# Lifestyles & Discussion > Bitcoin / Cryptocurrencies >  Bitcoin: Easy come, easy go?

## Gaddafi Duck

Reading the recent flood of threads throughout this message board, it's safe to say the Bitcoin mania is well underway. I understand this will draw in fanboy criticism, but I do find the fad surrounding Bitcoin to be entertaining. I'm surprised few have bothered to raise these points:

1) *Bitcoin's Flash Crash*: Value plummeted over 50% in less than a week due to a "glitch". Hey, I have a May 2010 Dow Jones to sell you, or a fully furnished Knight Capital. So much for being the elixir of decentralization when one program out of the supposedly unlimited Bitcoin service wells everyone tells me are out there can tank the market. See this: http://www.forbes.com/sites/timothyl...bitcoin-crash/

2) *You still have to convert back to fiat money, and still use fractional reserve banks*. Having Wordpress and a few other affiliates makes it seem like Bitcoin is nothing more than digital money for a digital life. What about the real world? As far as I understand, you STILL need a fractional reserve bank account to transfer money into. What good is it if it's just an online gift certificate for a handful of merchants 99% of us never use?

3) *It's anonymous.*  Lol...until you have to report it as capital gains. And what if the US government goes after these wallet programs and requires open disclosure? Companies will always comply with government's demands. They'll readily turn over whatever data they have on you. Then it's just connecting the dots....tracing Account 234kejrklskdfalskdfjwerlk bitcoin code with a bank account. Suddenly Mr. X matches up with John Smith who has a Wells Fargo Student Checking account that he opened 3 years ago. With 20 or so Bitcoin transactions where he/she neglected to report $20,000 in capital gains. Or if you do report the gains to begin with, doesn't that negate the "it's totally anonymous" appeal? 

What happens if you're linked to purchasing Bitcoins from a criminal? Say you buy 1,000 Bitcoins. What, then, if one of those came from a criminal or an embargoed nation? I don't need that, thank you. 

4) *It can't be hacked.* LoL? And if the slightest wiff of Bitcoin hacking gets rumored around the web, a firesale of Bitcoins will occur. Whatever the propaganda of it being 100% secure/untraceable/"bank level" (hah!) security, try convincing the stampede of sellers. Remember 2008...everything was sold. It didn't matter if it had any connection with a bank or housing or not.

Now, sorry to say that Bitcoin isn't money. Quadrupling in a month, dropping over 50% in a week, I mean, how would you even contract with someone long-term? Is anyone familiar with Iceland the past decade? Currency mismatching killed them. People tookout mortgages in foreign currency as the exchange rate was favorable. It was all great until the Kronur crashed, and suddenly your September mortgage payment is now double what August's was. If someone made a contract a month ago to pay you in 100 Bitcoins today, he's now gotta find 4 times the cash, and do so quickly as the market is moving. Now, if people are defaulting on their mortgages because they're slightly underwater as their home values may have dropped 10-20% from the time they purchased, do you think people are going to honor a car or home loan when the loan's value has quadrupled in a month? That's when the loan becomes YOUR problem.

It's totally impractical and unstable. Imagine having the task of building a house where your measuring tape changed size everyday. How chaotic of a design you would have. Whatever the pro-Bitcoin arguments are, just realize it's not possible to contract with them. To know they've gone from $0.05 to $115 in a matter of 2-3 years, with flash crashes in between, no one is going to be able to do business with them. It's all buying and flipping--that's all. Hot potato. You can't have business agreements without an entire risk management department to hedge you every step along the way.

I welcome the flood of the overnight Bitcoin experts to tear me apart

----------


## jclay2

Bitcoin will go down 50% in one day very soon at a minimum. This type of price action is pure mania.

----------


## amonasro

You raise some valid points. However the biggest problem with critics is that they don't really understand how Bitcoin works in the first place.

Bitcoin is only money if people choose to use it. Right about now people all over the world are getting their feet wet. Will it crash again? Maybe. Will a Bitcoin rise to a thousand dollars? A million? It's part of the risk.

Is it hackable? Very very very unlikely. The cryptography is secure. You'd need more computing power than exists in the world. And if you were successful, the key would just get changed again. Again, it's part of the risk.

Anonymous? You can buy from many major retailers online now with services that accept bitcoin as a proxy. So there is no need to convert to dollars in that case. Wallets don't have to be tied to people, and no one forces you to use a wallet program. Wallets full of bitcoins can exist on a thumb drive in a physical safe, far away from computers, with no proof of their creation. How governments will track users is yet to be determined. Chances are, they will be ways around it. Actually the government's response to Bitcoin is the thing I fear the most. I believe, however, that in this case governments are too stupid and inefficient to stop it.

Really it comes down to how many people will use it, and how many business will accept it as a payment.

----------


## Gaddafi Duck

> Bitcoin will go down 50% in one day very soon at a minimum. This type of price action is pure mania.


Indeed. It's all speculation. It's not money in any sense of the word. The fact that Bitcoin has proven it can crash over 50% in less than a week, and can lose all "value" altogether in a nanosecond, is as analogous to calling it "money" as it would be to call a Zimbabwe note in 2009 to be "money". Only the Zimbabwe note seemed to have held value somewhat longer...the sheer possibility of disintegrating into worthlessness is only reserved to bankrupt companies and virtual currency. Fiat currencies take a little longer. A simple glitch can wipe out Bitcoin instantly, as proven. At least glitches on the stock exchanges get fixed relatively quickly, and trades get canceled, and most get indemnified. With Bitcoin, a glitch dissolves confidence, and the value didn't recover until the most recent bubble mania that's taken hold. I didn't even know a flash crash happened until I read it on the news. My brokerage account was unaffected. Atleast there's a "system restore" feature and circuit breakers with exchanges....with Bitcoin, it's open waters. Swim at your own risk, because if the program you're relying upon fails, it's an "oops" for the developer, but you just lost everything.

