Author “What the hell is a bitcoin?”  (Read 17883 times)

0 Members and 1 Guest are viewing this topic.

“What the hell is a bitcoin?”
« on: December 20, 2013, 11:35:32 PM »
Just 10 months ago, a bitcoin sold for a measly $13, a couple of weeks back the price of a bitcoin topped $900! Bitcoin is a digital currency, meaning it’s money controlled and stored entirely by computers spread across the internet. Bitcoin isn’t just a currency, like dollars or euros or yen. It’s a way of making payments, like PayPal or the Visa credit card network. It lets you hold money, but it also lets you spend it and trade it and move it from place to place, almost as cheaply and easily as you’d send an email.

In a nutshell bitcoin is a re-imagining of international finance, something that breaks down barriers between countries and frees currency from the control of federal governments. So what is the future of bitcoin?

In my city I can buy lunch and pay with it. If people accept it as currency then it has value. From the Wall Street Journal;

Bitcoin Couple Travels the World Using Virtual Cash
World-Wide Odyssey Spanned Three Continents and Proved One Can Live on Bitcoin Alone
http://online.wsj.com/news/articles/SB10001424052702303789604579196171277465460

Here's one of the most informative articles about Bitcoin and what it is worth. If you want to learn the basics then this is it.
http://simonwinder.com/2013/11/bitcoin-how-high-can-it-go/

Will Bitcoin be illegal in the USA? I will bet anyone one Bitcoin in the long run that it won't be. Here's why... 

Building Better Bitcoins
By Stephen L. Carter 2013-11-29T14:00:01Z
http://www.bloomberg.com/news/2013-11-29/building-better-bitcoins.html

As the author of the article above writes, "I hope that bitcoins make it. To be sure, they aren’t without flaw. They appeal nevertheless to my libertarian side, because they challenge the control of money by governments that too often see inflation and deflation as instruments of policy. The virtual currencies suggest the possibility of a future in which networks of individuals can make transactions for their own interests, not beyond the reach of government scrutiny but beyond the reach of government manipulation."

Taken directly from the article linked above...

On this note, let’s give the last word to the economist Pippa Malmgren, explaining in a recent online symposium why she believes that bitcoins are already money:

“Money becomes real when people have faith in it. Governments have no monopoly on that, which is why they spend a lot of time putting many symbols of faith and trust on the currency from pictures of sovereigns like the queen or the president to hidden symbols of power like pyramids and seals. They would not need to if it stood on its own. Faith can be earned and it can be lost. The problem with bitcoin is that people are afraid a power outage or a hacker or bad management could erode or destroy the value of a bitcoin. But, then again, governments are doing their best to erode confidence in fiat money, too.”

Re: “What the hell is a bitcoin?”
« Reply #1 on: December 22, 2013, 05:00:43 PM »
I was interested to learn you can actually "mine" for bitcoins:

https://en.bitcoin.it/wiki/Mining

Re: “What the hell is a bitcoin?”
« Reply #2 on: December 23, 2013, 01:51:07 AM »
I suspect that within a year, maybe two, we will be talking about the next online currency. I don't see a future in bitcoin but then again maybe I have just made the equivalent of a vote against facebook. Time will tell I guess.


Re: “What the hell is a bitcoin?”
« Reply #3 on: December 23, 2013, 02:16:22 AM »
The us govt won't even allow online poker because of lost tax revenues. No way in hell they're gonna let some online currency cut them off at the knees and take away all of their power. Without the ability to tax they have nothing. The thought is frightening...how would they continue to take care of us?  8)

Re: “What the hell is a bitcoin?”
« Reply #4 on: December 23, 2013, 06:29:01 PM »
The us govt won't even allow online poker because of lost tax revenues. No way in hell they're gonna let some online currency cut them off at the knees and take away all of their power. Without the ability to tax they have nothing. The thought is frightening...how would they continue to take care of us?  8)

I have also been thinking about what the US did to on-line poker sites but what you have failed to realize is that the initial US response was just that... a reactionary response. The US federal government has caved in to consumer demand. Yes it has taken some time... well a lot of time but that was then and this is now. Individual states are rolling out new online wagering houses and in ten years it will be legal across your country. http://news.yahoo.com/online-gambling-gains-momentum-us-035535292.html The reason being is that they have realized the cash cow they missed out on. Most people who wanted to gamble just moved out of the US to Canada and other countries taking their money with them. I am betting (pun intended) that the government will not make those mistakes again.

