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Bitcoin The Almighty Buck Technology

Vast Bulk of BitCoins Are Hoarded, Not Used 438

Posted by timothy
from the just-sift-them-through-your-fingers-wait dept.
another random user writes with this news from Ars Technica:"More than three-quarters of the digital coins in the Bitcoin digital currency scheme aren't circulating because they remain dormant in user accounts that have never participated in outgoing transactions, a recently published study has found. The figure translates to more than 7.019 million BTCs, the term used to denote a single coin under the digital currency, which uses strong cryptography and peer-to-peer networking to enable anonymous payments among parties who don't necessarily know or trust each other. Based on exchange rates listed on Mt.Gox — the most widely used Bitcoin exchange — the coins have a value of more than $82.87 million. On May 13, the date the researchers analyzed their data, there were slightly more than 9 million BTCs in existence."
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Vast Bulk of BitCoins Are Hoarded, Not Used

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  • by eldavojohn (898314) * <eldavojohn.gmail@com> on Thursday October 18, 2012 @10:51AM (#41692759) Journal
    So what you're saying is that there is a limited resource which we cannot make more of that people are hording? And the more people horde it, the higher the deflation? And people watch their value rise in USD as this happens? And you're surprised?

    What motive is there to spend your BTC? Isn't this how deflationary spirals [wikipedia.org] occur? Wasn't this an effect of The Great Depression and lead to FDR implementing a pump-priming strategy [wikipedia.org]?

    Could someone explain how they would escape that spiral? I'm not an economist so I don't know if there are other routes of which I'm unaware.
    • by Spad (470073) <slashdot AT spad DOT co DOT uk> on Thursday October 18, 2012 @10:56AM (#41692825) Homepage

      Ultimately, once the maximum bitcoins have been generated, you're pretty much guaranteed a deflationary spiral with no real way to restart the economy as you can't introduce any more money into the system.

      Sure, you might think that once you reach that point people will start selling their hoarded BTC to cash in, but that doesn't really help because most people involved aren't going to be dumb enough to buy something that can only really go down in value.

      • Re: (Score:3, Interesting)

        by Voogru (2503382)

        So why do you have a computer when you can always wait another six months, and buy a better and cheaper one?

        The computer industry is a deflationary spiral.

        • by Anonymous Coward on Thursday October 18, 2012 @11:20AM (#41693183)

          So why do you have a computer when you can always wait another six months, and buy a better and cheaper one?

          The computer industry is a deflationary spiral.

          Because today, right now, right this very moment, a computer has a functional, practical use. You can do things with it. You can make things with it. Hell, I'm communicating to you right now with one! And this particular one is well past six months old; it's around four years old! This is far, far more than you can do with BitCoins right now, and, as the deflationary spiral continues, in six months.

          There's this difference between a functional tool and a rapidly-deflating unit of pseudocurrency. I admire your trolling efforts to confuse the two to throw the weak-minded of us off of the point, but, well, you're just wrong.

        • Arms race. The value of a computer is not the raw processing power, but its output relative to competitors and the rent of porting existing applications and data away from it.
      • Definitely not facebook stockholders hoarding these.

      • by Laxori666 (748529) on Thursday October 18, 2012 @12:02PM (#41693757) Homepage

        This is poor economic reasoning at best.

        The amount of money in circulation has nothing to do with how much wealth there is in the economy. Printing a trillion dollars right now won't magically generate a trillion dollars in wealth (e.g. physical goods) - rather it will make everybody who currently holds USD collectively one trillion dollars poorer, as you'll have the same amount of goods being chased by a larger amount of 'money'.

        The trick is that the wealth of an economy is not best measured by spending, but rather, by what is actually produced. Spending is epiphenomenal. You can notice that rich families tend to spend more dollars per year, so there is certainly a correlation between how much a family spends and how wealthy they are, but if a poor family starts borrowing money and sending as much as a rich family, they don't magically become a rich family. However, if you only look at spending, then that poor family will seem just as rich as the family that is actually wealthy.

        When the government prints money, spending certainly increases. This is because it's impossible for prices to adjust instantaneously. For example, if there were $1 million in the economy and the government printed another $1 million, with all else being equal, all the prices should double. It takes a while for that to happen, though, so the first people to receive the printed money get a huge discount, as they're essentially paying half of what things are now worth. The people who are way down the line in terms of receiving that inflated money (e.g. after many many transactions have been made) receive less of a benefit as the prices have already begun to adjust. And the people who are attempting to do the rational thing - save money - are completely boned, because now all the money they have accumulated is suddenly worth half of what it is.

