Posted on 12/03/2013 7:15:42 AM PST by Star Traveler
The astronomical rise in the value of bitcoin—which has surged more than 8,000 percent over the course of 2013—has created a new breed of digital currency multimillionaires.
The 34-year-old Roger Ver began investing in bitcoins in early 2011—and made his first million from the virtual currency that same year—which saw prices skyrocket from around $0.30 to $32 before settling at $2. He bought his first bitcoins at around $1.
With prices currently hovering above $1,000, his virtual wealth has since exploded. Ver says he doesn't feel "richer" but that his wealth is "much more liquid than it would be in a normal bank account."
Ver is one of hundreds of investors that have struck it big with bitcoin. But his association with the virtual currency extends far beyond just owning it.
(Excerpt) Read more at cnbc.com ...
Silicon Valley catches Bitcoin fever
http://www.freerepublic.com/focus/f-news/3097361/posts
A Prediction: Bitcoin Is Doomed to Fail
http://www.freerepublic.com/focus/f-news/3097365/posts
Bits and Bob [analysis of Bitcoin]
http://www.freerepublic.com/focus/f-news/3097370/posts
Bitcoin Under Pressure
http://www.freerepublic.com/focus/f-news/3097394/posts
Huge bitcoin heist: Black market drug shop Sheep Marketplace poofs with $40 million
http://www.freerepublic.com/focus/f-news/3097504/posts
The Rise and Fall of Bitcoin
http://www.wired.com/magazine/2011/11/mf_bitcoin/all/
If anyone has bitcoin now.....it’s TIME TO SELL.
The fraud potential is huge and you don’t want to be the one trying to sell in a panic.
If you find a product supplier that accepts bitcoin, yes.
See the M1 vs M3 money supplies data.
/johnny
In and of itself (that is “Bitcoin” itself) there hasn’t been shown to be any fraud potential. No one has shown that to be the case.
HOWEVER, there is “fraud potential” in using it (but not intrinsic to Bitcoin) - by way of how some people use it. An example would be in using it to engage in illegal activities where you are dealing with criminals and crooks (for instance, buying illegal street drugs).
But that kind of “fraud potential” would be there even if you use US Dollars or gold Krugerrands. There are other means of fraud, too - but it all has to do with “dealing with people” or businesses who are crooked in the first place. These kind of people would defraud you of US Dollars or any other kind of currency by the schemes they invent.
You can convert them back to USD via an exchange (e.g., Mt. Gox, Coinbase)
You can actually use Bitcoins to DIRECTLY buy something, if the seller is also a user of Bitcoins and wants to be paid in that currency.
Just think of it as having Russian Rubles or the Chinese Yuan. You can buy anything with those currencies if the seller will accept them. The seller may not accept them and his demand may be that you must pay him in French Francs. If that is his demand, then you’ll have to go to the “exchange” and convert whatever currency you have into French Francs.
It’s the same with Bitcoin. If that is your currency you’re holding at the time, you’ll have to go to the exchange and get French Francs for your Bitcoins.
The dollars in your checking account are only electronic entries in a database. You don’t think there is actually cash sitting in a bank, do you?
Can I do that with bitcoins?
Not if they are selling for zloty in Poland.
/johnny
Do Bitcoins resemble Tulips?
“Bitcoin Jesus” would be a great name for a rock band.
LOL Really?!?
