Author Topic: Bitcoin currency (merged topics)  (Read 200690 times)

osubuckeye4

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Re: Bitcoin currency (merged topics)
« Reply #60 on: March 29, 2013, 10:56:39 AM »
I've been following Bitcoin and am interested to see how it all plays out.

Way too speculative for me to invest any of my money into though.


After seeing what the DoJ did to the major internet gambling sites under the guise of "money laundering", I'm very skeptical when it comes to investing my money in anything that is 100% online.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #61 on: March 29, 2013, 11:31:44 AM »
Mt. Gox and Dwolla were both hit hard by DDoS attacks last night, but are still up and functional this morning, with the price still hovering around $90. 

I'm testing the process of liquidating bitcoin through both of these services and so far no problems getting dollars into my bank account, in fact it's quicker, by a day or two, than getting dollars into Mt. Gox.  Dwolla charges a $0.25 flat fee for transfers in this direction, which may be why they process them quicker.

I'd like to try purchasing PMs online with bitcoin and would be interested hearing from others who have done this.

Offline libertyzeal

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Re: Bitcoin currency (merged topics)
« Reply #62 on: March 29, 2013, 09:00:09 PM »
It's really bizarre to me how many gold & silver bugs hate bitcoin.  Lately, Chris Duane (who Jack has interviewed at least once) has made it his personal mission to smear bitcoin in a series of youtube posts and blogs.  I personally think people are getting too emotionally invested in their precious metals, and fear bitcoin because they see it as a competitor. 

If one truly understands gold and why it's been such an excellent medium of exchange, then one will naturally understand the usefulness of bitcoin  for many of the same reasons.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #63 on: March 29, 2013, 11:14:48 PM »
I personally think people are getting too emotionally invested in their precious metals, and fear bitcoin because they see it as a competitor.

I agree, emotion tends to seriously cloud one's judgement.

Thox Spuddy

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Re: Bitcoin currency (merged topics)
« Reply #64 on: March 30, 2013, 08:07:51 AM »
 A good discussion on the bit coin is here: Chris Duane – BitCoin: Is It Real Or Is It Fiat?http://financialsurvivalnetwork.com/category/kerry-lutz-podcasts/

Offline Jeff NH

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Re: Bitcoin currency (merged topics)
« Reply #65 on: March 30, 2013, 12:40:57 PM »

I'd like to try purchasing PMs online with bitcoin and would be interested hearing from others who have done this.

I've used dwolla to pay for silver rounds (no bitcoins in that transaction) and I've used bitcoin to buy shiresilver. I don't think I've ever purchased any bulk PM with bitcoin.

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #66 on: April 02, 2013, 07:42:34 PM »
I signed up for a coinabul.com account over the weekend, but haven't worked up the courage to pull the trigger on a precious metal purchase through their site.  A Gold Eagle is going for about 14.5 bitcoin per ounce now, while last week it was over 20 per ounce.  This is where the deflationary aspect of the currency makes people reluctant to buy anything with it, especially when the increase in buying power is as dramatic as it's been over the last month.

The price for one bitcoin is now at $118.  I've liquidated enough coin to get back my seed money and am just going to let the rest of the coins ride.  I need to step back for awhile and purge the emotion (fear/greed) out of my decision making process.

Offline libertyzeal

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Re: Bitcoin currency (merged topics)
« Reply #67 on: April 02, 2013, 07:50:51 PM »
I signed up for a coinabul.com account over the weekend, but haven't worked up the courage to pull the trigger on a precious metal purchase through their site.  A Gold Eagle is going for about 14.5 bitcoin per ounce now, while last week it was over 20 per ounce.  This is where the deflationary aspect of the currency makes people reluctant to buy anything with it, especially when the increase in buying power is as dramatic as it's been over the last month.

The price for one bitcoin is now at $118.  I've liquidated enough coin to get back my seed money and am just going to let the rest of the coins ride.  I need to step back for awhile and purge the emotion (fear/greed) out of my decision making process.

I know the feeling.  If I sell everything now and it goes to $500 I'll be quite unhappy, on the other hand if I wake up tomorrow and it's $20 I'll be kicking myself as well.  Much like yourself, I think the only way to remain sane is to gradually sell portions of it into the rally so I don't wind up at either extreme.

