Bitcoin currency (merged topics)

[Prodigy]

What's so hard about setting up a working linux setup at home? Takes about an hour. 

Extremely difficult when you don't have the hardware to put it on : )  I'm waiting for the opportunity to grab a laptop to replace the one I had with dual boot windows/linux.

I can't get any work done because I keep looking up for a second to check the price and gives me a heart attack every few minutes. So now i'm drinking calming tea hah.

This was actually the month where we were going to use a little of the savings we save each month and buy some. I bought 2, 3 weeks ago, had a bunch of shit with coinbase, ended up it going through, and I sold 1 at 450ish dollars which paid for both coins. (So i got a free bitcoin). But looking at these numbers, the volumes, the "fundamentals" etc etc etc etc etc etc, I'd like to buy but i can't. A fellow TSPer is trying to encourage me to use his Mtgox account to buy, but i'm not so sure. This price has to collapse at least a little bit. There is zero retraction on prices at all. If it dipped even JUST A LITTLE BIT, perhaps I'd be ok buying.

I am pretty sure it'll dip down in some sort of correction, like it always has, but who knows?  It is very possible that this recent run will be 'the one' that all the bitcoin users say will eventually happen, where adoption of it just hits the breaking point and it skyrockets to a price of tens or hundreds of thousands per bitcoin.  Or, it could drop to zero just as fast. 

If you're sweating over the price of it, you probably shouldn't be investing in it.  Be prepared to lose it all.  Don't just tell yourself that, you need to actually believe it.

[Cedar]

The Feds Embraced Bitcoin in the First-Ever Congressional Hearing on Virtual Currency
http://motherboard.vice.com/blog/the-feds-embraced-bitcoin-in-the-first-ever-congressional-hearing-on-virtual-currency

Homeland Security Calls Bitcoin an "Emerging Threat"
http://www.activistpost.com/2013/11/homeland-security-calls-bitcoin.html

It is sitting at $707 right now.

Cedar

[Cedar]

Bitcoin has fallen to less than half the value it recently traded for, following reports of fresh action by Beijing to restrict trade in the virtual currency. http://www.bbc.co.uk/news/technology-25428866
http://blogs.marketwatch.com/thetell/2013/12/18/bitcoin-spirals-down-as-china-exchange-halts-yuan-deposits/

Cedar

[Prodigy]

On my last post, it was trading for around $600, and I was replying to someone who had been thinking about buying some when it was at $300 and wanted nothing to do with the high $600 price.  It never went below that, unlike what most of us figured, and skyrocketed to over $1200.  Now that it's somewhere around $550ish, it's down to less than half of what it was recently.  I am guessing lots of people were, and still are interested in it, and will be waiting a bit to see when it bottoms out, then will buy when it looks more reasonable.  What is "reasonable" is constantly changing, but it's all perception.  I am guessing the guy earlier who thought $600 was outrageous is reconsidering it's current $550 price as a lot more reasonable...

I guess the point is that everyone knows (or should know) it is a volatile commodity right now - like I said before, if you're trying to time the bitcoin market and make a quick buck... good luck.  Flip a coin, and those are probably your chances of success.  Everyone knew when it was over $1200 that it was in a bubble of sorts, and that it would come crashing down at some point.  We just didn't know how high it would go before that happened.  That's what it's done for a long time now - nobody should be surprised by that.  Despite the China news, it will continue to build, then correct, then build, then correct, just like any commodity that continually gains popularity - until it evens out into a mature market.  It will be a long time before it is in any way considered mature... so until then, hold onto your hats and enjoy the ride.

Buy for the long term, and buy to support the cause.  The learning experience, alone, will be worth it.

[TexDaddy]

We bought one at $618, then got nervous and sold it at $1185. That was enough for me.

[mxitman]

I agree with Jack and think it's way too volatile, unless you actually mine them and aren't paying cash or get them in trade I wouldn't put up that kind of coin when you could do the same and get some AU!

