Posted on 11/02/2017 4:02:38 PM PDT by Enlightened1
There are finitely many bitcoins. It’s getting harder and harder to mine them. Are they basically the first 21 million prime numbers? something like all primes less than 2^29? Maybe 3 bits for some sort of checksum or identifier?
the mining is a problem. It takes a lot of electricity to verify a set of transactions and to thereby earn some additional mined bitcoin. I can’t see how this could ever scale up to where it could handle serious transaction volume. It would seem to be too inefficient.
Eh, you aren’t really spending 30 bucks on the coffee though.
You’re spending .0002 bitcoin.
What that means to you may be something different to someone else. It’s barter, essentially.
Worth whatever the people think it’s worth.
I had a website. I could offer to accept payment in bitcoin. That caused me no more risk than accepting VISA. It all ended up as dollars in my account 3 days later.
I wouldn’t ever buy one. I continue to think it’s a scam. BUT, for the time being...merchants can capitalize on the exchange and take their payment in coin of the realm.
At this price, buying in would be a catastrophic mistake.
If you are a merchant, accepting bitcoin offers you no more risk than credit cards. And, it might give you the edge over your competition.
Someone pays .121 bitcoin for a purchase. I get .121 bitcoin. Immediately, it goes thru the processor...
.121 bitcoin is worth 34 snazzleberries.
I get 34 snazzleberries in my account.
Don’t think of bitcoin as an investment. That time has LONG passed.
Think it through. Say a cup of coffee costs $X. At today's exchange rate that's Y BTC. If the "value" of a BTC now doubles that same Y BTC can be exchanged for $2X, so you effectively paid double for your coffee, because coffee is not priced in BTC. Bitcoin, by design, is a deflationary vehicle because the quantity of BTC is fixed. So the more it is adopted the higher its "price" has to rise, which means you never want to spend it.
Suppose your salary was paid in BTC. Each year your salary would be reduced because the next year's BTC is "worth" much more than this year's, and your actual salary isn't going to double each year. Your incentive is to save every BTC you earn, not spend it. For the same reason, you'd never borrow BTC because the effective "interest rate" would be astronomical. Would you try to buy a house today using a "payday loan"?
So now you have a "currency" that nobody wants to actually spend, and a nonexistent credit market. How does an economy operate like that? Economists will tell you that deflation is much more destructive than inflation. Ideally a currency should be perfectly stable, which is something BTC can never be, by design. Hence BTC can never be an actual viable currency. It's a pure speculative instrument.
Today's cryptocurrencies also assume they cannot be forged, but their security is based on mathematically hard problems that are assumed will remain hard forever. The rate of progress in quantum computing doesn't bode well for that assumption. At some point, the entire structure is subject to collapse, which again makes it completely unsuitable as a viable currency.
What goes up must come down....so there is a right time to sell!
OK then.
Of course the U.S is an actual place.
Where exactly is BitCoindia?
I find it amusing that people think those who “invest” in bitcoin (its not really an investment, it is a “use”) do not consider other investment opportunities.
Each week I cash out a portion of my bitcoin profits. I set aside my tax liability. I buy stocks in my DRIP accounts. I have been buying 1/2 oz of gold every two weeks for the past year or so.
Bitcoin could drop to zero tomorrow and I would still be so far ahead of where I was three years ago, it boggles the mind.
People who understand the technology or bitcoin are, almost by that defining quality, smarter than the average bear. We understand diversification, we understand tax liability, and we understand how the new “paradigm” is changing the entire way people are dealing with currency transfers.
Of course, there are the ICOs which are literally like penny stocks. Those are pure speculation.
If you’re making a profit on it, how is it not an investment?
You have described the system we have right now. Bitcoin is simply an accounting system not controlled by the Fed.
And what is the dollar backed by?
We are $20 trillion in debt. Our Fed manipulates the money flow and artificially keeps interest rates low, and lending low.
How anyone can have financial faith in that organization ie beyond me.
Bitcoin is based on two parties agreeing on a value. That agreement is written in a public ledger and the goods/services are exchanged. It is safe. It is transparent. It cannot be counterfeited.
Now tell me how the Federal Reserve system is better than that. What exactly is this full faith you have in your dollar. Does the Federal reserve back their digital dollars with anything physical? The last time the US exchanged a dollar for any physical was in 1971.
