Author Topic: Does anyone here use Bitcoins? (Read 598283 times)

Renegade · « **Reply #150 on:** April 07, 2013, 11:16 AM »

Understood. I would like to thank you for being a gracious host. I feel that I must bid you goodbye. Please know that all my best wishes are with you.

mouser · « **Reply #151 on:** April 07, 2013, 11:26 AM »

There's no reason to have to leave, I'd like you to stay. I just request that anyone who wants to discuss how much money they are making off the (fill in the blank) market, or suggestions for what to invest in, post in the basement or on a different forum.

I pass no judgement on any particular currency or market or investment strategy -- to be honest they all seem like legalized gambling and scams to me -- including the US stock market, etc. But that's besides the point. If you want to invest in such things go for it, I just don't think we want this forum to be a place for discussing how to make money in the markets.

wraith808 · « **Reply #152 on:** April 07, 2013, 12:43 PM »

I didn't read his posts as telling people what to invest in or where to invest, or even to invest. More of as a cackling statement of glee of his success. And I felt good for him, and feel that it's not a bad thing to celebrate success among our members (while of course kicking myself that I didn't do the same).

IainB · « **Reply #153 on:** April 07, 2013, 03:41 PM »

I would really like this forum to avoid anything related to discussing investing or making money on markets -- it's just not the place for it.
It's one thing for us to discuss the concept of something like bitcoins -- but when we start showing charts and talking about making money and when to buy and sell, etc.. that has no place here.
-mouser (April 07, 2013, 09:24 AM)

Yes, and there seem to be plenty of alternative forums to engage in or discuss these things.
However, because of its digital nature, it would seem to be relevant to discuss Bitcoins in the DC Forum, but not necessarily in the manner it predominately seems to be being discussed at present.

It is worth discussing because: To a student of economic theory and practice, Bitcoin is something that seems to break theory by peacefully offering a new, artificial, common, potentially safe and unregulated/uncontrolled (by any government) alternative to any and all national currency, and thereby potentially enabling the consumer to avoid the use of the banking system.
The potential implications are tremendous, apparently including, for example, transformation of the global money supply and associated inter-bank Forex and payments/settlements systems, greater freedom from taxation (forced State theft) and from compulsory/proprietary usury by the banks. Bitcoin would seem to have the potential to defeat the system of fractional reserve banking, which is a major means by which governments effect their State control over the voters.

For speculators to focus on the profits to be made from gambling in arbitrage trading, as a new market develops, would be a natural thing for any emerging market, and will generally assist in its development and stability - Bitcoin would presumably be no exception to that. However, there is some irony in that, where the trade profits are being measured in a State's currency, the new thing is being measured in terms of the old which it could eventually render obsolete. Bitcoins could potentially become the new Gold Standard and the major/only global currency, where the thing being traded (Bitcoin money) is the standard - a modern digital form of gold coins.

There are other forums on the Internet specifically set up for discussing and learning about mining and dealing/trading in the supply of Bitcoins - a good start might be, for example, the Bitcoin Forum - http://bitcointalk.org

IainB · « **Reply #154 on:** April 07, 2013, 03:50 PM »

Understood. I would like to thank you for being a gracious host. I feel that I must bid you goodbye. Please know that all my best wishes are with you.
-Renegade (April 07, 2013, 11:16 AM)

We cannot control events that affect us, but we can control our response to them.
In New Zealand, that kind of response would probably be termed "spitting the dummy".

Chillax @Renegade.

mouser · « **Reply #155 on:** April 07, 2013, 03:57 PM »

If i seemed to be saying we shouldn't discuss bitcoins at all, then I should clarify my position. I was only trying to say one should avoid discussions of investment strategies and talking about how much money one is making.

40hz · « **Reply #156 on:** April 07, 2013, 04:38 PM »

I didn't get a sense, after reading Mouser's comment/request, that there was any feeling on his part that discussing Bitcoin was somehow taboo or unacceptable. What I did hear was a request that the participants refrain from getting into an "investment tip" or boosterism mode when doing so.

