Bitcoin and the significance of decentralised currency

Tinybolt said:
My own little addition, investing in something this risky would be an excellent/terrible idea, the basics known to most is risk=reward. Im not going to expand on that however when it comes down to it for the time being investing GPU power into Bitcoin can buy you your weekly takeout. ( as can a 2 hour part time job but lets not get to technical )
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Ya I think it could actually be a good investment if you buy some now while it's still relatively unknown because as soon as any one big merchant comes on board the value will shoot up drastically, so either no one comes on board and it will stay a volatile currency with huge risks, or someone big will come on board and that will get the ball rolling for some serious upside and then you should start seeing interesting action.
 
Knersus said:
Ya I think it could actually be a good investment if you buy some now while it's still relatively unknown because as soon as any one big merchant comes on board the value will shoot up drastically, so either no one comes on board and it will stay a volatile currency with huge risks, or someone big will come on board and that will get the ball rolling for some serious upside and then you should start seeing interesting action.
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It's gone from $1 a couple months ago to $14 and climbing. This is bubble territory. It's no coincidence a lot of the forums I frequent have BitCoin supporters/salesmen trying to egg fools on.
 
The original creator is probably laughing all the way to the bank. There has been a 200 000% percent increase in the value of bitcoins since inception. Just imagine that. If you bought 10 000 bitcoins last year alone, for about R1500 bucks it would now be worth R1m.

Crazy.
 
Hard Rain said:
It's gone from $1 a couple months ago to $14 and climbing. This is bubble territory. It's no coincidence a lot of the forums I frequent have BitCoin supporters/salesmen trying to egg fools on.
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It does have a bubble feel to it. Going to be very interesting when the exchange collapses and everyone tries to get their bitcoins "out" the system into USD. I imagine those that time it well will make a killing and the majority stand to loose a massive amount.
 
have no clue what bitcoin is. Please somebody enlighten me
 
wamatt said:
It does have a bubble feel to it. Going to be very interesting when the exchange collapses and everyone tries to get their bitcoins "out" the system into USD. I imagine those that time it well will make a killing and the majority stand to loose a massive amount.
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I don't think there's an actual market exchange for these things, so if one would like to short them one would have to enter into an individual contract with someone, which is a shame.
 
Hard Rain said:
I don't think there's an actual market exchange for these things, so if one would like to short them one would have to enter into an individual contract with someone, which is a shame.
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Google MT Gox sold most of my coins there, money has been transferred into my account ( ABSA )
 
Tinybolt said:
Google MT Gox sold most of my coins there, money has been transferred into my account ( ABSA )
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I don't mean an exchange as a way to buy BitCoins, I mean an exchange to trade futures contracts so I can short (read: bet against) BitCoin appreciating in the future :p
 
i really have no idea why people would think this bitcoin is any safer than the multitude of currencies we have going already.

who determines it's value against the base currency? is it quoted against the USD?

who controls how many bitcoins are in circulation?

if you invest in this, don't come back here seeking sympathy when it fails. we WILL laugh at you.

of ffs, i just skimmed the article. they punt decimal places as an advantage. someone should tell them that banks are willing to trade to 4 decimal places with clients that are big enough.
 
Knersus said:
Once someone like Amazon or iTunes comes on board
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it is not legalities that would stop them from accepting bitcoins. the question would be why should they believe that these bitcoins can be converted into USD for them to cover their costs.

what happens when amazon wants USD for the bitcoins used by someone to buy an item? Who determines the bitcoins/USD value?

ask yourself this question, why doesn't amazon accept ebucks given this is no different?

why doesn't paypal introduce the paypal as a currency?

and then there is the regulations wrt to the BIS and whatever central bank of your country is? after all the cb has to recognise your currency for it to be legal tender in that country.

good luck bitcoins.
 
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Hard Rain said:
I don't mean an exchange as a way to buy BitCoins, I mean an exchange to trade futures contracts so I can short (read: bet against) BitCoin appreciating in the future :p
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For all this back and forth banter this is probably one of the only insightful posts, carry on arguing about the volatility of a currency. Dont forget we all use it everyday works exactly the same supply/demand. Will it make us millionaires most likely not will it fail horribly, could do. However for this "useless crazy waste of space currency" there is currently a demand at $18 per coin this is very likely to plummet and die but until it does people are making rather large profits off it. So whilst you argue how badly its going to do in the future there are those making real profits now.
I guess you get the talkers and the do-ers. I personally will not be looking to invest in Bitcoins long term as it is far to risky for me. But as Hard Rain mentioned, two ways to look at it. If in all your certainty it is as uninspired as you believe why not hedge your bets against Bitcoins...
 
disclaimer: I don't have a dog in this race, I have other ways to make or lose money.

milomak said:
i really have no idea why people would think this bitcoin is any safer than the multitude of currencies we have going already.
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I take it they conclude this from the inability of monetary authorities to manipulate this currency.

who determines it's value against the base currency? is it quoted against the USD?
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It has an exchange ratio with the USD, and presumably any other currency you care to exchange.
The exchange ratio determines the value of a bitcoin in relation to a USD. Normal rules of supply and demand.

who controls how many bitcoins are in circulation?
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The software has a deterministic algorithm for the number of bitcoins produced. There is a finite number of bitcoins allowable. The rate at which they can be produced is predetermined and slows predictably over time. The holders of bitcoins determine how much is in "circulation" by transacting or not.

if you invest in this, don't come back here seeking sympathy when it fails. we WILL laugh at you.
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You cannot earn interest on your bitcoins, so it is not an investment which defers current consumption for greater future consumption.