Offline Jeff NH

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Re: Bitcoin currency (merged topics)
« Reply #68 on: April 04, 2013, 05:22:38 AM »
The 'bitcoin bubble' is bad for bitcoin in the long term. It is meant to be a great/easy way to exchange value. I have some bitcoins - even have a couple of physical ones I bought a while ago somewhat as a novelty. I did not buy any of what I have as an investment or for speculation but rather to support the concept of bitcoin. I've used it to donate to a couple of charities and at the moment, I try to ignore the price. It is not worth the emotional investment of woulda/coulda.

Offline Otis

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Re: Bitcoin currency (merged topics)
« Reply #69 on: April 04, 2013, 06:43:57 AM »
Forbes mentions Bitcoins in an article from yesterday 4/3/2013. 

http://www.forbes.com/sites/jonmatonis/2013/04/03/bitcoin-obliterates-the-state-theory-of-money/

Otis

Offline Mr -A-

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Re: Bitcoin currency (merged topics)
« Reply #70 on: April 04, 2013, 06:59:16 AM »
This is getting pretty crazy with regular trades going for $140/btc...

Offline libertyzeal

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Re: Bitcoin currency (merged topics)
« Reply #71 on: April 04, 2013, 07:25:45 AM »
Forbes mentions Bitcoins in an article from yesterday 4/3/2013. 

http://www.forbes.com/sites/jonmatonis/2013/04/03/bitcoin-obliterates-the-state-theory-of-money/

Otis

Nice article, thanks for posting!  I've never really been a big fan of Mr. Denninger.

Offline chickchoc

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Re: Bitcoin currency (merged topics)
« Reply #72 on: April 04, 2013, 11:36:26 AM »

Offline MTUCache

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Re: Bitcoin currency (merged topics)
« Reply #73 on: April 04, 2013, 11:49:29 AM »
It's really bizarre to me how many gold & silver bugs hate bitcoin.  Lately, Chris Duane (who Jack has interviewed at least once) has made it his personal mission to smear bitcoin in a series of youtube posts and blogs.  I personally think people are getting too emotionally invested in their precious metals, and fear bitcoin because they see it as a competitor. 

If one truly understands gold and why it's been such an excellent medium of exchange, then one will naturally understand the usefulness of bitcoin  for many of the same reasons.
I'm relatively new to all of this type of economics, but I think the reason for the fear/mistrust of the Bitcoin by the PM bugs is probably because of how it highlights all of the fears they have in their own commodity without really offering a better alternative. It is susceptible to a lot of the same things that make people question the PM market (open to manipulation, plus it has other drawbacks on top of it (it's digital rather than tangible, and transactions are dependent on sites that are susceptible to hacking attacks or espionage).

Both PMs and Bitcoins are relatively difficult to do your commerce in, but one of them can be held in your hand while the other cannot. In most other aspects they're pretty comparable.

Offline Prodigy

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Re: Bitcoin currency (merged topics)
« Reply #74 on: April 04, 2013, 12:35:43 PM »
I just saw this on Yahoo news:  Bitcoin hacked

http://my.news.yahoo.com/bitcoin-hacked-price-stumbles-buying-103848677.html

Saw this on another site, and it goes to show that for all the good things Bitcoin has going for it, there are still common problems that vex other currencies.  The fact that hackers can manipulate the price with their attacks is somewhat disconcerting. 

Offline libertyzeal

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Re: Bitcoin currency (merged topics)
« Reply #75 on: April 04, 2013, 01:36:44 PM »
Saw this on another site, and it goes to show that for all the good things Bitcoin has going for it, there are still common problems that vex other currencies.  The fact that hackers can manipulate the price with their attacks is somewhat disconcerting.

It's kind of a misleading title/url.  Bitcoin wasn't hacked, an exchange got hit by a denial of service attack and couldn't transact.  Since it was mtgox, the biggest exchange, yeah, it did have a price impact.  I think the exchanges will continue to be a vulnerable point.

Offline raveneye

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Re: Bitcoin currency (merged topics)
« Reply #76 on: April 04, 2013, 01:39:04 PM »
"Bitcoin Hacked" headlines are like the "Internet crashed" headlines from the 90's that came out every time an AOL mail server was unavailable for more than 20 minutes... Ignorant media reporting about technology they don't understand to an ignorant public that understands even less.

