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baja
03-30-2013, 09:26 AM
This thread is a place to explore the new currency known as BitCoin.

What is it?

How does it work?

Is it safe?

PS Shout out to Arkie for suggesting we give this BitCoin discussion buried in another unrelated thread it's own thread.

baja
03-30-2013, 09:28 AM
Bitcoin (sign: BTC) is a decentralized digital currency[8][9] based on an open-source,[10] peer-to-peer internet protocol. It was introduced by a pseudonymous developer named Satoshi Nakamoto in 2009.[11]
Internationally, bitcoins can be exchanged by personal computer directly through a wallet file or a website without an intermediate financial institution.[12] In trade, one bitcoin is subdivided into 100 million smaller units called satoshis, defined by eight decimal places.[4]
Bitcoin does not operate like typical currencies: it has no central bank and it solely relies on an internet-based peer-to-peer network. The money supply is automated, limited, divided and scheduled, and given to servers or "bitcoin miners" that verify bitcoin transactions and add them to a decentralized and archived transaction log every 10 minutes. The log is authenticated by ECDSA digital signatures and verified by the intense process of bruteforcing SHA256 hash functions of varying difficulty by competing "bitcoin miners." Transaction fees may apply to new transactions depending on the strain put on the network's resources. Each 10-minute portion or "block" of the transaction log has an assigned money supply. The amount per block depends on how long the network has been running. Currently, 25 bitcoins are generated with every 10-minute block. This will be halved to 12.5 BTC during the year 2017 and halved continuously every 4 years after until a hard limit of 21 million bitcoins is reached during the year 2140.[1][11]
Bitcoin is the most widely used alternative currency.[3][13] As of March 2013, the monetary base of bitcoin is valued at over $800 million USD.[14][15] The large fluctuation in the dollar value of a bitcoin has evoked criticism of bitcoin's economic suitability as a currency.



https://en.wikipedia.org/wiki/Bitcoin

baja
03-30-2013, 09:33 AM
Bitcoin: How An Unregulated, Decentralized Virtual Currency Just Became A Billion Dollar Market
RIP EMPSONThursday, March 28th, 2013119 Comments
Hang around in the tech industry long enough and you or someone you know will be heard saying, “that’s so crazy it just might work.” Two years ago, if you’d have told me that an open-source, P2P currency would soon be a thriving, billion-dollar market, I would’ve told you that you were on a lonely bus headed to CrazyTown, U.S.A. But today, Bitcoin officially became a crazy idea that’s actually working.

Today, all the Bitcoin in circulation — some 10.9 million of them — have collectively crossed the billion-dollar mark. As it is wont to do, the value of Bitcoin (and its exchange rate) has fluctuated wildly today. At one point, it hit a dollar value around $78, then pushed into the mid-nineties. As of this minute, it’s hovering around $90.

Okay, it’s still a tiny fraction of Google’s market cap, but this is something — especially for a largely unregulated, decentralized virtual currency. (Say that three times fast.) The world’s most popular controversial crypto-currency, mind you.

Bitcoin supporters will scoff and tell you that this is no news, and that Bitcoin has been alive and thriving for years. In fact, it first appeared back in 2009, and has been slowly gaining steam since. But Bitcoin has largely remained outside the realm of mainstream media attention, because no one has been quite sure what to make of it. Is it a passing fad, a hilarious geek-driven phenomenon, or the real deal?

In fact, it has really been relegated to the realm of the uber geeky, or seen as the currency of anarchists or crazy digital libertarians. The black market marketplace known as Silk Road, which allows pretty much anyone to anonymously sell “alternative products” (i.e. large quantities of one’s drug of choice), uses Bitcoin for its currency. Something which hasn’t exactly helped Bitcoin’s “cross over” appeal.

And geeks have had a point: Eventually, with the increasing popularity of P2P networks, virtual currency and digital marketplaces, it was only a matter of time before these entities would collide and a virtual currency of record would emerge. No government control?! Even better!

Bitcoin crossing the $1 billion threshold may not seem like much, but if anything, it seems to be a sign to anyone listening that the crypto-currency is ready to be taken seriously. Of course, there are still a lot of concerns, as John Biggs laid out in 2011.

But why has Bitcoin become a billion-dollar market?

First off, startups are beginning to carry the torch. As Alex wrote yesterday, Expensify announced that it is now supporting Bitcoin “to give international contractors an alternative to PayPal and the high fees associated with the service.” Reddit has jumped on the bandwagon, too, along with WordPress and Namecheap, among others.



Adam Draper, the founder of Menlo Park-based accelerator, Boost VC, recently announced that the team would be focusing on Bitcoin-focused startups for its summer class. As he laid out in a post today, one of the other big reasons Bitcoin is beginning to take off — besides, of course, that it allows secure digital transactions without transmitting personal information — is that investor confidence is growing. Bitcoin startups are beginning to raise, and Draper claims that their fund is far from being the only one that’s interested.

What’s more, the government has finally realized that it needs to start taking virtual currency seriously and develop a strategy for dealing with these types of currencies. FinCEN recently put out a series of “Guidelines,” which will inform future regulation, but also works to establish trust and credibility for virtual currency, particularly Bitcoin.

Arkie
03-30-2013, 09:37 AM
From wikipedia:

According to Reuters, undisclosed documents indicate that banks such as Morgan Stanley and Goldman Sachs have visited bitcoin exchanges as often as 30 times a day.

There are some serious profits being made by the elite already. That quote was from Reuters in April, 2012 when bitcoins were only $4.88 each.

Rohirrim
03-30-2013, 09:44 AM
Digitalized currency? Brings up interesting questions. For instance, don't the corporations who control access to the internet control as well access to the currency?

