We gonna talk about BitCoin?

Henning said:
That's not a backing, a backing establishes and secures a value for exchange into real goods rather than simply an existence. That they exist and how to secure them is again no different than a US$ only using a different data system.
Click to expand...

They are backed by common belief and is part of the reason the value swings so wildly. Early days though. As time goes on and more and more people believe then the value will stabilize.
 
Henning said:
That's not a backing, a backing establishes and secures a value for exchange into real goods rather than simply an existence. That they exist and how to secure them is again no different than a US$ only using a different data system.
Click to expand...

Why would you want your currency tied to physical goods or service? What happens when people no longer desire the physical item to which the currency is tied? Allowing the market to set the value by supply/demand seems superior in my mind.

In addtion, I think you need to reconsider your requirement for a backing by "real" goods. Is a digital download a "real" good or service? Is a 1-month Netflix subscription a "real" good/service? What about an app download on itunes or google play? Obviously we are moving into an era where not everything you exchange currency for can be held in your hands.

The fact that cryptocurrencies are secure gives them value, at least in my mind. The coins are created in a predictable manner and distributed to users who contribute computing power to secure and maintain the blockchain. They can be sent from one account to another quickly and at very low cost. The best part is no government or person can arbitrarily take them away from you (Cyprus). Next year the Fed could do "Fiscal Easing" again and further drive down the value of your dollars, but that can't happen with cryptocurrencies.
 
Captain said:
They are backed by common belief and is part of the reason the value swings so wildly. Early days though. As time goes on and more and more people believe then the value will stabilize.
Click to expand...

Exactly, their value is determined by belief. Bitcoins are another religion.
 
Speculating on anything whether it be currency, stocks, or whatever is pretty much more informed gambling.

Saying "if only I'd kept that stock I'd have millions of dollars" is about like saying "if only I knew the next card was going to be a jack of spades I'd have won that hand".

I'm not saying I don't do the same thing... but that's pretty much all it is.
 
lionclaw said:
What an odd opinion.

Are you insinuating that the idea of bitcoin is irrational?
Click to expand...

People can believe in whatever they want. Are bitcoins irrational? Yeah, I guess they are since their value isn't tied to a ration of anything. US money used to be tied to a ration of metal, in fact the coins were minted of it. This no longer holds true which is why US currency is also irrational, another 'faith based currency'. However the USD is backed by the full faith and credit of the United States, what backs the bitcoin?
 
Seems to me that a Bitcoin is more of an electronic stock certificate than a currency, the stock being tied to nothing but the belief in itself.
 
Henning said:
Seems to me that a Bitcoin is more of an electronic stock certificate than a currency, the stock being tied to nothing but the belief in itself.
Click to expand...

There may be some truth to that, but I challenge anyone to develop a convincing argument that bitcoin is inferior to USD.

Also, some of the posts in this thread lead me to believe that not everyone really understands what bitcoin is and how it works. I would encourage anyone who wants to participate in a constructive conversation to come to the table informed. Extra points for downloading and reviewing the bitcoin client source code.
 
lionclaw said:
There may be some truth to that, but I challenge anyone to develop a convincing argument that bitcoin is inferior to USD.

Also, some of the posts in this thread lead me to believe that not everyone really understands what bitcoin is and how it works. I would encourage anyone who wants to participate in a constructive conversation to come to the table informed. Extra points for downloading and reviewing the bitcoin client source code.
Click to expand...

It is inferior in that there is nothing at all backing its value, nor is there any assurance that you can use this currency in trade for your needs. When you are hungry and go to the grocery store, is there an assurance that the store will accept your bitcoin as payment? Is there a determined value at which you can trade that bitcoin for a pound of beef? Is there a way you can pay at the register in bitcoin?

That most people don't understand bitcoin is not the problem of the people, it is the problem of the bitcoin.
 
Henning said:
People can believe in whatever they want. Are bitcoins irrational? Yeah, I guess they are since their value isn't tied to a ration of anything. US money used to be tied to a ration of metal, in fact the coins were minted of it. This no longer holds true which is why US currency is also irrational, another 'faith based currency'. However the USD is backed by the full faith and credit of the United States, what backs the bitcoin?
Click to expand...

Like gold, there's a limited amount. It takes time and computer effort to "find" one.
 
Henning said:
People can believe in whatever they want. Are bitcoins irrational? Yeah, I guess they are since their value isn't tied to a ration of anything. US money used to be tied to a ration of metal, in fact the coins were minted of it. This no longer holds true which is why US currency is also irrational, another 'faith based currency'. However the USD is backed by the full faith and credit of the United States, what backs the bitcoin?
Click to expand...

