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Fact, Fiction, And 11 Bitcoin Myths
Haters gonna hate, but the “Bitcoin bubble” meme has become the financial equivalent of a viral online cat video – wildly popular but pretty vacuous. In an effort to separate fact from fiction, ConvergEx's Nick Colas reviews 11 bitcoin myths (and dispels them). Still, there’s no doubt that the public is entranced: there are now 3x more Google searches for “bitcoin” than “Western Union”, and 33x more than for “Gold coins”. We started writing about bitcoin back in February because it was – and still is – a fascinating invention (for better or worse). How it plays out, we will just have to wait and see.
Via ConvergEx's Nick Colas,
In the spirit of the old high school essay question about the Holy Roman Empire, consider the following query: bitcoin is often described as an online crypto-currency, even though it is none of these things – discuss. The Cliff Notes suggested essay outline might go something like this:
Bitcoin doesn’t have to be just “Online.” There are meetups in parks around the world where you can bring your cash, hand it over to a guy or gal with a smartphone, and watch your Benjamins get deposited to an online bitcoin wallet.
The “crypto” part is also only partially correct. Yes, at its core the bitcoin system runs as a piece of open-source puzzles which individuals and businesses try to solve. The winner gets 25 new bitcoins for their trouble, currently worth about $23,000. Not bad, but the genius of the system is that everyone playing the puzzle must also register all bitcoin transactions that occur in the 10 minutes it typically takes to solve the puzzle. Those are also all visible to the system, but by forcing everyone to keep track and reconcile at the end of the 10 minute window, the chance of double-spending the same bitcoin is very low. Bottom line: you don’t need to know how to code to use bitcoins.
“Currency”… This is actually the hardest part of the question. Currencies exist primarily as a way for societies to avoid having to barter goods and services. It is much more efficient to hand over a $10 bill for dinner rather than contract with the restaurant owner to wash dishes for your meal. There are some places to spend bitcoin – a simple web search will find them. But the most accurate thing you can say about bitcoin as truly useful currency is ‘Not yet’.
We’ve been writing about bitcoin since February 2013 because we thought it was a remarkable and intellectually elegant solution to one key social problem: it simply costs too much money to move money. Want to send $100 to a friend in Argentina by Western Union? That will set you back $12. How about paying for a $1 bag of chips with a credit card in the US? Good luck with that – you’ll likely have to buy a 10 pack to meet the card minimum at the store. We had no idea the value of a bitcoin would skyrocket from our first report at $31 to about $900 today. We just thought it was cool.
Still, with all that capital appreciation comes a lot of misinformation. Part of that is understandable – bitcoin is new and very different from traditional notions of “Money”. Still, in the rush to understand what bitcoin is – and isn’t – the public discussion on the topic has gotten a bit muddy.
Today we offer up 11 bitcoin myths and our interpretation of the reality under the hype and confusion.
Myth #1: Bitcoin is huge
Reality: By any objective measure, bitcoin is tiny at a total value of $10.8 billion. Since one of the complaints about bitcoin is that it can enable hard-to-trace criminal activity, let’s compare that amount to the real enabler of drug sales, tax evasion, and even more heinous crimes the world over: the U.S. $100 bill. There are about $400 billion of those floating around the world. Total stock of cash money in the U.S.: about $800 billion. And when you look at total cash around the world, the number is about $3.8 trillion. Bottom line: bitcoin at current valuation is 0.3% of the world’s cash money. That is not huge.
Myth #2: Bitcoin is a major problem in dealing with drugs and terrorism
Reality: Bitcoin is way too volatile at the moment for any serious criminal element. These are not people that take capital risks where they don’t have to. Seriously – go try to steal 10% of a dealer’s cash and tell him it is frictional losses due to an illiquid market. I have heard enough Biggie Smalls raps to tell you how that story ends… Yes, some enterprising dealers clearly use bitcoin. But a serious problem? Bitcoin would be $10,000 or higher if it had any real share of the global drug trade. Consider that the UN Office on Drugs and Crime estimates the heroin trade into Europe is worth $20 billion on its own.
Now, it is entirely true that bitcoin businesses will have to develop the same anti-money laundering and know-your-customer rules as any other money transfer enterprise. And, as we will discuss briefly, that is very good for bitcoin.