        Printing money is immensely beneficial to the government, as they can essentially tax people without them knowing it. Far easier to increase the money supply by 10% - where prices might take months or years to adjust - instead of levying a 10% tax on everybody. It also benefits the people who are closest to the government the most, as they receive those printed funds first and get everything at a discount. Yet they have brainwashed people into thinking inflation is good, deflation is horrible, so yes, please continue to steal our money at an acceptable rate.

        Why is it such a bad thing for prices to go down? Prices go down every year in computer goods - hard drives, video cards, RAM, processors, etc., are all cheaper and higher quality. What would be the problem if this were to happen across the board? It would reward saving tremendously - you could literally leave your money in the mattress and you would be gaining more value with it each year. Compare this to today's economy where if you were to do that it would slowly be taken away from you by the massive amount of money printing going on.

        The argument, of course, is that if you would accumulate wealth by leaving your money in a mattress, everyone will do that, no one will spend, and the economy will tank. This is specious at best and intentionally deceptive at worst.

        First of all, there's the moral argument - why is it okay for the government to steal your money without your knowledge or consent to promote the economy elsewhere? At least a tax is up front and explicit.

        Secondly, people like to have shiny things. There will always be demand - how could there not be? What's preventing you from buying a jetski and an apartment with a swimming pool in it and expensive clothing and whatnot? Just a lack of the economic resources to do so. You can argue, given limited resources, everyone will decide to just wait a little more so they have more wealth before finally spending it. And, indeed, some people will do so. But not everybody is a miser who will hoard their wealth without spending a penny of it. That is an extreme, but the reasoning stands: that activity defeats the purpose of money, which is to allow you

        • Re: (Score:3, Insightful)

          by Anonymous Coward

          What would be the problem if this were to happen across the board? It would reward saving tremendously - you could literally leave your money in the mattress and you would be gaining more value with it each year.

          You've answered your own question. If inflation amounts to a tax, then deflation is a subsidy for people who stuff their money in mattresses where it does no one any good. You're paying people with fat mattresses sit and watch their money instead of using it to produce more and create new wealth.

    • by jeffmeden (135043)

      I think an equally good question would be, is it the goal of a currency (or the currency controllers) to avoid deflationary spirals? The BTC deflation is magnified because it's comparative worth is ONLY pinned to USD or some other major currency, and perhaps a few types of illicit drugs. The problems it faces are not really in line with even a small real-world economy.

      • by betterunixthanunix (980855) on Thursday October 18, 2012 @11:31AM (#41693305)

        I think an equally good question would be, is it the goal of a currency (or the currency controllers) to avoid deflationary spirals?

        That is certainly a goal of currency, but I think it is indirect in the sense that avoiding deflationary spirals is necessary to satisfy other, more immediate goals of currency. The purpose of currency is to facilitate trade of some kind -- it is not useful if it cannot be spent, and the most useful currency would be one that can only be used for this purpose (there are other views, of course). Thus hoarding (and deflationary spirals) make money less useful, or in the worst case, totally worthless.

        I have argued in the past that Bitcoin is actually not useful as currency, and that it will ultimately fail for economic reasons before it fails for technical reasons.

        • by jeffmeden (135043)

          I think an equally good question would be, is it the goal of a currency (or the currency controllers) to avoid deflationary spirals?

          That is certainly a goal of currency, but I think it is indirect in the sense that avoiding deflationary spirals is necessary to satisfy other, more immediate goals of currency. The purpose of currency is to facilitate trade of some kind -- it is not useful if it cannot be spent, and the most useful currency would be one that can only be used for this purpose (there are other views, of course). Thus hoarding (and deflationary spirals) make money less useful, or in the worst case, totally worthless.

          I have argued in the past that Bitcoin is actually not useful as currency, and that it will ultimately fail for economic reasons before it fails for technical reasons.

          Going with that presumption, most currencies are at odds because they want to be a store of value (i.e. you can hang on to "just dollars" and your savings is relatively safe) but at the same time they want to facilitate trade. Spending leads to inflation (typically) and saving leads to deflation (typically). Bitcoin, because it is such a small niche (compared to most currencies) is only worse off because a small tip in one direction or another will be amplified dramatically. The creator of Bitcoin posite

      • The goal of a currency is to neutralize forward expectations. People, on net, should neither be moving purchases up to avoid macro-inflation, or holding them off to take advantage of macro-deflation. When a general expectation of either sets in, it becomes a spiral. Engineering is filled with people who think that dollars should be like inches, and never vary, which is why it is particularly prone to deflationism.
    • by khallow (566160)

      Could someone explain how they would escape that spiral?

