# Lifestyles & Discussion > Bitcoin / Cryptocurrencies >  Now I understand Bitcoin?

## BUTSRSLY

If you are invested in bitcoin or bitcoin companies, then it's better than banking.  If you are a banker, then it's not.  If you are a criminal, it's better than banking.  If you aren't, you just take a picture of a personal check with your phone.

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## nayjevin

You mean if I'm selling something to someone, or transferring money, they need a checking account, and I need a bank account with that service + cell phone with camera + set up the banking app to do that, and then I have to wait for approval of the check clearing from my bank, and pay a transaction fee of a couple of dollars.

To appear legal to you.

There are people who are not criminals who value privacy.  Even if they are wrong, they put value into it.  That makes the service valuable.  Like insurance or add on protection plans at Best Buy.  They are not a good deal from a mathematical consumer standpoint but they are profitable anyway, because people value the protection and freedom from responsibility of saving/having enough money for replacements.  

So BTC value comes from value of privacy and value of saving on transaction fees.  Where else does its value come from?

People who value using it instead of banks for other reasons.  Bank haters and people who just like using new technologies.

Also, speculation.

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## BUTSRSLY

> Also, speculation.


I AM SORRY THAT YOU GOT A BITCOIN TATTOO ON YOUR FACE AND NOW YOU MUST RATIONALIZE YOUR DECISION WIT SELECTIVE VISION AND ILLOGIC

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## BUTSRSLY

> You mean if I'm selling something to someone, or transferring money, they need a checking account, and I need a bank account with that service + cell phone with camera + set up the banking app to do that, and then I have to wait for approval of the check clearing from my bank, and pay a transaction fee of a couple of dollars.


You mean if I'm selling something to someone, or transferring money, they need a bitcoin address, and I need a bitcoin address + computer or cellphone to transfer bitcoins + know how to use them, and then I have to wait for a blockchain, and pay a smaller transaction fee.




> To appear legal to you.


To ensure that I appear as terrorist.

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## squarepusher

> You mean if I'm selling something to someone, or transferring money, they need a checking account, and I need a bank account with that service + cell phone with camera + set up the banking app to do that, and then I have to wait for approval of the check clearing from my bank, and pay a transaction fee of a couple of dollars.
> 
> To appear legal to you.
> 
> There are people who are not criminals who value privacy.  Even if they are wrong, they put value into it.  That makes the service valuable.  Like insurance or add on protection plans at Best Buy.  They are not a good deal from a mathematical consumer standpoint but they are profitable anyway, because people value the protection and freedom from responsibility of saving/having enough money for replacements.  
> 
> So BTC value comes from value of privacy and value of saving on transaction fees.  Where else does its value come from?
> 
> People who value using it instead of banks for other reasons.  Bank haters and people who just like using new technologies.
> ...


Bitcoin is the opposite of private, every transaction ever for any coffee or 10 cent tip you give is permanently on the Block Chain.

Also, Paypal seems to be pretty easy to send money/buy things as it is, I don't really see why Bitcoin is necessary.

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## kpitcher

> Bitcoin is the opposite of private, every transaction ever for any coffee or 10 cent tip you give is permanently on the Block Chain.
> 
> Also, Paypal seems to be pretty easy to send money/buy things as it is, I don't really see why Bitcoin is necessary.


Paypal has a long history of questionable decisions on matters. They can, and have, locked people's accounts for no apparent reason. Checks can be accepted electronically and still bounce. Credit cards can have a chargeback for up to a few months after the fact. I used to accept CC for services and have been hit by chargebacks.  Bitcoin is the digital cash equivalent - the sender can not renig on a later date.

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## squarepusher

> Paypal has a long history of questionable decisions on matters. They can, and have, locked people's accounts for no apparent reason. Checks can be accepted electronically and still bounce. Credit cards can have a chargeback for up to a few months after the fact. I used to accept CC for services and have been hit by chargebacks.  Bitcoin is the digital cash equivalent - the sender can not renig on a later date.


Why would a buyer choose to use Bitcoin over Paypal when he has fraud protection with Paypal?

Coinbase is worse than Paypal as far as regulations/KYC/identity requirements.

I can understand if you mined a bunch of bitcoin 5 years ago its much better than Paypal, but for the average consumer to spend dollars for bitcoin does not make any sense currently unless they are wildly speculating on "moon" prices to come.

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## staerker

> Why would a buyer choose to use Bitcoin over Paypal when he has fraud protection with Paypal?
> 
> Coinbase is worse than Paypal as far as regulations/KYC/identity requirements.
> 
> I can understand if you mined a bunch of bitcoin 5 years ago its much better than Paypal, but for the average consumer to spend dollars for bitcoin does not make any sense currently unless they are wildly speculating on "moon" prices to come.


