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Discussion in 'Bad Dog Cafe' started by Tdub, Mar 3, 2014.
Skillz! Major bank job armed with keyboards.
How has it affected their value?
I had an account at Mt. Gox. Sure am glad I didn't have anything stored there.
For anyone wanting the nitty-gritty on what they are and how they work, this show will take good care of you. There's a transcript if you don't want to watch or listen to it.
I found your bitcoins! You lost them in the cushions of my couch when you were visiting Houston a few weeks ago. Next to the remote control that also disappeared.
All good no worries...
All of your Bitcoins are belong to us!
Are these coins True Bypass?
I used my virtual money Bitcoins to buy an air guitar!
I stole them and buried them for future generations to find .
The whole premise is flawed in my opinion. Gold is expensive not because it is rare, or because it is hard to get out of the ground, but because that is what people will pay for it.
If nobody wanted gold, then no matter how rare it is it simply wouldn’t be mined in the first place.
In any case no country that I’m aware of has used the gold standard for the value of its currency for a long time.
The value of money is actually based around making barter more convenient. I could swap you a dozen eggs for a new set of guitar strings, but you might not want eggs. You might want tomatoes instead, so now I have to swap my eggs for tomatoes and then hope I have enough for the strings!
It is a lot easier if we just have a piece of paper that we give a standard value to. We may give a value of £3.00 to the piece of paper, but it means that I can give it to you and you will give me my strings. You can then give the paper to someone who has some tomatoes and everyone is happy.
The value is not determined by anything more complex than you, me and the tomato-seller deciding whether or not we think £3.00 is a good swap for strings and tomatoes.
That scales up to support any major economy. From guitar strings and tomatoes to houses and cruise ships. The value of currency is merely a medium to make swapping goods and services easier.
Now the value of bitcoins, it seems to me and I confess I am not an expert, is not based on a shared, agreed notion of what is fair for exchanging goods and services, but on a notional, abstract bit of “work” that someone has determined has value. They have nothing to back them up. In fact, to even express their value, we have to covert them to a “real world” currency, because only the “real world” currency actually has value.
For example, if I’m in the USA I can spend dollars and talk about dollars and everything is relative to dollars. In the UK I use pounds and in Europe I can talk about Euro’s. Each has their own intrinsic value. But a bitcoin has non unless we convert to a real currency. It just seems so baseless to me.
I am keeping well away.
shave and a haircut....two bits
The Mt. Go's theft is the same as past bitcoin thefts. Someone within the exchange just empties the customer's wallets. I don't understand how it's anonymous, and that there is no digital paper trail. I read an article about a week ago, where an investigator said law enforcement is all over this, and it's not all that anonymous. She said when they do make a case they see every transaction the defendant made, not just the one they caught them making.
The value of currency is not intrinsic. Bills are just pieces of paper. It all, again, comes down to what people are willing to give you for that piece of paper, based on what they think someone else will give them for that piece of paper. Still barter.
There was a news story in the UK a few weeks back about some guy who had thrown out his old laptop on which were sitting several million pounds in Bitcoins. Apparently when he got them they were worth very little, but then value rocketed. He had spent several days unsuccessfully combing the council refuse dump in the hope of recovering it.
It is true that currency is used to make exchanges smoother than bartering. But one downside is that currency values do fluctuate, although in most cases less than Bitcoins currently do. I lived in Brazil in 1987, when the inflation rate was 45% per month! You had to spend all your money as soon as you got it on durable goods like rice and gasoline because every day it was worth a lot less. It got to where the stores just put price tags on everything in US $, and then to figure out the price in Brazilian cruzados you looked up the exchange rate in the newspaper for that day (the black market exchange rate, not the official exchange rate), and then you knew how much you had to pay. Also, they had to keep issuing new currency. 1000 cruzeiros became 1 cruzado, then 1000 cruzados became 1 new cruzado. Experiencing a sovereign currency like this makes one yearn for things like gold or bitcoins as an alternative. It's also why when the whole world went to hell at the end of 2008, everyone still fled to the US $, even though we started the whole crash in the first place.
The March 2 Sunday NY Times actually had an economist arguing for a form of currency pegged to the hypothetical "basket of goods". In other words, something like an inflation-indexed dollar. Just like you can buy "Forever Stamps", you could buy "Forever $$" that for some period of time would be guaranteed to be worth the original "basket of goods". Nice in theory but probably impossible in practice since the stuff in the basket of goods is also constantly fluctuating in its underlying real supply and demand and hence real price.
I went to university in Ithaca, NY. They had a local currency there called the "Ithaca Hour". It was supposed to be equal to one hour of work.
At least with bitcoins, you are not automatically further in debt the instant it was created like what we think of as "cold, hard, cash."
Their value is mostly based on their usefulness for anonymous transactions. That's what backs them.
Think of them more like tokens. People are willing to buy those tokens because they are useful, not because they have any other value.
Okay. I was trying to imagine what problem bitcoins are trying to solve and couldn't think of anything.
I mean it's not as if the Internet wasn't a commercial success and needed something like bitcoins for trade to happen. So from what you have said, the only advantage to using bitcoins for trading is that it is anonymous. Like paying for something with cash in a shop. No trail.
Well okay, but there seems to be mixed messages about whether they are anonymous or not. If they are then it looks like they are susceptible to theft, but if they are not anonymous then that does away with their one advantage.
In any case I feel safer using a credit card to buy stuff knowing that I am protected by consumer credit laws.
I just don't understand bitcoins. I don't "get" them, therefore I don't trust them.
Bitcoins have another advantage. They are transferred across international borders without fees, and quickly.
They are only as susceptible to theft as people are stupid/careless. The same as real money. Cold hard cash may not be easy to trace but it's hard to move discretely and can only really be used to buy things in person. Bitcoins can be transferred immediately to anyone, anywhere in the world anonymously. Try doing that with paypal/bank transfer, etc! I don't think anyone is trying to say you should trust it - it has already had so many big fluctuations in value that it's not a good idea to invest in it in any way. However, the currency itself is not a scam or anything, or at least I see no way in which it could be since the creator doesn't profit from anything to do with it and it's completely decentralised.
If you want a more in depth explanation, there are many websites out there that explain Bitcoin in every detail.