BITCOIN as an alternative to regular currency

[steven1976]

Does anyone in here actually use them? I don't know anyone so just curious.

[Euler]

When I was on my travels recently I learnt a friend of mine was accepting payment in BitCoin's as a gimmick. Remarkably he collected over 1000 so he is now a BitCoin millionaire. I've told him to sell them, but as we all know emotion often overrules common sense so it's not entirely impossible that he will hold them until such time as he losses it all again!

[gazuty]

.... it is known that only a quarter of those bitcoins have ever changed their master

Read more: http://voiceofrussia.com/2013_12_01/Nak ... aire-7433/

Supply. Demand.

Hmmm, when the 3/4 that have never changed hands are dumped into the market. Hmmmmmm.

Then speaking of selling the picks and shovels to the gold miners - https://products.butterflylabs.com/home ... power.html

[Zenyatta]

Read this, lol, fantastical, hackers have cleaned out everyone's accounts and got away with 60 million pounds! This Bitcoin business is sounding even more fun than trading

Massive bitcoin heist

"One of the largest heists in bitcoin history is happening right now. 96,000 bitcoins - that’s roughly £60m as of the time of writing - was taken from the accounts of customers, vendors and administrators of the Sheep Marketplace over the weekend.

Sheep was one of the main sites that came to replace the Silk Road when it closed in October, but it too has now closed as a result of this theft. It’s a little hard to work out exactly what’s happened, but Sheep customers have been piecing it together on reddit’s r/sheepmarketplace.

Here's what happened: someone (or some group) managed to fake the balances in peoples’ accounts on the site, showing that they had their bitcoins in their wallets when they’d actually been transferred out. Over the course of a week the whole site was drained, until the weekend when the site's administrators realised what was happening and shut everything down."


http://www.newstatesman.com/future-proo ... -real-time

[BJGardner]

Interesting piece about Tulip Mania and academic resesrch into historic bubbles.

http://en.wikipedia.org/wiki/Tulip_mania

[superfrank]

Sooner or later I think we'll end up on some sort of gold standard.

There are bubbles everywhere; money supply, debt, bonds, stocks, bitcoins - all due to central banks' mantra of debt = wealth. It doesn't!

Bitcoins will get trashed as soon as the banksters find a way to short them - then they'll sell and get congress/the FED to ban/investigate them.

[Zenyatta]

If it were a really currency you would want its value to be stable, but at the moment its a completely speculative instrument and the more is rises the more people will pile into it, until it looks like it will break and then everybody will be heading for the door. But when is the question!

Well, I've been doing some more research and it looks like there's a lot of conflicting opinions. It's probably a bubble, but we could be wrong.

Sure, Bitcoins are pretty useless as a currency at the moment, but that could change in the future. They do have some advantages, namely the system is radically decentralized, letting users bypass central banks and escape associated fees and controls. And because the system is decentralized, its going to be very hard for governments to ban or regulate them. Advocates draw an analogy between the internet and Bitcoins, saying that Bitcoins could do for finances what the internet did for information.

This article by Naval Ravikant (Wired magazine) argues the Bitcoin case. Clip:

“ Just as the web democratized publishing and development, Bitcoin can democratize building new financial services. Contracts can be entered into, verified, and enforced completely electronically, using any third-party that you care to trust, or by the code itself. For free, within minutes, without possibility of forgery or revocation. Any competent programmer has an API to cash, payments, escrow, wills, notaries, lotteries, dividends, micropayments, subscriptions, crowdfunding, and more. While the traditional banks and credit card companies lock down access to their payments infrastructure to a handful of trusted parties, Bitcoin is open to all."

http://startupboy.com/2013/11/07/bitcoi ... -of-money/

[steven1976]

A silver spike like in 1980?
They are actually illegal where I am. I wonder if other countries will follow suit as it will surely make cleaning money difficult to track?

[Zenyatta]

A silver spike like in 1980?
They are actually illegal where I am. I wonder if other countries will follow suit as it will surely make cleaning money difficult to track?

I notice the Thai central bank ruled Bitcoins illegal. But the big difference between Bitcoins and other alternative currencies is that Bitcoins are designed to work the same way as the internet: as a radically decentralized network ; trades can still carry on peer-to-peer. There is no person , building or site the Thai government can go to to stop it.

[Euler]

The problem with Bitcoins is that they are thin air, they have no really investment value at all. So there is not yield to speak of and over their value of ultility there is not real value at all. But as with all bubbles value goes out the window as people buy them in the hope of offloading them to some other fool for a slightly higher price.

[Euler]

Bitcoin price tumbles after warning from Chinese central bank

http://www.theguardian.com/technology/2 ... nk-warning

[Euler]

Greenspan Says Bitcoin a Bubble Without Intrinsic Currency Value

http://www.bloomberg.com/news/2013-12-0 ... value.html

[Zenyatta]

Bitcoin price tumbles after warning from Chinese central bank

http://www.theguardian.com/technology/2 ... nk-warning

Banks have a vested interest in opposing Bitcoins, because Bitcoin users can transfer money internationally without paying bank fees. The price hasn't fallen much...still over $US 1000.

[Zenyatta]

The problem with Bitcoins is that they are thin air, they have no really investment value at all. So there is not yield to speak of and over their value of ultility there is not real value at all. But as with all bubbles value goes out the window as people buy them in the hope of offloading them to some other fool for a slightly higher price.

I think it's hard to say what's going to happen over the long-term. I agree that the current price is ridiculous, I won't buy now, but if the price were to fall back to a more reasonable level in line with the earlier trend (say 1/10th current value - or around $US 100), it might be worth buying some? I do like the idea of a decentralized universal cyber-currency.

[steven1976]

I don't even understand where these bitcoins come from but surely if something isn't governed it will lead to being massively manipulated as is what is probably happening at the moment. Is it possible for the creator to just instantly create or print a trillion new bitcoins? How many are currently in circulation?