Bitcoins in the news again

[Texas Proud]

Quote:

Originally Posted by G-95 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!

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


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....

[Texas Proud]

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 late August 2012, an operation titled Bitcoin Savings and Trust was shut down by the owner, allegedly leaving around $5.6 million in bitcoin-based debts; this led to allegations of the operation being a Ponzi scheme.[111][112][113][114] In September 2012, it was reported that U.S. Securities and Exchange Commission has started an investigation on the case.[115]

• 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.

[G-95]

Quote:

Originally Posted by Snowx800 Where is the best place to buy some?

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!

[G-95]

Quote:

Originally Posted by sengsational 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.

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.

[UserRequested]

Quote:

Originally Posted by Texas Proud 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....

Amen to that.

[ERhoosier]

Quote:

Originally Posted by Snowx800 Where is the best place to buy some?

In LaLa land.

As one well-known guest FA on one of the cable business channels put it this AM, it's a "Ponzi Scheme". From what I know it's hard to disagree with that assessment.

[RonBoyd]

Quote:

Originally Posted by ERhoosier ... it's a "Ponzi Scheme". From what I know it's hard to disagree with that assessment.

Then we can safely assume the Justice Department has issued Warrants and we can look forward to "Perp Walk" photos appearing shortly? (Assuming further that the JD is apprised of "what you know.")

[Texas Proud]

Quote:

Originally Posted by ERhoosier In LaLa land. As one well-known guest FA on one of the cable business channels put it this AM, it's a "Ponzi Scheme". From what I know it's hard to disagree with that assessment.

I disagree with this assessment.... a Ponzi scheme is where you pay off old investors with new investor money.... the company (or whatever) does not own or invest in anything....

Here, you 'own' the bitcoin... you have the right to keep it on a memory stick like described in one article, or sell it in the open market... IOW, the money goes from the buyer to the seller, just like when you sell stock... it does not go to a company as an 'investment'.... this is more like the tulip bubble or in recent times the beanie babies bubble... they were not, and this is not a Ponzi scheme....


That does not change the fact that it is not a smart place to put your money....

[sengsational]

Yep, you're not going to get FDIC protection of you bitcoin assets. And if you keep your bitcoin in an exchange, it can be stolen (you don't have to keep it in an exchange, though). If you keep it on a memory stick, it could get lost or stolen. So that's pretty much the same as money, bank, under your matress. A lot of this news about bitcoin theft is growing pains. This is new territory and operators don't know what they're doing. I think they will get better at it, the currency will stabilize, and governments will try to clamp-down on it when it does become more trustworthy.

[Texas Proud]

Quote:

Originally Posted by G-95 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.

Quote:

Originally Posted by sengsational Yep, you're not going to get FDIC protection of you bitcoin assets. And if you keep your bitcoin in an exchange, it can be stolen (you don't have to keep it in an exchange, though). If you keep it on a memory stick, it could get lost or stolen. So that's pretty much the same as money, bank, under your matress. A lot of this news about bitcoin theft is growing pains. This is new territory and operators don't know what they're doing. I think they will get better at it, the currency will stabilize, and governments will try to clamp-down on it when it does become more trustworthy.

If the above is true, and there are only $2 billion value out there (which is still probably inflated value even with the decline)... that is not enough for any gvmt to worry about....


Heck, when I was a trust officer, I twice got wires of incoming money over $3 billion...


I forget who posted this about Cypress... but the size of bitcoin is a pimple on the butt of an elephant... (heck, smaller really... maybe a virus cell inside the pimple on the butt of an elephant...)

[mickeyd]

Bitcoins are kinda like these things, aren't they?


An S&H Green Stamp



S&H Green Stamps.

[sengsational]

Quote:

Originally Posted by mickeyd Bitcoins are kinda like these things, aren't they? An S&H Green Stamp

Not really. The value of those stamps was set by the issuing company (by telling you that 23 1/2 books were required to exchange for a toaster).

The value of a bitcoin is whatever anyone is willing to pay for it. There is no central place where value is set.

One of the cool things about bitcoin is that the system is designed to ease the currency into existance using a hard crypto problem. But that phase will end; all bitcoin that will ever exist will be minted and that will be that. From then on, it will be in an overall "deflationary" trend for as long as the currency gains popularity and trust. This is sometimes difficult to wrap your head around, since we're all so used to standard currencies becoming less valueable as time goes by (inflationary).

If many, many more people decide that they want to use bitcoin to transact their deals, then the price to buy bitcoin will increase. Right now, almost no one is using the currency, but it would be thinkable that 100 times the current number of people would decide that bitcoin is the way to go. So 2 billion becomes 200 billion. There's nothing stopping this kind of expansion. You just get smaller and smaller fractional bitcoin for transacting business.

--Dale--

[RonBoyd]

Well... here is one use for them:

OKCupid says it will accept Bitcoin, as currency falls to recent low | Ars Technica

Quote:

On Tuesday, as Bitcoin’s exchange rate fell to its lowest level in days at around $64 per bitcoin, OKCupid announced that it would accept the digital currency from users wanting to pay for bonus features on the site. The popular (and free) dating site, which boasts 4 million active users, will now become one of the world’s largest sites to accept Bitcoin.

[haha]

Quote:

Originally Posted by RonBoyd Well... here is one use for them: OKCupid says it will accept Bitcoin, as currency falls to recent low | Ars Technica

I am very interested to know what is for sale on a dating site, with Bitcoins or any other currency.

Ha

[RonBoyd]

Bitcoin RIP

Bitcoin Becomes BS-Coin, Mt. Gox Crashes Again - 24/7 Wall St.

Quote:

Our case is not truly a case against the future of digital currency, or even against virtual currencies. We have supported and would continue support anything that allows the most efficient and most cost-effective method of transferring money from consumer to companies and/or consumers to peers. The problem is that the history of Digicash, eCash and other virtual currencies have never been able to stay afloat. Ditto for micropayments, with most of those exchanges having shut down as well.

Quote:

Maybe it will be Amazon.com Inc. (NASDAQ: AMZN), with its own currency, that will win long term. EBay Inc. (NASDAQ: EBAY) has the wildly successful PayPal unit, but its fees can be high. Maybe the answer is merely Square and its competitors for transacting credit card payments right through your smartphone. Regardless of what the effort will be in the future, it seems unlikely to us that Bitcoin will rule the roost in the future.

Quote:

If Bitcoin ultimately goes the way it looks today, we don’t want to take credit for assigning the name “BS-coin” to it. Sadly, “BS-coin” will likely be its name.

[obgyn65]

I would be surprised if any ER forum participant uses bitcoins. I don't.

[RonBoyd]

There is an article about Canada taxing Bitcoins in MarketWatch yesterday and referenced by AfterDawn who included this video that does an excellent job of explaining Bitcoins.

https://vimeo.com/63502573#