’s insane to think a system like this will gain mass adoption.

26) The argument saying governments can not ban it because it is decentralized (like they banned drugs) doesn’t work for cryptos. First , drugs are much harder to find and much more expensive and unsafe because of the ban , and people are willing to take the risk because they like it. But if crypto is banned , value will drop too much , and if you can’t sell it for fiat without risking jail , goodluck to find a buyer. Fiat exchanges could close. Banks could terminate every crypto related bank account. And maybe then the mining death spiral would happen and kill all cryptos.

27) Crypto doesn’t exist. It’s like buying air. It’s just virtual collectibles generated by a code. Faguzzi, fugazzi, it’s a whazzie, it’s a whoozie.. it’s a.. fairy dust. It doesn’t exist. It’s never landed. It’s no matter, it’s not on the elemental chart. It… it’s not fucking real!

28) Most brilliant guys have come out and said Bitcoin was a scam or worthless. Including Bill Gates , Warren Buffet , The Wolf Of Wall Street…

29) Inflation is necessary for POW , BTC code will have to be changed to bypass the 21M cap or mining will die ! If BTC code is not changed to allow for miners to be paid reasonably , they will cease mining when the bitcoin block reward gets too low.Even monero understood it ,the code will have to be changed to allow for an infinite bitcoin supply (devaluating all current bitcoins) or the hash will decrease and the security of bitcoin will decrease dramatically and be 51% attacked

30) Don’t mix up blockchain and cryptos. Even blockchain is overrated. But when you hear this or that company is going blockchain , it doesn’t mean they support cryptocurrencies.

31) Craig Wright had a bitcoin mining company with Dave Kleinman (he died) and on january 1 2020 he claims he will be able to access the 1.1M BTC/BCH/BTG from the mining trust. He may or may not dump them on the market , he also said BTC had a fatal flaw and that by 2019 there will be no more BTC.

32) Hacks in cryptos are very common and usually massive. Billions of dollars in crypto have been stolen in the last 6 years. In may 2019 Binance was hacked and lost 7,000 BTC (and it’s far from being the biggest crypto hack).

33) Bitcoin was first. It's an ancient technology. Newer blockchains have privacy, smart contracts, distributed apps and more.Bitcoin is our future? Was the Model T the future of the automobile? (John Mc Afee)

34) IOTA investiguating stolen funds on mainnet. IOTA shuts down the whole network to deal with trinity wallet attack.

35) Compared to bitcoin other cryptos work just as fine and don't waste so much energy.

36 ) Everytime miners disagree on the updates it will create another version of bitcoin : problem of governance and legitimacy.

37) Cryptos are only legitimate if they act as a credit for a redeemable asset like USDT or gold backed coins.


While the native language of the writter is not english , I think you get the point and it doesn't make it any less relevant.
submitted by OverTheRedHills to u/OverTheRedHills [link] [comments]

Please stop comparing Bitcoin to fiat

I am getting tired of repeating myself so here's to hoping I can reach a broader audience assuming this doesn't get downvoted into oblivion.
If you read articles like this- https://medium.com/@vijayboyapati/the-bullish-case-for-bitcoin-6ecc8bdecc1
You are fundamentally misunderstanding money.
The entire purpose of money is to facilitate trade. It is not desired to be an asset that appreciates in value.
If money continued to increase in value over time, people would spend less of it. This would lead to less active markets (higher volatility). Business incomes would decline ( layoffs unemployment goes up) as people decide to spend less because their money will be worth more tomorrow. Consumption goes down, revenues decline, companies go out of business, unemployment goes up and up and we end up in a deflationary spiral that is unstoppable. This eventually leads to a depression, bread lines, nationalization of industry, and war. Yes, War.
It is NOT DESIRABLE for money to increase in value. We want people to spend money. Constantly. Keep those markets going. More trade. More trade. Buy bonds, buy stocks, buy fuckin candy bars, whatever, just spend your money. Keep trade going. That is the entire purpose of money - to facilitate fucking trade. This is why we have an inflationary system. To encourage spending money - to encourage trade.
Yet here we are. In the HODLverse where everyone thinks that it's a good idea to have money that continually increases in value while they chant "HODL" which is literally what I just described - a massive decline in trade.
Bitcoin is a commodity. It is an investment. Like gold, or oil, or muni bonds, or treasuries, or a million other things. Those are the comparisons you should make.
submitted by mobile-user-guy to Bitcoin [link] [comments]

TOP 20 Reasons Why Cryptocurrencies Are Worthless

https://medium.com/@quizas_869/20-reasons-why-cryptocurrencies-are-worthless-b38f34e4d6b3

1)Private keys are being bruteforced as we speak. Quintillions entries a second. When they’ll have enough bitcoins under control , they can move them all at once instantly.(At least 45,000 ETH are known to have been stolen this way for now through ethereum bandit)SHA 256 is too old , bitcoin is 10 years old , it is not secure enough , quantum computing can break it.
2)It is possible to change the code anytime and change the total supply or anything. DASH did it : they reduced the total supply from 84M to 18.9M a few years ago. They could also increase it to 999 Trillions if they wanted to so that millions of DASH are mined every week.
3)You can also fork bitcoin anytime and start over the pyramid scheme from 0. (BCH , BSV , BTG , LTC , BCD ETC etc)
4)And that’s if people don’t find a way to create an infinite amount of coins to sell on exchanges.. it happened with monero , stellar , bitcoin , zcash , zcoin , eos , etc..
proofs :
“Bitcoin , Coindesk : “The Latest Bitcoin Bug Was So Bad, Developers Kept Its Full Details a Secret”an attacker could have actually used it to create new Bitcoin — above the 21 million hard-cap of coin creation — thereby inflating the supply and devaluing current bitcoins.”
Stellar : “Stellar Inflation: Glitch Leads to 2.25 Billion Extra XLM Printed”
Monero : “A bug in the Monero (XMR) wallet software that could enable fake deposits to exchanges has been recently brought to public attention through a Medium post”
Zcoin : Forged coins were created, but not exceeding 1% of the circulating supply. We will release further details on exact numbers when Sigma is released.
EOS : “Hackers Forge Billion EOS Coins to Steal Real Crypto From DEX “
Zcash : “Zcash Team Reveals It Fixed a Catastrophic Coin Counterfeiting Bug” etc..
5)Segwit , and especially Lightning network is a very complex technology and it will inevitably have flaws , bugs , it will be exploited and people will lose money. That alone can cause bitcoin to drop very low levels.
6)Then miners will be losing millions everyday so they will stop mining , blocks will be so slow , almost no transaction will come though , and bitcoin will probably not have enough time to reach the next difficulty adjustement. This is reffered to as a death spiral. Then every crypto even those with no mining involved will crash hard.
7)Many crypto wallets are unsafe and have already caused people to lose all their investment , including the infamous “parity wallet”
8)It is NOT trustless. you have to trust the wallet you’re using is not just generating an address controlled by the developper , you have to trust the node the wallet connects to is an honest node , you have to trust a Rogue state or organization with enough computing power will not 51% attack the network. etc..
9)Bitcoin is NOT deflationary. Bitcoins are created every blocks (roughly every 10 minutes) and you wil be dead by the time we reach the 21 million current hard cap.
10)Bitcoin price is artificially inflated by Tether
Other major non-technical problems :
11)It’s an energy waste , an environmental catastrophy
12)The only usecases are money laundering , tax evasion , gambling , buying on the dark net , evading sanctions and speculation.
13)Governements will ban it if it gets too big , and they have a big incentive to do so , not only for the obscure usecases but also because it threatens the stability of sovereign currencies. Trump could kill bitcoin with one tweet , force fiat exchanges to cease activity.
14)Most cryptos are scams , the rest are just crazy speculative casino investments
15)Think of any amount you hold in ethereum as a gift card to use smart contracts on the ETH blockchain. Ridiculous. You’d rather hold a wal mart gift card or even better simply cash.
16)It is pyramidal : early adopters intend to profit massively while last comers get crushed.
17)The very few stores accepting bitcoin always have the real price in the local currency , not in bitcoin. And prices like 0.004563298 BTC are ridiculous !
18)About famous brokers listing bitcoin : they only want to give people an opportunity to short it , and make money on it as brokers do.
19)People say cash is backed by nothing and losing value slowly , and yes it is very flawed , but there is a whole nation behind it. The governement the police the taxes etc. Cryptos are so much worse it’s printed out of thin air we could change the algorythm of bitcoin to instantly mint an infinite amount of bitcoin , it is technically possible..
20)Everybody in crypto think they’re smart traders and that there will be a new bullrun and that then , they will sell. But because everybody thinks it will happen , it won’t. The truth is past performance doesn’t indicate future performance and it is absolutely not guaranteed that there will ever be another bullrun.
21)Also BTC went from about $0.003 to the price it is today , so don’t think it’s cheap now.
22)There is no recourse if you’re scammed/hacked/made a mistake in the address etc. No chargebacks
23)In case of a financial crisis , the speculative assets would crash the most and bitcoin is far from being a non speculative safe heaven ; and governements might ban it to prevent fiat inflation to worsen. If prices would rise , whales stuck with cryptos would dump and cause an immediate huge drop.
24) Having to write down the private key somewhere or memorize it is a security flaw ! It’s insane to think a system like this will gain mass adoption.
25) The argument saying governements can not ban it because it is decentralized (like they banned drugs) doesn’t work for cryptos. First , drugs are much harder to find and much more expensive and unsafe because of the ban , and people are willing to take the risk because drugs are probably the best feeling in the world , but cryptos are nothing it’s all virtual. If crypto is banned , value will drop too much , you can’t sell it for fiat without risking jail , and goodluck to find a buyer. Fiat exchanges could close. Banks could terminate every crypto related bank account. And maybe then the mining death spiral would happen and kill all cryptos.
26) Crypto doesn’t exist. It’s all virtual. It’s like buying air. It’s just virtual collectibles generated by a code.
27)The overwhelming majority of crypto holders are buying it because they think they will be able to sell it to a higher price later. This is clearly the greater fool theory.
updating..
submitted by OverTheRedHills to zec [link] [comments]

Inflation Vs. Deflation in relation to currencies and their history!

Let me start of by stating that I am a big believer that BTC will stand the test of time,however,the issue I am having is the ability to envision how that future will play out.Allow me to share my conundrum and I would appreciate any feedback or opinions on this matter.
When one looks at the history of money one can notice that every single one of them withoit exception is inflationary.From seashells to gold.The more valuable they become the more incemtives there are for people to either mine(in the case of gold) or simply provide resources to find them(in the case of seashells).Eventually,you will get to one of 2 points.Either an equilibrium between supply and demand is reached causing price stability or the currency proves itself to be unreliable due to high inflation(the supply of seashells is too unpredictable to be able to properly value it).Now comes Bitcoin where the laws of supply and demand is turned upside down.It doesnt matter how much demand there is,the supply will continuously decline as time goes by.The block rewards are set and it is expected to continue to decline.The Hashrate climbing only indicates the competition to mine and the rewards are set no matter what.So how can BTC ever reach a point of equilibrium in order for it to be a stable mean of transacting?I have seen articles with estimates of 1 to 100 million $,however,even at those levels,what can provide the counter weight to the deflationary character of BTC to prevent it from becoming so high that its use case becomes limited to people HODLING it forever.This argument can also apply to many other cryptocurrencies and I have yet to see a rational reasoning as to why BTC will not remain in a deflationary spiral forever.
submitted by Housam_jarrar to Bitcoin [link] [comments]

