text:
Steve Forbes, Forbes Staff
"With all thy getting, get understanding."
When governments undermine faith in their currencies people turn to alternatives. Weak as the dollar has been in recent years, for example, it is still seen in many parts of the world as infinitely preferable to the local money, which is why most of our physical currency- especially our hundred dollar bills– circulate outside the US. So it is no surprise that as the Fed readies another round of money printing, more and more Americans want to experiment with alternative currencies. Hence the intense interest in the digital phenomenon called the Bitcoin. Online trading has mushroomed. Alas, the Bitcoin is not the answer to the Federal Reserve's depredations against the dollar.
The basic reason: it has no fixed value. It trades like a stock or commodity. In recent days it has been crashing after a spectacular rise in terms of dollars. Such volatility makes it useless as a means to do transactions. Money has only one purpose–it makes doing transactions, that is buying and selling products and services and securities, infinitely easier than barter. All the other purposes of money flow from this basic function.
Money is most optimal when it is fixed in value just as commerce is facilitated when we have fixed weights and measures. When you buy a pound of hamburger you expect to get 16 ounces of meat. An hour has 60 minutes. A mile has 5280 feet. These measurements don't "float."
So too money best lubricates commerce when it has a fixed value. This is best seen in investing. When you make a capital expenditure or a buy an equity, you are obviously taking a risk. With stocks, you are buying future streams of income. Same with that new factory. But the risk is increased exponentially if you don't know what you will be paid back with. Is it a 100 cent dollar, a 20 cent, or a 115 cent dollar?
Such uncertainty hurts growth. When a government devalues its currency, money goes defensively into hard assets. Investing for the future suffers–and so does our future standard of living.
We don't really know how this coin is created. You can't have a functional money without a basic transparency. Unless you are addicted to volatile trading for the sake of trading, stay away from the Bitcoin. Thankfully its plunge will be a salutary caution to most folks.
"We don't really know how this coin is created. You can't have a functional money without a basic transparency." That is absolutely incorrect. The entire system is extremely transparent. All the software involved is open source. You can go to bitcoin.it and download the exact algorithms use to generate and trade bitcoin. There is no mystery.
This is not true, Because most people cannot read the source code to understand bitcoin and its algorithm. While it is accessible, the math is hidden in the source code, and the code (which has improved allot in the past 2 years) still feels unorganized and is hard to follow. This does not make it transparent. I think bitcoin (or its variants) will have another day but its not today.
What kind of argument is that? That's like saying that because most of the world does not speak Russian, the works of Dostoevsky don't exist.
There are lots of people who *can* read it, *have* read it, and believe me, a lot of people have been searching for vulnerabilities. To date, none are known, but anyone is welcome to try. That's the beauty of openness.
When you get right down to it, the process is not all that complicated. To those familiar with the concept of hashing, public key cryptography, and proof-of-work, that algorithm is actually kinda simple. Just because some people don't understand it, doesn't mean that it's "hidden".
Agree 100%. Either Mr. Forbes hasn't done his research or he equates "I don't understand the publicly-available open-source algorithm" with "we don't know how it's created."
"With all thy getting, get understanding." – Steve Forbes the guy who can't read code.
Huh? The fact that there IS code, no matter how readable means it is deterministic. A dumb computer can understand it. Can we say that about when where and how US dollars are created? Nope.
First my Disagreements
1. We know exactly how the coin is created. When a computer solves a hard compution correctly it may be rewarded a certain value of coins.
2. There is nothing in the realm of human action that is fixed and can be measured. There are ratios between things traded, but these are historical facts and subject to change a any moment. Measurement at it's based consists of spatial relations, and money does not measure that. A price is not measured by money, it consists in money. (Mises, Human Action)
Where agree with stipulation…
3. Bitcoin is not money…. (yet), as there is no real reason that it couldn't be and there are many people trying to bring it to that point.
A big factor in the valuation of money is what it could buy in the recent past. This determines how much people want to keep for current reserves, and the efforts they are willing to expend for money. Bitcoin isn't widespead enough in commerce to have this sort of memory and stickiness. People are trading for bitcoin based on it's value over the past hour or day, rather than the month or year, and generally not buying or mining it to keep in reserve, but rather for immediate use or long term speculation.
"People are trading for bitcoin based on it's value over the past hour or day, rather than the month or year, and generally not buying or mining it to keep in reserve, but rather for…
… immediate use or long term speculation."
Tough to argue with that tautology, but if you observe the block chain closely, I'd say the latter.
The algorithm of finding a coin or solving a block is irrelevant… The purpose is if you want to"mine" or basically "print" a bit count you need to do some trivially simple standard work (compute a sha decrypt of a hash block) the result of that work is some large number and there is a a global probability/difficulty level which that number would have to be less than which sets the standard of mining probability of bit coins to hold the inflation rate fixed no matter how much the computer power or network of miners grows. Its all spelled out in some simpler English on the Wikipedia page. Its kind of like having a uniform distribution of hidden gold deposits and giving everyone the same probability of finding them, whoever throws the most miners at it will find the most, but everyone should get and have the opportunity to.
But why does this matter? Do you ask how the paper money is created? what is the exact math that proves the bill is real with the secret labels they add etc? Yes we moved the printing press to the world and now the nerds will probably start with the upper hand instead of some bank or gov entity which initially distributes the cash… But once the bit coins are discovered then thats it there is no more creation of that coin we just speculate what the value is.
The average person will not mine for bit coins, does every person print their own money? People will exchange things of value and local currency for a global currency with fixed predictable inflation rate. A bit coin has no intrinsic value, the same with paper money since it was removed off the gold standard anyway.
As Mr. Forbes must know, every currency floats in value against every other, so the mere fact that bitcoin floats in value with respect to all other currencies cannot, by itself, disqualify it from being a currency. The fact that it is so volatile may make it a unattractive currency in which to invest, depending upon one's risk preference.
Aside from the volatility and risk, to determine whether it is a good buy at a given price, one would have to at least have a look toward the fundamentals. As luck would have it, since bitcoin is an electronic currency where the chain of custody of every fraction of bitcoin is preserved forever on every node on the network, it is very easy to keep track of the fundamentals.
The kind folks at blockchain.info have some nice python scripts and draw graphs for us every day. One of the most interesting graphs is that of Trade Vs. Transaction volume which is an estimate of the ratio of speculative trades in bitcoin (in and out of central exchanges, like Mt. Gox) to its real world transactions (normal people just buying stuff, i.e., economic activity).
I say it is interesting because if you look at that graph, for instance, over this calendar year, during which the USD trade price went from around $15 to peak at $266 a couple days ago and now printing around $66, it quite remarkable that the ratio is trending unmistakably downward. The interpretation seems plain: economic activity (transactions) were growing at a pace fast enough to more than keep up with bitcoin's nearly vertical rise. Trade vs. transaction has actually dropped below 1.0 for the past couple (post-"crash") days suggesting that nearly all speculation may have been driven away.
So amid all the talk of "bubble", and that was just about all that anybody's been talking about for the last week, it seems quite remarkable to consider that much if not all of that price rise was due to actual demand for the currency, and not much at all to speculation.
I pointed this fact out at Krugman's latest hit piece over at NYT. He didn't respond yet, but he's a very busy man. Aren't we all?
I may of course be entirely wrong in this interpretation, and of course my thoughts do not constitute investment advice. I would welcome and economists or even a currency trader to tell me what the correct interpretation ought to be.
Whether or not bitcoins plunge presents a salutary warning or a buying opportunity or perhaps both, only time can tell.
True, volatility against other currencies does not disqualify bitcoin per se; but you are missing Steve's argument. The problem with the dollar, or any other currency, is that government fiscal machinations change their value; indeed since those machinations are always in one direction – print more money to pay for government vagaries, the value of a currency is being destroyed. Thus today 1 hamburger is "worth" 6 dollars, a year rfom now the exchange rate will be 1 hamburger to 8 dollars.
Money in itself is nothing since you can't eat it, you can't protect yourself from rain and cold with it, it will not help you masturbate.
Only what you can exchange money for will do those things. And this is further exacerbated by the fact that you want many different things and use money as a value-holder in exchange with different people that can provide you with these things. Thus even if you make hamburgers you do not pay someone who build your house with thousands of hamburgers; you sell your hamburgers and use the money you got to pay the builder. If the value of that money decreases in the meantime you've been robbed.
Steve's comment that commerce is facilitated best when the value of money remains stable over time has got it exactly.
Now bitcoin, is maybe transparent in its creation, it's gyrations vis. other currencies may not be disqualifying, but it still has no value with respect to the real world. If I were to hold bitcoins, and got hungry how much would pay or that hamburger? Would it be the same tomorrow?
If I worked 6 minuets to get one bitcoin, and then could exchange that 1 bitcoin for a hamburger; I would consider it a good value. If, as seems likely, tomorrow I'd have to pay 3 bitcoins for the same hamburger, I'd be looking for the guy who "paid" me 1 bitcoin for 6 minutes of work with a shotgun. Or perhaps just look in the mirror and consider what a fool I was to accept that transaction.
I didn't take that to be Mr. Forbes' point at all, although he may well have made the case for hard currency elsewhere. If so, I would agree with him on that point. If so, there is no currency harder than bitcoin. It is harder even than gold, for gold will continue to mined profitably at some exchange price. Bitcoin stops being mined completely no matter the price.
Points on volatility well taken. Yes. It sucks. My point was that, in spite of the volatility, there is an actual BTC economy "out there", just like there would be economic activity in Namibia even if the USD/NAD FX was volatile. So it happens that there is a calculable USD equivalent value to that economic activity (just like we can estimate for Namibia). And since BTC is M0 for that economy (whatever size it happens to be–this economy of Bitcoinland), it should be relatively straightforward to estimate a fair USD exchange price and determine whether the current price is high, low, or just about right.