Meck77
03-30-2013, 09:50 AM
Who's to say the fed isn't just printing and buying?




An article from 2012. Offering a different angle.



More than three-quarters of the digital coins in the Bitcoin digital currency scheme aren't circulating because they remain dormant in user accounts that have never participated in outgoing transactions, a recently published study has found.

The figure translates to more than 7.019 million BTCs, the term used to denote a single coin under the digital currency, which uses strong cryptography and peer-to-peer networking to enable anonymous payments among parties who don't necessarily know or trust each other. Based on exchange rates listed on Mt.Gox—the most widely used Bitcoin exchange—the coins have a value of more than $82.87 million. On May 13, the date the researchers analyzed their data, there were slightly more than 9 million BTCs in existence.

Mathematician Dorit Ron and Adi Shamir (the "S" in the widely used RSA cryptography scheme) arrived at that finding by downloading the entire Bitcoin history and following the trail of some 180,000 transactions. They found there were about 3.12 million accounts, which are known as "addresses" in Bitcoin parlance. They belonged to about 1.5 different owners, on average, since there's no limit on how many addresses a single individual may possess. More than 609,000 of those addresses had received a significant portion of the outstanding BTCs without once making a payment, the researchers reported.

"However, if we sum up the amounts accumulated at the 609,270 addresses which only receive and never send BTCs, we see that their owners have actually put aside in some kind of 'saving accounts' 7,019,100 BTCs, which are almost 78 percent of all existing BTCs," the researchers wrote. Almost 60 percent of those coins were "old," meaning they were received more than three months prior to the May 13 cut-off date for the project.

http://arstechnica.com/tech-policy/2012/10/78-percent-of-bitcoin-currency-stashed-under-digital-mattress-study-finds/

Rohirrim
03-30-2013, 09:56 AM
Who's to say the fed isn't just printing and buying?




An article from 2012. Offering a different angle.



More than three-quarters of the digital coins in the Bitcoin digital currency scheme aren't circulating because they remain dormant in user accounts that have never participated in outgoing transactions, a recently published study has found.

The figure translates to more than 7.019 million BTCs, the term used to denote a single coin under the digital currency, which uses strong cryptography and peer-to-peer networking to enable anonymous payments among parties who don't necessarily know or trust each other. Based on exchange rates listed on Mt.Gox—the most widely used Bitcoin exchange—the coins have a value of more than $82.87 million. On May 13, the date the researchers analyzed their data, there were slightly more than 9 million BTCs in existence.

Mathematician Dorit Ron and Adi Shamir (the "S" in the widely used RSA cryptography scheme) arrived at that finding by downloading the entire Bitcoin history and following the trail of some 180,000 transactions. They found there were about 3.12 million accounts, which are known as "addresses" in Bitcoin parlance. They belonged to about 1.5 different owners, on average, since there's no limit on how many addresses a single individual may possess. More than 609,000 of those addresses had received a significant portion of the outstanding BTCs without once making a payment, the researchers reported.

"However, if we sum up the amounts accumulated at the 609,270 addresses which only receive and never send BTCs, we see that their owners have actually put aside in some kind of 'saving accounts' 7,019,100 BTCs, which are almost 78 percent of all existing BTCs," the researchers wrote. Almost 60 percent of those coins were "old," meaning they were received more than three months prior to the May 13 cut-off date for the project.

http://arstechnica.com/tech-policy/2012/10/78-percent-of-bitcoin-currency-stashed-under-digital-mattress-study-finds/

So, if I'm reading this right, it means that some guy invented a unicorn, and if he can get enough people to believe in the unicorn with him, he might be able to monetize it and have the market cornered on unicorns?

Arkie
03-30-2013, 10:31 AM
This could really be the people's currency. I just don't trust cyberspace. Do the people really have control, or will the privileged find a way to control it? This is the soundest currency possible if its secure. It increases on a logarithmic scale (not exponential like USD) that reaches a limit in 2140. So in other words, there's no way to inflate it without a decrease in the human population.

The network is programmed to increase the money supply as a geometric series until the total number of bitcoins reaches 21 million BTC, by issuing them to nodes that verify transaction records through intense bruteforce hashing with computing power.[3]
Currently, 25 bitcoins are generated every 10 minutes. This will be halved to 12.5 BTC within the year 2017 and halved continuously every 4 years after until a hard-limit of 21 million bitcoins is reached within the year 2140.[1][11] As of March 2013 over 10.5 million of the total 21 million BTC had been created; the current total number created is available online.[46] In November 2012, half of the total supply was generated, and by end of 2016, three-quarters will have been generated. By 2140, all bitcoins will have been generated with the last one consisting of fractional parts. To ensure this granularity of the money supply, clients can divide each BTC unit down to eight decimal places (a total of 2.1 × 1015 or 2.1 quadrillion units).

Prodigal19
03-30-2013, 02:21 PM
So, if I'm reading this right, it means that some guy invented a unicorn, and if he can get enough people to believe in the unicorn with him, he might be able to monetize it and have the market cornered on unicorns?

To be fair most currencies operate on the same premise. They only have value because people believe that they have value.

I do have a few bitcoins, not because I think they will ever replace current fiat money, but because I think the belief in bitcoins is going to continue to rise for a while. Unfortunately, this is also one of the main problems with bitcoins. Most people that have bought bitcoins don't have them to actually transact with them, but instead they see them as a worthwhile investment. If this continues there is absolutely no question that the value will crash, the only question is when will that happen. I believe that we still have a while before that happens.