[osubuckeye4]

On my last post, it was trading for around $600, and I was replying to someone who had been thinking about buying some when it was at $300 and wanted nothing to do with the high $600 price.  It never went below that, unlike what most of us figured, and skyrocketed to over $1200.  Now that it's somewhere around $550ish, it's down to less than half of what it was recently.  I am guessing lots of people were, and still are interested in it, and will be waiting a bit to see when it bottoms out, then will buy when it looks more reasonable.  What is "reasonable" is constantly changing, but it's all perception.  I am guessing the guy earlier who thought $600 was outrageous is reconsidering it's current $550 price as a lot more reasonable...

I guess the point is that everyone knows (or should know) it is a volatile commodity right now - like I said before, if you're trying to time the bitcoin market and make a quick buck... good luck.  Flip a coin, and those are probably your chances of success.  Everyone knew when it was over $1200 that it was in a bubble of sorts, and that it would come crashing down at some point.  We just didn't know how high it would go before that happened.  That's what it's done for a long time now - nobody should be surprised by that.  Despite the China news, it will continue to build, then correct, then build, then correct, just like any commodity that continually gains popularity - until it evens out into a mature market.  It will be a long time before it is in any way considered mature... so until then, hold onto your hats and enjoy the ride.

Buy for the long term, and buy to support the cause.  The learning experience, alone, will be worth it.

Or, until world governments decide to really crack down on it and make it a crime to use Bitcoin anywhere (in a modern country).

And... then the value drops to almost nothing.


It's either going to turn into a commodity, or it's going to turn into a fad (like Beanie Babies, remember Beanie Babies!?) 

[Cedar]

It's either going to turn into a commodity, or it's going to turn into a fad (like Beanie Babies, remember Beanie Babies!?) 

Someone does.
http://www.ebay.com/itm/like/380647311030?lpid=82

Cedar

[Prodigy]

Or, until world governments decide to really crack down on it and make it a crime to use Bitcoin anywhere (in a modern country).

And... then the value drops to almost nothing.


It's either going to turn into a commodity, or it's going to turn into a fad (like Beanie Babies, remember Beanie Babies!?) 

Exactly right.  That's the coin flip on whether it'll go up or down (or more likely way up, or way down).

[Jesse2004]

Two interesting blog posts on bitcoins that you might like to read:

http://gonzalolira.blogspot.com/2013/12/a-calm-analysis-of-bitcoins-as-currency.html

http://gonzalolira.blogspot.com/2013/12/bitcoins-fully-compliant-currency.html

I don't agree 100%, but I think some good points / issues are raised.

Jesse

[Otis]

Bitcoin is not going away.  In Bitcoin terms, this is like the year 1994, the year before Internet web browsing took off.  I believe it will be extremely valuable in the next several years.  Because of its P2P distributed technology, it is impossible to get rid of Bitcoin.  The Feds May one day try to crush it, but early indications are the Feds are fine with. 

[FreeLancer]

I agree with Jack and think it's way too volatile, unless you actually mine them and aren't paying cash or get them in trade I wouldn't put up that kind of coin when you could do the same and get some AU!

Fractional bitcoin is simpler to buy than AU and BTC scales down to 0.00000001.  Many are now referring to it on the basis of a millibit, or $0.70 at current prices.

The volatility is scary as heck in both directions, but the technology has proved itself far beyond what many could ever have dreamed. A decentralized shared ledger documenting ownership is a potentially revolutionary concept that could rival internet protocol in its ability to shatter the status quo. But there will be many white-knuckle moments before we get to $40,000.

[Otis]

Well said Freelancer. 

[FreeLancer]

After listening to his last two podcasts, it sounds like Jack is a couple sips of Koolaid away from full membership in the bitcoin cult. 

[CharlesH]

After listening to his last two podcasts, it sounds like Jack is a couple sips of Koolaid away from full membership in the bitcoin cult. 

 
Rob Gray is moving towards doing something more with Bitcoin I think (saw a post of his on the AOCS website this week that made me think that).  The two of them are friends and jack was apparently heavily invested in his friend's Mulligan Mint business.  The fact that I am hearing the two of them talk about Bitcoin in the same week makes me wonder if they are prepping the battlefield, so to speak, for an announcement about a new venture.

[FreeLancer]

Rob Gray is moving towards doing something more with Bitcoin I think.......

Hmmm.....that doesn't sound good.  I hoped Jack would have learned his lesson by now.

