Bitcoins in the news again

Yeah, I dont get it either.

"Created in 2009 by a programmer or programmers known only by a pseudonym, the bitcoin world has, until now, been dominated by a cabal of anonymous traders."
 
Cowie shells, tulip bulbs, Beanie Babies, Bitcoins .....

Investing in bit coins sounds a lot like giving my money to people I don't know to do things I don't understand and with no promise that I will ever see any of it again.

For some reason I can't quite put my finger on, I was reminded of this:

Among the many companies to go public in 1720 is — famously — one that advertised itself as "a company for carrying out an undertaking of great advantage, but nobody to know what it is".[28
Click to expand...

(from the wikipedia page on the South Sea Bubble: South Sea Company - Wikipedia, the free encyclopedia
 
traineeinvestor said:
Cowie shells, tulip bulbs, Beanie Babies, Bitcoins .....

Investing in bit coins sounds a lot like giving my money to people I don't know to do things I don't understand and with no promise that I will ever see any of it again.]
Click to expand...

Indeed. But have I got a deal for you my Kiwi friend. We should start a new venture dealing in Zitcoins. We will grant 1 Zitcoin for every zit or pimple a person has. You gain more Zitcoins by increasing the number of zits, or by trading zits with other members.
Ah, but how do we make money, I hear you ask. Well we float the venture on the HK stock exchange, after we reach a substantial membership base. Imagine millions of teens and preteens using Zitcoins to buy iTunes, zit cream and the like. We could venture into pharmaceuticals, set up a production company in Shenzen, and an online shopping cart and Zitpay payment service.:dance::dance:
 
At least beanie babies were fun to look at and good for a decoration in a 7 year olds room. Bitcoin is just a bunch of 0's and 1's that don't provide any value in of themselves. The only "value" they have is that others will accept them and that "value" is certainly extremely subjective ($ 260 to $ 56). My guess is that bitcoin will go back to its true vale of $ 0 soon enough.
 
Of course, the same can be said of gold and the US Dollar. Bitcoin is purported to escape the inflation tax of paper currencies. How long that will hold true is anyone's guess.
 
Today I was curious about Bitcoin. So looked it up before seeing this thread. Here's Krugman's take on it:
So how’s it going? The dollar value of that cybercurrency has fluctuated sharply, but overall it has soared. So buying into Bitcoin has, at least so far, been a good investment.

But does that make the experiment a success? Um, no. What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that’s not at all what is happening in Bitcoin.
Click to expand...
 
GrayHare said:
Of course, the same can be said of gold and the US Dollar. Bitcoin is purported to escape the inflation tax of paper currencies. How long that will hold true is anyone's guess.
Click to expand...


A currency is designed to grease the wheel of an economy... it is designed to make business transactions easier... to 'store value' if you will... it is not designed to make people rich... investing does that...


As someone else pointed out... I see this as a beanie baby craze.... or even a pyramid scheme.... where can I go to get my cash out when I want:confused: IOW, if I have Euros, I can easily convert them to Dollars or Yen... I do not see an easy way to convert these to any other currency unless this is some individual willing to buy mine...
 
I was hard pressed to think of currency like product more risky than airline frequent flier miles until they invented bitcoin. P.T. Barnum would be wondering why he didn't think of it
 
The whole concept of BitCoin baffled me. Beyond just the obvious questions over how an electronic fiat currency could be created without an economy, government or really anything behind it to back it up... the following two points in my mind doomed this from the start

1) By definition, the algorithms and math behind the system cannot ever be changed or improved. Nothing stops a competitor of BitCoin from reproducing the model and improving on the security of it, then pointing out potential vulnerabilities in the mathematics used for the older more outdated BitCoin system. Instantly a BitCoin would be diluted by another market and people would shift over to it creating a drop of 50-99% of BitCoins value.