----------


## Jordan

We're on one of these...which one?

----------


## enter`name`here

While I would agree that we are in the mania stage of a bubble, I feel that bitcoins fill a valuable function that is absent from the current financial system. As someone who works at a fractional reserve bank, and who deals every day with frustrated customers waiting for funds to arrive, I can tell you that the value of being able to instantly send money all over the world with out having to deal the often slow moving banking system cannot be understated. 

Yes it is volatile, yes people are going to get burned, but these are the growing pains of something that has never been tried before.

----------


## amonasro

Actually I'm pretty sure Bitcoin is the IMF's secret conspiracy for a one-world currency.

----------


## Gaddafi Duck

> You raise some valid points. However the biggest problem with critics is that they don't really understand how Bitcoin works in the first place.
> 
> Bitcoin is only money if people choose to use it. Right about now people all over the world are getting their feet wet. Will it crash again? Maybe. Will a Bitcoin rise to a thousand dollars? A million? It's part of the risk.
> 
> Is it hackable? Very very very unlikely. The cryptography is secure. You'd need more computing power than exists in the world. And if you were successful, the key would just get changed again. Again, it's part of the risk.
> 
> Anonymous? You can buy from many major retailers online now with services that accept bitcoin as a proxy. So there is no need to convert to dollars in that case. Wallets don't have to be tied to people, and no one forces you to use a wallet program. Wallets full of bitcoins can exist on a thumb drive in a physical safe, far away from computers, with no proof of their creation. How governments will track users is yet to be determined. Chances are, they will be ways around it. Actually the government's response to Bitcoin is the thing I fear the most. I believe, however, that in this case governments are too stupid and inefficient to stop it.
> 
> Really it comes down to how many people will use it, and how many business will accept it as a payment.


Of course it's hackable. Anything is. If it's so impractical, why isn't the Department of Defense using similar cryptography and just setting it and forgetting it? Why do they need to worry about cyberwarfare if all they needed was a Bitcoin programmer? Sheesh! That'd save billions of dollars a year. Bitcoin isn't some computing mana from heaven. I don't understand the coding, but I understand enough that anything made by a human is capable of being exploited and destroyed. People get paid boatloads of money to secure information every day, yet the data always seems to be getting attacked. I doubt Bitcoin is 30 years ahead of its time like everyone assumes it is. It's just a rumor that's accepted as fact..just like how 99% of the population feels Germany is the only fiscally responsible European nation, yet it's running deficits. I guess if you say "Bitcoin is unhackable/very very 99x unlikely it can be hacked" enough, you'll start to believe it.

It's not anonymous. Again, wait for the government to subpoena one of these companies that takes Bitcoin and tells them to hand over their sales data. Even if it identifies you as "Bitcoin Buyer wrjwk23jk3kmwnrmnsdmf,mzsd" it can still be traced back. How many hackers sit behind proxies not knowing the government knows who they are and what they're doing? Let alone the 99% of Bitcoin users who lack the anonymity skills of a hacker.




> Will it crash again? Maybe. Will a Bitcoin rise to a thousand dollars? A million? It's part of the risk.


Apparently my point was disregarded about how Bitcoin can never be able to function as money for the simple reason that businesses cannot contract with them for any meaningful period of time. Again, who is going to sign a mortgage with the pitch that, "Your mortgage could evaporate tomorrow and you basically bought your house for free! Or, it could escalate to levels where even if you had 3 jobs for a dozen lifetimes you'd never be able to pay off your house. But hey, that's part of the risk! "

----------


## PaulConventionWV

> Reading the recent flood of threads throughout this message board, it's safe to say the Bitcoin mania is well underway. I understand this will draw in fanboy criticism, but I do find the fad surrounding Bitcoin to be entertaining. I'm surprised few have bothered to raise these points:
> 
> 1) *Bitcoin's Flash Crash*: Value plummeted over 50% in less than a week due to a "glitch". Hey, I have a May 2010 Dow Jones to sell you, or a fully furnished Knight Capital. So much for being the elixir of decentralization when one program out of the supposedly unlimited Bitcoin service wells everyone tells me are out there can tank the market. See this: http://www.forbes.com/sites/timothyl...bitcoin-crash/
> 
> 2) *You still have to convert back to fiat money, and still use fractional reserve banks*. Having Wordpress and a few other affiliates makes it seem like Bitcoin is nothing more than digital money for a digital life. What about the real world? As far as I understand, you STILL need a fractional reserve bank account to transfer money into. What good is it if it's just an online gift certificate for a handful of merchants 99% of us never use?
> 
> 3) *It's anonymous.*  Lol...until you have to report it as capital gains. And what if the US government goes after these wallet programs and requires open disclosure? Companies will always comply with government's demands. They'll readily turn over whatever data they have on you. Then it's just connecting the dots....tracing Account 234kejrklskdfalskdfjwerlk bitcoin code with a bank account. Suddenly Mr. X matches up with John Smith who has a Wells Fargo Student Checking account that he opened 3 years ago. With 20 or so Bitcoin transactions where he/she neglected to report $20,000 in capital gains. Or if you do report the gains to begin with, doesn't that negate the "it's totally anonymous" appeal? 
> 
> What happens if you're linked to purchasing Bitcoins from a criminal? Say you buy 1,000 Bitcoins. What, then, if one of those came from a criminal or an embargoed nation? I don't need that, thank you. 
> ...


Haters gonna hate.  People hated on the Beatles and the TV set when they were invented, too.  Said they wouldn't last.  Pssh.

----------


## PaulConventionWV

> While I would agree that we are in the mania stage of a bubble, I feel that bitcoins fill a valuable function that is absent from the current financial system. As someone who works at a fractional reserve bank, and who deals every day with frustrated customers waiting for funds to arrive, I can tell you that the value of being able to instantly send money all over the world with out having to deal the often slow moving banking system cannot be understated. 
> 
> Yes it is volatile, yes people are going to get burned, but these are the growing pains of something that has never been tried before.


