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On May 05 2013 13:42 Sqisgar wrote:
Gold is also something that you can physically hold in your hand though.
I guess I don't value my money based on whether I can physically hold it or not.
I value it based on its ability to be used as a medium of exchange. If people accept it, it has value. In the same way, fiat currency has the same flaw, but with fiat currency, the central bank is allowed to tax all holders of the currency without consent through inflation. If you get involved in bitcoin, you are implicitly agreeing that your money will be inflated until the money supply reaches 21 million coins. There is no such luxury with fiat currency.
And has some utility outside being valued as currency.
Like I've said, gold's actual useful value (in electronics, jewelry etc.) is far below its market value.
Bitcoin's actual useful value is zero, which is far below its market value. In the same way that fiat currency (paper)'s useful value is zero, which is far below its market value (or accepted value).
In a situation where I have to pay someone overseas immediately, gold would be worthless and bitcoin would be of more value to me.
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Fiat currency has the advantage of a government and military enforcing its legitimacy.
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On May 05 2013 14:01 phar wrote:
Fiat currency has the advantage of a government and military enforcing its legitimacy.
And that is a disadvantage for gold?
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On May 05 2013 14:04 ryan1894 wrote:Show nested quote +On May 05 2013 14:01 phar wrote:
Fiat currency has the advantage of a government and military enforcing its legitimacy. And that is a disadvantage for gold?
I suspect phar is comparing conventional fiat currency to bitcoin - which is not enforced by any government and military.
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On May 05 2013 14:11 plogamer wrote:Show nested quote +On May 05 2013 14:04 ryan1894 wrote:On May 05 2013 14:01 phar wrote:
Fiat currency has the advantage of a government and military enforcing its legitimacy. And that is a disadvantage for gold? I suspect phar is comparing conventional fiat currency to bitcoin - which is not enforced by any government and military.
I guess there are different perspectives on this (Austrian School of Economics vs Keynesian Economics).
We'll find out soon enough who's right.
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On May 05 2013 14:14 ryan1894 wrote:Show nested quote +On May 05 2013 14:11 plogamer wrote:On May 05 2013 14:04 ryan1894 wrote:On May 05 2013 14:01 phar wrote:
Fiat currency has the advantage of a government and military enforcing its legitimacy. And that is a disadvantage for gold? I suspect phar is comparing conventional fiat currency to bitcoin - which is not enforced by any government and military. I guess there are different perspectives on this (Austrian School of Economics vs Keynesian Economics). We'll find out soon enough who's right.
This has nothing to do with "Austrian vs Keynesian." The closest thing to distinguishing the different perspectives would be "libertarians vs everybody else," but even that doesn't apply for the most part.
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I'm not sure if I am comfortable with buying virtual fake money which could just crash and be worthless at a moments notice, with my real money which I worked hard for.
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One of the motivations for digital currency is the difficulty of forgery and fraud. In some currencies, each "coin" keeps a cryptographic imprint of past transactions, without anywhere saying the [name, address, citizen id #] of the parties involved. So the coins are their own bookies, but you can also maintain anonymity.
The tough crypto math makes it difficult to forge a coin.
The transaction records make it difficult to defraud a party by, for example, "double-spending" a coin --- because there is a breadcrumb trail pointing back to the double-spender. So it's not like you can have some counterfeit bills and say, "I'm sorry. Someone must have given them to me." The buck stops with the offender.
What worries me though, is the means by which this sort of "hiccup" is resolved. Bitcoin in particular is vulnerable to a collusion attack, in which you have a plurality of merchants siding with the offending party. Anyone with a significant share of the currency is capable of doing bad things.
There are politics in digital currency.
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Transactions require a new block to be found to be recorded. This means a few things:
1. Blocks are on average found every 10 mins. That means a merchant needs to wait for 10 mins to verify the transaction, if not he'll be subject to possible fraud.
2. Verification can only be done through broadcasting. That means all merchants need to be online every time they perform a transaction.
You could set up a counter-party system to do credit/coin/transaction guarantees etc but you'll be exposed to counter-party risk.
These limitations make it very difficult to employ Bitcoin at the microeconomic level.
