Basically yes, but I don't personally know anyone that accepts bitcoin as payment. Also, the USD has more validity to it as a currency than does Bitcoin imo.
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Does anyone here use Bitcoin?
- Thread starter Gonolz
- Start date
Cracks me up that bitcoin is near 20,000 and there are still people that deny it’s existence. The thing is trading on the CBOE. It’s worldwide market cap increases by billions each day. It isn’t going anywhere.
Trading as a purely speculative investment yes. But I can't help feeling there will be a crash and I wouldn't want to be caught holding it for long.
In economics ‘tangible value’ isn’t a thing.
Everything in economics has a subjective value.
Do you genuinely not see a point in having a currency that can’t be counterfiet?
Can you not see why someone in Zimbabwe or Venezuela might prefer a currency that the regime can’t counterfiet?
The block chain is quite real. You could print it out if you wanted to hold it.
There is no such thing.
What advantage can you detect in holding a currency that governments cannot inflate to buy political support?
Until I actually need bitcoin myself to make a transaction that can't be made with a more standard currency it is irrelevant to me.
You may not be interested in inflation, but it will take its toll regardless, so it’s not actually irrelevant.
All the ‘standard’ currencies you’re familiar with can be counterfiet, by individuals, but more commonly and insidiously by the monetary authorities themselves.
Why do you think the Federal Reserve note has, by the Federal Reserve’s own admission, lost 98% of its value since they took control of the currency in 1913?
What percentage loss of value do you consider acceptable over the course of your lifetime in a ‘standard’ currency?
I understand hedging against inflation which if I'm not mistaking is curently below the targeted 2%. There are less risky ways to hedge against inflation than buying bitcoin. At the end of the day there is risk in any investment. You have to choose one that you understand and that is right for you and your family's current situation.
You mention the Federal Reserve ‘targeting’ an annual reduction of your USD purchasing power on the order of 2%.
Why do you accept monetary authorities encouraging debasement of the currency such that, assuming they managed to hit their ‘target’, would sap your purchasing power?
In 20 years it will take almost $1.50 to buy $1 of something today. How has anyone been convinced that is in their interest?
http://fortune.com/2017/12/18/bitcoin-400000-ronnie-moas/ Interesting for prediction.
While Americans may have a level of confidence in our currency, there are more people in the rest of the world that DON'T have that ability to be confident in theirs. And there is more money outside the US, than within. 1.5 vs 5 trillion in currency alone.
I do question the people purchasing, are they purchasing for quick gains or for long term currency replacement. Looking around at who does accept, there are some, not a lot, but it is a relatively new concept and growing. US dollar had very little value for a long time, relatively speaking.
Who accepts? - https://99bitcoins.com/who-accepts-bitcoins-payment-companies-stores-take-bitcoins/
While Americans may have a level of confidence in our currency, there are more people in the rest of the world that DON'T have that ability to be confident in theirs. And there is more money outside the US, than within. 1.5 vs 5 trillion in currency alone.
I do question the people purchasing, are they purchasing for quick gains or for long term currency replacement. Looking around at who does accept, there are some, not a lot, but it is a relatively new concept and growing. US dollar had very little value for a long time, relatively speaking.
Who accepts? - https://99bitcoins.com/who-accepts-bitcoins-payment-companies-stores-take-bitcoins/
Ok, but aren't merchants who take Bitcoin just pegging Bitcoin prices to the dollar anyway?
Just like when you are in a foreign country and a merchant will take payment in US dollars. They don't magically come up with a number - they look at the exchange rate, add a little for their conversion cost and then tell you how much the product is in USD instead of their own currency.
This isn't my thing so I could be way off here.
Just like when you are in a foreign country and a merchant will take payment in US dollars. They don't magically come up with a number - they look at the exchange rate, add a little for their conversion cost and then tell you how much the product is in USD instead of their own currency.
This isn't my thing so I could be way off here.
I am interested but just skeptical.
Lets say I set up an account at coinbase. Link it to an account, then buy $5K worth of bitcoin. Bitcoin goes to $100K. Can you cash out at coinbase into USD? If so then why not?
My reluctance has been in how to redeem the coins to USD and take profits. Do these wallets solve that problem?
Someone above posted about a young guy buying his house with cash, how did he get the cash?
Lets say I set up an account at coinbase. Link it to an account, then buy $5K worth of bitcoin. Bitcoin goes to $100K. Can you cash out at coinbase into USD? If so then why not?
My reluctance has been in how to redeem the coins to USD and take profits. Do these wallets solve that problem?
Someone above posted about a young guy buying his house with cash, how did he get the cash?
Yes you can cash back out. You would sell the bitcoin back to u.s. dollar and then transfer back to your bank account. Just be sure to keep good records to report the gains on your tax return.
Yes, you link and purchase bitcoin/litecoin/ethereum via CC or bank account. Withdraw from your wallet against USD to the same linked accounts or transfer to other party that has a wallet.
Then I guess the question becomes, how secure are these wallet company's and what would happen when it nose dives and there is a run on cashing out?
Secure is open for discussion, certainly looking at other recent security breeches. Coinbase specifically looks to be more secure and legit than some of the fly by night operations. Also reviewed by a number of legit news/technology orgs. They do a two step validation when you log in (password) plus they text a login code to your phone on record.
