Will people not spending their Bitcoin cause Bitcoin to fail? [duplicate]


People are definitely spending bitcoins--BitPay Inc processed over 5.2 Million dollars worth of eCommerce in March 2013, and that was before the full media glut of April. Some excerpts from their blog:

This eCommerce activity from merchants selling computers, consumer electronics, precious metals, and even government services has likely eclipsed the illicit activity widely estimated from sites like Silk Road.

BitPay has also approved over 1,300 new merchant applications during the month of March, bringing their total number of approved merchants to over 4,500. The explosive growth in BitPay’s business comes after February’s payment processing volume of $687,000 in transactions with 2,300 completed invoices.

BitPay is even hiring right now, though for software engineers rather than sysadmins.

Similarly, Coinbase reported recently that they are processing 15 Million dollars per month. Their business is a combination of eCommerce and Exchange...

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Imagine a scientist reading about an experimental result and then repeating the experiment for herself. Doing so allows her to trust the result without having to trust the original scientists.

Bitcoin Core checks each block of transactions it receives to ensure that everything in that block is fully valid—allowing it to trust the block without trusting the miner who created it.

This prevents miners from tricking Bitcoin Core users into accepting blocks that violate the 21 million bitcoin limit or which break other important rules.

Users of other wallets don’t get this level of security, so miners can trick them into accepting fabricated transactions or hijacked block chains.

Why take that risk if you don’t have to? Bitcoin Core provides the best possible security against dishonest miners along with additional security against other easier attacks (see below for details).

How Validation Protects Your Bitcoins

and put your...

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Bitcoin version 0.8.1-beta
Qt version 4.8.3




I have used this Bitcoin client for a while. The configuration was initialized under Windows XP, and later on transferred to a Windows 7 machine. It has worked for several months swithout any notable problems -- with the only exception of it sometimes not including a "mined" transaction into my free balance immediately as it matures (instead it needs to be restarted).

Today, about 4 hours after receiving a "mined" transaction, it then crashed telling:

Assertion failed!
File: src/main.cpp
Line: 1127
Expression: pindexFirst

After restarting, it appears to have recovered...

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Many netizens have heard of bitcoin, the digital currency. This means it exists electronically. To be more precise, bitcoin is a type of cryptocurrency – the implication of security and encryption is important.

In this post, we attempt to identify 10 questions about Bitcoins that can give you a clearer understanding of what it is, what it does and how you can use it to buy products or services online.

1. What are bitcoins?

Bitcoin (capitalised) refers to the software or network (ie: the Bitcoin Network), while bitcoin (not capitalised) refers to the digital currency itself (ie: two bitcoins).

The price fluctuates, depending on what people were willing to pay for it. It traded for as low as pennies (during the infancy stage) to as high as USD1200 during its peak in 2013.

2. Who developed the idea of bitcoins?

The idea of Bitcoin was conceptualised by Satoshi Nakamoto, an anonymous figure. In May 2008, he shared a white paper [PDF] about...

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Editor’s note: Brian Armstrong is the co-founder and CEO of Coinbase, a leading consumer, merchant, and developer platform for Bitcoin purchasing, selling, and payment acceptance. Follow him on Twitter.

Mt.Gox is gone. The one-time biggest Bitcoin exchange closed its doors this week and filed for bankruptcy this morning. Questions about the future of Bitcoin have once again been up-leveled to the headlines of nearly every major media outlet.

Over the past few weeks, we’ve seen a string of issues in the Bitcoin space, from the transaction malleability bug that ultimately closed Mt.Gox’s doors to a corresponding distributed denial of service (DDoS) attack that delayed transfers on multiple exchanges and services. These attacks, along with recent phishing scams and money-laundering arrests, have cast doubt on the Bitcoin space and caused consumer panic — which is fair.

But what hasn’t been communicated well is how those who are truly invested in the future of...

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In recent weeks, interest in Bitcoin, the counterculture cryptocurrency, has soared along with its price -- at last count, one Bitcoin fetched $138, up 2,600% in a year and 550% in two months. A number of journalists and financial bloggers simply aren't sure what to say about Bitcoin, because it's not generally well-understood, even within the small circle of true believers that stand to gain the most from continued publicity. Some people will tell you that Bitcoin has a bright future as a currency based on attributes that place it at odds with every other widely accepted currency in use today. Others want to stand back and watch it rise as a store of value, caught up in the excitement of rapid price-appreciation.