TOP 20+ Reasons Why Cryptocurrencies Are Worthless

-Private keys are being bruteforced as we speak. Thousands of quadrillions entries a second. When they'll have enough bitcoins under control , they can move them all at once instantly. (At least 45,000 ETH are known to have been stolen this way for now through ethereum bandit) Quantum computing is coming. bitcoin is using SHA 256. It's pretty old , it was already old in 2009 , it will be broken.
-It is possible to change the code of a crypto anytime to change the total supply or anything really. DASH did it : they reduced the total supply to 18.9M from 84M when it wasn't called DASH yet. They could also increase it to 999 Trillions if they wanted to so that millions of DASH are mined every week.
-You can also fork bitcoin anytime and start over the scheme from 0. (BCH , BSV , BTG , LTC , BCD ETC etc)
-And that's if people don't find a way to create an infinite amount of coins to sell on exchanges.. it happened with monero , stellar , bitcoin , zcash , zcoin , eos , etc proofs :
"Coindesk : "The Latest Bitcoin Bug Was So Bad, Developers Kept Its Full Details a Secret"an attacker could have actually used it to create new Bitcoin – above the 21 million hard-cap of coin creation – thereby inflating the supply and devaluing current bitcoins."
Stellar : "Stellar Inflation: Glitch Leads to 2.25 Billion Extra XLM Printed"
Monero : "A bug in the Monero (XMR) wallet software that could enable fake deposits to exchanges has been recently brought to public attention through a Medium post"
Zcoin : Forged coins were created, but not exceeding 1% of the circulating supply. We will release further details on exact numbers when Sigma is released.
EOS : "Hackers Forge Billion EOS Coins to Steal Real Crypto From DEX "
Zcash : "Zcash Team Reveals It Fixed a Catastrophic Coin Counterfeiting Bug" etc..
-Segwit , and especially Lightning network is a very complex technology and it will inevitably have flaws , bugs , it will be exploited and people will lose money. That alone can cause bitcoin to drop very low levels.
Then miners will be losing millions everyday so they will stop mining , blocks will be so slow , almost no transaction will come though , and bitcoin will probably not have enough time to reach the next difficulty adjustement. This is reffered to as a death spiral. Then every crypto even those with no mining involved will crash hard.
-Many crypto wallets are unsafe and have already caused people to lose all their investment , including the infamous "parity wallet"
-It is NOT trustless. you have to trust the wallet you're using is not just generating an address controlled by the developper , you have to trust the node the wallet connects to is an honest node , you have to trust a Rogue state or organization with enough computing power will not 51% attack the network. etc..
-Bitcoin is NOT deflationary. Bitcoins are created every blocks (roughly 10 minutes) and you wil be dead by the time we reach the 21 million current hard cap.
Other major non-technical problems :
-Bitcoin price is artificially inflated by Tether
-It's an energy waste , an environmental catastrophy
-The only usecases are money laundering , tax evasion , gambling , buying on the dark net , evading sanctions and speculation.
-Governements will ban it if it gets too big , and they have a big incentive to do so , not only for the obscure usecases but also because it threatens the stability of sovereign currencies.
-Most cryptos are scams , the rest are just crazy speculative casino investments
-Think of any amount you hold in ethereum as a gift card to use smart contracts on the ETH blockchain. Ridiculous. You'd rather hold a wal mart gift card or even better simply cash.
-It is pyramidal : early adopters intend to profit massively while last comers get crushed.
-The very few stores accepting bitcoin always have the real price in $ , not in bitcoin.
-About famous brokers listing bitcoin : they only want to give people an opportunity to short it , and make money on it as brokers do.
People say cash is backed by nothing and losing value slowly , and yes it is very flawed , but there is a whole nation behind it. The governement the police the taxes etc. Cryptos are so much worse it's printed out of thin air we could change the algorythm of bitcoin to instantly mint an infinite amount of bitcoin , it is technically possible..
-Everybody in crypto think they're smart traders and that there will be a new bullrun and that then , they will sell. But because everybody thinks it will happen , it won't. The truth is past performance doesn't indicate future performance and it is absolutely not guaranteed that there will ever be another bullrun.
-There is no recourse if you're scammed/hacked/made a mistake in the address etc. No chargebacks
-In case of a financial crisis , the speculative assets would crash the most and bitcoin is far from being a non speculative safe heaven ; and governements might ban it to prevent fiat inflation to worsen. If prices would rise , whales stuck with cryptos would dump and cause an immediate huge drop.
submitted by OverTheRedHills to eos [link] [comments]

[Article] Debunking the theory that a "deflationary" currency cannot be the basis of a functioning economy

Many economists argue that a low level of inflation (approx 1-2%) is required in order to maintain a productive and functioning economy. This is evidenced in the fact that most central banks have low level inflation as a target of their monetary policy objectives: The European Central Bank, Bank of England, and the Federal Reserve to name a few [1].
As a result, detractors of bitcoin say that it can never become a currency as it is deflationary in nature [2]. That is, there will only ever be 21 million bitcoin in existence. This means that over time once all of these coins are in circulation, there will be no new supply of bitcoin, and so any demand increase will result in a price increase. Currently there is around 4.3% annual inflation of Bitcoin's supply [3], and by 2028 that is projected to fall to below 1% [4]. Furthermore, if the anonymous 'Satoshi' has truly vanished then there are another 1M coins out of circulation [5]; and some studies suggest the total number of lost bitcoin is nearing 3M coins [6], a number that can only increase over time.
Due to these 'missing' bitcoins, the supply of Bitcoin will become increasingly scarce, and so their value is expected to rise given a constant or increasing level of demand. This means that goods and services will fall relative to their bitcoin valuation, resulting in deflation (deflation = the price level of goods & services in an economy decreasing). The traditional argument then goes as follows: due to goods & services becoming cheaper over time, saving is incentivized. After all, why would one buy a car for 1000 bits when it can be purchased for 998 bits tomorrow? A common example people point to as evidence for this is the infamous 10,000 BTC pizza purchase in 2010 which at today's valuation costs 100M USD [7].
However, this argument against bitcoin as a currency is flawed on two levels.
(1) When pointing to examples such as the pizza purchase, or the rapid increase in bitcoin's value, people are misattributing the cause of the deflation by assuming it is to do with bitcoins supply. In fact, in the years since the pizza purchase, the total supply of bitcoin has increased from 3 million BTC to 16 million BTC. This is a more inflationary supply increase than even the USD over the same period of time [8]. The real causes of bitcoin's price increase (and thus deflationary properties) in this period can be attributed to the parabolic nature of adoption that bitcoin has seen since its creation [9]. When looking at the practical nature of bitcoin as a world currency, and then drawing stats from the coin in its infancy, you are committing the fallacy of false equivalency [10] as the evidence presented is from a period of increasing adoption while a global currency would imply full or near full adoption. At the 'early adopters' stage we will see major +/- % fluctuations regularly, however if worldwide adoption was to be achieved then these value changes would be far smaller and much less significant. For example, the dollar, the world reserve currency, fluctuates on average by 92 pips in a day (1 pip = 0.0001 USD). Applying this same level of stability to a mass adopted bitcoin, and we see that the price fluctuations would become far smaller and less significant the greater the capitalization of the currency. Thus, in order to assess the viability of bitcoin as a world currency, one must start with a situation where bitcoin is a world currency in the first place.
(2) The second flaw of this argument is to assume that deflation will always lead to a deflationary spiral and thus collapse of the economy. With this same logic, one could argue that inflation will always lead to an inflationary spiral and thus an economy collapse as people see price levels rising, and thus are incentivized to spend their money NOW before they increase any further. This then leads prices to rise further and the effect to spiral out of control. CLEARLY though we can see that inflation does not always lead to an inflationary spiral as all western economies operate on an inflationary model. And thus to try use this logic that is empirically flawed as an argument of deflation is self defeating: Levels of inflation will not always lead to inflationary spirals, and levels of deflation will not always lead to deflationary spirals. It is this excessive quantity of inflation or deflation that will result in a spiral, not the attributes of inflation or deflation in isolation.
In the same way that 1-2% inflation per year is small enough to not trigger an inflationary spiral of panic, a small amount of deflation on a yearly basis would not trigger this deflationary spiral. In fact, we have evidence to support this claim. In the UK over the period of 1983-2006 we had interests rates that were higher than the rate of inflation [11], this would mean that consumers are incentivized to save instead of spend as they would have greater purchasing power in the future(i.e. there is deflationary pressure), yet we did not see an economic meltdown during these times. What we actually saw over this time period was a DECREASE in the savings ratio of the average UK household [12], from around 15% of income to just under 10% despite the fact that any money saved would have compounded 5% more inflation adjusted purchasing power per annum. At first this might seem to be irrational behavior but there are some speculative reasons as to why this was the case. One theory suggests that consumers do not notice inflationary or deflationary pressures in small quantities and thus do not make economic decisions based on them. Another one would say that despite the deflationary pressures, there are some purchases that are necessary and therefore cannot be delayed. i.e. the supermarket shop might be a small % cheaper in 1 years time, but it is necessary to do it now in order to survive. Finally, it can also be argued that as deflationary pressures make consumers feel wealthier, they are more inclined to go out and spend this wealth, thus decreasing their savings rate.
The arguments presented above show that perhaps Keynesian economic thinking is too narrow, and that an economy can be run on the back of a currency with deflationary pressures as these pressures in the right quantity will not result in a deflationary spiral, and have the advantage of not eroding the wealth of the population in a way that benefits the wealthy and hinders the poor (see: threshold effects of inflation for more information on this matter). While this article has argued that a deflationary currency can run an economy, it is a topic of future article to discuss which model of the economy is preferable.
Till next time,
Logical Crypto
Sources:
[1] https://en.wikipedia.org/wiki/Inflation_targeting#Summary
[2] https://www.theatlantic.com/business/archive/2013/12/why-bitcoin-will-never-be-a-currency-in-2-charts/282364/
[3] https://charts.bitcoin.com/chart/inflation#lf
[4] https://cointelegraph.com/storage/uploads/view/1d067f3721f10f0a76439de9860a4e54.png
[5] https://qz.com/1107843/bitcoins-btc-new-record-price-of-6000-means-satoshi-nakamoto-is-worth-5-9-billion/
[6] http://uk.businessinsider.com/nearly-4-million-bitcoins-have-been-lost-forever-study-says-2017-11
[7] https://en.bitcoin.it/wiki/Laszlo_Hanyecz
[8] https://upload.wikimedia.org/wikipedia/en/5/58/MB%2C_M1_and_M2_aggregates_from_1981_to_2012.png
[9] https://blockchain.info/charts/n-transactions-total?timespan=all
[10] https://en.wikipedia.org/wiki/False_equivalence
[11] https://www.economicshelp.org/wp-content/uploads/2012/01/inflation-interest-rates-1945-2011.png
[12] https://tradingeconomics.com/united-kingdom/personal-savings
submitted by LogicalCrypto to btc [link] [comments]

What's Holding Bitcoin Back

I've previously posted some of my writings here and garnered a positive response. Since then I've abandoned steemit and created a dedicated website dubbed graspbitcoin.tech that ventures to explain how bitcoin will change the world. Included below is the full text of the 3rd article in this series, but there are already a number of other post on my site that go further. This information is geared towards the general public and may seem largely like review to this community.

What’s Holding Bitcoin Back

Money should be a good store of value, medium of exchange, and unit of account. There are a lot of barriers preventing bitcoin’s widespread use by the aforementioned criteria, let’s take a look and see how they might be solved.

Lack of Understanding

Bitcoin is complicated and unfamiliar. This is a huge barrier to entry because people distrust what they don’t understand, and ease-of-use and simplicity is what usually sells a new technology. If you have read this series from the beginning though, you may now see some potential upsides to such a drastically different system than what we are used to. Many resisted smartphones for a time (and a few still do). The benefits have to outweigh the costs of adoption, so we may see niche cases being the early adopters (like citizens of Venezuela or remittances payments). Also, when a new complicated technology rolls around, it sometimes takes a generation before it becomes widespread; young people are particularly adept at adopting new tech.

Volatility

The tendency of bitcoin’s price to change rapidly or unpredictably is what comprises volatility.
When you search for bitcoin you may find that most of the results you get (and the discussions happening on forums) are about it’s price. This is understandable, it has seen some crazy moves both up and down over the years facilitating the potential for huge gains (and huge losses). Still, over time the price certainly is increasing. Unless you bought in a single 2 month period in 2013, holding bitcoin for longer than 2 years at any point in its history would land you in a better position than when you started. And, when viewed on a logarithmic scale (used in long-term stock charts), the trend is quite clear:
(Bitcoin Price 2012-2018, Logarithmic Scale (bitcoincharts.com))
There is a risk/reward to adopting new tech, and this is no exception. But, my goal is absolutely not to “sell” it to you as an investment by any means.