What happened yesterday was that the largest Bitcoin market, MtGox got hit with a Denial of Service attack.  A large number of virus-infected computers around the internet were all put to work attempting to access the website at the same time, and that prevented users from being able to log on and buy/sell on that one exchange.  As far as I can tell, noone lost their bitcoins, they just couldn't see their account.  It is similar to having Bank of America website go down for a few hours and the press reporting "Banks Crash".

When it comes to bitcoin, understand that you can either hold Bitcoin yourself, or hold it in a bank (like Instawallet, MtGox, or BTC-e).  If you have large amounts of Bitcoin and you worry about it the same way a Cyproit worries about his bank balance, then seriously consider installing the Bitcoin-Qt client, create a wallet, encrypt the wallet, transfer the coins into that wallet and even consider storing the wallet offline on a flashdrive or something that won't get lost if your computer crashes or is compromised.

A little background...
Bitcoins exist on the internet, but they can only be controlled by the keys in your wallet.  If your wallet is ever lost the bitcoins are lost forever, so back it up.
Your wallet has 100 unused keys.  As your create addresses and transactions, those keys get used up and new ones get added.  This means you should back the wallet up frequently if you do a lot with it.
Finally, if you store bitcoins at an exchange, bank, or mining pool, then they control the coins, and you are trusting them to be honest and keep them safe.  It is like keeping money in a bank in the Wild West.  It is possible for Jesse James to roll in, rob the bank, and leave you SOL.  There is no Bitcoin-FDIC.

Offline MTUCache

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Re: Bitcoin currency (merged topics)
« Reply #77 on: April 04, 2013, 02:05:32 PM »
When it comes to bitcoin, understand that you can either hold Bitcoin yourself, or hold it in a bank (like Instawallet, MtGox, or BTC-e).  If you have large amounts of Bitcoin and you worry about it the same way a Cyproit worries about his bank balance, then seriously consider installing the Bitcoin-Qt client, create a wallet, encrypt the wallet, transfer the coins into that wallet and even consider storing the wallet offline on a flashdrive or something that won't get lost if your computer crashes or is compromised.

A little background...
Bitcoins exist on the internet, but they can only be controlled by the keys in your wallet.  If your wallet is ever lost the bitcoins are lost forever, so back it up.
Your wallet has 100 unused keys.  As your create addresses and transactions, those keys get used up and new ones get added.  This means you should back the wallet up frequently if you do a lot with it.
Finally, if you store bitcoins at an exchange, bank, or mining pool, then they control the coins, and you are trusting them to be honest and keep them safe.  It is like keeping money in a bank in the Wild West.  It is possible for Jesse James to roll in, rob the bank, and leave you SOL.  There is no Bitcoin-FDIC.
This is the part about Bitcoin that I don't personally have a good grasp on yet, and the part that is always going to make them "scary" for the uneducated masses... that fear of the unknown is tough to get past when you've spent your whole life assuming that things exist in some physical form (even if it's in a bank, or Fort Knox, and you can't really touch it).

The way most people are living right now they'd be in a much worse position financially if their identity got stolen rather than their bank's website getting hacked... but what does the attention get focused on? Neither. Heaven forbid your FB security settings aren't right and people can find pictures of your kids. Nevermind the fact that you're basically openly sharing all the personal data anyone would need to open up a few hundred grand in accounts with your employer, your government, random strangers, etc.  ::)

Offline FreeLancer

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Re: Bitcoin currency (merged topics)
« Reply #78 on: April 04, 2013, 02:17:34 PM »
What?!  No government sponsored bitcoin insurance? 

Offline Hootie

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Re: Bitcoin currency (merged topics)
« Reply #79 on: April 04, 2013, 02:38:07 PM »
here are some charts that show the historic price of Bitcoin.

https://coinbase.com/charts

Offline Prodigy

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Re: Bitcoin currency (merged topics)
« Reply #80 on: April 04, 2013, 04:23:51 PM »
All very true, and I (as should everyone else with the knowledge) should have corrected the idea that it was 'hacked' as soon as I saw it.  Instead I just used the more correct term of them having been 'attacked' instead of hacked, and didn't clarify.  If we all help to spread knowledge to make bitcoins (and everything surrounding them) more understandable, more people will get into it.

