# Lifestyles & Discussion > Bitcoin / Cryptocurrencies >  Plz Explain Bitcoin to me......

## V4Vendetta

I'm watching something about miners - making money from using their internet connection to mine coins or something.... is that true?
Can someone explain it to me or link me to some info?

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## Bruno

This should help, V.  

http://www.ronpaulforums.com/showthr...coin+obsession

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## Conza88

Don't waste your time. Bitcon. 

When individuals are selling their gold en masse to get bitcoins, let me know. Because then it will be considered a legitimate money. Until then it is merely a product of the existence of the state (and hence not a free market money). Why in the world would you need bitcoin otherwise?

e-gold.com, goldmoney.com simple.

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## matt0611

> Don't waste your time. Bitcon. 
> 
> When individuals are selling their gold en masse to get bitcoins, let me know. Because then it will be considered a legitimate money. Until then it is merely a product of the existence of the state (and hence not a free market money). Why in the world would you need bitcoin otherwise?
> 
> e-gold.com, goldmoney.com simple.


This, only legal tender laws and interference by the state makes bitcoin attractive to some people. Its free market money backed by nothing that you can trade anonymously. I have no use for it, I'll stick with gold and silver thanks.

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## V4Vendetta

I've read - watched enough. I won't use it. Like the liberty Dollar - the federal government can use the national security or terrorism excuse, to make the users life a living hell.
The feds are even saying they may raid the homes of people who bought liberty dollars! (because they know that people who bought and traded liberty dollars were entirely anti-establishment)
Granted they do not have the authority to do such an act, and the Liberty Dollar is not counterfeit, and the liberty dollar was totally legitimate. It was even investigated by the secret service several times, and the secret service said it was legal.... it wasn't until Ron Paul's campaign that the feds decided it was a threat. Bitcoin  will be the exact same way. The fact that the CIA invited one of the founders of bitcoin to hold a presentation for CIA agents - just shows they consider it a threat, and have a plan in place to try and stop it. Too bad the founders can't see what the CIA is planning.

https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin

I fully support bitcoin in heart, thought, and meaning. But I can't participate in it until it's considered legal (which will probably never happen)
The actions by the feds create a "chilling" effect, and they know it, thats why they did it to the liberty dollar, to set an example. And it's working. You want anonymity??? *use cash*
The communist and nazis practiced "chilling" effects also..... what has this nation turned into? "Home of the brave" "Home of the free"... yeah ok.... if your like Michael Jackson and live in Never Never land

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## hugolp

> This, only legal tender laws and interference by the state makes bitcoin attractive to some people. Its free market money backed by nothing that you can trade anonymously. I have no use for it, I'll stick with gold and silver thanks.


Gold is backed by nothing also. Yet, I think its good money.




> I've read - watched enough. I won't use it. Like the liberty Dollar - the federal government can use the national security or terrorism excuse, to make the users life a living hell.
> 
> The feds are even saying they may raid the homes of people who bought liberty dollars! (because they know that people who bought and traded liberty dollars were entirely anti-establishment)
> Granted they do not have the authority to do such an act, and the Liberty Dollar is not counterfeit, and the liberty dollar was totally legitimate. It was even investigated by the secret service several times, and the secret service said it was legal.... it wasn't until Ron Paul's campaign that the feds decided it was a threat. Bitcoin  will be the exact same way. The fact that the CIA invited one of the founders of bitcoin to hold a presentation for CIA agents - just shows they consider it a threat, and have a plan in place to try and stop it. Too bad the founders can't see what the CIA is planning.
> 
> https://www.eff.org/deeplinks/2011/06/eff-and-bitcoin
> 
> I fully support bitcoin in heart, thought, and meaning. But I can't participate in it until it's considered legal (which will probably never happen)
> The actions by the feds create a "chilling" effect, and they know it, thats why they did it to the liberty dollar, to set an example. And it's working. You want anonymity??? *use cash*
> The communist and nazis practiced "chilling" effects also..... what has this nation turned into? "Home of the brave" "Home of the free"... yeah ok.... if your like Michael Jackson and live in Never Never land


1. The USA government does not control the whole world.

2. The key of Bitcoin and the difference with Liberty dollars is that it is decentralized. Its p2p just like music and video downloads. The USA government tried to ban them but people is still downloading music and video because p2p is decentralized and the government can not go against everybody.