YOU have been dealing with a currency that is not backed by an asset. YOU have been dealing with a currency that can be counterfeited. YOU have been dealing with a currency that has been inflated to the point where its purchasing power is 99% less than it was 100 years ago. YOU have been dealing in a system where almost 95% of transactions are based on electronic transfers that are MORE susceptible to outages and network issues as crypto currencies.
I am not sure why anyone would put faith in THAT system, when there is another system that is better, cheaper, deflationary, and no controlled by a Central Bank who does not have YOUR interests forefront in their minds.
Can you explain that to me?
Who is the Fed?
You are thinking about these “transactions” the wrong way.
Consider the person buying an oil tanker full of oil. They need to pay the person in Saudi Arabia (or wherever). Currently they “wire” money from their bank (and pay a fee) to a third party, who converts dinars to dollars (for a fee) and then wires it to the third party (for a fee.) This process takes, literally, days to complete.
This large transaction takes time and fees. A lot of both.\
In the Crypto world, they agree on the value of the crypto for the amount of oil. They transfer the “coin” to the other person’s address. The “crowd” looks at the public ledger to make sure that the sender has the coins to send, and then deducts them. And then they credit them to the valid account. This is done for a very (relatively) small fee.
This transaction takes minutes—an hour at most—and then the receiver is free to convert it immediately into their local fiat, gold, or just leave it in their account.
When you look at the amount and number of very large transfers the crypto process is more efficient, faster, and cheaper. Plus you do not deal with currency conversions that are expensive.
For the “cup of coffee” transactions, you would still use a debit card tied to an account—whether that is a traditional account or a hybrid crypto account is still to be discovered.
Bitcoin is not for the consumer, or retail level. But for large Wholesale and large contract transactions—it beats the SWIFT network by a lot.
You are kidding me right?
The Fed is a group of 12 private banks who manage the currency for the United States. It is not a Federal department. The US Treasury pays the Fed to manage our money. The Fed pays banks interest on their reserves. And they control the money supply through the interest rates charges to banks on overnight loans.
They also maintain the reserves of foreign currencies in order to facilitate international transfers.
The reason you are diversifying out of Bitcoin air into physical gold, etc. is because you know Bitcoin is just air.
Because it does not pay interest.
It is a method of money transfer. It is a store of value. (I am going to say it...get ready) It is a store of value in the same way some rocks are. You value it at one number, and I value it at another.
Since there are a limited number of them (maxing out at 21 million in a few years) So the more interest there is in using bitcoin, the more expensive they become. Like gold or silver.
Yes, I know people will say, “But I can hold gold in my hand.” Yes you can. But its still a rock. If I see it as a rock, I would ask if you were crazy putting value on a rock. You see it as gold—a hedge against inflation.
Try transferring value using gold. You will NEVER get spot for it. Transferring it beyond a face to face meeting is expensive a risky.
Its all in the functionality of the unit, and the general acceptance of the unit—be it digitial or a rock.
I understand why you think that.
I get paid in paper. The only thing that makes the paper in my wallet worth more than the paper in my trash can is that you and I agree that it is “worth” something.
I understand how these concepts are scary. I understand why some people will never accept the. That’s cool.
But consider this: When you are in the line at the grocery store, does everyone roll their eyes when someone pulls out a checkbook? Why? Because 90% of the transactions at retail stores is almost all digital money.
Its kind of funny—its like the old punch line, “We agree on the use of digital money; now we must negotiate what it will ‘look’ like.
They have huge assets? Really? What assets are those?
The US went off the gold standard in 1971. We do not back the money with anything except the Fed’s say so.
Are we selling real estate to pay our bills? No, we sell debt to pay our bills. And there is more debt in this country than for any other country in the history of history.
The ONLY asset the fed has is the ability to create more money with the push of a button. There is no limit and there is no controlling entitiy.
It is a little scary if you think about it. At least you and I have credit limits based on what we earn and the hard assets we possess. The Fed can literally push a button and create money in the system.
They have been doing it by buying assets (They are the largest mortgage holder in the world) with printed money. They only do that because it makes it look good. They CAN flood the markets with cash whenever they want.
At least bitcoin has controls to avoid that.
My digital checkbook is Chase one of the big 12 and my Chase checkbook isinsured up to $250,000 if Chase crashes.
Who is backing your Bitcoin checkbook should it crash?
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