I'm not sure if that comment was in jest or not, but just in case:

ir·ra·tion·al
iˈraSHənl/Submit
adjective
1.
not logical or reasonable.

When I said Bitcoin was backed by math, you went after me and said it had to be backed by a physical thing. But now you're telling me USD is backed by faith in the US government. So which is it? Can it be backed by an idea or does it have to be a physical thing?
 
Henning said:
It is inferior in that there is nothing at all backing its value, nor is there any assurance that you can use this currency in trade for your needs. When you are hungry and go to the grocery store, is there an assurance that the store will accept your bitcoin as payment? Is there a determined value at which you can trade that bitcoin for a pound of beef? Is there a way you can pay at the register in bitcoin?

That most people don't understand bitcoin is not the problem of the people, it is the problem of the bitcoin.
Click to expand...

I should have said the IDEA of bitcoin vs the IDEA of the USD. There is no guarantee that X dollars will buy you a pound of beef at the store. What US law dictates as such?
 
lionclaw said:
I'm not sure if that comment was in jest or not, but just in case:

ir·ra·tion·al
iˈraSHənl/Submit
adjective
1.
not logical or reasonable.

When I said Bitcoin was backed by math, you went after me and said it had to be backed by a physical thing. But now you're telling me USD is backed by faith in the US government. So which is it? Can it be backed by an idea or does it have to be a physical thing?
Click to expand...

I already said that the USD is also troubled, but it is an accepted standard. The fact that the USD is a fiat currency is already unconstitutional which is why we have The Federal Reserve as a work around. Why should we replace a troubled and problematic system of currency with another currency that has all the same problems plus more? That is, by your definition, irrational.
 
Henning said:
That most people don't understand bitcoin is not the problem of the people, it is the problem of the bitcoin.
Click to expand...

Such is the argument of all people who get left behind in the wake of change. If people don't want to learn anything new and get left in the dark ages, fine by me. But those people shouldn't expect anything other than a meager existence.
 
Henning said:
I already said that the USD is also troubled, but it is an accepted standard. The fact that the USD is a fiat currency is already unconstitutional which is why we have The Federal Reserve as a work around. Why should we replace a troubled and problematic system of currency with another currency that has all the same problems plus more? That is, by your definition, irrational.
Click to expand...

I'm not hearing an alternative solution.
 
lionclaw said:
Such is the argument of all people who get left behind in the wake of change. If people don't want to learn anything new and get left in the dark ages, fine by me. But those people shouldn't expect anything other than a meager existence.
Click to expand...

Works both ways, if a technology cannot adapt to general consumption, it will be left behind. More examples in that way than the other. Right now, Bitcoin isn't showing where it will be advantageous as a currency, it is unstable and difficult to use. Until they get a card you can swipe at the store, they will be a 'trader's commodity'.
 
lionclaw said:
I'm not hearing an alternative solution.
Click to expand...

I don't have one, I'm just not seeing where Bitcoin has positioned themselves to be a viable alternative either. It's just more of the same crapola with increased volatility and decreased useability. Why go from bad to worse? I do like that it gets the Federal Reserve out of the loop, but that is also what will doom it into a black market currency in the end. China has already banned it. We could start trading in Yuan.
 
Last edited:
lionclaw said:
I'm not hearing an alternative solution.
Click to expand...

Barter.

If you're really with the tinfoil crowd, that's your only solution.

Bitcoin does appear much like a glorified stock in the middle of a wild bubble. When it's value falls (and notice that's when, not if), it's likely to lose that "faith," as no one is required to accept it, and no one will when the price is falling.

It's gonna crash. Really hard. The "fun" part will be predicting when. No one is good at timing bubbles, except by chance.

And decrypting is difficult, not impossible.

This is a phenomenally stupid investment.
 
Henning said:
I don't have one, I'm just not seeing where Bitcoin has positioned themselves to be a viable alternative either. It's just more of the same crapola with increased volatility and decreased useability. Why go from bad to worse? I do like that it gets the Federal Reserve out of the loop, but that is also what will doom it into a black market currency in the end. China has already banned it. We could start trading in Yuan.
Click to expand...

You're right with regards to usability. I believe that will change as more payment processors come on board. I don't agree that it's the same old crapola. Cryptocurrency is a new idea.... i know people love comparing it to USD or gold, but the truth is it isn't really like either of those at all. I FIRMLY believe that once a person understands the math/mechanism behind it, that they would be less likely to make comparisons.
 
lionclaw said:
You're right with regards to usability. I believe that will change as more payment processors come on board. I don't agree that it's the same old crapola. Cryptocurrency is a new idea.... i know people love comparing it to USD or gold, but the truth is it isn't really like either of those at all. I FIRMLY believe that once a person understands the math/mechanism behind it, that they would be less likely to make comparisons.
Click to expand...

