Download the Kiva toolbar! - (what's this?)

April 18, 2014, 03:06:11 AM *
Welcome, Guest. Please login or register (it's quick and free!) for full access to all community features and functions, including instant messaging and message viewing preferences.

Login with username, password and session length

Cool Forum Options
: Not available. Login or register :)
: Popular Topics on Kiva Friends

Kivapedia
: View recent changes on Kivapedia
: Online shopping that helps support Kiva
: List of Kiva microfinance institutions
: List of Kiva group lenders
: Kiva Timeline : More...


.
Welcome to Kiva Friends, an active community for Kiva users, staff and supporters. Don't know what Kiva is? Read this!
   
   Home   Search Calendar Help Tags Login Register  

Pages: 1 [2] 3 4   Go Down
  Bookmark This  |  E-Mail This  |  Print It  
Author Topic: Reasons Kiva should accept Bitcoins  (Read 15949 times)
0 Members and 2 Guests were last seen viewing this topic.
iampaul
Kiva Supporter
*****
Posts: 485


View Profile
« Reply To This #10 on: July 09, 2011, 05:22:59 AM »

Due to bitcoin's appreciation, the ones who bought in a year ago no longer need to work. So, in a sense, they have been rewarded for their due diligence.

Not being facetious, I trust you are aware of the "tech bubble" and the "housing bubble" and the thinking behind them and the large number of people who lost money on them while a few made "boatloads of cash."

Quote
This means the first people to get into bitcoin are geeks (with money or mining equipment to invest) and, of course, the speculators.

The Bitcoin entry in Wikipedia words it like this:
Quote
Criticism

Unfair initial distribution
A common criticism is that the initial bitcoin distribution is heavily advantageous towards early-adopters. As stated, bitcoins are distributed ('generated') as an award for the solution to a difficult proof-of-work problem. The drawback is that the amount of work that has to be done for one bitcoin is currently over 500,000 times more than the amount of work at which the first bitcoins were going. As more people join, and also because of a reward function that halves the number of rewarded bitcoins every so many blocks, it becomes harder to "generate" bitcoins over time, using the same CPU/GPU power.

So the "reward" for processing power to generate the supply of bitcoin shrinks with each cycle. The earliest adopters were able to generate "boatloads" of bitcoin while those generating it now can only do so at a relative trickle of 0.0002% of that initial rate. The upside of that is that, although anyone can "print money" under this arrangement, the cost of doing so increases geometrically which probably puts a cap of sorts on the supply. But the first in are rewarded at the expense of those who come later - as long as they can keep convincing people that bitcoin is useful to them, otherwise the value collapses. When that happens, those who will have cashed out their bitcoin into other currencies or goods and services win and the rest won't even have physical currency to paper the bathroom walls. Where I come from that is called a pyramid or a bubble. No thank you.

Paul
« Last Edit: July 09, 2011, 05:24:21 AM by iampaul » Logged
David2051
Kiva Supporter
Evansville, IN
*****
Gender: Male
Posts: 1142



View Profile
« Reply To This #11 on: July 09, 2011, 12:00:53 PM »

I had never heard of it.  Now that I have, it sounds like something to be avoided. These quotes from the wiki article seemed interesting...

Quote
Gavin Andresen, one of the 'core developers', is explicitly advising people "not to make heavy investments in Bitcoins", as it is "kind of like a high risk investment".[53] As of May 2011, no publicly traded retailer accepts the currency for payment.
Logged

Join Team Smile Train!  http://www.kiva.org/team/smile_train  :-)

“send a postcard and receive a postcard back from a random person somewhere in the world!” http://www.postcrossing.com/

Learn more about ovarian cancer. Educate for early detection.  http://ovariancancerin.org/

Be a bone marrow donor, save a life.  http://bit.ly/4Amit

Change a child's life, be a sponsor.  http://children.org/
iampaul
Kiva Supporter
*****
Posts: 485


View Profile
« Reply To This #12 on: July 09, 2011, 02:54:42 PM »

A risky currency? Alleged $500,000 Bitcoin heist raises questions
Logged
asherp
Kiva Supporter
**
Posts: 10


View Profile
« Reply To This #13 on: July 09, 2011, 03:53:17 PM »


So it turns out that digital money is actually worth stealing! True, this is a major problem for adoption by the general public, since most people run windows and are most likely part of some bot-net anyway. Until wallet encryption in the client is the default, I don't think it's safe to store your coins on your windows machine. I'd recommend using a cloud service (I'd be surprised if Google didn't create such a service); if not, only run bitcoin in a guest account, create backups, or at least start using a mac. Again, if you abandon the idea that your money really needs to be kept in the central banking system to do with as they please, then there are certain responsibilities you'll have to assume.

