I have about 6,000Kh/s. If anyone has questions on how to start I can help you.
I don't know enough to comment on ebinsugewa hard cap deflation problem so I will ignore that point in the wall of text below. It might negate some of my points though.
@The shortcomings of gov currency
1. Inflation caused by an infinite supply. The gov can print new money. This is non-transparent. To insert the newly printed money into the economy it has to be given to someone. The person (company) that receives it most likely did not earn it in any real sense and they receive it pre-inflation. Inflation occurs only after the new money is spent. Currently printed money is causing a 5% inflation tax which trickles down and ultimately hits the middle class the hardest. That means if you save $100 today then in one year it will be worth $95. That lost $5 value doesn't just disappear, it ends up in someone's pocket. Someone high up on the banking food chain. In this system, people like you and I will always be losing that 5% while someone else much higher up will be gaining it.
That is the chief problem of gov money.
Alt coins have a finite supply. There is an end date at which point no new coins will be made.
In theory that is. The problem is while each alt coin is finite the number of alt coin "brands" is currently infinite. This is the exact same problem as printing new money. It is adding new currency to the supply.
In order to work long term there has to be a monopoly - one coin to rule them all. As it stands bitcoin is by far the major contender but it isn't decided yet so for now, problem not solved.
An unresolved problem today does not mean it will always be that way.
2. People want to be in control of their own fate. The rules that govern printed money creation are out of the hands of the people that use it.
3. Historically it has typically been both a great short and long term investment. If you had invested money in bitcoins at any point in the past 8 years with the exception of the last quarter of last year you would have made ENORMOUS profits. With very few exceptions the same is also true of a short term investment for most of that time as well.
4. Hides money from gov. Mostly this would be for people committing crimes - drug selling, tax evasion etc but also for people that are just hard core anti-gov or pro-privacy. Ironically politicians accept bitcoins to hide campaign contributions.
There currently is over 7.7 Billion dollars in the Bitcoin economy. That is people have spent nearly $8B in real world money to buy bitcoins. Bitcoin is 75% of the alt coin market. In total altcoins are worth $10 Billion. By worth I mean that is how much money people have sold their mined coins for. That does not count coins that have been mined but never sold and does not count the money spent on hardware and electricity.
Over 2 Million additional dollars are added to bitcoins every day.
You can sit back and watch and laugh and call it a scam all you want but the mountain is growing $2 million a day. I'm sure at some point in time there were more than a few guys laughing at people exchange paper for gold.
@The burst bubble last December.
From Jan 2013 to Dec 2013 bitcoins went from $12 each to $1200 each. Then in just a couple days dropped to $500. Then leveled at about $600 where they are today.
By itself that sounds mysterious and volatile but there was a reason for it.
China started heavily investing in BTC in mid 2013. It is difficult to invest, export or import Chinese money. The Yaun is not very liquid and it is heavily taxed so Chinese business people switched to Bitcoins for foreign transactions. In December 45% of all bitcoins were purchased with Chinese Yaun. 45% were purchased with USD. The other 10% was for the rest of the world. Then China created a new law and made Bitcoin very difficult for Chinese to use and as unliquid as their own currency. And the bubble burst.
The bubble happened because a large group of people had a legitimate use for the product. The bubble burst because a government used tyrannical control to secure a monopoly on money.
People always find ways around prohibition. Prohibition eventually fails every single time. Eventually China and other countries will over come the great firewall and the bubble will inflate again.
Currently 85% of the over 2Mill new dollars dumped into Bitcoin every day are USD. A very large chunk of that is speculation investment, both short and long, but another large chunk is people finding an immediate legitimate use in it. Some people get in for novelty and curiosity but I imagine that is a very small %.
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Originally Posted by Seahawk
All of them are tied directly to an exchange rate based on government issued currency.
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Technically they are tied to the exchange rate of BTC. BTC is tied to USD but that is irrelevant. Gold, Euros and laptops are also tied to the exchange rate of USD. The easiest analogy is to think of it as gold and gold is most commonly priced in USD but that doesn't mean it suffers from the inflation of USD.
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Crypto also seems to be very inaccessible for people to get into.
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Yep. That is currently is a huge hurdle keeping it from becoming mainstream. Give it time. It took computers 70 years to replace the typewriter. People are working on it and that is not an overly difficult problem to solve.
