How would Bitcoin's purchasing power be measured after fiat were gone?

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The Bitcoin price is the result of a free market. There is no central authority that could by order "pump money into the system".

This currently happens anyway - but decentralized. When more people buy Bitcoins the market cap increases. With a higher market cap a single trade has a lesser effect on the price. Therefore, over time when Bitcoin attracts more users and investors, volatility will go down. There is no need for a centralized intervention.

Bitcoin can also be compared to small cap stocks or currencies of small countries. These types of assets are known for their high volatility. Large cap stocks on the contrary show a significantly smaller volatility due to the above stated reasons.

For a more in depth treatment of these arguments, read this article on Bitcoin...

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Before we start, if you’re new to Bitcoin mining and don’t know what it is watch this short and simple explanation:

“Is Bitcoin Mining Profitable in 2017?“

The short answer would be “It depends on how much you’re willing to spend”. Each person asking himself this will get a slightly different answer since Bitcoin Mining profitability depends on many different factors. In order to find out Bitcoin mining profitability for different factors “mining profitability calculators” were invented.

These calculators take into account the different parameters such as electricity cost, the cost of your hardware and other variables and give you an estimate of your projected profit. Before I give you a short example of how this is calculated let’s make sure you are familiar with the different variables:

Hash Rate – A Hash is the mathematical problem the miner’s computer needs to solve. The Hash Rate is the rate at which these problems are being solved. The more miners...

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"The value of fiat currency (government issued currency) is calculated by the government, as they can manipulate its value very easily."

You should tell Bernanke this, because they've been missing their inflation targets for several years now, and we've had 1-2% inflation for three years in which the money supply has increased 142%. The value of currency is affected much more by international markets and trade imbalances; they can't just print money to buy Canadian and Saudi oil, it doesn't work like that. And since a huge proportion of dollars goes to buy oil and imported goods....

"How did that seller decide his prices for Bitcoins?"

That's sort of like asking how hot the Universe was at the instant of the Big Bang. Most theories of pricing only work if you have many, generally very very many, market participants. When there are two people, you're in a singularity because no rational actor would exchange anything for something that couldn't be exchanged anywhere...

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Authored by Valentin Schmid via The Epoch Times,

Up 158 percent against the U.S. dollar this year, bitcoin is now the best-performing currency. Many are confused as to how this mathematical protocol can be worth more than $2,600, and why it keeps going up. The short answer: Bitcoin is money, just a little better and cheaper than the alternatives.

If you don’t understand money, you cannot understand bitcoin. For most of us, money is the U.S. dollar, the fiat currency of the United States issued by the Federal Reserve and maintained by the commercial banking system.

But even this system is confusing. Most people don’t hold Federal Reserve notes anymore; they hold money in checking accounts or use their credit cards to buy things. This is electronic fiat money, stored on the servers of banks like JPMorgan Chase and Bank of America.

This type of money is a great medium of exchange. Because the state mandates the acceptance of fiat money by all commercial...

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When it comes to explaining the concept of money to people, there is one aspect a lot of consumers tend to forget. Money is only of value to our society because it provides us with purchasing power, and fiat currencies are not capable of maintaining that level of usefulness. Bitcoin, while suffering from mild price swings on a regular basis, is the only currency that can provide an increase in purchasing power over time.

Also read: Bitcoin Is Of High Value To Live-Streaming Apps Like MeVee

Fiat Currency’s Declining Purchasing Power

Figuring out how money works is not all that difficult, as the concept is entirely defined by how much one can do with the currency received. In the world of fiat currency, everything we buy or sell is priced at a certain value, and that amount needs to change hands if people want to purchase something in particular.

Some people may have noticed how they can purchase less and less with the same amount of money...

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With the addition of some simple price information within bitcoin wallets, the change in purchasing power of one’s bitcoins would be immediately apparent to the owner and would enable a better understanding of value when making spending decisions. In my opinion this knowledge would prompt more people to hold bitcoin and would drive adoption.

Before the introduction of HD wallets (HD means Hierarchically Deterministic and these wallets seamlessly and automatically generate a new public key each time you receive bitcoin), you had to manually generate a new public key for each and every transaction if you wanted to preserve any of your own privacy and the privacy of the Bitcoin network.

Also read: ‘Only One Blockchain Matters’ an Interview With Bobby Lee

An Average Cost Calculator Template

The advent of HD wallets was a unique turn in the bitcoin space because it meant that the entire network of users benefited from a seamless feature that nobody had to...

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Evander Smart · January 3, 2017 · 4:00 pm

Bitcoinist asked digital currency experts Kim Dotcom, Reggie Middleton and Tone Vays to give us their thoughts on what we should expect from Bitcoin this year.

3 Prominent Experts Share Their Predictions

It would be hard to find anyone who predicted Bitcoin could more than double in value in 2016. Even the most ardent proponents can only be so optimistic. My view of its price went as high as $800 by year’s end, but I certainly didn’t see the afterburners coming in a December Bitcoin buying spree.

Where do we go from here? Is there something that can affect the Bitcoin price in 2017 that we should consider? I asked three experts in the digital currency space to give me their thoughts on what we should expect from Bitcoin this year and here’s what I discovered, starting with Bitcoin blogger and trader, Tone...

