Virtual currencies recovering!

[JTsyo]

Venture capital has been investing in Bitcoin and its alternatives. If they believe the currencies will last, Ill bet they just will.

http://arstechnica.com/business/201...stors-bet-on-bitcoin-via-derivatives-markets/

The success of currency is based on faith. If people believe it will last, it will.

 

[M0oG0oGaiPan]

The success of currency is based on faith. If people believe it will last, it will.

you sound like lee parks

 

[JTsyo]

you sound like lee parks

I should add that it doesn't mean it'll have the same value vs the dollar as we saw in the past weeks. I don't think the overall value will matter as much as stability in price.

 

[MaxPayne63]

I should add that it doesn't mean it'll have the same value vs the dollar as we saw in the past weeks. I don't think the overall value will matter as much as stability in price.

The catch is that it won't be widely adopted if it can lose half its value in less than a day, and until it's widely adopted the value will be based on nothing more than belief in a greater fool.

 

[PrototypeZ]

Bitcoin is like the Zimbabwe Dollar was. Inflation was so terrible that at one point what you could buy a refrigerator for in the morning bought you a loaf of bread that evening. Now of course it would theoretically work the other way but as we've clearly seen it's crashing and completely unstable.

The whole Zimbabwe Dollar issue was amazing to watch unfold. I remember seeing pictures of people going to the grocery store w/ wheelbarrows full of money.

For grins and giggles got some of the 100 trillion dollar notes from Ebay. nothing like holding half of a quadrillion dollars in the palm of your hand.


In other news, watch what happens w/ zerocoin technology. If that ever gets implemented for BTC than all bets are off for what will happen. Laundering money with no traces of the transaction? Will probably be pretty popular with tons of criminals, Corporations moving funds around shell corps, individuals hiding money and skirting around systems.

Of course that will be all well and good until world governments say no way and put the skids on it. That is the real problem. Even if people buy into it there is nothing stopping world governments from pulling the plug on the masses. Sure virtual currency may get there one day, but like Napster to the music industry, I think BTC is not the one.

 

[SparkyJJO]

I still wish I got in on the mining when it was easy and cheap, and then sold when BTC was going for over $200. I could have made a bundle of money for next to nothing

 

[TurtleCrusher]

you sound like lee parks

It's true though.

 

[Doppel]

Bitcoin was on colbert

http://www.colbertnation.com/the-colbert-report-videos/425561/april-17-2013/bitcoin-plunge

 

[M0oG0oGaiPan]

It's true though.

heh wasn't really commenting on the bitcoin aspect of his post. lee parks teaches an advanced rider clinic (for motorcycles) based on his book total control and there's a section that deals with having faith in your machine.

 

[randomrogue]

I have a $100,000,000,000,000 note. It's awesome. I flaunt it when I want to impress the ladies and my M3 is in the shop getting the door molding replaced.

Currency is not just about faith. It's about stability. People need to know that their salary will pay their bills. If you got paid in Bitcoins you would have absolutely no clue what it would be worth at pay day.

 

[Crusty]

I have a $100,000,000,000,000 note. It's awesome. I flaunt it when I want to impress the ladies and my M3 is in the shop getting the door molding replaced.

Currency is not just about faith. It's about stability. People need to know that their salary will pay their bills. If you got paid in Bitcoins you would have absolutely no clue what it would be worth at pay day.

That's because you don't understand how bitcoins work. You won't negotiate your salary to be 100BTC, you will negotiate your salary to be $10,000 USD to be paid out in BTC.

 

[Acanthus]

I still wish I got in on the mining when it was easy and cheap, and then sold when BTC was going for over $200. I could have made a bundle of money for next to nothing

I sold 80 coins at $6 :|

 

[randomrogue]

That's because you don't understand how bitcoins work. You won't negotiate your salary to be 100BTC, you will negotiate your salary to be $10,000 USD to be paid out in BTC.

Yeah and why would I do that? Why would I unload my hard earned currency that I can use everywhere into a volatile and highly unstable internet currency?

 

[Crusty]

Yeah and why would I do that? Why would I unload my hard earned currency that I can use everywhere into a volatile and highly unstable internet currency?