People don't seem to understand that a lot of risk comes with something that has literally NEVER been tried before... but that doesn't mean it won't succeed or that it isn't practical, and it certainly doesn't mean it shouldn't be done.

----------


## PaulConventionWV

> Of course it's hackable. Anything is. If it's so impractical, why isn't the Department of Defense using similar cryptography and just setting it and forgetting it? Why do they need to worry about cyberwarfare if all they needed was a Bitcoin programmer? Sheesh! That'd save billions of dollars a year. Bitcoin isn't some computing mana from heaven. I don't understand the coding, but I understand enough that anything made by a human is capable of being exploited and destroyed. People get paid boatloads of money to secure information every day, yet the data always seems to be getting attacked. I doubt Bitcoin is 30 years ahead of its time like everyone assumes it is. It's just a rumor that's accepted as fact..just like how 99% of the population feels Germany is the only fiscally responsible European nation, yet it's running deficits. I guess if you say "Bitcoin is unhackable/very very 99x unlikely it can be hacked" enough, you'll start to believe it.
> 
> It's not anonymous. Again, wait for the government to subpoena one of these companies that takes Bitcoin and tells them to hand over their sales data. Even if it identifies you as "Bitcoin Buyer wrjwk23jk3kmwnrmnsdmf,mzsd" it can still be traced back. How many hackers sit behind proxies not knowing the government knows who they are and what they're doing? Let alone the 99% of Bitcoin users who lack the anonymity skills of a hacker.
> 
> 
> 
> Apparently my point was disregarded about how Bitcoin can never be able to function as money for the simple reason that businesses cannot contract with them for any meaningful period of time. Again, who is going to sign a mortgage with the pitch that, "Your mortgage could evaporate tomorrow and you basically bought your house for free! Or, it could escalate to levels where even if you had 3 jobs for a dozen lifetimes you'd never be able to pay off your house. But hey, that's part of the risk! "


It's not going to be used for contracts right away, obviously.  It's still new.  I know it's hard for you, but try to wrap your head around the concept that something new may be harshly introduced into the market and yet still overcome it and become stable.  As it becomes more stable and dependable, it will gain confidence and people can contract with it.  Right now, it wouldn't be practical, but that doesn't mean it will never be.  You can't expect something to have immediate viability in the market.  It has to be introduced and vetted first.  Once it's vetted, it will gain its market cred and stabilize.

----------


## Gaddafi Duck

> Haters gonna hate.  People hated on the Beatles and the TV set when they were invented, too.  Said they wouldn't last.  Pssh.


Yeahhh...this hater is going to hate. 4x increase in 30 days; 50%+ decrease in less than 7. The problem with your analogy of the Beatles and the TV set is that neither had the track record of Bitcoin, which yo-yo's worse than a hormonal imbalance. That means it's not an analogy at all. Just a series of statements that only share the English language in common.

Fanboys will be fanboys. Meanwhile, have fun juggling Bitcoins and shuffling them into and out of USD's without attracting the IRS' attention. Oh, it's 100% anonymous, right? So either report your gains, which thus dissolves the entire argument that Bitcoins are anonymous, or don't report them in which case "good luck" when all of a sudden $10,000 magically appears in your real world checking account from some random deposit. That will certainly raise red flags. Either way, when the government finds out, and it will, just make sure you don't have too many eggs in that basket. Because you'll have to turn over your flash drive as it'll be confiscated as contraband. 

I guess the Liberty Dollar is too far removed from people's minds.

----------


## amonasro

The Beatles had a pretty rocky start, I dunno.

----------


## Gaddafi Duck

> It's not going to be used for contracts right away, obviously.  It's still new.  I know it's hard for you, but try to wrap your head around the concept that something new may be harshly introduced into the market and yet still overcome it and become stable.  As it becomes more stable and dependable, it will gain confidence and people can contract with it.  Right now, it wouldn't be practical, but that doesn't mean it will never be.  You can't expect something to have immediate viability in the market.  It has to be introduced and vetted first.  Once it's vetted, it will gain its market cred and stabilize.


I know it's hard for you, but try and wrap your head around the concept of trying to pitch this to a businessman: We'll pay you in Bitcoins to have you deliver us 10,000 eggs every week for 3 years. What are Bitcoins? Well, they've been around for a while. Just know they've crashed anytime there's been a computer glitch. But hey! If a Mediterranean country suffers bank runs, you could easily, EASILY become rich just off of the panic from people running in to buy these Bitcoins.

It's a fun thing to play with. Zenga games are fun to play supposedly, only I never have. Terrible company to invest in...terrible. Bitcoins are fun, I'm sure. I've never done it, nor will I. Again, the fact that I can wake up to my Bitcoins becoming worthless  because someone either hacked and transfered my Bitcoins, or someone else was hacked and thus all confidence is lost, means it's just a speculative toy. Quit making it out to something it's not. 

There may be numerous differences between fiat currencies and Bitcoins. But when it comes down to it, their values are based in confidence--that's all. Only, what fiat currencies have over Bitcoins is that I can create something, pitch it to a corporation, and if they like it, we can agree and settle in a common currency. Fiat currencies are in use and are widespread. Bitcoins aren't. My time horizon isn't decades for that to happen while I'm constantly being bombarded with computer hacking. K thx.

----------


## Gaddafi Duck

The people in the Bitcoin trade now aren't people who are trying to make it what they want it to be. So many people are saying, and are convinced, that "wow, this could go to become a million dollars!" And hope that they can flip it when that time comes. 

Seems like every other bubble. Analysts were calling for Apple to hit $1000; it dropped 40% instead. People hoped for their homes to increase 10% from year to year; the entire market crashed instead. Same with dot-coms...yeah. 