PayPal uses USD, etc, while Bitcoin uses btc?

Some prefer the safety that comes with  complete financial servitude, FDIC. 

Some desire to pay a middleman, in case their payments backfire when blindly sending money to unscrupulous entities, PayPal.

Now to find where Bitcoin fits in.

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## PaulConventionWV

LOL @ thread.

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## presence

> I don't really see why Bitcoin is necessary.


Why is bitcoin a deflationary currency?
Why is the USD an inflationary currency? 

Which is a better store of value, a deflationary currency or an inflationary currency?  

That is why its necessary.

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## squarepusher

> Why is bitcoin a deflationary currency?
> Why is the USD an inflationary currency? 
> 
> Which is a better store of value, a deflationary currency or an inflationary currency?  
> 
> That is why its necessary.


They print 3600 BTC a day at a current market rate of $828,000 per day in network subsidies
The past years makes BTC look pretty inflationary


Even at face value, in the long run you saying people should own BTC because its deflationary, if it doesn't have other value then simply than being rare like hundreds of other Alt-Coins out there (Dogecoin, Litecoin, etc), that doesn't mean it will increase in value.

People can already send millions across the world for nearly free (SWIFT/SEPA transfer), Paypal is far superior to Bitcoin when comparing the two, what buyer would choose to buy goods without buyer protection if they could simply use Paypal which does that purpose.  Even with Silk Road and buying drugs on the internet there is still a permanent public record of all transactions, and its quite easy to figure out "tumblers" and trace coins.

It seems Bitcoin purpose now is to make early investors/holders rich by pumping it up and getting new people to invest $828,000 _each day_ to simply keep the price stable now at $230.  Its difficult to call Bitcoin a currency when it has very little acceptance and use case.

I see the libertarian argument for Bitcoin, that it is decentralized and the Federal reserve can't simply print money out of thing air, however right now coin mining is extremely centralized to mega asic warehouse miners in China, so why am I to trust these guys and what if they gang up for a 51% attack, or they are compromised by their respective governments, and the miner subsidy makes transactions extremely expensive at around $10 per transaction ... so that cost to buy a pack of gum at the store with Bitcoins costs $10 just in network fee/subsidies.

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## presence

> The past years makes BTC look pretty inflationary



I don't think you grasp what inflation is.

When priced in BTC a pizza used to cost 10,000 BTC in 2010.

now, 2015,  it costs 0.05 BTC.

Thats deflation.  Your money is worth more. 



A $10 pizza in 2010 

now cost $15 in 2015.

That's inflation.  Your money is worth less.



BTC Deflation:
Your money buys more with each passing year (note log scale)





USD Inflation:
Your money becomes more like toilet paper with every passing year

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## enter`name`here

the point of bitcoin is to have a currency outside of the control of the current financial elite. I and many others see value in this and thus btc has value. If you dont see value in this feel free to take your ball and go home, that's the beauty of the free market.

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## Crashland

> USD Inflation:
> Your money becomes more like toilet paper with every passing year


Idk, I think toilet paper might have more intrinsic value than gold.

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## squarepusher

> I don't think you grasp what inflation is.
> 
> When priced in BTC a pizza used to cost 10,000 BTC in 2010.
> 
> now, 2015,  it costs 0.05 BTC.
> 
> Thats deflation.  Your money is worth more. 
> 
> 
> ...


presence your main argument seems to be that Bitcoin will appreciate in value and make you rich (todamoon!) if you invest in it, how come Bitcoin is down 80% for the last year though?  It seems like it could just be a speculative bubble like Beanie Babies or Tulips




> the point of bitcoin is to have a currency outside of the control of the current financial elite. I and many others see value in this and thus btc has value. If you dont see value in this feel free to take your ball and go home, that's the beauty of the free market.


Except if you want to acquire Bitcoin you have to go through regulations far stricter than than Paypal.  I opened a Coinbase account in December just for fun to try out some Bitcoins, and after giving them nearly every piece of information about me including my mom's blood type, they mysteriously will not let me purchase coins due to "security reason" which still isn't resolved (thats over 1 month).
Every financial institution that deals with Bitcoin guarantee has relationship with FBI/Homeland Security/NSA/IRS and nearly every 3 letter agency you can think of.

Or you could just invest 200k in a mining warehouse operation and mine your own coins right?  Or I could just send my money to Slovenia or MtGox and hope for the best/knock on wood right?