Myth #3: Bitcoin is a currency.
Reality: Bitcoin really is a cross between a mutually held company or large partnership and a money transfer business. Its utility is that the bitcoin miners – those trying to solve the puzzles to get the 25 bitcoin reward – manage the transaction stack (blockchain, in bitcoin-speak) essentially for free. You want to be part of the partnership? Great – buy some bitcoins and hold on. But if you just want to send that friend in Buenos Aires money cheaply, you and she might both own bitcoins for a fraction of a second. You drop dollars in, she gets pesos out. Bitcoin is a system much more than it is a “Currency”. Maybe one day she will buy a beer with bitcoins, but the entire system has tremendous utility even without that functionality.
Myth #4: Bitcoin has never been more volatile than now, with all the attention it is getting.
Reality: Check out the two charts we’ve included after this note. They show trailing one month returns for bitcoin back to August 2010 as well as the standard deviation of those returns. May 2011 was the peak for trailing 28 day returns at 853%. The last peak was 11/30/2013 at 479%.
Myth #5: Chinese citizens are shut out of buying bitcoins by government regulation of the banking system.
Reality: According to data aggregator bitcoincharts.com, yuan-based bitcoin demand is still greater than dollar based transactions. Over the past 24 hours, 85,588 bitcoins changed hands on BTC China, while only about 56,000 traded on dollar-based exchanges.
Myth #6: Bitcoin is a store of value.
Reality: The phrase “Store of value” should be used very carefully and only with specific historical proof. It implies that when social or political floodwaters come, the asset in question will allow you to buy shelter, clothing and food. Gold has that history, as does silver. Perfect one-carat diamonds also make the grade, albeit only in the last 50-100 years. Bitcoin may one day prove it deserves to sit alongside those assets. It isn’t there yet.
Myth #7: Bitcoin is untraceable.
Reality: Bitcoin transactions flow through an open-source piece of software, so everyone sees every trade. No, there are no name/address identifiers, but Forbes magazine showed how easy it is to trace bitcoins through the system back in September. Methods to “Launder” bitcoins certainly exist, but so do the risks of handing over your coins to an online thief. Bottom line: after hearing about what the NSA can do with your computer and phone records, if you think anything you do online is secret, I can’t help you. OK, if you have mad hacking and crypto-skills, maybe. But chances are pretty good that you’d just screw it up. And get caught.
Myth #8: Loss of anonymity will make bitcoin worthless.
Reality: Remember, as long as banks and money transfer businesses have to maintain expensive data centers to run their businesses, bitcoin will always be a cheaper way to transfer money. Now, how many business build attractive and secure consumer and business offerings on the core bitcoin system – that is an interesting question and is certainly the most important issue regarding its long term price.
Myth #9: It’s a Ponzi scheme!
Reality: A Ponzi scheme is one that has no use other than to defraud later victims into giving money to earlier participants. Again, bitcoin has a potentially significant positive social value. Two regional Federal Reserve papers, published in the last month, agree with that statement. But if you still think bitcoin is a Ponzi scheme, you should probably get rid of your Federal Reserve notes as well. They aren’t “Backed” by anything either. Please remit them directly to: Nick Colas, ConvergEx, 1633 Broadway, NY NY 10019. I will forward them to one of my favorite charities – the USO - where they will do a world of good.
Myth #10: Bitcoin is ready for prime time.
Reality: I don’t own any bitcoin (I lost the 0.10 someone gave me in a demo) and I won’t be using them any time soon. The reason? I am afraid that there is simply no safe place to hold them. Hackers attack bitcoin “Wallets” with disturbing regularity. As the price continues to rise, their incentives to up. Their game goes higher as well. I don’t think I am alone in this sentiment. I want a company I recognize to start a bitcoin storage site. It could be a bank, or Paypal, or Apple. I don’t care which. There are plenty – they call me regularly – bitcoin millionaires out there. How about some of you start reinvesting in the system that has made you so wealthy?
Myth #11: Something better will come along and wipe bitcoin off the map.