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Not satisfied with eliminating digital piracy from the world, two U.S. senators want to crack down on Bitcoin, an open-source digital currency.

Senators Charles Schumer and Joe Manchin are pressing officials to take action against Bitcoin, which Gawker recently claimed is being used on underground black markets to purchase illegal drugs. The senators expressed their concerns in a letter to Attorney General Eric Holder and Drug Enforcement Administration chief Michele Leonhart, Reuters reports.

Unlike other currencies, Bitcoin uses a peer-to-peer technology to manage transactions and validate payments. Since no bank is involved, purchases don’t leave a paper trail for law enforcement agencies to track criminal activity.

“The only method of payment for these illegal purchases is an untraceable peer-to-peer currency known as Bitcoins. After purchasing Bitcoins through an exchange, a user can create an account on Silk Road and start purchasing illegal drugs from...

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Bitcoin has stared down an existential threat, after a consortium of miners briefly gained enough processing power to theoretically destroy the currency.

For a few hours on Friday, mining pool Ghash.io controlled 51% of all the processing power being used to perform the calculations that keep bitcoin secure. If it had abused that power, it would have had the ability to indirectly take money from other users, for instance by buying something and then rewriting history so that the purchase never happened.

But shortly after the threshold was breached, some members of the mining pool pulled their computing power from the group, averting – or at least, delaying – catastrophe.

"The high level of combined hash power in the Ghash pool is concerning to many participants in the system," said one such member, BitFury, an industrial bitcoin mining firm. "As a leader and trusted partner in the bitcoin system, BitFury has decided to transfer some of its hashing power away...

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7 Reasons Why Bitcoins Are Better Than Fiat Currencies

One of the most asked questions I get when people discover I work in the Bitcoin industry is ”Evander, why should I start using Bitcoins when I have Dollars (Or any other fiat currency)?” Instead of explaining it to each person for ten minutes, I figured I’d just make an article about it that I can send out with a simple hyperlink. Hell, I might put the link in my email signature!

FYI, “fiat currency” is any national currency decreed legal by the national government, but is intrinsically valueless money. Fiat currencies no longer represent gold deposits or other things of known market value. They are just the accepted pieces of national paper, printed by a private central bank and loaned to the national government, with interest. All fiat currencies are debt instruments.

The U.S. Dollar and other fiat currencies certainly have their own inherent advantages, which mostly revolve around their acceptance by...

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George Basiladze

George is a finance guy with an in-depth knowledge of financial systems. Together with Dmitry they designed the concept of

Cryptopay

in May 2013 and started developing the system.

Latest posts by George Basiladze (see all)

Bitcoin remains a wholly under appreciated technology, despite the growing interest in the underlying
The term blockchain is derived from the two English words 'block' and 'chain'. An individual 'block' refers to all of the transactions which have taken place within a fixed period of time. Each block contains information to identify its immediate predecessor, which therefore links all of the blocks together into a long 'chain' going back to the network's very first transaction.">blockchain. There are several key features that make bitcoins a great alternative to bank-issued fiat currencies, including the decentralisation and consensus the software is built on. The peer-to-peer nature of the
The first...

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Make the value of bitcoin...

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Signs on window advertise a bitcoin ATM machine that has been installed in a Waves Coffee House in Vancouver, British Columbia October 28, 2013. REUTERS/Andy Clark

There's a lingering misconception out there that deflation will be a problem for Bitcoin, and that will prevent it from widespread use.

The argument (which, full disclosure I used to believe) basically goes like this: Because there's a fixed amount of the coins, people will horde them on anticipation of rising prices, and this hording will prevent the actual spending of currency, and therefore Bitcoins can only be speculative tools.

This argument stems from the correct argument that economists make about national fiat currencies, which is that when you're in a period of deflation (characterized by falling prices and a rising currency) economic activity slows down, because you'll have more buying power tomorrow than you did today, and so what's the rush to...

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Bitcoin has been around for over 8 years now. But the widespread popularity of this digital currency as an alternative to fiat currency dates back only to the past 2-3 years. While Bitcoin continues to gain a lot of media attention as the “future of currency”, it has its own struggles that raise doubts among people.

Even though there is so much media attention towards the digital currency, it hasn’t contributed much towards the rate of adoption. Bitcoin continues to suffer from a slow rate of adoption which is attributed to either the lack of understanding or confidence among the masses.

A recent article in one of the leading business publications offers an insight into the minds of an average user. In addition to the lack of understanding about Bitcoin and its underlying technology, there are other concerns shared by regular people used to the traditional banking system which is affecting the adoption.

Traditional financial systems follow a centralized...

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Table of contents

General

What is Bitcoin?

Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

Bitcoin is the first implementation of a concept called crypto-currency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a...

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As long as we use video cards for mining it is generally agreed to measure their capacity in Kh/s. In fact, the productivity of video cards can be measured according to their cryptographic algorithm. For the capacity rating of video cards we use Scrypt algorithm.

What does "700 Kh/s = 1 Unit" mean?