The real proof is that major corporations are already accepting it; http://www.businessinsider.com/overstockcom-will-take-bitcoin-next-year-2013-12


Re: “What the hell is a bitcoin?”
« Reply #5 on: January 06, 2014, 01:14:38 AM »
Just 10 months ago, a bitcoin sold for a measly $13, a couple of weeks back the price of a bitcoin topped $900! Bitcoin is a digital currency, meaning it’s money controlled and stored entirely by computers spread across the internet. Bitcoin isn’t just a currency, like dollars or euros or yen. It’s a way of making payments, like PayPal or the Visa credit card network. It lets you hold money, but it also lets you spend it and trade it and move it from place to place, almost as cheaply and easily as you’d send an email.

In a nutshell bitcoin is a re-imagining of international finance, something that breaks down barriers between countries and frees currency from the control of federal governments. So what is the future of bitcoin?

In my city I can buy lunch and pay with it. If people accept it as currency then it has value. From the Wall Street Journal;

Bitcoin Couple Travels the World Using Virtual Cash
World-Wide Odyssey Spanned Three Continents and Proved One Can Live on Bitcoin Alone
http://online.wsj.com/news/articles/SB10001424052702303789604579196171277465460

Here's one of the most informative articles about Bitcoin and what it is worth. If you want to learn the basics then this is it.
http://simonwinder.com/2013/11/bitcoin-how-high-can-it-go/

Will Bitcoin be illegal in the USA? I will bet anyone one Bitcoin in the long run that it won't be. Here's why... 

Building Better Bitcoins
By Stephen L. Carter 2013-11-29T14:00:01Z
http://www.bloomberg.com/news/2013-11-29/building-better-bitcoins.html

As the author of the article above writes, "I hope that bitcoins make it. To be sure, they aren’t without flaw. They appeal nevertheless to my libertarian side, because they challenge the control of money by governments that too often see inflation and deflation as instruments of policy. The virtual currencies suggest the possibility of a future in which networks of individuals can make transactions for their own interests, not beyond the reach of government scrutiny but beyond the reach of government manipulation."

Taken directly from the article linked above...

On this note, let’s give the last word to the economist Pippa Malmgren, explaining in a recent online symposium why she believes that bitcoins are already money:

“Money becomes real when people have faith in it. Governments have no monopoly on that, which is why they spend a lot of time putting many symbols of faith and trust on the currency from pictures of sovereigns like the queen or the president to hidden symbols of power like pyramids and seals. They would not need to if it stood on its own. Faith can be earned and it can be lost. The problem with bitcoin is that people are afraid a power outage or a hacker or bad management could erode or destroy the value of a bitcoin. But, then again, governments are doing their best to erode confidence in fiat money, too.”

Very cool

Re: “What the hell is a bitcoin?”
« Reply #6 on: January 06, 2014, 03:56:11 AM »
http://o.canada.com/technology/personal-tech/kanye-west-inspired-cryptocurrency-coinye-west-aims-to-simplify-bitcoin-mining/

"Kanye West inspired cryptocurrency, Coinye West, aims to simplify Bitcoin mining
Strange cryptocurrencies are starting to become more common"

Is 2014 the year cryptocurrency jumped the shark?

Re: “What the hell is a bitcoin?”
« Reply #7 on: January 18, 2014, 06:44:06 AM »
Is 2014 the year cryptocurrency jumped the shark?

I'll bet you one bit coin that crytocuttency is here to stay. In fact I'll bet that it only grows bigger this year.