      Eventually you'll want to do something with your bitcoins. Then you spend them.

      • I can't buy an iMac, a Kindle Paperwhite, a Nintendo Wii U, groceries, pay monthly bills or rent with bitcoins. They're a fictional currency.

        I bet my gold in World of Warcraft has a higher value than bitcoins.

    • Hoard, not horde. Get it right. [flickr.com] Sorry, I can't take anyone seriously who misuses homophones.
    • by Vekseid (1528215)

      > Could someone explain how they would escape that spiral? I'm not an economist so I don't know if there are other routes of which I'm unaware.

      Start a rival chain, don't make it crazy deflationary, possibly patch up a few of Bitcoin's technical flaws.

      Ironically it might spur even more Bitcoin transactions as people move to the new chain.

      • BTC have network rent: the people who have them represent a large base of the people who want them.

        But you can do what health insurance companies, banks, and patents do: bribe some legislators to force people to buy your crappy product.

    • by OverlordQ (264228)

      The proponents of BitCoins claim that they can effectively do a bitcoin stock split. IE everything moves the decimal over one, so things costing 1 BTC now cost .1 BTC, and 'OH look, 10x more bitcoins in the universe!'

    • by aaarrrgggh (9205)

      In my extremely limited understanding of the matter, if the transaction volume of bitcoins increases then the exchange rate becomes less artificial, and faith in the currency is established. Right now, it trades more as a penny stock from what I can tell. As long as you can exchange bitcoins for goods and services, they have value; if the price you pay in bitcoins is more favorable than the price you would pay in another currency, you are incentivized to spend bitcoins.

      Unfortunately, the barrier seems to

    • by udachny (2454394)

      What you are observing is an inflation hedge. How do you actually propose for the BitCoin users to use them?

      The best way to use savings is to grow it (that's if your day to day expenses are covered). With governments of the world printing all fiat currencies, with gold going higher for a decade and with more and more inflation in sight, the investors are fighting for inflation hedge providing assets.

      What do you think the savers should do, buy government bonds? :)

      With real rate of inflation being in double

    • This. (Score:4, Informative)

      by sirwired (27582) on Thursday October 18, 2012 @11:48AM (#41693563)

      This has been the biggest flaw in BitCoins since day 1, and one which it's backers stubbornly refuse to acknowledge. (Either that, or they believe that a deflationary spiral is a good thing.)

    • by geekoid (135745)

      Tax the money being held. You can not have a healthy economy id money doesn't keep flowing.
      When people who are basically buying everything they they need keep hording money about that, it hurts the economy.
      Now when you are talking about a tiny percentage of the money, it doesn't matter much, but when a significant amount is held buy relativily. few, you have economic issues. The kind of economic issues that destroys class structures and lead to internal strife

      This is why I am a fan of remove all not for pro

    • This comes from Gresham's law that bad money drives out good. People desire a money that holds it's purchasing power. If there is a money that loses purchasing power and one that holds it the good money will be hoarded and the bad money will be circulated.

      http://en.wikipedia.org/wiki/Gresham's_law [wikipedia.org]

  • by alphatel (1450715) * on Thursday October 18, 2012 @10:54AM (#41692787)
    Or there's that many people/computers that grabbed some fraction of bitcoins, and either lost their wallets or never bothered to log in again.
    • by ka9dgx (72702)

      I have 5BTC, somewhere.... I think....

    • This would be me. I am personally responsible for the destruction of .15 BTC.

      • Approximately 100-200 BTC lost here due to wallet being lost. That was way back in the early days before the GPU computations started.

  • by hawks5999 (588198) on Thursday October 18, 2012 @10:57AM (#41692839)
    Maybe we need an ETF for BitCoin
    • by sarysa (1089739) on Thursday October 18, 2012 @11:34AM (#41693347)
      Gold, not so much. Bitcoins had a distribution method that was vastly different to the discovery of gold. The distribution favoing early adopters and being limited to a select few IN AN EDUCATED WORLD (coupled with natural human greed tendencies) is why the masses will never accept it. (But we'll have bubble cycles while people try to figure out whether or not bitcoins have value)