Fedaykin
03-30-2013, 05:06 PM
The vast majority of "use" of Bitcoin is currently:

* People trying to get rich quick, riding the bubble.
* Drug dealers, child pornographers, and anyone else interested in doing online transactions "anonymously".

The problem is

a.) There is absolutely nothing backing the value of Bitcoin other than people think it has value. At least a USD is backed by the U.S. economy. Roh's comment about unicorns pretty much sums it up. Bit coin has a high probability of having zero value tomorrow. It's happened before and will happen again when various nodes in the system were compromised. The USD and other fiat currencies, as vulnerable as they are, will not lose all their value because someone hacked a single server.

b.) Bitcoin isn't actually anonymous. Every transaction (including what 'addresses' were involved) are recorded permanently. The only way to gain anonymity is to attempt to prevent whomever from knowing that you are the owner of a particular 'address'. Use of tools like Tor, and technologically complex solutions (i.e. splitting a single transaction into thousands of individual transactions), etc. can help, but at the end of the day you have to get someone to convert Bitcoins into whatever currency you actually want, which means you have to tell someone what 'addresses' you own.


In addition, there is no way to "insure" bitcoins like in a bank with USD. Get your computer compromised and have someone take all your bitcoins? To bad! Good thing it's not trivial to compromise the typical computer user's system with real simple things like clicking on the wrong link from the Mane!

Fedaykin
03-30-2013, 05:11 PM
To be fair most currencies operate on the same premise. They only have value because people believe that they have value.


There is a difference between a fiat currency, which at least represents a nominal value within a national economy, and a completely unbacked virtual currency.

The USD can plummet if the U.S. economy gets screwed up badly. The Bitcoin value will plummet simply when the fad is over -- or if the Bitcoin system is compromised enough (which has already happened several times).

Prodigal19
03-30-2013, 05:48 PM
There is a difference between a fiat currency, which at least represents a nominal value within a national economy, and a completely unbacked virtual currency.

The USD can plummet if the U.S. economy gets screwed up badly. The Bitcoin value will plummet simply when the fad is over -- or if the Bitcoin system is compromised enough (which has already happened several times).

You can just as easily say that gold and silver are unbacked currencies. Neither have much of an intrinsic value. It doesn't stop people from investing in them. At least bitcoins can easily be traded.

The bitcoin system itself has not been compromised, exchanges and websites that deal with bitcoins have. This is why it is dumb to have an online wallet. This problem alone will not cause the downfall of the bitcoin.

There is no reason to believe that this "fad" will end any time soon. As long as people think the bitcoin has a reasonable chance to be an alternative currency it will have value and as long as it has value it will be an investment opportunity. Even if its value were to drop drastically tomorrow, it would recover most if not all of that value extremely quickly as people jump in to buy cheap bitcoins.

The thing that probably will result in the death of the bitcoin is some governments decisions to make them illegal. I believe we still have a ways to go before that happens though.

Broncojef
03-30-2013, 06:16 PM
I'll stick to hard physical metals at this point, as the money printing continues, interest rates are suppressed, spending continues into oblivion, banks fail and start getting raided by governments and socialism fails worldwide its the one safe bet. Just as with everything else governments will move to regulate, tax, steal and spend everything they can get their hands on. If I can't buy it and hold it I don't want it.

Fedaykin
03-30-2013, 06:28 PM
You can just as easily say that gold and silver are unbacked currencies. Neither have much of an intrinsic value. It doesn't stop people from investing in them. At least bitcoins can easily be traded.


Ehh, no sorry. A bitcoin is an entirely virtual contsruct. Has no value, no use, indeed it doesn't actually exist as anything other than an idea.

At least gold and silver have a use. Or other physical things that might be used as currency.


The bitcoin system itself has not been compromised, exchanges and websites that deal with bitcoins have. This is why it is dumb to have an online wallet. This problem alone will not cause the downfall of the bitcoin.


The system has been compromised when massive impact can be had on the value of the Bitcoin. Doesn't matter if it's just one exchange.


There is no reason to believe that this "fad" will end any time soon. As long as people think the bitcoin has a reasonable chance to be an alternative currency it will have value and as long as it has value it will be an investment opportunity. Even if its value were to drop drastically tomorrow, it would recover most if not all of that value extremely quickly as people jump in to buy cheap bitcoins.

The thing that probably will result in the death of the bitcoin is some governments decisions to make them illegal. I believe we still have a ways to go before that happens though.


No reason to believe it can't end soon. It's an extremely risky bet to jump on the bitcoin wagon. Even the creator says don't buy bitcoins with money you can't 100% afford to lose. It's an experiment. An interesting experiment that could prove very useful, but still an experiment.

If you have money to burn, go for it. If you're trying to make a real investment, do it with something else. Some people are going to make a lot of money. Most people will probably lose it all.

baja
03-30-2013, 06:42 PM
Ehh, no sorry. A bitcoin is an entirely virtual contsruct. Has no value, no use, indeed it doesn't actually exist as anything other than an idea.

At least gold and silver have a use. Or other physical things that might be used as currency.



The system has been compromised when massive impact can be had on the value of the Bitcoin. Doesn't matter if it's just one exchange.




No reason to believe it can't end soon. It's an extremely risky bet to jump on the bitcoin wagon. Even the creator says don't buy bitcoins with money you can't 100% afford to lose. It's an experiment. An interesting experiment that could prove very useful, but still an experiment.

If you have money to burn, go for it. If you're trying to make a real investment, do it with something else. Some people are going to make a lot of money. Most people will probably lose it all.

I agree with this.

Some people are going to make a lot of money. Most people will probably lose it all.

But not this. It's speculation, possible but at this point speculation.

