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[Chunes]

Thirdly INFLATION IS BELOW TREND

Not if you're a college student or have health problems.

[Levi]

This looks interesting, but I'm going to have to read more. 

The main problems I see are:

1)  What if someone figures out how to make these for cheap.
2)  How is copying prevented.
3)  If #2 has something to do with checking a central server, then how is tracking prevented?
4)  If each bit coin is worth ~6 dollars, what if I wanted to buy something worth 1 dollar?

For fun I might buy 50 coins and see what happens.    If the stock market is any indication people can always be depended on to go bat-shit insane when it comes to speculation, and I'm all for people(IE: me) taking advantage of it.   

[mainiac]

Thirdly INFLATION IS BELOW TREND

Not if you're a college student or have health problems.

in·fla·tion/inˈflāSHən/Noun
1. The action of inflating something or the condition of being inflated.
2. A general increase in prices and fall in the purchasing value of money.

What you said was irrelevant.

[olemars]

4)  If each bit coin is worth ~6 dollars, what if I wanted to buy something worth 1 dollar?

Since there's no physical denomination of a bitcoin there's no limit to how you can split it up, so you could spend, say, 0.00001 bitcoins.

[Levi]

4)  If each bit coin is worth ~6 dollars, what if I wanted to buy something worth 1 dollar?

Since there's no physical denomination of a bitcoin there's no limit to how you can split it up, so you could spend, say, 0.00001 bitcoins.

Isn't each bitcoin discrete though?  From what I've read so far I was under the impression that each coin has a value, and you couldn't split it up without exchanging it for several lower value coins.

[Leonon]

There's a lot more information in their PDF.


Here's what I could figure from reading half of it. Each "coin" is a hash tag that's regenerated for every transaction. The hash tags have to have a certain number of null bits at their start (this increases the CPU work to generate them).

It looks like the whole thing is decentralized and the fraud is prevented by using a consensus of clients calculating which version of a coin would be most recent based on how big they are as a hash tag.

One big flaw I see is that it would be possible to create your own network of clients to generate coins unsupervised. Without oversight it should be possible to generate new coins and "age" already existing coins much faster than would occur naturally. Since not all clients on the main network have to be synchronized (would be impossible due to technical issues) one could then release the counterfeit and aged coins into the system to both devalue normally generated coins and take control over the aged coins.

[olemars]

4)  If each bit coin is worth ~6 dollars, what if I wanted to buy something worth 1 dollar?

Since there's no physical denomination of a bitcoin there's no limit to how you can split it up, so you could spend, say, 0.00001 bitcoins.

Isn't each bitcoin discrete though?  From what I've read so far I was under the impression that each coin has a value, and you couldn't split it up without exchanging it for several lower value coins.

FAQ says you can currently use up to 8 decimals, and if the need should arise the precision can be increased.

[Criptfeind]

You know, I really have to wonder if money can be made non-naturally like this. Also, wouldn't Moore's law screw this up and lead to hyper inflation? (Not to mention the fact that without a regulatory body like all the other money units have this thing is going to basically bust over and over again... And quite frankly I do not think anyone will trust it to be stable. After all money needs to act as a store of value.)

[Levi]

4)  If each bit coin is worth ~6 dollars, what if I wanted to buy something worth 1 dollar?

Since there's no physical denomination of a bitcoin there's no limit to how you can split it up, so you could spend, say, 0.00001 bitcoins.

Isn't each bitcoin discrete though?  From what I've read so far I was under the impression that each coin has a value, and you couldn't split it up without exchanging it for several lower value coins.

FAQ says you can currently use up to 8 decimals, and if the need should arise the precision can be increased.

Hmm, you might be right.  I had read that as in regards to the blocks generating ever smaller numbers, but now that I re-read that it might be implying coins can be split.

More research need! 

[Leonon]

You know, I really have to wonder if money can be made non-naturally like this.

Come on down to Billy-Bob's Farm Fresh Monies! 100% All Natural Currency!

[Criptfeind]

Pifff hah hah hah.

Okay. Yeah. That was funny, but you know what I mean right?

[Leonon]

Not specifically about the "naturally" part but I do see some issues with an infinitely replicable form of currency whose main form of counterfeit protection is other users saying "Don't worry, this guy's legit."

[alway]

Yeah, it's the difference between a government saying "This currency is legit and worth something because we say so and we have the backing of millions of citizens, a major economy, and a standing army" and a group of anonymous internet people saying "This currency is legit and worth something because we want it to be," without even so much as an index of places this 'currency' is not considered to be worthless and can actually be spent.

[Criptfeind]

What I mean is this has no backing at all. Not even the imaginary backing that real money has.

It did not grow out of goods and services. It has never been tied to anything. It is basically just some guys saying "Hey! This counts as money now!"

Ninja'd.

[Phmcw]

Good, based on your reaction it won't take off.
Which is lucky because this is a libertarian wet dream, and would be dramatically damaging to the economy.

Still a few thing : actually this money generate itself when you calculate the transaction, but the algorithm seems well thought (RTFM for more information) and the false network scam would take more calculus power than those of the legitimate network. The idea is that you would earn more money with your network by calculation legitimate transaction. Which in turn should barely pay for the electricity.

And actually, you could sell them for euros or dollards right now.