And speaking of this economy of Bitcoinland… I failed to mention that it has no central bank and no political actors of any kind, and therefore has neither the means nor will to dilute its currency vis-a-vis others for any reason. Thus it has no means to reward TBTF banks with quantitative easing, and no TBTF banks of any kind. Bitcoinland also has (as yet) no major lenders and therefore no significant debts, upon which will borrowers and then banks default if its currency happens to go vertical versus others. Nor does Bitcoinland have major exporters or centers of tourism who will be crushed if its currency happens to go vertical. Also, Bitcoinland's currency BTC happens to be actually, literally, verifiably transferable over the internet without reliance upon trusted (fee-collecting) 3rd parties.
Other than that, Bitcoinland is a lot like Namibia.
Now I just want a hamburger
So who paid you to write this bs? Do better research journalist.
Heh! I think Steve Forbes is the guy who pays the guys who pay the journalists… but yeah he can afford better ones.
You can't buy as dimwitted a writer as this for all the money Steve has.
"We don't really know how this coin is created. You can't have a functional money without a basic transparency."
Actually, we known exactly how this coin is created. Furthermore, every last thing about it is transparent. That openness and that transparency is actually a fundamental part of how the system functions. If you don't believe me, check out the source code:
I agree this currency is volatile, but that's no reason to spread misinformation about it. The theory is sound, as is the cryptography that Bitcoin is built on. If anyone begs to differ, then the source code is open; prove it. Saying that we don't know how it is created is just plain inaccurate.
Come on Steve… I have so much respect for you. Volatility will subside as marketcap increase and there are instruments to hedge. You know this.
I agree that, the greatest value of a currency is its utility. This is exactly why the people that take the time to understand bitcoin are so excited. Secure, anonymous, instant transactions that are close to free. Couple that with scarcity, and you have a currency and store of value that the world has never seen.
It's okay… I forgive you. The "We don't really know how this coin is created" comment means you haven't spent much time researching it.
As the BTC-based economy grows, the exchange value of its (M0) currency will likely grow with it. As I pointed out above, the (BTC) economy appears to have more than kept pace with USD exchange price of its currency over the past 4 months. That is an astounding growth rate. Will it continue for 4 more months? For four years?? Will that economy ever get as big as, oh say, Sweden's? And what is the USD valuation of SEK M0?
Actually it's already bigger than the national currencies of some small countries…
Good points Steve, I agree. I wrote a post yestday with my own concerns: "My problems with Bitcoin" http://su.pr/28Hpg2
Impressive in its recycling of fears of "volatility" and a new one, "We don't really know how this coin is created. You can't have a functional money without a basic transparency."
Don't say "We". "You" don't really know how this coin is created. In fact, Bitcoin is an open source project. You (or anyone else) can pull down the source from Github. That is total transparency.
Then we have the Federal Reserve. You want to claim the Fed is Transparent? Really? Not even the most fervent supporter of the Federal Reserve claims they are transparent. In fact, every time someone like Ron Paul calls for an Audit of the Federal reserve, the OPPOSITE is demanded, that we should NOT know what the Federal Reserve is doing, we should NOT know why they are doing it, and we should NOT know who they are funneling money to.
Bitcoin shot up to $266 dollars from $13 this year. It hit a low from $266 of $50 last night. The fact is that until Bitcoin gains acceptance over a broad population, and gains in value by many orders of magnitude from its current price, Bitcoin cannot be very stable. Over the next few years Bitcoin will increase in use. That will force up its valuation. And Bitcoin will become more stable.
Today, Bitpay allows very low cost transactions in Bitcoin with no exposure of risk on the part of the merchant. Many, many purchases from trusted vendors do not need to require credit card accounts from their customers, nor do the customers need a third party to force charge backs from trusted vendors. (The Vendors themselves can return money reliably as required).
With Credit Card companies and Banks routinely charging massive fees for simple and small transactions, Bitcoin represents a vehicle for cutting away those costs. That drives acceptance which will drive stability.
What are you talking about? Bitcoin is an open source protocol. It doesn't get more transparent than that.
"We don't really know how this coin is created. You can't have a functional money without a basic transparency."
Unless you've done your homework, you shouldn't just say things. The reason Bitcoin has been succeeding for the last 3 years is that the whole system is as transparent as it gets! The whole Bitcoin code is open source. The whole network runs distributed on any computer that runs it. There is no central authority or shady Bitcoin issuer. It's all available for everyone to see! Check out http://blockchain.info and you can watch every single transaction coming through the Bitcoin network
Agreed; this is a rather shallow article, I'm surprised
I am surprised you didn't touch on the 21 million Bitcoin limit (which seems to stem from an aversion to inflation). Advocates of Bitcoin are encouraging each other by indicating that this is a good quality of the currency: it seems that nobody understands the importance of inflation and interest as market regulators.
2040 will be the guaranteed deadline for your plunge (as the last Bitcoin is expected to be 'mined' during that year), but I personally believe it will occur much sooner than that for reasons very similar to your opinions.
I would have thought Mr. Forbes, with his well-taken points about the Federal Reserve's ongoing dilution of USD, would be at least open to the idea of the fixed limit. Krugman is off his rocker about it. Obviously a currency so hard as to have a fundamental limit for eternity is bound to have some attraction as a Store of Value… at least for a value investor… at least at some point.
Slight nitpick, last bitcoin to be mined will be in 2140 (not 2040), although the dilution rate after 2040 will indeed be miniscule. It is already small, and is likely what is (or at least was) driving demand so high.
Just a quick correction, the last coins will be "mined" by 2140, not 2040. Although long before then their rate of creation will be so minimal as to be negligible, provided that the price isn't extraordinary (which it may be)
You can have both deflationary and inflationary currencies coexisting at the same time, people then can use each one for whatever purpose they believe benefits them the most.
Interestingly the Bitcoin is currently divisible to the eighth decimal place but "this limit may be changed in the future".
So I might be wrong in this but doesn't that give the currency the flexibility required?
If you still wanna buy Bitcoins in the UK, directly without intermediators on ebay or other middle men (with huge fees) is difficult, I made this guide with an easy process:
Fair comment about Bitcom…. but back to the root of why it's out there is the lack of stability of our won currency.
No back up such as gold, governments such as our own printing vast amounts of money which could and should be extremely inflationary, ie. a dollar becoming worth a half dollar, a quarter, who knows…
Now if I was better off financially (of course regular wages have dropped over 12% in the last few years and a college degree is not worth so much these days), I'd probably invest in some foreign currencies, perhaps food commodities and or metals… but alas my future worth is tied to the dollar…. you better believe it's a scary thought to me….
But the rich investors have very low interest rates to keep borrowing and investing and laughing all the while at the middle class…. and indeed perhaps Atlas is shrugging!
Others have cleared up that we DO know how it's created.
I just want to comment by pointing out how Mr Forbes would be better off reading his own journalists' work on bitcoin, as he has some of the best on the web, right here.
It's quite remarkable that he could write such a violently wrong article.
Even on basic economics, for example he says our future standard of living is hurt by people buying hard assets – yet that's the very foundation of capitalism.
To say it has no fixed value is also silly, considering the USD has lose more than 90% of it's value in around 50 years.
I don't wish to be rude Mr Forbes but it's Internet money, and us youngsters (I'm in my late 40s) understand it.
It is an experimental currency with an immature trading platform. It is saying a 3-year-old will never be a track star because the child cannot run fast. Nobody knows how this will pan out.
This article is written from a high-flying investor's view.
From a software engineer, and someone who likes to buy things, bitcoin is very real, very secure, and very anonymous money.
You can't compare it to stocks or commodities; when's the last time you've bought something at Amazon or Target with 12 shares of KO? You can do that today with bitcoin.
When's the last time you went to an ATM and turned in APPL for cash? The first bitcoin ATMs are already in place.
At the end of the day, money is something you can buy stuff with. I can buy stuff with bitcoin.
You might not be happy about it, and it may be awful for the government. It is anonymous, which will be great for criminals. Which is bad.
But it is money. And it's here to stay.
"The basic reason: it has no fixed value. It trades like a stock or commodity."
Ok, correct me if I'm wrong but… does any currency have a fixed value? Fixed relative to what?
The entire premise of ForEx is trading currencies amongst each other similar to stocks or commodities. Fiat currency has no fixed value relative to commodities or other currencies unless artificially pegged there by law (another artifact of the state). Gold has no value except what the market will accept for it, as we've seen all too well recently.
Can you name a single fixed value currency that currently exists?
This article doesn't seem to make any sort of economic sense.
This seems to be one of the most hastily-written and thoughtless pieces I have ever seen on this site, moreover written by Mr. Forbes himself.
Another interesting article decrying bitcoin usefulness as a "currency" because it fluctuates as a store of value. But what if it's just inherently different from a currency? Would it gain legitimacy if people started to describe it as a "infinitely fungible, hard-limited, easily transmissible, store of value?" The digital gold comparison might be the most accurate yet. Its value is driven entirely by demand. Will it fluctuate in value? Oh yes. Does this actually make it attractive to investors? Definitely. Does it mean bitcoin is going to die because people can't treat it like traditional fiat? Don't assume so much. These are still the early days when a number of digital currencies are stumbling about in their infancy. Bitcoin is the largest of the so called alt currencies and may have gained the biggest footing, but years ahead will tell what kind of technology evolves out of this field. Bitcoin could be either a predecessor, a prototype, a revolution, or a fad. But the interesting thing is how difficult it is to kill the network. If you understand this, you'll understand why it's not going away anytime soon.
Money or not, it is useful at any value. There are 3rd party services out there like Bitpay and Walletbit will gladly act as the middleman and pay merchants USD on behalf of customers. Transactions are irreversible as well. It's a system that's different, disruptive to credit card companies, and potentially more attractive for merchants. Bitcoin still needs to overcome trust issues that consumers may face when buying, but reputable merchants can win out.
I'd like to point out one factual inaccuracy: "We don't really know how this coin is created." This is false. There's a reason why it's well established that there will only ever be 21 million BTC in existence. We know exactly how it is created, even insofar as the rate that it is created and its effect on inflation. Calling for "basic transparency" without a cursory glance at the details is misleading. Bitcoin, despite not being tied to anyone's identity, is highly transparent. Anyone can see the transactions occuring and the coin being created in real time via services like blockchain.info.