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## kpitcher

Getting back to the original question, it's hard to make money by mining. If you're into hardware mods and are fine playing around with best cases for airflow, have no problem with tweaking computer configs to get optimal speeds then it may be an interesting hobby. I've got a number of rigs chugging along and each has a return on investment payoff of ~ 4 months at the current pricing. But if these prices drop then of course that scales out to a longer period. But machines on server racks is part of what I normally do so I haven't went too far out of my way with this. If I had just bought bitcoins about 4 months ago I would have made far more than I have in mining.

With that said, I think the entire concept with bitcoins is valid. A digital currency that bypasses central banking is very nice. More places are accepting them for practical purposes. Also I view investing in them a bit like playing the forex markets. Just instead of small movements you may get big jumps and drops all in the same day.

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## Nielsio

http://vforvoluntary.com/bitcoin

You've been warned.

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## Teaser Rate

> Getting back to the original question, it's hard to make money by mining. If you're into hardware mods and are fine playing around with best cases for airflow, have no problem with tweaking computer configs to get optimal speeds then it may be an interesting hobby. I've got a number of rigs chugging along and each has a return on investment payoff of ~ 4 months at the current pricing. But if these prices drop then of course that scales out to a longer period. But machines on server racks is part of what I normally do so I haven't went too far out of my way with this. If I had just bought bitcoins about 4 months ago I would have made far more than I have in mining.
> *
> With that said, I think the entire concept with bitcoins is valid. A digital currency that bypasses central banking is very nice.* More places are accepting them for practical purposes. Also I view investing in them a bit like playing the forex markets. Just instead of small movements you may get big jumps and drops all in the same day.


I can see why having an untraceable digital currency can be a good thing if you're into buying drugs, credit card numbers or illegal pornography online,  but outside of that, I don't really see the point. Why would I buy books on Amazon in a vulnerable and unstable currency when I can just use my credit card?

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## low preference guy

> I can see why having an untraceable digital currency can be a good thing if you're into buying drugs, credit card numbers or illegal pornography online,  but outside of that, I don't really see the point. Why would I buy books on Amazon in a vulnerable and unstable currency when I can just use my credit card?


What about gambling? Gambling is illegal.

If you want to buy raw milk and pay online, bitcoins would be useful as well.

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## specsaregood

It is their blackmarket use that gives them value.   Now, if you envision a future with less government control and less blackmarkets; then you should short them.

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## low preference guy

> Don't waste your time. Bitcon. 
> 
> When individuals are selling their gold en masse to get bitcoins, let me know. Because then it will be considered a legitimate money. Until then it is merely a product of the existence of the state (and hence not a free market money). Why in the world would you need bitcoin otherwise?
> 
> e-gold.com, goldmoney.com simple.


It's a product of government intervention in the monetary system? So what? It doesn't mean it doesn't have value. Mises' books are a product of the same, and it doesn't mean they don't have value.

So you're saying that if the state didn't exist bitcoins wouldn't have value? I have news for you: the state exists, and bitcoins do have value.

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## hugolp

> I can see why having an untraceable digital currency can be a good thing if you're into buying drugs, credit card numbers or illegal pornography online,  but outside of that, I don't really see the point. Why would I buy books on Amazon in a vulnerable and unstable currency when I can just use my credit card?


Privacy in general.

Btw, I want to point out that Bitcoin is not anonymous, its pseudo-anonymous. The distintion is important because if you think that by using Bitcoin you are untraceable automatically you are very wrong. To become anonymous with Bitcoin you have to follow certain rules, its not automatic.

Being able to be anonymous is a characteristic of any cash-like system (including Bitcoin), but its not the main advantage of Bitcoin. Bitcoin is desgned to be non-inflationary and give a stable currency for people to use with ease, specially on the Internet, so they are shielded from the way the government currencies are managed.

Another advantage of Bitcoin is that it is extremely competitive and the cost of sending money at any part of the world is almost zero. Comparing the credit cards there is no competition.

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## Conza88

> It's a product of government intervention in the monetary system? So what? It doesn't mean it doesn't have value. Mises' books are a product of the same, and it doesn't mean they don't have value.
> 
> So you're saying that if the state didn't exist bitcoins wouldn't have value? I have news for you: the state exists, and bitcoins do have value.


I'm glad you don't deny it. So what? It cannot be called a free market money, since it would not exist otherwise. 




