EVE General Discussion

Let's make it happen?

This thread is bad.

We're not bad, we just poast that way. https://forums.eveonline.com/default.aspx?g=posts&m=1585832#post1585832

Traded my house for tulip seeds already :(

Well at least this terribad idea is original....

...Oh, wait - never mind.

This thread is bad and you should feel bad

You might have heard of a currency called Bitcoin. It only exists on the Internet and according to it's supporters it will eventually replace all other currencies used for electronic payments. It is so powerful that the banks don't know what to do about it. It is absolutely secure and can't be manipulated because the software that runs it is open source so anyone can look at the program code and see what it does. (The fact that someone claimed to have had $1.4 million worth of Bitcoins stolen from his electronic wallet this a few weeks was just a hiccup. Of course, with no audit trail of any kind he didn't want to bother the police with this because there's nothing they can do. Cynics are suggesting that as he ran the "exchange" where the money was stored there might be more to the story, but what "18-year-old" would ever bother about "losing" that trivial amount of money?) One argument presented to me was that "fiat currencies" (the red flag du jour when talking to believers in financial conspiracies) have no actual asset backing since countries went off the gold standard and therefore the US dollar, the Yen, the Euro, the UK pound and the Australian dollar (the biggest players in the foreign exchange market) could all be worth nothing tomorrow and nobody will accept them as payment for anything. Questions about the asset backing of Bitcoins were met with non sequiturs about software and algorithms and how nobody controls it.

I have been somewhat critical of the proponents of this magical money for several reasons. One of them is that everything they say about the future of this is an echo of what I have been hearing for decades about multi-level marketing, which has always been a couple of years away from totally dominating retail sales of almost everything. (The silliest thing was someone telling me that the only way you could buy a Honda car in Japan was from an Amway distributor.) It doesn't take much work to find that the numbers related to MLM show that it is no threat to the retail industry and never will be.

The main function of Bitcoin seems to be speculation in the value of Bitcoins. When I asked where I could spend them to buy things that I might really need to buy, such as food and petrol, I was referred to a list of a hundred or so places that would take the currency. Most of them had "bit" in their name and only offered unspecified "services". The only place that seemed to be taking a lot of them was Silk Road, an underground sales outlet with about 70% of sales being illegal drugs. It was shut down by the FBI, coincidentally making the FBI one of the biggest Bitcoin holders in the world.

Having been told of the wonders of this currency I thought I would see just how much of a threat it is to the word's financial systems. Apparently there are about 12 million Bitcoins in circulation right now, with the number growing through some algorithm in the software that all users are obviously capable of reading and understanding, and which, of course, they trust that criminals like Silk Road haven't been tampering with to get an edge. The maximum number of Bitcoins that can ever exist is 21 million, but nobody can predict when that might happen. Current speculative value at the time of writing is just under $US450/coin. Using these values, let's see how Bitcoin stacks up against the Australian economy (which is about the tenth largest in the world). The $AU is worth $0.94US at the time of writing and this has been factored into the calculations.

Total value of Bitcoins: $A5.75 billion

Now, that's a lot of money, so let's see how it compares to the real world.


Cash in circulation $55.9 billion 10.28% Cash in wallets, purses, cash registers and behind the couch cushions

M3 (all the money in the economy) $1,584.4 billion 0.36%

Federal Government Budget Expenditure (2013-14) $398.5 billion 1.44%

Tasmanian Government Budget (2013-14) $5.1 billion 112.64% Oh look - more money than Australia's smallest state spends

Coles supermarket sales $35.8 billion 16.05% Just less than two months' grocery sales. There are other big supermarket chains.

Woolworths supermarket sales $40.0 billion 14.36% 52 day's sales of groceries and liquor (Woolworths don't separate the two in their reporting)

Bank profits (2012) $23.7 billion 24.24% That's just the profit the banks made, not assets

ASX daily share turnover $4.7 billion 122.23% Shares alone, not futures or any other equities or derivatives

ASX market capitalisation $1,200 billion 0.48% Value of publicly listed shares on the Australian Stock Exchange (eighth biggest in the world). Does not include the value of futures contracts or any other derivatives.

References:
Reserve Bank of Australia - http://www.rba.gov.au
Australian Government Budget Papers - http://www.budget.gov.au
Tasmanian Government Budget Papers - http://www.budget.tas.gov.au
Coles/Wesfarmers Annual Report 2013 - http://www.coles.com.au/about-coles/annual-reports
Woolworths annual report 2013 - http://www.woolworthslimited.com.au
Australian Bankers' Association - hhttp://www.bankers.asn.au
Australian Stock Exchange - http://www.asx.com.au
So it seems that if someone had all the Bitcoins in the world they could fund the Australian Government for five days, pay the bills for the smallest state for 13 months, keep bank shareholders happy for just under three months, buy all the shares sold on Monday and a bit of Tuesday and buy groceries and booze for almost two months.

And this is going to take over the world economy real soon now.

To be continued

That's a bit redundant.

One thing I'd like to point out about bitcoins (no I don't own any) is that Virgin Galactic, the space tourist guys, do accept bitcoins as payment. There are, btw, bitcoin atms now too. While I doubt it's going to revolutionize the world overnight.... it does seem to be catching on.

According to the 18 November 2013 Congressional hearings in the US, bitcoin is, in fact, a currency.

Bitcoins is like Napster,
Ignore it and it will go away.
What? another CD store closes.
Who wants to buy music they can't touch?
Will that be debit, credit or bit.