Arkie
03-30-2013, 06:53 PM
You can just as easily say that gold and silver are unbacked currencies. Neither have much of an intrinsic value. It doesn't stop people from investing in them. At least bitcoins can easily be traded.

The bitcoin system itself has not been compromised, exchanges and websites that deal with bitcoins have. This is why it is dumb to have an online wallet. This problem alone will not cause the downfall of the bitcoin.

There is no reason to believe that this "fad" will end any time soon. As long as people think the bitcoin has a reasonable chance to be an alternative currency it will have value and as long as it has value it will be an investment opportunity. Even if its value were to drop drastically tomorrow, it would recover most if not all of that value extremely quickly as people jump in to buy cheap bitcoins.

The thing that probably will result in the death of the bitcoin is some governments decisions to make them illegal. I believe we still have a ways to go before that happens though.

Gold is the only currency that has intrinsic value. In contrast the $1 bill has the exact same intrinsic value as a $100 bill. USD has 0 intrinsic value.

Fedaykin
03-30-2013, 06:55 PM
Gold is the only currency that has intrinsic value. In contrast the $1 bill has the exact same intrinsic value as a $100 bill. USD has 0 intrinsic value.

And a "gold backed currency" has exactly the same intrinsic value: 0

W*GS
03-30-2013, 06:58 PM
Gold is the only currency that has intrinsic value.

Gold has no intrinsic value.

baja
03-30-2013, 07:10 PM
Gold has no intrinsic value.y

May I have your gold

Arkie
03-30-2013, 08:13 PM
Gold has no intrinsic value.

Gold has had intrinsic value for the last 5000 years and will continue forever or until he human race dies out.

Fedaykin
03-30-2013, 08:19 PM
Gold has had intrinsic value for the last 5000 years and will continue forever or until he human race dies out.

Gold has an intrinsic value that is distinct from the extrinsic value we designate for it. Same with any precious metal, gem, etc.

In other words, gold has a value based on what we can do with but, but that worth is not $1600/oz. Despite it's extrinsic value increasing, the intrinsic value of gold is declining as we find better materials to do the things we used to use gold for.

Broncojef
03-30-2013, 08:24 PM
Gold has no intrinsic value.

There is a reason countries are demanding repatriation of their gold supplies overseas, China and other countries are buying gold and silver in huge quantites and the government is suppressing the price of metals by any means neccessary right now. Everyone knows fiat worldwide is in a death spiral and they are searching for a medium that holds its value no matter what stupid things the federal reserve and other supposed smart people are passing for monetary policy these days. Bernanke is printing $85 Billion a month right now to prop the system up, when that stops so does whats left of the economy. Gold and Silver have value and that value will jump to extreme values in a short amount of time.

baja
03-30-2013, 08:30 PM
Gold has had intrinsic value for the last 5000 years and will continue forever or until he human race dies out.

Keep in mind you are responding to a paid globalest shill.

baja
03-30-2013, 08:33 PM
There is a reason countries are demanding repatriation of their gold supplies overseas, China and other countries are buying gold and silver in huge quantites and the government is suppressing the price of metals by any means neccessary right now. Everyone knows fiat worldwide is in a death spiral and they are searching for a medium that holds its value no matter what stupid things the federal reserve and other supposed smart people are passing for monetary policy these days. Bernanke is printing $85 Billion a month right now to prop the system up, when that stops so does whats left of the economy. Gold and Silver have value and that value will jump to extreme values in a short amount of time.

Boom goes the hammer!!

Inkana7
03-31-2013, 09:46 AM
BitCoins are retarded, just don't worry about them.

Arkie
04-03-2013, 11:26 AM
I could have bought bitcoins for $90 each last Sunday, but I didn't have my account set up. It took three business days and now the bitcoins are up to $138. I still tried to buy some at that price, and they're saying "Sorry, the maximum number of purchases in the last 24 hours have been reached.":cuss:

TonyR
04-04-2013, 12:16 PM
If millions of people started using bitcoins on a regular basis, the soaring value of bitcoins would actually be disastrous. You’ve heard of hyperinflation: this would be hyperdeflation. Take a gold bar valued at $600,000. At $60 per bitcoin, the value of that bar is 10,000 BTC. But then assume that bitcoins rise in value to $600 apiece, and then to $6,000, and then to $60,000 — as would have to happen if the fixed number of bitcoins was being used to store hundreds of billions of dollars in value. Then the value of the gold bar would plunge, in bitcoin terms — to 1,000 BTC and then 100 BTC and finally just 10 BTC. The same thing would happen to all other goods and services in the world, including your own salary. Everything would be constantly going down in price, if you thought in bitcoin terms.

Inflation is bad, but deflation is worse. The reason is that in a deflationary environment, no one spends money — because whatever you want to buy is sure to become cheaper in a few days or weeks. People hoard their cash, and spend it only begrudgingly, on absolute necessities. And they certainly don’t spend it on hiring people — no matter how productive their employees might be, they’d still be better off just holding on to that money and not paying anybody anything.

The result is an economy which would simply grind to a halt, with massive unemployment and almost no economic activity. https://medium.com/money-banking/2b5ef79482cb

DenverBrit
04-04-2013, 01:07 PM
Bitcoins are a 'speculative' investment....a 'commodity' rather than a currency.

Be careful, when the bubble bursts, it will fold like a 'dot-com' stock that was all 'valuation' and no substance.