This is not financial advice. We’re simply looking at the pros and cons of this space, and I encourage everyone to do their own research and come to their own conclusions. Never invest anything you aren’t prepared to lose.

This meteoric rising (and crashing) of the “price” (which, I’ll point out, might just as well be considered an exchange rate) understandably makes it pretty difficult to use bitcoin as a currency. If it moves a few percent in a day, and can move a few hundred percent in a month, purchasing a car or a house could cost you significantly more by the time your finished closing. That’s just not viable, and certainly not a good unit of account.
However, I see the volatility in price simply as growing pains. It is the market that dictates the price of bitcoin, quite literally, it’s traded like a stock. This is referred to as speculation (“the purchase of an asset with the hope that it will become more valuable at a future date”). Speculation happens between national currencies already, but they are generally stable in comparison so it’s not lucrative. People are unsure of how this whole bitcoin thing is going to play out. It’s not like anything we’ve ever seen, it’s difficult to understand (and use), and it’s not accepted at every corner store or online business. Many in the space are just here for a quick buck, and they sell it when the price rises to get back “real” money we are used to, that is “stable” in price against other currencies, and can predictably buy goods and services.
The way I see it, all of these will concerns diminish in time.
Though Amazon or Target don’t yet accept bitcoin, Microsoft and Overstock.com do. Some cities and towns across the world are embracing it a lot more than others. It’s not surprising to see San Francisco accommodating the new technology. But, other cities like Portsmouth in New Hampshire with numerous cafes and shops accepting bitcoin (and “Dash coin”) might surprise you. There are maps available to see where crypto-currencies are accepted at locations near you, and the amount of them are increasing, albeit slowly. It’s a bit of a chicken-and-egg situation, but that hasn’t stopped revolutions from happening before.
Consider when cars first came about, roads were dirt and mud which cars didn’t do well with. It took building massive infrastructure before cars could ever become mass-adopted, but we spent the time, money, and effort because we saw the potential advantages. It will be trivial for businesses to accept bitcoin compared with pouring hundreds of millions of dollars in asphalt to connect our world. Other parallels include train tracks, phone lines, electricity lines, communication satellites, etc. Each of these replaced or iterated on previous functional technologies, and required massive upfront costs before the benefits were available. It’s clear now that we made some good choices there but there were doubts at the time.
Despite some pretty major setbacks, bitcoin’s trend is up. Interest is growing and more businesses and individuals are actually using it. But due to the trading mentality, the uncertainty with regulations, uncertainty in the technology itself, uncertainty that the price will not drop, and other factors, emotion and greed encourages people to sell in flocks if the price climbs high enough.
Furthermore, right now with a large enough stack of money one can influence this market in drastic ways, and cries of manipulation of the price are not unfounded. So-called “whales” can buy and sell huge amounts of coins and the price can jump a bit each time. Coupled with uncertainty in the space, and so many “investors” trying to time the markets, we end up with a pretty volatile landscape where the price is not stable. My argument is that this is diminishing as it gains in popularity, and it is gaining value because its utility is growing (see the network effect”) and the utility itself is slowly becoming more apparent.

Volatility is actually decreasing.

Bitcoin Volatility Over Time(bitvol.info)
In the period from 2011 to 2014 bitcoin’s volatility often spikes into the 15% range. But from 2014 to the present, volatility has only just spiked above 7% twice, spending most of it’s time below 5%. Even the large boom and bust in price at the end of 2018 seems tame compared to the early years.
The trends show the price going up over time, and volatility going down. The more actual use the coin has (people saving and buying with bitcoin), the percentage of people entering the space to use it the way it was intended increases, the percentage of “stock traders” declines. And as more capital enters the space, the less influence whales have (because the current against which they swim is getting stronger). And as the price stabilizes, traders will become less interested.
There is a critical point where this becomes a negative feedback loop. I could be wrong, but the idea is at least founded in reality, and it would solve the unit of account issue if the price could stabilize to within a few percent per year.
Similarly, as a store of value, bitcoin becomes more viable in this scenario. This is coupled with the fact that although bitcoin is somewhat inflationary now as the supply is increasing (bitcoins are “discovered” as rewards for mined blocks), the amount of discovered coins are cut in half every few years. This “halving” is logarithmic, meaning eventually the amount of coins discovered is infinitesimally small, and total supply will asymptotically approach 21 million coins (the maximum supply that we will ever see).
This model of supply is actually meant to mimic gold because it’s a well-known store of value and monetary device throughout history (though it is not easily divisible, and not as portable as bitcoin). In both bitcoin and gold, mining is more fruitful in the beginning, and as we extract the low-hanging-fruit, mining requires greater effort and yields less return.
World population is increasing which leads to bitcoin becoming deflationary in the future if demand continues (the supply won’t increase beyond 21 million). And, I argue that it will become more valuable in time due to the network effect as bitcoin use becomes more widespread (the value of being able to exchange with more people anywhere, any time, and without permission from anyone).
This is a positive feedback loop, and shows how bitcoin is deflationary long-term. While deflation is generally considered negative by economists, the main reason is based around debt which isn’t possible in the same way with bitcoin because bitcoins cannot be created out of thin air like fiat currency.
The discussion of deflation vs inflation is an important one, and bitcoin’s monetary policy is an outlier compared with national currencies which are typically inflationary. The US dollar for example averaged 3% inflation since the year 1900. That means that over the last 100 years, a dollar has lost over 95% of its purchasing power. You could buy 95% more stuff with $1,000 last century, or, saving $1,000 from 100 years ago would buy you 95% less stuff at present. Put another way, purchasing power is cut in half after about 25 years, a concern for anyone retiring for over 20 years with a fixed retirement sum.
Some other national currencies have higher inflation rates, and there are numerous cases of inflationary spirals over the years. A few examples include Germany 1923, Hungary 1945, China 1947, Vietnam 1988, Peru 1990, Yugoslavia 1992, Zimbabwe 2008, and right now in Venezuela 2018. Entire countries of people have lost essentially all of their money, and it keeps happening over and over. A wise man would tell you it’s dangerous to say “it could never happen here”.
*UPDATE: Turkey is also now in financial crisis. This is our money with which we hold and exchange value, our earnings, our savings, our livelihoods. Maybe it’s time we had, at least, another option outside of government control. An option that governments can’t destroy through mismanagement. A neutral option that ignores all borders, is open to everyone, and can be accessed anytime from anywhere.

The Fear of “Hacks”

It’s a very real threat to have all your money stolen, if your bank was robbed you are protected by FDIC (in most cases only up to $100,000). The vast majority of coins that have been stolen have come from hackers attacking “exchanges” and getting away with millions. These exchanges are websites where you can trade bitcoin for other crypto-currencies (or “alt-coins”). You can also buy and sell bitcoin on them, and subsequently people end up storing a lot of coins on these exchanges, and the exchanges hold the “private keys” so they can execute trades.
Cryptographic private keys are analogous to a key that opens a door, or, a key that locks a message in a box before it is sent to the recipient. In our case the door opened allows you to sign your message and spend coins, and the message is your transaction on the bitcoin network. Anyone with your private keys can spend your coins. Exchanges are a honey pot of thousands of private keys that represent a lot of money. If a hacker can break into the exchange and steal the keys all at once, their work will pay off.
This is why any crypto guru will advise you not to store large amounts of coins on exchanges, and rather transfer them in your own wallets where you hold the private keys. The mantra is “your keys, your money; not your keys, NOT YOUR MONEY!” Of course your own computer can be hacked, but you are not as big a target as an exchange which may hold vast sums of money. There are also some pretty safe ways to store your coins if done right.
Centralized exchanges are a necessary evil for many people because they facilitate acquiring and trading coins easily. But decentralized exchanges are becoming more common because they allow you to trade while keeping your coins in your control at all times. They need some work and more users, but it’s a promising solution to this problem. Summarizing the above, the big hacks you read about are virtually eliminated if your keys are in your control and you keep them safe.

Fees

Transaction fees are generally negligible in a bitcoin transaction, but in many ways “fees” are holding us back. Interestingly, this is a symptom of being in the very early days.
Firstly, there is a lot of work on “scaling” crypto-currencies (making fees even lower than they already are and increasing transaction speeds). This is just an engineering problem, and many people are working on solving it in many different ways. Other currencies like NANO or IOTA have different underlying tech and have zero fees and instantaneous transactions.
In fact, most fees people encounter aren’t fees from bitcoin transactions; instead, they get hit with fees when exchanging between national currencies and bitcoins. In order to electronically trade USD($), EUR(€), or YEN(¥) with bitcoin, we need to hook into the closed-off for-profit banking network and we need third-parties to do so (and they take their cut).
But even these fees could be avoided in time. For example, you can buy bitcoins with cash directly from a person (localbitoins.com). And, it might seem distant, but in the future you may end up receiving bitcoins as your salary, from a friend, or from accepting them in your place of business. Likewise you can spend your bitcoins directly to other bitcoin users. Getting coins directly eliminates all the exchanging and associated fees because once your money is on the bitcoin network, fees will be negligible (especially as these networks evolve).

Usability

Right now it’s easier than ever to acquire some bitcoin. People can download “Coinbase” or “Square App” on their smartphone and purchase some using a credit card in a few minutes. Depending on which service you use and how much you want to buy, you may need to send a picture of your license for KYC regulations. However, as I mentioned above, there are risks to storing all your coins on exchanges, especially with large amounts. I always recommend transferring them to a wallet where you control the private keys.
But using wallets and storing private keys (and “seeds”) securely, is not as straightforward as we would like. This is a major factor holding back adoption, because if it’s not easy to use, people will consider it too much effort.
The next post in this series digs into wallets and storing your coins.
submitted by mrcoolbp to CryptoTechnology [link] [comments]

CMV: the rise and widespread use of cryptocurrencies will cause an economic depression akin to the 30's Great Depression.

First off, please do not respond to this if you don't understand the basics of monetary policy and how central banks currently use quantitative easing to stabilise the economy.
(in short, central banks buy bonds from big normal banks at advantageous rates in times of economic recession, expanding the money supply in the hope of triggering investment behaviour, fixing the recession. They later sell back the bonds at lower prices, and this is one of the bigger mechanisms that causes fiat inflation)
Now one of the many things bitcoin and its kin pride themselves on, is their deflationary nature. The money supply will be fixed at some point, and the value of the currencies will only increase.
Of course this sounds scarily familiar to the gold standard, which all of the mainstream economists these days agree on is what caused the Great Depression. If holding money becomes more advantageous than investing or spending it, the economy will grind to a halt.
Now the crypto community has proven to be unshakeable on this point. Any crypto that wants to introduce an inflationary model will be rejected (in fact all of the coins, AFAIK, are deflationary.)
If cryptos become widely adopted (and already we see people putting money in bitcoin like in gold), many people will abandon typical savings funds on banks and put their money on the blockchain. This means the banks will be without liquidity to keep the economy going. Central banks will expand fiat money, but who will want it? Can fiat really co-exist next to a superior currency like the cryptos? Or will it just devalue in some hyper-inflationary spiral? Note, crypto is worse than gold, because crypto is made to replace money. It can be spent, it can be invested, it can be effortlessly transferred anywhere.
Which brings us to possible solutions once the next recession does hit.
1. inflationary cryptos.
This is the most likely solution, and we can hope the public will see reason, and adopt measures to inflate an existing blockchain (say bitcoin). Due to the nature of blockchains, this will require widespread approval. Blockchains are decentralized, any change must be approved by the majority.
Why I don't see this working: the blockchain community is extremely stubborn. See here for Dan Larimer's opinion on the matter
Furthermore, because there are multiple cryptos, there is an incredible competition incentive not to be the blockchain that will become inflationary and thus devalued just like fiat.
2. Keynesian mechanics
The government could fix the economy by funding government projects and directly incentivizing businesses with government money. However, this will have to be paid for with fiat money. It requires fiat to have a reasonable value. The gov will of course possess crypto assets as well, but these are limited. The gov cannot create extra money to fund businesses, and will have to rely on tax money or printed fiat.
3. government intervention in crypto
This is the only true solution I see, but equally terrifying for obvious reasons.
This is a footnote from the CMV moderators. We'd like to remind you of a couple of things. Firstly, please read through our rules. If you see a comment that has broken one, it is more effective to report it than downvote it. Speaking of which, downvotes don't change views! Any questions or concerns? Feel free to message us. Happy CMVing!
submitted by divinesleeper to changemyview [link] [comments]