> *The Necessity for a Value Independent of the Monetary Function before an Object can serve as Money*
> 
> If the objective exchange-value of money must always be linked with a pre-existing market exchange-ratio between money and other economic goods (since otherwise individuals would not be in a position to estimate the value of the money), it follows that *an object cannot be used as money unless, at the moment when its use as money begins, it already possesses an objective exchange-value based on some other use. This provides both a refutation of those theories which derive the origin of money from a general agreement to impute fictitious value* to things intrinsically valueless' and a confirmation of Menger's hypothesis concerning the origin of the use of money.
> 
> This link with a pre-existing exchange-value is necessary not only for commodity money, but equally for credit money and fiat money.' No fiat money could ever come into existence if it did not satisfy this condition...
> 
> ~ Theory of Money and Credit, Mises


Bitcoin is _fiat, built on top of fiat_. Bitcoin has no has prior objective-exchange value use. All that happened is one day some people said, "tada" "this is now money!".

No.

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## low preference guy

> Bitcoin is _fiat, built on top of fiat_. *Bitcoin has no has prior objective-exchange value use. All that happened is one day some people said, "tada" "this is now money!".*


I dispute that as well. Bitcoins had their starting value because they are a tool for doing anonymous transactions, and could be used as such even if they didn't have use as a monetary unit.

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## hugolp

> Bitcoin is _fiat, built on top of fiat_.


Bitcoin is not fiat. In fact, Bitcoin is the opposite of a fiat currency, its a voluntary currency.




> Bitcoin has no has prior objective-exchange value use. All that happened is one day some people said, "tada" "this is now money!".
> 
> No.


Bitcoin had a previous value to being money, and that is the value the entrepreneurs gave to it. Or are you going to dish entrepreneurship now?

Btw, several notorious austrian economists say that Bitcoin does not violate the Mises regresion theorem. Also, Bitcoin is being used as money all over the world right now. So either Bitcoin does not violate the Mises regression theorem or the theorem is wrong.

The sad thing is that you attribute yourself powers similar to a central planner and claim to know exactly what kind of money people would use in a free market. You can make your educated guess, but you should always acknoledge that there is a degree of uncertainty.

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## Conza88

> I dispute that as well. Bitcoins had their starting value because they are a tool for doing anonymous transactions, and could be used as such even if they didn't have use as a monetary unit.


Would you like to address the quote from Mises, instead of taking up alms with what I said. Also please elaborate on their starting point use.

Because you do realise, if I was to concede for the sake of argument your point.. in no way does it make it an economic good.

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## Conza88

> Bitcoin is not fiat. In fact, Bitcoin is the opposite of a fiat currency, its a voluntary currency.


Bitcoin is fiat. Maybe you don't know what a *fiat currency is*... or how it comes out.  
_
"Fiat Money is the term for a medium of exchange which is neither a commercial commodity, a consumer or produce good, nor title to any such commodity."_

Voluntary exchange tokens, doesn't make something a money.




> Bitcoin had a previous value to being money, and that is the value the entrepreneurs gave to it. Or are you going to dish entrepreneurship now?


Haha.. that isn't an _objective exchange-value based on some other use_.




> Btw, several notorious austrian economists say that Bitcoin does not violate the Mises regresion theorem. Also, Bitcoin is being used as money all over the world right now. So either Bitcoin does not violate the Mises regression theorem or the theorem is wrong.


Notorious, _hardly_. All the _notorious_ ones conclude _bitcoins_ are a con. Make your mind up please; either you think it does violate the regression theorem or it doesn't. I'm not sure you even understand what it is.




> The sad thing is that you attribute yourself powers similar to a central planner and claim to know exactly what kind of money people would use in a free market. You can make your educated guess, but you should always acknoledge that there is a degree of uncertainty.


I do? The sad thing is you don't know what a money is.


*Daily Bell*: You have also written extensively on money and monetary affairs. Is a gold standard necessary for a free society?

*Dr. Hans-Hermann Hoppe*: in a free society, the market would produce money, as all other goods and services. There would be no such thing as money in a world that was perfectly certain and predictable. But in a world with unpredictable contingencies people come to value goods also on account of their marketability or salability, i.e., as media of exchange. *And since a more easily and widely salable good is preferable to a less easily and widely salable good as a medium of exchange, there is an inevitable tendency in the market for a single commodity to finally emerge that differs from all others in being the most easily and widely salable commodity of all. This commodity is called money.* *As the most easily salable good of all it provides its owner with the best humanly possible protection against uncertainty in that it can be employed for the instant satisfaction of the widest range of possible needs.* Economic theory has nothing to say as to what commodity will acquire the status of money. Historically, it happened to be gold. But if the physical make-up of our world would have been different or is to become different from what it is now, some other commodity would have become or might become money. The market will decide. In any case, there is no need for government to get involved in any of this. *The market has provided and will provide some money-commodity*, and the production of that commodity, whatever it is, is subject to the same forces of supply and demand as the production of everything else.