Reality: Of course something better will come along. That’s what happens in technology. I personally think a charity-based bitcoin product would be huge. Donate bitcoin in New York, and let the charity redeem them at very close to 100 cents on the dollar where they are needed. Somalia, as one example, is facing almost total isolation as Barclay’s - the last foreign bank in the country - threatens to leave at the end of the year. The $100 million remitted by Somalis working abroad will then have to pay even higher fees to send their money home. What if a famine or other calamity occurs? And how will the economy have a chance with no access to outside capital?
At the same time, I simply do not see why a competing product will wipe out the utility of bitcoin. It has a first mover advantage and a large existing network of miners to support it. There are scores of early adopters with eight and even nine figure net worths to reinvest and build the system. There are other online money transfer products out there, of course, and more to come. The challenges will be the same for all of them: security, utility and legal compliance.
Let me sum up with a final thought: I absolutely understand why there are so many bitcoin haters out there. But don’t hate the player, hate the game. Technology is a tremendously disruptive force in society, and it knows no boundaries. It disturbs every status quo. That’s what is does. Just don’t make the mistake of thinking that you can reverse it by calling it a bubble. Sticks and stones, that…
Now, if someone hacks the entire bitcoin system just to crash it (there’d be no actual value in the effort, since bitcoin would be worthless), then of course will go to zero. But that won’t be the end – something else will come along. Technology doesn’t stop. Get used to it.
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you only recognize your fear but not your ignorance
For the billionth time: go to gyft.com, buy a CVS gift card with bitcoin, go to CVS and buy beer. You CAN buy beer with bitcoin.
I tried to up-arrow you, but starting a comment in Italics disables the buttons for some reason. Simple quote marks work better for your purpose on this site.
FTA:
"Maybe one day she will buy a beer with bitcoins, but the entire system has tremendous utility even without that functionality."
For the billionth time: go to gyft.com, buy a CVS gift card with bitcoin, go to CVS and buy beer. You CAN buy beer with bitcoin.
+1
If you have 30 or so minutes watch this video. http://www.youtube.com/watch?v=JP9-lAYngi4
When I first heard of twitter it sounded stupid, "tweeting" sounded gay. I vowed I'd never have a twitter account. What I never saw coming was the use in places like Iran to create a communications network that allowed protesters to organize. Thus having learned not to judge technology too quickly and with just my gut I held an open mind to bitcoin and then found the above video. In the USA things are "great" comparatively. We get paid in the worlds favorite fiat currency, we have a fairly stable legal system, our banks are OK. So a bitcoin has far less importance to the average us citizen. But in many places the governments are very corrupt and so are the banks. bitcoins are like electronic gold, allowing you to transfer your value to a digital form where you can later turn them into dollars or euros or some other form of currency that you prefer, that ultimately beats the crap out of your third world fiat. The crypto story is yet to fully unfold. Now is the time to watch and listen closely.
Great analogy. I remember my first encounter with Twiitter and I didn't see what was cool about it at all. I still don't use it myself, but the really useful things it can do were not immediately apparent to me and I have been quite surprised at how it has developed. "The crypto story is yet to fully unfold" is a bit of wisdom I will bear in mind. As I mused above, perhaps Bitcoin itself will be recalled as the Commodore 64 of crypto-currencies someday; not the thing that came out on top ultimately, but one of the things that broke ground, found what would and wouldn't work, and opened the way for sweeping developments most people didn't see coming from the original.
In the video I linked the speaker talks about Napster as the commodore 64. He explains how as a centralized system napster was sued and all of the subsequent systems evolved to evade government controls until you got to the disributed decntralized network that bitcoin is based on. The prospect of a banking system that can survive government attack and operate free from any central authority has the potential to liberate millions of people all over the earth. You know Willis Carrier bought the rights to air conditioning from Buffalo Forge when the greta depression hit, because they believed air conditioning would never amount to much. So doubters beware doubting that which you know nothing about.
The guy in that video has also predicted bitcoin to go to 10k by the end of 2014 and to hundreds of thousands within three years. Or to zero.
More like an hour and twelve, but an absolutely fascinasting presentation by a highly articulate, highly intellegent, highly honest and deeply passionate individual.
The ZH croud tend very libertarian so you guys need to take an hour of your time to hear this guy out.
Many thanks for the link, Gorles.