Response to Bitcoin=Deflation=Fail

My grandparents emailed me an article in The Atlantic this morning: http://www.theatlantic.com/business/archive/2013/12/why-bitcoin-will-never-be-a-currency-in-2-charts/282364/
It's another attempt to demonstrate that bitcoin = deflation = fail.
Here's my response to them...
Hey Grandparents,
This is what's known as the "deflationary spiral" argument, and has been hurled at Bitcoin advocates since Bitcoin's inception. The argument is that when people expect their money to be worth more tomorrow, they won't spend it today. On the surface, it makes sense. In reality, it's at best entirely exaggerated, and at worst a complete fallacy.
The deflationary spiral argument has been used by inflationistas (people who believe in endless money printing to achieve prosperity) to justify their horrible central planning and monetary debasement. It is the main argument economists use to denounce gold as money (because gold isn't produced at the same rate as economic growth, thus meaning the value of gold may appreciate relative to goods - similar to Bitcoin). Of course, the fact that 19th century America was on a gold standard and saw its strongest period of wealth creation and economic growth ever hasn't seemed to bother gold's detractors.
Fortunately, now that Bitcoin exists, and exhibits not just deflationary tendencies but MASSIVE deflationary tendencies (it's up 10,000% this year, etc), we have an amazing real world laboratory to see if the deflationary spiral truly is as terrible as alleged.
From what I've seen in Bitcoinland, we can debunk it as a myth. People absolutely spend, even when they think the money will be worth more tomorrow. They may spend less... but that is not a bad thing. It means they spend only on the things they really want, instead of rampant consumption. It makes buyers think twice before buying. This is wise and prudent. It encourages saving, and discourages consumption. Indeed in my own experience, I buy things with Bitcoin all the time... and I KNOW it will be worth more in the future. Am I a fool? Or do I merely realize that money is not wealth - that its only value is in exchanging for real wealth. I need to eat. I need a home. I need a car and clothes and some entertainment. These things are wealth, and so I trade bitcoins for them. I'm just more prudent in how I do it.
Detractors would claim that when people are prudent with their own finances, that this is bad for the economy. I believe the opposite - when people are imprudent with finances, that is when the economy suffers. Of course, imprudence means exaggerated spending today, which boosts GDP figures (because GDP is just a measure of spending). This seems to have tricked most modern economists into thinking that consumption is the cause of economic growth. I disagree. Consumption doesn't drive an economy - it is the result of the economy. Consumption is the reward for production and savings.
Besides... if the deflationary spiral was actually a dire runaway phenomenon, then are the detractors saying that Bitcoin will rise in price forever? If so, why aren't they buying some? And if they aren't sure that it will rise forever, then this defeats their argument, because once it is no longer rising, people would be happy to spend it, thus correcting the deflation problem. Examined carefully, one should realize that to the extent the deflationary spiral exists, it is a self-correcting phenomenon (as are most pricing issues in an open market).
And for a final anecdotal nail in the coffin... last year on Bitcoin Black Friday, BitPay (the largest merchant processor for Bitcoin payments) processed 99 orders globally. This year on Bitcoin Black Friday, despite the fact that Bitcoin rose from $13 to $1000, BitPay processed 6,296 orders globally. I have not seen evidence that "deflation" is hampering growth... in fact, quite the opposite.
-Erik
BitPay article: http://www.washingtonpost.com/blogs/the-switch/wp/2013/12/02/black-friday-set-a-record-for-bitcoin-commerce-bitpay-says/
submitted by evoorhees to Bitcoin [link] [comments]

19 myths about Bitcoin

19 myths about Bitcoin
Let me clarify common misconceptions about Bitcoin.

Myth # 1. It's just something similar to other virtual currencies, nothing new

All other virtual currencies are controlled by their regulatory center.
This means that:

they can be printed on the subjective whims of the currency regulator;
they could be destroyed by an attack on this regulatory center.;
arbitrary rules can be imposed by the currency regulator.
Bitcoins, being initially a decentralized currency, solve all these problems.

Myth # 2. Bitcoins do not solve any problems that gold and/or Fiat money cannot solve

Unlike gold bitcoins:

easy to carry and store;
easy to authenticate.
Unlike Fiat money, bitcoins:

have predictable and decreasing emissions;
not controlled by any regulatory center.
Unlike Fiat electronic money, bitcoins:

can be anonymous (like cash);
there's no way the accounts can be frozen.

Myth # 3. Bitcoins are secured by CPU time

It is incorrect to say that bitcoins are secured by CPU time. When it is said that a currency is "secured" by something, it is meant to be centrally tied to something at the exchange rate. You can not exchange bitcoins for the computing power spent on their generation (it is too high). In this sense, bitcoins are not secured by anything. This is a self-valuable product. Think, unless gold is provided with something? No, it's just gold. It's the same with bitcoins.

Bitcoin currency is created with the use of processor power: the integrity of the block chain is protected from all sorts of attacks by the existence of a large computer network. That's it.

Myth # 4. Bitcoins are worthless because they are not secured by anything

Gold is not secured by anything, but is used and valued everywhere. See the previous myth.

Myth # 5. The value of bitcoins is based on how much electricity and processing power is required to generate them

This myth is an attempt to apply labor value theory to bitcoins, which is not applicable to them and is probably false. Just because something requires X resources to create doesn't mean that the final product will cost X. it can cost more or less X, depending on the usefulness to users.

In fact, there is a broken causal relationship (this applies to the above theory as a whole). The value of bitcoins is based on how valuable they are. If bitcoins rise in price, more people will try to generate them (because bitcoin generation becomes more profitable), this will increase the difficulty of generating, which in turn only leads to the difficulty of mining them. If bitcoins fall in price, then the reverse process occurs. These processes maintain a balance between the cost of generation and the cost of bitcoins generated.

Myth # 6. Bitcoins have no value of their own (unlike some other things)

Many things have their own value, but it is usually well below the market value of the thing. Consider gold: if it were not used as an inflation-resistant value, and used only for industrial purposes, it would not have today's value, since the industrial need for gold is much lower than it is available.

Historical value has helped establish some things as a means of exchange, but it is certainly not a necessary condition. Perhaps bitcoins will not be used as a raw material for industrial purposes, but they have many other useful qualities that are necessary for the means of exchange.

The value of bitcoins is determined solely by people's desire to trade them - supply and demand.

Myth # 7. Bitcoins are illegal because they are not a legal tender

Short answer: chickens are not a legal tender, but bartering with chickens is not illegal.

There are many currencies that are not legal tender. Currency, after all, is just a convenient unit of account. Although national laws may vary from country to country (you should definitely check the laws of your state), in General - trading with any commodity exchange, including digital goods (e.g.: bitcoins, virtual worlds second Life or WoW game currencies), is not illegal.

Myth # 8. Bitcoins are a form of domestic terrorism because they only harm the economic stability of the state and the state currency

Read the relevant Wikipedia article. Action will not be considered terrorism if it is not violent. Bitcoins are not imposed on anyone with violence, so they are not terrorism.

Also, bitcoins are not "internal". It's a worldwide product. Look at the auto-generated node map.

Myth # 9. Bitcoins will only facilitate tax evasion, which will lead to a possible fall of civilization

It's up to you whether you follow the laws of the country or face the consequences of breaking the laws.

Myth # 10. Bitcoins can print/mint everyone, therefore they're useless

To generate coins requires significant computing power, in addition, over time, all the coins will be generated.

Myth # 11. Bitcoins are useless because they are based on unverified / unproven cryptography

The Sha-256 and ECDSA algorithms that are used in the #Bitcoin program are well-known industrial encryption standards.

Myth # 12. First bitcoin users are unfairly rewarded

The first users were rewarded for taking on a higher risk of losing their time and money.

From a more pragmatic point of view, the term "equity" is a conditional concept, making it unlikely to be agreed upon by a large number of people. Establishing "fairness" is not the goal of the Bitcoin project, as it would be simply impossible.

The vast majority of the 21 million bitcoins still haven't been distributed among people. If you start generating or purchasing bitcoins today, you can become one of the "first users"yourself.

Myth # 13. 21 million coins is not enough, it is not commensurate with the needs of mankind

In fact, the Bitcoin project will exist 2099999997690000 (just over two quadrillions) of the maximum possible indivisible units.

One bitcoin is 100 million (one hundred million) of them. In other words, each bitcoin can be divided into 10^8 parts.

If the value of bitcoins rises too much, then people for convenience can start working with smaller pieces such as Milli-bitcoins (mBTC) and micro-bitcoins (µbtc). However, it is possible and denomination with coefficients 1:10, 1: 100 and so on.

Myth # 14. Bitcoins are stored in wallet files, just copy the wallet and get more coins!

No, Your wallet file contains secret private keys that give you the right to dispose of your bitcoins. Imagine that you have a key issued by your Bank to manage your account. If you give it to someone else, it will not increase the funds in your Bank account. The funds will be spent either by You or by this third party.

Myth # 15. Lost coins cannot be replaced, which is bad

The minimum bitcoin unit is 0.00000001, so this is not a problem. If you lose coins, all other coins will rise in price a little. Consider this a donation to all other bitcoin users.

There is a related question (and the answer to it).

Why is there no mechanism to replace lost coins?
It is impossible to distinguish between the lost coin and the one that is simply not used at the moment and waiting in someone's purse of his time to be useful.

Myth # 16. It's a giant pyramid scheme.

In financial pyramids (see Ponzi scheme and MMM), the founders convince investors that they will be in profit. Bitcoins do not give such guarantees. There is no regulatory center, there is just a group of people who are building a new economy.

However, one should not confuse bitcoins by themselves with various projects on the Internet, which can accept bitcoins as a contribution and be financial pyramids.

Myth # 17. Limited emissions and lost coins generate a deflationary spiral

Both deflationary forces can manifest themselves, and economic factors such as hoarding counteract the human factor, which can reduce the chances of a deflationary spiral.

Myth # 18. The idea of bitcoin may not work because there is no way to control inflation

Inflation is simply an increase in prices over time, which is usually a consequence of currency depreciation. It is a function of supply and demand. Given the fact that the supply of bitcoins is fixed (due to the peculiarities of their issue), unlike Fiat money, the only way out of control of inflation is the disappearance of demand for bitcoins.

It should also be taken into account that bitcoins are a currency with a predictable decentralized issue. If demand falls to almost zero, then bitcoins will be doomed in any case. However, it is unlikely that this can actually happen.

The key point here is that bitcoins cannot be impaired by a sharp increase in inflation by any person, organization or government, since there is no way to increase the supply too much due to the peculiarities of the issue.

In fact, a more likely scenario is an increase in demand for bitcoins due to the growing popularity, which should lead to a constant increase in the exchange rate and deflation.

Myth # 19. Bitcoin community is anarchists, conspiracy theorists, supporters of the gold standard and geeks

Confirm. However, it is necessary to consider that it is only a part of all color of community.
https://preview.redd.it/qkk7hybryqg21.jpg?width=1980&format=pjpg&auto=webp&s=a373d5483cc87c1e2c651ff864fc324273fa3f08
submitted by trip2crypto to u/trip2crypto [link] [comments]

Dan Hedl Breaks Down Bitcoin.

