Hot answers tagged

24

Colored coins are a method to track the origin of bitcoins, so that a certain set of coins can be set aside and conserved, allowing a party to acknowledge them in various ways. Such coins can be used to represent arbitrary digital tokens, such as stocks, bonds, smart property and so on. The colored coins protocol is decentralized just like Bitcoin, but the ...


23

Assuming Bitcoin is still active at that point in time, mining will continue, because transaction fees will make it worthwhile to do so. This topic has been discussed heavily in other answers, including: What happens once the mining reward gets cut in half? How many bitcoins will there eventually be? How much will transaction fees eventually be? The last ...


17

NooShare is an idea for: a decentralised ledger similar to Bitcoin with the novel feature that its proofs of work are iterations of essentially arbitrary Markov-Chain Monte-Carlo (MCMC) chains, the scheduling of which can be purchased using the currency itself. It is a novel economic basis for sharing fallow computational resources. I don't know ...


16

Here are a few ways Bitcoin can be affected by the decisions of a wealthy investor: Value manipulation: A wealthy investor can sell coins or purchase coins in such a rapid pace that the market sinks or rises to an unrecoverable level. In real exchanges, the SEC protects investors from these hostile trades. There is no SEC protection with Bitcoin. Update: ...


14

Every block has exactly one "coinbase transaction", the one transaction which doesn't have actual inputs, but gets all the fees and mining subsidy. Every 210000 blocks, this subsidy halves. Right now, each block is allowed (not required!) to bring 50.00000000 BTC into circulation. Very soon, this will become 25.00000000. Four years later, 12.50000000. And ...


9

Assume for a second that we found a proof of work algorithm that had all of the good properties of sha256, but was also useful for SETI and maintaining world peace. Now suppose a group of miners collectively have more than 51% of the hashing power. In which of the following scenarios are they more likely to collude to double spend via a 51% attack: A) When ...


9

For speculation, you would buy when the price is low in anticipation that the price will rise in the future. There are some signs that the currency is seeing wider use and has greater potential in the future. For instance: - http://blockchain.info/charts/n-transactions Concluding that that growth means that a bitcoin will be worth $4 or $2 or $32 by any ...


8

Some discussions around how to make it more useful https://en.bitcoin.it/wiki/Intrinsic_worth_brainstorming https://bitcointalk.org/index.php?topic=11834.0


8

To participate in a disruptive technology Many of the other answers are covering the investment angle, but also consider that Bitcoin is a disruptive technology. Bitcoin allows an individual the kind of control over their money which has never been available before in all of history. This is a very big deal. It is now possible to send any amount of money, ...


7

In terms of thwarting P2P currencies, in addition to those mentioned in makerofthings7's answer, I will add: Delaying transactions with only minority Proof-of-work share. Forking the protocol with majority Proof-of-work share. Employing black budgets outside of public view. Selling put options to gain the money to attack with. Using the law to keep the ...


7

Idealists might argue that Bitcoin was developed to forever change the financial landscape, and would be affronted at the suggestion that Satoshi was out for profit. Skeptics might call the whole thing the most elaborate Ponzi scheme ever envisioned. Realists might suggest that Satoshi, emotionally traumatized by the recent unceremonious departure of his ...


6

CoinWorker pays Bitcoins for repetitive jobs such as identifying images that contain adult content, or rating search engine results. It acts as a Bitcoin interface to the CrowdFlower network.


6

If you are a student from China, studying in the UK (say) - you can buy bitcoins on btcchina.com directly from your Chinese bank account, send them to Intersango.com and sell them for GBP, and transfer them to your UK bank account. You can avoid having to send thousands of pounds to a British bank account to cover your expected expenses and instead just ...


5

http://blockchain.info/charts/market-cap. 24 hour Weighted price from mt.gox and tradehill.


5

I appreciate the enthusiasm of those who have answered this question. Everyone here clearly wants bitcoin to succeed, and so everyone is enthusiastic. I am enthusiastic, too. I am afraid, however, that this enthusiasm is coloring respondents' logic. Literally every response on this page (especially the highest ranked one) is wrong. In order for a ...