How much money is anyone putting into Bitcoins, really? I know there's a top 5 bitcoin holders thing out there, that show them holding millions of dollars worth, but that's all novelty and no one knows if those are actual real people or just a country manipulating the marketplace. How many here actually have put 10 grand to see this run up to 40 grand over the past month? Or is it just people buying 1 bitcoin here, another there? Because it seems like all the Bitcoin advocates, when asked, are hesitant to put anything meaningful down.

Probably because it isn't what they would like it to be. It's all people trying to buy and flip, buy and flip. The marketcap and volume is so small and so illiquid that it wouldn't take much to manipulate it. Nothing the Plunge Protection Team couldnt handle.

----------


## TheTexan

Bitcoin (or a similar technology) will succeed, because it fulfills a market demand that no other currency is currently able to fill.

Government force may slow it down, but you know what they say about stopping ideas whose time has come, etc, yada yada yada.  

Give it time.

----------


## PaulConventionWV

> I know it's hard for you, but try and wrap your head around the concept of trying to pitch this to a businessman: We'll pay you in Bitcoins to have you deliver us 10,000 eggs every week for 3 years. What are Bitcoins? Well, they've been around for a while. Just know they've crashed anytime there's been a computer glitch. But hey! If a Mediterranean country suffers bank runs, you could easily, EASILY become rich just off of the panic from people running in to buy these Bitcoins.
> 
> It's a fun thing to play with. Zenga games are fun to play supposedly, only I never have. Terrible company to invest in...terrible. Bitcoins are fun, I'm sure. I've never done it, nor will I. Again, the fact that I can wake up to my Bitcoins becoming worthless  because someone either hacked and transfered my Bitcoins, or someone else was hacked and thus all confidence is lost, means it's just a speculative toy. Quit making it out to something it's not. 
> 
> There may be numerous differences between fiat currencies and Bitcoins. But when it comes down to it, their values are based in confidence--that's all. Only, what fiat currencies have over Bitcoins is that I can create something, pitch it to a corporation, and if they like it, we can agree and settle in a common currency. Fiat currencies are in use and are widespread. Bitcoins aren't. My time horizon isn't decades for that to happen while I'm constantly being bombarded with computer hacking. K thx.


What do you mean, crashed any time there's a computer glitch?  one 50% decrease doesn't prove everything you're trying to make it prove.  It's only been a few months, and that's not nearly enough time to establish anything.  Like I said, it is still new, so OF COURSE I wouldn't pitch any contract with bitcoins to a businessman right now.  In the FUTURE, though, bitcoins will probably be more stable.  It has to be vetted first.  

Despite its supposed "crashes" though, which are really just volatile decreases that happen when things are still new, it has risen thousands of percent, so that "crash" wasn't really a crash.  It was just a dip.  

Also, everything is based in confidence.  The fact that anything can be used as currency is entirely based on confidence.  You can't pitch bitcoins to a corporation YET because the currency is still new and volatile, but that DOES NOT MEAN it will NEVER gain stability.

Why do I feel like I'm talking to a brick wall?

----------


## PaulConventionWV

> The people in the Bitcoin trade now aren't people who are trying to make it what they want it to be. So many people are saying, and are convinced, that "wow, this could go to become a million dollars!" And hope that they can flip it when that time comes. 
> 
> Seems like every other bubble. Analysts were calling for Apple to hit $1000; it dropped 40% instead. People hoped for their homes to increase 10% from year to year; the entire market crashed instead. Same with dot-coms...yeah. 
> 
> How much money is anyone putting into Bitcoins, really? I know there's a top 5 bitcoin holders thing out there, that show them holding millions of dollars worth, but that's all novelty and no one knows if those are actual real people or just a country manipulating the marketplace. How many here actually have put 10 grand to see this run up to 40 grand over the past month? Or is it just people buying 1 bitcoin here, another there? Because it seems like all the Bitcoin advocates, when asked, are hesitant to put anything meaningful down.
> 
> Probably because it isn't what they would like it to be. It's all people trying to buy and flip, buy and flip. The marketcap and volume is so small and so illiquid that it wouldn't take much to manipulate it. Nothing the Plunge Protection Team couldnt handle.


Your argument works against you.  Only small investors are involved in this.  That means that at least some of what's going on is legitimate transactions.  I have about $600 in bitcoins, and it's risen to over $900 already.  The fact that we are cautious doesn't prove this is a crazy scheme.  It proves that we are good investors because we are cautious.  Caution should be used when investing in anything.  If we had invested earlier, we could have been millionaires by now, and some people are.  So this isn't some get rich quick scheme.  It's a get rich quick reality, and despite that, it's still going.  There are ALWAYS going to be speculators no matter what.  The fact that people speculate, however, doesn't negate the fact that most of it could be based on real transactions.  You can't look at all the people making investments and decide that, because you see that happening on RPF, that must be the chief reason for the rise.  EVERYTHING involves investors.  Its long term rise, however, will prove that, yes, people actually are using it.

----------


## Mike4Freedom

> Your argument works against you.  Only small investors are involved in this.  That means that at least some of what's going on is legitimate transactions.  I have about $600 in bitcoins, and it's risen to over $900 already.  The fact that we are cautious doesn't prove this is a crazy scheme.  It proves that we are good investors because we are cautious.  Caution should be used when investing in anything.  If we had invested earlier, we could have been millionaires by now, and some people are.  So this isn't some get rich quick scheme.  It's a get rich quick reality, and despite that, it's still going.  There are ALWAYS going to be speculators no matter what.  The fact that people speculate, however, doesn't negate the fact that most of it could be based on real transactions.  You can't look at all the people making investments and decide that, because you see that happening on RPF, that must be the chief reason for the rise.  EVERYTHING involves investors.  Its long term rise, however, will prove that, yes, people actually are using it.


