Chris_Sleeps Posted May 31, 2011 Share Posted May 31, 2011 (edited) This isn't fiat money because it has no legal status, that should tell you something about it's real value. Its legal status is irrelevant if there is a community of people that still have faith in the currency. Aslong as they trust in it, they can exchange it between themselves. In essence it is a lot like a local currency, just global and based on computers. Edited May 31, 2011 by Chris_Sleeps Grammar Link to comment Share on other sites More sharing options...
RootsBooster Posted May 31, 2011 Share Posted May 31, 2011 I don't really know much about data encryption or online security, but if these bitcoins are just data, then can't they be copied? I read about them taking so long to generate each algorythm (or something) but what's to stop someone from copying that once it's been generated? Link to comment Share on other sites More sharing options...
DaFoot Posted May 31, 2011 Share Posted May 31, 2011 I don't really know much about data encryption or online security, but if these bitcoins are just data, then can't they be copied? I read about them taking so long to generate each algorythm (or something) but what's to stop someone from copying that once it's been generated? They have a hash of each transaction incorporated into the coin somehow. I don't understand the details but the hashing of a transaction into the coin is supposed to prevent copying. Link to comment Share on other sites More sharing options...
RootsBooster Posted May 31, 2011 Share Posted May 31, 2011 They have a hash of each transaction incorporated into the coin somehow. I don't understand the details but the hashing of a transaction into the coin is supposed to prevent copying. Wouldn't that make it traceable then? Link to comment Share on other sites More sharing options...
Cyclone Posted May 31, 2011 Share Posted May 31, 2011 Wouldn't that make it traceable then? That would have to be the entire point. You couldn't forge a 'coin' because they'd know the current history and owner of every coin that had been issued. I don't see any point to this scheme at all though, it smells like a money making scam for whoever dreamt it up and nothing of value to anyone else. Link to comment Share on other sites More sharing options...
Bulgarian Posted May 31, 2011 Share Posted May 31, 2011 I Imagine that you could buy $100 of bitcoins, with no buying fee, then use them to buy stuff on the internet, again with no fee, it's like having virtual cash. Provided it's secure it would be pretty good. Of course someone will figure out a way to make money of it and ruin it all. Link to comment Share on other sites More sharing options...
Cyclone Posted May 31, 2011 Share Posted May 31, 2011 Or you could just use $100 which doesn't risk disappearing when the system fails in some way. Link to comment Share on other sites More sharing options...
Bulgarian Posted May 31, 2011 Share Posted May 31, 2011 Or you could just use $100 which doesn't risk disappearing when the system fails in some way. True, but how can you use the $100 without someone charging you along the way. Like I said it's a nice idea if it works. Link to comment Share on other sites More sharing options...
anywebsite Posted May 31, 2011 Share Posted May 31, 2011 (edited) Its legal status is irrelevant if there is a community of people that still have faith in the currency. Aslong as they trust in it, they can exchange it between themselves. In essence it is a lot like a local currency, just global and based on computers. Trust is the only thing that gives any currency it's value. With fiat money you trust that you can (and have to) pay your taxes in that currency, because the government says so. With bitcoins there is absolutely nothing real to have any trust in. So what happens when the faithful few lose their trust in it? Even if it works for a while, if you make a profit in bitcoins, you'll need to convert them back into pounds sterling to pay your taxes on that profit. Also, it's not managed well, there are other huge economic flaws in the system. Only a limited amount of bitcoins can be made (in theory) which creates a deflationary pressure. If it becomes more popular, then bitcoins go up in value. So, if it is a success, then nobody will want to sell anything in bitcoins, they'll want to horde them & buy more, it can never become a tradeable currency. So, it's value will go up, until people lose trust & work out they cant actually buy anything with bitcoins, the founders will sell their horde, then there will be a massive crash & they'll be totally worthless in the blink of an eye. Edited May 31, 2011 by anywebsite Link to comment Share on other sites More sharing options...
Cyclone Posted May 31, 2011 Share Posted May 31, 2011 True, but how can you use the $100 without someone charging you along the way. Like I said it's a nice idea if it works. Well, personally I'd use £, being in the UK. And I normally do it using a credit card or debit card, facilities for which no one charges me... I could use paypal I suppose, but then you'd be right, someone picks up the bill for the service. That said, I'd rather trust paypal with my money than this invented 'currency'. Link to comment Share on other sites More sharing options...
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