I'm not sure I see anything in the discussion that falls into that. Although if you don't know Renegade's unique style of outrageous humor and...um...presentation (or if you landed here from Google) you might be forgiven for not realizing none of his comments were ever intended to be taken as serious investment advice. And I think Mouser's comment was being directed more to the occasional forum visitors who might not know that rather than the regulars. And I wouldn't read any more into it than that.

Regarding Renegade's comment IainB quoted above...I'm not at all sure what any of that is about. So in the absence of knowing what led Ryan to decide he'd prefer to take himself elsewhere, about all I can say is "Hail & farewell good friend and colleague! You will be missed. And should you ever change your mind, you know where to find us."

Tinman57 · « **Reply #157 on:** April 07, 2013, 07:41 PM »

[ Looks like it's really taking off....]

Online electronics store buys into bitcoins as sole currency

An online electronics retailer, Bitcoinstore, has had such a successful trial run accepting only bitcoins for payment that it will continue operating.

http://www.pcworld.c...s-sole-currency.html

app103 · « **Reply #158 on:** April 07, 2013, 07:51 PM »

Still can't really get behind it 100% until it's possible to pay for the basic necessities with it, (rent, utilities, food) without having to convert it into traditional currency, first.

KynloStephen66515 · « **Reply #159 on:** April 07, 2013, 09:15 PM »

$171.4/BTC now o.0

How I wish I bought them back in '12 when they were $5/BTC

Hindsight is a heartless bitch.

wraith808 · « **Reply #160 on:** April 07, 2013, 09:39 PM »

Still can't really get behind it 100% until it's possible to pay for the basic necessities with it, (rent, utilities, food) without having to convert it into traditional currency, first.
-app103 (April 07, 2013, 07:51 PM)

Well, that defines stock, gold... pretty much everything that's not hard curry.

40hz · « **Reply #161 on:** April 08, 2013, 06:33 AM »

I tend to follow about a dozen libertarian/counter-economics blogs. And needless to say, bitcoins seem to be their new poster child. However, I find it interesting that the diehard bitcoin supporters are constantly crowing about how the prices are illogically ratcheting up while at the same time criticizing national monetary policies and currencies for encouraging inflation. Same goes for the widespread bitcoin supporters' criticism of fractional reserve banking for "printing money with nothing backing it " when there is really no underlying value you can pin a bitcoin to - other than the "irrational exuberance" that is apparently driving its soaring rates.

In the end, I think this is going to end with the usual wheeler-dealers making out like bandits, and the rest of the general public (who got involved in all good faith) being robbed blind. But that should come as no suprise. In the investment world that's called: business as usual.

40hz · « **Reply #162 on:** April 08, 2013, 06:49 AM »

[ Looks like it's really taking off....]

Online electronics store buys into bitcoins as sole currency

An online electronics retailer, Bitcoinstore, has had such a successful trial run accepting only bitcoins for payment that it will continue operating.

http://www.pcworld.c...s-sole-currency.html
-Tinman57 (April 07, 2013, 07:41 PM)

I think that's a purely political move on their part. (Note the name of the store.) I strongly suspect they're attempting to garner goodwill and capitalize on the current bitcoin publicity juggernaut. Where I come from, one of the first rules of running a successful retail operation is that you accept every form of payment out there.

Deliberately restricting the ways people can hand you money makes no business sense at all. $:-\$

tomos · « **Reply #163 on:** April 08, 2013, 09:22 AM »

I tend to follow about a dozen libertarian/counter-economics blogs. And needless to say, bitcoins seem to be their new poster child. However, I find it interesting that the diehard bitcoin supporters are constantly crowing about how the prices are illogically ratcheting up while at the same time criticizing national monetary policies and currencies for encouraging inflation. Same goes for the widespread bitcoin supporters' criticism of fractional reserve banking for "printing money with nothing backing it " when there is really no underlying value you can pin a bitcoin to - other than the "irrational exuberance" that is apparently driving its soaring rates.
-40hz (April 08, 2013, 06:33 AM)

You ignore the *big* difference that Bitcoin is limited. Otherwise I agree with the above.