Why? Because you can effectively hide the BTC from the government and not pay taxes on it so long as you actually use the BTC to buy something instead of cashing it out for USD.

 

[Paratus]

Bitcoin was on colbert

http://www.colbertnation.com/the-colbert-report-videos/425561/april-17-2013/bitcoin-plunge

It was awesome. I had recently told my wife about them.

 

[randomrogue]

Ah so this whole Bitcoin scheme is for money laundering and tax evasion? Ah gotcha!

 

[Born2bwire]

Why? Because you can effectively hide the BTC from the government and not pay taxes on it so long as you actually use the BTC to buy something instead of cashing it out for USD.

The point is that the prices are still set in USD. Only at the time of transaction are the prices converted to BTC. In this manner, the purchasing power of your bitcoins oscillates wildly. There is no incentive to hold on to bitcoins long term at the moment other than speculation. In the past month the value has had a low of $47.70 and a high of $263.

 

[Crusty]

The point is that the prices are still set in USD. Only at the time of transaction are the prices converted to BTC. In this manner, the purchasing power of your bitcoins oscillates wildly. There is no incentive to hold on to bitcoins long term at the moment other than speculation. In the past month the value has had a low of $47.70 and a high of $263.

Right, which is why currently it's in your best interest to cash out BTC for USD as soon as you get the BTC. I never said it was a good idea to hold onto the BTC...

 

[Chiropteran]

I still wish I got in on the mining when it was easy and cheap, and then sold when BTC was going for over $200. I could have made a bundle of money for next to nothing

People were saying the exact same thing two years ago. The ones that ignored the trolls and just mined and held are rich now.

Look at the early responses in this thread:
http://forums.anandtech.com/showthread.php?t=2167303

"that site looks pretty shady to me too"

"move along... nothing to see here !"

"There has to be a catch, there always is.

You dont get anything for free, and your pc doing some random workload which turns into a currency is just odd.

Im willing to bet the guy behinde it will eventually screw everyone over somehow.
Kinda like those pyramid schemes..."

"Know how to make more money? Turn your PC off for that hour."

Back then a single video card could mine about a bitcoin per day, double that for 5970s. But a bitcoin was only worth $5, so it didn't seem like much. And people were so focused on the fact that a mere year ago you could mine hundreds of bitcoin a day on a CPU, so this 1 bitcoin a day BS was worthless, and it was a big waste of time.

Except if you actually mined and held all your coin, even with just a single 5850 video card, you would have 250+ bitcoin now, for basically doing nothing, which could be sold for $24,000 today, post crash prices.

History may or may not repeat itself. In a couple years you might be looking back and saying "damn, I should have mined in 2013, when you could mine a whole bitcoin in less than a month!"- because with the ever-increasing difficulty and the occasional reward halving the mining results of today are probably the best they will ever be.

 

[Chiropteran]

I have a $100,000,000,000,000 note. It's awesome. I flaunt it when I want to impress the ladies and my M3 is in the shop getting the door molding replaced.

Currency is not just about faith. It's about stability. People need to know that their salary will pay their bills. If you got paid in Bitcoins you would have absolutely no clue what it would be worth at pay day.

I have 100 trillion Zimbabwe dollar too

The point of bitcoin is to remove the need for "faith". What backs USD? Nothing. What actually backs the Euro? Nothing. What backed Zimbabwe dollars? Nothing. What backs bitcoin? Nothing. They are all the same in that respect.

Where they differ is in what happened to the Zimbabwe dollar. Rampant printing of money caused insane hyperinflation. Nobody has the ability to print bitcoin at will. Bitcoin technically inflates at a very regular rate through the mining process, which is cut in half about every 2 years on average. Effectively, bitcoin feels deflationary, because the rate of adoption exceeds the rate of currency production.

Now, you will probably argue that the USD or Euro are different from the Zimbabwe dollar and will never suffer from inflation of that level.

QE3 was announced on 13 September 2012. In an 11-to-1 vote, the Federal Reserve decided to launch a new $40 billion a month, open-ended, bond purchasing program of agency mortgage-backed securities and also to continue extremely low rates policy until at least mid-2015.[66] According to NASDAQ.com, this is effectively a stimulus program which allows the Federal Reserve to relieve $40 billion dollars per month of commercial housing market debt risk.[67]

QE3 isn't going to cause a Zimbabwe style hyperinflation economic meltdown, but it does erode the value of everything you have that is priced in USD. But if QE3 isn't enough, they will simply come up with another way of printing more money. Who knows what could happen in later years? your only choice is to have faith that the US government will do what it can to prevent it's main currency from falling into hyperinflation.