This is part of the reason why bitcoin is so difficult to counterfeit. While unaffilliated 3rd party exchange sites like MtGox and online wallets are still figuring out how to deal with their architecture, the bitcoin blockchain itself has thus far proved impenetrable.
But all in all, the long term investors simply ask themselves one thing. Will their fiat inflate? Will Bitcoin deflate? The answer to both of those questions is "Yes"
Bitcoin reveals a generational divide.
I agree with the vast majority of the comments here.
Before you consider this article just take a look at a BTC/USD chart as well as the Nasdaq index in 2008-2009. They look similar. Also, consider the value of other currencies as well. Perhaps BTC isn't all its cracked up to be, but to attack it on various principals that at least on a chart seem all too similar with other investment vehicles, seems a little premature.
Wow Steven, if you're having trouble understanding how a proof of work system based on crytographic hashes work, why didn't you just ask someone to explain it to you?
Merchants don't care what is money and what is not money. They care about what cuts their costs or draws customers.
A merchant that accepts bitcoins for payment but then has those payments converted instantly to dollars (or euro, etc.) is not exposed to exchange rate volatility. Additionally that merchant is not exposed to chargeback risk or settlement delays, etc. Even with conversion to fiat, bitcoin costs less than any other payment method: https://bitpay.com/pricing
Additionally, by accepting bitcoins a merchant has an advantage over its competitors who are not as forward thinking. The choice to accept bitcoins equates to greater market share. So whether or not you want to speculate on the exchange rate is a separate discussion from whether or not bitcoins will be used for commerce. And simply, if bitcoins are used extensively in commerce, do they not then become money?
Dear Forbes, please stop spreading FUD and lies about bitcoin.
"In recent days it has been crashing after a spectacular rise in terms of dollars. Such volatility makes it useless as a means to do transactions."
This is the most popular lie by mainstream media, after the bitcoin "crash". The truth is – YOU DO NOT HAVE TO EVEN TOUCH BITCOINS IN ORDER TO ACCEPT PAYMENTS IN THEM. You can choose to have them instantly converted into fiat currency of your choice.
A quote from wordpress.com, when they started accepting bitcoin payments:
Q: How do you handle BTC? Are you participating in the bitcoin network? Mining?
A: We aren't mining or handling BTC at all, actually. Our payment processing partner for Bitcoin is BitPay.com. They track the exchange rates, generate the quotes and the wallets, receive your BTC and finally send us USD.
This information could be found by doing 5 minutes of searching on google, so either you are TOTALLY incompetent, or you are being payed to write intentional disinformation.
Also, "We don't really know how this coin is created. You can't have a functional money without a basic transparency.".
All bitcoin software, protocols, everything – are open source. It is the highest level of transparency even theoretically possible.
Sincerely, Informed Reader
"Is it a 100 cent dollar, a 20 cent, or a 115 cent dollar?"
Of course a dollar will always be worth 100 cents just as a bitcoin will always be worth 100 million satoshis. That doesn't prove a thing.
A more pertinent question is how many milligrams of gold is that dollar or bitcoin worth. The dollar most assuredly floats in value. So do the euro, bitcoin, yen and pound.
"We don't really know how this coin is created." We know exactly how "the coin" is created. It's open source software – meaning its completely transparent to those able to read the code themselves. How is it that you arent researching these issues before printing the article? Unbelievable.
It is too bad this valuable real estate (blog post from Steve Forbes) was not used to describe how Bitcoin could be the catalyst for causing the flat tax to finally happen.
If a digital currency with user-defined anonymity (hat tip to Forbes contributor Jon Matonis for coming up with that term) becomes used widely for income tax evasion, then income tax will be seen as being fair — those whose income is taxed by their employers will be forced to pay full taxes while tax collections from others whose income and spending occurs without leaving an auditable trail may essentially disappear entirely.
About the only way for the State to survive would be to abruptly switch to a flat tax where it is much easier to collect from these tax evaders as it is built into the price being paid to a merchant that complies with the tax laws.
Doh, correction to the statement from above:
"then income tax will **no longer** be seen as being fair"
Ouch! Much respect Steve but you clearly didn't do your due diligence on this one. I agree with some of your points, particularly regarding volatility but when you speak of "basic transparency" Bitcoin is as transparent as it gets.
I don't believe Bitcoin will succeed but I think it is laying the groundwork for the future.
If you are going to argue against Bitcoin at least have your facts straight.
Prices "float" all the time, have you looked at the price of gas in dollars recently? Any time you "buy" something (a stock, a bond, etc) there is a chance that thing compared to the value of a dollar (or any other currency including bitcoins) will go up or go down. Now I wouldn't necessary recommend having a bond in which they will pay you back in bitcoins (because bitcoins do fluctuate in value significantly right now). And just because you don't know how a bitcoin is created doesn't mean it isn't well known by many people here is how bitcoins are created:
New bitcoins are generated by the network through the process of "mining". In a process that is similar to a continuous raffle draw, mining nodes on the network are awarded bitcoins each time they find the solution to a certain mathematical problem (and thereby create a new block). Creating a block is a proof of work with a difficulty that varies with the overall strength of the network. The reward for solving a block is automatically adjusted so that roughly every four years of operation of the Bitcoin network, half the amount of bitcoins created in the prior 4 years are created. 10,500,000 bitcoins were created in the first 4 (approx.) years from January 2009 to November 2012. Every four years thereafter this amount halves, so it will be 5,250,000 over years 4-8, 2,625,000 over years 8-12, and so on. Thus the total number of bitcoins in existence will never exceed 21,000,000.
Here's a good Slate article that also points to some of the major problems with Bitcoin: http://www.slate.com/articles/news_and_politics/view_from_chicago/2013/04/bitcoin_is_a_ponzi_scheme_the_internet_currency_will_collapse.html
How's that good when the author demonstrates a clear inability to understand what a Ponzi scheme is? Other than that and the technical inaccuracies, an interesting read and food for thought.
All you people thinking Steve doesn't know understand the mechanics behind the FUD he's trying to spread – stop for a second – don't you think perhaps the real reason for the FUD isn't in a miscomprehension of Bitcoin but rather he has HUGE vested interests in Bitcoin failing?
Poor Steve (figuratively) :-(
"know understand" = "know or understand"
"isn't in a" = "isn't a"
Fingers typing faster than brain, sorry.
Neal King, often cited (probably wrongly) as a contender in the hunt for the true identity of the creator of Bitcoin, wisely noted to Adam Penenberg of Fast Company, ""As long as people want to play the game, they can pretend that a Bitcoin has value, but if someone refuses to accept it, you can't make him; and it would be seriously unwise for him to accept it. … [Although the U.S. dollar] also has no intrinsic value, [you can pay taxes with dollars and thus to settle debts]… If the U.S. government loses the ability to enforce payment obligation on that person, a $1 bill will also have no value beyond the paper."
Yes you can pay taxes with dollars, but with Bitcoins you can avoid it.
That's real beauty of it.
The only problem I really have with your comment is that it is wrong to mix the definition and understanding of real money to an enforcement of its usage. This has nothing to do with the value, acceptance or meaning of real money. Be careful!
Great article, but time does "float" if your near super large and dense objects and if you approach light speed. Just nit picking.
I find the premise of this article totally silly. Of course it's money – perhaps not stable money, but money nonetheless. Did the currencies in the Weimar Republic or Zimbabwe cease to be money because of inflation (ie, not stable value)? If so, at what magic point does money cease to be money?
Can you store value with it? Yes.
Can it be used to pay debts and as a medium of exchange? Yes.
Everything written in this article simply pointed out the realities about Bitcoin. But it seems like Bitcoin has got such army of defenders that are always ready to pounce on any one that tries to point out glaringly obvious facts and realities about Bitcoin as it is today, that even a kid can relate to. I begin to wonder why are you guy trying SO HARD to defend the indefensible about Bitcoin, as if you were employed to do just that?
If Bitcoin has become real money (medium of exchange) to you as you want us to believe, what is the percentage of your daily expenses that you make using Bitcoin?
What "obvious facts and realities" are those? With all due respect to the otherwise brilliant and usually right Steve Forbes, this article seemed less intended to inform than to pour scorn on a topic that the author seemed to know woefully little about. The parts of it that failed to be non sequiturs were simply wrong.
It doesn't matter whether you or I use bitcoin on a daily basis. The fact is simply undeniable (and almost entirely unremarked in the mainstream press) that a significant and rapidly growing amount of commerce (see blockchain.info) is being transacted in bitcoin. The fact that neither you or I use Swiss Francs on a daily basis does not affect whether CHF is a currency, much less whether or not it is a good store of value. In a world of nearly instant fungibility, the distance between what we store value in and what we buy our groceries with has never mattered less and is likely to continue to decrease.
Oh no, quiet everyone – Lovina's figured out we're paid shills and is onto us!
Lovina: did it even cross your mind that the simpler and more obvious conclusion that the barrage of "defender" replies is actually an indignant response to a poorly researched and poorly written article?
Just as if Steve wrote an article claiming that the Easter Bunny exists and lives at the North Pole with Santa as if it were an actual fact there'd be plenty of people who would legitimately disagree.
The responses you see here are no different.
Thought that was pretty funny. Yeah, yeah, it's the Koch brothers trying to destroy the US dollar and pave the way for narco-traffickers to take over the world. That's it.
Ya know that local youth symphony that's always hassling you about donating and buying $10 tickets to their concert at the refurbished movie house? Well the Bitcoin Foundation is even more non-profit than them.
All true. And more. Bitcoin isn't a corporation, it isn't a person its just a brand name for an open-source cryptocurrency software scheme that can be and has already been replicated (Litecoin is an example). In other words, it's a toy, just a toy. It has zero authority and therefore, once the bubble is burst, it will have zero value.