I am going to chime in here, I have not talked about bitcoins on this forum yet. What I see going on is this:

The majority of bitcoins buys as of late are people that expect its value to rise and want to flip the coins. So people are buying and holding. As it goes up no one wants to be left out, so they buy. In such as small market cap it is causing huge rises. 

Bitcoin could become a great competing currency. As of right now its a lot of speculation. It will continue to rise in the short term until the early adapters decide they want to profit take. 

Now onto cyprus and the EU. People over there are buying bitcoins as a way to park money until it is safe to convert it back to EU one bitcoin at a time so they can slowly withdraw the cash and start storing under the mattress again.

----------


## abacabb

EZ Come EZ Go

----------


## Aeroneous

> 2) *You still have to convert back to fiat money, and still use fractional reserve banks*. Having Wordpress and a few other affiliates makes it seem like Bitcoin is nothing more than digital money for a digital life. What about the real world? As far as I understand, you STILL need a fractional reserve bank account to transfer money into. What good is it if it's just an online gift certificate for a handful of merchants 99% of us never use?


This one got me thinking a bit.  I'm skeptical of Bitcoin... while I am enjoying watching its progress and hope it will succeed tremendously, I won't be investing any of my funds into it.  When it comes to the above point though, I don't see how it is at all unique to Bitcoin.  Short of some form of barter, every other investment out there requires a conversion to fiat money at some point.  Nearly all equities, bonds, precious metals used as investments instead of currency, CDs, etc., require a purchase with fiat currency and end up getting converted back to a fiat currency upon their maturity.

Basically all I'm getting at is that any potential investor shouldn't let this be a deterrent.

----------


## sailingaway

Fiat money held confidence for some time, this may too. As with anything else that has no inherent value... APART from confidence, I don't know what would keep it up, so I'm avoiding it, but I predict a lot of people who 'time it right' will make money. I just don't have anything to 'understand' about it, to give me confidence.

----------


## brooks009

> Fiat money held confidence for some time, this may too. As with anything else that has no inherent value... APART from confidence, I don't know what would keep it up, so I'm avoiding it, but I predict a lot of people who 'time it right' will make money. I just don't have anything to 'understand' about it, to give me confidence.


I really don't understand the inherent value argument. Does gold have inherent value? I cant think of anything I could do with a piece of gold besides a paper weight. The only things that have inherent value to me are food and water.

----------


## jclay2

> I really don't understand the inherent value argument. Does gold have inherent value? I cant think of anything I could do with a piece of gold besides a paper weight. The only things that have inherent value to me are food and water.


At least gold has always had a broad mass appeal for decoration at its most basic level of utility.

----------


## jmdrake

> Bitcoin (or a similar technology) will succeed, because it fulfills a market demand that no other currency is currently able to fill.
> 
> Government force may slow it down, but you know what they say about stopping ideas whose time has come, etc, yada yada yada.  
> 
> Give it time.


^this.  People concentrating on the "worth" of Bitcoins are missing the point.  Remember WikiLeaks?  Remember how the government leaned on PayPal and VISA to shut down avenues for people to send Assange money?  They can't do that to Bitcoins.

----------


## newbitech

> ^this.  People concentrating on the "worth" of Bitcoins are missing the point.  Remember WikiLeaks?  Remember how the government leaned on PayPal and VISA to shut down avenues for people to send Assange money?  They can't do that to Bitcoins.


as long as assange could use that money to pay for the stuff to keep it going.  I understand your point, and i agree.  I think concentrating on the USD value is distorting the true value anyways, if it exists.  I personally want to see more evidence of common transactions occurring in bitcoins.  

I imagine with any competing currency to the established fiat there is going to be a period of exchange like this one.  At the same time, I need to see some validation that it's not just pumping by speculators looking to roll over their established currency into beaniebabie type fad.  

Just not seeing that right now.

----------


## Seraphim

http://www.zerohedge.com/news/2013-0...s-go-parabolic

Parabolic action.

I'm inclined to think a short term retracement is line, but long term I don't think it's done going up.




> Bitcoin will go down 50% in one day very soon at a minimum. This type of price action is pure mania.

----------


## Romulus

Its been frozen at $141.3 all day it seems.

----------


## newbitech

> http://www.zerohedge.com/news/2013-0...s-go-parabolic
> 
> Parabolic action.
> 
> I'm inclined to think a short term retracement is line, but long term I don't think it's done going up.




heres a 4 hour chart, its hitting resistance right now.  looks like its hitting some significant resistance since the latest run up.   I suspect it will come on down and test that 95-100 range where you see that green volume spike (under the "oi" in the copyright notice).  

We'll see if this selling wave has the same volume of the previous waves (red volume bars on the bottom of the chart).  I think it will hold the $100 level, but it will be interesting to see if we get panick selling once it retraces the 100-130 levels.  

One thing that is really nice about charting bitcoin is that technical indicators work, since the market is behaving on fundamentals w/o government intervention.   IOW, since it's unregulated at this time, the price action is a true of free market as we'll ever see. 

chart source 

http://bitcoin.clarkmoody.com/

----------


## dannno

> the biggest problem with critics is that they don't really understand how Bitcoin works in the first place.


/thread

Every single complaint in the OP is filled with brazen innaccuracies and distortions.

----------


## amonasro

> Its been frozen at $141.3 all day it seems.


Might have to do with the major exchanges being lagged pretty badly. They are getting hit with huge volume.

----------


## Romulus

And now we are seeing the decline.... lots are cashing out??

----------


## newbitech

> And now we are seeing the decline.... lots are cashing out??



looks like an orderly decline so far.  but this is good for the stability.

----------


## Jordan

Virtually zero liquidity relative to the amount of bitcoin out there. Everyone is holding, which makes it easy for bitcoin to advance rather quickly. Although, at this time about 12 hours ago, there was only about 5k coins available at $150. Now there's 15k.