And, once you do obtain your Bitcoins, if you somehow manage to follow the steps and month long process above, good luck securing them from hackers!  No chargebacks or reverses literally makes Bitcoin the hacker/scammers dream.  Or you could just follow this simple 24 process to secure your coinz 

https://ww.reddit.com/r/Bitcoin/comm...bitcoins_in_a/



> Please note, this is only for storing your bitcoins safely offline. It is not a guide to having a secure offline wallet for everyday use.Also note, there is a million other ways to store your coins offline - I am sure some will be suggested in the comments, however this guide is aimed at simplicity, ease of use and paranoia of loosing coins. However, there are more secure ways of generating private keys than used in this guide, but I think most will agree the method used here is very, very safe.Ever since I got a few coins I've been wanting to secure them properly offline, but haven't gotten around to it before now. I made this guide because I know it would have helped me, so hopefully it can help someone else sparing some time or even better securing their coins in a safer way.This guide is intended for the new user, explaining every step thouroughly in the process. It does not involve using specialized software such as Armory or Electrum, however it requires a certain amount of technical know-how (such as changing settings in the bios of a computer).*I HIGHLY SUGGEST TESTING THE METHOD BY COMPLETING THE GUIDE WITH A SMALL AMOUT FIRST. ONLY THEN, REPEAT THE PROCESS WHEN YOU FEEL CERTAIN YOU KNOW AND UNDERSTAND, WHAT YOU ARE DOING.**WHAT THIS GUIDE WILL DO*Create a multisignature M-of-N Shamirs Sharing Secret address to which you will send the coins you want to store. Store the private keys on printed paper and on USB sticks, ready to be distributed to people you trust, bank deposit boxes or something similar.This is done through an offline Linux invironment, using well known open source software to generate the private keys.*WHAT YOU NEED*
> Bitcoins ready to send to the cold storage address. This could be on an exchange (i.e. Bitstamp), in a hot wallet (i.e. Blockchain) or elsewhere.A(n old) computer. For maximum security (paranoia) a computer that has never been connected to the internet.An online computer.Three or four USB sticks. Brand new or formatted.A printer that can connect to the computer by cable. 
> *STEP BY STEP GUIDE*ON YOUR ONLINE COMPUTER
> 1. Download Linux Mint .iso file by going to this webpage and click on a proxy near you. (Please note, if your offline computer is a 32bit system, you need to go here instead)
> 2. Download Universal USB Installer by clicking this link.
> 3. Insert a USB stick in your computer and run the program Universal USB Installer. Select Linux Mint, the iso file you downloaded in 1. and the flash drive in each of the drop down menus.ON YOUR OFFLINE (OLD) OFFLINE COMPUTER
> 4. Get into the bios. If possible, disable all wifi. Set boot priority to USB before disk storage.
> 5. Insert the USB stick you made in 3 and boot the machine in Linux Mint.
> 6. On the desktop is a file that reads "Install Linux Mint". Double click. Choose to erase the disk and install Linux Mint. When prompted, select the "Overwrite free disk space" option. (Can't remember if that's the exact wording).
> ...

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## Zippyjuan

> Why is bitcoin a deflationary currency?
> Why is the USD an inflationary currency? 
> 
> Which is a better store of value, a deflationary currency or an inflationary currency?  
> 
> That is why its necessary.


Bitcoin is a store of value? Relative to the dollar, it has lost over three quarters of its value in the last year.

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## presence

> presence your main argument seems to be that Bitcoin will appreciate in value and make you rich (todamoon!) if you invest in it, how come Bitcoin is down 80% for the last year though?  It seems like it could just be a speculative bubble like Beanie Babies or Tulips


Could be.   Here's 2014 in log perspective since 2010. 





I don't hold BTC.  I trade it.

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## NorthCarolinaLiberty

> You mean if I'm...


You mean if I put curtains on my windows, then I have something to hide?

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## nayjevin

Bitcoin has a tiny advantage for the average consumer, a mass of early adopters with inflated perception of its advantage, a mass of major money players invested in its future, and a major advantage for the merchant, assuming traditional payment methods can't afford to compete with the low transaction fees.

It has a fundamental advantage in that it cannot be counterfeited or inflated.  It has untapped value of what the technology can do (public ledger with self-interested individuals maintaining it).  It has upside in that it will only become more useful and easy to use, while traditional payment methods have settled in at .50 - 2.00 per transaction as the viable model for those technologies.

