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Poll: Is Bitcoin a Long-Term Alternative?
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Is Bitcoin a Long-Term Alternative?

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Old 11-20-2013, 10:02 AM   #26
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Originally Posted by Fedaykin View Post
That's an awesome analysis pulled directly out of your ass! Gratz!
The first part is reality. The last sentence was just my own guess.
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Old 11-20-2013, 10:11 AM   #27
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The first part is reality. The last sentence was just my own guess.
Yep, that's what I was commenting on. The problem is: math.

BTC does 50,000 transactions a day, and at current market Capitalization of $6bn can only replace 0.3% of M1. In other words, only 0.3% of commerce can occur in BTC at current valuation. If I own a business, why should I give a rats ass about the current 0.3% of my customers might have BTC and 0.0025% of all transactions (my est)?

To be a currency, BTC must grow enormously in usage. Because the supply is BTC is essentially fixed, that means the valuation of BTC much grow proportionally as well.
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Old 11-20-2013, 10:22 AM   #28
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Many places will convert it, ranging from extremely shady (blind drops at airports) to just mildly risky (sites with very poor security records that you have to give bank account info to).
People you trade with in person can be shady strangers at the airport or just your friends with smartphones. Coinbase.com is an American site based in San Francisco with a good reputation and good security. They need your info only if you are purchasing from your bank account or want to cash out to a bank account. That's only necessary because of the USD banking system. They don't need your info if they are just holding bitcoin you acquired from a friend or mined yourself.
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Old 11-20-2013, 10:26 AM   #29
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To be a currency, BTC must grow enormously in usage. Because the supply is BTC is essentially fixed, that means the valuation of BTC much grow proportionally as well.
Bitcoin can handle it. A Satoshi is the smallest fraction of a Bitcoin that can currently be sent. A satoshi equals 0.00000001 BTC, or $0.00000605. It's a lot cheaper than a penny and has plenty of room to appreciate.
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Old 11-20-2013, 10:37 AM   #30
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Bitcoin can handle it. A Satoshi is the smallest fraction of a Bitcoin that can currently be sent. A satoshi equals 0.00000001 BTC, or $0.00000605. It's a lot cheaper than a penny and has plenty of room to appreciate.
You're not understanding the issue. The issue is not the divisibility of the BTC, it's the wild changes in valuation (of ALL units unit) against the USD that it needs to undergo to be a viable currency.
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Old 11-20-2013, 10:56 AM   #31
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You're not understanding the issue. The issue is not the divisibility of the BTC, it's the wild changes in valuation (of ALL units unit) against the USD that it needs to undergo to be a viable currency.
Yeah, wildly erratic deflation is not exactly something you want in a replacement currency.
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Old 11-20-2013, 11:01 AM   #32
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Originally Posted by Arkie View Post
Coinbase.com is an American site based in San Francisco with a good reputation and good security. They need your info only if you are purchasing from your bank account or want to cash out to a bank account. That's only necessary because of the USD banking system. They don't need your info if they are just holding bitcoin you acquired from a friend or mined yourself.
Giving your bank account info to an internet site = at least mildly risky
Mining bitcoin = requires specialized knowledge, expensive up front investment in equipment, and free electricity to be profitable.
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Old 11-21-2013, 01:05 PM   #33
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The first airport bitcoin machine opened up in Turkey 2 days ago. That's a great idea. It accepts several currencies so you can transfer all of your unspent foreign currency to bitcoin before you hop on the plane. These will be popular in airports around the world. No need to travel with money anymore. Just get off the plane, go to the machine, and get however much foreign currency needed for your stay in that country.
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Old 11-21-2013, 02:47 PM   #34
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Originally Posted by Arkie View Post
The first airport bitcoin machine opened up in Turkey 2 days ago. That's a great idea. It accepts several currencies so you can transfer all of your unspent foreign currency to bitcoin before you hop on the plane. These will be popular in airports around the world. No need to travel with money anymore. Just get off the plane, go to the machine, and get however much foreign currency needed for your stay in that country.
Like an ATM?
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Old 11-21-2013, 08:19 PM   #35
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http://buttcoin.org/
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Old 11-22-2013, 08:27 AM   #36
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"Bitcoin is a Ponzi scheme libertarians use to make money off each other"
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Old 11-22-2013, 09:41 AM   #37
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Interesting bit:

"Indeed, researchers from the University of California-San Diego and George Mason University found that 64 percent of all bitcoins are being hoarded in accounts that have never been spent. And of the bitcoins that are being spent, a full 60 percent are on the gambling site Satoshi Dice."


So, in other words only 15% of bitcoins are being used for anything other than as an investment or for gambling on one particular site.

Want to guess what the overwhelming majority of the rest are used for? Hint: not legal purposes.
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Old 11-22-2013, 09:58 AM   #38
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The author lost credibility saying it's a Ponzi scheme. He either doesn't know the characteristics of a Ponzi scheme, doesn't understand how bitcoin works, or he's trying to mislead people who haven't tried it yet. It can be obsessive. It can be compared to a mania or bubble, but not a Ponzi scheme. Everybody knows how many bitcoins exist and can make judgments based on this knowledge. All profits come from appreciating perception of market value. There is no central authority moving money from new investors to old investors. If this is a Ponzi scheme, then Ponzi schemes have been redefined to include all commodities.
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Old 11-22-2013, 10:18 AM   #39
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Quote:
Originally Posted by Arkie View Post
The author lost credibility saying it's a Ponzi scheme. He either doesn't know the characteristics of a Ponzi scheme, doesn't understand how bitcoin works, or he's trying to mislead people who haven't tried it yet. It can be obsessive. It can be compared to a mania or bubble, but not a Ponzi scheme. Everybody knows how many bitcoins exist and can make judgments based on this knowledge. All profits come from appreciating perception of market value. There is no central authority moving money from new investors to old investors. If this is a Ponzi scheme, then Ponzi schemes have been redefined to include all commodities.
He is somewhat correct.

A case study report by the European Central Bank observes that the Bitcoin currency system shares some characteristics with Ponzi schemes, but also has characteristics that are distinct from the common aspects of such schemes.
http://www.ecb.europa.eu/pub/pdf/oth...es201210en.pdf

But whatever it is, it's proven too volatile and unstable to be called a 'currency.'
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Old 11-22-2013, 11:00 AM   #40
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Originally Posted by Arkie View Post
The author lost credibility saying it's a Ponzi scheme. He either doesn't know the characteristics of a Ponzi scheme, doesn't understand how bitcoin works, or he's trying to mislead people who haven't tried it yet. It can be obsessive. It can be compared to a mania or bubble, but not a Ponzi scheme. Everybody knows how many bitcoins exist and can make judgments based on this knowledge. All profits come from appreciating perception of market value. There is no central authority moving money from new investors to old investors. If this is a Ponzi scheme, then Ponzi schemes have been redefined to include all commodities.
Not a ponzi scheme, but the sentiment is correct: it's something that looks to be about certain folks making a lot of money on total bull.
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Old 11-22-2013, 11:08 AM   #41
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An argument could easily be made that it's a pump and dump scam.

http://en.wikipedia.org/wiki/Pump_and_dump
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Old 11-22-2013, 11:18 AM   #42
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"A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation." - http://en.wikipedia.org/wiki/Ponzi_scheme
Not to be confused with economic bubble.

Quote:
An economic bubble: A bubble is similar to a Ponzi scheme in that one participant gets paid by contributions from a subsequent participant (until inevitable collapse). A bubble involves ever-rising prices in an open market (for example stock, housing, or tulip bulbs) where prices rise because buyers bid more because prices are rising. Bubbles are often said to be based on the "greater fool" theory. As with the Ponzi scheme, the price exceeds the intrinsic value of the item, but unlike the Ponzi scheme, there is no single person misrepresenting the intrinsic value.