This:
This is the part about Bitcoin that I don't personally have a good grasp on yet, and the part that is always going to make them "scary" for the uneducated masses... that fear of the unknown is tough to get past when you've spent your whole life assuming that things exist in some physical form (even if it's in a bank, or Fort Knox, and you can't really touch it).

is definitely true and is part of the problem.  The logical response is this:

"Bitcoin Hacked" headlines are like the "Internet crashed" headlines from the 90's that came out every time an AOL mail server was unavailable for more than 20 minutes... Ignorant media reporting about technology they don't understand to an ignorant public that understands even less.

What happened yesterday was that the largest Bitcoin market, MtGox got hit with a Denial of Service attack.  A large number of virus-infected computers around the internet were all put to work attempting to access the website at the same time, and that prevented users from being able to log on and buy/sell on that one exchange.  As far as I can tell, noone lost their bitcoins, they just couldn't see their account.  It is similar to having Bank of America website go down for a few hours and the press reporting "Banks Crash".

When it comes to bitcoin, understand that you can either hold Bitcoin yourself, or hold it in a bank (like Instawallet, MtGox, or BTC-e).  If you have large amounts of Bitcoin and you worry about it the same way a Cyproit worries about his bank balance, then seriously consider installing the Bitcoin-Qt client, create a wallet, encrypt the wallet, transfer the coins into that wallet and even consider storing the wallet offline on a flashdrive or something that won't get lost if your computer crashes or is compromised.

A little background...
Bitcoins exist on the internet, but they can only be controlled by the keys in your wallet.  If your wallet is ever lost the bitcoins are lost forever, so back it up.
Your wallet has 100 unused keys.  As your create addresses and transactions, those keys get used up and new ones get added.  This means you should back the wallet up frequently if you do a lot with it.
Finally, if you store bitcoins at an exchange, bank, or mining pool, then they control the coins, and you are trusting them to be honest and keep them safe.  It is like keeping money in a bank in the Wild West.  It is possible for Jesse James to roll in, rob the bank, and leave you SOL.  There is no Bitcoin-FDIC.

and while that is completely logical and 100% right on, the average person will have a hard time understanding.  Denial of Service, digital wallet, encrypting your wallet, backing it up offsite/on flash drive, lost digital wallet = forever lost bitcions - many of these things are separate concepts that someone interested in bitcoin needs to research and understand to feel truly comfortable. 

I think saying things like "Ignorant media reporting about technology they don't understand to an ignorant public that understands even less", even if true, isn't taking the whole of reality into consideration.  I've been into computers my whole life and that's what I went to school for and what I do for a living, but I can't possibly expect the public to understand some of these mid to higher level concepts offhand.  If you are interested in the idea of bitcoin, you should look into how it works, and how to protect your investment, but that's something most people won't know before hand.

Once enough people do that, it will catch on like wildfire and eventually people will use it and still have no real idea how it works, but they'll likely know the basics to keep themselves relatively safe.  Just like with our dollars, how many people really know how the fractional banking system actually works, and how the value of that dollar in their hand is derived?  Very few, but they know the methods to acquire it, spend it, and how to keep it relatively safe.

The good part is everything someone needs to know can be boiled down to a very understandable place, it's just a matter of finding the right resources.  The bitcoin website itself is pretty good, and anyone interested could start there and let Google take over after that.

osubuckeye4

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Re: Bitcoin currency (merged topics)
« Reply #81 on: April 05, 2013, 07:53:06 AM »

Once enough people do that, it will catch on like wildfire and eventually people will use it and still have no real idea how it works, but they'll likely know the basics to keep themselves relatively safe.  Just like with our dollars, how many people really know how the fractional banking system actually works, and how the value of that dollar in their hand is derived?  Very few, but they know the methods to acquire it, spend it, and how to keep it relatively safe.

The good part is everything someone needs to know can be boiled down to a very understandable place, it's just a matter of finding the right resources.  The bitcoin website itself is pretty good, and anyone interested could start there and let Google take over after that.

The problem with the Bitcoin is that it is not really backed by anything.

The U.S. dollar is backed by the U.S. government.

When you put (up to $100,000) in a FDIC insured and government approved bank, you have the guarantee of the government that they will back up that money should something happen to it.

The value of the Bitcoin is only as strong as the number of merchants who are willing to accept it.

If all merchants stopped accepting the Bitcoin tomorrow, it becomes worthless.

