Buying drugs with bitcoins hitting the mainstream
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Steven Douglas
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No question about it - in many respects. Bitcoins float against all other currencies. It's no more a store of value than FRN's or any other currency, but it does compete with all of them in that it bypasses functions ordinarily reserved to traditional banks -- especially fees taken through currency conversion.
For now people are still forced, by and large, to convert back into legal tender, or fiat currency for most transactions. Bitcoins are a teensy microcosm of the overall economy for now, but as bitcoin usage becomes more common, more popular, and more trusted, the overall velocity of bitcoin transactions increases. You might sell something in exchange for bitcoins, and decide NOT to convert it back to fiat currency, but immediately use the bitcoin proceeds to make a purchase of your own - bypassing banks altogether. The more that happens, the more it affects the velocity of transactions that would normally be forced through the banking system.
dannno
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Interesting, anybody know how taxes are handled with bitcoins?
Steven Douglas
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Good question. Everyone will have a different perspective, of course, but here's how the bitcoin wiki handles it: (delicately)
losinglife
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when can i start buying herb is all i care about 
DerailingDaTrain
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^ I edited out the site name but seriously you've been able to do that for years
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Bitcoins aren't taxed. Transaction fees are low. Wire money to mt. gox for the exchange to happen by sending via Dwolla. This combo seems to be the cheapest when converting USD to BTC.
Only 21 million bitcoins can be mined in existence from now until 2030 I believe. 8 million have been dug up so far from blocks. Difficulty increases over time to mine coins as better hash crunching technology hits the market.
Bitcoins can't be fraudulently inflated because transaction data is checked and double-checked with all others contributing to the P2P network. If a bad hash gets thru, it would be identified immediately and the transaction is void. This is what gives them their store of value.
BTC will be a huge headache for central banks in the coming years. Price of things in BTC will constantly go down over time. The currency transaction is anonymous and your location itself is even more anonymous if you are using Tor. Silk Road can only be accessed with it anyway. But other vendors accepting BTC are popping up daily.
Only 21 million bitcoins can be mined in existence from now until 2030 I believe. 8 million have been dug up so far from blocks. Difficulty increases over time to mine coins as better hash crunching technology hits the market.
Bitcoins can't be fraudulently inflated because transaction data is checked and double-checked with all others contributing to the P2P network. If a bad hash gets thru, it would be identified immediately and the transaction is void. This is what gives them their store of value.
BTC will be a huge headache for central banks in the coming years. Price of things in BTC will constantly go down over time. The currency transaction is anonymous and your location itself is even more anonymous if you are using Tor. Silk Road can only be accessed with it anyway. But other vendors accepting BTC are popping up daily.
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heavenlyboy34
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Bitcoins are hard currency? I was under the impression that they were digital fiat. I haz teh intrigued.
It's actually a very fool proof system in terms of preventing from phony inflation. The global community keeps all bitcoins in check.
heavenlyboy34
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How quickly does the bitcoin supply expand? /curious
heavenlyboy34
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How quickly does the bitcoin supply expand? /curious
hazek
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The reward for "mining" a block started out at 50BTC per and will get halved approx. every 4 years until it reaches 0 which will happen sometime 2130, although most will be mined around 2030.
As you can see, we are approaching the first time the reward will be halved sometime in December this year.
As you can see, we are approaching the first time the reward will be halved sometime in December this year.
Kluge
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It's really a pretty incredible system.
The second that quantum computers come into existence, Bitcoins will hit the shitter (Bitcoins specifically). There are better alternatives for the long run than the current hashing algorithm that Bitcoin uses. As a software engineer, http://solidcoin.info, is alot more exciting than Bitcoins. In the end, its all about acceptance and popularity - nothing wrong with a little competition.
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DerailingDaTrain
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Technically, the IRS could treat bitcoin transactions as a type of barter since bitcoins are not recognized as currency. So the fair value in fiat for Bitcoins would need to be reported for each transaction. Like most barter transactions, most individuals will choose not to report these transactions. If a big business, like Amazon, chooses to accept bitcoins, they would likely follow IRS guidelines and pay taxes in fiat.
edited my post
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