Myths about Bitcoin

All hi. I begin a new series of posts under the name "Myths about Bitcoin", and I will begin with the most important, with economy. So we will begin...

Let's understand what facts about Bitcoin are myths, what reality.

The economy

Bitcoin — the same virtual currency, as well as all others, nothing new To govern
Practically all other virtual currencies are controlled by the regulating center. It means that

they can be printed according to the solution of the regulator of currency;
they can be destroyed by attack to this certain regulating center;
the regulator of currency can impose any rules.
Being initially decentralized currency, the Bitcoin solves all these problems.

Bitcoins do not solve the problems which are not solved by fiatny currencies and gold To govern
Unlike gold, bitcoins:

It is easy to list
It is easy to store
It is easy to check
It is easy to split up for very small parts
Unlike fiatny money, bitcoins:

Are issued in the predicted and limited quantity
Are not controlled by the central power (such as Central Bank of Russia or Federal Reserve System of the United States of America)
Are not based on a debt
Unlike fiatny electronic money, bitcoins:

Are theoretically anonymous currency
Cannot be frozen
Are quicker listed
Cheaper in transfer
The bitcoin is provided with computing power To govern
It is incorrect to say that bitcoins "are provided" with computing power. If the currency "is provided", it means that it is centrally tied to something at an exchange rate. However it is impossible to change bitcoins for the computing power used for their creation. In this sense bitcoins are provided with nothing. It is self-valuable currency. In the same way as nothing provided gold, nothing provided also bitcoins.

The currency bitcoin is created by means of computing power, and the integrity of a block chain is protected from any attacks thanks to network of powerful computer knots.

Bitcoins have no value as are provided with nothing
It is possible to argue with it as gold is also supported with nothing, except trust of people to its cost. Properties of bitcoins are result of architecture of system that allows to give them an assessment them costs. It is shown when individuals change bitcoins for other currency or on the contrary.

The value of bitcoins is defined by mining energy consumption
Main article: Mining
This statement is attempt to correlate bitcoin to the labor theory of cost which, in general, is considered false. The fact of the fact that the X resources it was used for creation of a certain product in itself does not mean at all that the made product on value will be equal to X. Its price can be higher or lower, depending on its practical value for users.

Actually relationship of cause and effect is broken here. Costs of a mining of bitcoins are defined by their value. If the cost of bitcoins increases, the bigger number of people will be engaged in their mining (because the mining will be favorable). Thus, the mining will become more difficult, and the cost of bitcoins will increase too. The reverse situation is observed if the cost of bitcoins falls. It results in balance owing to what the cost of a mining is always proportional to the cost of the made bitcoins.

Bitcoins have no own cost
While other material goods have own cost, the purchase sale price, generally much more exceeds their cost. Let's consider, for example, gold. If it was not used as means of saving the capital protected from inflation but only for industrial application, it would not have such value which it has today as the production needs for gold much less, than cash resources of gold.

In any case, at the same time historically it developed so that own cost and also such other properties as divisibility, the interchangeability, deficiency and stability helped to make certain goods a means of exchanging, that is it definitely is not a necessary condition. Whereas to bitcoins their lack of "own cost" in this sense is put in a shortcoming, they extremely compensate it due to other useful properties inherent in them as to a means of exchanging that does them equal or the best, than commodity money.

The cost of bitcoin can be considered and on the other hand, within the global Bitcoin network, but without considering each separate bitcoin. The cost of separate phone is determined by network to which it is connected. If there was no telephone network, from phone there would be no advantage. In the same way the cost of separate bitcoin is determined by global network of dealers in bitcoins, exchange operations, existence of purses, etc. Just as phone has to transfer voice information on network, the bitcoin has to transfer economic information on network.

First of all, the cost is determined by on what people want to make currency exchange — supply and demand.

The first mayner earned unfair reward
The first recipients of bitcoins earned reward that they subjected the time and money to the increased risk. The capital invested in bitcoins at each stage of their existence strengthened an ecosystem and helped currency to step over the next boundary. To argue that the first recipients of bitcoins do not deserve receiving the corresponding profit — the same, as to claim that the first investors of the company or people taking shares of the company at the IPO (initial public offering) get profit unfairly.

If to use more pragmatic definitions, then the term "justice" represents the conditional concept that does improbable its coordination by a large number of people. The bitcoin does not set before itself the purpose to establish "justice" as it would be just impossible. There is no reasonable ground for complaints from people who did not bring any capital investments for that time, and then saw how cost (perhaps) considerably increases.

Having begun a mining or acquisition of bitcoins today, you can also become "the early user".