If it is a currency with a value of its own, it's the same old song and dance no matter how it's created. When more payment processors come on board, it will become regulated and taxed if not outright banned. The Fed will not give up their position easily. The Bitcoin could work in conjunction with a revolution, but not on its own.
 
MAKG1 said:
...no one is required to accept it...
Click to expand...

Good point. The dollar bills in my wallet say "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE."

Of course, that doesn't stop the value of the dollar from fluctuating, but it's something.
 
The crypto is protection against counterfeiting.... just as the special paper and other features protect the us dollar. And I agree that the crypto is likely superior.

But the bottom line is that Henning is right - Currency is an IDEA, and it's backed by FAITH that when you trade something of value for currency, you'll be able (later) to trace that currency for something else of value.

Even when the USD was backed by gold, it was still belief that the gold was in Ft. Knox, and that gold was of a "fixed" value, that backed the USD.
 
TMetzinger said:
But the bottom line is that Henning is right - Currency is an IDEA, and it's backed by FAITH that when you trade something of value for currency, you'll be able (later) to trace that currency for something else of value.
Click to expand...

I don't see anyone arguing against that point.

TMetzinger said:
The crypto is protection against counterfeiting.... just as the special paper and other features protect the us dollar. And I agree that the crypto is likely superior.
Click to expand...

While resistance to counterfeiting is one advantage, the primary advantage I see is that it is generated on a predictable basis and the volume of currency cannot be manipulated by a centralized entity.
 
lionclaw said:
I don't see anyone arguing against that point.



While resistance to counterfeiting is one advantage, the primary advantage I see is that it is generated on a predictable basis and the volume of currency cannot be manipulated by a centralized entity.
Click to expand...

Then how does the volume of the currency increase with demand growth?
 
Palmpilot said:
Good point. The dollar bills in my wallet say "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE."

Of course, that doesn't stop the value of the dollar from fluctuating, but it's something.
Click to expand...

It doesn't change the fluctuations.

But what it does do is say that if you have a mortgage for $200,000 for example, the bank cannot say "OK, now you owe us $250k because the value of the dollar has fallen."
 
BitCoin is the currency of criminals, drug cartels, terrorists and tax dodgers. I see this currency becoming very, very popular in the 21st century. Buy now.
 
Dav8or said:
BitCoin is the currency of criminals, drug cartels, terrorists and tax dodgers. I see this currency becoming very, very popular in the 21st century. Buy now.
Click to expand...

How will it expand to meet demand? How will it be spent? Can you buy a new G-550 with them? Can you buy a yacht? Can you build high rise buildings in city centers with them?
 
bullwinkle said:
Bitcoin is just another fiat currency, without even a nation's army to back it. It is going to crash hard.
Click to expand...

Bitcoin doesn't have an Army, but it has something that fiat currencies don't have.

There can only ever be 20 million bitcoins.
 
JimNtexas said:
Bitcoin doesn't have an Army, but it has something that fiat currencies don't have.

There can only ever be 20 million bitcoins.
Click to expand...

Which in itself will kill it. As a currency it will be useless, it is no more than a stock certificate in a frozen growth company. How can you expand an economy when you can't expand its currency?
 
Henning said:
Which in itself will kill it. As a currency it will be useless, it is no more than a stock certificate in a frozen growth company. How can you expand an economy when you can't expand its currency?
Click to expand...

Long division.
 
bartmc said:
I dropped AAPL at $13.00 to buy a $7,000 Ford Ranger. :mad2:



Apple had switched to OS X(and I was a Unix Guy) and the iPod's they were coming out with looked neat. Then, I needed a truck. :mad2: That was 2003ish.
Click to expand...


I only hung on until $97. Heh. Didn't scale out. Oh well.
 
Use ethernet money to invest in an ethernet company. Invest in the Terrafugia Transition with BitCoin.
 
Henning said:
How will it expand to meet demand? How will it be spent? Can you buy a new G-550 with them? Can you buy a yacht? Can you build high rise buildings in city centers with them?
Click to expand...

I don't know about now that it has gained notoriety and inflated values, but a few years ago it was used to transfer money all over the world by illicit people and organizations. I guess there are banks that would accept it and transfer it to real money that really didn't give a crap who or what was making the deposit.
 
lionclaw said:
There may be some truth to that, but I challenge anyone to develop a convincing argument that bitcoin is inferior to USD.
Click to expand...
Here's a compelling argument: I can't go to the local hardware store in town and buy anything without cash on the barrel head. He doesn't even take credit cards although will extend store credit if he likes you.
 
The number of retailers that accept BitCoin grows every day.
 
You must log in or register to reply here.
Back
Top