Bitcoins:
*- Commodity?* No.
*- The most easily and widely salable good?* No. Let me know when people start trading in gold en masse for bitcoins. "Good as gold" is a phrase that exists for a reason.
*- With the best humanly possible protection against uncertainty?* Haha! Speaks for itself really given what it is based on - 'faith' and nothing else (besides legal tender laws & the state - which gives it the appearance of 'validitity' & 'legitimacy'. Bitcoin is merely a reaction to the existence of the state. It is not a valid free-market money. And I'd be interested to hear the 'positives' / 'arguments for' bitcoin - that would still exist, if there was a voluntary society (free market in money & the law) etc.

Like I said, when people start trading their gold [free-market commodity money] en masse for bitcoins.. let me know.

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## hugolp

I did not realize that I was talking with the (in)famous Conza. Ill try to be patient:

Ive moved the discussion about fiat money to the end so its more focused on Bitcoin.




> Haha.. that isn't an _objective exchange-value based on some other use_.


Well, thats the thing, unless you are a marxists, its not for you to decide. The entrepreneurs found that Bitcoin was useful to fulfill their vision of the project, so for them it had value. That means Bitcoin had an initial value.




> Notorious, _hardly_. All the _notorious_ ones conclude _bitcoins_ are a con. Make your mind up please; either you think it does violate the regression theorem or it doesn't. I'm not sure you even understand what it is.


So Bob Murphy from the Mises Institute is not a notorius austrian economist? Then why was he choosed to be the one debating Krugman? Why does his articles appear regulatrly at mises.org? Please stop giving false information.




> I do? The sad thing is you don't know what a money is.


Yes you do. Everyone can see what you said in your previous post. Ill ignore the personal attack about not knowing what money is. Also, posting long cites is not going to impress anyone here.




> Like I said, when people start trading their gold [free-market commodity money] en masse for bitcoins.. let me know.


They already do. There are several shops that sell gold and silver for bitcoins:

- http://thegoldtrader.com/
- http://www.chariottrading.com/bitcoin.html
- http://www.midasbitcoin.blogspot.com/
- http://goldstarbullion.com/
- http://mjbmonetarymetals.co.uk/
- http://gold2bitcoins.com/
- http://www.swapsilver4bitcoins.com/




> Voluntary exchange tokens, doesn't make something a money.


As defined by Ludwig Von Mises (and others before him) money is what is used as medium of exchange. So a voluntary exchange token can be money. But that is not the discussion here. Bitcoin is money. The discussion is about "fiat money".




> Bitcoin is fiat. Maybe you don't know what a *fiat currency is*... or how it comes out.  
> _
> "Fiat Money is the term for a medium of exchange which is neither a commercial commodity, a consumer or produce good, nor title to any such commodity."_


If you redefine terms, you can prove that you can fly with a chair. The word fiat means "by decree" and that is the most accepted definition of fiat money. With the most accepted definition Bitcoin is clearly not fiat money.

Now, just for fun, lets analyze it with the definition you have provided. Lets see how wikipedia defines commodity:




> A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market.[1] A commodity has full or partial fungibility; that is, the market treats it as equivalent or nearly so no matter who produces it.


Bitcoin is a commodity, thefore (according to your definition) is not fiat money. And even if you dont want to accept Bitcoin as a commodity then the only other option for Bitcoin is that it is a consumer or produce good, and therefore (according to your definition) is not fiat money.

Honestly, the problem with your definition is that it relays on deffinition of terms that are too vague. Whats a commodity, what is a consumer or produce good is very open to interpretation, therefore very open to maniulation. Its not a useful definition. And the most important part, its not the commonly used definition.

EDIT: And I forgot that you have ignored the most important part of my previous post. Bitcoin is being used as money already. So either it does not violate the Mises regressiom theorem or the theorem is wrong.

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## heavenlyboy34

This is very interesting stuff, thanks.

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## Conza88

-> ... rest assured I'll get to the above over the next few days. Weekend is just getting started for me and have to head out now. In the mean time:




> http://vforvoluntary.com/bitcoin
> 
> You've been warned.