----------


## Romulus

dropping like a rock!

----------


## Jordan

> dropping like a rock!


To be fair, a 10K bitcoin order would send it back up to $145, whereas 10K bitcoins of selling pressure sends it back to $110. 

So, basically, an order of 1/1000th of all bitcoin outstanding could drive prices up a little more than 10%, or down about 20%. Illiquid as all hell.

----------


## enter`name`here

Bubble may have popped, buckle up.

----------


## Gaddafi Duck

> /thread
> 
> Every single complaint in the OP is filled with brazen innaccuracies and distortions.


Every single one, eh?

Someone enlighten me beyond saying "You don't get it/how Bitcoins work." It'll never be anonymous in the physical world. If you want to use your Bitcoins to pay for food for a night out or use it to buy a stock, you have to convert it into Dollars, Yen, Euros, etc. That shows up as a line item on your bank statement. Congrats, you left a paper trail.

What if you use your Bitcoins to buy a tshirt from LewRockwell.com, and the government says tomorrow that all Bitcoin transactions on these websites that accept them (wordpress, lewrockwell, etc.) must report these. Then what? They'll turn over your Bitcoin #. "So what?" So, you still need the tshirt shipped to your address do you not? I guess if you wanted to go through the trouble of having it sent to some abandoned building with a fake name you could avoid some traceability, but it's not that hard to link "Bitcoin buyer XYZ" with "Invoice 1234" that got shipped to 321 A Street in Miami, FL. So you can't use it to buy real stuff.

I suppose the only way to have some sort of anonymity is to use Bitcoins to strictly purchase stuff that doesn't require it to be shipped to your address, or requires you to transfer Bitcoins out of the Web and onto the Fed's database of banks. How many virtual ice cream cones can you buy? That's all Bitcoins become. Online gift certificates to the few merchants that accept them for virtual goods. If you use them to buy anything that needs to be touched, then you lose anonymity BECAUSE you HAVE to give up your address, or name, or email. How else are you to get these goods? Fly to a warehouse everytime you buy something with Bitcoins? Exactly what am I not "getting", dannno? HAhaha...

----------


## dannno

> Now onto cyprus and the EU. People over there are buying bitcoins as a way to park money until it is safe to convert it back to EU one bitcoin at a time so they can slowly withdraw the cash and start storing under the mattress again.


That's with the big assumption that people are going to continue to trust the euro and not begin to adopt cryptocurrencies for more every day type transactions.

----------


## dannno

> Every single one, eh?
> 
> Someone enlighten me beyond saying "You don't get it/how Bitcoins work." It'll never be anonymous in the physical world. If you want to use your Bitcoins to pay for food for a night out or use it to buy a stock, you have to convert it into Dollars, Yen, Euros, etc. That shows up as a line item on your bank statement. Congrats, you left a paper trail.
> 
> What if you use your Bitcoins to buy a tshirt from LewRockwell.com, and the government says tomorrow that all Bitcoin transactions on these websites that accept them (wordpress, lewrockwell, etc.) must report these. Then what? They'll turn over your Bitcoin #. "So what?" So, you still need the tshirt shipped to your address do you not? I guess if you wanted to go through the trouble of having it sent to some abandoned building with a fake name you could avoid some traceability, but it's not that hard to link "Bitcoin buyer XYZ" with "Invoice 1234" that got shipped to 321 A Street in Miami, FL. So you can't use it to buy real stuff.
> 
> I suppose the only way to have some sort of anonymity is to use Bitcoins to strictly purchase stuff that doesn't require it to be shipped to your address, or requires you to transfer Bitcoins out of the Web and onto the Fed's database of banks. How many virtual ice cream cones can you buy? That's all Bitcoins become. Online gift certificates to the few merchants that accept them for virtual goods. If you use them to buy anything that needs to be touched, then you lose anonymity BECAUSE you HAVE to give up your address, or name, or email. How else are you to get these goods? Fly to a warehouse everytime you buy something with Bitcoins? Exactly what am I not "getting", dannno? HAhaha...


Ya, you still don't really grasp how they work, or more importantly, how they could work.

You can already buy a god damn visa gift card with bitcoin and pay for anything you want. No bank statement. 

Most bitcoin users have several wallets and you can use a new wallet for every transaction, there is no bitcoin "user#". So you can tie ONE transaction to ONE invoice. Who cares?

More products will continue to be developed that will fulfill the ability to make more anonymous transactions in more places. You are already supposed to report your bitcoin income and pay tax on sales, the benefit of bitcoin is that it is extremely difficult for them to prove anything or track anything, so it's pretty much voluntary unless they are able to prove otherwise.

----------


## Gaddafi Duck

> What do you mean, crashed any time there's a computer glitch?  one 50% decrease doesn't prove everything you're trying to make it prove.  It's only been a few months, and that's not nearly enough time to establish anything.  Like I said, it is still new, so OF COURSE I wouldn't pitch any contract with bitcoins to a businessman right now.  In the FUTURE, though, bitcoins will probably be more stable.  It has to be vetted first.  
> 
> Despite its supposed "crashes" though, which are really just volatile decreases that happen when things are still new, it has risen thousands of percent, so that "crash" wasn't really a crash.  It was just a dip.  
> 
> Also, everything is based in confidence.  The fact that anything can be used as currency is entirely based on confidence.  You can't pitch bitcoins to a corporation YET because the currency is still new and volatile, but that DOES NOT MEAN it will NEVER gain stability.
> 
> Why do I feel like I'm talking to a brick wall?