      If you're interested in a long dry read, I wrote an article about Bitcoins while studying a different virtual economy [pamelabowman.org]. The perspectives in this thread couldn't have come at a better time. I'll probably integrate them into my article. ;)
      • The irony is that when adopted, the classical international gold standard was an inflationary move, because bad gold coinage had driven out silver, and silver was being hoarded
    • What we need is digital cash that reflects the realities of currency, which includes having a central authority. The economic and technical problems that Bitcoin has stem primarily from the lack of an issuing authority. I have argued this point in the past; the summary is this:
      1. On the technical side, digital cash without an authority that can issue fresh tokens will be unable to support offline transactions securely or will be forced to have tokens that grow at least linearly in the number of transactions
      • Once upon a time before the great Greenspan/Bernanke devaluation, people would take dollars around the world. But that was back under the Democracy, many young people can't remember living under it.
  • Speculators (Score:5, Interesting)

    by Dan East (318230) on Thursday October 18, 2012 @10:58AM (#41692855) Homepage Journal

    I wonder how many of these were generated early on and are being hoarded by the early adopters. The rate at which bitcoins can be created out of thin air is artificially controlled to keep production at a steady pace. What I'm curious about is how many bitcoins were created initially before they gained widespread publicity, and are those being hoarded?

    • A different analysis showed that around 2M BTC have never been spent even once after being mined. Many of these unspent block rewards are from the early days so it's not clear whether they're lost or hoarded. Given the very low exchange rate at the time, it wouldn't be surprising if they were simply discarded.

    • Re:Speculators (Score:5, Informative)

      by Animats (122034) on Thursday October 18, 2012 @11:40AM (#41693457) Homepage

      I wonder how many of these were generated early on and are being hoarded by the early adopters.

      Probably most of them. In the early days of Bitcoin, the amount of computation needed to generate a Bitcoin was orders of magnitude less than it is now, and the number of Bitcoins that could be generated per unit time was higher. [bitcoin.it] More than half of the Bitcoins in existence were generated prior to the end of 2009. The system has a huge early-adopter bias built into it.

      Bitcoin generation is competitive; the compute load required to generate a Bitcoin is automatically adjusted about once a month based on the number of Bitcoins generated in the last time period. The originator of Bitcoin is still anonymous, and being the first adopter, generating coins with no competition, probably holds many of those cheap-to-generate Bitcoins.

      But they can't cash out without crashing the market. The total daily transaction volume in Bitcoins is roughly that of a big supermarket or two. Most of that volume is between traders; actual goods and services sales are tiny.

      That's the real problem with Bitcoin. As a currency, it went nowhere. It was supposed to compete with PayPal. Instead, it's mostly a speculative vehicle. By now, one would think that there would be games, music stores, and app stores using Bitcoins, just as a convenience for small transactions. Didn't happen.

      (Anyone remember CyberCoin? DigiCash? Beenz? Didn't think so.)

  • Money Laundering? (Score:5, Interesting)

    by eldavojohn (898314) * <eldavojohn.gmail@com> on Thursday October 18, 2012 @11:01AM (#41692897) Journal

    "We discovered that almost all these large transactions were the descendants of a single large transaction involving 90,000 Bitcoins which took place on November 8th 2010, and that the subgraph of these transactions contains many strange looking chains and fork-merge structures, in which a large balance is either transferred within a few hours through hundreds of temporary intermediate accounts, or split into many small amounts which are sent to different accounts only in order to be recombined shortly afterwards into essentially the same amount in a new account."

    Not to imply that anything wrong was happening but isn't that the definition of money laundering?

    Perhaps an individual experimenting with how effectively he can automatically clean BTC with temporary internet accounts being made for transactions leading back to a brand new account? But wouldn't the whole chain of ownership be shown on that final balance? What else could be the purpose of the mentioned exercise?

    The researchers started by mining the history for data that identified when two or more addresses belonged to the same owner.

    How is this done? I thought that BTC just needed an address and that was it. You could use throwaway accounts if you wanted to, right? From the wikipedia page [wikipedia.org] on it:

    Because transactions are broadcast to the entire network, they are inherently public. Unlike regular banking, which preserves customer privacy by keeping transaction records private, loose transactional privacy is accomplished in Bitcoin by using many unique addresses for every wallet, while at the same time publishing all transactions. As an example, if Alice sends 123.45 BTC to Bob, the network creates a public record that allows anyone to see that 123.45 has been sent from one address to another. However, unless Alice or Bob make their ownership of these addresses known, it is difficult for anyone else to connect the transaction with them. However, if someone connects an address to a user at any point they could follow back a series of transactions as each participant likely knows who paid them and may disclose that information on request or under duress.