They have indeed. Everyone needs to watch these:

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## KingRobbStark

The reason I am found of Bitcoin is the important role they give those who use it. They give them the ability to "mine" it. That puts the burden of the creation of money on the consumer, and I find that remarkable. 

But

The problem I have with it's reliability is its algorithms. The problem I do is because we don't know enough (and I understand why they keep it secret). Regardless I don't see why people would not want to invest in an alternate currency. It would seem to be the logical approach at the moment.

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## hugolp

> The reason I am found of Bitcoin is the important role they give those who use it. They give them the ability to "mine" it. That puts the burden of the creation of money on the consumer, and I find that remarkable. 
> 
> But
> 
> The problem I have with it's reliability is its algorithms. The problem I do is because we don't know enough (and I understand why they keep it secret). Regardless I don't see why people would not want to invest in an alternate currency. It would seem to be the logical approach at the moment.


All the algorythms that Bitcoin uses are public. In fact all the software that Bitcoin uses is Open Source and anyone can check it.

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## hugolp

While waiting for the answer of the one and only Conza Ill post the answer of the Bitcoin community to this:




> http://vforvoluntary.com/bitcoin
> 
> You've been warned.


http://weusecarrots.com/

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## Jeez

Problem i have with BC is that it is utterly worthless when there is no power case in point the power outage in New England due to the hurricane. Most communities which still haven't received power are resorting to barter system, if BC cannot be used then what good is it for your average joe.

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## hugolp

> Problem i have with BC is that it is utterly worthless when there is no power case in point the power outage in New England due to the hurricane. Most communities which still haven't received power are resorting to barter system, if BC cannot be used then what good is it for your average joe.


Yes, Bitcoin is a computer/smartphone/internet currency (although there is bitbills  ). If the electricity is gone and our civilization returns to a pre-electricity stage then Bitcoin has nothing to do. I am confident that will not happen, and if it does the least of your problems will be that you can not trade bitcoins.

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## Conza88

> Well, thats the thing, unless you are a marxists, its not for you to decide. The entrepreneurs found that Bitcoin was useful to fulfill their vision of the project, so for them it had value. That means Bitcoin had an initial value.


Sorry, dropping the epithet of "marxist" isn't a valid argument. Calling me a marxist is absurd. Care to back up your reasoning behind the claim? Did you miss the part of Hoppe's quote where it explicitly stated:_ "Economic theory has nothing to say as to what commodity will acquire the status of money."_ The key here being *commodity*.

*Doug Casey on bitcoin*(June 22nd, 2011)
Quote:"L: Do they have value in themselves?

Doug: Theres the rub; I dont see that they do. Bitcoins are just an  electronic abstraction. They cant be used for anything else, nor are  they made of something that can be used for anything else. They are like  one of those knots in a string that disappear if you pull hard enough  on the ends of the string. They are not backed by anything at all. Like  government fiat currencies, they are a con game, functioning only as  long as people have confidence in them, regardless of whether that  confidence is well placed or not.

Ive always said that the dollar is an I owe you nothing, and that the  euro is a Who owes you nothing. With Bitcoins  which no individual  can be held accountable for and which have no value in themselves  Id  have to say they are a No one owes you anything. It was inevitable,  therefore, that the scheme would collapse at least in its present form.

Their main value seems to have been as a speculative medium. Worse,  actually, in that they are  or were  based on finding a greater fool  to pass them on to, for something of value. The bubble in Bitcoins is,  however, just one of many to come as people try to get out of paper  currencies in the years to come. With the bubble that arose in tulip  bulbs in 17th century Holland, you might at least have wound up with a  flower. This time, people just got stung.  The message is clear: Get  used to bubbles, as governments print up more and more fiat money.

Bitcoin reminds me of the so-called barter currencies people tried to  start in the U.S. some time ago, supposedly trading units of barter.  People traded chits, where a barber might charge ten for a haircut, and a  lawyer 100 for an hour of counsel. But they were just another paper  currency, based on confidence. And, when youre dealing with total  strangers, confidence is hard to come by"

- Doug Casey on Bitcoin and Currencies
http://www.caseyresearch.com/cwc/doug-ca...currencies

Also at:
http://lewrockwell.com/casey/casey89.1.html(June 23rd, 2011)

Further comments on bitcoin:
http://www.caseyresearch.com/cwc/doug-ca...y-marriage(June 30th, 2011)



> So Bob Murphy from the Mises Institute is not a notorius austrian economist? Please stop giving false information.


