Bloo Loo Posted March 28, 2013 Author Share Posted March 28, 2013 the current value of the bitcoin community is $800 million. that suggests that plenty of trade is going around to give it that kind of value. it doesnt need to overtake fiat, nor does it need to be accepted by everyone. it only needs to be accepted by those that want to accept it and those that want to trade in it. thats the purpose of a market currency. the market decides. its not a fiat replacement its a fiat alternative. why would one having 1 more option of how to pay for things be a disadvantage to you. because YOU cant exchange it. it is credit...precharged credit, but credit all the same. Quote Link to comment Share on other sites More sharing options...
mfp123 Posted March 28, 2013 Share Posted March 28, 2013 (edited) because YOU cant exchange it. it is credit...precharged credit, but credit all the same. why would a guy in vietnam accept US dollars in payment if its not legal tender in vietnam and hes never even been to the US nor does he ever plan to visit there or settle a US tax bill. his local supermarket wont accept US dollars over the counter, nor can he go to the cinema by paying in US dollars. is he wrong to accept any payment in US dollars. Edited March 28, 2013 by mfp123 Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted March 28, 2013 Author Share Posted March 28, 2013 why would a guy in vietnam accept US dollars in payment if its not legal tender in vietnam and hes never even been to the US nor does he ever plan to visit there or settle a US tax bill. his local supermarket wont accept US dollars over the counter, nor can he go to the cinema by paying in US dollars. is he wrong to accept any payment in US dollars. dunno...who cares...money is what people will accept. With Btc, without some connection and infrastructure, its going to be damned hard to accept it.. there are some "minted" Btcs though....which seems to defeat the object somewhat. Quote Link to comment Share on other sites More sharing options...
mfp123 Posted March 28, 2013 Share Posted March 28, 2013 (edited) dunno...who cares...money is what people will accept. With Btc, without some connection and infrastructure, its going to be damned hard to accept it.. there are some "minted" Btcs though....which seems to defeat the object somewhat. but the value of bitcoin to people is the fact that other people will accept it. just like any other currency. if there were say a million users worldwide in a years time, or bitcoins gather big momentum, how many users in 10 years - 2 million? 5 million? 10 million? 50 million? worldwide you could be looking at the size of a small country using it. the difference is that its not tied to a geographical area or by any central bank like a traditional currency. swiss francs are highly desirable because its a stable currency. however Switzerland has a population of just 8 million people, and your swiss francs can arguably only be spent in switzerland. yet people are happy to swap their own highly liquid US dollars, to hold a currency only used by 8 million people, because it often devalues less than their own. if a few million people back bit coin it will have the same backing as a small country, which that in itself gives it value. it doesnt need to just be tradeable in your local supermarket anymore than a swiss franc can be traded in your supermarket. but that doesnt mean the currency doesnt have value to the people that use it and will accept it. Edited March 28, 2013 by mfp123 Quote Link to comment Share on other sites More sharing options...
The Spaniard Posted March 31, 2013 Share Posted March 31, 2013 (edited) Karl Denninger's analysis of Bitcoin: http://market-ticker.org/akcs-www?blog=Market-Ticker&cat=Monetary And Bill Still's: Edited March 31, 2013 by The Spaniard Quote Link to comment Share on other sites More sharing options...
evetsm Posted March 31, 2013 Share Posted March 31, 2013 Karl Denninger's analysis of Bitcoin: http://market-ticker.org/akcs-www?blog=Market-Ticker&cat=Monetary And Bill Still's: Denninger hates gold, how is he going to love bitcoins? In other words, although he keeps reminding us of the imminent economic collapse, he offers no way to protect yourself, even though gold has done that for 5000 years. Nothing has more monetary properties than gold, except maybe bitcoins. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted March 31, 2013 Author Share Posted March 31, 2013 Denninger hates gold, how is he going to love bitcoins? In other words, although he keeps reminding us of the imminent economic collapse, he offers no way to protect yourself, even though gold has done that for 5000 years. Nothing has more monetary properties than gold, except maybe bitcoins. except, two parties to a contract can exchange gold for goods/services....without a third party involved. Quote Link to comment Share on other sites More sharing options...