The basic reason: it has no fixed value. It trades like a stock or commodity.
so what the author is saying is. stocks are worthless please do not buy stocks or other currencies.
if anyone wants to argue with me, first take a look at other currencies but the USD
they all go up and down against the opposite trader eg. CAD vs USD it trades like stock.
so in the end Steve Forbes has no idea what he is talking about.
bitcoin would be the future as government cannot control the inflation or deflate of this currency, hence why Mr. Forbes is bashing it
any currencies go up and down because of GDP, demand ETC so again currencies themselves are stocks (money is amount based on how much gold, other precious metals and gems they have.
A bitcoin is more like a 17th century tulip than a stock or commodity.
Commodities have at least some real world basis for their worth in currency beyond being a store of wealth. They can be eaten or used as fuel or made into other useful things.
Stocks have value based on earnings.
A bitcoin's only value is in that hopefully people will value it tomorrow. But then again, they might not.
That's what a currency is.
So the only thing preventing BTC from being 'money' in your mind is your opinion that it does not have a fixed value?
Are there any 'monies' that DO have a fixed value?
Do you believe in Subjective Value Theory?
What does 'fixed value' even mean?
all money is dead. we have too meany people on this planet to have an economic system base on money. there are not enouff job to give to every one. we have a surplus work force that we cannot give job to. we have billions of people to employ we have never had in the history of the earth had so meany people to take care of. but here is the thing we have teck that make money useless. mater replicators are on the way and they work. this teck will kill the economic system of the world.
I am astonished that the mogul Steve Forbes doesn't have a realistic concept of what money is. My advice to him is to read (or listen to) the book Atlas Shrugged, the Francisco money speech:
"Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value."
How can money have a "fixed value" if it is a tool for exchange? I doubt Mr Forbes was in favor of Nixon's price controls in the face of inflation. Bitcoin is money, the same way any commodity (like gold) is. Frankly, to go a step further, Mr Forbes' preference to put the US back on the gold exchange, is an extension of his poor grasp of what "money" is, and in my opinion is a reflection of his wish that his vast bank account be somehow eternal instead of ephemeral.
Of course the richest want to freeze their social, political, and economic advantage, but listen to Francisco: "men who wish to deal with one another must deal by trade," not at the barrel of the gun, which is the only way you can "fix" an exchange rate and therefore make your money have a "fixed value."
Oh Mr. Forbes… how disappointing. As a regular viewer of your show on Fox Business, I expected far better from you regarding educating yourself on the topics to which you speak or write.
Bitcoin is, by far, the most transparent currency and financial payments system in history. All account balances and all transactions ever made are a matter of public record. Bitcoin is governed by mathematics, which is immune to back-room deals and Keynesian-style manipulations. The protocol and software are open source and are able to be reviewed and analyzed by anyone who cares to. You really can't get any more transparent than Bitcoin.
Bitcoin has been lauded as a libertarian high-tech success and lamented as a ponzi scheme but what if it is neither? What if, despite intentions, it is a revolutionary tool for criminals to launder money and make illegal transactions? All that needs to happen is this: people wanting drugs and contraband buy bitcoin to make transparent transactions on sites like silk road (this seems to be a popular use already), illegal merchants accept bitcoin because it allows transparent transactions and they are satisfied they can later exchange bitcoin for USD, they are satisfied of that because people wanting drugs and contraband will buy their bitcoin with USD, which is legal, so they can then buy illegal things with bitcoin. That, gentlemen, is a self-sustaining economy: illegal merchants accept bitcoin for one illegal transaction, then sell bitcoin on an exchange to another customer wanting to make the next illegal purchase. Bitcoin would be useless to drug dealers if they could not get USD for it, and it would be useless to drug purchasers if they could not get drugs with it, but it is highly useful to both if they can. New bitcoin-like currencies could be created, but would be useless without the established confidence of both sides that the cycle will continue. By being first to market, bitcoin can establish steady confidence of the drug market and become the paypal of the black market, with stability growing as speculators drop out. It doesn't matter that it has no inherent value if it comes to be the standard currency of the dominant black market where buyers find the most sellers and where sellers find the most buyers. It could also be very useful for other money laundering and for terrorists, as long as the drug and contraband markets steady the value. This is not a great positive thing, and it is not a joke, it is potentially a tool for all kinds of criminal activities that can sustain itself on those activities.
The market has been glutted by investors. Bitcoin however is just a tool to allow people to transfer goods and services. It has and will continue to work in that way, allowing people a currency uncontrolled by governments. This doesn't mean it isn't vulnerable to people over/under valuing it in the way any currency can be. This is true of any currency.
I think what will ultimately slow the process of speculative investment will be the creation of aditional bitcoin markets. Once one digital currency takes off it will only be a matter of time before regional ones take off. Individual networks could be created for regions, or particular types of markets. Eventually people will simply make markets where they want to transfer goods and services, and they will be free to establish their own currencies in conjunction with whatever operations they deem fit. Right now the market is being glutted with consumers. There is nothing to stop b
Of course its not money. Its merely a means of exchanging currency for global transactions. Furthermore we know exactly how the blocks are created, and it is very easy to confirm you have a legitimate block or set of blocks that make up the bitcoin(s) (does your puzzle piece fit in the puzzle or not??).
All money in this world is fiat. It's perceived worth is determined by how much or how little is out there. Bitcoins will not be created forever, unlike the USD. Once 21 million bitcoins are "unlocked" then no more bitcoins will be created. This has value.
The Fed is destroying our money and our country. For the last 100 years the fed has driven up inflation, increasing costs to Americans and has done little to nothing to keep unemployment low. In the period before the Fed's creation, Americans enjoyed declining prices. We had massive growth increases. All Congress asked of the Fed, in its two mandates are: price stability and low unemployment. The experiment in a private central bank has been a dismal failure, not just here but worldwide. JP Morgan, Warburg, and the other elites who wrote and pushed the Federal Reserve Act on the American public knew what they were doing!
Secondly, as we saw with Cyprus, people are looking to bitcoin as a way to keep governments out of their piggy banks, like they are looking at gold and silver. I prefer metals since they have massive intrinsic value over a bitcoin, whose value seems greatest in currency swapping.
It's not money, but it might become money which is why people are speculatively buying it. The volatility reflects the huge uncertainty of bitcoin "making it".
Now, you say in the article: "We don't really know how this coin is created. You can't have a functional money without a basic transparency."
That's flat out wrong. There's a white paper that describes the protocol and the entire system is absurdly transparent. Anyone can view every single transaction made on the bitcoin network since creation.
Steve, just because you don't know how this coin is created doesn't mean that we don't know how this coin is created.
The article asserts that, unlike currency, Bitcoin "has no fixed value."
Actually, real currency does not have a fixed value, either. Its value is determined in the marketplace — unless you're talking about Soviet rubles or other currencies in which prices and exchange rates are set by a government. It may be an attribute of a good currency to have a stable value, but "fixed" value is not really a concept outside of planned economies.
Bitcoin may not be a currency, but currency status is not defined in terms of fixed value. (Nothing has a fixed economic value, really. Economic values tend to be relative.) Currency is a unit of account which facilitates trade which would otherwise have to be conducted through barter. Bitcoin may be a currency for certain cyberspace transactions, because that is what it was designed to be. The real question raised by this article is whether a functional system of exchange between cybercurrency and currency can be established.
It is not like money. It is like gold: not that useful, but scarce and expensive to mine, and because of that, people give it value.
"You can't have a functional money without a basic transparency."
- For all of you who know how the Federal Reserve system works, and know about the $7 trillion in "off the books" gifts, er, loans that the major U.S. banks received over the last 4 or 5 years, you probably just fell off of your chairs laughing.
Kinda wish I had a pulpit my dad built to assault things that threatened my interests…
Yes indeed and this discussion on bit coin takes me back to one of my favorite quotes from Mike Orsinki, "You can do anything with software"..he's the developer that wrote the sub prime software that all the banks used and abused for the loans. It's like buying a copy of "Word" and doing what you will as Microsoft is not responsible for what a user does with "utility" software as such. His software, same thing.
So how the bitcoin software grows or does what ever it's going to do will be interesting and to see how the "humans" go after it with valuating software. The video documentary, Quants, The Alchemists of Wall Street really makes the points for the layman, and the only video I have seen that helps educate the layman on how models and algorithms work…yup, bitcoin a model and the algorithms that support it…same thing:) We have too much value placed on intangibles and their value and we are out of place with bringing most of the tangible values up to par and they are on the down side of the teeter totter today sadly as they create jobs.
By the way, I don't think we are ready for jobs that pay us in bitcoins yet either, but you can do anything with software but again it doesn't always work in the world where humans interact, way too many example of that in the world today.
Quoted from the article: "The basic reason: it has no fixed value. It trades like a stock or commodity. In recent days it has been crashing after a spectacular rise in terms of dollars. Such volatility makes it useless as a means to do transactions. Money has only one purpose–it makes doing transactions, that is buying and selling products and services and securities, infinitely easier than barter. All the other purposes of money flow from this basic function.
Money is most optimal when it is fixed in value just as commerce is facilitated when we have fixed weights and measures."
Please tell me what the U.S. dollar is fixed to?
Wow. Economists are as dumb as a box of rocks. Long live pseudoscience.
I replaced "bitcoin" with "gold" in this article and had a good laugh.
"We don't really know how this coin is created. You can't have a functional money without a basic transparency."
How embarrassing. Moments like these are fantastic for showing which emperors wear no clothes.
Steve – let me translate your statement into a language you can hopefully understand: "As long as diamonds are black, ugly, and extremely abundant they will never be useful in jewelry."
it is probable that money having a fixed or stable value is desirable.
But in the real world that is not the case. BitCoins have no fixed value, Dollars have no fixed value, gold has no fixed value. Even Adam Smith grasped that ultimately Money is a question of belief, the intellectual underpinnings of the free market were first compiled by a man who noted that accumulating gold did not make a nation more wealthy.
