Bitcoin - World's 30th largest Currency

[NYEXPAT]

I don't understand Bitcoin (at all). Therefore, I have some very basic questions.

1. What is Bitcoin cash?

2. How do you sell, let's say 2 Bitcoins, and can you get actual dollars (real money you can spend at Kroger's) for them?

First, I forgot to mention that he has about $92,000 in Bitcoin Gold as well!

1. Bitcoin cash- As a result of the "hard fork"in October a holder of 1 Bitcoin received 1 of the new crypto's Bitcoin Cash. Again in November there was a "hard fork" and he would have received 1 Bitcoin Gold for each Bitcoin he held.
B-Cash trades at about $1700 or so.
B-Gold trades at about $308 or so.

2. You would sell them on your local exchange and the USD. would be deposited into your bank account. Alternatively, you could go to your local Tesla dealer and just trade them for a new model S, or buy a sh$tload of video games online.

 

[sengsational]

Eventually when people are required to use Bitcoin in order to purchase anything on the web - think of an article to read on a news site, instead of paying a monthly fee you might pay the equivalent of 1 cent of a bitcoin to read an article, something that is so impractical with electronic payment systems today that it is functionally impossible.

Just curious, from what I read the chain has history back to the beginning... therefore at some point in time there will be too many transactions to process.... in your example you use 1 cent... do you know how much processing power would have to be used to track every purchase that used 1 cent when it is cumulative?

This leads me to believe that at some point bitcoin will fail due to amount of electricity needed to verify it is legit... IOW, if it cost $1 to verify a 1 cent transaction, nobody is going to be doing verification....


OR, do I have it wrong on how this stuff works...

The full block chain was 560GB, the last I checked. But you don't need a "full node" to validate transactions.

That being said, Bitcoin was never intended to be a "micro payment system", so forget paying Bitcoin to read an article. Never was supposed to address that problem.

The smallest unit of Bitcoin is a satoshi. 100 satoshi is worth 0.016 at the moment. But just because it CAN be subdivided pretty small doesn't mean it was meant for micropayments.

 

[NYEXPAT]

The full block chain was 560GB, the last I checked. But you don't need a "full node" to validate transactions.

That being said, Bitcoin was never intended to be a "micro payment system", so forget paying Bitcoin to read an article. Never was supposed to address that problem.

The smallest unit of Bitcoin is a satoshi. 100 satoshi is worth 0.016 at the moment. But just because it CAN be subdivided pretty small doesn't mean it was meant for micropayments.

Isn't this the reason behind the hard forks? It is my understanding that the advent of Bitcoin Cash was to increase block size, reduce fee's and speed up transaction time. I understand Bitcoin Gold was basically to allow people to mine on a machine with a graphics card and take more control/influence away from the large miners in China?

 

[NYEXPAT]

I should mention that I am just learning, Have never owned any crypto and know nothing about computers/software and even less on how to operate my smartphone. I am interested in currencies and the movement of money in an efficient fashion.

 

[sengsational]

Isn't this the reason behind the hard forks? It is my understanding that the advent of Bitcoin Cash was to increase block size, reduce fee's and speed up transaction time. I understand Bitcoin Gold was basically to allow people to mine on a machine with a graphics card and take more control/influence away from the large miners in China?

I'm conceptually challenged by forking. In other words, I'm talking out of my, um, yeah, talking through my hat.

The driver for forks is certainly to address limitations in the original implementation. In other words, it's all about mining. But it seems to me that if you think traditional bitcoin is sketchy, these forks are REALLY sketchy! Seems to me that they are really no better than any other upstart crypto-currency except that you can transfer your traditional bitcoin into them more easily? I don't know.

Each fork, and there have been quite a few recently, seems to lay claim to traditional bitcoin at the time of the fork. Obviously, as a traditional bitcoin holder, you can't take value from every fork that comes along. I guess what they do is if you take action to convert your traditional bitcoin to one of the forked versions, your original bitcoin is gone and you have this new crypto-currency. But I don't see anything different in that versus selling your traditional bitcoin and buying some other random (non bitcoin fork) crypto-currency.

Maybe someone here knows or can do some reading. I haven't researched it.

 

[redduck]

=NYEXPAT;1979494
<snip>...
2. You would sell them on your local exchange and the USD. would be deposited into your bank account. Alternatively, you could go to your local Tesla dealer and just trade them for a new model S, or buy a sh$tload of video games online.

So, you can sell your bitcoins and then keep the real-honest-to goodness money you receive in your brokerage or bank or buy video games online (I personally would buy Pong--but, that's just me).