2) As we all are well aware, computers get faster and faster every year. In 5 years you'll be carrying a cell phone or watch with the computing power of the worlds fastest super computer from 5 years ago. What is mathematically impossible to defeat today from a security standpoint could easily be broken in a decade or few with quantum computers. Processing power so incredibly advanced that it could even cripple today's most advanced RSA encryption used by Amazon and the other payment system monsters.

This was a short term fad... I'm sure some made a fortune on it. For the long haul, its destine to fail, and fail badly.
 
bitcoins?
bit cons
s*it coins

If this forum's mostly savvy people cannot figure it out, then we are left with the obvious default.
 
Chuckanut said:
I was hard pressed to think of currency like product more risky than airline frequent flier miles until they invented bitcoin. P.T. Barnum would be wondering why he didn't think of it
Click to expand...


I would not put FF miles in the currency category... they are just bonus points to be used...

But they have made them where you can buy things... but still, not like cash...
 
Another article if anyone cares:

Bitcoin Craze Highlights Intrinsic Value of Gold and Silver (GLD, SLV, EBAY, AMZN) - 24/7 Wall St.

The current craze reminds me of the lessons of DigiCash from the 1990s that was supposed to be an anonymous virtual currency. I actually wanted that effort to work, but it was ahead of its time and there were too many concerns and technical limitations keeping it from succeeding. Then there was eCash. Now there are at least a dozen offshoots. The world of micropayments was supposed to take off 10 years ago, and Peppercoin was supposed to be a leader there. Now that domain is an insurance website, and you hardly ever hear about micropayments now. So, what is the real long-term value of a buck, virtual or real? If history doesn’t somehow change, a buck is probably worth a buck.
Click to expand...
 
EvrClrx311 said:
The whole concept of BitCoin baffled me. Beyond just the obvious questions over how an electronic fiat currency could be created without an economy, government or really anything behind it to back it up... the following two points in my mind doomed this from the start

1) By definition, the algorithms and math behind the system cannot ever be changed or improved. Nothing stops a competitor of BitCoin from reproducing the model and improving on the security of it, then pointing out potential vulnerabilities in the mathematics used for the older more outdated BitCoin system. Instantly a BitCoin would be diluted by another market and people would shift over to it creating a drop of 50-99% of BitCoins value.

2) As we all are well aware, computers get faster and faster every year. In 5 years you'll be carrying a cell phone or watch with the computing power of the worlds fastest super computer from 5 years ago. What is mathematically impossible to defeat today from a security standpoint could easily be broken in a decade or few with quantum computers. Processing power so incredibly advanced that it could even cripple today's most advanced RSA encryption used by Amazon and the other payment system monsters.

This was a short term fad... I'm sure some made a fortune on it. For the long haul, its destine to fail, and fail badly.
Click to expand...
Well, I'll be the only one on this board to say so, but I think that this currency will continue to thrive and serve a purpose.

If we get quantum computing, we no longer have any security, anywhere, and suggesting that will happen in a decade or two seems very speculative anyway. In other words, all of our crypto will be useless, so we'll have bigger problems than bitcoin, hehe.

As to the process of minting new bitcoin, the process automatically gets harder. The algorithm is set up so that there will never be more than some pre-defined number of bitcoin in existence (more than I can say for paper we print). As to getting country based currencies from and to bitcoin, you can do that today on many exchanges, and soon there will be ATM's.

I own $5 worth of bitcoin ( just for fun). Actually, I bought in with $5. I think it might be $50 or $100 now (yep, it fluctuates a lot). I bought in when discussions came up on the crypo boards, early-on.

Governments want desparately for it to fail, so they might find a way to bring it down. I suspect that the volitility will stay high, which keeps confidence low.
 
sengsational said:
Well, I'll be the only one on this board to say so, but I think that this currency will continue to thrive and serve a purpose.
Click to expand...
I hope you are right. Eventually something will happen to break the government monopoly on money. Who knows how that will go, but it sure be interesting! All governments have done about as badly as could be done, so it won't please everyone, but some will be better off.

Talent and money will eventually shuck off the baggage that they are dragging. When that happens it won't be calm, but it will be interesting. Interesting indeed.