1/ The Bitcoin (double) Standard
A deep dive into the cognitive dissonance of nocoiners, and the ridiculous double standard they have for Bitcoin. Thread 👇
2/ Manipulation
Over the last decade, banks globally have been fined with more than $200 billion in penalties, following investigations into manipulation of various markets/instruments: FX, metals, LIBOR, etc. Those cumulative fines are 2x the current total crypto market cap.
3/ Intrinsic Value
Complaining it has no intrinsic value when their primary currency has absolutely no intrinsic value.
“Bitcoin units have no intrinsic value… the U.S. dollar, the euro, and the Swiss franc, have no intrinsic value either.”
https://t.co/bssEa3U3S5
4/ Money Laundering
Approximately $2T a year globally is laundered, Americans spend $100B on drugs annually, Crypto market cap is $109B as of this tweet storm.
“Cryptocurrency [represent a] “low risk” for money laundering and terrorist financing activities... according to FATF
5/ Complexity
Consumers don’t understand how their existing financial system works, nor their cell phone, microwave, etc. There is minimal new training needed for them to be literate/enjoy basic interactions, just like any new technology in their life.
6/ Volatility
The only constant in markets is volatility. No one says “Gold isn’t a good SoV because the price fluctuates” but we hear that all the time with #bitcoin. What did you expect with a new emerging sound money? It certainly wasn’t going to be a linear price path.
7/ Energy Consumption
🚨 Electricity police! 🚨
Complaining about energy consumption, without first comparing it to the energy consumption of gold mining, the financial system, government, courts, military, selfies, or watching the Kardashians.
https://t.co/4ONTBlKRrA
8/ Monetary Policy
Worried about deflationary spirals when they most they’ve spent studying deflation is the 15 second dismissal argument from their econ 101 professor
9/ Control
Worries that it was created by an anonymous “hacker” vs highly flawed founding individuals of their government/financial system. Worries that no one “controls” the monetary policy vs a group of old white men they can’t even name
10/ FUD
What all of this FUD represents is the magnitude change Bitcoin brings. Any new technology evokes FUD, which is proportional to the impact it will have on the world. Humans don’t like change, FUD is a representation of the change that a new technology rings.
11/ History rhymes
When the bicycle debuted in 1800s, it was blamed for all sorts of problems—from turning people insane to destroying women’s morals
In the future, we’ll look at these double standards as we do now with bicycle objections: with laughter https://t.co/hTrn2xpnqx
submitted by Kashpantz to Bitcoin [link] [comments]

Of Wolves and Weasels - Day 187 - Guest Post: Confessions of a Bitcoiner

Hey all! GoodShibe... on Summer Vacation!
Please enjoy this post by Guest Writer Justlite and tip them well ;D)
Note: To tip them directly:
+dogetipbot @Justlite xxx doge verify
I've been part of this Dogecoin community since early January and I have to say the people here constantly amaze me. For me Dogecoin and this community is the future of cryptocurrency and I'm speaking as a long time Bitcoiner. Over a month ago I explained in a previous post why I believe Dogecoin price will rise again and correctly predicted Bitcoin to rise substantially shortly after my post against in the face of several counter arguments late last year. My thoughts have not changed on Dogecoin but I feel it's worth giving my experience on cryptocurrencies as a Bitcoiner in the early days of 2010-13 and how that compares with Dogecoin.
I bought Bitcoin and Litecoin in the early days and I can tell you the Bitcoin community back then was hopeful, cheerful and very welcoming...forgive us right now we are at the fighting stage with the established status quo wants to knock Bitcoin down.
In the early days we were only known for CPU/GPU mining discussions and tipping one another after each comment. In fact Bitcoin was only ever used to tip and trade but not to buy anything since we didn't have anything available for Bitcoin. We were very brave I mean wiring money to a company in Japan and getting these online things called Bitcoin which doesn't buy anything?!
Back then Bitcoin fans were seen as weird and Bitcoin as a complete joke we were idealist and we still are. Many of the people that fought us then were actually the libertarian precious metals community and because gold and silver were tangible and has been money for 5000 years Bitcoin wasn't and was barely a year old. It's hard to argue with them, after all some guy that called himself Satoshi Nakamoto, the Japanese equivalent of Jack Smith, created it but left after a year and no one saw how he looks like.
We could understand their concerns, a lot of early Bitcoiners like me also have gold and silver in the belief it will protect our wealth from the next financial collapse. But Bitcoin was created for this purpose too, no more will the 1% have economic power over the 99%, "1 CPU - 1 vote" said Satoshi in his white paper. We are also in the digital era and with all the success the internet is nowadays there still was no internet currency without the excessive charges of credit card companies.
Bitcoin changed all that it wasn't just an internet currency it was hoping to be money on every platform in every country, person to person, in at least 10 minutes between any country in any amount for free! Fast forward to present day and we are starting to see that.
Of course we have had many setbacks on the way, such as exchanges being hacked, wallets stolen. We weren't so security conscious back then and we learned the hard way.
Then we grew in price and popularity and quite recently the government fought us when our dark market Silk Road was shut down by the Feds. We have had 4 price bubbles a lot of sleepless nights I've personally ploughed in tens of thousands of dollars lost a lot of Bitcoins on the way (and also lost 15000 Litecoins) and forced to read articles with declarations of "Bitcoin is dead" after each major price drop.
Sound familiar?
"History doesn't repeat it self but it does rhyme" Mark Twain
That's all part of the growing pains of a disruptive idea.
Dogecoin, by comparison, has a whole economy after just 7 months of inception! It's remarkable as I am also a big Litecoin fan and even that community isn't as productive as this. People talk about Dogecoin's PR as it being behind its popularity but I honestly believe there is no intentional PR, I mean where is the PR team?
I believe it was a combination of a friendly meme encouraging positive kind people, a internet currency that's easily explainable to anyone, a very mineable coin using your PC/laptop so everyone can get involved in and great online platform such as Reddit to connect like minded users together and everything just snowballed from there.
Now Dogecoin is one of the most productive coins out there with several client and core devs, hundreds of retailers, apps, doge specific websites, blogs and charity fundraisers. That's why I believe Dogecoin is undervalued right now.
This doesn't mean you should put your life savings into Dogecoin or other cryptocurrencies as they are still a risk and early stage technology. Just buy with what you can afford to lose!
So where is Dogecoin heading? - The analysis
As long as we still use doge for goods and services and keep the positivity going then I can only see the price of doge going higher and reaching all time highs without the need for manipulation. Over what time frame?
Like Bitcoin it won't be overnight and granted there's no supply limit so it will never reach tens or hundreds of dollars but we don't need it to. I honestly want Dogecoin to be a currency and I personally like having whole doges. Ideally I would hope that 1 or even 10 doge will buy 1 loaf of bread or 1 litre of milk at my local grocery store some day.
Supply vs Demand
As I mentioned before the supply coming to the exchanges from multipools has been immense - it is thought about 160 million doge a day is being mined and sold on exchanges just from miners. This not only exerts a lot of selling pressure but it also encourages weak hands to sell forcing the price down further it's a downward spiral which we have been seeing.
Any other coin would have collapsed long ago but doge is no ordinary coin. After the next two halvings in October time it will be down to 40 million a day and low enough to allow for natural demand to outpace the supply causing the price to increase steadily which will give momentum and may then lead to a new all time high and the second bubble.
Network Hashrate
I'm of the belief that ASICs are a necessary evolution in cryptocurrencies by making a coin secure which will attract investment/adoption and environmentally friendly. With scrypt ASICs large and small coming online the network hashrate has more than doubled in the last 2 months from 40 GH/s to 90 GH/s and while we tend to see a jump in hashrate just before a halvening I attribute this rise to small miners also buying ASICs and a lack of more profitable altcoins. Again that's great for the stability of our coin and this will provide further confidence that Dogecoin is a good crypto to buy/adopt/invest.
Deflationary Inflation
Sounds confusing so let me explain unlike Bitcoin where there will only be 21 million coins mined, Dogecoin will reach 100 billion coins mined after block 600k and then see 5.25 billion coins mined each year forever which works out as 5.25% inflation in the first year and then 4.99% in the second year and so on.
While this may seem a lot I have come to the conclusion that it may be a blessing for Dogecoin as it is thought that 5 billion coins per year would be lost permanently anyway so this will 5.25billion coins would replace the lost coins. The extra 5.25 billion coins per year would be enough to incentivise miners to continue mining doge (which would hopefully be at a high enough price after the 600k block reward) and securing our network.
Because Bitcoin has a cap it is seen as a store of value like gold whereas Dogecoin has a infinite supply but at a predictably low yearly increase in fact from 2015 to 2020 Dogecoin will have less yearly inflation than Bitcoin. This can actually encourage people to treat Dogecoin as a true currency to buy everyday items with than as a store of value. I believe that is what Satoshi envisioned Bitcoin to be.
What are the whales doing?
The top 20 dogecoin addresses which account for 40% of all mined Dogecoin out there haven't sold any of their DOGEs.
The whales with large wallets have not sold their DOGE over the course of the last 4 months but the smaller wallets have! Why? The whales are happy to see their DOGE go to zero if they thought it was dying or they have been there and done that and know that perhaps Dogecoin is heading up? I can tell you I have no intention of selling my DOGEs as I believe interesting times are ahead.
The Bitcoin Effect
Bitcoin has paved the way for a crypto to go from $0.0001 to $1000+ and brought technological development, liberty and a sense of community all in a 5 year timespan.
While only $0.00023 Dogecoin has got an ecosystem, a following, funded several charity efforts and a burgeoning economy after only 7 months thanks in part to the network effect of Bitcoin and the rest down to you.
All I can say to you all is well done to all of you for being such a positive and productive community. Keep using Dogecoin and check the links at the side bar such as dogedoor.net and suchlist.com so that you can spend, buy, tip and mine doge and spread the word.
Now let's go to the moon!
TL;DR - Bitcoin had it's ups and downs and not short of haters over the years. Dogecoin is following the same path but in a shorter time frame. After the next 2 halvings Dogecoin price should be rising and adoption will speed up again which will make it a true currency so keep buying using and tipping doge wherever you can.
It's 8:09AM EST and we've found 87.24% of our initial 100 Billion DOGEs -- only 12.76% remains until our period of Hyper-inflation ends! Our Global Hashrate is up from ~76 to ~92 Gigahashes per second and our Difficulty is up from ~1196 to ~1351.
I Hope you enjoyed today's Guest Post by Justlite!
Note: To tip them directly:
+dogetipbot @Justlite xxx doge verify
GoodShibe
submitted by GoodShibe to dogecoin [link] [comments]

If bitcoin is ultimately deflationary, and promotes "hoarding", doesn't that also promote saving, and consuming less?

Reading this, the quote "But from an economic perspective, a deflationary currency isn’t a good thing, explained Gordon," made me pause.
Bitcoin discussions often site the "deflationary spiral" as a downside of Bitcoin. However, can this not also be seen as a positive aspect? If I need food, I'll buy food, even if I can buy "2 foods" tomorrow. I'll always need to spend some money. If I want a newfangled mapple product, I'll probably put off doing so if my savings are in Bitcoin. I see this as a great thing - promoting a collective savings of scarce resources.
If I keep my savings in fiat, I am indirectly taxed for doing so - I must buy things that appreciate in value to maintain "real" wealth. For a great number of people, buying appreciable assets with their $1500 savings is not easy for several reasons (fees, liquidity, etc.). Holding it in a deflationary (but very divisible) currency like Bitcoin sort of does this automatically.
This is yet another discussion regarding the economics of Bitcoin; I apologize if this particular aspect has been discussed ad nauseam.
submitted by Rooke to Bitcoin [link] [comments]

Krugman, trolls: to support your claim of deflation being bad in the context of bitcoin, please explain how we will see deflationary spirals like the Great Depression or 90s Japan if there is no bitcoin-denominated debt/wages/prices? If you don't, then stop using it as a handwaving argument plz thx.