As to how it'll turn out ...

app103 · « **Reply #164 on:** April 08, 2013, 09:46 AM »

Nothing, be it bitcoins, gold, diamonds, paper currency, baseball cards, classic cars, real estate, grandma's wedding dress, or anything else, has any value unless humans place one upon it. And it only has the value that we decide upon, and only for as long as we decide.

You ignore the *big* difference that Bitcoin is limited.
-tomos (April 08, 2013, 09:22 AM)

I own things I wouldn't trade for all the bitcoins, gold, diamonds, paper currency or anything else in the world, like my grandmother's sewing box. They are very limited...only 1 exists. They have great value to me. But you wouldn't agree that they have any value at all and would consider them worthless...to you.

That kind of makes the value that we humans assign to most things, nothing more than an opinion. And opinions are subject to change. (see Texas dollars, French Francs, German Deutschmark, Pogs, Beanie Babies, stock prices, etc.)

tomos · « **Reply #165 on:** April 08, 2013, 09:58 AM »

Yes app
it's not that I'm a fan of Bitcoin, nor even a fan of money at all - as we know it. Just wanted to point out to 40 that he ignored that important difference in his comparision with fractional reserve banking. It's a big reason it's doing so well and may be the making of it (could even possibly be the breaking of the fiat currencies).

40hz · « **Reply #166 on:** April 08, 2013, 02:40 PM »

You ignore the *big* difference that Bitcoin is limited. Otherwise I agree with the above.
-tomos (April 08, 2013, 09:22 AM)

I think I'm probably missing something again being a bitcoin neophyte. Limited in what way?

A pseudo-currency that was worth pennies a few years ago suddenly became valued at $100 last week and is now (or maybe has already) broke the $200 mark? Says who? And with what to back it? It's hyperinflating by huge amounts above all the other traditional value backers like gold.

If there were a sudden loss of confidence in standard currencies I'd think gold and all the other commodities would be hyperinflating in market value just as rapidly. But they're not. So I don't think the Cypress banking crisis (as one often given example) is driving the bitcoin roller coaster. I think it's pure speculative "gold rushing" fueld by the usual combination of greed and ignorance at play here. It's not sustainable. And when it crashes it will be far more likely to take down bitcoin rather than anything else.

wraith808 · « **Reply #167 on:** April 08, 2013, 03:08 PM »

I think I'm probably missing something again being a bitcoin neophyte. Limited in what way?
-40hz (April 08, 2013, 02:40 PM)

http://blockchain.in...harts/total-bitcoins

Bitcoin uses an inflation source method of Limited Release, i.e. the rate of inflation will be halved every 4 years until there are 21 million BTC.

http://eprint.iacr.org/2012/584.pdf

tomos · « **Reply #168 on:** April 08, 2013, 03:14 PM »

Sure, there's lots of differences. There's the novelty thing too.

You ignore the *big* difference that Bitcoin is limited. Otherwise I agree with the above.
-tomos (April 08, 2013, 09:22 AM)

I think I'm probably missing something again being a bitcoin neophyte. Limited in what way?
-40hz (April 08, 2013, 02:40 PM)

Oh, I presumed you knew that - the production of Bitcoin is limited. I cant remember exactly but (I think) 20 million by 2040 and that's it. That is a big difference between it and current currencies. A lot of people blame fiat currencies for the economic state of the world. While I have grave reservations about fiat currencies, I think this is not the main problem at all. But for these people, Bitcoin is very attractive. Simply because it's limited. Well, also that it's 'free-market' and not controlled by banks or governments. And oh yes, it's a novelty thing too ;-)

[overlapped with wraith's post but will leave this bit anyway]

It seems to bother you a lot it not being backed by anything, yet you seem accepting of the same thing with the dollar (or am I misunderstanding your position there?)