rxe Posted March 31, 2013 Share Posted March 31, 2013 There are a couple of problems with Bitcoin - but that hasn't stopped me buying two of them, just for a laugh (cost me about £40). The first is scalability. You have a limited pool of currency and you expect take up to grow. This will inevitably lead to deflation, which will be approximately equal to the rate of growth of the market. If all this works out as some expect, I will be the 10 millionth richest person on the planet for my down payment of £40. The absurdity of this suggests that at some stage, this will break. Secondly, the argument that these transactions are "secret" is lunacy. As soon as material amounts of goods are traded, users will need an exit for the bitcoins. This leads to a paper trail, and this leads to discovery by any determined authority. Once some small time drug trader gets busted, you can bet he will reveal the names and addresses of the people who bought from him. If these become truly "threatening", then they will be declared illegal, and anyone caught using them will be put through the wringer by the Inland Revenue or equivalent. Try telling them that someone gave you that BMW in exchange for some magic beans .... it will be on the transporter before you can say "proceeds of crime act". Finally, as others have said, this seems to be a scheme designed to make early adopters rich. However in effect, you are handing over fiat (which can at least buy goods in the real world) and buying magic beans on an unregulated web site. I think it may be a scheme to make very early adopters rich, but it is worth a £40 punt.... Quote Link to comment Share on other sites More sharing options...
happy_renting Posted March 31, 2013 Share Posted March 31, 2013 except, two parties to a contract can exchange gold for goods/services....without a third party involved. Two parties to a contract can exchange bitcoins for goods/services....without a third party involved. Quote Link to comment Share on other sites More sharing options...
happy_renting Posted March 31, 2013 Share Posted March 31, 2013 (edited) dunno...who cares...money is what people will accept. With Btc, without some connection and infrastructure, its going to be damned hard to accept it.. there are some "minted" Btcs though....which seems to defeat the object somewhat. The infrastructure is the Internet, and mobile phones. Not sure what you mean by 'minted.' ALL bitcoins are originally 'mined' - lucky for the original miners, just like for gold. 'Minted' (physical) bitcoins exist, but their value comes from a unique code on each one, which represents a bitcoin in cyberspace. When you give someone that bitcoin, you are really giving them that code to obtain the virtual bitcoin over the internet. Bitcoins without codes are also available, but they are essentially worthless novelty items. Potential forgery of the privately minted bitcoins with codes is a risk, but then, so is accepting forged legal tender coins and notes. Arguably, by being able to use the code and verify the physical bitcoin is a genuine token for a cyberspace bitcoin, these are safer than 'normal' coins. Edited March 31, 2013 by happy_renting Quote Link to comment Share on other sites More sharing options...
DiggerUK Posted March 31, 2013 Share Posted March 31, 2013 The only serious point to be made about Bitcoins is that nobody understands what they are, or were they come from, and were they go. So who benefits? I always go by the maxim that if I haven't got a clue what's going on, then I keep my fiat in my cold, dead, hand. None of this passes the smell test. ..._ Quote Link to comment Share on other sites More sharing options...
happy_renting Posted March 31, 2013 Share Posted March 31, 2013 (edited) Ultimately it's EDF, E-ON, npower etc because the coins are mined into existence using electricity. Only a notional amount. Essentially, the first owner of a bitcoin 'mines' it using their computer, essentially tying up an asset of fairly irrelevant value. It someone pays them cash for it, they get the cash in exchange for their bitcoin. As bitcoins have become more valuable, and computers continually get more powerful, the computation to mine bitcoins is designed to become more complex. One of the strengths of bitcoin seems to be that it is a near-perfect free market, with no-one setting a fixed exchange rate; buyers and sellers can negotiate the currency transaction as they so with. It finds it's own level. Because of the Internet, everyone and anyone can find out what the 'going rate' for bitcoins is - near-perfect market knowledge. As more bitcoins are minted, up to the maximum, and become (possibly) more valuable, individual transactions will affect the bitcoin price less and less, meaning that price should be less volatile, and no-one will be big enough to manipulate the price significantly. Every bitcoin will have as much power as any other. There is no commitee setting or fixing the price, there is no government forever printing them for inflation, no individuals control the market. Edited March 31, 2013 by happy_renting Quote Link to comment Share on other sites More sharing options...
happy_renting Posted March 31, 2013 Share Posted March 31, 2013 The only serious point to be made about Bitcoins is that nobody understands what they are, or were they come from, and were they go. So who benefits? I always go by the maxim that if I haven't got a clue what's going on, then I keep my fiat in my cold, dead, hand. None of this passes the smell test. ..._ You are wise not to invest in something you don't understand. But don't assume that, because you don't understand, nobody else does. Quote Link to comment Share on other sites More sharing options...
mfp123 Posted March 31, 2013 Share Posted March 31, 2013 The only serious point to be made about Bitcoins is that nobody understands what they are, or were they come from, and were they go. So who benefits? I always go by the maxim that if I haven't got a clue what's going on, then I keep my fiat in my cold, dead, hand. None of this passes the smell test. ..._ most people dont understand fiat. if they did and understood how it works in reality, they wouldnt trust it. people just accept it because everyone else does. Quote Link to comment Share on other sites More sharing options...
