Dumb question: Who issued the Bitcoins in the first place?
Another dumb question: What’s to stop that person from issuing more?
I don't get it either. At least with the tulip Ponzi scheme, those who lost out had pretty flowers.
This whole thing seems a bit like Enron.
PT Barnum is smilin' in his grave <^..^>
Anyone with a computer can issue a bitcoin.
Another dumb question: What’s to stop that person from issuing more?
It takes a LOT of processing time to generate a bitcoin. On my machine it would take about a year of calculations to solve the algorithm needed to generate a single bitcoin.
There are also a limited number of possible solutions to the algorithm, that sets a cap on the total number of bitcoins that can exist.
Oh you haven't heard of the godlike powers of:
(Blaring fan fair music)
It has amazing powers.
It can leap tall buildings in a single bound...
it can defy basic laws of economics...
it can cure rickets and embarrassing anal seepage.
it can even deal with the heartbreak of psoriasis.
There is no problem too tough for it.
Of course if the guys who wrote it sez "Well OK since 21 Million Bitcoins seem so popular lets get doubly popular and do it again!" There is nothing to stop them.
but shhhh don't say anything it will harsh the "true believer's" mellow and we can't have that.
Do your research on Bitcoin. Risky, but great idea. no more than 21 million can ever be “mined”, and the difficulty of mining one BC increases every day.
Here is a great article - but do your homework on understanding what it is first.....
http://www.freerepublic.com/focus/f-chat/3098466/posts
Dumb question: Who issued the Bitcoins in the first place?
Another dumb question: What’s to stop that person from issuing more?
Supposedly, there is a 21 million coin limit.
Other crypto-currencies and private currencies also exist.
Anyone can solve (mine) for these solutions given the technical expertise and hardware. Therefore, it is individuals and not government indebting them, or bankers skimming off the creation of fiat that creates this new form of money. In lieu of government and banks, technology keeps everyone honest and provides for the distribution thereof. Basically, technology is replacing government and banking monopolies here and why the US Senate, the Red Chinese and London Banks are upset.
It's more complicated than I can simplify in a short post. I have probably invested in about 4 hours total of research to understand the whole system. But I'll try to make it simple...
There is a controlled process set up to limit the total Bitcoins that can actually be put in electronic circulation (Capped at 250K). They are created when someone sets up a support site with a program that interacts with others to validate transactions (currently 50 Bitcoins). A person that writes the program/algorythm necessary for the system is rewarded and new Bitcoins are created. There are currently something like 125K in circulation. The system that support Bitcoins will not take more than 250K. So once the magic number is reached, all of the infrastructure (alledgedly) will be in place to support all transactions. And all transactions are are regulated and approved independently and by private consensus through the software that was set up by each of the users.
Pros - It is solid as long as there remains confidence, government doesn't regulate, demand stays consistent and acceptance expands. Cons - If you lose your wallet (figuratively and literally per the system), it's gone. There is no paper or value to hold for proof. If you lose a decryption code.... Also, trading is all speculation at the moment. The designers have tried to set it up to closely resemble the price fluctuations of precious metals. But, best I can tell, there is nothing tied to those values. The value of a Bitcoin is all confidence and speculation driven by the trading price.
Disclaimer: I am no where near an authority on this and only started researching it a couple weeks ago. So far, unless the price drops back to $1/Bitcoin, I'll not be investing. And as far as I am concerned, it is only viable as an investment. Trading them for goods would require timing purchases and sales just right to validate the value of any barter for the seller and buyer.
Not a thing. The idea behind it is clever -- attempting to mimic the mining of gold, -- but in the end it's just another fiat currency. An intangible one at that.
You’ve benLurkin but you haven’t ben read’n. Just this week there’s been about 5 stories on FR explaining this.