Beyond using "deflation" as a simple boogeyman, I've never heard someone explain why this would be a systemically catastrophic as it has been in well known cases (US Great Depression, Japan's Lost Decade, etc.).
In those well-known cases the main problem, basically, was the deflationary spiral caused by the real value of the debt increasing, thus exacerbating the vicious cycle of lower output leading to lower wages, lower investment, lower spending, lower output, etc.
However, how does this apply to Bitcoin?
  1. How much debt is there denominated in bitcoins? Almost none.
  2. How many people have their wages denominated in bitcoin (not just paid in bitcoin, but set in bitcoin)? Almost none, and even if some do, it's probably readjusted to the dollar exchange rate every month or two or three.
  3. How many people set prices for their products in bitcoins? Besides the Bitcoin Trezor pre-order experiment, almost none, unless it's a trivial amount (for example, the price of embedding a hash of a document in the blockchain at www.proofofexistence.com) or temporary (for example, a price for a drink special at happy hour, as was the case in Miami yesterday).
"That describes the current state of the 'Bitcoin economy'", the skeptic/critic might say, "what about the future? One day there might be a lot of bitcoin-denominated debt, what then when those people can't pay it back when the value of the currency deflates?"
It's not that simple; the world is dynamic so we can't just imagine that suddenly people have bitcoin-denominated debt-- they actually have to take it on. Will they?
As our esteemed sage says in page 410 of his book Economics (Krugman, Wells, 2006), there's a difference between expected and unexpected deflation. He mentions it in the context of a liquidity trap and the inability of monetary policy to stimulate the economy due to the fact that nominal interest rates are zero bound (they can't go below zero). However, I'll use the distinction in the context of bitcoin to argue that we might never see a significant amount of lending denominated in bitcoin because agents expect deflation. Thus in only the most extreme cases, where a borrower knows that the investment they seek to finance is guaranteed to have a healthy ROI in bitcoin, will that borrower take out a loan in bitcoin at a >0% rate.
Now, perhaps these skeptics/critics might say they actually want a world with high amounts of debt, not low-debt as I've described. Fine, I'll concede that mass adoption of bitcoin as a currency might reduce the level of debt in society. (Though, I'll be happy to take that to the masses and see which side of the more-debt/less-debt argument most people fall under.)
But what I don't think they can casually say is that bitcoin adoption will lead to deflationary spirals. I'm all ears, though, if you have a more drawn out argument.
tl;dr Deflation was bad in during the Great Depression and Japan in the 1990's mainly because it was unexpected and, most importantly, debt was denominated in dollars and yen (respectively) and created a deflationary spiral. I reject the handwaving argument that "bitcoin is bad because it's deflationary", if critics/skeptics don't acknowledge that we are unlikely to see much if any bitcoin-denominated debt (nor bitcoin-denominated wages/prices.)
submitted by iwantathink to Bitcoin [link] [comments]

Bitcoin, Deflation and the End of Top-Down Consumerism

I had a "shower thought" the other day about bitcoin while doing some gardening and thought I'd run it by you folks and maybe get some discussion going. I'm going to try and flesh out my original train of thought in a few paragraphs so this could get long, but feel free to skip to the TL;DR below if you're short on time.
There seems to still be a lot of hand-wringing among both critics and supporters of bitcoin regarding the currency's deflationary nature. I don't want to re-hash all the related arguments here in detail as they have already been well articulated elsewhere, but suffice it to say many observers of the bitcoin space, especially classically-trained economists, are eager to pronounce doom for the future of bitcoin as a currency because it does not have the "desirable" property of being inflationary.
Why is an inflationary currency "desirable," you ask? Well, one of the arguments frequently trotted out by the the aforementioned skeptics is that an inflationary currency is good because it impels holders of the currency to spend it before its devalued over time by inflation, thereby stimulating spending and stimulating the economy as a whole. This was also the same argument that both the Federal Reserve and especially the Abe administration in Japan made when they started their respective quantitative easing programs. In particular, the Abe administration and the Bank of Japan have stated that they will pump as much money into the system as needed to ensure that the "economic evil" of deflation is defeated.
And yet, as someone who is very much skeptical of disgusted with consumerism for consumerism's sake, I find this line of thinking really disturbing. Sure, on paper it's "good" for the economy if Mr. Tanaka goes out and buys a new Toshiba OLED TV with his quickly-depreciating yen, but if Mr. Tanaka already has a perfectly-working TV he bought two years ago and would not have bought the new TV without being "induced" to do so by the threat of his cash becoming increasingly worthless, is the transaction really occurring on a purely voluntary basis (i.e. based on the fact that Mr. Tanaka just wants a new TV) or is there some measure of unnatural coercion taking place, distorting the market? As you can probably guess, I think the latter is more true than the former. The fact of the matter is, a lot of people buy a lot of garbage they don't need due to the coercive nature of an inflationary currency and inflationary currency plays a non-trivial role in supporting our modern consumerist society.
Bitcoin, on the other hand, may produce the opposite effect as a deflationary store of value: if Mr. Tanaka holds bitcoin instead of yen, he won't be so easily manipulated by a central authority into coerced consumption. In fact, the opposite is true: if bitcoin generally appreciates it may produce an anti-consumerism effect whereby Mr. Tanaka will only buy a new TV if he actually really, really needs one. Obviously Toshiba doesn't like this since they actually have to try much harder to innovate and convince people that they need new TVs, but I would argue that this is a good thing for the environment and innovation since less external waste is generated and Mr. Tanaka is empowered to build his own wealth rather that remain stuck in the work-consume hamster wheel.
If you believe like I do that rampant consumerism is a bad thing, the above bitcoin-induced effect is already really awesome and a great reason to support bitcoin, but I think bitcoin may be an even more potent force for destroying the cancer of thoughtless consumerism by virtue of the fact that the ability to send money instantly and cheaply to anyone, anytime and anywhere could potentially reduce the role that advertising plays in modern society as a way of monetizing information and entertainment.
Just think of all the content services that most people use on a daily basis that are supported by advertising: TV, radio, magazines and a good chunk of the internet. Imagine instead a world where all of these content services are built on mandatory (pay-per-view) microtransactions instead of advertising. Instead of having Mr. Tanaka buy Asahi beer, which pays Fuji News to run ads so Mr. Tanaka buys more beer in an endless cycle of pointless consumerism, Mr. Tanaka can just pay Fuji News in bitcoin for the right to view their content and buy Asahi beer on a purely rational basis (i.e. when he naturally wants to) rather than when he’s been brainwashed by endless advertising to do so. Thus, I think bitcoin could become a powerful force for dismantling the inefficient and soul-crushing consumerist society that we all live under, and it’s deflationary nature has an important part to play in inducing the changes needed for this to happen.
I know that the above argument is very rough around the edges and could probably be refined and improved by smarter people than me, so I ask you, /bitcoin, do you think bitcoin could potentially become a powerful force for re-aligning our ideology as a society away from consumerism to something more meaningful and fulfilling, or am I being to optimistic and naïve here?
TL;DR: I think that bitcoin, by virtue of being a deflationary currency and enabling seamless, instant transactions has the potential to subvert the consumerist dogma of our current society, but on the other hand maybe I’m wrong and just inhaled too much pollen while gardening earlier.
submitted by KoKansei to Bitcoin [link] [comments]

