Posted on 12/21/2016 9:39:45 AM PST by oblomov
I understand how it must sound to those not familiar with it.
It is a completely decentralized non-aligned “currency.”
Its value is based entirely on what two people agree it to be.
But the benefits are that transaction costs are minuscule. Transactions between two people can happen without the intermediary like Visa. You can take it easily across borders and convert it easily. When you are limited to $10,000 being taken out of the country, it moves across wires.
There are no charge-backs. If you are a seller of products, take-backs are a huge part of your costs.
It cannot be counterfeited, the ledger cannot be hacked. You can use it to record transactions (contracts, deeds, and the like) and the ID is unique and tied to a public block chain. It is more “real” in that sense than any government agency.
Sure, in the event of an EMP you are not going to get ahold of it. But in that case, your gold and silver are not going to be all that useful immediately.
There is a place for it in a well diversified portfolio. The blockchain technology will replace the “credit card” processor. And for third world countries, without access to banks (nearly 65% of most people in the world!) it allows for tiny transactions between two people with cel phones.
It is kind of “out there” but it is being accepted more every day.
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.
Unlike US dollars, the quantity is not determined by government policy. It is strictly limited to a finite number of bitcoin that is only about 30% greater than the amount currently in circulation. It is not backed by debt, but by a distributed ledger that verifies the mathematical validity of each transaction.
The fact that it is recognized as a medium of exchange is what gives it value. But how is this different from any historical non-barter exchange?
With barter (e.g., I give you a cow in exchange for you roofing my house), we exchange items of demonstrable value in and of themselves. But what if we exchange seashells, or gold? I can no more eat a seashell or gold or use it to shelter my family than I can eat a bitcoin.
I went to the Numer.ai site and briefly looked around but it was not immediately obvious what sort of service or business that is - a collaborative hedge fund based on artificial intelligence models of markets?
It looks interesting. Does it sell shares?
To make a long story short, the participants at Numer.ai are data scientists building models. Each month or so, the models are evaluated, and the best 100 submitters (in terms of predictive value) are compensated with bitcoin.
I haven’t made a lot of money from it, but it is a fun challenge and it allows me to keep my hands dirty with analytical work.
If you have sufficient capital (you are an accredited investor with significant capital to invest) you could invest in the fund. The company itself does not have publicly traded stock.
Here’s an article about them:
http://fastml.com/numerai-like-kaggle-but-with-a-clean-dataset-top-ten-in-the-money-and-recurring-payouts/
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.
I use Purse.io and replace at the least what I spend every time I use it there. I save money on my purchase and get more (so far) as Bitcoin appreciates against the dollar. I bought in on average at $200 so I am way up.
So this bitcoin thread got re posted today. Old thread had some valuable posts I made. ALL GONE NOW.
Thanks moderators, I ain’t reposting nothin no more.
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Just like every other currency on Earth.
The newer it is, the older it gets.
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