Value is rooted in the needs and wants of humans. It is subjective, not fixed. We do not all need or want the same things.
Dollars are made of a clothlike paper and some ink – does that transparency re-assure you of their value ? what underpins the Dollar is not the "full faith and credit" of the US government, but faith that if necessary the US government will confiscate the production of its people to redeem the dollars it prints.
If you do not know what a BitCoin is, then you have not looked hard enough. Aside from the totally transparent information on the entirety of the BitCoin system, what it really is, is a means to exchange what you have produced for what you want – money. Whether it is a good form of money or a bad one is unanswered.
Gold is pretty volatile at the moment – is that not money ? Our faith or lack of in dollars is the root of golds volatility – are dollars not money ?
Further even volatile currency can function extremely well as a means of exchange – high speed electronic transactions need not care about daily or monthly volatility.
If you wish to move your wealth from one place to another in privacy nothing is better today than BitCoin.
As someone extremely familiar with business and investment, you already know that many – nearly all financial exchanges already take place without paper dollars or gold coins, and often enormous deals are exchanges of various financial "papers" such as stocks and bonds.
there is no question that BitCoin is money, the only question is whether it will thrive or implode.
So Steve Forbes who was for the bailing out of bad banks, wants to use the force of governments to fix the price of gold (gold standard), isn't for a free market money, shocking.
I find it interesting that there are a few people who actually rail against bitcoin. After further research you learn they are either directly connected to the banks or know someone that is and that is where the negativity is coming from towards bitcoin, which should tell everyone that bitcoins are hotter than the center of a volcano and that the banks are simply threatened. I applaud apposing this article and Steve Forbes misguided perspective, for staying focused on the real issues about bitcoin. After extensive research on bitcoin you will realize people working with banks and certain governments have been the primary behind the scenes forces CAUSING THE VOLATILITY in the bitcoin market. This is done by causing DDOS attacks on exchanges and spreading fear and panic to start a selling stampede then buying in large volumes and causing massive sell offs again. Thus they can say, "oh this is too Volatiiiile, run away" "Spooky dooky dooo"! That volatility argument is staged and pure HOGWASH!!!
Listen up!!! Eventually if people "acquire and exchange their bitcoins in moderation, the bitcoin value will rise slowly and remain stable" when people LEARN TO IGNORE fear mongering. Bitcoins are here to stay, they are everywhere. A currency by the people and for the people. Thousands of merchants are accepting them including Amazon through Bitpay. For just a lengthy list of merchants accepting bitcoins you can visit: https://www.spendbitcoins.com/places/ There is even a company out helping people EARN bitcoins, thegrassisgreeneronline.com/bitcoinpros.
Say what you want but bitcoins are the future and i believe their value will continue to skyrocket. Fiat currency has many more problems than bitcoin and as you can read from supporting comments of bitcoins, even after a drop in the bitcoin market they are still over 450,000% higher in value than they were in 2009. Even with the biggest dip ever in the bitcoin market bitcoins still surpass 20 national currencies in value, http://www.foxnews.com/tech/2013/03/29/digital-currency-bitcoin-surpasses-20-national-currencies-in-value/ and that's what has the worthless fiat currency producers and the banks and their "buddies" (eh hem cough) worried and using scare tactics and frivolous staged volatility arguments to drive people away from bitcoins; DON'T BUY INTO THEIR TACTICS, BUY INTO BITCOINS!! Bitcoins are projected to reach $1000 in value this year and many say $10,000 a piece by 2015. I don't recommend blowing little Johny's college fund or your life savings on bitcoins, but for gosh sakes if your smart you will at least find a way to get some bitcoins and hang on to some and allow them to generate an income for you. As Jeff Cox from CNBC stated, "Even with Wednesday's volatile trading, Bitcoin's worth has grown tenfold over the course of the year." http://www.cnbc.com/id/100632030. It's a no brainer, don't believe the negativity and get some darn bitcoins people!!
Bitcoin is a new currency that has already succeeded, it doesn't need to be questioned any longer if it will, it already has. However during this new stage bitcoin is simply experiencing normal testing by groups that are seeking weaknesses in the system, design, and market and whether or not they can exploit it or cause it to shift. So far they have been able to cause the market to shift but that is temporary. Not only has bitcoin succeeded but it has survived a huge crash prompted by those who would like to seek it's demise and bitcoin has bounced RIGHT back. And lets not forget WHERE it bounced back to??? Oh gee, only to a place in value that is 500,000% higher value than it was in 2009. That's no great fall folks. What will happen very soon is a large group or the majority of bitcoin owners will learn 'never give into the fear mongering' so when an attempt at a selling stampede is tried, we will all look at them sideways and say "Chill. We're keeping our bitcoins and we will continue to hold the majority of them and only spend them and exchange them in moderation! When the masses can do this, THAT my friends is what will bring stability to the market (call it creating a bull market if you like) and put an end to these staged volatility arguments. Oh so you may say "well yes that may bring stability to the market but you will never get a large enough group of people to acquire bitcoins and work together like that"! Oh really? You may want to check out the first ever bitcoin multi-level marketing company just recently launched here: thegrassisgreeneronline.com/bitcoinpros. If you are a supporter of bitcoins, whether you like mlm or not i highly recommend you join this company so by our numbers we can put a stop to articles like this and silence those who seek to promote instability in the bitcoin world.
Steve Forbes, I have to disagree with your statements, the Bitcoin creation is absolutly transparent as it resides in known algorithms and new generated coins are recorded in the Block Chain that is accessible to everyone, we can estimated a fixed Bitcoin value. You can calculate the computacional effort expended to mine one block, through that effort we can estimate the amount of electrical power needed for that challenge, looking at the power bill you can directly tell the amount of money was expend to acquire the mined coins.
Its funny how all the people who write articles about how Bitcoins won't work always seem to demonstrate that they do not have a clear understanding of them and yet they feel they can speak on them as an authority.
All currencies fluctuate in value. Bitcoins are fluctuating violently because people are buying them in spikes. As the currency matures it will become more stable. The recent drop in value came after an exchange was shut down in Poland, which triggered a sell off. The worst imaginable thing that could happen to Bitcoins happened about a month ago when the Block Chain forked. The problem was corrected and nobody lost any money. This event should have caused a little panic but it went largely unnoticed. This just proves that the markets are pretty irrational and that people still don't understand them.
The only thing that is a threat to Bitcoin is governments declaring them illegal. Bitcoins in theory are just as sound as gold. And governments have been known to make gold bullion illegal from time to time in order to strengthen their fiat currencies.
We know EXACTLY how Bitcoins are created (Jackass, did you even research this before writhing this article?)
And people who say "what's to stop someone from creating another virtual currency?" Well, you don't understand the technology behind Bitcoins. The technology is sound, there would be no reason to create another currency therefore a new "virtual" currency wouldn't gain acceptance as it would most assuredly be a scam.
Also, Bitcoins are infinitely divisible so there is no danger of running out of supply as some claim.
Do your research before you start trying to inform people about Bitcoins.
Fixed value? What is the author talking about? Fixed against what? Nothing is a fixed value any more. All 'values' fluctuate against each other and over time, including USD, Gold, etc…
Bitcoin is volatile against what, USD? This argument goes both ways. Bitcoin is not linked to a fixed amount of commodity, like total amount of gold in the Treasury. But neither is USD (any more)
What I do not understand about Bitcoin: is there such thing as a counterfeit Bitcoin? Alternative to Bitcoin? Can I make my own currency using same or similar algorithms? If I can, what is it really worth? Does it simply represent the amount of computer time taken to 'mine' a coin? But with the advance of technology, this part will decrease…
BTW I think we are entering a very strange economic territory where 'value' of things is defined by popularity (imagined value, not need-based). The more people 'buy into' some product or technology, the more it is 'worth'. Since popularity comes and goes, so is the 'value'. If you translate that into currency, whatever money system is more popular, the more total value it will have? We have seen this with sudden jump of Bitcoin exchange rates – simply because the all-popular USD and EUR are not that popular any more. Does this not represent a decline in 'mind share' for those currencies, and therefore a dive in their total value? And popularity of Bitcoin is equivalent to increase in total 'value', so the argument that it is not 'real money' is really moot? If a dozen million people decide to take paperclips as payment, then I guess this is the new currency. If people think paperclip value is stable, then it will be. It is a brave new world. I am unsure if it will last, but this is where our economic leadership have been taking us for a few decades at least, with things like unrealized capital gains, housing bubbles, 0% interest rate, and unsubstantiated dollar
Maybe the rush to Bitcoin should trigger some uncharacteristic thinking process in the Fed, and it stops printing money like crazy…
Personally, I prefer currency to be tied to a fixed commodity. I confess I would prefer a carton of milk to be the currency – at least it is something I can readily use. Ultimately the Calory is the value of currency. If I can buy a hamburger for $1, and that will enable me to run for 2 hours, that is the value of $1 for me. Everything else seems almost as artificial as Bitcoin
In truth, if The Bernanke raised the discount rate to 4% tomorrow, every bubble in the world that was one would come crashing down in about 15 min. (Actually it might take a couple hours due to trading halts. But stay with me here…) That's why he won't do it! And that, more than anything else, is why the world needs bitcoin… or something very much like it.
For a minute there I thought you might know what you are talking about. But when you said "We don't really know how this coin is created.", you showed your ignorance. How it is created is very VERY well documented. Better documented in fact than ANY other currency. Certainly its volatility of late is a problem. But then again, so is the volatility of gold, and nobody is saying that gold isn't money in some sense.
As we said before, Bitcoin is not a legal tender, unlike the dollar note. It appears more of a virtual game, superfluous and inconsequential, played by some netizens. (vzc1943, mtd1943)
I wanted to buy Bitcoins here, in the UK, directly without intermediators on ebay or other middle men (because fees are huge), and I found it very difficult, so I made this guide with the cheapest way:
And yet, Mr. Forbes, you are the gentleman who wrote, in the mid-1990s in your Fact and Comment column, that tightening fuel economy standards for cars would actually lead to increased gasoline consumption, because "people would drive more". Which of course leads to the inescapable conclusion that the way to save gasoline is to mandate LOWER MPG for cars.