    Movement from a known to unknown account in an attempt to "launder" it maybe?

  • is defined when an increase in price leads to a decrease in supply. Since many of the people who have BTC paid little or nothing for them, they have no reason to cash in until there is a rapid decline in value, which leads to one of the periodic BTC crashes. Since the desire for hard money is like the desire for any other form of perversion, it will keep coming back, booming in value until all the limited money perverts are stocked up, and then will be bleed dry by the echo system of people who, in their tu
  • Implied valuation (Score:4, Insightful)

    by sjbe (173966) on Thursday October 18, 2012 @11:03AM (#41692935)

    Shocking that people wouldn't be doing transactions with a currency that few people know about or understand and that even fewer people are willing to accept as payment.

    Based on exchange rates listed on Mt.Gox — the most widely used Bitcoin exchange — the coins have a value of more than $82.87 million.

    That is referred to as an inferred value. Same thing happens with companies. Say you buy 5% of a company for $1 million. By doing so you think the entire company is worth $20 million (5% of $20 million is $1 million). That doesn't mean it is actually worth that much, it just means someone paid an amount that implies the value of the company. On a thinly traded commodity inferred values can be wildly misleading because the person doing the transaction might have overpaid compared with the going market rate. If most of the bitcoins are sitting on the sidelines, that $80 million valuation is almost certainly far higher than is realistic.

  • Is anyone actually exchanging bitcoins for other currency? The summary implies each can be traded for about $11.50 but that seems questionable if there isn't any trading going on.
  • They're waiting for a safe and simple way to convert them to cash. When that exists, the value will plummet as everyone tries to sell at once.

  • by rcs1000 (462363) <rcs1000@gm[ ].com ['ail' in gap]> on Thursday October 18, 2012 @11:06AM (#41692987)

    Worth remembering that some Bitcoins (perhaps many) will have been 'lost'. I had the Bitcoin wallet software on my mobile phone, with perhaps 20BTC in it (this was when the exchange rate was c. $4); my four year old daughter fell into the swimming pool, and I didn't think to remove the phone from my pocket. If anyone knows a way to remove the wallet.dat file from a broken Galaxy Note, I would be interested to hear.

    Also, there will be some people who have lost the passwords for their wallets.dat, and are therefore unable to access their funds. Of course, in 20 years time they'll be able to decrypt them, but for now they're out of luck.

    • Besides data loss cases like yours (backups!), it's likely that quite a few were lost in the early days simply because they weren't worth very much. People installed the client, ran the miner for a while, and then lost interest. For a long time, 1000 BTC was worth perhaps ten dollars; IIRC, at one point someone spent that much on a pizza. It would buy about $12,000 now, but at the time it would probably not have been considered worth preserving unless one was both far-sighted and optimistic about Bitcoin's

    • There's one guy on the forums that specializes in data recovery from phones with flash memory. You should definitely look him up. His name is crazyates and his site is http://www.flashfixers.com/ [flashfixers.com]
  • Trickle down economics.

    Even the innovators aren't participating in it.

    • by arth1 (260657)

      Trickle down economics.

      In this case, I think the term is "trinkle down economics".

      Even the innovators aren't participating in it.

      Except by hoarding the disproportionate amount of bitcoins they got at the start, and working hard to create an artificial interest?
      Once they dump their coins, the bubble will burst.

  • In other news... (Score:2, Informative)

    by Galestar (1473827)
    Vast bulk of actual dollars are hoarded not used.
    • Not true. (Score:5, Insightful)

      by sirwired (27582) on Thursday October 18, 2012 @11:52AM (#41693627)

      The vast bulk of dollars are NOT hoarded. They are mostly stored in banks, which in turn lend them to others. They should have covered this concept (Fractional Reserve Banking) back in middle school... you need a refresher.

      These BitCoins aren't being stored in a lending bank, they are being stored under the metaphorical mattress.

  • by Thud457 (234763) on Thursday October 18, 2012 @11:13AM (#41693093) Homepage Journal
    The dwarves delved too greedily and too deep.
    You know what they awoke in the darkness of Khazad-dum.
  • I understand the technical aspects of Bitcoin but not the economic ones. I can see how people might be willing to speculate a bit and accept payment in BTC in the hope they will go up in value, but I can't see any reason why anyone would circulate them on a routine basis.

    Perhaps hoarding is a consequence of this speculative hope they will go up in value. But that seems self-defeating, since if Bitcoins don't circulate it's hard to see how they will become more widely accepted.