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the only one I've heard as being accepted for payment is bitcoin
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Mostly true but several others are accepted as payment at many places as well.
Most of those are GPU minners. GPUs haven't been used for bitoins since 2012. For Bitcoin search for "ASIC Miner". The rigs are generally much more organized and manageable. They are in square cases with a single wire or often just a USB stick. They don't consume nearly as much electricity.
You are right that bitcoin requires an insane computational resource from a NORMAL computer. That is why people don's use normal computers to mine bitcoins anymore. You have to use special made ASIC chips. If you have one then the computational power is no longer insane. It is still huge, your point is valid, but with the proper hardware it isn't as insane as the number sounds if you were talking about GPUs. An ASIC chip is about 1K-10K times more efficient than an equivalent GPU at finding bitcoins.
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This makes it possible for only those already wealthy in other currency to get in, and create more wealth for themselves out of thin air.
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Sorta true. I think you were thinking of using a regular computer for Bitcoins though. That isn't possible and not what miners do anymore. Again think of it as gold. Not everyone got rich during the gold rush but some people certainly did.
The buy-in isn't that prohibitive. If you know what you are doing then $1,000 worth of hardware will produce about $10 per day. Your hardware is paid for in 100 days. What I'm trying to do is sell the hardware instead of actually mining myself which is more profitable.
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This biases it towards those who start in the beginning.
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Again same as gold. If you lived in California in 1849 you would have a big leg up on everyone that showed up in 1850.
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if you could find someone to convert it to cash.
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That is no problem.
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It would also be possible for the creators of a cryptocurrency to mine before releasing it to the general public
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It is open source and fully transparent. You can tell when this happens and some of the alt coins have tried this. Some of them made money that way too. That just shows you should do your research before you buy something you've never heard of before. Bitcoin didn't pre-mine though.
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Although, no crypto other than Bitcoin has actually risen in value.
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Totally not true at all. None have risen to quadruple digits but several have had huge price rises.
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If a wallet key is lost, then all the crypto in that wallet is lost forever, leading to further scarcity.
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Same as gold. If a pirate ship full of gold is sunk, all other gold becomes worth more. If a bank catches fire more money is printed and all other money becomes worth
LESS!
Think about that. It is a major point in all of this. Finite supply is MUCH better for the users.
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They seem extremely volatile, with value changing by the minute, making pricing difficult.
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The dust will eventually settle. There will be huge waves when economies the size of China jump in and then get booted out. It will take a long time to balance itself but eventually it will.
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Most big players in crypto seem to be into it for the purpose of hoarding coins, and then dumping them when the value is high, instead of using it as an actual payment method.
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That sounds like a guess. I'm going to guess you are wrong but still just a guess either way.
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Exchanges offer no protection for users.
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True but banks didn't offer any insurance until 1930 and now they only insure up to 250K. My personal bank went bankrupt 2 years ago. I only had a couple hundred dollars in it so I was covered by FDIC but if I had had $300K in it I would have lost $50K. People treat exchanges like banks but that is not what they are meant to be. Alt coins don't need a bank. Though some kind of interest earning institution would be handy just know that it will probably not be insured and be aware of the risk that involves.
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the total energy expended worldwide for digital currency is HUGE!
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If it defeats inflation I would argue it is worth it. Compare to gold. The effort people went through to mass gold over the past 2K years is mind blowingly cruel. To this day diamond trade very often involves slave trade and murder. Just because attaining gold and diamonds is horrible doesn't mean wasting electricity is OK, but my point is establishing a stable currency is not easy or pretty or quick. I'm not even sure if it is worth it but people are more than prepared to be wasteful if it means getting rich.
TL;DR
---------- Post added at 02:02 AM ---------- Previous post was at 01:50 AM ----------
Bitcoin is 75% of the market - $7.7Billion. People that use altcoins as a currency deal almost entirely in bitcoins.
In second place with 10% of the market is Ripple. It is a special circumstance coin that was funded by companies and investors so it doesn't really work the same as the others.
100 other coins share the remaining 15% of the market. Doggecoin is 6th place with $50K
The other coins are mostly purchased as investments, either short day trades or long term speculation that it has potential to become a mainstream currency similar to bitcoin.
Most altcoin investors think Bitcoin has established itself as the gold standard and the other coins are fighting it out to become silver and copper. Often when people buy the other coins they are trying to make a long term bet on the odds of their coin earning second or third place.
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