So, (once again) there are people who are making lots of money on Bitcoins, and are not just richer in Bitcoin currency, but are richer in U.S. dollars (or whatever the currency is in Peru).

 

[Teacher Terry]

When we cash out some of our bitcoin the $ goes right into our bank account.

 

[NW-Bound]

So, you can sell your bitcoins and then keep the real-honest-to goodness money you receive in your brokerage or bank or buy video games online (I personally would buy Pong--but, that's just me).

So, (once again) there are people who are making lots of money on Bitcoins, and are not just richer in Bitcoin currency, but are richer in U.S. dollars (or whatever the currency is in Peru).

Yep. The money is only real and safe when it is converted into greenbacks.

That's the bottom line. And the money people get from selling their bitcoins comes from latecomers who pay big bucks for the bits.

Bitcoins are not like shares in Apple who makes "stuff", or in Amazon that provides a service. Bits are, well, just bits.

 

[NW-Bound]

Another thing I forgot to add.

Yes, buying stocks has some risks. A stock may be overvalued, but if it is a real company the risk is the same as buying a house in a hot market. One may overpay by a factor of 1.5x or 2x, but a house is really worth something. If you buy wrong, you still have 50 cents on the dollar.

What is the real value of bits? And people are creating bits all the time. Soon, we will have lots of bits that we buy and sell to each other, and nobody has to work. Everybody can generate bits.

 

[flintnational]

Another thing I forgot to add.

Yes, buying stocks has some risks. A stock may be overvalued, but if it is a real company the risk is the same as buying a house in a hot market. One may overpay by a factor of 1.5x or 2x, but a house is really worth something. If you buy wrong, you still have 50 cents on the dollar.

What is the real value of bits? And people are creating bits all the time. Soon, we will have lots of bits that we buy and sell to each other, and nobody has to work. Everybody can generate bits.

+1
If bits are actually sustainable, what happens when Amazon decides to create bits. You get a discount on all products sold on Amazon but only if you use their bits. Not sure why Amazon would want to create a bit. But, if I was a believer, I sure wouldn't want to compete with them by holding some other bit.

 

[redduck]

From reading this thread I've learned that along with the bits you buy, you also get chains and forks. They've got to be worth something, no?
In any case, I've decided not to exchange my Wellington shares for bitcoin shares until I understand bitcoins and the bitcoin market just a little bit better--which will be probably never.

 

[NW-Bound]

From reading this thread I've learned that along with the bits you buy, you also get chains and forks. They've got to be worth something, no?

They are similar to the new CryptoKitties that can breed (search the Web for this). You own more and more Kitties with time.

I guess that's the advantage of virtual assets. They can easily spawn offsprings. In the old days, one could own a closet full of beanie babies, and they do not spawn. Real kitties do spawn, but boy they eat, which costs money, but also defecate. Not nice. Better raising Virtual Kitties.

As long as one can find people buying Virtual Kitties for big bucks, raising them is a lot cleaner and more profitable operation than raising real kittens.

 

[NYEXPAT]

So, you can sell your bitcoins and then keep the real-honest-to goodness money you receive in your brokerage or bank or buy video games online (I personally would buy Pong--but, that's just me).

So, (once again) there are people who are making lots of money on Bitcoins, and are not just richer in Bitcoin currency, but are richer in U.S. dollars (or whatever the currency is in Peru).

Yes
and yes, if they have sold the bitcoin or have hedged its value on a futures exchange like the Cboe or the Cme (beginning on Sunday).
The caveat being there are no exchanges in Peru to buy Bitcoin. If I wanted to buy, I can use an exchange in Chile and buy Bitcoin with the money being taken from my bank in Peru. Most people are unaware that the majority of trading takes place in Japan and South Korea and not the USA. Very few people in Peru buy crypto and I have never heard it mentioned in Expat circles.

 

[NYEXPAT]

When we cash out some of our bitcoin the $ goes right into our bank account.

Teacher can you clarify, as a holder of Bitcoin did you receive Bitcoin Cash and Bitcoin Gold after the hard forks in October and November and was it at a ratio of 1 to 1?

 

[redduck]

I found a stock First BITcoin Capital (BITCF) that has done quite well this year (and quite well today I might add). I couldn't transfer the information to the ER Forum (no surprise there). Anyhow, you might want to take a gander (so sayeth the duck).

 

[Teacher Terry]

Expat: I don't know because my son is the brains of the operation and when we want to cash some out he does it for us. All I know is that he said we ended up in a good place after the forks. My son has also made all of us $ by trading coins.