Forgive me if I don't feel disposed to take your advice on much of anything.
Yes, as fixed value – as it can be any http://en.wikipedia.org/wiki/Shell_money
Before Windows was a fixed value, tomorow – maybe… .
You should adapt to the …tablet trends…. of the money 'coin' value.
QUOTE: most of our physical currency [.....] circulate END OF QUOTE
May I suggest writing "most of our physcial currency circulates", with a final "s"?
But back to the topic: For money to have a "fixed value", you'd always have to be able to buy the same loaf of bread or the same computer or the same gallon of gasoline for the same number of dollars, as the decades go by. That can't happen. How many loaves of bread are worth a gallon of gasoline? That will always fluctuate.
Admittedly the rapid and erratic and very very large fluctuations in the value of bitcoins are not conducive to their use in commerce. But is it not obvious that this and other objections are related to the fact that bitcoin is in its infancy? It has to go through these things in order to get past them.
First of all, by your definition, bitcoin has a fixed value in the same way that the USD has a fixed value. 1 bitcoin = 1 bitcoin, just as 1 USD = 1 USD.
Secondly "No trasparency"!? The program is open source and visible to anyone who can read it. The process is very well explained and cannot be manipulated by single actors.
Dedicated to: Steve Forbes
Do you really know how a dollar is created? Have you not heard Ron Paul? Dollars created out of thin air!!! Just like bitcoins.
If you are a true citizen of your country, you must honor and obey your Constitution, otherwise you're not a loyal citizen to the U.S Constitution. In General Congress, The People of The United Stats Of America…… Article 1 section 8 and 10. -Make anything but gold and silver coin a tender in payment of debts.
Money is anything you consider is money for many ignorants, but , for example a true citizen of The United States Of America gold is money, here is his name and what he said. J.P. Morgan: "Gold is Money. Everything Else is Credit." Did he honored the Constitution?
With all due respect but the FED is hurting the great country of The United States Of America like insane, printing money is not the answer, creating digist like the founders of bitcoins, is not the answer. The answer is Gold like Alan Greenspan said so.
Tell your audience how many gallons of gas can a piece of paper with the sign of 100 can they buy now compared to 1960. Do a settlement exist with fiat money?
Do I hear "EUROS" "SUCRES (Alba)"? Maybe Lunaros, Ameros?
By the way, will you accept mexican pesos or bitcoins for one of your magazines?Let me guess, fiat dollars!
Any new monetary form that has a hope of introducing less interference by old men that are corrupt and manipulative like the federal reserve corp is O K with me.
Even if bit coins have no value, so either did the dollar before is was traded and identified by traders and people back in the day of our forefathers. I do not know anything of economics or how value gets attached to money. All I know is there's no accountability for the people when the banks protect the banks and you and I have no control over that. I think you miss the whole point of bit-coins, it people that are sick of the same old good old boys and trying to find some real value for the common folk
Just wanted to say I will never post or come to this page again because it has to much crap on this page and takes forever to load goodbye Forbes forever
So Mister Forbes!!! You don't mine Bitcoins! We Will!!!!!!
Challenging status quo has been human nature since time immemorial. On the other hand history is filled with people of novel ideas being subjected to total rejection by the academia. Our present financial system neither evolved in one day nor is perfect; despite all out efforts by the world community to make it stable. Our stock markets crash without warning, commodity prices fluctuate defying every prediction and inflation in third world countries erodes currency and buying power almost daily.
An idea is always a brain child of one individual; it is the human community that adopts it, nurtures it, refines it and finally implements it. A paradigm shift requires open mind, debate and some time. This Bit will change the world Bit by Bit just like the computer Bit did it half a century ago.
Regarding Bitcoins and gold, it's important to keep in mind that neither has "intrinsic" value.
Rather, both are valued by men for their unique properties.
Gold is:
* Divisible.
* Fungible.
* Value dense.
* Recognizable.
* Durable.
* Zero counter-party risk.
* Stable in supply, yet minable.
* Liquid.
* International.
* Non-manipulatable. (Non-centralized.)
By comparison:
* Diamonds, while valuable, are NOT divisible, nor are they fungible.
* Water, while valuable and divisible, is not value-dense enough to compete with gold as a form of money, on the free market.
* Food, while valuable, is not durable.
* Dollars, while liquid, do not represent zero-counter-party-risk (rather, they are debt-based.)
* Dollars, while recognizable, are not stable in supply (inflation is a worry).
* Dollars are also not minable. (Production is available only to a monopoly cartel, versus gold, which anyone can produce.)
* Food, which anyone can produce, is not liquid, especially in comparison to dollars or gold.
* Dollars, while you can hold them in your pocket, a board of bankers still has the power to reach into your pocket and manipulate its value. (This is not the case with gold.)
Soon it becomes very clear that gold was never "declared" to be a form of money by any "authorities" but rather, became money due to natural market forces.
If gold became money strictly due to natural market forces (as a result of its unique properties) then clearly the only reason it has been supplanted by dollars is due to artificial restraints imposed on the market by government force. (Such as legal tender "laws", tax "laws", money laundering "laws", etc.)
Such forces must be constantly active, otherwise, natural market forces would immediately resolve back to gold again as they have for thousands of years.
Now let's consider Bitcoin's unique properties:
* Divisible.
* Fungible.
* Value dense.
* Recognizable.
* Durable.
* Zero counter-party risk.
* Stable in supply, yet minable.
* Liquid.
* International.
* Non-manipulatable. (Non-centralized.)
* Non-confiscatable.
* Accounts cannot be frozen.
* Anonymity is possible.
* Electronically transferrable.
As you can see, Bitcoin's unique properties are similar to those of gold, although it adds new properties due to its ethereal nature.
Those new properties (non-confiscatable, non-freezable, pseudonymous, transferrable electronically) all serve to route-around the artificial forces that are currently being used to supplant gold with the dollar. After all, the various immoral, legal-tender legislation in place today uses the force of a gun to impose fiat money onto an economy that would otherwise resolve to gold by natural forces. That artificial force depends on the government's collusion with banks and their collective monopoly on the ability to issue, store, freeze, confiscate, track, and transfer dollars.
Thank you I read this article with a lot of interest because I was also readin something about Bitcoin. To be honest I thought it got something to do with cloud storage shiznit but anyway… Will BitCoin ever amount to anything more than a bit? That is the question. Is it really a boom or a bust? The interrogatory sentence is actually a title of the article written by Vivek Sood, author of The 5-star business network that is all over Goodreads.com http://tinyurl.com/bitcoinVivek
"…it has no fixed value" and "We don't really know how this coin is created."
Are you for real? Please, I know you are rich, but tr not to write things that make humanity collectively dumber.
you have clearly no idea what you are writing.
saying something like "We don't really know how this coin is created. You can't have a functional money without a basic transparency. " means that you haven't made simple homework. shame that you put your name on so poor article
Your article makes an interesting point but unintentionally highlights another one. An hour is an hour, a pound of meat is a pound of meat, but my pound and your dollar fluctuate, maybe not as much as bitcoins do. OK Bitcoins are vulnerable to the caprices of the market whereas my pound sterling and your dollar are vulnerable to government manipulation, bank manipulation and, er, the caprices of the market.
I get your point. The bitcoin can fluctuate wildly, as wildly as, say, the Deutschmark just prior to the Second World war or, I imagine, Greek currency at this present moment. Maybe Bitcoin isn't money – but then that would only be because money hasn't been money for quite a while.
I feel like the author doesn't understand the mining/creation of this currency and that's why he's knocking it.
In other words, you won't tell us what it is, but you'll tell us what it's not?
Okay. You've also perfectly justified why the USD "floats". Just incredible. *rolls*
The author of this article can write correctly (unlike me, but sorry my english is actually pretty poor ^^) . He can manipulate words to disguise some vague arguments against bitcoin. But we could summarize this article in a few lines "I don't know what is bitcoin , i don't know what we can do with it neither what we can buy with it and I don't understand how to use it and how it works. I don't understand the concept and I believe that many other people are thinking like me"
If you wrote it that way it would have save us the time to read it and do something more productive, but i do understand that journalists can't say present things that way.They actually rarely write about the things they feel or think. Beside if you wrote it that way it would have never been published :)
But my point is , it's not because you and a some other people don't understand bitcoin that it's not money. You could say the same about your debit card. Do you really know how the network is working ? do you really know the crypto securities used in the visa network ? do you really understand how transactions are made ? no ? and honestly I don't know much about it either.actually do you know that most of the system that protect your card are kept secrets ? This is NOT the case with bitcoin. The system is totally transparent !! It couldn't be clearer. It's not even a matter a trusting it. it's like if you did not trust me if i tell you the sun will set tonight and rise again next morning.
RAY LOAN COMPANY offers legitimate and accredited loan lender. We provide with
A good loan of all kinds in a very fast and easy way, Personal Loan, Home
Loan, Student Loan, Business Loan, Investor loan, auto loan debt consolidation.
Come back to us if interested in details below:
Contact: Mr. RAY
E-mail: firstname.lastname@example.com Please note: Our minimum
Loan amount is $ 1,000 dollars
The application can be submitted the same week, and it is 100% free (risk).
Best Regards.
Recycled article from 7 months ago, nice. One question, can you pay bills with it ? If the bank or gas station don't take it, I don't want it can't use it.
"We don't really know how this coin is created."
If you had done your research you would know that this statement is false. The exact, mathematical information on how BitCoins are created (or rather, FOUND) is readily available.