You really need to open those eyes of yours and take a look at what is really going on with bitcoin or you'll miss out on the next big thing.
Bitcoin Breaks Out, You Can Now Pay The IRS In Cryptocurrency http://www.forbes.com/sites/benkepes/2014/01/15/bitcoin-breaks-out-you-can-now-pay-the-irs-in-cryptocurrency/

The fact is the US government has almost already approved the use of bitcoin a few months back when the; Bank of America says Bitcoin could become a 'major means of payment' and Analysts at Bank of America Merrill Lynch issued the bank's first research report today on Bitcoin, the virtual currency that approximates cash on the internet, concluding that the currency has the potential to become a "major means of payment for ecommerce" as well as a "serious competitor to traditional money transfer providers." http://www.theverge.com/2013/12/5/5178536/bank-of-america-says-bitcoin-could-become-a-major-means-of-payment

Unfortunately the report has been hidden and not publickly available any more but I had read it a while back;
Conclusions
We believe Bitcoin could become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money-transfer providers. As a medium of exchange, Bitcoin has clear potential for growth, in our view. There is much speculation that Bitcoin may help avoid high taxes, capital controls, and confiscation. The correlation between CNY's share of volume of all Bitcoin exchanges and price of Bitcoin is rising. That said, the fact that all Bitcoin
transactions are publically available and that every Bitcoin has a unique
transaction history that cannot be altered may ultimately limit its use in the black market/underworld. Bitcoin’s role as a store of value can compromise its viability as a medium of exchange. Its high volatility, a result of speculative activities, is hindering its general acceptance as a means of payments for on-line commerce. Is Bitcoin a bubble? Assuming Bitcoin becomes;
(1) a major player in both ecommerce and money transfer 
(2) a significant store of value with a reputation close to silver
Our fair value analysis implies a maximum market capitalization of Bitcoin of $15bn (1BTC = 1300 USD). This suggests that the 100 fold increase in Bitcoin prices this year is at risk of running ahead of its fundamentals.

The city of Toronto is now the second Canadian city with Bitcoin ATMs.

Re: “What the hell is a bitcoin?”
« Reply #8 on: January 18, 2014, 07:44:24 AM »
Let the bitcoin proponents talk all they want. But if the stateless currency collapses, those who have been foolish enough to pour it into their IRAs will be looking to the state for relief.

http://www.sfgate.com/opinion/editorials/article/Bitcoin-is-hardly-a-wise-investment-5115991.php

I'd rather invest in hula hoops.

Re: “What the hell is a bitcoin?”
« Reply #9 on: January 18, 2014, 06:16:10 PM »
I'm down... hula hoops! BUY BUY BUY.... and then we wait.

Re: “What the hell is a bitcoin?”
« Reply #10 on: January 18, 2014, 06:49:16 PM »
I'm all for alternative currencies and the like. Caveat Emptor. But I have questions about this bitcoin and, thus far, the updates on C2C and online searching has eluded me. How is an electronic "coin" that contains all the transactional history insides the code supposed to mean more freedom or privacy? To me it is more like an NSA or Banker dream to have electronic currency (which we already have to a large degree) but eliminate cash and have the history of every transaction contained inside the electronic "coin". And the coin, I imagine, could be deleted by a powerful government, a very clever hacker, an EMP, or even by the mysterious person(s) who created it.

Re: “What the hell is a bitcoin?”
« Reply #11 on: January 18, 2014, 07:01:53 PM »
I'm all for alternative currencies and the like. Caveat Emptor. But I have questions about this bitcoin and, thus far, the updates on C2C and online searching has eluded me. How is an electronic "coin" that contains all the transactional history insides the code supposed to mean more freedom or privacy? To me it is more like an NSA or Banker dream to have electronic currency (which we already have to a large degree) but eliminate cash and have the history of every transaction contained inside the electronic "coin". And the coin, I imagine, could be deleted by a powerful government, a very clever hacker, an EMP, or even by the mysterious person(s) who created it.

Yes, I have had similar thoughts.  What if the power goes out?  Wouldn't matter if you were a bitcoin millionaire at that point.

Having every transaction stored in the code of the coin seems like an NSA wet dream.

Re: “What the hell is a bitcoin?”
« Reply #12 on: January 18, 2014, 07:08:43 PM »
Yes, highly suspicious. If SHTF as the doomsday sayers keep talking about the only investments that will matter is stuff done in gold, silver, food, medicine, and especially lead (if you know what I mean.) And even then it is most likely over because save African bushmen and some remote tribes in the Amazon I don't think most people will be able to survive.  Also interesting that the bitcoin promoter so often on C2C these days mentions paper back ups to this amazing new electronic currency! Very high-tech.