Bradbury Robinson Posted March 31, 2013 Share Posted March 31, 2013 Once some small time drug trader gets busted, you can bet he will reveal the names and addresses of the people who bought from him. What kind of drug dealers have you been visiting that keep records of names and addresses? Do they invoice on a monthly basis? Quote Link to comment Share on other sites More sharing options...
Traktion Posted March 31, 2013 Share Posted March 31, 2013 (edited) Karl Denninger's analysis of Bitcoin: http://market-ticker.org/akcs-www?blog=Market-Ticker&cat=Monetary And Bill Still's: Karl Denninger's points are largely flawed, IMO. It seems like he doesn't fully understand the technology. The idea that you can't confirm what a Bitcoin is doesn't make much sense. The block chain will almost instantly confirm a transaction, which proves that Bitcoins are involved - good luck checking gold purity or forged notes that easily. The only reason you would want to wait for confirmations on the network is to confirm that there hasn't been a double spend. However, someone who hands over a fake note/coin will likely be long gone too - the same is for anyone who has spend money with a cloned credit card. Besides, how quickly can you send a tenner to someone in Australia? How about a lump of gold to someone in the USA? Suggesting that you need to wait 10 min for confirmation or 60 min for complete certainty as still far better than the other alternatives. For point of sale, there are already third parties who take the risk of fraud away from you. The likes of BitPay provide such a service. They charge 1% for doing this currently and that includes converting to a fiat money of your choice and depositing it in your bank for the next working day. EDIT: To add, this provides instant, zero risk transactions for a merchant - that's pretty impressive, IMO. How much fraud have BitPay had to deal with? In 10,000 transactions, not one incident (of double spends). That includes many anonymous transactions, with no face to face contact (where you could even request ID), which you would clearly have at POS. Bill Still just provided a bunch of straw men, so I'm not going to comment on much of that. All that needs to be said is - Bitcoin is voluntary. If you don't want to use it, you are free to use something else. Edited March 31, 2013 by Traktion Quote Link to comment Share on other sites More sharing options...
Traktion Posted March 31, 2013 Share Posted March 31, 2013 What kind of drug dealers have you been visiting that keep records of names and addresses? Do they invoice on a monthly basis? People need to realise that you can randomise and mix Bitcoins very easily too. On a simple level, you can just create a whole bunch of new addresses and spread your Bitcoins randomly between them. From observing the block chain, it would be impossible to know whether these were the same or different people. When done with a bit of finesse (or with help of software), it would provide plausible deniability Essentially, until the new addresses are in some way confirmed to be owned by the same person as the original address, they could be anyone's. The fact that Silk Road exists and has provided a market place for all sorts of illegal drugs pretty much proves the point. You can and it is used to buy/sell drugs and the authorities have been powerless to stop it. Quote Link to comment Share on other sites More sharing options...
rxe Posted March 31, 2013 Share Posted March 31, 2013 (edited) Really simple.... Drug Dealer: "how much prison time am I likely to get?" Police: "bugger all if you co-operate, 10 years if you don't" Drug Dealer: "what does co-operation mean?" Police: "it means you keep sending out packages of dope in return for bitcoins, just like you do today, nothing else" <police install HD camera at the post office> Seriously, this has already happened in Aus.... The fact that Silk Road exists and has provided a market place for all sorts of illegal drugs pretty much proves the point. You can and it is used to buy/sell drugs and the authorities have been powerless to stop it. It is exists because it is too small to worry about. Only middle class druggies can use Tor, and they represent eff all volume. As soon as it becomes larger, it will be killed off, and pretty easily too, with a small amount of co-operation from the interested countries. Simple approach: make it an offence for any company operating in that jurisdiction to accept bitcoins. Suddenly the drug dealers have nowhere to spend their magic beans and the whole game collapses. Edited March 31, 2013 by rxe Quote Link to comment Share on other sites More sharing options...
erat_forte Posted March 31, 2013 Share Posted March 31, 2013 People need to realise that you can randomise and mix Bitcoins very easily too. On a simple level, you can just create a whole bunch of new addresses and spread your Bitcoins randomly between them. From observing the block chain, it would be impossible to know whether these were the same or different people. When done with a bit of finesse (or with help of software), it would provide plausible deniability Essentially, until the new addresses are in some way confirmed to be owned by the same person as the original address, they could be anyone's. The fact that Silk Road exists and has provided a market place for all sorts of illegal drugs pretty much proves the point. You can and it is used to buy/sell drugs and the authorities have been powerless to stop it. Surely to take delivery you have to give S.R. a mailing address? How is that secured? (genuine qn) Quote Link to comment Share on other sites More sharing options...
