And its all outside government control.
I’m sure this subject is more complex but that’s the impression I get of bitcoin; that it has value because all have faith that the computerized transactions represent money which can be spent or stored for future use.
What you've stated here pretty much describes my feelings regarding the Bitcoin. A number of people here have previously tried to explain to me just how this works, but I confess I still fail to understand the concept (and maybe never will.) I don't know why any individual or business would accept the Bitcoin as legitimate currency. To me, it's an artificial currency not backed by anything or any government, and relies solely on the faith of the people willing to deal in Bitcoins. Others here have indicated that they see it as a good investment. I hope it works out for them. As for me, one of the cardinal rules of investing is that you should never get involved in an investment that you don't understand, so I'm staying away.
Not backed by anything....
You are correct. It is backed by the owners.
But, as an aside, what is the dollar bill backed by?
There is an upside limit to the number of bitcoin that can be created. So, when they are all created it cannot be inflated to meet the debt demands of the country.
Think about it: 100 years after the introduction of the Federal Reserve note, the dollar’s purchasing power is now about 2% of what it was.
That isn’t exactly “backed” by anything “real.”
I toyed with the idea of accepting Bitcoin for my ecig website.
Setting it up would have cost quite a bit, but essentially it works just like accepting credit cards.
You accept payment in the Bitcoin, it’s value is immediately transferred to an exchange and you get the correct (current) amount of USD deposited to your bank account in a couple days.
There’s little risk to accepting Bitcoin as payment if you do it that way... holding it, well...that presents a bit more risk.
Guys, listen up.
1) Bitcoin is generally hated by gold people. Keep that in mind with all you hear. Bitcoin soaks up currency that the gold people think might otherwise go to gold. That’s why they hate it.
2) Bitcoin should not be thought of as an “investment”. It’s storage. International storage. Don’t think of up or down. Think of storage.
3) THE PRIMARY VALUE OF BITCOIN IS PORTABILITY. The gov’t doesn’t want you taking money out of the country? They can’t stop it. They can confiscate cash at the airport. They can X-Ray gold and confiscate it. Bitcoin is not stoppable at the airport.
4) Gold people are all about SHTF stuff. Well, if food is scarce no one will trade it for pieces of metal. If food is available somewhere else, outside the country, again, portability.
5) Don’t think it can’t happen here. A day may come when you need to flee. You can’t do it with gold.