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To: palmer

So you’re saying someone has a reserve of REAL metal somewhere?

If this is just play money for on-line stuff, it’s worthless. I don’t get it.


8 posted on 02/19/2014 6:13:05 AM PST by the OlLine Rebel (Common sense is an uncommon virtue./Technological progress cannot be legislated.)
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To: the OlLine Rebel

Nobody has a real reserve anywhere, the big centralized currencies leased theirs away a long time ago. The way bitcoin works is that people can get the coins only by making sure that transactions are nonfraudulent. The amount of new coin released from the mining is strictly limited. That way you can be sure that your bitcoins will be worth something in the future subject to wild speculative swings of course. You can use to buy things you need online, or buy hard currency to buy physical things.


9 posted on 02/19/2014 6:18:27 AM PST by palmer (There's someone in my lead but it's not me)
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To: the OlLine Rebel
If this is just play money for on-line stuff, it’s worthless. I don’t get it.

I think of the coins as more of a product than of a currency. A widget isn't backed by metal either. But it may be a product that is in demand, giving it real value.

The transactional security, potential for at least partial anonymity, the ability to bypass intermediaries and their fees for a transaction, and the (as yet) non-government control may make it a product that is in demand.

Here's how my relatively inexperienced mind looks at it:

A lot of computer power is needed to help keep up with and manage the ongoing ledger of transactions and help utilize the encryption necessary to create such a product. As a reward, the computers that do the work (miners) and the people that run them get to split up shares of the products as they are created. They can hoard them, exchange them online for products, or sell them off for real dollars in exchanges as they wish.
15 posted on 02/19/2014 7:12:29 AM PST by mmichaels1970
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