Seeing as how the DoJ is targeting Silk Road (one of the top Bitcoin marketplaces), a move by them to shut that site down could destroy the value of the Bitcoin tomorrow, especially if other more reputable Bitcoin accepting vendors get spooked and decide to no longer accept Bitcoins.



Then again, as someone who got some of my $ seized that was tied up in online poker... maybe I'm just irrationally overconcered with "what if's".


That is the thing that is pushing me away from investing in the Bitcoin at this point in time.

Offline MTUCache

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Re: Bitcoin currency (merged topics)
« Reply #82 on: April 05, 2013, 08:03:57 AM »
Then again, as someone who got some of my $ seized that was tied up in online poker... maybe I'm just irrationally overconcered with "what if's".
I don't think you're being overly-concerned at all... this is a genuine concern.

Just as Jack and his guest mentioned on the podcast yesterday (Silver Circle episode), there's a point not too far in the future where our government is going to have to put capital controls in place to prevent the appearance of runaway inflation. One of the places where we've seen evidence of that first has been in electronic transactions. Not only are they openly encouraging electronic transactions because of how traceable they are (and how easily the banks can charge interest and fees on them), they're slowly discouraging and even removing other options people have. Bernanke saying that "silver is not money" was just the tip of the iceberg on this. What he's really getting at is that no other currency is going to be considered "money" in the US if the Fed has their way. It starts with very easy things to control and vilify (like off-shore poker and betting sites). It's not too far of a slide to move that into Bitcoins, off-shore banking investments, etc. If the Fed and IRS can't get their hands on it, they're going to do everything they can to make sure that you can't either...

If people are going to be concerned about the banks putting a levy on their deposits, or the government forcing allocations in their 401ks, they damn well better be prepared to lose whatever investments they have in an electronic, traceable non-US denominated account... and probably at a moment's notice.
« Last Edit: April 05, 2013, 08:14:56 AM by MTUCache »

Offline Prodigy

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Re: Bitcoin currency (merged topics)
« Reply #83 on: April 05, 2013, 08:38:07 AM »
The problem with the Bitcoin is that it is not really backed by anything.

The U.S. dollar is backed by the U.S. government.

When you put (up to $100,000) in a FDIC insured and government approved bank, you have the guarantee of the government that they will back up that money should something happen to it.

The value of the Bitcoin is only as strong as the number of merchants who are willing to accept it.

If all merchants stopped accepting the Bitcoin tomorrow, it becomes worthless.

You've just described every other currency in existence.  Replace every instance of the word 'Bitcoin' with 'US Dollar' and you'd be 100% right on.  Currency only has value because people are willing to accept it.  The dollar has absolutely no backing other than good faith of a government.  Bitcoin has no backing other than the good faith of a bunch of people all over the world.  Even gold falls mostly into this category.  A vast majority of it's value is because people want it, not because it's particularly useful.  Some uses in jewelry and trace amounts in manufacturing could not come anywhere near it's current value if that's all it had to go on.

Each one has advantages and disadvantages, but to me the biggest advantage of Bitcoin is it's transparency.  No corrupt or incompetent government can ever destroy it's value.


Also, as far as "When you put (up to $100,000) in a FDIC insured and government approved bank, you have the guarantee of the government that they will back up that money should something happen to it."   We've recently seen what the central banks are willing to do, and we are pretty much guaranteed that even FDIC insurance is a complete joke the moment the government really needs that money.  Or, if a large portion of banks fail, how can the FDIC possibly insure them all?  If the 2008 recession put a massive strain on the FDIC, imagine what an actual crisis would do.  Where would we get the money to insure all those accounts?


Seeing as how the DoJ is targeting Silk Road (one of the top Bitcoin marketplaces), a move by them to shut that site down could destroy the value of the Bitcoin tomorrow, especially if other more reputable Bitcoin accepting vendors get spooked and decide to no longer accept Bitcoins.

Then again, as someone who got some of my $ seized that was tied up in online poker... maybe I'm just irrationally overconcered with "what if's".

That is the thing that is pushing me away from investing in the Bitcoin at this point in time.