 

[exnavynuke]

So, you can sell your bitcoins and then keep the real-honest-to goodness money you receive in your brokerage or bank or buy video games online (I personally would buy Pong--but, that's just me).

So, (once again) there are people who are making lots of money on Bitcoins, and are not just richer in Bitcoin currency, but are richer in U.S. dollars (or whatever the currency is in Peru).

You're either rich in bitcoin currency or you're rich in US dollars. Until you "cash in" your bitcoin, you've gained nothing. Just like that penny stock that you have 345,068% gains on. Until you cash in, you only have paper gains.
Cashing in is, currently, easier for the bitcoin than the penny stock as demand is higher at the moment for bitcoins than most penny stocks.

Yep. The money is only real and safe when it is converted into greenbacks.

That's the bottom line. And the money people get from selling their bitcoins comes from latecomers who pay big bucks for the bits.

Bitcoins are not like shares in Apple who makes "stuff", or in Amazon that provides a service. Bits are, well, just bits.

All money is only "real and safe" as long as people value it for something. Bitcoin has a highly volatile valuation while the USD has a very low volatility in its valuation currently. Of course, the USD could suffer hyperinflation in 5 years and bitcoin could steady out in that time... not very likely imo, but I also never predicted that the Zimbabwe dollar would suffer massive inflation so what do I know.

Bitcoins are just bitcoins with no inherent value beyond what people are willing to trade them for, and US Dollars are just pieces of paper with ink on them with no inherent value beyond what people are willing to trade them for.

 

[NYEXPAT]

You need to look at the intrinsic value. I can wipe my a$$ or light a Cuban with my $100 bill, try that with a Bitcoin!

 

[flintnational]

...........Bitcoins are just bitcoins with no inherent value beyond what people are willing to trade them for, and US Dollars are just pieces of paper with ink on them with no inherent value beyond what people are willing to trade them for.

I use to also believe this about fiat government money (USD). Then someone reminded me that USDs are different. They do have inherent value. The government that backs them also has the ability to tax. The ability to tax is of very high value. To some degree, the ability to tax supports the value of fiat currency. Or at least it should work that way.

 

[NYEXPAT]

I use to also believe this about fiat government money (USD). Then someone reminded me that USDs are different. They do have inherent value. The government that backs them also has the ability to tax. The ability to tax is of very high value. To some degree, the ability to tax supports the value of fiat currency. Or at least it should work that way.

I did not know that. So the more the gov't taxes, the stronger their currency, relative to countries that tax less. If money supply is not a factor, why doesn't the Guvmint just print more money?

 

[NW-Bound]

...All money is only "real and safe" as long as people value it for something...

It is true that there's always some nagging doubt about any fiat money. Hence, there are gold bugs who do not trust paper money.

However, between any major currency and bitcoin, I will take the currency.

 

[FUEGO]

I use to also believe this about fiat government money (USD). Then someone reminded me that USDs are different. They do have inherent value. The government that backs them also has the ability to tax. The ability to tax is of very high value. To some degree, the ability to tax supports the value of fiat currency. Or at least it should work that way.

I've come to this realization, too. People use "fiat" to modify currency. They use it in a pejorative manner.

Sure, our government is out and about fiat-ing currency all day. Maybe the money becomes worthless some day. In the meantime, the US has an 18 trillion GDP. They can (and do) siphon off some of that in the form of various taxes. We also have a couple trillion dollars worth of assets in the form of vehicles, real estate, gold reserves, intellectual property, etc.

 

[redduck]

=NYEXPAT;1979957
You need to look at the intrinsic value. I can wipe my a$$ or light a Cuban with my $100 bill, try that with a Bitcoin!

It's not so easy to light a Cuban with a $100 bill. I tried it, but before I got within 10 feet of him with the flaming bill, someone knocked me to the ground and I skinned my knee.

 

[Islandtraveler]

My 22 year old is in it. He invested about 4k and it is now worth about 15k. I suggested that he take out his original stake and continue with the houses money. He said “Not yet Dad” What do I know? I only lived through 1987, 2002, 2008 as well as a multitude of self inflicted bear markets. I guess he needs to feel the pain for himself.

 

[aja8888]

My 22 year old is in it. He invested about 4k and it is now worth about 15k. I suggested that he take out his original stake and continue with the houses money. He said “Not yet Dad” What do I know? I only lived through 1987, 2002, 2008 as well as a multitude of self inflicted bear markets. I guess he needs to feel the pain for himself.

Whisper in his ear "Beanie babies".....