Bitcoin is highly transparent and indicating otherwise is deceptive. Yes criminals use it as well BUT they use cash also. It can be easily stolen by fraudulent merchants.. True however when did BUYERS become unaware. It is buyer beware and the need for safe transactions with merchants opens up a whole new business opportunity for entrepreneurs. Overall the rapid ups and downs seen in the bitcoin values is due to speculators driving the price up. If it was illegal to purchase bitcoin for speculation this wouldn't happen. (nor is there a way to enforce such a law due to the "worldwide" use of bitcoin. HOWEVER, bitcoin is here to stay. Bankers can just "suck it up" the value will "only" rise as more and more merchants begin accepting it and more and more people use it with no consideration of its value based on conventional currency other than the fact that it will only rise as it is accepted. Expect Bitcoin to eventually reach $100000 each. Thank goodness it is easily divided. You could spend $60 on a tenth of a bitcoin and one day see it worth $6000 or more.


text:
Snow has fallen at LEGOLAND® California Resort! That means Holiday Snow Days are back beginning November 23! Build a snowman with LEGO® accessories. Throw real snowballs at targets. Witness the lighting of the World's Largest LEGO Christmas Tree. And now that spirit continues after the sun goes down with Winter Nights! Visit LEGOLAND.com for details.
Enter now for your chance to win a family 4-pack to LEGOLAND to take part in their winter nights starting November 23 - December 31.
Copyright © 2014. All rights reserved.

subset: commoncrawl


text:
16 Years of Debian
It was about 16 years ago that Ian Murdock came upon the idea to design a new Linux distro. He named it Debian after Debra and Ian.
Only Murdock himself knows about the moment of conception and naming of the distro, but its birth is recorded in a mailing to the comp.os.linux.development newsgroup on August 16, 1993, almost exactly 16 years ago:
"This is a release that I have put together basically from scratch; in other words, I didn't simply make some changes to SLS and call it a new release."
The SLS he's referring to is Softlanding Linux System, a distro put together by Peter McDonald in 1992 that was the first to go beyond just the Linux kernel and some basic utilities. SLS introduced the graphical X Window System, but it was buggy and led to some frustration in the Linux commmunity. Among those frustrated was Ian Murdock.
Debian is one of the oldest Linux distros, although Slackware predates it by just a bit. Just a month before Murdock announced Debian, Patrick Volkerding released Slackware 1.00. Unlike Debian's total rewrite, Slackware was a modified version of SLS.
Issue 166/2014
Tag Cloud
Password Management Services Vulnerable to Attack
Should you trust an online service to store your online passwords?
New Raspberry Pi Adds Two USB Ports
New B+ board lets you build cool things without the complication of a powered USB hub.
Microsoft Grabs No-IP.com Domains
Redmond rushes in to root out alleged malware haven.
Firefox Steps into 3D
New initiative will bring futuristic virtual reality effects to the web surfing experience.
New Trojan Targets Online Banking
Dyreza malware launches a man-in-the-middle attack that compromises SSL.
HP Rolls Out Massive Cloud Network
New cloud combines worldwide access with local attention to data security.
New Attack Targets Wireless Logins
A first cousin of the recent Heartbleed attack affects EAP-based wireless and peer-to-peer authentication.
Geeks Petition for Free Lenovo BIOS
FOSS community acts to protect freedom of choice for laptop devices.
Firefox Says Yes to DRM
Quintessential open source browser shores up its market share with a step toward the proprietary dark side.
Webcam Hijackers Busted
Authorities in 16 countries take action against users of the imfamous BlackShades malware tool.


text:
Two weeks ago, BP CEO Tony "I'd like my life back" Hayward tried to deny independent scientists' findings that oil from the Deepwater Horizon spill wasn't confined to the surface of the water. Today, the National Oceanic and Atmospheric Administration sided with the independent reports—with the head of NOAA adding, "We have always known there is oil under the surface."
As Mother Jones points out, it's pretty inevitable that there would be oil underwater, given that the whole point of using chemical dispersants is to break the oil down into droplets and allow those droplets to sink, so they can be more easily eaten by the hydrocarbon-guzzling microbes that live in the water—a strategy that works quite well in smaller oil spills, using the smaller doses of dispersants approved by the EPA.
But dose makes the poison—both with dispersants and oil droplets, themselves. The plumes, in this case, are so large that, as microbes devour them, that process depletes all the oxygen in the surrounding water. Essentially, it's the same thing that happens in the Gulf Dead Zone.
Likewise, oil sunk by dispersants doesn't wash up on the beach—again, a good thing in smaller spills. Here, though, it ends up creating a threat to underwater ecosystems, especially coral reefs.(PHOTO: Moderate Resolution Imaging Spectroradiometer (MODIS) on NASA's Terra satellite on June 7, 2010. "At least part of the oil slick is pale gray. A large area of oil is southeast of the Mississippi Delta, at the site of the leaking British Petroleum well. Traces of thick oil are also visible farther north.")
- BP oil spill conspiracy theories
- BP's spill plan: they knew where it would go, that ecology would ...
- BP Goatse
- BP: "The solution will not be televised" / UPDATED
- BP Disaster: Oil reaches Louisiana marshlands
- BP continues kludgey, toxic attempts to contain Gulf oil spill ...
- Birds drenched in oil from BP spill: photo gallery
- Did methane hydrates cause Deepwater Horizon explosion?
- The Deepwater Horizon disaster for visual learners
- Gas surge shut BP's oil well down a few weeks before Gulf spill ...
- Tom the Dancing Bug: Lucky Ducky in "Slick Deal"
- Sign at BP gas station: "Do not leave pumps unattended / You are ...
15 Responses to "How a big oil spill turns good cleanup plans upside down"
Brainspore says:
Likewise, oil sunk by dispersants doesn't wash up on the beach—again, a good thing in smaller spills. Here, though, it ends up creating a threat to underwater ecosystems, especially coral reefs.
If I was a public relations goon I'd probably advise BP that it's better to destroy a reef than a beach. Televised images of destroyed beachfront property and oil-soaked pelicans do a lot more damage than reports about dead anemones.
Anonymous says:
Hurricane season just started June 1
(Oil + Corexit 9500 / Evaporation ) + Hurricane =??
orwellian says:
"(Oil + Corexit 9500 / Evaporation ) + Hurricane =??"
Until recently, BP would have said "Profit!!" but now I think the plan is to have the oil inundate New Orleans to finish the job. At this point, I think Iran is paying them to destroy the US. The tankers the oil is being put into will most likely be used to spread oil slicks to both coasts.
pabos says:
I saw lots of pea sized oil balls in the water yesterday in Orange Beach, AL. I think that they will actually land on the beach, and be a hell of a lot harder to collect.
carljohnson says:
Could you please say "dose makes the poison" every day from now until the end of time? Because I've been saying it for years and years and it just doesn't seem to make an impression on people. Maybe you guys can get it across.
ADavies says:
The thing is, there is no way to actually, "clean up" a major oil spill. Even under ideal conditions (which are rare) only a fraction of the oil can be captured.
That's why I say: The only winning move is not to drill.
Richard says:
I thought it was common knowledge by now that all BP is doing is positioning itself to support it's legal team. BP's idea of a cleanup plan is information management everything else that's said is incidental to that goal.
The whole issue of oil plumes in water was nicely studied by the MMS some time ago in 2000, but never quite released for another 5 years:
Project "Deep Spill"
A joint industry project (JIP) was formed between the MMS and 23 different oil companies to conduct this research. The project consisted of an experimental release of oil and gas conducted in June 2000 off the coast of Norway. Mixtures of crude oil and natural gas, diesel oil and natural gas, as well as only natural gas were released at approximately 800 meters water depth. The goal was to simulate a blowout or pipeline rupture in deep water and obtain data to verify the predictions of a deep water blowout model being developed under a separate contract. In another, related, research project, experiments were conducted in a simulated deep ocean environment created in a high pressure chamber located at the University of Hawaii.
So the story we should be discussing is somewhat different than this simple denial of reality when one issue is why we seem to accept their position as having any validity at all.
An even larger issue is why we have allowed this pursuit of greed to destroy the Gulf ocean's environment as some simple cost of their business, in order to serve our apparent need for cheap gasoline.
donniebnyc says:
There is a simple two word answer to your question as to why this was allowed to happen: campaign contributions.
maxonaplane says:
Are there any websites tracking the distance reached by the oil spill? I'm planning a vacation to Florida for July and was worried as to exactly how far the oil spill's arms have reached.
Slingerdoo says:
Try the Deepwaterhorizonresponse.com site and look under News/Info, then Maps. NOAA is releasing "Nearshore Trajectory Forecast" maps.
Here's a link:
Jason Olshefsky says:
Duh! If the microbes need oxygen, load the Gulf with a few billion tons of potassium nitrate. I heard it's an oxidizer.
SeattleGuy says:
Tony Hayward? He's still a few clues shy of a solution.
Wardish says:
I've a paranoid slant.
I wonder how fast BP is moving equipment and other resources to completely offshore entities.
I suspect this "we will fix all the issues generated by the oil spill" stance will go away after a long set of delaying tactics.
But of course, I'm a paranoid type fellow.
EH says:
Sorry to GN you, but this post appears to have skipped the copy editor.
voiceinthedistance says:
Coreexit = misnamed product.
Correct name: CoralExit


text:
Las Vegas spas have no equal for sheer size and extravagance. The hotels are huge and flashy, and so are many of the spas. Recently opened spas in Las Vegas like Sahra Spa & Hammam at The Cosmopolitan, The Spa at ARIA and Qua at Ceasars Palace have exotic European technologies like laconiums, hammams, ice fountains and water circuits that make for a visually rich and relaxing experience. But it's not all about flash -- Vegas attracts great massage therapists and master estheticians. Here are the best spas in Las Vegas and what they offer.
1. The Spa at Encore, Las Vegas
Encore is the newest and perhaps most beautiful hotel ever created by legendary Vegas hotelier Steve Wynn, who also built Bellagio and Wynn Las Vegas. The Spa at Encore is truly stunning, combining opulence and good taste. The locker room area is hung with rich fabrics and Venetian glass chandeliers, and the walk to the treatment rooms feels like a journey into sacred space. (See photo.) The best rooms are beautiful garden suites with a shower and natural light. The menu includes "Transforming Rituals" like the Encore Escape, which incorporates hot poultices, lomi-lomi, hot stones and a scalp massage. Very relaxing.