Great interview questions for bitcoin engineers

From here...
https://bitcointalk.org/index.php?topic=5006583.0
Questions. Chapter 1: Introduction 1. What are the main Bitcoin terms? 2. What is a Bitcoin address? 3. What is a Bitcoin transaction? 4. What is a Bitcoin block? 5. What is a Bitcoin blockchain? 6. What is a Bitcoin transaction ledger? 7. What is a Bitcoin system? What is a bitcoin (cryptocurrency)? How are they different? 8. What is a full Bitcoin stack? 9. What are two types of issues that digital money have to address? 10. What is a “double-spend” problem? 11. What is a distributed computing problem? What is the other name of this problem? 12. What is an election? 13. What is a consensus? 14. What is the name of the main algorithm that brings the bitcoin network to the consensus? 15. What are the different types of bitcoin clients? What is the difference between these clients? Which client offers the most flexibility? Which client offers the least flexibility? Which client is the most and least secure? 16. What is a bitcoin wallet? 17. What is a confirmed transaction and what is an unconfirmed transaction? Chapter 2: How Bitcoin works. 1. What is the best way to understand transactions in the Bitcoin network? 2. What is a transaction? What does it contain? What is the similarity of a transaction to a double entry ledger? What does input correspond to? What does output correspond to? 3. What are the typical transactions in the bitcoin network? Could you please name three of such transactions and give examples of each type of the transaction? 4. What is a QR and how it is used in the Bitcoin network? Are there different types of QRs? If so, what are the different types? Which type is more informational? What kind of information does it provide? 5. What is SPV? What does this procedure check and what type of clients of the Bitcoin network usually use this procedure? Chapter 3: The Bitcoin client. 1. How to download and install the Core Bitcoin client? 2. What is the best way to test the API available for the Core Bitcoin client without actually programming? What is the interface called? 3. What are the major areas of operations in the Bitcoin client? What can we do with the client? 4. What are the available operations for the Bitcoin addresses? 5. What are the available read operations for the Bitcoin transactions? How is a transaction encoded in the Bitcoin network? What is a raw transaction and what is a decoded transaction? 6. If I want to get information about a transaction that is not related to any address in my own wallet, do I need to change anything in the Bitcoin client configuration? If yes, which option do I need to modify? 7. What are the available read operation for the Bitcoin blocks? 8. What are the available operations for the creation of the transactions in the Bitcoin network? 9. How do you normally need to address the unspent output from the previous transaction in order to use it as an input for a new transaction? 10. What is the mandatory operation after creating a new transaction and before sending this new transaction to the network? What state does the wallet have to be in order to perform this operation? 11. Is the transaction ID immutable (TXID)? If not why, if yes, why and when? 12. What does signing a transaction mean? 13. What are the other options for Bitcoin clients? Are there any libraries that are written for some specific languages? What types of clients do these libraries implement? Chapter 4: Keys, Addresses and Wallets. 1. What is a PKC? When it was developed? What are the main mathematical foundations or functions that PKC is using? 2. What is ECC? Could you please provide the formula of the EC? What is the p and what is the Fp? What are the defined operations in ECC? What is a “point to infinity”? 3. What is a Bitcoin wallet? Does this wallet contain coins? If not, what does it contain then? 4. What is a BIP? What it is used for? 5. What is an encrypted private key? Why would we want to encrypt private keys? 6. What is a paper wallet? What kind of storage it is an example of? 7. What is a nondeterministic wallet? Is it a good wallet or a bad wallet? Could you justify? 8. What is a deterministic wallet? 9. What is an HD wallet? 10. How many keys are needed for one in and out transaction? What is a key pair? Which keys are in the key pair? 11. How many keys are stored in a wallet? 12. How does a public key gets created in Bitcoin? What is a “generator point”? 13. Could you please show on a picture how ECC multiplication is done? 14. How does a private key gets created in Bitcoin? What we should be aware of when creating a new private key? What is CSPRNG? What kind of input should this function be getting? 15. What is a WIF? What is WIF-Compressed? 16. What is Base58 encoding and what is Base58Check encoding? How it is different from Base64 encoding? Which characters are used in Base58? Why Base58Check was invented? What kind of problems does it solve? How is Base58Check encoding is created from Base58 encoding? 17. How can Bitcoin addresses be encoded? Which different encodings are used? Which key is used for the address creation? How is the address created? How this key is used and what is the used formula? 18. Can we visually distinguish between different keys in Base58Check format? If yes, how are they different from each other? What kind of prefixes are used? Could you please provide information about used prefixes for each type of the key? 19. What is an index in HD wallets? How many siblings can exist for a parent in an HD wallet? 20. What is the depth limitation for an HD wallet key hierarchy? 21. What are the main two advantages of an HD wallet comparing to the nondeterministic wallets? 22. What are the risks of non-hardened keys creation in an HD wallet? Could you please describe each of them? 23. What is a chain code in HD wallets? How many different chain code types there are? 24. What is the mnemonic code words? What are they used for? 25. What is a seed in an HD wallet? Is there any other name for it? 26. What is an extended key? How long is it and which parts does it consist of? 27. What is P2SH address? What function are P2SH addresses normally used for? Is that correct to call P2SH address a multi-sig address? Which BIP suggested using P2SH addresses? 28. What is a WIF-compressed private key? Is there such a thing as a compressed private key? Is there such a thing as a compressed public key? 29. What is a vanity address? 30. What is a vanity pool? 31. What is a P2PKH address? What is the prefix for the P2PKH address? 32. How does the owner prove that he is the real owner of some address? What does he have to represent to the network to prove the ownership? Why a perpetrator cannot copy this information and reuse it in the next transactions? 33. What is the rule for using funds that are secured by a cold storage wallet? How many times you can send to the address that is protected by the private key stored in a cold storage? How many times can you send funds from the address that is protected by the private key stored in a cold storage? Chapter 5: Transactions. 1. What is a transaction in Bitcoin? Why is it the most important operation in the Bitcoin ecosystem? 2. What is UTXO? What is one of the important rules of the UTXO? 3. Which language is used to write scripts in Bitcoin ecosystem? What are the features of this language? Which language does it look like? What are the limitations of this language? 4. What is the structure of a transaction? What does transaction consists of? 5. What are the standard transactions in Bitcoin? How many standard transactions there are (as of 2014)? 6. What is a “locking script” and what is an “unlocking script”? What is inside these scripts for a usual operation of P2PKH? What is a signature? Could you please describe in details how locking and unlocking scripts work and draw the necessary diagrams? 7. What is a transaction fee? What does the transaction fee depend on? 8. If you are manually creating transactions, what should you be very careful about? 9. Could you please provide a real life scenario when you might need a P2SH payment and operation? 10. What is the Script operation that is used to store in the blockchain some important data? Is it a good practice? Explain your answer. Chapter 6: The Bitcoin Network. 1. What is the network used in Bitcoin? What is it called? What is the abbreviation? What is the difference between this network architecture and the other network architectures? Could you please describe another network architecture and compare the Bitcoin network and the other network architectures? 2. What is a Bitcoin network? What is an extended Bitcoin network? What is the difference between those two networks? What are the other protocols used in the extended Bitcoin network? Why are these new protocols used? Can you give an example of one such protocol? What is it called? 3. What are the main functions of a bitcoin node? How many of them there are? Could you please name and describe each of them? Which functions are mandatory? 4. What is a full node in the Bitcoin network? What does it do and how does it differ from the other nodes? 5. What is a lightweight node in the Bitcoin network? What is another name of the lightweight node? How lightweight node checks transactions? 6. What are the main problems in the SPV process? What does SPV stand for? How does SPV work and what does it rely on? 7. What is a Sybil attack? 8. What is a transaction pool? Where are transaction pools stored in a Bitcoin network client? What are the two different transaction pools usually available in implementations? 9. What is the main Bitcoin client used in the network? What is the official name of the client and what is an unofficial name of this client? 10. What is UTXO pool? Do all clients keep this pool? Where is it stored? How does it differ from the transaction pools? 11. What is a Bloom filter? Why are Bloom filters used in the Bitcoin network? Were they originally used in the initial SW or were they introduced with a specific BIP? Chapter 7: The Blockchain. 1. What is a blockchain? 2. What is a block hash? Is it really a block hash or is it a hash of something else? 3. What is included in the block? What kind of information? 4. How many parents can one block have? 5. How many children can one block have? Is it a temporary or permanent state of the blockchain? What is the name of this state of the blockchain? 6. What is a Merkle tree? Why does Bitcoin network use Merkle trees? What is the advantage of using Merkle trees? What is the other name of the Merkle tree? What kind of form must this tree have? 7. How are blocks identified in the blockchain? What are the two commonly used identities? Are these identities stored in the blockchain? 8. What is the average size of one transaction? How many transactions are normally in one block? What is the size of a block header? 9. What kind of information do SPV nodes download? How much space do they save by that comparing to what they would need if they had to download the whole blockchain? 10. What is a usual representation of a blockchain? 11. What is a genesis block? Do clients download this block and if yes – where from? What is the number of the genesis block? 12. What is a Merkle root? What is a Merkle path? Chapter 8: Mining and Consensus. 1. What is the main purpose of mining? Is it to get the new coins for the miners? Alternatively, it is something else? Is mining the right or good term to describe the process? 2. What is PoW algorithm? 3. What are the two main incentives for miners to participate in the Bitcoin network? What is the current main incentive and will it be changed in the future? 4. Is the money supply in the Bitcoin network diminishing? If so, what is the diminishing rate? What was the original Bitcoin supply rate and how is it changed over time? Is the diminishing rate time related or rather block related? 5. What is the maximum number of Bitcoins available in the network after all the Bitcoins have been mined? When will all the Bitcoins be mined? 6. What is a decentralized consensus? What is a usual setup to clear transactions? What does a clearinghouse do? 7. What is deflationary money? Are they good or bad usually? What is the bad example of deflationary spiral? 8. What is an emergent consensus? What is the feature of emergent consensus? How does it differ from a usual consensus? What are the main processes out of which this emergent decentralized consensus becomes true? 9. Could you please describe the process of Independent Transaction Verification? What is the list of criteria that are checked against a newly received transaction? Where can these rules be checked? Can they be changed over time? If yes, why would they be changed? 10. Does mining node have to be a full node? If not, what are the other options for a node that is not full to be a mining node? 11. What is a candidate block? What types of nodes in the Bitcoin network create candidate blocks? What is a memory pool? Is there any other name of the memory pool? What are the transactions kept in this memory pool? 12. How are transactions added to the candidate block? How does a candidate block become a valid block? 13. What is the minimum value in the Bitcoin network? What is it called and what is the value? Are there any alternative names? 14. What is the age of the UTXO? 15. How is the priority of a transaction is calculated? What is the exact formula? What are the units of each contributing member? When is a transaction considered to be old? Can low priority transactions carry a zero fee? Will they be processed in this case? 16. How much size in each block is reserved for high priority transactions? How are transactions prioritized for the remaining space? 17. Do transactions expire in Bitcoin? Can transactions disappear in the Bitcoin network? If yes, could you please describe such scenario? 18. What is a generation transaction? Does it have another name? If it does, what is the other name of the transaction? What is the position of the generation transaction in the block? Does it have an input? Is the input usual UTXO? If not – what is the input called? How many outputs there are for the generation transaction? 19. What is the Coinbase data? What is it currently used for? 20. What is little-endian and big-endian formats? Could you please give an example of both? 21. How is the block header constructed? Which fields are calculated and added to the block header? Could you please describe the steps for calculation of the block header fields? 22. What is a mantissa-exponent encoding? How is this encoding used in the Bitcoin network? What is the difficulty target? What is the actual process of mining? What kind of mathematical calculation is executed to conduct mining? 23. Which hash function is used in the Bitcoin mining process? 24. Could you describe the PoW algorithm? What features of the hash function does it depend on? What is the other name of the hash function? What is a nonce? How can we increase the difficulty of the PoW calculation? What do we need to change and how do we need to change this parameter? 25. What is difficulty bits notation? Could you please describe in details how it works? What is the formula for the difficulty notation? 26. Why is difficulty adjustable? Who adjusts it and how exactly? Where is the adjustment made? On which node? How many blocks are taken into consideration to predict the next block issuance rate? What is the change limitation? Does the target difficulty depend on the number of transactions? 27. How is a new block propagated in the network? What kind of verification does each node do? What is the list of criteria for the new block? What kind of process ensures that the miners do not cheat? 28. How does a process of block assembly work? What are the sets of blocks each full node have? Could you please describe these sets of blocks? 29. What is a secondary chain? What does each node do to check this chain and perhaps to promote it to the primary chain? Could you please describe an example when a fork occurs and what happens? 30. How quickly forks are resolved most of the time? Within how many new block periods? 31. Why the next block is generated within 10 minutes from the previous? What is this compromise about? What do designers of the Bitcoin network thought about when implementing this rule? 32. What is a hashing race? How did Bitcoin hashing capacity has changed within years from inception? What kind of hardware devices were initially used and how did the HW utilization evolved? What kind of hardware is used now to do mining? How has the network difficulty improved? 33. What is the size of the field that stores nonce in the block header? What is the limitation and problem of the nonce? Why was an extra nonce created? Was there any intermediate solution? If yes, what was the solution? What are the limitations of the solution? 34. What is the exact solution for the extra nonce? Where does the new space come from? How much space is currently used and what is the range of the extra nonce now? 35. What is a mining pool? Why was it created? How are normally such pools operated? Do they pay regularly to the pool participants? Where are newly created Bitcoins distributed? To which address? How do mining pools make money? How do the mining pools calculate the participation? How are shares earned calculated? 36. What is a managed pool? How is the owner of the pool called? Do pool members need to run full nodes? Explain why or why not? 37. What are the most famous protocols used to coordinate pool activities? What is a block template? How is it used? 38. What is the limitation of a centralized pool? Is there any alternative? If yes, what is it? How is it called? How does it work? 39. What is a consensus attack? What is the main assumption of the Bitcoin network? What can be the targets of the consensus attacks? What can these attacks do and what they cannot do? How much overall capacity of the network do you have to control to exercise a consensus attack? Chapter 9: Alternative Chains, Currencies and Applications. 1. What is the name of alternative coins? Are they built on top of the Bitcoin network? What are examples of them? Is there any alternative approach? Could you please describe some alternatives? 2. Are there any alternatives to the PoW algorithm? If yes – what are the alternatives? Could you please name two or three? 3. What is the operation of the Script language that is used to store a metadata in Bitcoin blockchain? 4. What is a coloured coin? Could you please explain how it is created and how it works? Do you need any special SW to manage coloured coins? 5. What is the difference between alt coins and alt chains? What is a Litecoin? What are the major differences between the Bitcoin and Litecoin? Why so many alt coins have been created? What are they usually based on? 6. What is Scrypt? Where is it used and how is it different from the original algorithm from which it has been created? 7. What is a demurrage currency? Could you please give an example of one blockchain and crypto currency that is demurrage? 8. What is a good example of an alternative algorithm to PoW? What is it called and how is it different from the PoW? Why the alternatives to Bitcoin PoW have been created? What is the main reason for this? What is dual-purpose PoW algorithms? Why have they been created? 9. Is Bitcoin “anonymous” currency? Is it difficult to trace transactions and understand someone’s spending habits? 10. What is Ethereum? What kind of currency does it use? What is the difference from Bitcoin? Chapter 10: Bitcoin security. 1. What is the main approach of Bitcoin security? 2. What are two common mistakes made by newcomers to the world of Bitcoin? 3. What is a root of trust in traditional security settings? What is a root of trust in Bitcoin network? How should you assess security of your system? 4. What is a cold storage and paper wallet? 5. What is a hardware wallet? How is it better than storing private keys on your computer or your smart phone?
submitted by 5tu to BitcoinTechnology [link] [comments]

Why is the deflatory property of bitcoin not bad?

Hi,
We live in an economy so big, that no precious metal can be used to represent the ammount of wares and goods we produce. That is why we have abstracted our concept of Value to easy to reproduce paper Money.
Wouldn't this limited property of bitcoin stop the economy from growing or even lead to a deflationary spiral?
submitted by sakkara to Bitcoin [link] [comments]

I think it's clear Bitcoin has moved to the "then they attack you" phase

It should be very obvious to all of you that the "mainstream media" and "economics academia" (both mouthpieces for entrenched powers) has more or less unanimously decided during the part few days that Bitcoin is the "volatile bubblylicious deflationary spiral tulip funbux craze that drug dealers, pederasts and terrorists like" (did I summarize that right?).
It is important to understand that these FUD attacks are coming from a place of terror of the unknown, where Bitcoin is the unknown, and these people (venal, or ignorant, or lackeys) are reacting with the standard social defense mechanisms to protect their interests and belief systems.
I don't say that lightly -- agree or not, you all know very well that most people (statists) fervently believe that currency, much like roads, must necessarily be a monopoly of the state, and they cannot even begin to conceive how these goods can come about otherwise.
Of course... any real-world evidence that these goods can exist and work without being a state monopoly questions this core belief 99% that of the populace have faith in. Bitcoin is that proof by counterexample in the domain of money -- it is the first currency in a long time that has market value because people truly voluntarily choose it, rather than because people are ordered under threats to accept and use it. And so, Bitcoin raises the question that must never be answered.
And what do dogmatic humans generally do when faced with a taboo? They fog, they attack, they gaslight, they change the subject, they lie. They'll do anything to get you to "shut up about the question, because it's making me uncomfortable". It is what it is.
The plan moving ahead is to continue using and buying Bitcoin, talking to people about Bitcoin, demonstrating Bitcoin to others, and generally continuing to live a decent life. Whether you choose to ignore or question the dogs, ultimately you must lead by example, lead by honesty, lead by nonaggression.
Pitch in with your views here. Have a good day, guys!
submitted by throwaway-o to Bitcoin [link] [comments]