    I thought the point of currency

    • If you were not in my same location, I couldn't give you cash.

      Cash transmission via mail takes days.

      Paper transmission via mail takes days plus the amount of time you sit on the check to ensure it clears.

      Western Union requires you to go to them and charges a fee

      Credit cards charge a fee (if they provide the service).

      Bitcoins can be transferred to you with nothing more than an internet connection and an address.

      • by TheSpoom (715771) <slashdot@@@uberm00...net> on Thursday October 18, 2012 @11:47AM (#41693553) Homepage Journal

        This is why I never bought into BitCoin: It's a vastly overwrought solution to a small problem in a largely functional currency system. It's saying, because nobody has set up easy internet money transfers, let's dump the entire currency system and start a new one.

        It's reinventing the wheel because a spoke is broken.

      • by jest3r (458429) on Thursday October 18, 2012 @12:19PM (#41693949)

        Not really that easy.

        As a consumer In order for me to actually acquire a Bitcoin and then spend it I have to do the following:

        1. Go to my Bank and transfer CAD to my local BitCoin Exchange [cavirtex.com] - $3.00 fee
        2. Covert the CAD balance transferred to the BitCoin Exchange into BTC (3% fee)
        3. Send the BTC to my Wallet
        4. Transfer money from by Wallet to the seller (there is a small fee applied to that .001 BTC or something like that)
        5. The Seller then also incurs a fee if they are using BitPay or some other third-party to handle the transaction which is typical of a legitimate purchase
        6. Furthermore if I don't want to lose my wallet I need to use a Hosted Wallet which costs me even more!!
        7. Then when I want to cash out my remaining balance (which is always a strange amount) I have to pay even more fees through the Exchange (this is why there seems to be a lot of hoarding).

        This whole process takes days and is not really worth the time and effort for small items.

        Finally using the Default Bitcoin client (which they still recommend on the Bitcoin website) takes almost a DAY or more to download the Block Chain. You can't even begin to do any of that until you have the Block Chain download. There are other clients that don't need to do this but for the average newbie the Bitcoin website recommends Bitcoin-QT which requires a full download.

        At this point it is a currency for people who can't use Credit Card or Interac or PayPal really. But the fees are just about the same when you look at the big picture and time-to-spend is really high.

  • If only 1/4 of the coins are in circulation, the value of the BitCoin isn't really that high. If the other 3/4 were to start being used on a regular basis, you'd have 3x more bitcoins available which would mean each one would be worth about 1/3rd of what it is now.

  • I've bought so much crap off Amazon with them, I wish the difficulty would go back down so I could generate more!

  • Somehow, I seriously doubt that BitCoins are "hoarded". I would bet actual money that most are simply forgotten about.
  • by interval1066 (668936) on Thursday October 18, 2012 @11:26AM (#41693255) Homepage Journal
    I think people love the commerative bc's, the special editions, etc...
  • Gee, what do you expect? It's a transparently value-holding commodity, not a place-holding commodity; I'm just making up theoretical terms, here, but, so to say, its value comes from exchanging it for value's own sake, not through direct representation of something else. Case in point: when was the last time you bought or sold something in terms of bitcoins? Yet there they are, soaking up processor time, gaining value and losing face. Is that what it's all about? "I dedicated my processor to a hell of a lot

  • monopoly money (Score:4, Insightful)

    by wbr1 (2538558) on Thursday October 18, 2012 @11:34AM (#41693355)
    I have a warehouse full of Monopoly money,valued at $500 USD. I don't spend it either. No one will take it.
    • Re: (Score:2, Flamebait)

      by slashmydots (2189826)
      Just because you think it doesn't work and isn't in use and isn't real currency doesn't mean it isn't, sorry. I made a lot of money on bitcoins so you're wrong. Keep trolling though. As it spreads in popularity, you just look more naive.
  • From Wikipedia: Gresham's Law is an economic principle that states: "When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."
  • A transaction is instant so there's no "floating" money. So 100% of bitcoins are "stored." Unless you do transactions are like 10 per second, they'd certainly be considered sitting dormant. If I pay for something somewhere with BTC, it's instantly sitting dormant in the shop's balance instead. In fact, money is never really sent. You actually just send a message to the protocol/network that you're changing the ownership of X amount of BTC and your wallet file is one giant password that authorizes it if
  • unfortunately you can't trust anyone to use it.
  • by Conchobair (1648793) on Thursday October 18, 2012 @12:20PM (#41693953)
    Because there is nothing to spend them on.

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