Not me. I learned about Bitcoin in 2011, just before it went on its first massive run, from less than a dollar to a peak of $35 that summer. I didn't think it was worth anyone's time then, and it's still not worth anyone's time now, unless you have a taste...

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BitCoin, the web’s virtual currency, isn’t without its controversy. But two things are known for sure – it’s an interesting economic experiment, and people are using it to buy real things right now. Whether you just want to find out more about BitCoin or to actually use the currency, you’ll want to check out “Virtual Currency: The BitCoin Guide”, the latest manual from author Lachlan Roy.

Cash is great. There are no banks to worry about. No fees, no credit cards, no chance of having your identity stolen or your account frozen. You may not earn any interest, but you will always have instant access to your money and you will know exactly how much you have.

Wouldn’t it be great to be able to use cash on the Internet, too? To have the ability to store your own money on your own computer? To buy what you need online without dealing with banks and middlemen? That’s where BitCoin comes in. Cash for the Internet is here.

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Now that U.S. Senators Charles Schumer and Joe Manchin are advocating a crackdown on Bitcoins (a peer-to-peer electronic currency), the mainstream media is starting to pick up on the story. Our informed readers here have probably heard something about the issue by now, but may be wondering what the heck these things are. There has been much debate about whether bitcoins are a legitimate digital currency or an Internet era scam, so we will examine the issue of in an effort to make some sense of it.

Bitcoins were created by an anonymous person, purportedly from Japan, going by the name of “Satoshi Nakamoto.” On the surface, bitcoins are one of the first successful implementations of a digital currency created independent from any government or central bank and therefore is resistant to government control. Bitcoins are championed by cyber libertarian/anarchists who want people to be able to spend money as they deem fit. There is evidence that bitcoin currency is having some...

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Address reuse refers to the use of the same address for multiple transactions. It is an unintended practice, abusing the privacy and security of the participants of the transactions as well as future holders of their value. It also only functions by accident, not by design, so cannot be depended on to work reliably.



Address reuse harms the privacy of not only yourself, but also others - including many not related to the transaction. In some cases, these risks are serious enough that they are likely in violation of reasonable consumer protection laws.

When addresses are re-used, they allow others to much more easily and reliably determine that the address being reused is yours. Every time the re-used address's private key signs a fresh transaction, whoever receives it can use the histories of that address to discover information about you, and everyone who is interested in discovering the identity of the address's owner has one more...

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This was written by someone to inform our community about various issues re: Bitcoins.

Recently, Visa and MasterCard have refused to do business with Backpage.com, a popular site for advertising in the adult industry. Backpage.com allows payments to be made in alternative currencies such as Bitcoin, Litecoin, and Dogecoin. This explanation provides basic information about Bitcoin (Litecoin and Dogecoin are very similar) which may be helpful to sex workers who need to use it to pay for advertising.

Bitcoin: Like Foreign Money

The simplest way to understand Bitcoin is to think of it as foreign currency. It is the money of a country that doesn’t exist in the physical world. If I travel to Europe and want to buy something, I must exchange some of my US dollars for Euros. The Europeans don’t want dollars, because they normally do business in Euros. Most airports will have a "currency exchange" booth, that will accept my dollars and give me...

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Bitcoin Unlimited , one of the Bitcoin Core software forks introduced in late 2015, garnered much attention in recent months. The project gained hash power support from several new Bitcoin mining pools, including ViaBTC , GBMiners and BTC.TOP , while node adoption appears to be on the rise as well.

The central idea behind Bitcoin Unlimited - specified in " Bitcoin Unlimited Improvement Proposal 001 " (BUIP001) - is to hand control of Bitcoin's block size limit to users and miners. Or perhaps more accurately: to make this control more explicit and easier to handle.

But as explained in " How Bitcoin Unlimited Users May End Up on Different Blockchains ," BUIP001 does not include a technical consensus mechanism as reliable as in Bitcoin's current consensus rules.

Instead, Bitcoin Unlimited relies on a philosophy often referred to as "Emergent Consensus."

(Note: If you are not sure...

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How is this not a fiat currency?

Bitcoin is absolutely fiat. Nothing backs bitcoin beyond what people are willing to exchange for bitcoin right now.

Gold has a long, long history of holding value, bitcoin does not. However, gold has a long history of being confiscated too. The Roman army did it for years to continually expand the Roman empire. More recently, in 1933 US Presidential Executive Order 6102 prohibited individuals from "hoarding" gold coins, bullion, and certificates in excess of $100. People were required to "deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933." Today, they simply arrest you for suspected 'smuggling' or 'money laundering' at airports and border crossings if they catch you carrying a lot of gold.