Definitely valid concerns, for sure.  I have no doubt the US government will attack bitcoin and other similar currencies at some point.  Technically they already have, but how much further they will go remains to be seen.  I do have a lot of faith that technologically savvy backers of Bitcoin will create some work-arounds for people in bitcoin-oppressive countries  (just look at Pirate Bay and how long they've managed to flip the bird to everyone wanting t o shut them down).  It still worries me, though, and it's why I haven't invested very much in it.

osubuckeye4

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Re: Bitcoin currency (merged topics)
« Reply #84 on: April 05, 2013, 08:50:54 AM »
Definitely valid concerns, for sure.  I have no doubt the US government will attack bitcoin and other similar currencies at some point.  Technically they already have, but how much further they will go remains to be seen.  I do have a lot of faith that technologically savvy backers of Bitcoin will create some work-arounds for people in bitcoin-oppressive countries  (just look at Pirate Bay and how long they've managed to flip the bird to everyone wanting t o shut them down).  It still worries me, though, and it's why I haven't invested very much in it.

Look at how long the big poker sites were able to flip the bird to the USDoJ.

And then look what happened on 4/15/11, really without much warning at all.



Before you think I'm trying to say you're wrong and I'm right... that's not the case at all. I think that you make a lot of valid points. I'm just always trying to find out more information, that's all.  :)

Offline libertyzeal

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Re: Bitcoin currency (merged topics)
« Reply #85 on: April 05, 2013, 08:55:11 AM »
Whenever someone asks or complains about what backs bitcoins, I always reply with what backs gold?  I rarely get the right answer.

I've developed a pet theory on the matter. 

When people start saying that gold has intrinsic value because it's used in jewelry and a few other things, it really gets my goat.  I've heard such pro-gold luminaries as Peter Schiff say this.

Why is gold valuable? Because it's used in jewelry.  Why is jewelry valuable?  Because it's made from gold.  The logic is completely circular.

First we have to separate the idea of industrial use from monetary use. I've found most Austrians have a real problem with this.  In fact, I'll take it a step further and say that things with a valuable industrial use (silver) are less valuable as money because industrial supply/demand for their industrial use disrupts the pricing mechanism.  If the government decreed tomorrow that everyone must install solar panels or face stiff tax penalties, then the value of silver would shoot up overnight.  Whatever we use as our ultimate unit of account needs to have a predictable supply for that intended purpose (use as money).

Gold makes an excellent money because it has almost ZERO industrial use.   

It's not rocket science.  A good medium of exchange has a known set of properties.  You can't make more of it, the quantity is generally stable and known, it's easily recognized, divided, transported, etc.  Historically we have found no better material for this than gold.  These properties are what backs gold, not the fact that it's used in esoteric electronics or jewelry.

Bitcoin happens to share many of these properties (but not all).

Offline MTUCache

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Re: Bitcoin currency (merged topics)
« Reply #86 on: April 05, 2013, 10:46:14 AM »
Agree completely between the intrinsic value of gold.

One question I have for you Bitcoin users... how difficult would it be for somebody to "corner the market" on it and manipulate it's value based on scarcity?
 
If I'm looking at the correct sources, I'm only seeing a total expected production of Bitcoins somewhere in the neighborhood of 21 Million, with around 8 million currently in circulation. Regardless of whether the current value is inflated or not, this means that anybody with a spare $B(USD) could buy all the Bitcoins in existence (or at least all of them available for sale, which I assume would be a large proportion of them).

If the Fed decided to kill this they could do it almost overnight, simply by buying all the supply and sitting on it (and it wouldn't really impact their bottomline by that much, because they waste this much almost daily). Any other government would have this option as well (including the EU, China, etc). A large investor could pretty easily inflate the value of their own holdings by buying up a large portion of the remaining ones and then dumping at the peak (likely causing a crash when the market is saturated).

I dunno. Anything global and digital like this just feels like it has to be MASSIVE in order to avoid these types of manipulation. Small things on the internet either shrivel up quickly or explode... which is not good when you're trying to make a viable, transparent currency or commodity. If it's small enough to be contained by any small group it's going to get corrupted, bought out, stamped out, etc.

Offline Prodigy

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Re: Bitcoin currency (merged topics)
« Reply #87 on: April 05, 2013, 11:56:07 AM »
Look at how long the big poker sites were able to flip the bird to the USDoJ.

And then look what happened on 4/15/11, really without much warning at all.