Them-there-nerds are tricky, watch out. ;D

alkemical
04-05-2013, 12:53 PM
http://bigthink.com/ideafeed/why-bitcoin-is-a-big-deal

DenverBrit
04-05-2013, 01:25 PM
The Bitcoin looks like a 'bubble' on steroids. It needs to settle down and stop being a commodity for it to succeed.

http://i2.cdn.turner.com/money/dam/assets/130404044816-chart-bitcoin-value-april-2013-614xa.png


According to Jesse Colombo, an independent financial analyst and investor who keeps close tabs on bubbles at TheBubbleBubble.com, the Bitcoin bubble is currently in a mania phase.

While Colombo doesn't believe the Bitcoin is doomed to fail, he expects prices to retreat back to pre-mania levels -- less than $15 apiece.

It's hard to predict when investors will realize they're paying too much for Bitcoins, but it won't take much for prices to drop quickly. Given that the Bitcoin market is small, all it could take is just one large sale to give investors a reality check, said Colombo.

http://buzz.money.cnn.com/2013/04/05/bitcoin-bubble/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top +Stories%29

Requiem
04-05-2013, 02:03 PM
Bitcoins? Lol.

W*GS
04-05-2013, 02:35 PM
And, of course...

Hack attacks hit Bitcoin exchange rates (http://www.bbc.co.uk/news/technology-22026961)

DenverBrit
04-05-2013, 02:37 PM
And so it begins.

Requiem
04-05-2013, 04:46 PM
What the **** is a BitCoin? Internet currency!? Real money ain't no thang. Spend it out da roof.

Arkie
04-09-2013, 11:04 AM
What the **** is a BitCoin? Internet currency!? Real money ain't no thang. Spend it out da roof.

Bitcoin has tripled in value since we started talking about it 9 days ago. I'm convinced cryptocurrency will eventually replace our money. Maybe not completely, but like e-mail did to the postal system, or like Napster did to the music industry. It's so much easier to deal with your peers without a middleman.

elsid13
04-09-2013, 02:02 PM
Bitcoin has tripled in value since we started talking about it 9 days ago. I'm convinced cryptocurrency will eventually replace our money. Maybe not completely, but like e-mail did to the postal system, or like Napster did to the music industry. It's so much easier to deal with your peers without a middleman.

That really not a bold predication because it already happening and has been happening since we saw credit and debt cards become widely available. The only thing paper money is an easy portable exchange method. Technology is providing easier safer method for this exchange to occur.

Arkie
04-09-2013, 05:30 PM
That really not a bold predication because it already happening and has been happening since we saw credit and debt cards become widely available. The only thing paper money is an easy portable exchange method. Technology is providing easier safer method for this exchange to occur.

All of that is tied to US dollars or some other government's fiat. It still has to go through a central bank. Bitcoin is completely decentralized. It can't be manipulated or counterfeited. It's more divisible. In fact, one bitcoin would have to be worth $1 million for it's smallest unit to equal our penny. It's easier to exchange online, and it can eventually be just as easy to exchange in physical form as our paper money.

W*GS
04-09-2013, 05:32 PM
Bitcoin is completely decentralized. It can't be manipulated or counterfeited.

It can just be hacked.

Arkie
04-09-2013, 05:56 PM
It can just be hacked.

So can any internet bank. The bitcoin itself is untouchable and recorded on thousands of servers around the world in blockchains as it's mined. This part of it can't be hacked. The value is even more secure than USD. It can't be manipulated by non-market forces. Bitcoin can be lost or stolen like cash, but it can also be kept just as safe, from cold storage to paper records of the Bitcoin addresses locked up in a safe box.

W*GS
04-09-2013, 07:26 PM
So can any internet bank. The bitcoin itself is untouchable and recorded on thousands of servers around the world in blockchains as it's mined. This part of it can't be hacked. The value is even more secure than USD. It can't be manipulated by non-market forces. Bitcoin can be lost or stolen like cash, but it can also be kept just as safe, from cold storage to paper records of the Bitcoin addresses locked up in a safe box.

http://www.orangemane.com/BB/showpost.php?p=3825657&postcount=32

elsid13
04-10-2013, 02:38 AM
All of that is tied to US dollars or some other government's fiat. It still has to go through a central bank. Bitcoin is completely decentralized. It can't be manipulated or counterfeited. It's more divisible. In fact, one bitcoin would have to be worth $1 million for it's smallest unit to equal our penny. It's easier to exchange online, and it can eventually be just as easy to exchange in physical form as our paper money.

You might want to go reread history and look at the banking crises of the 1800s to understand why there is central bank. Bitcoin follows that model pretty closely.

alkemical
04-10-2013, 08:16 AM
There are challenges with BitCoin, but I fully endorse it. We're looking at accepting payments for it with our business.

baja
04-10-2013, 08:58 AM
Remember I was the one that told you to buy bitcoin. Now I'm telling you to sell because it is being speculated up. When this ballon pops it will be heard around the world. It will probably go up for a while but when it crashes it will do so in free fall style. After it crashes buy all you can... baja

Arkie
04-10-2013, 09:38 AM
Remember I was the one that told you to buy bitcoin. Now I'm telling you to sell because it is being speculated up. When this ballon pops it will be heard around the world. It will probably go up for a while but when it crashes it will do so in free fall style. After it crashes buy all you can... baja

I remember well. It was like 11 days ago.

I tried to buy some at $90. Couldn't get in as I watched go up to $140. I got in when it came down to $126, but I haven't been able to get anymore with the huge demand.

It already has "crashed" a few times. I didn't know about bitcoin when it reached $1. I read that nobody could believe 1 bitcoin actually reached parity with $1 of "real money" in February 2011. They were saying it was huge bubble then. The truth is nobody knows where the top is.

I wonder when 1 bitcoin surpasses 1 oz. of gold? Any predictions?