If there were a sudden loss of confidence in standard currencies I'd think gold and all the other commodities would be hyperinflating in market value just as rapidly. But they're not. So I don't think the Cypress banking crisis (as one often given example) is driving the bitcoin roller coaster. I think it's pure speculative "gold rushing" fueld by the usual combination of greed and ignorance at play here. It's not sustainable. And when it crashes it will be far more likely to take down bitcoin rather than anything else.
-40hz (April 08, 2013, 02:40 PM)

very good points

IainB · « **Reply #169 on:** April 08, 2013, 07:22 PM »

All this discussion seems to rather cloud the reality that Bitcoin started off as a very interesting kind of practical digital experiment in creating a crypto-currency, to test the theory as first described in 1998 by Wei Daito.

"b-money, a scheme for a group of untraceable digital pseudonyms to pay each other with money and to enforce contracts amongst themselves without outside help".

The initiator of the Bitcoin experiment went under the pseudonym of Satoshi Nakamoto. Towards the end of 2010 Satoshi apparently left the project saying he had moved on to other things.

However, the experiment continues unabated, and this discussion thread is tangible evidence that we have effectively become participants in it to some extent. Even if we are not directly involved in Bitcoin, we are all apparently part of the associated and influencing environment within which it operates.
Though the relative value of a Bitcoin in terms of exogenous currencies seems to be the most compelling factor for some, it is actually a by-product of the experiment. The current artificial and deliberate cap of about 20 million BTC numbers (objects) that can be created in/by the Bitcoin protocol is very interesting in that it is a control - it safely controls the experiment and caps the bubble that we see inflating/deflating (it is currently re-inflating after having had one major deflation).
This control affects/limits the endogenous money supply (M3) in this enclosed system, but not necessarily the velocity of circulation of the money. The latter may be theoretically unlimited, but in practice could be under a constraint set via a function determining the necessary CPU cycle time forced to be consumed in operating the protocol.

The discussion in this thread around Bitcoin's comparative US$ value appreciation worries me, because I have kinda "seen it all before" in other artificial bubbles, in stock exchanges and commodity exchanges in different parts of the world, and witnessed the financial outcomes for the real people (and their families) involved.
From experience and the study of real-life practical market economics and from econometric modelling and modelling the behaviour of traders in stock exchanges and commodity trading systems, I would strongly suggest extreme caution when considering committing any hard cash (or other assets) into Bitcoin.
As I said above:

For speculators to focus on the profits to be made from gambling in arbitrage trading, as a new market develops, would be a natural thing for any emerging market, and will generally assist in its development and stability - Bitcoin would presumably be no exception to that.

The rule-of-thumb for financial risk management in such speculative markets is: Do not risk more than you would be prepared to lose or could afford to lose.

$171.4/BTC now o.0
How I wish I bought them back in '12 when they were $5/BTC
Hindsight is a heartless bitch.
-Stephen66515 (April 07, 2013, 09:15 PM)

Don't let the glare of the potential gains dazzle you to the extent that you are unable to see the potential losses (statistical history: there's already been one relatively major deflation, don't forget), and be aware that fear is likely to be a primary motivator in your behaviours - fear of potential loss of an unrealised potential and intangible gain. This is or would be absurd/irrational. As well as being irrational and acting as an amplifier for our innate greed under these circumstances, fear is one of the most destructive of human emotions, and it is extremely difficult to remain rational whilst in a state of fear - and therefore easy to make mistakes.
Money can make a very good servant, but a dreadful master.

app103 · « **Reply #170 on:** April 08, 2013, 08:24 PM »

Don't let the glare of the potential gains dazzle you to the extent that you are unable to see the potential losses (statistical history: there's already been one relatively major deflation, don't forget), and be aware that fear is likely to be a primary motivator in your behaviours - fear of potential loss of an unrealised potential and intangible gain. This is or would be absurd/irrational. As well as being irrational and acting as an amplifier for our innate greed under these circumstances, fear is one of the most destructive of human emotions, and it is extremely difficult to remain rational whilst in a state of fear - and therefore easy to make mistakes.
Money can make a very good servant, but a dreadful master.
-IainB (April 08, 2013, 07:22 PM)

What you said agrees with what I had said before, elsewhere, about not investing in objects to which you can easily become emotionally attached, or are symbolic (investing huge sums on an engagement ring for your bride is the first that comes to mind). That attachment reduces the value of the object to $0, because the attachment will stand in your way of ever selling it. You can't cash in on sentimental value. The only thing you can buy with it is regret.