Re: “What the hell is a bitcoin?”
« Reply #13 on: January 18, 2014, 07:13:15 PM »
Yes, highly suspicious. If SHTF as the doomsday sayers keep talking about the only investments that will matter is stuff done in gold, silver, food, medicine, and especially lead (if you know what I mean.) And even then it is most likely over because save African bushmen and some remote tribes in the Amazon I don't think most people will be able to survive.  Also interesting that the bitcoin promoter so often on C2C these days mentions paper back ups to this amazing new electronic currency! Very high-tech.

Concur on all of the above, plus  w a t e r.

Re: “What the hell is a bitcoin?”
« Reply #14 on: January 18, 2014, 08:16:07 PM »
I'd rather invest in hula hoops.

Onan,
I think the idea is if you have large amounts of profits sitting in an offshore Cayman/Ireland account, and do not want to pay taxes when you repatriate those profits into the US, you buy a bunch of bitcoins and then bring those into the US tax free.

Disclaimer: I am not a financial expert or a financial professional. Just taking a wild guess and having fun.

Re: “What the hell is a bitcoin?”
« Reply #15 on: January 18, 2014, 08:38:45 PM »
Onan,
I think the idea is if you have large amounts of profits sitting in an offshore Cayman/Ireland account, and do not want to pay taxes when you repatriate those profits into the US, you buy a bunch of bitcoins and then bring those into the US tax free.

Disclaimer: I am not a financial expert or a financial professional. Just taking a wild guess and having fun.

I am sure your assessment is on target. But to post about the advantages in this forum... well if it is to speak the Cayman Island type investors... I could be wrong but I doubt those guys are reading it here.

Re: “What the hell is a bitcoin?”
« Reply #16 on: January 18, 2014, 09:47:45 PM »
I invested all my money into pogs.
So, I should be covered in any scenario.

[attachimg=1]

Re: “What the hell is a bitcoin?”
« Reply #17 on: January 18, 2014, 11:19:44 PM »
CryptoLocker thrives on the existence of bitcoin.

While it's not the black hats' only option, it does provide a significant advantage for the more sophisticated attackers to remain anonymous while collecting their ransoms. 

[attachimg=1]

Re: “What the hell is a bitcoin?”
« Reply #18 on: January 19, 2014, 11:18:30 AM »
Cayman Islands aint what it used to be. Beautiful but I wonder why the natives live in such crappy houses but I guess they are priced out of the prime property. Anyhow the Cayman government have announced that they are going to report banking to the IRS and US government. Swiss caved in a year or so ago. So maybe bitcoins is the answer for those magnets or criminals with money to hide (or just patriotic Americans who seek to minimize tax obligations or seek to diversify holdings into other banks and currency) but I find the fact that it is digital and that the transactional history contained in the "coin" troubling.

Re: “What the hell is a bitcoin?”
« Reply #19 on: January 19, 2014, 11:47:32 AM »
... I wonder why the natives live in such crappy houses but I guess they are priced out of the prime property.
You damned rabble-rouser -- even mentioning that.  F***in' natives of any place on Earth aren't entitled to anything.   Right, boys??

Re: “What the hell is a bitcoin?”
« Reply #20 on: January 19, 2014, 12:18:19 PM »
It seems bitcoin was designed by religious beliefs promoting gambling w/currency value determined by the followers. Much like the insurance industry (gambling) is trying to overthrow the US Constitution and Bill of Rights based on wisdom and responsibility (instead of selfish greed which is the foundation of all religious leadership).

Laws requiring insurance (like auto) should also have full public disclosure of books. Full public disclosure of other insurance payouts most likely would have prevented the American 1929 Stock Market crash, Great Depression, large migration of richest American Jews to Germany after WW1, and WW2.

The philosophies of wisdoms regarding survival of life are taught. Religions are designed to be followed by those perverting wisdoms and thus should be taxed as any other income producing activity for human survival.

IOW, bitcoin seems to be aimed at equalizing the worth of a human through international currency exchange while escaping current tax laws of the different countries participating whose leaders already know the value of their cash money changes internationally by the picosecond.

That should prepare me for going to the local market fresh produce section in case I have to blow a fresh Rush Limburger.