Theft and exchange shutdowns[edit]
It is possible to steal bitcoins; theft has been documented on numerous occasions. At other times, Bitcoin exchanges have shut down, taking their clients' bitcoins with them. A Wired study showed that 45 percent of Bitcoin exchanges end up closing.[78]
On 19 June 2011, a security breach of the Mt. Gox Bitcoin exchange caused the nominal price of a bitcoin to fraudulently drop to one cent on the Mt. Gox exchange, after a hacker allegedly used credentials from a Mt. Gox auditor's compromised computer illegally to transfer a large number of bitcoins to himself. They used the exchange's software to sell them all nominally, creating a massive "ask" order at any price. Within minutes the price reverted to its correct user-traded value.[79][80][81][82][83][84] Accounts with the equivalent of more than US$8,750,000 were affected.[81]
In July 2011, the operator of Bitomat, the third largest Bitcoin exchange, announced that he lost access to his wallet.dat file with about 17,000 bitcoins (roughly equivalent to US$220,000 at that time). He announced that he would sell the service for the missing amount, aiming to use funds from the sale to refund his customers.[85]
In August 2011, MyBitcoin, a now defunct Bitcoin transaction processor, declared that it was hacked, which caused it to be shut down, paying 49% on customer deposits, leaving more than 78,000 bitcoins (equivalent to roughly US$800,000 at that time) unaccounted for.[86][87]
In early August 2012, a lawsuit was filed in San Francisco court against Bitcoinica — a Bitcoin trading venue — claiming about US$460,000 from the company. Bitcoinica was hacked twice in 2012, which led to allegations that the venue neglected the safety of customers' money and cheated them out of withdrawal requests.[88][89]
In late August 2012, an operation titled Bitcoin Savings and Trust was shut down by the owner, allegedly leaving around US$5.6 million in Bitcoin-based debts; this led to allegations that the operation was a Ponzi scheme.[90][91][92][93] In September 2012, the U.S. Securities and Exchange Commission had reportedly started an investigation on the case.[94]
In September 2012, Bitfloor, a Bitcoin exchange, also reported being hacked, with 24,000 bitcoins (worth about US$250,000) stolen. As a result, Bitfloor suspended operations.[95][96] The same month, Bitfloor resumed operations; its founder said that he reported the theft to FBI, and that he plans to repay the victims, though the time frame for repayment is unclear.[97]
On 3 April 2013, Instawallet, a web-based wallet provider, was hacked,[98] resulting in the theft of over 35,000 bitcoins[99] which were valued at US$129.90 per bitcoin at the time, or nearly $4.6 million in total. As a result Instawallet suspended operations.[98]
On 11 August 2013, the Bitcoin Foundation announced that a bug in a pseudorandom number generator within the Android operating system had been exploited to steal from wallets generated by Android apps; fixes were provided 13 August 2013.[100]
A Bitcoin bank, operated from Australia but stored on servers in the USA, was hacked on 23 and 26 October 2013, causing a loss of 4100 bitcoins, worth over A$1 million.[101]
In Hong Kong a Bitcoin trading platform owned by Global Bond Limited (GBL) vanished with 30 million yuan (US$5 million) from 500 investors on 26 October 2013.[102]
http://en.wikipedia.org/wiki/History_of_Bitcoin
Well, in making a comparison, you can’t “create” Bitcoins without an intense amount of computer computation (nicknamed “mining”) - which serves to limit the rate at which it can come into being over a fixed amount of time.
THEN ... there is an upper limit to the number of Bitcoins that can ever be created.
In addition to that, Bitcoins are not inherently (in and of itself, in its “structure”) - perishable.
NOW ... from what I understand of tulips, there was no upper limit for how many people could create. There was also no “rate” for which tulips could be created — thereby meaning they could be created as fast as you wanted.
And, they didn’t work well — long-term — as they are inherently perishable, in and of themselves, by their very “nature”.
THEREFORE ... I think people who are trying to make a comparison are not aware of these ESSENTIAL and important differences.
As I pointed out - “in and of itself” - that is, in it’s very structure.
There is always “fraud potential” in dealing with people or businesses - no matter what currency you’re using.
If you’re keeping gold Krugerrands in a safe in your house, someone can break in and steal them. That not an inherent problem with what a Krugerrand is, but with how you deal with the security of your Krugerrands and keep them safe.
In dealing with exchanges, it would be like dealing with Madoff and investing with him. You may have done that and lost a lot of money in the process. That’s not a problem with US Dollars, but is a problem of dealing with a crook - no matter what currency you use.
The thing to invest upon will be when a competitor to Bitcoin arises that is a digital currency based upon actual gold or silver or something..
I know a lot of people talk about that kind of thing (something backed by gold or silver or ...) — but that takes away the advantage of not being susceptible to “central control” and also the advantage of making it so that a government cannot “haul something away” by force (which governments tend to do).
Bitcoin is decentralized and has no location for a government to be able to “go to” — or — have “something” that a government can “haul away by force”.
For a lot of people — those very things, in and of itself — makes it valuable to them.
Fraudulent messages display a countdown timer while demanding a “ransom” payment of the online currency worth over £500.
http://news.sky.com/story/1169286/bitcoin-ransom-scam-warning-for-email-users
Maybe they are related.
Most certainly there is cash in the bank. At least enough to cover what piddly amount I keep in there. I get the whole frqactional reserve scheme, but if I want cash today, I can get cash today. Tomorrow? That’s another question / argument.
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