If a run happens (entirely possible), last one in gets the lowest trade out value, but that is the exact same as a run on selling stocks etc right?
If a run happens (entirely possible), last one in gets the lowest trade out value, but that is the exact same as a run on selling stocks etc right?
Am I wrong in the recollection that "crypto currency" developed on the dark web as a way to pay for illicit, untraceable things like hitmen, human trafficking and drugs?
Bitcoin exists independent of the dark web, but it gained its initial foothold as the unit of account on a dark web ‘store front’ called Silk Road. It was mainly a Craigslist/eBay (no bidding, but seller ratings) for drug sales.
Which goes to my earlier question. If the
issue is the decreased purchasing power of the dollar, how does bitcoin solve this if you ultimately have to convert your bitcoin to dollars in order to cash out?
Convert 10 dollars to X Satoshis.
Time passes, dollar keeps being debased, convert X Satoshis to 10 dollars + difference at new exchange rate.
You protected your purchasing power in the interim by not holding the value in dollars.
Again, some are only considering this as a US thing. You could exchange into any currency you want, but the US dollar is the most popular globally for all trading (crypto, stock, etc). The dollar and crypto are not tied together. Its not unlike people investing in Forex.
That’s a lot of trust. There’s a finite amount of gold in the world. It bounces around substantially in price. There’s a finite amount of oil in the world. It bounces around substantially in price. Even if a crypto currency does eventually make it to stable currency status it may not be bitcoin. If it’s not bitcoin, bitcoin’s value will drop to zero. The speculation driving its rise is that people believe it will keep going up in value like it has and have bought into this new world order stuff. But that’s not real stable ground.
There’s good reason to suspect that bitcoin will not be the winner including alternative coins have lighter energy footprints and various other advantages.
I’ll add the trust in the dollar is a function of the strength of the us gov. Yes trust in bitcoin is in its ledger, perceived security and speculation that it will continue to be valued. Right now it is a get rich quick scheme. I would argue that the price of the US dollar and what the dollar does in comparison to bitcoin is orthogonal.
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How readily can you store, move, and transfer $1mm of gold, oil, or bitcoin?
Thats where it gets a leg up on those. Plus, can you authenticate $1mm of gold or oil readily? Or are those bars of painted tungesten and barrels of water?
I’m definitely in favor of free market money. One of the most important lines in the US Constitution was the one that forbade States from issuing paper money. Link
They failed to predict the central government would violate that tenet.
No doubt it is making some early adopters money, but it’s not a ‘scheme’ ala Charles Ponzi. No one is being defrauded buying a bitcoin. I have more trust in the math behind crypto currencies than I do the math behind indebted welfare states with fiat currencies.
I’d dispute your assertion the dollar’s strength is a function of the government. In fact, I’d argue that the dollar is widely accepted in spite of the debasement conducted by our monetary authorities because of our enormous economy. The petrodollar situation is another underpinning, and frankly there’s no telling how long that lasts.
Then you need to scroll back in the thread to the part where I quoted Bernanke. Note the price of gold at the beginning and end of his term, and how much the FRs balance sheet changed.
I understand the concept of fiat currency and that the value of fiat currency can go down if more money is printed. It’s not a one to one proposition. Inflation is assymetrical. One does not hold cash because of that. It’s why I have a diversified portfolio of national and international stocks, reits, gold, etc. the idea that the value of bitcoin in dollars is always to be an upward trajectory because the us prints more money isn’t true. Yes gold went thru the roof with the economy crashing. Ok. It also crashed hugely when it went back up. There’s still more dollars in circulation. A lot of money creation is actually done thru banks by the way. But I digress. The point is the value of bitcoin is speculative. It has value because people say it does. It’s like any other thing. That bitcoin is finite doesn’t mean that will maintain a relative and always increasing valuation versus any other thing that has less scarcity.
In history I’m unaware of fiat currency pool that didn’t grow, so I think the statement would ring more true without the ‘ifs’.
It will go down because the monetary authorities are going to keep printing and thereby stealing purchasing power from the existing holders.
I’m confident we largely agree on inflation, but that last sentence stands out to me. Holding cash shouldn’t be penalized by the monetary system. When we realize it is we should explore why.
I’d agree it’s not an absolute. But I also think it’s pretty far from 50/50.
It’s an important thing to keep in mind though. They’re central to the monetary model that bitcoin threatens.
It has value because it has utility, not just ‘because people say it does’.
Let’s put it another way. If demand for bitcoin and USD remain the same, the price of bitcoin in USD is going up. Fair?
Bitcoin will go away if there is no demand for it, and I could see that happening if a superior medium of exchange comes along. But there are some network effect factors in play as well, and bitcoin has an advantage right now.
I enjoy discussing this stuff as it intersects my interests in tech and economics, but don’t mistake me for a bitcoin evangelist, more of a free market evangelist.
Also a lot harder to lose a million in physical gold than losing a million in bitcoin due to some kind of hacker cyber attack.
History, specifically Executive Order 6102, suggests otherwise. Good news is that the official Federal government price on gold is $42.22/oz. So if the government is the one that takes your million in gold they’ll cut you a check for ~$34k to avoid running afoul of the 5th amendment.