There is no room for emotions of any kind in investing. Good investing is done cold, without feeling, nothing like love or fear to misguide you or stand in your way.

Tinman57 · « **Reply #171 on:** April 08, 2013, 08:25 PM »

Well....I'm no financial genius or stock market expert, but I think I'll just keep my cash in a money market account, even if the interest rates are for crap. Thanks once again Uncle Sam.

But I do know that I just popped open a bottle of Samual Adams Alpine Springs Ale, and it's just soooooo good it very well may lead to another. If nothing else it will at least make me forget all about this head cold I have and the for-crap finances the U.S. is sweltering under. But then again, this isn't the forum for that.....

40hz · « **Reply #172 on:** April 08, 2013, 09:34 PM »

It seems to bother you a lot it not being backed by anything, yet you seem accepting of the same thing with the dollar (or am I misunderstanding your position there?)
-tomos (April 08, 2013, 03:14 PM)

Not misunderstanding. More me not making myself clear. Which comes from not sufficiently elaborating because I was trying to do a post on a smartphone.

By "not backed by anything" I meant anything - as in nada.

There is no government enforcement, no sanctioned exchange system with any regulatory clout behind it, no specie or standard of valuation - and above all, no legal status protecting it.

If somebody cleans out my bank account I have several very direct avenues of legal recourse. If somebody swipes my bitcoin wallet, who am I supposed to call?

Although many who are into the whole "pirate" thing are quick to dismiss (or simply diss) government, it still has its uses. One is that it possesses the means (legal and physical) to enforce its will. And that's significant. Because bitcoin does not.

If you burn bitcoin, what can bitcoin actually do? Threaten a civil suit? And because of its decentralized P2P structure - who exactly has legal status to file a suit anyway? And for what? Since bitcoins have little if any legal recognition (so far) it may be very hard to establish they actually have any genuine value.

And therein lies the fundamental problem with crypto-currencies IMO. Currencies are only as good as your ability to make them (emphasis on make) mean something. In the case of the US dollar, it's backed by Uncle Sam's promise to tax US citizens unto the umpteenth generation to make good on what the dollar is said to represent. Behind that pledge is the full productive capacity, labor force, natural resources, and military might of the United States - which the government holds a great deal of control and influence over.

That's what I mean by "backed by something" as opposed to bitcoin which strikes me as primarily being a small mutual admiration society attempting to do an end run around government backed currencies. Unfortunately, short of a complete economic collapse of the world monetary system - it just isn't going to happen.

Bitcoins could (in theory) fill a vacuum in places where the legal currency did collapse. (But so could a lot of other things like cigarette packs.) However, an attempt to create a parallel monetary system in places where it hasn't is simply not going to be allowed - both for bad reasons - and also for some extremely good ones. And that will remain the case no matter how many people and places sign on to accept bitcoins as a form payment.

f0dder · « **Reply #173 on:** April 09, 2013, 02:03 AM »

The initiator of the Bitcoin experiment went under the pseudonym of Satoshi Nakamoto. Towards the end of 2010 Satoshi apparently left the project saying he had moved on to other things.
-IainB (April 08, 2013, 07:22 PM)

Come up with a processing-intensive alternative currency.
Write efficient botnet code.
...?
Profit!

SKA · « **Reply #174 on:** April 09, 2013, 02:43 AM »

Another guess on bitcoin future:
http://www.naturalne...in_bubble_crash.html

Ska