Not being facetious, I trust you are aware of the "tech bubble" and the "housing bubble" and the thinking behind them and the large number of people who lost money on them while a few made "boatloads of cash."

I'm guessing you didn't think very highly of Google stock when it was just a search engine? I went to BU, one of the first few colleges to use Facebook. I'm a pretty optimistic person, but I had no idea that in seven years there would be almost 1 Billion people on it, and I certainly didn't think it would be used to start a revolution. The point is, some ideas are actually worth something - figuring out just how much it's worth is up to you. Bitcoin is literally an algorithm that implements the concept of decentralized currency - you can read the source code for yourself and decide what it's worth. A lot of intelligent people did this, and now most of the world's supercomputing power is spent mining bitcoins. Apparently, it's an idea that works.


But the first in are rewarded at the expense of those who come later - as long as they can keep convincing people that bitcoin is useful to them, otherwise the value collapses. When that happens, those who will have cashed out their bitcoin into other currencies or goods and services win and the rest won't even have physical currency to paper the bathroom walls. Where I come from that is called a pyramid or a bubble. No thank you.

How exactly do you create a decentralized currency that doesn't provide incentives for early adopters? Remember, anyone can take the bitcoin source code and create their own network. If you have a better idea, then I suggest you release your source code or invest in someone who does!

Logged
Diane R
Administrator
Bay Area, CA
*****
Gender: Female
Posts: 4364



View Profile
« Reply To This #14 on: July 09, 2011, 04:44:17 PM »

[N]ow most of the world's supercomputing power is spent mining bitcoins.

I'm curious if you have a source for this claim?

--Diane.
Logged
iampaul
Kiva Supporter
*****
Posts: 485


View Profile
« Reply To This #15 on: July 09, 2011, 04:52:13 PM »

A lot of intelligent people did this, and now most of the world's supercomputing power is spent mining bitcoins.

I'm not a programmer, so source code means nothing to me. But this statement did interest me. Those supercomputers were built and paid for using "traditional" currency. Assuming your statement is accurate, I wonder how many of the people who paid for the construction of that computing equipment are aware that their computing power is being spent mining bitcoins. Apparently the employee of the Australian Broadcasting Company who was using the company computers for mining never checked with his boss. But of course, if he had, those bitcoins would be considered the property of the Australian Broadcasting Company, wouldn't they?

I guess you and I are just going to have to agree to disagree on bitcoins, and you're still in the wrong place to convince Kiva. I see no point in my participating in this thread further. If bitcoin does take off, then great. Maybe I'll use it if it goes mainstream. You mentioned Google and Facebook but not the great many other dotcoms that fizzled and left people with less than they started with. BTW, I am a Google stockholder - not much, but a nice little position in my Roth accounts. I am happy their shares are valued in dollars and not bitcoins. Facebook shares are too hot for my coffers. I hope the investors don't get burned by them.

Paul
Logged
David2051
Kiva Supporter
Evansville, IN
*****
Gender: Male
Posts: 1142



View Profile
« Reply To This #16 on: July 09, 2011, 04:54:18 PM »

and now most of the world's supercomputing power is spent mining bitcoins.

If it were true, what an incredible waste that would be.  As if there weren't infinitely many more valuable things computers could be doing than cross checking peoples financial transactions....
« Last Edit: July 09, 2011, 04:56:21 PM by David2051 » Logged

Join Team Smile Train!  http://www.kiva.org/team/smile_train  :-)

“send a postcard and receive a postcard back from a random person somewhere in the world!” http://www.postcrossing.com/

Learn more about ovarian cancer. Educate for early detection.  http://ovariancancerin.org/

Be a bone marrow donor, save a life.  http://bit.ly/4Amit

Change a child's life, be a sponsor.  http://children.org/
Diane R
Administrator
Bay Area, CA
*****
Gender: Female
Posts: 4364



View Profile
« Reply To This #17 on: July 09, 2011, 06:07:38 PM »

In my day job, I am the support staff for two supercomputers.  I would like to reassure any concerned readers that my supercomputers, and the others with whose admins I am affiliated, take no part in mining bitcoins.  Instead, the researchers with whom I work use these powerful tools for computational chemistry (working currently on ocean desalinization membranes and future battery storage technologies), protein folding and related medical science, and cognitive computing (involving simulations of human cortical function).