Bitcoin may be in a bubble now, but it's not unsustainable. It worked for 3 years at much lower prices. It will keep going whether it's $10 or $10,000. People will save it and spend it at any price. The condo in Portugal that sold for 850 bitcoins a couple of weeks ago would still sell for 400 bitcoins today. Like Fed said, it would have to be substantially higher to support even a small percentage of the economy. The market still perceives this as not very likely, and $750 is actually cheap. It's only 75% of the $1000 milestone, a magnitude of 10 below 10,000. Bitcoin has been growing at these magnitudes in it's short existence. It's speculative. No doubt about that. I personally think it's cheap even if it only becomes the internet currency for drugs and gambling, but I really think it's much more useful than that.
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Old 11-27-2013, 08:58 AM   #43
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November 27: MILESTONE bitcoin reaches $1000
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Old 12-03-2013, 06:25 PM   #44
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Default Why didn't I think of that?

A College Kid Made More Than $24,000 Yesterday Just By Waving This Sign On ESPN

The guy received 100 transactions totalling more than 22 bitcoins. At current prices above $1,100 per bitcoin, the kid has made over $24,000.

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Old 12-06-2013, 01:40 PM   #45
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http://www.huffingtonpost.com/2013/1...n_4400392.html

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Well, it had to happen some time: Bitcoin is crashing.

The price of the crypto-currency tumbled nearly 21 percent on Friday to $877.46 on trading site Mt. Gox and has fallen more than 29 percent since closing at a record high of $1,237.96 on Wednesday, according to Bitcoin data tracker BitcoinCharts.com. (Story continues after chart, courtesy of bitcoin.clarkmoody.com.)

bitcrash

Much of Bitcoin's meteoric rise in the past few months has been due to speculative trading in China, the Wall Street Journal pointed out earlier this week (subscription only).

China's central bank shot a gigantic hole in that trade on Thursday by telling Chinese banks they couldn't use the untraceable digital currency, calling it "not a currency in the real meaning of the word."

That doesn't mean Chinese investors can't keep speculating in Bitcoin, but it is a blow to the credibility of the four-year-old currency. Created by an unknown hacker or hackers known as Satoshi Nakamoto, Bitcoin has the potential to be a long-lasting digital alternative to national currencies like the U.S. dollar and the Chinese yuan. But it has also become favored for illicit uses such as money laundering and drug-dealing, raising concerns about whether policy makers will ever embrace it fully.

Regardless of Bitcoin's long-term potential, there is little doubt its price has jumped too far too quickly: It traded for less than $100 just six months ago.

An official for Bitcoin exchange BTC China, where a growing percentage of Bitcoin trading takes place these days, told the WSJ that most Chinese investors are just hoping prices will keep rising long enough for them to sell and turn a profit. The People's Bank of China, in its statement on Thursday, reminded traders that might not be the soundest approach to investment, according to the New York Times:

“The price can be easily controlled by speculators, creating severe turbulence and huge risks," the PBOC reportedly said. "Ordinary investors who blindly follow the crowd can easily suffer major losses.”
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Old 12-06-2013, 04:35 PM   #46
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Much of Bitcoin's meteoric rise in the past few months has been due to speculative trading in China
I thought it was a ponzi scheme that libertarians were using to make money off each other.

Anyway, Fed thought nobody would ever spend it. The best time to spend it is when everybody perceives it's in a bubble.

Bitcoin May Be in a 'Bubble' but It Can Also Buy You a Tesla Model S

A Lamborghini dealership in Costa Mesa, California, says it just sold a Tesla Motors Model S for bitcoins and will accept the virtual currency for any future car purchases.

A Tesla costs 60 bitcoins, but if you think it's a bubble, then you need to act fast!
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Old 12-06-2013, 04:59 PM   #47
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I thought it was a ponzi scheme that libertarians were using to make money off each other.