Before you think I'm trying to say you're wrong and I'm right... that's not the case at all. I think that you make a lot of valid points. I'm just always trying to find out more information, that's all.  :)

No, it's all good - I think it's been a very good discussion : )

But you are right, I don't think bitcoin is immune to government blocking.  I just know that it will be harder to do technologically than something like the poker sites or Pirate Bay.  The bitcoin network has tons of different nodes in just about every country, similar to a typical peer-to-peer set up, and completely lacks any central portal/site to access it.  The biggest current problem is the exchange sites are limited, and the big one (MtGox) has a majority of the traffic so it's definitely a weak point.

Agree completely between the intrinsic value of gold.

One question I have for you Bitcoin users... how difficult would it be for somebody to "corner the market" on it and manipulate it's value based on scarcity?
 
If I'm looking at the correct sources, I'm only seeing a total expected production of Bitcoins somewhere in the neighborhood of 21 Million, with around 8 million currently in circulation. Regardless of whether the current value is inflated or not, this means that anybody with a spare $B(USD) could buy all the Bitcoins in existence (or at least all of them available for sale, which I assume would be a large proportion of them).

If the Fed decided to kill this they could do it almost overnight, simply by buying all the supply and sitting on it (and it wouldn't really impact their bottomline by that much, because they waste this much almost daily). Any other government would have this option as well (including the EU, China, etc). A large investor could pretty easily inflate the value of their own holdings by buying up a large portion of the remaining ones and then dumping at the peak (likely causing a crash when the market is saturated).

I dunno. Anything global and digital like this just feels like it has to be MASSIVE in order to avoid these types of manipulation. Small things on the internet either shrivel up quickly or explode... which is not good when you're trying to make a viable, transparent currency or commodity. If it's small enough to be contained by any small group it's going to get corrupted, bought out, stamped out, etc.

I don't think there really is any defense against that.  I think, just like with the technological issues, the bigger bitcoin gets, the harder it will be to manipulate it or shut it down.    One advantage/disadvantage of bitcoin is that someone actually -could- buy up a majority of the supply, and it's possible we'd never know that 1 - it was one organization and 2- who it was.  It's entirely anonymous, so that creates some potential issues as well.

In the end, it's future is unknown, and it's price is swinging wildly.  Both of those factors will have to be mostly taken care of before it will get mainstream adoption.

Offline Hootie

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Re: Bitcoin currency (merged topics)
« Reply #88 on: April 05, 2013, 12:09:05 PM »
here are some more resources on the "United States Department of Treasury Financial Crimes Enforcement Network"
FIN-2013-G001


According to Sercurity Now's Steve Gibson
Quote
So for we end-users of Bitcoin, there is no longer any gray area at all. The United States Department of Treasury Financial Crimes Enforcement Network says we're doing nothing wrong.

osubuckeye4

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Re: Bitcoin currency (merged topics)
« Reply #89 on: April 05, 2013, 01:13:56 PM »

But you are right, I don't think bitcoin is immune to government blocking.  I just know that it will be harder to do technologically than something like the poker sites or Pirate Bay.  The bitcoin network has tons of different nodes in just about every country, similar to a typical peer-to-peer set up, and completely lacks any central portal/site to access it.  The biggest current problem is the exchange sites are limited, and the big one (MtGox) has a majority of the traffic so it's definitely a weak point.


I'm not that worried about BitCoin itself getting shut down.

Sure, there's always the possiblity that something crazy is going on behind the scenes. Then again, I mean any time I buy a gift card from a restaurant in town that just opened up, there's always the possiblity that the restaurant will shut its doors the next day. You'd think there would be warning signs in advance, but anythings technically possible.

What I'm saying is, to fear that Bitcoin itself will be shut down is kind of irrational. There are no signs of that happening.



What I'm more worried about would be many main/popular sites that currently accept Bitcoin getting shut down, seeing as how many of them are already on the DoJ's radar.

A lot of these sites that accept Bitcoins are either borderline illegal or outright illegal.


I guess what I'm saying is... if Amazon and EBay announced they were accepting Bitcoins, or if Bank of America said I could pay my mortgage payment with Bitcoins, I'd be much more on board.

Right now I don't trust the long term sustainability of sites like Hackers on a Plane (travel to hacking conferences by paying with Bitcoins) or Silk Road (buy illegal drugs with Bitcoins).

If those sites get shut down, I think it could spook more reputable sites from staying away from Bitcoins in general.

I could definitely be wrong though, wouldn't be the first time I was wrong about something to do with technology and investments.  :D