I know and I didn't say they did. The costumers had to acquire BTC somehow and that had a cost. As I said, somebody somewhere always pays. On the contrary. The retailer gives (part of) the saved costs to the Customer. He make promotions in the way of "pay with Bitcoin, and you get 2% reduction". Actually, if they do that CCs can revoke their CC license. They are not allowed to advertise cheaper prices for non-CC payment...
Five held over Bitcoin scams in China and Germany Bitcoin The growing value of Bitcoin may be making it more attractive to cyber-thieves Continue reading the main story Related Stories Virtual money 'a reputational risk' Bitcoin's rise divides the experts Bitcoin currency breaks $1,000 mark Suspected Bitcoin fraudsters have been taken into police custody in Germany and China. The German authorities say they arrested two people following an investigation into malware that generated the virtual currency by infecting its victims' PCs. Xinhua reports three people have been detained in China after a trading platform was shut without warning, cutting off investors from their funds. The cases do not appear to be related. The German Federal Criminal Police Office say one of its suspects was arrested in the southern state of Bavaria and the other in the northern region of Lower Saxony. Continue reading the main story How Bitcoin works Bitcoin is often referred to as a new kind of currency. But it may be best to think of its units being virtual tokens rather than physical coins or notes. However, like all currencies its value is determined by how much people are willing to exchange it for. To process Bitcoin transactions, a procedure called "mining" must take place, which involves a computer solving a difficult mathematical problem with a 64-digit solution. For each problem solved, one block of bitcoins is processed. In addition the miner is rewarded with new bitcoins. This provides an incentive for people to provide computer processing power to solve the problems. To compensate for the growing power of computer chips, the difficulty of the puzzles is adjusted to ensure a steady stream of about 3,600 new bitcoins a day. There are currently about 11 million bitcoins in existence. To receive a bitcoin a user must have a Bitcoin address - a string of 27-34 letters and numbers - which acts as a kind of virtual postbox to and from which the bitcoins are sent. Since there is no registry of these addresses, people can use them to protect their anonymity when making a transaction. These addresses are in turn stored in Bitcoin wallets which are used to manage savings. They operate like privately run bank accounts - with the proviso that if the data is lost, so are the bitcoins owned. It accuses them of being behind a botnet that allowed its operators to secretly use other people's computers to carry out "Bitcoin mining". The technique - which involves using processing power to solve complicated mathematical problems - is used to create a secure record of Bitcoin transactions. The incentive for the malware's creators to commit their crime was the fact that Bitcoin miners are rewarded for their help with new bitcoins generated as a side-effect of the process. The reward for each puzzle solved is currently 25 bitcoins, currently worth a total of $29,075 (£17,788). Bitcoin breached the $1,000 mark for the first time last week. The police say they are also investigating related cases of fraud, copyright violations and offences related to the distribution of pornography. Chinese detentions The Chinese case relates to the closure of GBL, an online Bitcoin exchange platform based in Hong Kong, launched in May. According to Xinhua, by the end of September it had 4,493 registered members, and a trading volume that made it the fourth biggest in the country. China's official news agency says that on 26 October the site shut operations, leaving a fake postal address as a contact. It adds that three suspects were subsequently apprehended in different locations on the mainland. The agency says that the amount of money involved is unclear. However, the Hong Kong Standard has previously reported that up to HK$31.8m (£2.5m) was at stake. Bitcoin gained fame in China after film star Jet Li's charity One Foundation received a donation in the currency in April to help the victims of an earthquake. In recent weeks there have been a series of articles highlighting its use as a way to circumvent restrictions on money transfers out of the mainland - a factor that analysts say has helped propel a surge in Bitcoin's value.