Arkie
04-10-2013, 09:46 AM
You might want to go reread history and look at the banking crises of the 1800s to understand why there is central bank. Bitcoin follows that model pretty closely.

Because they thought one central bank could be less corrupt than hundreds of decentralized banks. Bitcoin is the only popular currency that doesn't require a trusted 3rd party. It can't even follow the banking crises models without actual banks. This is a new revolution.

DenverBrit
04-11-2013, 03:29 PM
Bitcoin really is nothing more than a speculative play.....or revenge of the nerds. Maybe if they can find a sensible way to stablize it and keep it stable, it will serve a function, but for now, it's a hackers wet dream.

Bitcoin Is No Longer a Currency
It's the ultimate dotcom stock

Bitcoin might be a bubble or it might be THE FUTURE, but there's one thing it's not: a currency. It's a tech stock. The question is whether it's Pets.com or Paypal.

http://www.theatlantic.com/business/archive/2013/04/bitcoin-is-no-longer-a-currency/274859/

Bitcoin crashes, losing nearly half of its value in six hours
Plunge happens on the same day one anonymous redditor made it rain in Bitcoin.

On Wednesday afternoon, the Bitcoin bubble appears to have burst. As of this writing, its current value is around $160—down from a high of $260. (It fell as low as $130 today.)

Though it wasn't the original intent, BTC is now a commodity. People don't spend; they hoard, hoping to cash in. Well, it looks like they cashed in.

http://arstechnica.com/business/2013/04/bitcoin-crashes-losing-nearly-half-of-its-value-in-six-hours/

baja
04-11-2013, 05:10 PM
Bitcoin really is nothing more than a speculative play.....or revenge of the nerds. Maybe if they can find a sensible way to stablize it and keep it stable, it will serve a function, but for now, it's a hackers wet dream.

Bitcoin Is No Longer a Currency
It's the ultimate dotcom stock



http://www.theatlantic.com/business/archive/2013/04/bitcoin-is-no-longer-a-currency/274859/

Bitcoin crashes, losing nearly half of its value in six hours
Plunge happens on the same day one anonymous redditor made it rain in Bitcoin.




http://arstechnica.com/business/2013/04/bitcoin-crashes-losing-nearly-half-of-its-value-in-six-hours/


This is being done by the banksters, They do not want BitCoin to survive and will do what ever they can to be rid of it.


All this will do is stop speculators other than the banks so in the long run the Bit Coin will survive and thrive. Let it bottom out and buy all you can

mhgaffney
04-11-2013, 05:23 PM
You might want to go reread history and look at the banking crises of the 1800s to understand why there is central bank. Bitcoin follows that model pretty closely.

You have it backwards.

The crises of the 1800s, panics etc, were deliberately caused by the big banks to scare the nation into the false idea that a central bank would avert these events.

That has long since been proven false.

MHG

DenverBrit
04-11-2013, 05:30 PM
This is being done by the banksters, They do not want BitCoin to survive and will do what ever they can to be rid of it.


All this will do is stop speculators other than the banks so in the long run the Bit Coin will survive and thrive. Let it bottom out and buy all you can

Problem is, a currency needs a central control system, which of course is the opposite of the Bitcoin philosophy. Without a linkage to world currencies or Gold, how will it stabilize and hold realistic value?

Imagine the dollar fluctuating in the same manner; you'd go broke buying just basics. Gold is a much better play than an artificial 'digital' currency that is played like a speculative commodity. Its very methodology makes it inherently unstable and wide open to hackers and manipulators.

It needs to get back to it's opening values, stabilize and link itself to Gold.... ..which would devastate most Bitcoin investors who overpaid for it. I see a 'split' as the most palatable play, which would also substantially increase the number of Bitcoins in circulation........which would help make it more viable, and soften the blow for early adopters.

Meck77
04-11-2013, 05:50 PM
I remember well. It was like 11 days ago.

I tried to buy some at $90.

Good thing you didn't. Down to $72.00. https://www.bitstamp.net/



It's on a wild ride, halts in trading, meh not my cup of tea.
http://blogs.marketwatch.com/thetell/2013/04/11/bitcoins-biggest-exchange-halts-trade-a-victim-of-our-own-success/

Maybe if it comes crashing down I'll buy some and forget about them for 20 years.

DenverBrit
04-11-2013, 06:05 PM
Good thing you didn't. Down to $72.00. https://www.bitstamp.net/



It's on a wild ride, halts in trading, meh not my cup of tea.
http://blogs.marketwatch.com/thetell/2013/04/11/bitcoins-biggest-exchange-halts-trade-a-victim-of-our-own-success/

Maybe if it comes crashing down I'll buy some and forget about them for 20 years.

This site has it listed with a spread that makes no sense.

Last: $ 99.00000
Bid: $ 79.00000 Ask: $ 99.00000
Dark Bid: false Dark Ask: false
Monthly volume: 14,127.79153 BTC

Tradehill orders are executing normally. Other major Bitcoin exchanges are experiencing technical issues at the moment.

And also from the site, a bizarre pitch mean to reassure? :rofl:

Tradehill shut down and returned client funds in January 2012 due to payments fraud and regulatory uncertainty in the US. Tradehill was the first institution in the Bitcoin market to hold millions of dollars in user funds and process full payouts. Every other Bitcoin company that achieved scale either lost money in a hack or went insolvent.
https://www.tradehill.com/

Fedaykin
04-11-2013, 06:09 PM
Good thing you didn't. Down to $72.00.

.. and dropping like a rock (currently $61), as all the people who have large reserves start cashing out.