Convince me that deflation in this scenario isnot the issue I think it is

Just read the "Common Myths" section before posting this and was impressed at how terrible the answer was: "As deflationary forces may apply, economic factors such as hoarding are offset by human factors that may lessen the chances that a Deflationary spiral will occur."
You have to do better than that at tackling probably the #1 issue with Bitcoins.
This is the most likely scenario that I see happening: Bitcoin becomes a widely used currency/commodity for online trade with a couple of million adopters. During the years to come there is an ever slowing pace of mining along with a constant drop-off in coins as accidents/server crashes/forgotten stashes takes its toll on the total availible ammount. This WILL lead to an ever increasing value as long as people use BTC. (No-one is arguing this and the solution touted is that BTC can be divided into ever smaller part, I.E deflation) Now the people that get into Bitcoins understand how the system works and you guys all know that it WILL increase in value. Why would you ever spend the BTC that you have accumulated? Why not use your USD´s that is doomed to always loose it´s value?
This leads to a clearing out of the user base I believe: The only people selling BTC are those who treat it as a commodity, an investment. They feel that it´s time to cash in the profits. Eventually the only people holding bitcoins are those who still believe in it´s value but at the same time less and less actual trade is taking place. You can allready see this happening; the ammount of people selling is slowing down (selling btw is the same as trading). Also, those who actually purchase goods and services with bitcoins are (I believe) those who have made a killing by now and feel good about the unrealized profits so they splurge on consumption.
In the end I think Bitcoin will be traded as a commodity with nothing to back up its value other than the belief in the system. Fewer and fewer will actually use their Bitcoins for trade thus further debasing it as an acceptable payment (at the moment more and more are accepting it as payment because of the increase in popularity. This will likely continue for a while but once the retailors realize that the number of BTC transactions is drying up this trend will reverse). The deflation spiral will keep prices going ever higher until that one day when you realize that everyone was in it for the long run but suddenly it no longer holds any use. When that day come you are not looking at a 50% drop, that day is the end of Bitcoin.
EDIT: Aaaand I fucked up the title
EDIT #2: This is going better than expected, I have actually gotten some good answers and I will think about them for a while tonight and answer in a few hours (also, I got a big finals two days from now that needs my immidiate attention.) Ferretinjapan gave the most thought through answer yet and It might be beyond me to analyse what he says to it´s full extent but I will do my absolute best. Either way, ferretinjapan´s should write the answer to the deflation question in the "Common myths" section as he has a way better grasp at this than whoever wrote "...are offset by human factors that may lessen the chances that a Deflationary spiral will occur.". That argument is just... unsubstansiated.
Final thought before I take a break here; Don´t downvote this thread as a whole. Downvote my answers if anything but you guys need to allow a serious discussion about this issue because it is a big one and this subreddit do hold some weight in the debate. Well thought out answers here can ripple out and convince more people to join in on BTC, just shunning me out as someone who doesn´t understand BTC and markets is not in your interest.
EDIT #3: Nooo! All my karma! My old stuff is getting downvoted to nothing... How sad :)
EDIT #4: Interesting read
submitted by oskarege to Bitcoin [link] [comments]

Ordinary people understand Bitcoin; the experts do not

It's really interesting to see all of these mom and pop "investors" start putting money into Bitcoin. It's easy to deride them and say that they don't know what they're doing, that this is a bubble. "You can't have deflationary money." "It's not backed by anything." "It's just an unproductive asset."
These are all arguments from the pseudo-intellectual elite. They're well-reasoned arguments that make sense on the surface, but they don't get through to average Jill. Average Jill understands many things that experts do not. Aristotle, a man who made his living off of words, believed that a male and female horse will have a different number of teeth; horse breeders obviously knew better, but they did not record their narrative and history has forgotten what they knew. Average Jill knows better than the intellectuals.
Average Jill understands that if everyone thinks that something has value, then it will have value. Jill understands that fears of "hoarding" and "deflationary spirals" are nonsensical to their very core. Average Jill understands that the economy is driven by real wealth and production of goods and services; not by central bankers who buy and sell government debt to satisfy their own set of arcane laws that they deem sacred. Average Jill understands the feeling of ownership and security that Bitcoin provides, one that simply does not exist in a bank account that can be revoked through fraud or numerical error, or in a stock whose value is dependent on the morality of the managers and the honesty of the auditors.
This is a sense of ownership that has not existed in human history; save perhaps those pioneers who held their wealth in their land and the fruits of their labor, and defended it with lead and blood.
Humans want hard money. It's hardwired into our psychology. Economists say that this makes us ignorant of economics; we know that this and statements like this make them ignorant of the real world. Bitcoin has risen tremendously, despite the negative press covfefe, and will continue to rise because Average Jill sees it for what it is-- a game changer.
Disclaimer: I am long $BTC, and long $JILL. Statements should not be interpreted as not giving advice to buy or sell; the only advice is to

HODL!!!!!.

submitted by Jowemaha to Bitcoin [link] [comments]

Why Bitcoins?

Why Bitcoins? For businesses & individuals.
1) Lower transaction costs for businesses.
2) Lack of the middle man.
3) No fraud or charge-back (from a sellebusiness PoV).
4) Immunity to inflation due to decentralisation.
5) Decentralisation.
6) Centralisation (lack of).
7) Open Source.
8) Natural deflationary cycle.
9) Transparency.
10) Transportability.
11) Transferability.
12) Anonymous if you so choose and put in the effort.
13) Lower vendor costs (for consumers).
14) Easier to use than Credit Card or Western Union, or Money Gram, etc.
15) End of Inflation.
16) It is up to THE PEOPLE (you, me, everyone) as to whether Bitcoin succeeds and brings about the changes noted above (and possibly others I’ve missed). Upon business adoption, inspires people adoption, means growth for businesses that have adopted, means jobs, means eventually governments will have to adopt for tax reasons, means transparency.
Notes;
2a) Freezing accounts, messing around with funds, stealing money, lots of extra charges.
4a) Inflation is a poison and only designed to steal from the poor - re: minimum wage does not scale with inflation, production control does. The fed are already enacting plans to devalue the USD by at least 33% within 20 years (19 years now), your $1,500 is slowly losing value and will eventually be worth a lot less.
5a) What happened in Cyprus, won't happen to you, and there is no central body for the powers that be to attack and shut down.
6a) Your 'money' (Bitcoins) will be worth more in the future. Prices and quality, natural order is to go down in price and quality to go up. Enforced monopolies fight against the natural order of economy to keep prices high and stifle quality.
7a) Everyone can see how it works and what’s actually going on, and if you can’t read code, you can ask someone you trust. Anyone can contribute. If you don’t know how to code and you desperately want to, you can learn, most everything is online these days. Such ‘open arms’ do not exist in the fiat world. If your contribution is good, then it will be adopted by communal consensus (meaning that you can’t just make a change and force everyone to use it, people need to accept/download/use your contributed version. There is no ‘choice’ in the fiat world, ask Cyprus.
8a) Banks can destroy a currency if they so choose (hyperinflation), Bitcoin is immune.
9a) If politicians & political parties were paid via Bitcoin, then everyone would see if they were getting bribed or abusing their position, they would be held fully accountable. A massive cut down on bank ‘fiddling’ and screwing up the global economy.
10a) This is one of the most important points. Imagine the horse > car > plane. Now imagine gold > fiat > bitcoin. It is far more transportable than gold or fiat, which means massive cost reduction.
11a) You can send your money (Bitcoins) to someone and you know they’ll get it, you can even check their wallet to know they received it, and there’s nothing no authority can do to stop you.
13a) Potentially, because of the profit from no fraud and the deflationary nature of Bitcoin. Vendors will realise they can lower their prices for Btc purchases. And when inflation ends, due to no fraud, they will still be able to have lower prices than competitors.
14a) Anyone who’s used Bitcoin to send Bitcoin to another person will agree with this point. The only people that disagree are the ones that have not used Bitcoin to send Bitcoin to someone else.
15a) In an ideal world, where sometime in the future Bitcoin gets adopted as the world primary economic
The people do not have a choice in the fiat world, Bitcoin gives you a choice and promises many things, well, you can see for yourself with a little research that the ‘promises’ are simply fact, maths based fact.
Inflation would end. This means that prices would stop going up, energy, oil, water, etc. Prices would spiral downwards and quality would improve substantially, as these would be the only ways to retain customers. As holding an illegal monopoly would be much harder to keep going when everyone can see which politicians you’re bribing. Also, minimum wages would go up, or rather decline of prices would mean you’d slowly get more for your minimum wage (a deflationary world).
I’ll be honest and say Bitcoin is not for EVERYONE (yet). If you’re reading this thinking “But what your computer dies and you lose all your life savings! Haha.”
Then you clearly do not understand Bitcoin. And either you should go and learn more, OR, you should STAY AWAY, as your mentality along those lines indicate that you would withdraw all your fiat bank money and stick it all in your wallet, always. Which is a rather silly thing to do, and if you don’t do that, why would you ever do that with Bitcoin? Best you let the banks continue to take and look after your money.
Don’t get me wrong, moving your entire wealth into Bitcoin is a fine idea, so some say. But I definitely recommend caution, and only converting small amounts until you understand what is happening comfortably.
And if you convert a substantial amount of money to Bitcoins - NEVER EVER store all your Bitcoins on 1 wallet, and always backup all (which is extremely easy to do).
I've probably missed some points out that should've been mentioned, feel free to add or ask questions.
Edit: The points and very brief additional notes are just that, points and brief notes. I hope to inspire valid questions and also to inspire you, the reader, to curiosity. Hopefully to look into why inflation would end, why the transfer ability is a massive pro, etc. It would probably take a good few pages (probably more) to go into detail on each point. This post is meant to answer some questions, inspire you to others, and encourage you to seek answers yourself. I am not trying to explain everything about Bitcoin, I am trying to explain why (in extreme brief) people/businesses move into the Bitcoin economy.
submitted by BitcoinJobe to Bitcoin [link] [comments]

Bitcoin Power Hashing Solutions Introduction in English by Kartike Kanwar - +91 9999897808 Realistic BITCOIN Prediction As Global Recession Nears! Countdown Begins... Remonetizing Gold Is the Only Way Out of the Deflationary Spiral. SwapToken AbnCoin MantraCoin CaliphCoin Future Digital Currency cybermiles Bitcoin BTC buy sell Episode 33: The Ascending Spiral

This is the common argument against bitcoin being a viable currency. Traditional currencies often lose their value over time (are inflationary) to encourage spending. Next, let’s look at why bitcoin is deflationary. To explain it we have to look at two things: Money supply and economic activity. The first is easy. Thus, the arguments for the deflationary debt spiral lose relevance when it comes to the Bitcoin economy. In our view, it is likely that many Bitcoin critics have not taken into account this point ... Theoretically, those who argue that bitcoin will go down the deflationary spiral, believe that with the number of bitcoins already fixed, its value over a period of time will be proportional to its demand within the same timeframe. With everyone believing it, they will end up hoarding bitcoin expecting the value to rise in the future. Mass hoarding will take bitcoin out of circulation leading ... Because Bitcoin is a deflationary currency, you should expect it to only increase in value; especially because the rest of the world practices inflation. This is a reality I don’t ever expect to ... Deflationary spiral is an economic argument that proposes that runaway deflation can eventually lead to the collapse of the currency given certain conditions and constraints. It is a common criticism made against the viability of Bitcoin.The ‘deflationary spiral’ is a real condition that affects the popular fractional reserve backing system.

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Bitcoin Power Hashing Solutions Introduction in English by Kartike Kanwar - +91 9999897808

Www.OneBitcoinBuy.com Investors have lifted Bitcoin past $13000, likening it to gold as a place to store money. Bitcoin's Recent Volatility Risks Deflationar... Nog steeds vanuit huis maar niet minder Bitcoin: De 33ste aflevering van De Bitcoin Show met daarin de volgende onderwerpen Vulnerabilities in the price of Bitcoin driven by miners By Blockware ... Initially there wasn't enough demand in the economy, but as the reward diminishes over time, bitcoin will have a deflationary monetary policy and simulate a scarce resource like gold. But you can ... Deflationary spiral. Category Education; Created using ... SHOCKING BITCOIN MOVE BEFORE THE END OF JUNE!!!! EXACT PRICE TARGET .... !!!! 👀 - Duration: 13:27. The Moon Recommended for you. New ... Khan Academy is a 501(c)(3) nonprofit organization with the mission of providing a free, world-class education for anyone, anywhere. Our interactive practice...

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