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On May 05 2013 13:29 ryan1894 wrote:Show nested quote +Seems like most people are buying it as a speculative investment than as a more liquid currency: the number of businesses accepting such thing certainly hasn't grown in scale to Bitcoin's supposed value. Honestly, this thing is a speculative investment at best and an extremely risky gamble at worst. You're buying a thing that's unstable and barely accepted anywhere with a stable widely accepted currency such as the dollar or the euro. Only reason why most people would do that is the belief and faith that it'll be something like virtual gold. Almost every feature you describe applies to gold. A very small number of businesses take gold directly as currency (albeit much higher than bitcoin) and the production value of gold per ounce is ~$300-400, yet the value it's trading at is ~$1400 an ounce The only reason gold demands such a high value is because people believe it does.
So you basically accept that Bitcoin is being bought and sold mostly as a speculative investment over purchasing goods and services? At one point, gold and other precious metals, and hell, even commodities today, were probably considered speculative investments until it became stable, regulated, and institutionalized. If that's what bitcoin is mostly used for, then most people are better off looking into other things than risking on something like this.
If however, you are arguing that bitcoing has some merit of purchasing goods and services as a currency such that it's more liquid than gold, then I have to argue back that most businesses probably do not want to accept currency that is extremely volatile and unstable such that even a financial crisis in a small country and media attention can fluctuate its price. You don't see much volatility in other exchanges when a country or media goes to shit.
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On May 05 2013 17:29 BirdKiller wrote:
So you basically accept that Bitcoin is being bought and sold mostly as a speculative investment over purchasing goods and services? At one point, gold and other precious metals, and hell, even commodities today, were probably considered speculative investments until it became stable, regulated, and institutionalized. If that's what bitcoin is mostly used for, then most people are better off looking into other things than risking on something like this.
If however, you are arguing that bitcoing has some merit of purchasing goods and services as a currency such that it's more liquid than gold, then I have to argue back that most businesses probably do not want to accept currency that is extremely volatile and unstable such that even a financial crisis in a small country and media attention can fluctuate its price. You don't see much volatility in other exchanges when a country or media goes to shit.
Gold used to be institutionalised. We were forcefully removed off full reserve banking a long long time ago. You seem to name regulation as an advantage to fiat currency. I disagree.
I agree that bitcoin is currently volatile and therefore isn't attractive for a merchant to accept. This is probably going to be the case until merchants (especially those that don't trust their currency/central banking system) begin to trust bitcoin over their respective fiat currencies. Also the market cap is extremely small and currently it's way too difficult to purchase and trade with bitcoin. Until companies start charging fees to keep people's money safe and guarantee security etc, I don't see bitcoin becoming that popular amongst the general public.
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All the naysayers, including myself are currently kicking themselves that we didn't buy bitcoins half a year ago when this thread popped up (or whenever you heard of them, including a week ago)!
Current rate: $ 548.40, and it peaked at $ 611!
Litecoin seems to be the current craze.
This whole invention of a new currency and investors starting to go nuts over it is pretty fucking interesting. I kinda want to buy into the hype, particularly the litecoin looks like it has plenty of room to grow, but it's pretty slow and tedious to get money into a system that the trading sites accept... and I think that by the time I have money on one of the trading sites, it'll be largely too late to get in at the current low prices. Maybe if you have USD, it's easier?
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Ive been waiting for a crash since 400$. Now its at 600$, fml 
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On May 05 2013 15:54 mmp wrote:
Also, P = NP.
lololol
i wouldn't want to be holding BTN the day quantum computing arrives
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On May 05 2013 14:42 Grimmyman123 wrote:
I'm not sure if I am comfortable with buying virtual fake money which could just crash and be worthless at a moments notice, with my real money which I worked hard for.
Just like with gambling, never put anything on the line you aren't prepared to lose.
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On November 19 2013 06:07 moopie wrote:Show nested quote +On May 05 2013 14:42 Grimmyman123 wrote:
I'm not sure if I am comfortable with buying virtual fake money which could just crash and be worthless at a moments notice, with my real money which I worked hard for. Just like with gambling, never put anything on the line you aren't prepared to lose.
Although speculating and gambling have a lot in common, I wouldn't completely equate them. At least with speculating you can read up on the background of the item you're buying, economists' analysis and get at least some kind of an informed opinion beyond pure probabilities (which in gambling are always stacked against you... otherwise casinos would be out of business).
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On November 19 2013 02:08 Warri wrote:Ive been waiting for a crash since 400$. Now its at 600$, fml
It will crash roughly around $1000.
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Glad I bought 2 BTN (although too late, they weren't cheap anymore). It's not much money, but it's fun to follow it a bit and see where it goes.
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EPT