21 million coins cannot be enough
One bitcoin is split up to the 8th sign after a comma. Actually according to the Bitcoin project will exist 2,099,999,997,690,000 (a little more than 2 quadrillion) the greatest possible indivisible units which are called "satosh".

Cost 1 BTC is 100 000 000 such units. In other words, each bitcoin can be divided on 10^8 parts.

As the cost of 1 bitcoin (BTC) becomes too big for use in daily transactions, people can begin with transactions with smaller units, such as миллибиткоин (mBTC) or microbitcoin (μBTC).

Bitcoins can be lost irrevocably that harms an ecosystem
Bitcoins can share to 0,00000001 therefore if there are less bitcoins, the currency in itself does not face at the same time any problems. If you lose your coins, then the cost of all other coins increases a little. Consider it a gratuitous gift for all other users of bitcoins.

Why the Bitcoin has no mechanism for return of the lost coins? The answer is simple: it is impossible to understand whether the coin is "lost" or it just is not used, remaining in someone's to a bag.

The bitcoin does not work because there is no way to control inflation
Inflation is only price increase for some time that in general is result of devaluation of currency. It is a consequence of function of supply and demand. Considering that the offer of bitcoins is limited, unlike fiatny money, the only thing that can lead to the fact that inflation will get out of hand, is a lack of demand. Temporary inflation is possible at fast acceptance of partial bank reservation, but it is stabilized as soon as a significant amount from 21 million bitcoins, begins to be kept by banks as reserves.

Considering that the Bitcoin is the decentralized currency system if demand decreased practically to zero, the currency would be anyway doomed.

The main idea is that the bitcoin as currency, cannot be subject to inflation by the individual or even the state as there are no ways to increase the offer over a certain sum. In fact, more plausible scenario, considering the growing popularity of bitcoin and increase in demand for it, increase in cost of currency (deflation) is.

Alternative cryptocurrencies, besides Bitcoin, are useless
The bitcoin is the largest and most popular cryptocurrency, but once you consider also other types of currency, such, Litecoin. Obviously, smaller types of currency not especially intrigue with cost in several cents for a coin, however can cost the investments. Alternative cryptocurrencies will be of particular importance when issue of all bitcoins is carried out.

The bitcoin has no payment return mechanism, and it it is bad
Return of payment is useful for restriction of roguish operations. The guarantor of payment service provider bears responsibility for prevention of roguish operations. If you buy something on the eBay website, and the seller did not carry out delivery, then the PayPal payment service provider raises funds from the account of the seller and returns you your money. It strengthens eBay website economy because people realize that their risk is limited and with bigger hunting buy goods from doubtful sellers.

The bitcoin is created in such a way that your money — yours and only yours. To allow return of payment means to allow other person to take your money. You can have or full authority for possession of your money, or protection against fraud, but not that and another together. On the other hand neither the cash dollar, nor cash euro, nor any other currency possess the built-in means of return of payment. Besides, nothing prevents creation in the Bitcoin of Services system, similar to services of PayPal which would provide return of payment and protection against fraud.

Fraud will always exist. In your interests to send bitcoins only to persons to whom you trust.

Owners of shops cannot establish the prices in bitcoins because of an unstable course
It is considered that bitcoins have to be on sale sellers immediately to cover to avoid the expenses connected with fluctuation of a course.

If final expenses of owners of shops would also be carried out in bitcoins, the course would not matter. Big extent of acceptance of Bitcoin in this case would promote stabilization of a course. It is supposed that in the future volatility will decrease as the market grows in various directions.

Meanwhile, many sellers simply regularly update data on the current market rate and automatically update the prices on the websites. Other decision is an option for sale which will allow to sell bitcoins on a fixed rate during a certain term of time. It protects the seller from falling of the prices and simplifies implementation of operations during this period.

Some payment service providers (for example, BitPay) allow the seller to receive not bitcoins, but their money equivalent. Actually, at the time of transaction commission the payment service provider makes recalculation of bitcoins to fiatny currency and enlists the last into the account of the seller. In this case shops do not face at all need to watch a course.

In the following post we will talk about myths of the Bitcoin technology. It is interesting to whom to get acquainted with my series of posts on history of Bitcoin I leave references
https://steemit.com/cryptocurrency/@krutilla/who-remembers-beginning-of-bitcoin
https://steemit.com/cryptocurrency/@krutilla/dynamics-of-growth-and-taxes-history-bitcoin
https://steemit.com/cryptocurrency/@krutilla/bans-of-theft-and-exchange-history-bitcoin
All thanks)