Like I said before, a few people are going to get rich -- everyone else is going to get screwed, just like all bubbles.

Arkie
04-11-2013, 06:46 PM
.. and dropping like a rock (currently $61), as all the people who have large reserves start cashing out.

Like I said before, a few people are going to get rich -- everyone else is going to get screwed, just like all bubbles.

That's usually how short term trading works. The most you can lose is 100% of your investment. Those who bought bitcoin at the beginning of the year are up 1000%. That's still short term. ;) Long term, I see bitcoin going to either 0 or 10,000+. That's still a great risk/reward payoff. The last time bitcoin crashed it went from $31 down to $3. This time it has to fall from $260 to $26 to see the same drop. Next time it could fall from $2000 to $200, but I doubt it will have the same volatility in a few years.

DenverBrit
04-11-2013, 06:54 PM
That's usually how short term trading works. The most you can lose is 100% of your investment. Those who bought bitcoin at the beginning of the year are up 1000%. That's still short term. ;) Long term, I see bitcoin going to either 0 or 10,000+. That's still a great risk/reward payoff. The last time bitcoin crashed it went from $31 down to $3. This time it has to fall from $260 to $26 to see the same drop. Next time it could fall from $2000 to $200, but I doubt it will have the same volatility in a few years.

But it's not remotely how a currency works.

It will remain volatile as long as it is traded as a commodity. It has to be indexed to something....gold?......or it will be just another worthless dot com play; volatile with unsustainable valuations and no substance to fall back on.

Fedaykin
04-11-2013, 07:16 PM
That's usually how short term trading works. The most you can lose is 100% of your investment. Those who bought bitcoin at the beginning of the year are up 1000%. That's still short term. ;) Long term, I see bitcoin going to either 0 or 10,000+. That's still a great risk/reward payoff. The last time bitcoin crashed it went from $31 down to $3. This time it has to fall from $260 to $26 to see the same drop. Next time it could fall from $2000 to $200, but I doubt it will have the same volatility in a few years.

I agree. But what you're describing is "reasonable" for a commodity, not a currency.

Arkie
04-11-2013, 07:19 PM
But it's not remotely how a currency works.

It will remain volatile as long as it is traded as a commodity. It has to be indexed to something....gold?......or it will be just another worthless dot com play; volatile with unsustainable valuations and no substance to fall back on.

I'll concede that it's more of a commodity at this very early stage. It's not a worthless dot com play though. Bitcoins take expensive equipment and real energy to mine.

bitcoin mining (https://www.google.com/search?safe=off&q=bitcoin+mine&bav=on.2,or.r_cp.r_qf.&bvm=bv.45175338,d.aWc&biw=1366&bih=667&um=1&ie=UTF-8&hl=en&tbm=isch&source=og&sa=N&tab=wi&ei=wG1nUde5OYTzyAHex4HICg#um=1&safe=off&hl=en&tbm=isch&sa=1&q=bitcoin+mining&oq=bitcoin+mining&gs_l=img.3..0l10.5380.6439.0.6942.4.2.0.2.2.0.107. 181.1j1.2.0...0.0...1c.1.9.img.ETNptKY9Y9o&bav=on.2,or.r_cp.r_qf.&bvm=bv.45175338,d.aWc&fp=4cf2ac02f56e200c&biw=1366&bih=667)

baja
04-11-2013, 07:23 PM
I agree. But what you're describing is "reasonable" for a commodity, not a currency.

actually it's the greatest commodity ever when you consider the bulk of the buyers are hedging against the failure of fiat money

Fedaykin
04-11-2013, 07:31 PM
I'll concede that it's more of a commodity at this very early stage. It's not a worthless dot com play though. Bitcoins take expensive equipment and real energy to mine.

bitcoin mining (https://www.google.com/search?safe=off&q=bitcoin+mine&bav=on.2,or.r_cp.r_qf.&bvm=bv.45175338,d.aWc&biw=1366&bih=667&um=1&ie=UTF-8&hl=en&tbm=isch&source=og&sa=N&tab=wi&ei=wG1nUde5OYTzyAHex4HICg#um=1&safe=off&hl=en&tbm=isch&sa=1&q=bitcoin+mining&oq=bitcoin+mining&gs_l=img.3..0l10.5380.6439.0.6942.4.2.0.2.2.0.107. 181.1j1.2.0...0.0...1c.1.9.img.ETNptKY9Y9o&bav=on.2,or.r_cp.r_qf.&bvm=bv.45175338,d.aWc&fp=4cf2ac02f56e200c&biw=1366&bih=667)

*LMAO* that's not "expensive equipment" that's commodity hardware that millions of people have. See: All relatively modern computers (PCS, XBox, etc.) that run games. The bitcoin "mining" process is highly paralleizable, just like 3d graphics processing.

It's hard to do profitably mind you, because the electricity to run the hardware to mine the bitcoins is more expensive than the profit. This is why bitcoin mining using hacked computers in botnets is so popular, so that the "miners" can use other people's electricity to mine.

Fedaykin
04-11-2013, 07:33 PM
actually it's the greatest commodity ever when you consider the bulk of the buyers are hedging against the failure of fiat money

When/if the dollar tanks, so will bitcoin. It's a fantasy currency that only has use in a society with enough wealth to do digital commerce.

Good luck trading a collection of binary digits to buy seeds when the **** hits the fan.

Fedaykin
04-11-2013, 07:36 PM
*LMAO* that's not "expensive equipment" that's commodity hardware that millions of people have. See: All relatively modern computers (PCS, XBox, etc.) that run games. The bitcoin "mining" process is highly paralleizable, just like 3d graphics processing.