Bitcoin is mathematically impossible to inflate, beyond the known inflation that occurs from bitcoin mining. There will *never* be more than 21 million bitcoin. You don't need to have faith in bitcoin, as long as you understand the laws of physics and math you can know factually that bitcoin will behave exactly as it has been promised to behave.


Now, the interesting thing is that bitcoin doesn't need to beat out USD. It doesn't need to beat out the Euro. If it's good enough to replace the bottom 5% worst currencies in the world, it will be wildly successful. Anything more than that is just icing on the cake.

 

[Born2bwire]

Right, which is why currently it's in your best interest to cash out BTC for USD as soon as you get the BTC. I never said it was a good idea to hold onto the BTC...

But that destroys its value as a currency since you're arguing that it has the same utility as beer coupons at a fair. Liquidity is definitely necessary for bitcoin to work because it is going to have to rely on velocity to increase its supply. But it lacks the ability to store wealth with its volatility and so its value is going to be defined by its velocity. When people stop trading bitcoins, it becomes worthless. We can talk about gold being a medium of currency but gold has the ability that it can be stored and exchanged via an effigy in the form of a gold backed currency because it retains its value. I don't think bitcoin even qualifies as a true commodity because it lacks utility. It does require an investment to produce it, but it does not have any commercial or industrial utility that helps set a natural level of demand. Without a basic level of demand the value of bitcoin can fall to any level.

If you trade a commodity, at the end of the day that warehouse of wheat is going to be bought up and eaten. If you buy a stock, you get a return on the profits of the company via dividends and you share in the ownership. If you buy a bond, you get a return via interest payments. All of these, while having a degree of volatility and trade, retain a real value. I don't see bitcoin being able to store value and being unable to do so will lend itself to these volatile fluctuations.

 

[PrototypeZ]

Ah so this whole Bitcoin scheme is for money laundering and tax evasion? Ah gotcha!

Really it is difficult to do just that even with Bitcoin for a number of reasons. First, the transactions can be traced back. Second, if you are moving large amounts of money you will need to eventually go through a bank. US banks have auditing that looks at large money transfers, transfers over $10K, etc. Even if you were not making $10K+ level transaction and thought you could just do 10 $1K transactions, it will still get flagged. They do this to catch laundering operations, tax evasion, etc.

However if zerocoin extension is adopted and implemented with Bitcoin then the privacy would be in place and tracing transactions would be much more difficult. At that point governments will probably intervene.

Good read, check it out regarding Bitcoin and privacy:

http://blog.cryptographyengineering.com/2013/04/zerocoin-making-bitcoin-anonymous.html

 

[randomrogue]

The US government backs the dollar. "This note is legal tender for all debts, public and private." In addition if you put it in the bank it's backed by the federal reserve.

The dollar didn't drop 80%. Bitcoin did.

Face it, bitcoin is gambling and used to buy drugs. It's volatile and practically worthless unless you find another sucker.

 

[PrototypeZ]

I do not disagree with your post. Of course the first thing that people realize they can do to rake in money is to scam for bitcoins, host sites that accept it for services, payments over Tor networks for Silk Road type items, and god knows what else. I think it is funny that people think it is anonymous while it can be easily traced.

 

[Doppel]

http://thegenesisblock.com/tough-da...oin24-halted-bitfloor-shuts-down-permanently/

We are in the infancy of what may be the greatest fundamental shift for human society of the 21st century.

It's amazing people can say such a thing about bitcoin, I presume without laughing as he types.

People were saying the exact same thing two years ago. The ones that ignored the trolls and just mined and held are rich now.

As you said earlier, a broken clock is right twice a day. Predicting when a gambler will lose his fortune is hard. Predicting that he will is not; he will if he keeps at it long enough.

Btw you guys better be careful criticizing Chiropteran's precious bitcoins lest he block you. There is only so much he can take.