[nimzy88]

Well looks like you can start saving your bitcoins up to come out here to Vegas for next years SHOT show. This was on multiple news stations yesterday. It looks like the front desk, maybe a few restaurants and gift shops are accepting the coins at 2 of the downtown hotels.

http://www.fox5vegas.com/story/24506810/vegas-casinos-now-accepting-cybercurrency-bitcoin

[FreeLancer]

Well looks like you can start saving your bitcoins up to come out here to Vegas for next years SHOT show. This was on multiple news stations yesterday. It looks like the front desk, maybe a few restaurants and gift shops are accepting the coins at 2 of the downtown hotels.

Vice has a perverse tendency to adopt tech before it goes mainstream.  Bitcoins in Vegas won't just stay in Vegas.

[FreeLancer]

So both JP Morgan Chase and the US Treasury are railing against the dangers posed by bitcoin this week. 

I wouldn't have thought that bitcoin's measly market cap could stimulate this level of fear mongering amongst the financial establishment.  Are they're really that worried about us losing our shirts in cryptocurrency saving and speculation, or are they worried about its continued growth spelling the beginning of the end of their control over money?

[rikkrack]

Signed up today, reading what it is all about.

[Prodigy]

So both JP Morgan Chase and the US Treasury are railing against the dangers posed by bitcoin this week. 

I wouldn't have thought that bitcoin's measly market cap could stimulate this level of fear mongering amongst the financial establishment.  Are they're really that worried about us losing our shirts in cryptocurrency saving and speculation, or are they worried about its continued growth spelling the beginning of the end of their control over money?

“It’s a terrible store of value. It could be replicated over and over,”

I'd like to think the CEO of one of the biggest financial firms in the world isn't a complete idiot, and that there is some context I'm missing in that statement.  Replicated over and over?  Clearly he has no freakin clue how bitcoin works.

“And honestly, a lot of it – what I’ve read from you guys – a lot of it is being used for illicit purposes."

First off, whenever someone starts a sentence with 'And honestly', that's a pretty clear sign what's about to follow is complete BS.  Lo and behold - complete BS follows.  The list of legitimate businesses accepting bitcoin is absolutely staggering.  Just in very recent news we have overstock.com, tigerdirect.com, (both massive sites) and a UK public university accepting bitcoin.  There's over 20,000 businesses on bitpay, alone.

A fun game to play is the 'what CAN'T you buy with bitcoin' game.  Lately, it's getting almost impossible.  Amazon and eBay will be accepting them in the near future, and once that happens that will be the end of that game.

Is bitcoin used in illicit activities?  Of course, just like any anonymous form of exchange.  I promise you, though, that government-backed cash is used in infinitely more illicit activities than any cryptocurrency.  Although to be fair, many governments are trying to do away with cash, too...

[FreeLancer]

These guys are just ludicrous.

[R_Morgan]

The two main arguments against Bitcoin that i hear from people is

1) it has no inherent value

2) It can be used for illegal activities.

In regards to #1, I always have to laugh, especially when this came from my father in law who was a bond trader of all things!  But if you have any arguments against bitcoin you can x100 for the U.S. Dollar and any modern currency.  Any of the failings that Bitcoin or other currencies have, our currency does it worse, at least with Bitcoin there is a no shit cap on it, and the value is only determined by the market and what the conglomerate of users dictate to be vs the artificial  and total faith based value that the U.S. Dollar has.

For #2, what i always say is....well what did people buy Coke with in 2007? Cash.  99.9% of drugs in America are bought with U.S. Dollars, and guess what I have never heard of a drug bust based on "we tracked the serial numbers on his cash and knew right when he traded it for drugs".  The fact that people use money to buy drugs (whether bitcoin or Dollars) just belies the argument against regulation for this reason, and the fact that BILLIONS AND BILLIONS have been spent to keep peopel from using and getting drugs and it has failed, where there is a need there will be someone to fill it.  I also point out, "Ok so youre right bitcoin is bad because people can use it to buy illegal things, so heres a magic wand...BAM Bitcoin is gone, will drug use stop? will we even see a small dip in its production,  shipping and use? NO, so what the fuck are you talking about?"