Re: “What the hell is a bitcoin?”
« Reply #21 on: January 19, 2014, 10:53:38 PM »
I'm gonna further reveal my dorkiness here, but bitcoins remind me of lindens in Second Life. A lot of people run pretty profitable businesses there catering to people who want to live in a virtual utopian existence – fashion, interior design, real estate, even virtual prostitution, stripping and gambling – using linden currency, then come back here to real life and exchange them in PayPal for cash. Stuff that would illegal here or taxed, not so over there. And you'd be amazed how much money can be made. Hell, I made $600 one week breeding and selling virtual cats (yeah, you read that right). And the really good escorts can make $700 to $1,400 a week. None of it taxed or on the books (yet).

I recently opened a bitcoin wallet to pay for some stuff coming from India. And that's all I'll say about that. I don't plan on using them on a regular basis.

Re: “What the hell is a bitcoin?”
« Reply #22 on: January 19, 2014, 11:58:34 PM »
I'm gonna further reveal my dorkiness here, but bitcoins remind me of lindens in Second Life. A lot of people run pretty profitable businesses there catering to people who want to live in a virtual utopian existence – fashion, interior design, real estate, even virtual prostitution, stripping and gambling – using linden currency, then come back here to real life and exchange them in PayPal for cash. Stuff that would illegal here or taxed, not so over there. And you'd be amazed how much money can be made. Hell, I made $600 one week breeding and selling virtual cats (yeah, you read that right). And the really good escorts can make $700 to $1,400 a week. None of it taxed or on the books (yet).

I recently opened a bitcoin wallet to pay for some stuff coming from India. And that's all I'll say about that. I don't plan on using them on a regular basis.
It's amazing how much money can be made on thing's like digital weapons and armor... but that "second life" and "sims" digital item profits must be astronomical!  Virtual cat breeding huh?  Amazing!  I can understand the value of certain weapons in the games I play but I guess I was thinking too much inside the box.

Re: “What the hell is a bitcoin?”
« Reply #23 on: January 20, 2014, 12:23:13 AM »
It's amazing how much money can be made on thing's like digital weapons and armor... but that "second life" and "sims" digital item profits must be astronomical!  Virtual cat breeding huh?  Amazing!  I can understand the value of certain weapons in the games I play but I guess I was thinking too much inside the box.

I played Ultima Online for a few years. I made a couple hundred a month selling houses.

Re: “What the hell is a bitcoin?”
« Reply #24 on: January 20, 2014, 12:26:57 AM »
I've still got like 10,000 gil from Final Fantasy 7 ... wonder if I can exchange for bitcoins.

Re: “What the hell is a bitcoin?”
« Reply #25 on: January 20, 2014, 01:42:22 AM »
Bitcon is more like it.

It's a fad solution for a problem that never existed. Someone in the system has a friend in the media that pitched it. Just like Furbies, and Elmo dolls. Media Hype and public hysteria with someone getting rich.

Re: “What the hell is a bitcoin?”
« Reply #26 on: January 20, 2014, 02:45:37 AM »
It's amazing how much money can be made on thing's like digital weapons and armor... but that "second life" and "sims" digital item profits must be astronomical!  Virtual cat breeding huh?  Amazing!  I can understand the value of certain weapons in the games I play but I guess I was thinking too much inside the box.

AV skins, hair, clothes, houses and furnishings -- and yes, breedable animals with the potential to breed rare and, as such, valuable offspring are the most profitable things over there (http://wiki.secondlife.com/wiki/Breedables_Guide_For_Second_Life). They're programmed with genetic code and dominant and recessive traits, etc., so people can get really scientific about breeding if they want. Me, I just roll the dice. I once had a guy pay me $450 (REAL DOLLARS; I don't have the energy to convert it to what he paid in linden) for a rare type of cat that my two plain cats parented. It was an awesome day for me. But see, then he could take that cat, breed it to produce more with that desired trait, and probably make that $450 back (and then some) pretty quickly.

Anyway, the point of all that -- bitcoins remind me of lindens. I don't plan to use them much.

Re: “What the hell is a bitcoin?”
« Reply #27 on: January 22, 2014, 09:17:48 AM »
Funny thread here; the thing that seems to be misunderstood here is that 80-90% of the people today will not use Bitcoin because Bitcoin is not an investment like the classical investment options and packages you are used to like, ira, 401k, mutual funds, stocks, commodities...