Bob Murphy hasn't come out in favour of bitcoin. Please stop giving false information.




> Yes you do. Everyone can see what you said in your previous post. Ill ignore the personal attack about not knowing what money is. Also, posting long cites is not going to impress anyone here.


Yes and they'll see that in fact, *no*, I am not guilty of what you're accusing me off.. "Being a central planner" etc. Same could be levelled at you, you're the one suggesting it is - contrary to all evidence.




> They already do. There are several shops that sell gold and silver for bitcoins:
> 
> - http://thegoldtrader.com/
> - http://www.chariottrading.com/bitcoin.html
> - http://www.midasbitcoin.blogspot.com/
> - http://goldstarbullion.com/
> - http://mjbmonetarymetals.co.uk/
> - http://gold2bitcoins.com/
> - http://www.swapsilver4bitcoins.com/


- Just a link, no proof of gold for bitcoin acceptance/selling.
- Previously we used mybitcoin.com to accept Bitcoin payments. _This service has been suspended._ (Bitcoin Ewallet vanishes from internet  up to 1.3 million gone). _"We buy Bitcoins. And will send you payment via Dwolla."_ It's not clear at all what they are offering to buy it with, either fiat paper or commodity money. 
- Offer, sure. Any proof of actual transactions?
- Reminds me of Tulip Mania. People buying to a pyramid scheme doesn't however make it a legitimate money / venture.
- Bitcoins Lose 66% in value over 48 hours - "$#@!coins". This guy is one of the people linked to on the front page from your next site.
- _"Send us Your gold - receive Bitcoins! Turn Your gold items and jewelry into Bitcoins. Do not let Your gold just sit there and collect dust. Bitcoin value is rising much faster than the price of gold. Make the most of Your gold by selling it for Bitcoins!"_ 

  lmao! They are selling their bitcoins for gold. Wise guys... if there are people stupid enough to fall for it. Just wow.  "_Bitcoin value is rising much faster than the price of gold."_ LOL.
- My claim was: *Gold en masse*. By that I mean mainstream acceptance, and people en masse going from gold to bitcoin. Like when people flee from fiat currencies to commodities, goods, that aren't even money... i.e because of hyperinflation. 




> As defined by Ludwig Von Mises (and others before him) money is what is used as medium of exchange. So a voluntary exchange token can be money. But that is not the discussion here. Bitcoin is money. The discussion is about "fiat money".


No, voluntary exchange token - like WoW "money". Digital currency, same deal. Digital bits don't actually exist as some real thing in tangibility. To be sure, they can be written as a magnetic pattern on a platter, or stored as electrical impules. But what were they before? How did they come to acquire the use as money or commodity? Or were they just stated as "this is money" one day after not existing in that combination of bits ever before, which would be no different from Rothbard's "Rothbards".




> If you redefine terms, you can prove that you can fly with a chair. The word fiat means "by decree" and that is the most accepted definition of fiat money. With the most accepted definition Bitcoin is clearly not fiat money.
> 
> Now, just for fun, lets analyze it with the definition you have provided. Lets see how wikipedia defines commodity: "A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market.[1] A commodity has full or partial fungibility; that is, the market treats it as equivalent or nearly so no matter who produces it. "


Wikipedia is not a valid reference. Try again. We're talking about from an Austrian School perspective, remember... the thing Ron Paul promotes. 


*Money.* The most commonly used medium or media of exchange (q.v.) in a market society. A community's most marketable economic good, which people seek primarily for the purpose of later exchanging units of it for the goods or services they prefer. The circulating media most readily accepted in payment for goods, services and outstanding debts. Money is an indispensable factor in the development of the division of labor and the resulting indirect exchanges on which modem civilization is based. 
    Ch. XVII (pp. 398-478)">; M. 29-34, 50-67, 79-90; also PLG. Ch. V (pp. 141-74), 183-84.

Thank you Mises. 




> Bitcoin is a commodity, thefore (according to your definition) is not fiat money. And even if you dont want to accept Bitcoin as a commodity then the only other option for Bitcoin is that it is a consumer or produce good, and therefore (according to your definition) is not fiat money.
> 
> Honestly, the problem with your definition is that it relays on definition of terms that are too vague. Whats a commodity, what is a consumer or produce good is very open to interpretation, therefore very open to manipulation. Its not a useful definition. And the most important part, its not the commonly used definition.


Your definition of a commodity, well here's a real one: http://wiki.mises.org/wiki/Commodity. Nothing there supports bitcoin being a commodity in any sense of the word.