The Fact that JP Morgan is worried about "illegal activities" surrounding a small percentage of crypto coin users is laughable given that they continue to manipulate markets steal money and generall fuck up the economy and lives of people everyday.  If this was a microcasm and JP Morgan was a person doing any of this they would be arrested, but if you sit on teh board of the Fed, Hey its fair play

[Prodigy]

The two main arguments against Bitcoin that i hear from people is

1) it has no inherent value

Agree with your whole post, but I wanted to touch on that specific argument.  Just the phrase 'inherent value' alone is so misused and wrong in the first place.  Nothing has an 'inherent value' - value is derived by perception, and perception alone.  'Inherent' implies every human on the earth would value it.  I could see the argument that food and water have inherent value, but almost nothing else would.  Gold and precious metals do not have inherent value, they are valued because most of the population of the earth finds at least some sort of worth in them - not because they are somehow inherently valuable to human life.

But let's evolve the argument - "Fine, neither gold nor bitcoins have 'inherent value', but even if people stopped valuing gold just because it's pretty and shiny, it still has actual industrial uses and can still be valued.  Bitcoins are just digital ones and zeroes, they are worthless without people wanting them."   

Also completely untrue, but to understand why you have to understand when someone says 'bitcoin' they can either be talking about 1) the digital coins/currency or 2) the protocol, aka the code that runs the software/network and makes bitcoin the currency possible.  The protocol itself is a couple thousand lines of code that have completely revolutionized the way we look at money, as well as 'collective trusted agreements'.  The code makes it possible for anyone in the world to send a unit of bitcoin anywhere else in the world instantly, anonymously, and with a very very small transaction fee.  It makes it possible to memorize your wallet, or write down a few strings of numbers on a piece of paper, then travel anywhere in the world and wherever you are, you'll have access to your currency.  Only a cryptocurrency like bitcoin can say that - and in that there is massive value.

On a more basic level, and even more valuable, it makes it possible for any two people in the world to use the bitcoin blockchain to come to an agreement and verify ANYTHING with complete trust, because once something is on the blockchain it is there forever - forever unchangeable (quick example - there is a dude in South America working on an application using the bitcoin protocol that would allow someone to put a document on the blockchain so you can later prove it existed in exactly that form any time in the future.  Usually this requires an official notary and can be complicated when dealing across nations borders - here it is instant and trustworthy).  At it's most basic level, bitcoin is simply a way for collective agreement on something.  That's why the currency works so well - everyone can agree that Bob has 3 bitcoins because it's permanently written in the records (blockchain) and millions of people have computers constantly verifying that information is accurate.  Using this, there will be hundreds of non-currency applications using the bitcoin protocol over the coming years.

Anyone who says all of that has "no value" simply has their head in the sand and is suffocating in their own ignorance.

[MTUCache]

... there will be hundreds of non-currency applications using the bitcoin protocol over the coming years.

This, I feel at least, is the real crux of the issue that the typical layperson completely misses. Probably because it's so difficult to wrap your head around it when you're first figuring out how Bitcoin actually works (i.e., getting away from the centralized-mindset of where all this data is "stored" and who's in charge of managing it).

The computing power of the miners, who are verifying and "publishing" these blocks every ten minutes, is so vast and untapped. It won't take much longer before all of that computing power is being used to push through all the other non-money uses of this network. Business contracts, document archiving, real estate deeds, micro-loan agreements, warranties and guarantees on products or services, etc. It's tough to figure out exactly how that process works (at least, I definitely don't understand the details of it yet), but from what I've heard it's pretty well accepted that there are untapped capabilities in that area.

That revolutionizes transactions, that's when we start seeing companies and people really putting some substance behind their signatures and guarantees. There doesn't need to be "promises" anymore when the money for those goods or services always has a record of how/why you earned it. There are entire start-up businesses based in how to leverage this, and if even a handful of them work out we're going to see a dramatic revolution in banking worldwide. Things like Western Union, Visa, Mastercard, are suddenly equivalent to the Pony Express. Banks like Chase and Wells Fargo start looking a lot more ridiculous for charging these ungodly fees for something that other people do for free, from a phone, anywhere on the planet, and a lot more securely. Your example of a notary is a perfect example of how far this kind of decentralized trust-network could permeate our digital economy.

[FreeLancer]

We may be seeing the death of Mt. Gox, the largest exchange up till just a few months ago.