You cannot earn dividends from your bitcoins, so it is not an investment which generates a capital return. Bitcoins cannot provide any cash flow to the holder by virtue of owning them.

So it is not an investment, it is a store of value which has the property of increasing it's exchange ratio to other objects over time. Therefore holding bitcoins for future gain is pure speculation.

of ffs, i just skimmed the article. they punt decimal places as an advantage. someone should tell them that banks are willing to trade to 4 decimal places with clients that are big enough.
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Because the total number of bitcoins is predetermined and finite, bitcoins are a deflationary currency, ie. the exhange ratio of a bitcoin is generally increasing in respect of other objects. So over time the denomination of a bitcoin becomes unusably large in general trade, so the denomination must be reduced, for which purpose a bitcoin has 8 decimal points.

This works the opposite to fiat currencies, like the dollar, where the original fractional denominations are now worthless and unused, and the valuation moves to the left of the decimal point. (a 1900 penny is now ~= 1$)
 
Thanks Ozoned, that's a very helpful post. As for the claims of Bitcoin being a "bubble" I think this is probably the case. The difference with the "Bitcoin bubble" is that it has some strengths that make it more resilient to an implosion and also prevent it from completely crashing. The point of the article was to highlight these strengths which are decentralisation and extreme liquidity.

Do I think that Bitcoin will suddenly have a drastic devaluation eventually? Yes, I do.

Do I think that Bitcoin will recover if it crashes? Absolutely

Bitcoin volatility may be violent and may even last decades but I believe that this process will make it the most solid, stable currency of all.. eventually
 
someone with a lot of faith in bitcoins
Dear PricewaterhouseCoopers LLP
Using your Office @ 830 Crescent Centre Drive, Suite 260, Franklin, TN 37067 Telephone: [1] (615) 503-2860 we were able to gain access to your network file servers and copy over the tax documents for one Willard M Romney and Ann D Romney. We are sure that once you figure out where the security breach was, some people will probably get fired but that is not our concern.

All major news media outlets are going to be sent an encrypted copy of the most recent tax years that your company had on file since you did not have them all in a convenient electronic form. The years before 2010 will be of great interest to many. If the parties interested do not want the encrypted key released to the public to unlock these documents on September 28 of this year then payment will be necessary.

The deal is quite simple. Convert $1,000,000 USD to Bitcoins (Google if if you need a lesson on what Bitcoin is) using the various markets available out in the world for buying. Transfer the Bitcoins gathered to the Bitcoin address listed below. It does not matter if small amounts or one large amount is transferred, as long as the final value of the Bitcoins is equal to $1,000,000 USD at the time when it is finished. The keys to unlock the data will be purged and what ever is inside the documents will remain a secret forever.

Failure to do this before September 28, the entire world will be allowed to view the documents with a publicly released key to unlock everything.

Bitcoin Address to Stop Release:
1HeF89wMjC48bWNgWvVo7Wu3RaLW8XVsE8

And the same time, the other interested parties will be allowed to compete with you. For those that DO want the documents released will have an different address to send to. If $1,000,000 USD is sent to this account below first; then the encryption keys will be made available to the world right away. So this is an equal opportunity for the documents to remain locked away forever or to be exposed before the September 28 deadline.

Who-ever is the winner does not matter to us.

Bitcoin Address to Promote Full Release:
12AP6iCwRNFQqKLStH3A4b4hw3SL6RaNgB

Cheers!

Reference to avoid Fakes that only you will have.
1.all these considerations did not deter me from the path of duty
2.he moment I understood the will of my Heavenly Father
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An update on the above story as I came across another person putting faith in bitcoins

A Canadian man is hoping to be the first person to sell his house for virtual currency Bitcoins.

Entrepreneur Taylor More listed his two-bedroom Alberta bungalow, asking 405,000 Canadian dollars (£261,000; $395,000) - or the equivalent in Bitcoins.

He says the first reaction of his family was that of a shock.

Bitcoins are now a widely used alternative payments system and one Bitcoin is currently worth about £37.
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http://m.bbc.co.uk/news/technology-21863593

The value of bitcoins seems to have rocketed in the last couple of months

http://bitcoincharts.com/charts/mtgoxUSD#rg360ztgCzm1g10zm2g25zv
 
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