Seems like the writer, contradicted himself to some degree when making the first point? At first says it doesn't have to be online, then turns right around and says if you meet up with someone at a park you get get your paper money deposited to and "online wallet". I would say that perhaps he should have chosen better wording, such as electronic wallet. But maybe online is the more proper term. All Bitcoin transactions are recorded on a ledger that you have to be online in order for it to be recorded, correct? I don't know that I have a problem with an online currency/money. My understanding is the ledger is still pretty anonymous, point about the NSA well taken... "after hearing about what the NSA can do with your computer and phone records, if you think anything you do online is secret, I can’t help you." The NSA is so paranoid they seem to feel a need to know what everyone is doing everywhere anyway(see The Bourne Trilogy). Abolish the NSA. I thank Justin Amash for his efforts toward this endeavour. What I wonder about sometimes though is, what about when the electricity goes out? Good to have some PM's too I'd say. It's called diversification.
One thing I have seen some haters try and claim is, it's a fiat currency. Where do they get that from? I don't know that people are being made to use it "by decree". Someone who says it's fiat would have to show me some evidence of such. So far from what I have seen and read it's your choice. I like that about it. For instance, I can trade someone in PM's right now if we both agree to it by choice.
Just some not so random thoughts. I'm currently neither a Bitcoin supporter or detractor. You could say I'm a little leery about it, but I might get some at some point even so.
Pleae allow me to help you protect your money during your first transaction if you aren't sure how to.
electrum.org download the binary (geek word for install file) and install onto your OS of choice.
Create a new wallet and record the 12 word seed it provides you. KEEP THIS WORD LIST SAFE Put a copy in your safe. If you lose these 12 words you lose your money. (with total control over your money comes total responsibility for your money). NO ONE CAN RETRIEVE THOSE TWELVE WORDS FOR YOU. Although many geeks over at bitcointalk.org can easily help you retrieve your private keys from your hard drive.
Electrum will provide you with 5 public addresses to start with. Select whatever address you want and click "show QR code". Print it out.
Go to localbitcoins.com create an account with a strong passphrase (use startpage.com to learn what makes a passphrase strong) and enable 2 factor authentication if you have a smart phone.
Type in your zip code, select "cash" deal. Review the list of sellers in your local area. Look for a good price and plenty of positive feedback. Read the other purchasers reviews.
Contact the seller and set up a meeting in a public place with wi-fi. Bring your QR code, or if you have one, a laptop or smartphone.
Watch the seller send the BTC.
go to blockexplorer.com and watch your wallet address. Within a few minutes it will say "1 transaction, xxxxBTC"
Hand over cash.
Shake hands and walk away.
Alternatively this whole transaction can and should be done within the localbitcoins.com site. WHen you click "purchase BTC" at a sellers listing, LBTC.com will put the sellers BTC into escrow on the websites servers. Then the coins are sent to your localbitcoins.com wallet on the same server; your wallet is protected by your strong passphrase and 2fa. Upon the coins being transferred to your wallet, you can provide the seller with a secret 7 digit code that localbitcoins.com gives you, the buyer. Once he types it in, the transaction is complete. Then you take possession of your coins because although localbitcoins.com is reputable their servers are storing your money. So do a withdrawal from your wallet on lbtc.com and send the coins to your electrum wallet which you possess the private keys for.
If you can find someone who's done a purchase. Bring them along to show you the ropes.
Anyone in the fingerlakes region of NY is welcome to ask me to assist them in any way.
That reminds me of an argument that, say, a 10% tax on a transaction, income, consumption or whatever is a 'necessary' 'contribution' due to an insecure and untrustworthy world.
And which one would you prefer - paying a 10% tax or bribe or losing 10% to the bid/ask spread of an illiquid currency? One pays for and encourages more of the same, i.e. tyranny, coercion, violence, taxation, interference, whereas the other actually works to decrease the bid/ask spread and increase liquidity. In other words, one is getting worse and can only get worse precisely because it is done involuntarily; and the other one improves precisely thanks to your voluntary participation.
rehypothecation, baby!
When will STUX Coin
Yes! Digitize that money and await fat bankster cock. They know you are too stupid to see the event horizon of tangible assets. Become the sheep marketplace. Surely, your "wallet" is safe!
