I can forgive people who know nothing about Bitcoin for saying dumb things so my pet hate is Bitcoin enthusiasts who bitch and moan about Fractional Reserve Banking.

The most recent examples are the "...MtGox... running a fractional reserve bank" variety

I assume some of this is said in jest but an FRB should be solvent. Illiquid perhaps, but not insolvent.

So glad to see this happening!

I suggested this in June 2011 and put some thoughts about what it may and may not include. Really happy to see Sirius making this happen! More power to your elbow!

Here's my post from two years ago:
https://bitcointalk.org/index.php?topic=17290.0

I believe there's this guy Joe Cascio working on something similar:
http://joecascio.net/joecblog/2013/03/25/collateralized-identity-using-bitcoin-to-suppress-sockpuppets/

+1 Ruby

^^^ That stuff is pure ^^^

Why don't you go build something interesting for Bitcoin in SproutCore

It's a mantra of the Pragmatic Programmer that you should learn a new language every year. Never found the time myself.

+1

This was my original thought when pondering the question.

If it's too valuable for the consumer to spend then it's too valuable for the vendor not to accept.

You don't get this with gold because - although it has an equivalent value to the thing you're buying - it's physically impractical for the vendor to accept. For this reason, Gold is (now) a poor choice for barter and trade but an excellent store of value - hence the hoarding. That's not true of bitcoin.

If widget is worth 1 USD, 15 BTC and 1/1500 oz of Gold then the only thing that effects your choice of which to pay with is which one is more practical. USD has the upper hand in that respect and that's still true today and that's why we hoard bitcoin. Hopefully, it won't be true in the future.

JoelKatz is correct.
BubbleBoy is incorrect.

I like what you have on the site currently.

The forex method might be the standard for exchanges but these are used by traders all the time.

A standard rule for any user interface is "Don't make me think!"

Like most people on here, I'm an IT nerd so maths, rates and calculation make sense to me but I work with artists all day long and their math skills tend to be poor. My first thought would be how they would respond to the three options. When people change up money for holidays they tend to think of how many euros or dollars etc they're going to need but they also might want to think about it in terms of their home currency but I think they rarely think in terms of rates and the notion that they're either buying/seling euros etc doesn't even come in to it.

My preference would be to put in the number of GBP I want to sell and for the interface to calculate the resultant BTC at the current exchange rate and then to be able to adjust the rate and/or the BTC you're wlling to receive. IMO, That's a more natural way of thinking about it. I guess this is effectively all three methods at once - you can change any parameter and it will recalculate the other params based upon which one was changed. How that's stored in the DB is irrelevant to the user but I guess the forex format of storage is probably the best.

I guess the UI might look something like...

Qty1 * currency_seletor = rate * Qty 2 * currency_selector_2

If you update either quantity then the rate is recalculated. If you change the rate then Qty2 is recalculated. Put that with some nice Ajax currency graphics and you're on your way. It would also be good if it let you know if your order matches any in the orderbook.

Why come back? There won't be anyone here.

Make sure that you bump the thread if you're wrong too. That'd be more fun. Will you promise that too?

"Interest = Always Bad"

Really?? No justification apart from showing that exponential things are exponential.

Great idea.

Bitcoin backed virtual currency!

I have a Brixton pound note stuck to the wall of my office.

Not New Cross - but Crystal Palace.

As for California, my wife and I went on a month's long trip along the Pacific Coat Highway and then on to Las Vegas. Best holiday I've ever had but there's no doubting that California is full of irrational nut jobs. Nice people but enemies of reason.

If it's just a PDQ and a touchscreen monitor then it just needs to be vandal proof rather than secure. If it's within a shop, library or community centre then it doesn't even need to be that. The beauty of bitcoin is that the value of the bitcoin would not stored within the machine. If someone stole all the equipment then they'd just have the equipment and not the bitcoin.

In the UK at least, if you use a card with chip and pin then chargebacks are not a problem. As the PIN is sufficient to show that you identified the card holder. And even if it was disputed you could show from the blockchain that the bitcoin was delivered to the address.

I don't think I'd need to shoehorn a client into the PDQ. It would just be like purchasing tickets at a box office.

 - State your bitcoin address, or swipe your card with it on!? on adjacent computer terminal
 - enter the amount of GBP you'd like to convert to bitcoinin in terminal.
 - Hit purchase on terminal
 - Pay by Chip annd PIN card with PDQ.
 - collect receipt
 - Go spend your Bitcoin in local shops and services.

Seems like a good way of getting Bitcoin into the hands of real people in a real business community.

I have an office here so it's the sort of thing I could set-up either here or in the local library (also in the centre of town).

Then promote it as a local currency.

97 views and no reply?

Can I assume then that this is actually workable?