We have introduced a concept of a “Unit” by which we understand the video card Radeon R9 280 X Gigabyte (GV-R928XOC-3GD) that has productivity around 700 Kh/s. From there, if the total capacity is 2 800 Kh/s we consider this as a combined working process of 4 video cards. And if we have your request for hardware purchasing you will get 4 video cards Radeon R9 280X Gigabyte...

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Bitcoin has reached all new heights, attracting the interest of investors and non-investors alike. Many people are more interested in trying to snag a piece of this crypto-currency’s astronomical gains than really enjoy the unique attributes of an anonymous digital money. So should you buy?

TL;DR – No, you probably shouldn’t invest seriously in Bitcoin, but you can buy one or two Bitcoins for fun if you really want.

I first heard about Bitcoin in 2009 or 2010 from my boyfriend at the time. He even got me to set up a wallet, so I could use my computer to earn Bitcoin’s in the background. At that time, I was freaked out at the idea of something or someone using my computer’s processing power while I slept, so I’m not entirely sure if I actually own any Bitcoins. Last year, I made some efforts to try to find my lost wallet in the hopes of learning out I had a handful of Bitcoins kicking around from my undergraduate days. But in what has been almost 10 years, I had given...

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David Andolfatto:

Why gold and bitcoin make lousy money: A desirable property of a monetary instrument is that it holds its value over short periods of time. Most assets do not have this property: their purchasing power fluctuates greatly at very high frequency. Imagine having gone to work for gold a few weeks ago, only to see the purchasing power of your wages drop by 10% in one day. Imagine having purchased something using Bitcoin, only to watch the purchasing power of your spent Bitcoin rise by 100% the next day. It would be frustrating. Is it important for a monetary instrument to hold its value over long periods of time? I used to think so. But now I'm not so sure. While I do not necessarily like the idea of inflation eating away at the value of fiat money, I don't think that a low and stable inflation rate is such a big deal. Money is not meant to be a long-term store of value, after all. Once you receive your wages, you are free to purchase gold,...
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If you have sent a bitcoin payment in the last couple of weeks, you may have noticed that your transactions are taking much longer than expected to confirm.

We have received your emails.

Since, like the Bitcoin network, we are currently working through a backlog, we want to thank you for your patience. With the high volume of questions we're getting about delayed payments, we decided it would be best to write a short explanation about what's happening with many bitcoin transactions right now.

Transactions on the Bitcoin network itself aren't controlled or confirmed by BitPay, but by the bitcoin miners which group transactions into "blocks" and add those blocks to the Bitcoin "blockchain" – the shared historical record of all transactions. When a transaction has been added to a block six blocks ago, it's considered a done deal.

Currently, bitcoin network traffic is unusually high due to increasing demand for transactions per block. Block sizes are...

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Bitcoin topped $1200 overnight for the first time, bringing it ever closer to the price for an ounce of gold...

As Bloomberg notes, a ten-day rally for the cryptocurrency has narrowed its gap with the precious metal to the smallest on record.

Each asset has been touted as an alternative to regular currencies, because of constraints on their supply and the capacity they offer to sidestep governments.

Partity looms once again...

But, as GoldMoney's Stefan Wieler previously noted, the price of Bitcoin is closing in on the price of gold again this week; however, this comparison is completely arbitrary.

Gold is measured in weight, while Bitcoin, much like currency, is an abstract form of money and can only be measured in units of itself. One Bitcoin is worth a lot more than 1 gram of gold, but a lot less than 1 tonne. Despite Bitcoin’s stellar performance in 2016, the size and depth of the cryptocurrency market is dwarfed by the $7 trillion gold...

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Like it or not, we are living through a major inflectionary point in human history; on more fronts; with more lasting, and dramatic changes than any before it. Yes, there have been hundreds of humanity-altering wars throughout history. However, never have so many people been impacted by current events; as, for example, there are 7.4 billion people today, compared to 2.3 billion at World War II’s onset. And while WWII shaped the culture, economic and monetary, and physical borders for generations; in hindsight, until recently, the post-war Era has been “more of the same.” Only this time, global economic leadership switched from one Western power, the UK, to another, the U.S.; as evidenced by the “reserve currency,” in an increasingly global world, switching from the Pound to the dollar. Read...

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Mike R

I’ve expressed these sentiments before regarding Bitcoin here at this web-site, but here it is from somebody infinitely smarter than me, and with the money to back up what he says …
Via MauldinEconomics.com,

The price of Bitcoin has risen by 210% since March to over $2,900… and one of the world’s most successful investment strategists is warning investors to stay away.

Speaking at the Mauldin Economics’ Strategic Investment Conference, Raoul Pal-author and publisher of The Global Macro Investor, an elite macroeconomic and investment research service—said Bitcoin’s explosion upward is mania.

Bitcoin Is a Bubble
“The explosion [in the price of Bitcoin] is a mania. It’s people looking for a rate of return. It’s in the bubble phase. [Bitcoin] goes through this periodically… it rises several hundred percent, and then collapses.”
In December 2013, Bitcoin ran up to over $900 and subsequently collapsed to below $250… it would take three years for...

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