2. Spa Bellagio, Las Vegas
Spa Bellagio was the first truly extravagant spa to open in Vegas, and it still holds up. With 55,000 square feet and 56 treatment rooms, it's not just a massage, it's an experience. The extravagent hotel is styled after a Tuscan town, with the famous fountains out front. The salon is flashy with gold, but the spa upstairs is quieter and more earthy, with nice touches like the jade tiles in the floor that are lit from below. The therapists here are uniformly wonderful, and it's one of the few places in Vegas where you can get a watsu treatment.
3. The Spa at Mandarin Oriental, Las Vegas
Part of CityCenter, The Spa at Mandarin Oriental is probably the most intimate, opulent and expensive spa on The Strip. See a slide show of The Spa at Mandarin Oriental, Las Vegas. The sexy 27,000 sq. ft. spa on two floors was designed to evoke 1930s Shanghai. It combines intimacy with the latest spa technologies, including experience showers, a stunning hammam, and tile tepidarium chairs that keep your warm while you look out at Vegas. It caters to couples -- seven of its 17 treatment rooms are couples suites.
4. Vdara Hotel & Spa, Las Vegas
This is one of the smaller, quieter spas on the Las Vegas Strip, and that's one reason I love it. Vdara is part of the $8.5 billion CityCenter complex of hotels that opened late 2009. This all-suite hotel and spa has no casino (ARIA casino is next door) and just one restaurant and one bar. The two-level, 18,000 square foot spa with 11 treatment rooms has lots of natural elements that are grounding, including a stone fountain in the relaxation lounge. I had one the of the best massages of my life here.
5. The Spa at ARIA, Las Vegas
The major hotel of the $8.5 billion City Center, ARIA Resort & Casino is one of the newest and most sophisticated properties in Las Vegas, with a tasteful (and surprisingly green) casion, restaurants, clubs, the "Viva Elvis" show. Its spa has set new records for size -- 80,000 square-foot spa, 62 treatment rooms and two innovative new relaxation rooms -- heated black mineral stone beds that emit infra-red heat (and feel great to lay on) and a salt meditation room with lounge chairs that vibrate to music. It also has spa suites for eight -- perfect for bridal parties. See slide show of The Spa at ARIA.
6. Qua Baths & Spa at Caesars, Las Vegas
Caesars was the first of the mega-resorts and still one of the most popular -- its six towers over 80 acres! The theme of ancient Rome, with statuary, fountains and the odd centurion. Qua Baths & Spa at Caesars is one of the city's newer spas and large at 50,000 sq. feet. It features "Roman baths" (which honestly don't look so different from the regular wet facilities). Besides the usual steam and sauna, there's an Arctic Ice Room to cool off (though the man-made "snow" looks suspiciously like foam) and a tepid laconium that's pleasant for resting. They call all the therapists "artisans" here. Despite the Roman theme they have Native American treatments. I tried the Mohave Rain, which uses something like 13 essential oils on your spine.
7. Canyon Ranch SpaClub At The Venetian & The Palazzo, Las Vegas
This is the biggest spa in Vegas, a 137,000 square-foot mega-spa with 82 treatment rooms, two spa cafes, a 40 foot rock-climbing wall, a full gym and cycling studio, a Bridal Studio, and European technology like a water circuit called Aquavana, Crystal Steam Rooms, Experiential Rains showers, Finnish Sauna, Herbal Laconium and indoor Igloo. Whew! You can still get nutritional counseling, but in Vegas the Strip Tease Fitness classes are popular. Expect the great massage therapists that Canyon Ranch is known for.
8. Sahra Spa & Hammam at The Cosmopolitan of Las Vegas
The Cosmopolitan is the newest and hippest hotel on the Strip, with sophisticated electronic art like the four square columns at check-in with ever-changing projections. Stunning. The rooms have balconies and chairs that, if you're lucky, overlook the Bellagio water fountain show next door. The entrance to the Sahra Spa & Hammam on the 14th floor is lined with 420 tons of sandstone quarried nearby, which gives it an earthy Red Rock Canyon feel. Unusual amenities include a spectacular 1,200 square foot hammam where up to four people can get a treatment and enjoy the heated stone loungers. The spa has three Spa Suites with multiple treatment tables. The spa is on the same floor as the pool. Beware excited, wet kids in elevators.
9. The Spa at Wynn Las Vegas
The Spa at Wynn is not as glamourous The Spa at Encore next door, but it is comfortable and handsome. I especially like the fireplace in the locker room area, topped with a faux marble of a woman getting out of the bath. You could curl up on a sofa by that for a good long while. The walls are an earthy orange, and there's a Jacuzzi room decorated with green Majolica plates and a holy man in meditation posture. It has 45 treatment rooms, and its signature spa treatment is the Good Luck Ritual, an 80-minute long treatment based on the elements of Feng Shui.
10. Reliquary Spa at Hard Rock Hotel, Las Vegas
Located not far off the Strip, Hard Rock Hotel has an unusual but beautiful spa. The entrance has a gothic look, with black wood, brass studs and gorgeous clay tiles on the ceiling . There's a coed lounge or "library" with crystal chandeliers and a black and white piece of art that has the lyrics to "Stairway to Heaven". The locker rooms are lined with stark white subway tiles that look very cool, and Reliquary is one of the few Vegas spas with a large co-ed bath house where you can hang out. It looks like there is natural light, a very pleasant illusion. For exercise, there's a pole dancing studio. Outside, the pool scene is big -- they can fit as many as 7,000 people into their three pool areas.


text:
Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact firstname.lastname@example.com.
SOURCE SLI Systems
Leading Seed and Plant Retailer in the UK Recognizes Importance of Relevant, Customizable Search for Merchandising, User Engagement, Sales and Conversion Increases
News Highlights
-- Thompson & Morgan saw a conversion rate (CVR) for SLI search users 74% above site average CVR
-- 21% of visitors used SLI Search which generates 47% of site revenue
-- 30% higher average order value when using SLI search
-- Site search bounce rate was 45% lower than site average
SAN JOSE, Calif., May 1, 2014 /PRNewswire/ -- SLI Systems (SLI.NZ) today announced that Thompson & Morgan (http://www.thompson-morgan.com) has restored SLI Learning Search on their e-commerce site to enhance the search functionality offered on their new platform. Since switching to SLI, Thompson & Morgan, the leading retailer of seeds and plants in the UK, saw several bottom line benefits, including a higher conversion rate and larger average order value for search users, along with a bounce rate that is 45% lower than the site average.
Thompson & Morgan have sold seeds, plants, bulbs and gardening supplies since 1855, through catalogs and major garden center chains in the UK and Europe. In the last decade, around 60% of the company's sales have shifted online. Having the right site search is critical for Thompson & Morgan to enable customers to find the right products they want to buy quickly and efficiently, according to Clare Dixey, group e-commerce manager. "The unique names of many gardening products can be hard to spell correctly, and our previous search often turned up 'no results' or poor results when the exact right term wasn't used," she said.
A key search feature for Thompson & Morgan is SLI's Auto Complete, given the hard-to-spell product names. "Offering visitors search suggestions as they begin typing in a keyword is really important in helping them finding the right product more easily, and improving the overall experience," said Dixey.
Learning-based Search Accelerates Business Growth
SLI Learning Search continually improves search relevancy through intelligence gathered from visitors' search queries and click-throughs, helping visitors to Thompson and Morgan's site more easily find and purchase what they're looking for. According to Dixey, the results speak for themselves: Only 21% of site visitors use the search box yet are generating 47% of the total site revenue. Additionally, SLI's site search conversion rate is 74% higher than the site average; the average order value for search users is 30% higher than the site average; and the bounce rate for site search users is 45% lower than the site average.
Another unique benefit of SLI search is the powerful merchandising capability it provides, she said. "When users search for a specific term, we can send them to a specific landing page, plus show promotional and merchandising banners which meet particular criteria. We also have the ability to change the order of results, which is useful when we want to highlight a product that's been in the news or want to offer a special promotion."
One of Dixey's goals was to enable visitors to choose multiple facets at once to refine searches. For example, a customer might want a perennial plant that is easy to grow, with pink flowers that blossom between July and August. Working closely with the SLI team, they created the Garden Plant Finder, a unique feature in online gardening retail and a valuable tool that helps customers narrow down the types of results they want to see.
Thompson & Morgan also uses Site Champion, SLI's user-generated SEO solution. Site Champion drives traffic and revenue to the site by using popular customer search terms to create optimized landing pages in the major search engines.
"Site Champion really complements the SEO activities that we do in-house. It drives a lot more referrals for non-brand traffic to our site, which then converts to sales," said Dixey. "For every online retailing challenge we've faced, SLI always come up with a solution. The best thing about SLI is that it's a results engine that we don't really have to touch – it's brilliant in terms of resources," she said.
About SLI Systems
SLI Systems (SLI.NZ) provides leading SaaS solutions that help online shoppers connect to the products they are most likely to buy, directly driving increased sales and higher customer satisfaction for online retailers. With offerings that include site search, navigation, merchandising, mobile, product recommendations and user-generated SEO, SLI Systems is the most chosen SaaS-based site search provider to Internet Retailer Top 1,000 retailers. The company's patented technology continuously learns from the behaviour of visitors to deliver the most relevant results possible. Whether via PC, tablet or phone, a site powered by SLI delivers the kind of satisfying search experience that increases conversion rates, secures brand loyalty and results in higher order values. SLI Systems operates on five continents. For more information, visit: www.sli-systems.com.
Nancy MacGregor Hill
RealTime Communications
www.twitter.com/nmhill / www.twitter.com/slisystems
Logo - http://photos.prnewswire.com/prnh/20121127/MM19509LOGO
©2012 PR Newswire. All Rights Reserved.
1960 Union Ave.
All content © Copyright 2000 - 2014 Worldnow and WMCTV. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.