It's hard to do profitably mind you, because the electricity to run the hardware to mine the bitcoins is more expensive than the profit. This is why bitcoin mining using hacked computers in botnets is so popular, so that the "miners" can use other people's electricity to mine.

And more importantly, in order for the result of "mining" to have value, it has to produce something with actual value. Doesn't matter how much effort it took to create it is that effort does not materilize as something valuable.

When you mine gold, you have gold.

When you min bitcoins, you have a collection of binary data with exactly zero intrinsic value and exactly zero backing it.

Even the lowly fiat dollar has more backing than that (i.e. the U.S. economy).

baja
04-11-2013, 07:37 PM
When/if the dollar tanks, so will bitcoin. It's a fantasy currency that only has use in a society with enough wealth to do digital commerce.

Good luck trading a collection of binary digits to buy seeds when the **** hits the fan.


True but most buyers don't see it that way.

DenverBrit
04-11-2013, 08:10 PM
I'll concede that it's more of a commodity at this very early stage. It's not a worthless dot com play though. Bitcoins take expensive equipment and real energy to mine.

bitcoin mining (https://www.google.com/search?safe=off&q=bitcoin+mine&bav=on.2,or.r_cp.r_qf.&bvm=bv.45175338,d.aWc&biw=1366&bih=667&um=1&ie=UTF-8&hl=en&tbm=isch&source=og&sa=N&tab=wi&ei=wG1nUde5OYTzyAHex4HICg#um=1&safe=off&hl=en&tbm=isch&sa=1&q=bitcoin+mining&oq=bitcoin+mining&gs_l=img.3..0l10.5380.6439.0.6942.4.2.0.2.2.0.107. 181.1j1.2.0...0.0...1c.1.9.img.ETNptKY9Y9o&bav=on.2,or.r_cp.r_qf.&bvm=bv.45175338,d.aWc&fp=4cf2ac02f56e200c&biw=1366&bih=667)

The only value Bitcoins have is whatever the next guy will pay.

Calling it a commodity is generous; commodities have a market value, like housing, they have a 'floor,' you don't lose everything......assuming it's not a futures margin.
Bitcoins are imaginary 'monopoly' money and an interesting speculative gamble where you can lose 'everything.'

To be a 'currency' it must be indexed if it is to be stable. For now, it's a high risk, short term play. There is money to be made if you can afford to lose it all.

Blackjack is safer. :)

Fedaykin
04-11-2013, 08:23 PM
The only value Bitcoins have is whatever the next guy will pay.

Calling it a commodity is generous; commodities have a market value, like housing, they have a 'floor,' you don't lose everything......assuming it's not a futures margin.
Bitcoins are imaginary 'monopoly' money and an interesting speculative gamble where you can lose 'everything.'

To be a 'currency' it must be indexed if it is to be stable. For now, it's a high risk, short term play. There is money to be made if you can afford to lose it all.

Blackjack is safer. :)

^^ this sums it up very tidily

alkemical
04-12-2013, 02:39 PM
http://www.att.com/shop/apps/isis-mobile-wallet.html#fbid=u0WyP0t5lFY

Technologies like this will enable competing currencies even more.

Arkie
04-12-2013, 04:12 PM
The Winklevoss Twins who helped Zuckerberg create facebook have one of the largest stakes in Bitcoin.

Never Mind Facebook; Winklevoss Twins Rule in Digital Money (http://finance.yahoo.com/news/big-investors-emerge-bitcoin-gets-191114595.html)

The twins, the first prominent figures in the largely anonymous bitcoin world to publicly disclose a big stake, say they own nearly $11 million worth.

“People say it’s a Ponzi scheme, it’s a bubble,” said Cameron Winklevoss. “People really don’t want to take it seriously. At some point that narrative will shift to ‘virtual currencies are here to stay.’ We’re in the early days.”

“We have elected to put our money and faith in a mathematical framework that is free of politics and human error,” Tyler Winklevoss said.

The brothers began dabbling in bitcoin last summer when the dollar value of a single coin was still in the single digits. To keep their holdings secure from hackers, they have taken the complex codes that represent their holdings off networked computers and saved them on small flash drives, putting the drives, in turn, in safe deposit boxes at banks in three different cities.

It’s hard to verify how the Winklevoss holdings compare with other bitcoin players, given the anonymity of accounts, and the twins say they believe that some early users of the system probably have holdings that are at least as large.

A Maltese company, Exante, started a hedge fund that the company says has bought up about 82,000 bitcoins — or about $10 million as of Thursday — with money from wealthy investors. A founder of the fund, Anatoli Knyazev, said his main concern was hackers and government regulators, who have so far mostly left the currency alone.

These investments were all in an uncertain state on Thursday after the big price swings and the shutdown of trading on Mt. Gox, a Japanese-based company that claims to handle 80 percent of all bitcoin trades. Mt. Gox said in a statement that the problems were a result of the currency’s popularity, making it impossible to process all the incoming orders. It added that it was not the victim of hackers but “instead victim of our own success!”

The 6-foot-5 Winklevoss brothers were unfazed. The brothers said they took advantage of the low prices to buy more.

“It has been four years and it has yet to be discredited as a viable alternative to fiat currency,” Tyler Winklevoss said. “We could be totally wrong, but we are curious to see this play out a lot more.”

DenverBrit
04-12-2013, 05:02 PM
Arkie, from your linked story.

“To say highly speculative would be the understatement of the century,” said Steve Hanke, a professor specializing in alternative currencies at Johns Hopkins University.

This is not a currency, it's a nerdfest. :giggle:

New coins are “mined” by programmers who solve mathematic riddles and can sell their coins on upstart exchanges.