Bitcoin as a consumer or producer goods; for the sake of argument; _sure..._  and yet that doesn't make it a money at all.

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## low preference guy

More for the discussion about "commodities".

*Michael S. Rozeff* 



> I add this. It seems to me that a bitcoin is a newly-produced commodity or good. In the same way, those persons who discovered a rock and got gold out of it produced a new good or commodity by extracting the gold. Marketability is a quality of a good that is subjectively assessed by those in the market. It seems that bitcoins possess it. People can recognize it and transport it at almost zero cost. They can exchange it very easily. The supply process of the bitcoin is also apparently known, but what is not known (at least to me) is the entry of future close substitutes. I'm leery of that. But gold had the same problem. How did early users of gold know that vast supplies would not be discovered?


Bitcoins Are a Free Market Money
Bitcoins Are a Free Market Money - 2

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## Conza88

Yeah, Rozeff... not a _notorious_ Austrian. Not an actual economist, does finance. Don't think he's comparable to Peter Schiff:

*Peter Schiff on bitcoin*(June 20th, 2011)
Quote:http://www.youtube.com/watch?v=vTr_hTC90oQ#t=3m14
- The Peter Schiff Show: Donald Norman interview, co-founder of Bitcoin Consultancy

Further comments on bitcoin:
- http://www.youtube.com/watch?v=QoopVDjXydE(June 21st, 2011)*Or..

Jörg Guido Hülsmann on money*(2008)


Quote:"To be spontaneously adopted as a medium  of exchange, a commodity must be desired for its nonmonetary services  (for its own sake) and be marketable, that is, it must be widely bought  and sold. The prices that are initially being paid for its nonmonetary  services enable prospective buyers to estimate the future prices at  which one can reasonably expect to resell it. The prices paid for its  nonmonetary use are, so to speak, the empirical basis for its use in  indirect exchange. It would be extremely risky to buy a commodity for  indirect exchange without knowing its past prices; as a consequence, the  spontaneous emergence of a medium of exchange is virtually impossible  whenever such knowledge is lacking. On the other hand, when it exists,  then there can arise a monetary demand for the commodity in question.  The monetary demand then adds to the original nonmonetary demand, so  that the price of the money-commodity contains a monetary component and a  nonmonetary component. Although in a developed economy the former is  likely to outweigh the latter quite substantially, it is important to keep in mind that the monetary use of a commodity ultimately depends on its nonmonetary use  [emphasis added]. The medieval scholastics called money a res  fungibilis et primo usu consumptibilis. It was in the very nature of  money to be a marketable thing that had its primary use in consumption."

-The Ethics of Money Production, page 23
http://mises.org/resources/3747/The-Ethi...Production

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## jonahtrainer

> I can see why having an untraceable digital currency can be a good thing if you're into buying drugs, credit card numbers or illegal pornography online,  but outside of that, I don't really see the point. Why would I buy books on Amazon in a vulnerable and unstable currency when I can just use my credit card?


With government and banks, with the legalized cartel, have politicized currency. Gold and silver are not mere barbaric relics but essential checks and balances in the political machinery. As essential competent of the power they exert is in their privacy. Ideas are bulletproof but people are not. Money and currency are essential to have the the ability to establish and maintain a free press; the only business offered specific protection in the Constitution. BitCoin is a technological innovation that furthers this ability.

Another reason to use BitCoin is to boycott the use of the Federal Reserve's product. It was not the protests and riots that changed society during the Civil Rights era. It was the boycotts of the businesses.

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## hugolp

Conza, this is a bit sad. The discussion was if Bitcoin violates the Mises regression theorem and if it was fiat money. You have not answered to any of those and have just attacked Bitcoin, and without too much sense. If you like bashing Bitcoin for some particular reason, do it, but dont make us loose our time. Just correcting some random things:




> Sorry, dropping the epithet of "marxist" isn't a valid argument. Calling me a marxist is absurd. Care to back up your reasoning behind the claim?


I did not call you a marxists. I said that Bitcoin had initial value because some people subjectively valued it (thats a fact). And this could only be refuted if you were a marxist (which I dont think you are). Otherwise its undeniable that people valued Bitcoin before it was money, therefore (unless you are a marxist) Bitcoin had value before being money.

Posting the same quotes you have posted before wont help you. I dont think you are going to impress no one by posting the same long quotes.




> Bob Murphy hasn't come out in favour of bitcoin. Please stop giving false information.