Yes, he doesn't understand that "intrinsic value" should be read as "usefulness value". luckily BERNANKE thinks otherwise: Bitcoin 'May Hold Long-Term Promise'. http://www.businessinsider.com/ben-bernanke-on-bitcoin-2013-11
Early miner's story: "When I first heard about bitcoin, right at the end of 2009- I was mining ~400-700 a day for a week or two. plain old AMD tower I never actually spent any bitcoin in exchange for products at the time nor managed to exchange them - All deleted years ago,hard drive gone, kaput, send to trash and god knows where right now. I'm still relatively poor, wasn't too long ago when I couldn't afford duvet covers and only finally got back into bitcoin very recently despite following it's progress for years. So the idea that anyone who heard about bitcoin early is automatically rich isn't always true. many people wasted it away, deleted, donated, got hacked, "invested" and so on and so forth when coins were worth a fraction of the value they are today , It can make you angry if you think about it too much but hey that's life, no such thing as a free lunch and nobody can predict the future some people look back and say it makes them feel sick to see how easy mining was with the low diff back the and start envisaging what they would of done in that situation, but it makes you feel more sick having a winning lottery ticket and throwing it away than never playing, watching the rest of the game unfold but never jumping in. I don't want to get into a rant but it's so easy in retrospect to say you would of just mined for a few days and held those coins for 4 years and be rich. You'd have to have some crazy self control and strange level of foresight to hold onto them. I remember at the time you would literally earn more money by clicking adverts for hours than mining, it wasn't even called mining it was called 'generating'- there was no competition, no standalone miner, no pools, and definately no fpga or asics..The concept itself was fascinating, you could see it's something special but the idea of any sort of mainstream adoption was just a pipe dream, to see it on prime time news for the first time was surreal. except once you got wallet balance them what would you do with it? There was nothing you could buy with them, no exchanges just a few guys on IRC. The economy was built by these guys establishing services, and forging a demand- and if nobody ever spent bitcoin would not be where it is today.. I remember the first place i saw to buy was through the mail by sending cash. and there wasn't even alpaca socks then, not that i remember.. first thing i saw for sale was a photo then some tea leaves.the famous pizza story was a while after that. there was no economy, it wasn't seen as a get rich scheme nor an investment= it was just a test of niche beta software with a tiny community of hackers and libertarians. just like wow gold marketed towards crypto geeks, you could delete the wallet and install windows again and not bat an eyelid. In fact i did that more than once. people sent xxx btc transactions just to test sending was working correctly!! this could buy you a house now!, so there is definately room to feel sick.. far as i remember the faucet gave out 50 (or maybe it was 5?) anyway the real true winners are the ones who 'luckily' forgot about wallets until recently, they wake up to a golden ticket. for anyone else, likely would of jumped at a chance to sell those coins for a fraction of a dollar a little later down the line (easy 10x increase on the 'informal' rate which was published).. who would turn down free money for leaving your computer running in the background for a week, especially if they are poor student or whatnot? these weren't big vc's and finance guys playing with it at this time.. what about .25 cents, half a dollar, $1- when everyone was screaming crash and couldn't believe they could exchange 1 of those coins generated by running this program for a real life dollar, how about $2 dollar, $5, $10+ or when it crashed from 30 (when everyone was saying it's all over) and so on and so forth.. right up until the crazy % increase we are at today. who knows maybe in a further 5 years people will find it insane a mbtc was just over a dollar in the same way, it wasn't so far back at all when $1000 was much to early to be talking about. I'm definitely sure I'm not the only person who had a similar experience, and a lot of people came a bit later, with slashdot article for example. I would be inclined to agree with your opinion that current estimates on lost coins are too conservative and hazard a guess that minimum of 15% of released coins are permanently gone to the blockchain, of course when dealing with a resource which has value by scarcity this only serves to ultimately increase the value, so it's not all bad."
Since there is no registry of these addresses, people can use them to protect their anonymity when making a transaction. This is incorrect. The blockchain is the registry of transactions, a ledger if you wish and once an IP address can be connected to a wallet, all transactions in the past can be revealed. So because of this, quasi-anonymus is a better word...
And this is how coins get lost: "My buddy has 10 lost coins. Bought them for 10 a piece, backed up his wallet to a flash drive. Slipped it into his coat pocket it fell out while he was snow blowing his driveway and the snow blower destroyed it. It is a pretty funny story that we just laugh about now. He used to call it his 100 dollar flash drive, I should give him shit for it now though." "We looked into the price to get data off flash memory chips at the time and it wasn't worth it for him. I'm sure now he would have quite a different tune though. I do know what landfill it is in though...."