Bitcoin is a "Venture Capital" investment. That means the people who invest can afford losing the money. Unless you are a multi millionaire like on the shark tank you are not buying them. The opportunity to make money was three years ago. It came and past. Regular folk can't even set up a rig to mine for them any more. In the end it seems Bitcoin will be controlled by the corporations that can afford to mine for them and who can afford to buy them.

Nevertheless Bitcoin is still early in the lexicon of society. If you are over 40 then it it is very likely your opinion will mean very little on the future of bitcoin. It is very much like obamacare... it needs young people to believe and use it.

Although many people don't believe in bitcoin http://www.bloomberg.com/news/2013-12-31/bitcoin-is-a-high-tech-dinosaur-soon-to-be-extinct.html I am of the belief that bitcoin is like MySpace. Eventually the government and corporations or someone will create a cryptocurrency to replace it but cryptocurrencies are here to say and in our lifetime everyone here will eventually use one whether you think so or not.

Just remember before you come to judgement; the united states has the worst banking system in the modern word. It is a decade behind in security compared to that of europe and canada and in truth the success of bitcoin and other cryptocurrencies lie in Europe and other asian countries rather than in the united states.

It is interesting that everyday since this threads original posting, more and more corporations are announcing their acceptance of bitcoin. The most important recent announcement;  You Can Now Buy Victoria's Secret Lingerie With Bitcoins :DD http://www.businessinsider.com/you-can-now-buy-victorias-secret-lingerie-with-bitcoins-2013-12

Re: “What the hell is a bitcoin?”
« Reply #28 on: January 22, 2014, 08:22:37 PM »
...I am of the belief that bitcoin is like MySpace. Eventually the government and corporations or someone will create a cryptocurrency to replace it but cryptocurrencies are here to say and in our lifetime everyone here will eventually use one whether you think so or not.

That's funny, that's exactly what I was thinking.  It seems like it's an idea that has legs (if the powers-that-be don't find a way to thwart it).  However I'm not sure bitcoin is gonna be the winner, it may be just the buggy beta version of an idea that takes off when a better platform comes along later. 

One thing that worries me is the 21 mil. max circulation.  I know that they go out to 8 decimal places (the tiniest fractions I believe are being called "satoshis", after the founder).  However it seems like a misstep to me, why not just have a trillion of the things and not have all the decimals?

Btw I thought for kicks I'd try and buy like a hundred bucks worth (around a tenth of) a bitcoin.  I tried 3 different sites and, even though I'm fairly tech-savvy, it seemed way too complicated and clunky.  Also was turned off with various fees tacked on (one site had 3 different fees from 3 different middle-men).  I thought one of the big ideas with it was low-cost / seamless transactions.

Re: “What the hell is a bitcoin?”
« Reply #29 on: February 03, 2014, 06:22:33 PM »
Btw I thought for kicks I'd try and buy like a hundred bucks worth (around a tenth of) a bitcoin.  I tried 3 different sites and, even though I'm fairly tech-savvy, it seemed way too complicated and clunky.  Also was turned off with various fees tacked on (one site had 3 different fees from 3 different middle-men).  I thought one of the big ideas with it was low-cost / seamless transactions.

That's interesting... I'll have to find an easier way for you to waste your money... err... hehehe, kidding :) I'll look into that for you. You need to be careful but I think the best way is to buy directly from one of the corporate miners these days rather than figuring it out on your own but I'll get back to you on it.

In the meanwhile read this http://dealbook.nytimes.com/2014/02/03/more-bitcoin-regulation-is-inevitable/?_php=true&_type=blogs&_php=true&_type=blogs&smid=tw-share&_r=0&_r=0 it does seem that regulation is inevitable whether it be called bitcoin or anything else. Bitcoin is just such a catchy name so far it is the one that has the confidence of the corporations. That of course can change.

The article itself points out that when cryptocurrencies are legally accepted it may be regulated like the commodity market rather than the stock market. In my eye that is a real good first step for many reasons; the main one being less scrutiny and oversight. After the bank of america's in-depth study into and support of the idea of cryptocurrencies, it is of no surprise that the government is taking the idea seriously and that you will see more state regulators holding hearings on it.

Imo the best quote from the article; " To protect consumers who want to use Bitcoin for legitimate transactions, the government may adopt reporting requirements on virtual currency exchanges so that there is a public repository of information about prices. Although the government cannot control the value of a virtual currency, it can make the currency more transparent to users so that they are not defrauded."