If that was too technical, basically it boils down to being used full-time for scientific research, not bitcoin mining.  Methinks the claim might be a wee bit overstated.

--Diane.
Logged
asherp
Kiva Supporter
**
Posts: 10


View Profile
« Reply To This #18 on: July 09, 2011, 06:28:34 PM »

There are a few cases where some IT staffers have used their company's computers unlawfully. But most mining is done by garage hackers - pretty much anyone who knows how to install a GPU can be a miner.

The total hashing power of the bitcoin network is currently 145,408 teraflops (see http://bitcoinwatch.com/ ). If you look at the top 500 supercomputing projects  (see http://en.wikipedia.org/wiki/TOP500#The_systems_ranked_.231_since_1993 ) and total their combined processing power (for the US it's 25,280 teraflops) you get a number significantly less than the power the bitcoin network has devoted to verifying the block chain.  

That may seem like a lot, but you should compare it to the total cost in electricity (http://bitcoinweekly.com/articles/the-wasted-electricity-objection-to-bitcoin-part-ii). Given a mining efficiency of .5 Mhash/J and a hash rate of 11447 Ghash/s, you find that the entire network uses 22894 kW of electricity. At $.11/kW that's $60,440 a day. If you consider that the annual cost of credit card fraud is about 8.6 billion dollars (about $24 Million dollars per day) then the money spent to run the bitcoin network pales in comparison.
« Last Edit: July 09, 2011, 06:59:28 PM by asherp » Logged
tomviolence
Kiva Supporter
Movin' to Florida
*****
Gender: Male
Posts: 344


A mile and a half on a bus takes a long time

View Profile
« Reply To This #19 on: July 10, 2011, 08:39:44 AM »

reasons not to

1) No one uses them. Name a MFI who uses them. Name a major corporation who uses them.
2) The exchange rate. The value fluctuates, in some cases dramatically, so over the time of the loan you lose if the value increases. (i.e - if you pay 1 bitcoin in 2011 equal to $25 to fund a loan, and a year later the loan pays back $25, which is now worth .1 bitcoins if the value has increased 10 fold). If you assume you will be paid back in bitcoins, and the value goes up, the lender will need to default instead of paying you back $250.00 for your bitcoin. The poor of the world are not going to finance your currency speculation
3) Transaction fees. There are none for Kiva now, so why use a currency that is more costly to use ?
4) People in Europe (or other countries like Canada etc) need to exchange their money (euros, pounds, dollars, etc) into US dollars to make a loan. Why should bitcoins have precedence over this significant population of lenders ? 
5) A decentralized, partially anonymous currency is great for international drug dealing, why is is a good fit for kiva ? What is the benefit ? How would accepting bitcoins do anything worthwile for the working poor of the world ?

I understand the concept, and a country neutral currency would have an advantage if it was widely accepted. And bitcoins won't be widely accepted until they are widely accepted. So perhaps in ten years this might worth revisiting. The costs to Kiva (or anyone) running a multi currency backend are significant. You need to add significant value for that.

Logged

"Famines will be famines, banquets will be banquets
Some spend winter in a palace, some spend it in blankets
Dont wag your fingers at them and turn to walk away
Dont shoot someone tomorrow that you can shoot today
Time to end the praying
Listen what they're saying"

The Housemartins - "Get up off your knees" - from "London 0 Hull 4"
Pages: 1 [2] 3 4   Go Up
  Bookmark This  |  E-Mail This  |  Print It  
 
Jump to:  

 
Powered by MySQL Powered by PHP Powered by SMF 1.1.11 | SMF © 2006-2009, Simple Machines LLC
Thanks to PixelSlot
Valid XHTML 1.0! Valid CSS!
Page created in 0.237 seconds with 24 queries.