What's only been a few months? Bitcoin has been around for several years. There you have it--it's not investing; it's gambling. There's a 100% chance that the Bitcoin exchanges will have a glitch at some point, no? So knowing the past glitch resulted in a collapse in the value, you're hoping you're not caught holding Bitcoins at that point I assume. So it's not investing--it's gambling. I hope I hit black when I play roulette, too, but to say betting on black is investing is a joke. When I buy shares in a company, hopefully it's for investing purposes. You don't buy stock in a company knowing it's going to go bankrupt. If you are, you're gambling. Just like buying bank stocks in early 2009 when you could buy Citi for $1. Was it investing? No, it was gambling. You took a chance that government policy would basically rewrite the accounting laws and recap the banks. So, for someone who bought Citi at $1 it paid off. Someone who bought Bitcoin at $1 has paid off. But knowing that Bitcoin is at the mercy of a Bitcoin exchange that no one knows who runs it, and has no oversight, tends to be more of a gambling proposition.

Do whatever you want with Bitcoins. Like I said,  I don't care. I do care when people make Bitcoin out to what it's not. It's not money. You can't contract with it. It surged 20% today. Fun for peer-to-peer transactions, but no business is going to contract this long term. Few people actually earn Bitcoins for a living (the few who mine them), so you're facing what Iceland faced: currency mismatching. In a contract, one side is going to get creamed. Either Bitcoins crash or they go parabolic. In either event, how long will the parties who lossed on that contract stay around?

Again, if you bought a house with a Bitcoin mortgage for 30 years, you already had to foreclose. It went up 5 fold from a month ago. If you bought a house for $100,000 worth of Bitcoins, your mortgage is now worth $500,000. How many people are okay with paying $500,000 for a $100,000 house?

----------


## Gaddafi Duck

> Ya, you still don't really grasp how they work, or more importantly, how they could work.
> 
> You can already buy a god damn visa gift card with bitcoin and pay for anything you want. No bank statement. 
> 
> Most bitcoin users have several wallets and you can use a new wallet for every transaction, there is no bitcoin "user#". So you can tie ONE transaction to ONE invoice. Who cares?
> 
> More products will continue to be developed that will fulfill the ability to make more anonymous transactions in more places. You are already supposed to report your bitcoin income and pay tax on sales, the benefit of bitcoin is that it is extremely difficult for them to prove anything or track anything, so it's pretty much voluntary unless they are able to prove otherwise.


Whoa, thanks for proving my point. Who are you going to buy the Visa card from? You are you going to buy the LewRockwell.com Tshirt from?

How are you going to take possession of these? Oh, by sending your "anonymous" Bitcoin payment that has your street address attached in order to receive the goods. In that case, all the government has to do is deem Bitcoin as a gigantic money laundering operation, and they don't even need to pass a new law. Every merchant who accept Bitcoins will have to turn over their transaction logs. And this is what the government will see:

Bitcoin payment received for $10. Purchased shirt. Sent shirt to: dannno, [your street address], [city], [state] [zip]

So, the jig is up. Then it comes down to how hard is it to backtrace Bitcoin transactions where no personal info is involved. You're again assuming it's "hackproof". Nothing is. If cyptography was full-proof, the Defense Department wouldn't need entire departments dedicated to network security. Nor would any private company. They'd just hire a temp programmer to secure the data, then set it and forget it. Only, the real world doesn't work that way. There's no device that's invented yet that makes something hack proof, so the government and the CIA will be able to identify Bitcoin users if it really wanted to.

----------


## Gaddafi Duck

Or maybe there's an easier way. The government could just have Google index every webpage in the universe (which is does) and grab all the user IDs and IPs of people pushing Bitcoin. So the people who say "Bitcoin is 100% anonymous" and subsequently said "I have $X in Bitcoin" makes me laugh. Now you've illustrated you have Bitcoins, and the government has your IP address. Then they can just take your laptop and find the Bitcoins on it, or search for the flash drive in your house.

LoL @ saying you're anonymous, only to post about it on a public forum where anyone can read it and thus trace your IP back to your home computer. Or internet cafe down the block.

----------


## amonasro

Hey Gaddafi, are you going to short Bitcoin or what?

----------


## Gaddafi Duck

Nope, I have no skin in the game, nor will I ever. I pointed out Bitcoin will never be mainstream. Again, no one earning USD's is going to contract a mortgage, car loan, or business contract with someone demanding Bitcoins. It will either be a huge windfall for the person with USD's if Bitcoins crash to nothing as all of a sudden they can buy their car with $1 USD if a bitcoin is worth nothing, which it has shown it can do, or it's going to be a huge tax if Bitcoins go from $15 to $115 in a matter of a few months, which it has shown it can do. Likewise, no bank or lender is going to want to enter an agreement where they could give away something for virtually free if the currency they're demanding collapses. Or, if the currency they are demanding shoots to the moon and their debtor cannot pay, they lose that money they lent out.

I live in reality. Not "well, let's just see". I can't imagine pitching that to my boss, or anyone to anybody beyond a fanboy club. "Let's just wait and see". I guess it shouldn't be too surprising that those pushing Bitcoin so much are only willing to put in a couple hundred bucks. Why not more? It's as if people insist Bitcoin is this magic elixir with all of these properties, and will fight it day and night and laugh at critics who "don't get it", yet they're hesitant to put any meaningful amount of money down in the event they're wrong.

----------


## Romulus

Wow the haters really hate, more than the lovers love.

----------


## Gaddafi Duck

Critics are haters... gotcha. Sorry I pointed out the obvious flaws with Bitcoins, and thus that means I'm worthy of the label "hater" which goes to diminish the logic I used, which makes perfect sense.

Are my criticisms not valid? Beyond saying "you don't get it/you're a hater" I  have yet for someone to sit down and explain to me how they can expect to be anonymous with Bitcoin when they go on Facebook, Twitter, and online message boards, saying they own Bitcoin. 

"You'll never find where I am because I use a proxy. By the way, I'm on 123 West A Street in Miami, Florida".