Traktion Posted March 31, 2013 Share Posted March 31, 2013 Really simple.... Drug Dealer: "how much prison time am I likely to get?" Police: "bugger all if you co-operate, 10 years if you don't" Drug Dealer: "what does co-operation mean?" Police: "it means you keep sending out packages of dope in return for bitcoins, just like you do today, nothing else" <police install HD camera at the post office> Seriously, this has already happened in Aus.... That isn't much to do with Bitcoin and everything to do with setting up a sting operation. Silk Road may have grasses, but those with good ratings are likely to have said rating for a reason. Still, buying illegal stuff with Bitcoin isn't a magical shield. However, it means you are much less likely to get caught. Quote Link to comment Share on other sites More sharing options...
rxe Posted March 31, 2013 Share Posted March 31, 2013 Surely to take delivery you have to give S.R. a mailing address? How is that secured? (genuine qn) Exactly. The system leaks at the physical edges. It is a bit like networks of kiddly fiddlers using encryption to send images. In theory it is foolproof, but not if the person at the other end is plod. Quote Link to comment Share on other sites More sharing options...
Take Me Back To London! Posted March 31, 2013 Share Posted March 31, 2013 There are a couple of problems with Bitcoin - but that hasn't stopped me buying two of them, just for a laugh (cost me about £40). The first is scalability. You have a limited pool of currency and you expect take up to grow. This will inevitably lead to deflation, which will be approximately equal to the rate of growth of the market. If all this works out as some expect, I will be the 10 millionth richest person on the planet for my down payment of £40. The absurdity of this suggests that at some stage, this will break. Secondly, the argument that these transactions are "secret" is lunacy. As soon as material amounts of goods are traded, users will need an exit for the bitcoins. This leads to a paper trail, and this leads to discovery by any determined authority. Once some small time drug trader gets busted, you can bet he will reveal the names and addresses of the people who bought from him. If these become truly "threatening", then they will be declared illegal, and anyone caught using them will be put through the wringer by the Inland Revenue or equivalent. Try telling them that someone gave you that BMW in exchange for some magic beans .... it will be on the transporter before you can say "proceeds of crime act". Finally, as others have said, this seems to be a scheme designed to make early adopters rich. However in effect, you are handing over fiat (which can at least buy goods in the real world) and buying magic beans on an unregulated web site. I think it may be a scheme to make very early adopters rich, but it is worth a £40 punt.... Well said. We may have a dislike of the present monetary sytem and wish for something much better or an alternative, however as you highlight, Bitcoin seems to been set up to make the founders and early adopters rich. IMO, if it was set-up to be a currency with integrity and sound principles it would be more stable and not be something that would be attractive to gamblers/speculators for a quick profit. Quote Link to comment Share on other sites More sharing options...
Traktion Posted March 31, 2013 Share Posted March 31, 2013 (edited) Surely to take delivery you have to give S.R. a mailing address? How is that secured? (genuine qn) This isn't a risk to the dealer, but rather the buyer (see previous post). However, you could always arrange a drop somewhere instead, I suppose (then get someone innocent to collect etc). BTW, I'm not into drugs, so this is pure speculation on my part! EDIT: P.S. Silk Road is just a social networking style system, AFAIK. The transaction is only between the individuals involved. Edited March 31, 2013 by Traktion Quote Link to comment Share on other sites More sharing options...
Traktion Posted March 31, 2013 Share Posted March 31, 2013 Well said. We may have a dislike of the present monetary sytem and wish for something much better or an alternative, however as you highlight, Bitcoin seems to been set up to make the founders and early adopters rich. IMO, if it was set-up to be a currency with integrity and sound principles it would be more stable and not be something that would be attractive to gamblers/speculators for a quick profit. What sort of system would you use to encourage adoption, if not the carrot of getting rich? Quote Link to comment Share on other sites More sharing options...
DiggerUK Posted March 31, 2013 Share Posted March 31, 2013 You are wise not to invest in something you don't understand.But don't assume that, because you don't understand, nobody else does. As nobody can explain in any comprehensible way what they are, that tells me that nobody really understands what the hell they are. At least with fiat and gold we know what they are. most people dont understand fiat. if they did and understood how it works in reality, they wouldnt trust it. people just accept it because everyone else does. True, but why do people accept Bitcoins when it is patently obvious that it is only because they have faith and trust that they are safer than fiat. Sorry me old chinas, I'll stick with fiat and gold. ..._ Quote Link to comment Share on other sites More sharing options...
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