Can you show me on the doll where the bitcoin touched you?
Funniest ZH comment of the day!
Oh snap!
Sheep marketplace already existed and recently closed shop.
You really are behind the times.
Just startpage it. Don't google it.
Please... give us a 48 or 72 hour moratorium on Bitcoin stories.
Nobody really cares that much and the belittles the subject.
only if the same applies to gold/silver stories
isn't this the story of the rise and fall of the EURO, the EURO promised uniform consumer pricing across all European countries, then when it filtered down to bank accounts and bonds, the shtf.
Exactly right.
One is a fiat paper currency. The other is digital and used voluntarily.
One can be printed ad finitum, the other will never be more than 21,000,000 and 500,000 have already been lost.
How did you type your comment?!?! You obviously can't read.
Presented without comment...
http://visualcapitalist.com/plus/blog/bitcoin-an-almost-exact-fit-to-gol...
how is BTC anything more than a fancy PayPal? fonestar still values his BTC in $. what sense does that make? others support BTC and claim that the digital $ is also useless when the power goes out. i don't think that BTC or another cryptocurrency will be anything other than a small tech tulip market until the local McDonald's workers are paid for their labor in BTC, rather than $. otherwise BTC is simply a techy currency. "to the moon, bitchez! (valued in $)"
Paypal is just an electronic payment system that was borne as a low cost alternative to accepting visa and other main stream cards. In the video I posted the speaker calls bitcoin the most important computer science invention since the internet and he is a 20 year veteran of the computer security industry. You can't really make gut feel judgement about this stuff, you have to go get some knowledge. Here is the link again http://www.youtube.com/watch?v=JP9-lAYngi4 One key point he makes is billions of people have no access to banking systems at all. Bitcoin allows you to be your own bank. He also says Western Union with their up to 30% fees will be the first victim of bitcoin. This is not about a US citizen buying a big mac with bitcoins in his smartphone. This is about a possible revolution and a possible world revolt against the dollar as he alludes to in the final part of the video where he says the Chinese ran a 1-1/2 hour documentary on bit coin on national TV! The Russians and the Chinese would love to kick control of the world currency out of the US government hands. I think a top reason on the list for them is that oil is traded in dollars.
dont worry, people didn't understand the web back in the 90's either so you can wait on the sidelines until you can't avoid it
If you like your Bitcoin, you can keep it.
> there are now 3x more Google searches for “bitcoin” than “Western Union”, and 33x more than for “Gold coins”
Then I'd like to buy gold and silver coins
RE "there is simply no safe place to hold them" dude, ever heard of offline or paper Bitcoin wallets? https://bitcoinarmory.com/
The bitcoin blockchain itself has never been hacked.
What hackers attacked was websites that stored the private keys to customer's wallets, NOT the blockchain wallets themselves. There are wallets/addresses on the blockchain with tens of thousands on bitcoins inisde each one, which no one has hacked up to now.
Up to now, famous last words.
xxx You obviously have no idea how the bitcoin system operates.
Please try ti learn the technical underpinnings of BTC before making yourself look like an idiot again.
Like I said its painfully obvious.
Does the number 10^256 mean anything to you?
If they can't hack the blockchain then they will the wallets. Oh skip that last part they already have.
I will send you $100 in BTC to the address of your choosing if you provide a link to a bitcoin wallet being hacked.
The whole ZH community will be able to see the transaction at blockexplorer.com and know I stuck to my word.
So show me a link. Not a server being hacked. Not a website being hacked. that's why I tell people HOLD YOUR OWN COINS!
A wallet built off the original BTC protocol that was hacked, show me this.
its secure dude and you're just a liar and a troll. You obviously don't like bitcoin and that shows in your comments.
But your assertion that Bitcoin wallets based on the protocol have been hacked is false.
"Here’s your digital-currency lesson of the day, courtesy of a guy who calls himself TradeFortress: “I don’t recommend storing any bitcoins accessible on computers connected to the internet.”
But there was a catch. You had to trust the company — and its internet-connected computers — with your bitcoins. In retrospect, that was a bad idea. And now, Inputs.io customers are learning just how bad of an idea it was."