5

Could it be Christmas shopping? People who have thick bitcoin wallets, needing dollars to buy Christmas presents? Many online retailers make half their money by selling Christmas presents.


5

I'm not sure the volume actually did increase so much in November and December. The actual amounts transacted each month were: Jan 31 2011 3,679,198.19243835 Feb 28 2011 4,533,818.22264172 Mar 31 2011 9,331,953.39257620 Apr 30 2011 13,893,407.03577082 May 31 2011 11,850,890.09316489 Jun 30 2011 73,031,161.99932121 <-- biggest Jul 31 2011 37,...


5

Paul Krugman, who is apparently the "17th most widely cited economist in the world today", wrote this article in Sep 2011: http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfetters/ Personally, I'm not convinced that Krugman fully understands Bitcoin though (after all, it has substantially different properties to other money), and I'm not the only one....


5

There is no way to determine (that I can imagine) the number of lost private keys, you would have to make a guess that after x years without movement the private key is lost but that would just be a guess.


5

Adding to my answer on What are some of the proposed ideas to why the Bitcoin dropped to sub $400 in the end of summer 2014?, which I think is still mostly accurate: Bitstamp loot There are about 19k bitcoins held by the hacker that raided Bitstamp. While, as far as I know, they haven't found their way back into the market, it is an amount that would ...


4

One has to distinguish between three different sources of deflation. Based on the famous quantity equation there are three possible scenarios how a deflation can happen. M * V = Y * P M= Money Supply; V= Money Velocity; Y= Output/Production/Real GDP; P= Price Level Deflation is commonly defined as a decrease in overall price level (e.g. P goes down). So ...


4

You could easily create a bitcoin2, bitcoin3, ... you could create an infinite number of bitcoin currencies having different parametric spaces. These would live in separate mathematical spaces however, so you wouldn't for example be able to create bitcoins in bitcoin2 that affect bitcoins in the original bitcoin: it would be a completely separate system. ...


4

I really think Bitcoin's biggest vulnerability is the 51% attack that can be performed by entities with large amounts of money, not any regulatory issue. Last I heard, it would cost $16 million to carry out a 51% attack. While this is a lot of money to most people, it's chump change to the federal government or Visa / Mastercard / Large banks. I saw a ...


4

Once upon a time someone used Bitcoin's ability to embed arbitrary text inside a transaction to put an ASCII Art Ben Bernanke into the blockchain. Referring to the fact that current blocks must still reference the Bernanke block as a "dependency" rounds out the joke.


4

The Chinese are intense savers and frugal. Their interest in Bitcoin will involve relatively small price corrections. Do you want to say the will be resistent to price drops (in the bubbles for example)? Yes. Bubbles will still happen, but the correction would be less severe because Chinese investors tend to buy-and-hold through the ups and ...


4

I like this question1 - we don't get many big picture questions. How could Bitcoin change the world? A mature digital cryptocurrency could reduce trade barriers and thus increase the rate of productivity dispersion throughout society. As money is a form of fungible authenticated information2, non-proprietary digital money gets to take advantage of the ...


4

The best way to derive the possible value is by looking at market cap of bitcoin as a whole. There is currently about 1.2 trillion in USDs in physical currency alone. There are many ways to count how much USD there is though. M1 represents all of the currency in the M0 money supply, plus all of the money held in checking accounts and other checkable ...


3

According to xkcd: Money Chart estimated total economic production of the human race as of 2011 is $2,396,950,000,000,000 . Divide it by 21 million and the theoretical maximum price per bitcoin would be $114,140,476, but that figure is impossible, because for one, even in best case scenario Bitcoin will co-exist and compete with other currencies and would ...


3

Closed vs open loop isn't a black or white definition. For example even in the US were you have significant velocity of money companies buy parts in other currencies (from other countries), consumers imports goods manufactured overseas, and investors buy foreign stocks. So there is no such thing as a completely closed loop. I think what you are asking is ...


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