I live within a tightly knit community in South East London. I think I could get nearly every shop in the town to accept Bitcoin. I know a good proportion of the shop owners. You'd have to repackage it as "community money" though as this town is one of those socialist hippy arty California type towns.

http://www.telegraph.co.uk/finance/personalfinance/investing/gold/8609976/UK-unveils-first-ATM-for-gold-at-Westfield-Shopping-Centre.html

Similar discussion of Bitcoin ATMs here...

http://forum.bitcoin.org/index.php?topic=5122.0
http://forum.bitcoin.org/index.php?topic=5127.0
http://forum.bitcoin.org/index.php?topic=5300.0
http://forum.bitcoin.org/index.php?topic=5943.0
http://forum.bitcoin.org/index.php?topic=6926.0
http://forum.bitcoin.org/index.php?topic=24335.0

Not sure why you'd need a full on ATM machine?

You could just have a normal PDQ machine and a touchscreen monitor that sends bitcoin to their address once it's been processed or am I missing something?

http://e-till.net/images/page_64.jpg

When I tell friends and family about bitcoin they're keen but then they ask how they can get some. This makes it simple. Very simple. No? WHat am I missing?

Looks great! Can you buy outside of the USA?

UK here but would like one.

I like the geocaching idea!

Vires in Numeris - In Numbers We Trust? That's great. Ah nope. Google syays "Strength in Numbers". Shame. I quite like "In SHA256 we trust"

+1

Same here. I talk to people about it and then they say "That sounds great! How do I get some?" ... "Urmm well.. I can buy some for you via #bitcoin-otc and then just transfer the balance to my bank account"... "...oh.".

Maybe it's just a GBP thing.

The encouraging thing is the... "that sounds great!" part.

There's no bullshit just facts, mathematics, reason and economics.

If you can make/find/mine for a price cheaper than you can sell then they'll be an incentive for new entrants. Competitive markets have low profits.


If people won't buy your fish for the cost it took you to get it to them then you'll stop fishing because that signals increased supply and/or reduced demand. (N.B. I'm talking all costs here - assets, labour, opportunity, knowledge attainment.) If BTC mining becomes a bigger operation then you can bet that the bulk of those costs will be fuel for the rig and that will be damn close to the BTC price as it is with everything else.

An oz of Gold costs about the amount it takes to get it out of the ground. Same with oil, copper, iPhones, whores, cocaine, apples, oranges, fish, widgets. Similarly, a bitcoin will find its value at about the amount of energy/time/knowledge/opportunity cost that it takes to produce one.

I can't believe that anyone would even dispute this. It's just economic reality. 'Money making machines' don't stay 'money making machines' for long.

PS. I'm not a miner. I bought my BTC.

Not a fallacy. That's why.

Whilst the cost to mine a bitcoin is less than the price to sell one, there will be an incentive for people to start mining. Difficulty and even technological advances are irrelevant.

It's not only true of bitcoin, it's true of gold and very other natural scarce resource that I've looked at so far. Not precisely but certainly the same order of magnitude.

Price of a fish ~= Cost to get that fish on your diner table.

Obsessed by this topic today but did some digging around (pardon the pun) regarding gold price and extraction costs...

http://www.moneyweek.com/blog/what-is-gold-really-worth-00301

It would seem that extraction costs of Gold are about $600/oz. So within an order of magnitude and not far from the previously relatively stable gold price.

So the question is... what's stopping me from going and buying myself a piece of this money farm? We'll I'm guessing the actual cost of extraction for a new entrant would be close to the current gold price or why would the current owner sell their mining land, equipment and knowledge to a new entrant? Seems to me that mining difficulty proably hasn't changed that much in the last few years and therefore it must be the dollar losing value.

Interesting. It suggest that the BTC price probably wouldn't be too far from the cost of mining it and thus the major factor in the mining cost will drive the price. At the moment, the BTC mining cost is the labour, knowledge attainment and opportunity costs.

OK. Let's assume that it costs $1.50 - $2.50 in electricity/equipment to make a bitcoin.

Why don't I give up work and start mining tomorrow?

There's labour costs / opportunity costs.
There's the accumulation of knowledge.
Lack of hardware supply? (supply drops, price is higher)

There's more cost than just the electricity at the moment but eventually the electricity costs will be the main factor. I don't think people are factoring in the really big costs - the opportunity cost being the greatest.

Seems possible that $17 might be close to the cost of producing a bitcoin given the current conditions (opportunity costs, hardware availability, knowledge acquisition, electricity) and perhaps that's why it has stabilised.

My comment regarding kWh per BTC was misleading.

See this post for a similar discussion regarind mining cost / price correlation...
http://forum.bitcoin.org/index.php?topic=23360.60

^^ True that.

As another commentator mentioned - technological improvements does not help the issue with the 1:1 price/energy in a wasteful mining system. If Bitcoin is to remain a proof of work then it needs to do something along the following lines...

Fuel -> electrical energy -> hashing -> electricity energy -> consumer.

The market will/would be driven by how efficient you can make the conversion to and from the hashing. The BTC price will reflect how much proof-of-work you can measure. The hashing seems a lot like a 0.01 Ω sense resistor in a circuit. You want it measure work without throwing too much away. Best place to put that sense resistor is probably somewhere within the power station as that's the only place you're likely to get any kind of efficiency.