----------


## ronpaulfollower999

> Critics are haters... gotcha. Sorry I pointed out the obvious flaws with Bitcoins, and thus that means I'm worthy of the label "hater" which goes to diminish the logic I used, which makes perfect sense.
> 
> Are my criticisms not valid? Beyond saying "you don't get it/you're a hater" I  have yet for someone to sit down and explain to me how they can expect to be anonymous with Bitcoin when they go on Facebook, Twitter, and online message boards, saying they own Bitcoin. 
> 
> "You'll never find where I am because I use a proxy. By the way, I'm on 123 West A Street in Miami, Florida".


Cute, but streets in Miami are numbered, not lettered.

----------


## nobody's_hero

I'm not made up on whether or not I support bitcoin, but it seems like a lot of the criticism of them are similar to the same problems we see with our fiat Fed notes. Really I don't want to jump in the middle of it but here's my take:

a) Anonymity doesn't exist at all in this market; I'm just gonna bust that bubble here and now. Gov't tracks everything. If your intention is to point out that bitcoin supporters are selling the idea as an 'anonymous' system and in reality we know it isn't, then point taken, because it's supporters aren't being honest (or at least, being a little naïve). But I also don't see that as a mark against bitcoin, itself, because hell, it's simply neither better *nor* worse than what we have now. Fiat currency use isn't anonymous (maybe if you buy a pack of gum at a store at night, if they don't catch you on the 7-11 security camera walking into the store). You won't be buying a house with fiat without filling out loads of paperwork. You can't open a bank account without disclosing 110% of your personal identity (thanks, PATRIOT ACT  ). So even if you can't do any of that with bitcoin, at the very least it's no worse than what we have now. Big brother is watching, have a nice day.

b) Talk of mortgages and contracts is basically moot because if you remember not so far back we had a massive mortgage crisis where people suddenly found themselves underwater on homes that were valued at more than they were worth. It didn't happen in a bitcoin world, it happened in an FRN world. Yet, I have to give a point to bitcoin on this, because where in our fiat system, there was a massive bailout involved in the mortgage industry, bitcoin offers no such promises of bailouts. It may be rough sailing at times, but there's no Fed. Reserve system in bitcoin to do something drastic and interventionist, as is the case currently with our FRNs. 

c) Hacking and counterfeiting concerns? Well, as far as I know, there's been no hacking at the fed. But Bernanke counterfeits money all day long like it's nothing. Bitcoin has yet to be hacked or counterfeited. The Fed has yet to be hacked but it does counterfeit, so I award this round to bitcoin. 

d) Government doesn't like competition. I do wish people would stop stating that government is going to crack down on bitcoin and use that as an excuse to say it is a flawed system. The government cracks down on everything it doesn't approve of. That's not a reflection on bitcoin, it's a reflection on the government. 

That's all I can think of at the moment. I do keep up with these threads but I haven't made a decision either way. I'm just buying a bit of silver here and there, but even that is not secure since FDR showed us that all it takes is an executive order to seize precious metals. I also know that the FRN system we have now, especially the way they are running it behind closed doors, is both immoral and unsustainable. Bitcoin isn't immoral based on what I understand about how new coins are created, and I think it scores points for being transparent. Whether or not it is sustainable, who knows? Chaos and uncertainty have the potential to decimate currencies, whether digital or paper.

----------


## KrokHead

> Bitcoin: Easy come, easy go?

----------


## unknown

> I know there's a top 5 bitcoin holders thing out there, that show them holding millions of dollars worth, but that's all novelty and no one knows if those are actual real people or just a country manipulating the marketplace. How many here actually have put 10 grand to see this run up to 40 grand over the past month? Or is it just people buying 1 bitcoin here, another there? Because it seems like all the Bitcoin advocates, when asked, are hesitant to put anything meaningful down.


Thats my question, whos bidding it up at these price levels?

----------


## DGambler

> Thats my question, whos bidding it up at these price levels?


People that are reading stories like this:

http://thehill.com/blogs/on-the-mone...t-wealthy-iras

Or perhaps like this:

http://read.thestar.com/#!/article/5...e8e4ace70a95e3

It doesn't matter how much bitcoin is in relation to fiat if the economy is there to support it as  prices can be priced in fractions of a whole BTC.

----------


## MoneyWhereMyMouthIs2

> Why do they need to worry about cyberwarfare if all they needed was a Bitcoin programmer?



Are you scared yet??  I'm not worried about cyberwarfare at all.  Not even a little.  Now... cia, dhs, local police... those are some scary ass people.  


I think you are right about #3 though.  I won't be the least bit shocked when some people get hammered, or bitcoin gets legislated out of existence, probably with an amendment to some "security bill" or something.

----------


## awake

Flash in the pan or not, there is a organized campaign now to undermine Bitcoin. The top world counterfeiters have acknowledged the threat openly and are no doubt acting to destroy their competition.

----------


## Mike4Freedom

> Flash in the pan or not, there is a organized campaign now to undermine Bitcoin. The top world counterfeiters have acknowledged the threat openly and are no doubt acting to destroy their competition.


What I am afraid of is this. jp morgan and goldman sachs might be buying up all these coins and have been when BTC was valued lower and are waiting and will just dump all there coins very soon then buy them up on the way down and just keep doing this over and over again. 

BTC will not be a good currency until it is less volitile. 

The reason I think this is because the big banks will see this as a threat and would want to crush it. This is the best way to crush it by manipulating the market, I mean look at silver prices, lol.

So What I would do is this. Sell your BTC before they do and then just wait and buy when it corrects. 

BTC can eventually be a great way to move wealth out of a country,

----------


## Jordan

> Hey Gaddafi, are you going to short Bitcoin or what?



You weren't talking to me, but no matter. How could someone short it when there's no way to value it?

----------


## amonasro

> You weren't talking to me, but no matter. How could someone short it when there's no way to value it?


Same way you short any other stock.

----------