TradeFortress says that this was a social engineering attack, meaning that the attacker masqueraded as someone he wasn’t in order to get access to the site’s systems on cloud-hosting provider Linode. “The attack was done through compromising a chain of email accounts which eventually allowed the attacker to reset the password for the the Linode server,” he said.
Typical story there. Bitcoin code broken...Not in the least.
hold your own coins!
Here you go. Prove it. I will be honest about it if you actually do it.
1Miqw7N9F2b47pZr2zgNa9TCb825ESWqXf
Nothing yet. Sucks to get called out doesn't it?
I'm waiting...
https://bitcointalk.org/index.php?topic=50232.0
Specific wallet attack.
http://www.theverge.com/2013/11/26/5147410/bitcoin-hack-allegedly-steals-over-1-million-from-bips-wallet-service
Where is my $100 worth of bitcoin?
https://bitcointalk.org/index.php?topic=83794.0
$100
http://news.softpedia.com/news/Bitcoin-Wallet-Inputs-io-Hacked-4-100-BTC-Stolen-397853.shtml
“I don’t recommend storing any bitcoins accessible on computers connected to the internet.”
So much for bitcoins as a means of transmitting money
"But there was a catch. You had to trust the company — and its internet-connected computers — with your bitcoins. In retrospect, that was a bad idea. And now, Inputs.io customers are learning just how bad of an idea it was."
The problem is you have to trust bitcoin companies in the first place to even buy them.
if you are going to quote someone at least read what they said.
Ok you bought bitcoins through a company, put them on a flash drive whatever BUT go to exchange them for money you, are back on the net, with all the problems that guy mentioned.
Please do not ever use bitcoin you disingenuous troll.
And how was I trolling exactly? Please explain your assertion. Please provide examples of me trolling ZH. You guys write checks here and you fail to understand that I might know a thing or two about Bitcoin. YOU are the troll. I have never even seen you post before but NOW, all of a sudden you feel the need to. People like you will ruin the concept of bitcoin. You are the NSA. I will defend Bitcoin to the end on it's merits and all you have to offer is vacuous name calling? It proves my point.
After reading this thread I have come to the conclusion that the sheep will never learn and we are doomed to repeat this nightmare over and over and over again. Just go to gyft and buy gift cards with bitcoin and all is well? What kind of ignorant crap is that? Nobody purchased a Tesla with bitcoin either. This is all beginning to be very boring and childish...just sayin.
There is more of a chance the FEDs will try to control it than there is of them stopping it. In any case $1,000,000 per bitcoin seems to be a fair value for it.
Bitcoin can be shut down in a hearbeat, you can't rely on it.
Keep your eyes on the prize: real physical gold.
another coin seller! guess business is a bit slow? or all of it a bit coin????
myth #9 its a ponzi scheme. You call that a fucking arguement? It is exactly this. every shitcoin buyer is trying to profit from increses. what about bitcoin is NOT a myth?
This shitcoin buyer got in because of the ramification for human liberty should the BTC experiment succeed. The astronomical return is just a nice benefit for being a libertarian and having a working brain.
same with gold... you nutcase
If it's good enough for kings it's good enough for me.
The critics of Graham Bell all said: "Nobody has a telephone, why should I get a telephone?"
For all of Bitcoin's drawbacks there are some things I really do like about it. I belong to a group called the Free State Bitcoin Consortium but I am merely an observer there. The Bitcoiners there are FAR less obnoxious then the ones here and you can actually read what they write and perhaps learn a thing or two. In fact they are not obnoxious at all and they are libertarians.
This makes me wonder about what is going on ZH. We seem to have some major sophomoric adversarial issues going on every time a Bitcoin thread appears. It's not just one "side" or the other that is doing it either. Gold sucks, Bitcoins sucks, fiats suck, barter sucks, everything sucks and my way is better than yours. Does that sum it up? Many of us are acting like petulant male teenagers in high school arguing about who has the fastest car thinking the girls will be impressed by the machismo.
Divide and conquer seems to be alive and well. Perhaps it might be a good idea to fucking knock this shit off. The intent of "goldbugs" is to hold assets outside of state control and piss off the state. The intent of Bitcoiners is transfer value quickly without borders and piss off the state. Pissing off the state is the common ground and we all know the state is really the central banks. We have a common enemy.