The question 'does it have value' is too often conflated with 'should I invest in it.'  Many folks see or saw it's value and decided that meant it was time to invest.  Leaves a strange landscape, when a high percentage of the populist uprising have gotten burned

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## tommassi

> If you are invested in bitcoin or bitcoin companies, then it's better than banking.  If you are a banker, then it's not.  If you are a criminal, it's better than banking.  If you aren't, you just take a picture of a personal check with your phone.


yes man..and now you can get some new cryptocurrency and make big money!

see 
www.leocoin.org
and
www.buy-leocoin.org

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## timosman

bump

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## dannno

> Bitcoin is a store of value? Relative to the dollar, it has lost over three quarters of its value in the last year.


Bitcoin was $275 when this post was written, it has gone up around 4,000% compared to today's value.

If bitcoin were to make another 4,000% gain from today's value, it would be at $450k

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## timosman

> Bitcoin was $275 when this post was written, it has gone up around 4,000% compared to today's value.
> 
> If bitcoin were to make another 4,000% gain from today's value, it would be at $450k


You'd finally be able to afford your favorite senior pads.

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## dannno

> You'd finally be able to afford your favorite senior pads.


If by "senior pads" you mean a mansion in Puerto Rico, you would be correct.

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## timosman

> If by "senior pads" you mean a mansion in Puerto Rico, you would be correct.


I need a place to crash in PR.

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## dannno

> I need a place to crash in PR.


Noted.

You wanna go down there and do some investing? They have 0% capital gains tax.

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## Zippyjuan

> Bitcoin was $275 when this post was written, it has gone up around 4,000% compared to today's value.
> 
> If bitcoin were to make another 4,000% gain from today's value, it would be at $450k


It was also as high as $20,000 and wend to $3200- a loss of 84%.  If it follows that trend, it could be worth a nickel.  Its value is not constant but constantly changing. That is not a "store of value".

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## Zippyjuan

> Noted.
> 
> You wanna go down there and do some investing? They have 0% capital gains tax.


On the plus side, it only took a year to get electricity back for everybody following that  hurricane. Housing and other infrastructure still not all rebuilt.

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## dannno

> It was also as high as $20,000 and wend to $3200- a loss of 84%.  If it follows that trend, it could be worth a nickel.  Its value is not constant but constantly changing. That is not a "store of value".


No, if it follows the trend, it will go up 4,000%, then go back down 84%, then the next run up will be to $4 million. Then it will settle back down to $1-2 million.

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## Zippyjuan

> No, if it follows the trend, it will go up 4,000%, then go back down 84%, then the next run up will be to $4 million. Then it will settle back down to $1-2 million.


How many people would be able to buy a bitcoin if the price of one was $4 million?  Or even $1- 2 million a pop?

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## kpitcher

> How many people would be able to buy a bitcoin if the price of one was $4 million?  Or even $1- 2 million a pop?


Bitcoin currently has 8 decimal places allowed. Even at 4 million each a satoshi (The smallest unit, or 0.00000001 BTC) would only be worth 4 cents. So plenty of people would be able to afford bitcoin

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## Zippyjuan

> Bitcoin currently has 8 decimal places allowed. Even at 4 million each a satoshi (The smallest unit, or 0.00000001 BTC) would only be worth 4 cents. So plenty of people would be able to afford bitcoin


Do the exchanges deal with only full coins or can you by one satoshi on them? You can't buy say half a share of Google on a stock exchange for example.

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## oyarde

Bit coin is easy to understand . You , the avg individual , long on faith and not overly bright work hard all week for your 500 FRN take home . Then you take your worthless , unbacked paper dollars and get you some pretend crypto bits instead .

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## dannno

> Do the exchanges deal with only full coins or can you by one satoshi on them? You can't buy say half a share of Google on a stock exchange for example.


Wow you are ignorant.. yes everything is in Satoshis. That is the whole point.

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## kpitcher

> Do the exchanges deal with only full coins or can you by one satoshi on them? You can't buy say half a share of Google on a stock exchange for example.


Yup, most people do buy partial shares. The 8 decimal places seemed silly years ago, but as with many things Satoshi he was ahead of his time. Exchanges do have a minimum purchase which is usually equivalent to a few dollars.

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## Zippyjuan

> Yup, most people do buy partial shares. The 8 decimal places seemed silly years ago, but as with many things Satoshi he was ahead of his time. Exchanges do have a minimum purchase which is usually equivalent to a few dollars.


Thanks for the info.  I tried to research it and saw one exchange had a minimum purchase of 0.001 bitcoins.

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## Mordan

> Thanks for the info.  I tried to research it and saw one exchange had a minimum purchase of 0.001 bitcoins.


do me a favor. buy early so you don't become the contrarian indicator of a blown off top

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## JessicaStone

Well, I do not think that a lot of problems connected to the Bitcoing trading can be resolved with the help of forum communication. But after using https://3commas.io/ this process became more clear for me. And I will happuly use another points for this purpose, as well.

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