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To: grania
I still have my question of is the algorithm used to accumulate bitcoin credits to somehow accumulate those cut-off decimal parts of pennies in data entries? What does happen to them anyway?

Actually, these sub-bits/sub-pennies really can be just ignored / rounded-off and "reconciled" in bank's favor at the end of the day (fiscal period) but, if I understand your question correctly (or simply more broadly), you are asking if it's possible to exploit rounding-off mechanism to accumulate money in ANY electronic transaction, including but not limited to bitcoins?

In other words, whether the banking scheme from Office Space would work in real life, in electronic exchanges.

The answer is really not related specifically to bitcoins but, in general, it's usually not worth the time "invested" in such endeavour for anybody who is smart enough to devise and implement such a scheme. Transactions volume is only one of the factors.

This is just the most recent experiment you can draw your own conclusion from:
Money-making machine cashes in on currency trades - BBC, by Mark Ward, 2013 November 18

There is something real that I accumulate until it's meaningful. If one uses Amazon's credit card they accumulate Amazon credits which can be used for purchases there.

Similar to the "points" and/or "rewards" that you get from most credit cards. They exist in cyberspace (just like your "regular" bank account), but yes, you could convert them into "real" goods or services from shops at Amazon-land - just as you could with bitcoins for those who sell and buy in Bitcoin-land. There are even now bitcoin ATMs (a few were installed in Canada recently).

I have another money question. (is there a good website for Q&A about this stuff?) It's about gold. People think they own gold if they have a gold mutual fund or a certificate that someone is holding "x" amount of gold for them in a safe vault somewhere. It seems a little naive to believe that. If I owned gold, I'd want it to be in my immediate control and in a form so it can readily be identified as trustworthy gold. Am I being too cynical?

Most respected large gold ETFs are backed by physical bullion bars stored in the banks' vaults. For example, SPDR GLD, the worlds's largest gold ETF, stores the gold bars in the London vault of HSBC Bank. Gold of ETFS Physical Gold ETC is stored in the London's vault of J.P. Morgan. Sprott advertised that its PHYS Sprott Physical Gold Trust can be actually audited.

If I owned gold, I'd want it to be in my immediate control and in a form so it can readily be identified as trustworthy gold. Am I being too cynical?

Being cynical is fine, especially when considering range of available investments and the amount of accompanying misinformation, but also probably just a little bit confused by all the noise and hoopla about gold as "money" (rather than investment / trading vehicle or commodity) and more specifically "physical gold" vs "paper gold".

Just to assuage your discomfort with "paper gold" / gold ETFs, hedge funds and billionaires such as John Paulson, George Soros, Warren Buffett, just to name a few, have invested and divested their holdings in GLD, not in in the "physical" gold. I think that speaks volumes of their level of comfort investing in and holding for a long period of time the "paper gold."

ETFs have significant advantages over physical gold, such as much higher liquidity (the price of gold really took off since late 2004 when SPDR GLD ETF allowed hoi polloi to easily invest in gold, not in the form of futures or coins or bullion or miners' stocks - the demand skyrocketed, and the price correspondingly went up), no sales/VAT taxes, no safekeeping and other fees, no other expenses, such as insurance etc. etc. Similarly, SLV (iShares Silver Trust) started trading on NYSE in 2006. So, in real life, you really have much more "immediate control" over your investment via ETF than you would have with any "physical" gold or silver instrument - bullion, coins, jewelry etc.

So in a sense, these are demand-driven commodity-based trading vehicles, very liquid (at some point GLD became the most "valued" ETF in the world, beating SPY) but nobody confuses them with "money" unlike bitcoins, which are far less liquid.

All of the above is simply information, not a recommendation of or against certain investments.

30 posted on 11/20/2013 4:42:11 PM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: CutePuppy

Thanks for all of that information. You’ve made it really clear.


32 posted on 11/20/2013 5:06:24 PM PST by grania
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