From a goldbug perspective who has used Bitcoins and has a blockchain wallet, I would like offer some rational advice. I have been witnessing for a very long time how supposed ZH Bitcoiners attacked goldbugs on this blog. It was no surprise that goldbugs would retaliate. Goldbugs have heard it all over the many years and decades. Goldbugs have long memories because they have been alive a lot longer than most Bitcoiners. I would like a few certain ZH "Bitcoiners" to know that you have alienated a lot of people who might have otherwise given the concept a go. Most of the Bitcoiners I know on a personal basis actually DO own physical gold and silver as well.
Here is an interesting concept of how things could possibly work together effectively being shut down by FinCEN. This is the thinking we should strive towards. What if gold and silver were involved? I don't know that it could work but consider the possibilities.
http://www.wired.com/wiredenterprise/2013/12/casascius/
THis is fightclub asshole. We do this for fun!
Take your pansy ass back to wherever. Half the reason I read zerohedge is to see fonestar shit on even though he 100% corerct.
That dude has balls of steel and I respect that. I've seen him be a punching bag for months now and he keeps coming back.
If I had to get a response from xenofrog, akak, or fonestar...
it would be in that order. yet I also "punch them the hardest" in that order as well.
This isn't playboy. It's not all about the articles. Did you see the kittens using mining equipment in the link above?!?!
So cute!
Oh, I am so sorry your highness. You want fight club then let's fucking go. First of all, who the fuck are you? What have you ever done to promote liberty? Tell us all what you have done. You work for the NSA don't you? A little worried are you?
fone, school me if you will. What determines the price of a BTC?
Miners, volume, hype? We know there is a finite amount, we know how many are out there now so what dictates the value and or price?
The price is set on the various exchanges mt.gox etc. The markets are not mature and are highly volatile. The volatility is certainly a problem for bitcoin as a usable currency. I mean you sell a guys hamburger for bitcoins and in an hour the bicoins are worth half? that is no way to run a business. But highly volatile immature markets are also no reason to totally discount this emerging technology and call it the modern day tulip bulb rush. The market will stabilize over time I am convinced that in my lifetime I will never have a better chance to either be significantly rewarded or significantly hosed, so how can you not play even just a little?! http://bitcoinity.org/markets Here is where you can see prices in real time. Remember too, trading is 24/7
But Bitcoin seems more of a service as I have said before, what causes the price action?
To me, it's the same this as Paypal but with Paypal you get a rate locked in when you transfer "currency" to said operating platform.
I don't get it... not trying to pick a fight but is this another "faith" mechanism?
I think the price is really due to hoarding. Nobody has any place to spend bitcoins beyond the odd website or new age coffee shop. There is a sense that this is the new gold and people believe that and want to own it. 21 million bitcoins max and 7 billion people. It is impossible to say where the eventual stable value settles in. I dont think calling it feverish speculation is at all out of line. A dangerosu bet to be sure. But to call it the same as fake tulip bulbs is just silly.
"What determines the price of a BTC?"
Same thing that determines the price of gold or oranges... how much will someone buy for and how much will someone sell for?
these articles are like red meat thrown to the lions
Please, everybody, please BUY BITCOIN!! Since the NSA invented it, there is every reason to believe that the mysterious core of users who own but rarely trade most of the bitcoins are either NSA employees, former NSA employees, or the NSA itself. This is your contribution to their pension plans. They have done their job. Do yours. Thank you.
BTW, this article correctly pointed out that Bitcoin is not anonymous. In fact, it was engineered to be 100% traceable if you have the tools and resources.
With all that, it still has enormous potential value as a medium of exchange.
The majority of ZHers are Americans and most comments made are the result of being viewed through that prism. The average person in South America, china or Africa using bitcoins to send money to their relatives could give a fat flying fuck about the fed, fidelity, fincen, the US banks, whether or not it's an NSA plot or anonyous etc. this shit's gonna turn interesting around mid next year when hardware wallets and debit cards start to proliferate. The 3G/4g networks and even dedicated btc networks are going to be way more important than the public internet for btc traffic.