Ha
 
Hello all

Bitcoins were created for so many reasons, here are some of them
1. Avoiding taxes because there are no tax law when we do transactions with bitcoins. This will benefit international traders.
2. This digital currency will allow small businesses to eliminate middle man (banks, credit card companies, and other financial institution). That means higher margins because all those fees from banks and credit card company will be gone when they use bitcoins. Again, this is benefiting international trades or transactions.
3. People in china has been using this digital currency since year 2000. It is really tough for chinese to purchase stuff from overseas because of capital control by Chinese government, therefore most people in china are using bitcoins. It will allow them purchase stuff from overseas and bitcoins are untraceable by government.
4. Black markets do exist and they are everywhere, bitcoins will make it easier for them when they do business internationally and once currencies become bitcoins, they are untraceable.

My opinion... Bitcoins and money are the same, they were created out of thin air and they are fiat money. Both are just tools or i would say medium of exchange. I don't think bitcoins were created for investment purposes but i will not be surprise that we can profit from it because bitcoins idea is still new and growing fast. In the long run, bitcoins will be just like other world currencies. It's a good idea for short-term but know when to get out and plan an exit strategy.

Happy investing in global market!
 
G-95 said:
Hello all

Bitcoins were created for so many reasons, here are some of them
1. Avoiding taxes because there are no tax law when we do transactions with bitcoins. This will benefit international traders.
2. This digital currency will allow small businesses to eliminate middle man (banks, credit card companies, and other financial institution). That means higher margins because all those fees from banks and credit card company will be gone when they use bitcoins. Again, this is benefiting international trades or transactions.
3. People in china has been using this digital currency since year 2000. It is really tough for chinese to purchase stuff from overseas because of capital control by Chinese government, therefore most people in china are using bitcoins. It will allow them purchase stuff from overseas and bitcoins are untraceable by government.
4. Black markets do exist and they are everywhere, bitcoins will make it easier for them when they do business internationally and once currencies become bitcoins, they are untraceable.

My opinion... Bitcoins and money are the same, they were created out of thin air and they are fiat money. Both are just tools or i would say medium of exchange. I don't think bitcoins were created for investment purposes but i will not be surprise that we can profit from it because bitcoins idea is still new and growing fast. In the long run, bitcoins will be just like other world currencies. It's a good idea for short-term but know when to get out and plan an exit strategy.

Happy investing in global market!
Click to expand...


Just a rebuttal....


1. It does not avoid taxes because you use bitcoins... it avoids taxes because you are committing fraud... barter is taxable... so bitcoins is also taxable... sure, you do not have to report it, just like if you used barter, but it is not the 'coin' that is making it avoid taxes...

2. The problem with this is that from what I can see, the value of them are not that stable.... IOW, when a business has expenses in dollars, they are hoping that the dollar is very stable in value so they can predict income and expenses for a year or more.... the value of bitcoins look to be based on... well, nothing.... I would much rather pay a bank a percentage for certainty than not pay and hope that the bitcoin keeps its value...

3. I do not see how... per wiki

Date of introduction 3 January 2009 Source Bitcoin Genesis Block
How can something be used since 2000 when they did not exist until 2009:confused:


Bitcoin is the ultimate fiat money.... with NO backing at all.... and the little that I know, there will never be any backing... at least with the dollar, euro, yen etc., you have the taxing power of the state to back up the value... you have knowledge of when a state is getting out of control and move your money to a safer currency if you think it is going to decline in value... the rise and fall of currency valuation is very slow compared to bitcoin... so, the fiat money backed by big countries that produce a lot of GDP seem a much better bet that this fiat money....
 
Been reading up on them.... seems that there can be hacking... this from wiki...