Again with the low tricks. I said that Bob Murphy has said Bitcoin does not violate the Mises regression theorem, not that he supports or does not support Bitcoin. This was as answer to you claiming that all important austrian economists claimed Bitcoin violated Mises regression theorem. You were wrong and your claims false. Its very low that you are using cheap tricks to try to appear right.

Also, appeal to authority is a sad falacy to use. Just explain why you think Bitcoin violates the Mises regression theorem in a clear way, instead of avoiding answering to my points and muddling the conversation.

Point being, unless you are a marxists, Bitcoin had initial value other than being money. It does not violate the Mises regression theorem. I still want to know how do you justify that Bitcoin is being used as money right now, because it either does not violate the theorem or it does and therefore the theorrem is worng.




> Some Bitcoin bashing without any relevance to the discussion





> Your definition of a commodity, well here's a real one: http://wiki.mises.org/wiki/Commodity. Nothing there supports bitcoin being a commodity in any sense of the word.


Actually, with that definition Bitcoin is as well a commodity.




> Bitcoin as a consumer or producer goods; for the sake of argument; _sure..._  and yet that doesn't make it a money at all.


I really dont care if you consider Bitcoin a commodity or a consumer good. As I already said the definition of commodity, consumer goods, etc... are too vague. But the point again is that the definition of fiat money you supplied (not mine or the most commonly accepted, the one you supplied) said that a consumer good can be non fiat money. Therefore you just admited that even under your definition Bitcoin is not fiat currency.

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## Jeez

> Yes, Bitcoin is a computer/smartphone/internet currency (although there is bitbills  ). If the electricity is gone and our civilization returns to a pre-electricity stage then Bitcoin has nothing to do. I am confident that will not happen, and if it does the least of your problems will be that you can not trade bitcoins.


If you say so, anyway BC community drama is pure gold, it seems to draw the crowd that seems to have never gotten out in the real world. And the scammers' seemed to be taking advantage of them left and right. Is it fair to assume 50% of tokens have been scammed after Bruce-Ted dabacle?

has-bruce-wagner-pulled-off-the-financial-biggest-scam-on-the-bitcoin-community

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## hugolp

> If you say so, anyway BC community drama is pure gold, it seems to draw the crowd that seems to have never gotten out in the real world. And the scammers' seemed to be taking advantage of them left and right. Is it fair to assume 50% of tokens have been scammed after Bruce-Ted dabacle?
> 
> has-bruce-wagner-pulled-off-the-financial-biggest-scam-on-the-bitcoin-community


No, its actually that the bitcointalks forums have been populated by trolls and the real users are leaving or already gone. In fact, some of us are starting a new forum that will be more moderated (at the style of this one) at: https://bitcoin.org.uk/forums/

Thats why you see so much drama at bitcointalk. And btw, that article has some big mistakes, you can check the original sources at the threads in the forum and how he has manipulated the information (you might want to look for sources other than a web by that name).

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## specsaregood

> Thats why you see so much drama at bitcointalk. And btw, that article has some big mistakes, you can check the original sources at the threads in the forum and how he has manipulated the information (you might want to look for sources other than a web by that name).


Which is obvious that Jeez knew it was discredited source based on how he linked to it here.   He wants to reference a site with the domain buttcoin.org and expect people to take it seriously?

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## Jeez

> No, its actually that the bitcointalks forums have been populated by trolls and the real users are leaving or already gone. In fact, some of us are starting a new forum that will be more moderated (at the style of this one) at: https://bitcoin.org.uk/forums/
> 
> Thats why you see so much drama at bitcointalk. And btw, that article has some big mistakes, you can check the original sources at the threads in the forum and how he has manipulated the information (you might want to look for sources other than a web by that name).


Yeah regardless it is quite funny that person who at the epicenter of BC community is a scammer and there is spin website called ButtCoins . IMO as told you before bitcoin will stagnate (thanks to hackers/scammers/trolls) unless someone credible steps up to the plate and takes control and steers this ship: either Mr Satoshi or someone in Silicon Valley with deep pockets.

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## low preference guy

> Yeah regardless it is quite funny that person who at the epicenter of BC community is a scammer and there is spin website called ButtCoins . IMO as told you before *bitcoin will stagnate (thanks to hackers/scammers/trolls) unless someone credible steps up to the plate and takes control and steers this ship: either Mr Satoshi or someone in Silicon Valley with deep pockets*.


this is a hilariously wrong statement.

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