Gox froze bitcoin withdrawals early yesterday after mounting complaints by account holders unable to withdraw first fiat, then bitcoin.  Prices across all exchanges are down, with Mt. Gox leading the pack to the bottom.  I should have removed the small amount I was playing with, but now will have to ride out the storm.

And people were just starting to crow about how stable bitcoin prices have been lately.  Volatility is a given in this market, get used to it.  Cryptocurrency is the wild, wild, west.  There are no referees, no timeouts, and no do overs.

[R_Morgan]

Agree with your whole post, but I wanted to touch on that specific argument.  Just the phrase 'inherent value' alone is so misused and wrong in the first place.  Nothing has an 'inherent value' - value is derived by perception, and perception alone.  'Inherent' implies every human on the earth would value it.  I could see the argument that food and water have inherent value, but almost nothing else would.  Gold and precious metals do not have inherent value, they are valued because most of the population of the earth finds at least some sort of worth in them - not because they are somehow inherently valuable to human life.

But let's evolve the argument - "Fine, neither gold nor bitcoins have 'inherent value', but even if people stopped valuing gold just because it's pretty and shiny, it still has actual industrial uses and can still be valued.  Bitcoins are just digital ones and zeroes, they are worthless without people wanting them."   

Also completely untrue, but to understand why you have to understand when someone says 'bitcoin' they can either be talking about 1) the digital coins/currency or 2) the protocol, aka the code that runs the software/network and makes bitcoin the currency possible.  The protocol itself is a couple thousand lines of code that have completely revolutionized the way we look at money, as well as 'collective trusted agreements'.  The code makes it possible for anyone in the world to send a unit of bitcoin anywhere else in the world instantly, anonymously, and with a very very small transaction fee.  It makes it possible to memorize your wallet, or write down a few strings of numbers on a piece of paper, then travel anywhere in the world and wherever you are, you'll have access to your currency.  Only a cryptocurrency like bitcoin can say that - and in that there is massive value.

On a more basic level, and even more valuable, it makes it possible for any two people in the world to use the bitcoin blockchain to come to an agreement and verify ANYTHING with complete trust, because once something is on the blockchain it is there forever - forever unchangeable (quick example - there is a dude in South America working on an application using the bitcoin protocol that would allow someone to put a document on the blockchain so you can later prove it existed in exactly that form any time in the future.  Usually this requires an official notary and can be complicated when dealing across nations borders - here it is instant and trustworthy).  At it's most basic level, bitcoin is simply a way for collective agreement on something.  That's why the currency works so well - everyone can agree that Bob has 3 bitcoins because it's permanently written in the records (blockchain) and millions of people have computers constantly verifying that information is accurate.  Using this, there will be hundreds of non-currency applications using the bitcoin protocol over the coming years.

Anyone who says all of that has "no value" simply has their head in the sand and is suffocating in their own ignorance.

You are correct, it is overused and I was guilty, what i meant and should have said was "tangible value"

[k2kidd]

Russia cracks down on Bitcoin. 


Russian Central Bank warns against using Bitcoin
RT-Jan 29, 2014
Russia's top financial regulator is warning citizens against using virtual currencies, as they could be tied to gangs into money laundering and terrorist financing. ... against virtual currencies, which in their anonymity can be used as a ... Cracking down on “dubious” bank practices has been the number one ...

[MTUCache]

Russia cracks down on Bitcoin. 


Russian Central Bank warns against using Bitcoin
RT-Jan 29, 2014
Russia's top financial regulator is warning citizens against using virtual currencies, as they could be tied to gangs into money laundering and terrorist financing. ... against virtual currencies, which in their anonymity can be used as a ... Cracking down on “dubious” bank practices has been the number one ...

Lol. Yes, I'm sure those Russian mafia guys are going all in on Bitcoin since they have such problems making money while using Euros and Dollars. Much like I'm sure the Bloods and Crips are conducting most of their drug trafficking in crypto-currency as well. 

[Smurf Hunter]

I'm actively getting setup with coinbase just to dip my toe into the Bitcoin game.

Has anyone setup recurring purchase?  e.g. dollar cost averaging?

I was thinking maybe buy $10USD with of BTC every Friday for example.  I don't really plan on this as a major investment, but like silver it's an alternative medium of exchange in case things ever got weird.