People looking at Cyprus are seeing...

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TL;DR: No. The argument is basically that hoarding will make Bitcoins so valuable that nobody will be willing to offer people enough to part with them. Does that pass the giggle test? Another way of stating the argument is this, "If gold is $2,000/oz today but people think it will be $5,000/oz next year, nobody will trade any gold today." Again, think about it. Does that pass the giggle test either?

Hoarding increases the value of Bitcoins, increasing the profits from mining. This encourages more people to mine, increasing the total hashing power and thus the security of the system.

It also makes holding Bitcoins more profitable. This helps to encourage people to accept them in trade because they are less worried about them decreasing in value while they are holding them. Using Bitcoins as a currency inevitably means people sometimes have to hold them and having them drop in value while you hold them is a risk. Hoarding reduces this risk. But it also makes it harder...

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Find answers to recurring questions and myths about Bitcoin.

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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 "cryptocurrency", 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 central authority. The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010...

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It's pretty simple, really. For any medium of exchange to displace another as a means for buying stuff, users need come out ahead. And this isn't happening with bitcoin.

We can break any exchange medium's user base into consumers and sellers. Now we know that sellers love bitcoin—they've been adopting it at a blistering pace, from Amazon to Microsoft to CVS. No wonder when we consider the cost savings they enjoy. A merchant is required to pay around 1.5-2.0% for each credit card transaction. Bitcoin payment processors like Coinbase, Bitnet, and Bitpay charge just 0.5% while simultaneously absorbing all of merchant's forex risk. A retailer with $1 million in sales that converts all of its shoppers from Visa/Mastercard payments to bitcoin has just earned themselves $10,000. It's a no-brainer.

While sellers are jubilant, consumers aren't. Tim Swanson shows that bitcoin payments haven't budged in over a year with bitcoin processor Bitpay's transactions volume amounting...

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As I am sure that 99% of the people reading this are aware, Bitcoin recently dropped significantly in price, and at a rather quick rate. This did not surprise me, as Bitcoin has traditionally followed a pattern of volatility, followed by stabilization, followed by more volatility. What did surprise me was the reaction from so many in the community. So many people are rushing to find a reason why this happened, and not stopping to think it through rationally, nor to analyze it based on Bitcoin’s history.


Full Disclosure: Bitcoin, Reddcoin, and Ethereum

I am almost completely invested in digital currencies in general, with the exception of the cash that I need for specific bills and day-to-day life, and I keep small amounts of a wide range of currencies. However, the majority of my funds are in Bitcoin, Reddcoin, and Ethereum. While it is obvious why Bitcoin is on that list, as it is the reason that the cryptocurrency industry exists at all, when I...

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creighto wrote:BTW, it's not true that Bitcoins are 'deflationary', or even of a fixed number. At least not yet, as the 21 million mark (which is actually 2,100,000,000,000,000 as the client hides the real number from the user by adding a decimal point at the eighth digit for readibility) is a limit that can never be reached, and won't even come close for 120 years. Presently, bitcoins are *very* inflationary, running just under 50% APR. This will drop off quickly in the next few years, dropping to 6.5% APR roughly around Jan 2013 and then below 2% APR by 2020; but calling it 'deflationary' is wildly inaccurate.

Somehow I misunderstood - I had thought that the limit will almost be reached in 20 years. However, this doesn't change anything about the main problems.

Whenever the economy shrinks relative to the bitcoin there is inflation (e.g. because the pool of bitcoins grows faster than the economy, or because the economy contracts, for example after a natural...

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I've long suspected bitcoin was created by a government. Bulletproof protocols usually require peer review, yet there have been zero leaks from the reviewers. Pools of crypto guys who don't leak stuff are usually employed by governments.

The part that puzzles me is why a government would do this. I can imagine several possibilities:

1. To finance their own black operations.

2. Because they thought digital currencies were inevitable, and they preferred bitcoin to some potentially more malevolent form. (Could bitcoin have been worse from a government's point of view?)

3. A friend suggested this: because they felt their currency would never become the standard reserve currency, and they felt it was better that no one's be if theirs couldn't be.

4. A variant of the above: the US did it because it seemed inevitable that the dollar would eventually lose its place as the standard reserve currency, and better to have it replaced by bitcoin that the yuan.


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