Incidents of theft

There have been incidents of theft of bitcoin balances:

  • On 19 June 2011, a security breach of the Mt.Gox bitcoin exchange caused the nominal price of a bitcoin fraudulently to drop to one cent on the Mt.Gox exchange, after a hacker allegedly used credentials from a Mt.Gox auditor's compromised computer illegally to transfer a large number of bitcoins to himself. He used the exchange's software to sell them all nominally, creating a massive "ask" order at any price. Within minutes the price corrected to its correct user-traded value.[100][101][102][103][104][105] Accounts with the equivalent of more than USD 8,750,000 were affected.[102]

  • In July 2011, the operator of Bitomat, the third largest bitcoin exchange, announced that he lost access to his wallet.dat file with about 17,000 bitcoins (roughly equivalent to 220,000 USD at that time). He announced that he would sell the service for the missing amount, aiming to use funds from the sale to refund his customers.[106]

  • In August 2011, MyBitcoin, a now defunct bitcoin transaction processor, declared that it was hacked, which resulted in it being shut down, with paying 49% on customer deposits, leaving more than 78,000 bitcoins (roughly equivalent to 800,000 USD at that time) unaccounted for.[107][108]

  • In early August 2012, a lawsuit was filed in San Francisco court against Bitcoinica — a bitcoin trading venue — claiming about 460,000 USD from the company. Bitcoinica was hacked twice in 2012, which led to allegations of neglecting the safety of customers' money and cheating them out of withdrawal requests.[109][110]


  • In September 2012, Bitfloor, a bitcoin exchange, also reported being hacked, with 24,000 bitcoins (roughly equivalent to 250,000 USD) stolen. As a result, Bitfloor suspended operations.[116][117] The same month, Bitfloor resumed operations, with its founder saying that he reported the theft to FBI, and that he is planning to repay the victims, though the time frame for such repayment is unclear.[118]

  • On 3 April 2013, Instawallet, a web-based wallet provider, was hacked[119], resulting in 35,323.8093592 bitcoins[120] ($129.90 at the time of trade, or nearly $4.6 million USD) being stolen. Instawallet suspended operations.






At least when your money is stolen from a US bank you are made whole... and if the bank goes under, you are made whole up to $250,000.
 
Last edited:
Snowx800 said:
Where is the best place to buy some?
Click to expand...

Not sure where the best place is but BitPay is pretty legit. Remember, this bitcoins still making progress for its acceptance in our new world a.k.a social media and digital world generation. Most geeks will know more about this and they are using it in their digital world.
There are risks for sure, but there will be no gain if we don't take risks. As i mention, know when to get out....goodluck!
 
sengsational said:
Well, I'll be the only one on this board to say so, but I think that this currency will continue to thrive and serve a purpose.

If we get quantum computing, we no longer have any security, anywhere, and suggesting that will happen in a decade or two seems very speculative anyway. In other words, all of our crypto will be useless, so we'll have bigger problems than bitcoin, hehe.

As to the process of minting new bitcoin, the process automatically gets harder. The algorithm is set up so that there will never be more than some pre-defined number of bitcoin in existence (more than I can say for paper we print). As to getting country based currencies from and to bitcoin, you can do that today on many exchanges, and soon there will be ATM's.

I own $5 worth of bitcoin ( just for fun). Actually, I bought in with $5. I think it might be $50 or $100 now (yep, it fluctuates a lot). I bought in when discussions came up on the crypo boards, early-on.

Governments want desparately for it to fail, so they might find a way to bring it down. I suspect that the volitility will stay high, which keeps confidence low.
Click to expand...

I just read an article that 1 bitcoin worth $179.00 as of April 11th, 2013. Total bitcoins in circulation are worth about $2 billions.
 
Texas Proud said:
Bitcoin is the ultimate fiat money.... with NO backing at all.... and the little that I know, there will never be any backing... at least with the dollar, euro, yen etc., you have the taxing power of the state to back up the value... you have knowledge of when a state is getting out of control and move your money to a safer currency if you think it is going to decline in value... the rise and fall of currency valuation is very slow compared to bitcoin... so, the fiat money backed by big countries that produce a lot of GDP seem a much better bet that this fiat money....
Click to expand...

Amen to that.
 
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