Anyway, Fed thought nobody would ever spend it. The best time to spend it is when everybody perceives it's in a bubble.

Bitcoin May Be in a 'Bubble' but It Can Also Buy You a Tesla Model S

A Lamborghini dealership in Costa Mesa, California, says it just sold a Tesla Motors Model S for bitcoins and will accept the virtual currency for any future car purchases.

A Tesla costs 60 bitcoins, but if you think it's a bubble, then you need to act fast!
Oh look, yet another high profile purchase. Whoop de do! Meanwhile, the vast bulk of bitcoins are still just being used as an 'investment'.

And, Tesla just lost about 1/3 of their asking price as the price drops from $1250 to $850 in < 2 days (assuming they didn't cash out immediately)...

I know I just can't wait to us a 'currency' that changes in value that much so frequently! Not that boring old USD where what I'm spending doesn't change by 30% overnight. Give me the thrill of never knowing how much I'm actually spending! Yee-haw!
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Old 12-18-2013, 12:32 PM   #48
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Bitcoin crashed 50% just today.

Why I want Bitcoin to die in a fire

Quote:
To editorialize briefly, BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions. Which is fine if you're a Libertarian, but I tend to take the stance that Libertarianism is like Leninism: a fascinating, internally consistent political theory with some good underlying points that, regrettably, makes prescriptions about how to run human society that can only work if we replace real messy human beings with frictionless spherical humanoids of uniform density (because it relies on simplifying assumptions about human behaviour which are unfortunately wrong).
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Old 12-19-2013, 06:48 AM   #49
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China drove the price up to 7,588 yuan ($1,250). That's why the price on the western exchanges almost reached that price. It would be worth only $10 if it were just Libertarian money. It was growing faster than the most optimistic projections last summer which had the price quadruple to $400 by the end of the year and reaching $1000 by next April. Even that was crazy to imagine back then.
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Old 05-22-2014, 04:33 PM   #50
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- It was four years ago today that the first purchase was made using bitcoin, when a Florida programmer bought two Papa John’s (PZZA +2.48%) pizzas.

Mr. Hanyecz was a programmer and coder living in Jacksonville, Fla., and part of the fledgling bitcoin community. On a bitcoin forum, he offered 10,000 bitcoins to anybody who would buy him a pizza. Today that’s worth about $5 million at current prices, but back then it was worth about $60. Hanyecz figured that was enough for two pies and compensation for somebody’s time.

He finally found a taker, another coder living in the U.K., who called a Papa John’s in Jacksonville, placed the order, and paid with his credit card. Hanyecz sent over the 10,000 bitcoins, and a somewhat confused deliveryman showed up at his door with two pepperoni pizzas. “Pizza delivery from London,” he said in an unsure voice. Hanyecz left the offer open, and bought several more pies. But the publicity surrounding his purchase brought more people into bitcoin. As a result, he said, the mining level of difficulty increased, and Hanyecz found himself unable to harvest as many bitcoin as he used to. He then dropped the offer.

In the four years since, it’s become much easier, although still very limited, to spend bitcoins, and it has more utility online than in the real world, which is to expected with a digital currency. So far as we know, there aren’t any major pizza chains that take bitcoin (you can, however, go through eGifter, which takes bitcoin), although if you’re in Brooklyn, drop in to Lean Crust Pizza on Fulton Street. We reached out to Papa John’s for comment, by the way. The company didn’t respond, and we’re not sure if it’s aware of its place in bitcoin history.

-And on Bitcoin Pizza Day, the digital currency’s price jumped above $500. This is the first time the price has been over $500 since late March, according to the Coindesk Bitcoin Index. After a dismal four-month start to 2014, this week is bringing some renewed hope that good news might again be in the driving seat for bitcoin.

Still, as we’ve warned repeatedly over the past week, history tells you to be wary. Volatility will be back.

http://blogs.wsj.com/moneybeat/2014/...oin-pizza-day/
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