* The Business of Software

A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.

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Moderators:

Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

Bitcoins - is anyone here accepting them

or considering using them for payment?
Patrick Hughes Send private email
Thursday, March 28, 2013
 
 
I'd probably do it for B2C but no one could seriously do it for B2C
Bring back anon Send private email
Thursday, March 28, 2013
 
 
"...no one could seriously do it for B2B"
Bring back anon Send private email
Thursday, March 28, 2013
 
 
For my copywriting I could accept part payment in BC - if I had a "wallet", which I don't.

No-one's ever offered 'em. If they did I wouldn't reject the idea completely. I'm not sure it would work so well for software with automated license keys etc?

I imagine you'd need a custom-made shopping cart. Or not?



AC
Reluctantlyregistered Send private email
Friday, March 29, 2013
 
 
Still don't understand them, or the text in the GPL.
Scott Send private email
Friday, March 29, 2013
 
 
I'm wondering why they are appreciating so quickly, against the dollar for example. Also, the way of "mining" them seems bizarre.

It all looks like a movie plot that escaped into the real world.
Scorpio Send private email
Friday, March 29, 2013
 
 
Is it even legal, creating alternate currencies?

Sooner or later, especially it catches on, the government will clamp down on it.
ssware Send private email
Friday, March 29, 2013
 
 
@ssware
That is a good point. Most governments like to be in control of their money supply (i.e. allowed to debase their currency via inflation/money-printing), so clamp down on anyone trying to undermine their monopoly with alternatives.

You can go to jail for a long time for this, but I assume that Bitcoins avoid that by being distributed, so outside of federal jurisdiction. As you say though, if anything like this ever took off, you can bet the FBI would be kicking in some doors.
Scorpio Send private email
Friday, March 29, 2013
 
 
Scorpio Send private email
Friday, March 29, 2013
 
 
>I'm wondering why they are appreciating so quickly

Tulipmania perhaps ( http://en.wikipedia.org/wiki/Tulipmania )? As they aren't backed by gold or a government I wonder if they might suddenly become worthless overnight. But I don't claim to fully understand how it (or macro economics) all works.
Andy Brice Send private email
Friday, March 29, 2013
 
 
@Andy
Money is no longer backed by gold (the Gold Standard was seen as too much of a constraint), but currencies are backed by central banks that are supposed to step in during a crisis.

Sadly, not all central banks are created equal (ECB, cough, cough), but we're getting off topic ;-)
Scorpio Send private email
Friday, March 29, 2013
 
 
There is a limit to the supply of bitcoins that seems to be impossible to exceed analagous to the way it's impossible to brute force defeat AES encryption. Bitcoins are rare like gold
Drummer Send private email
Friday, March 29, 2013
 
 
I placed a button on a less popular product. No one has bought yet. At this point I am hesitating to place the button on a more popular product page, don't want to scare off customers with one more payment button.

On the other hand, sometimes people from Nigeria complain they can't purchase with credit card, and Bitcoin works there. (Not everyone from Nigeria is scammer, I had the last customer from there paid us with Liberty Reserve)
handzhiev Send private email
Friday, March 29, 2013
 
 
I don't, but I would if anyone offered them.

Personally, I don't see how the government could get involved.  If I, as a US citizen, decided to accept the Euro, could the US government get in my face?  They don't control that currency either.  As long as I pay taxes on income received (and maybe that's where it gets dicey).

Bitcoin is anonymous, just like paying for things in cash.  So no difference there.  And it is designed to be rare, so inflation is built in -- I don't know the exact number, but there can never be more than a million Bitcoins.  So over time, you could buy things with smaller and smaller coins (ie .00001 coins for a $50 piece of software).  Right now those million coins are still being minted (aka mined).

It's really fascinating -- I'd recommend reading up on it.
Doug Send private email
Friday, March 29, 2013
 
 
Most people on this board have enough problems just keeping the lights on and operating a solvent business by accepting real funds.

WTF is Bitcoin going to solve?

Besides, the entire purpose of Bitcoin is to provide completely anonymous funds transfer.

Do you want to sell to anonymous parties? How does support work?

This question is really stupid. Bitcoin is ideological bullshit from techies.
WannabeTycoon Send private email
Friday, March 29, 2013
 
 
Reading the Wiki page on Bitcoin begins to creep me out a bit because it forces one to think about the ultimately arbitrary nature of currency generally, in the same way that some people get creeped out when they learn "too much" about how the human body (particularly the brain) works.

From the little I know (or, let's face it, anyone really knows) about it, I would not be inclined to accept them.  Significant safety, legality, and ethical questions, and I have enough questions in my life already.
Racky Send private email
Friday, March 29, 2013
 
 
I think you're wrong wannabe tycoon.
Bitcoin or something like it is a vital requirement to allowing people to conduct their lives online without having big business or the government tracking their every move.
Drummer Send private email
Friday, March 29, 2013
 
 
Never doubt the ability of "ideological bullshit" to change the world.

Someone has already pointed out how it can help those who have the funds buy stuff, when in countries rejected by conventional processors.

What does it solve? Well it if works it solves one of the greatest problems of our time - government-controlled fiat currencies, along with their crazy effects (including wars).

No-one is forcing you to use them - which is rather the point, isn't it?



AC
Reluctantlyregistered Send private email
Friday, March 29, 2013
 
 
I should also add that they're like cash, in the sense that you cannot change your mind, demand a refund or threaten 'chargeback'.

As for being creeped out by the way the current financial system works, you should be.

Back to relevancy for the business of software... One aspect that appeals to me about them is they're not tied down by country. For example my Paypal account is great for transferring money into a bank account where I can then withdraw from an ATM, and it's great for online digital purchases.

But physical purchases?

Forget it. I can't use Paypal for *anything* that needs to be delivered, because for 99% of the time I'm not in the UK and they flatly won't process anything for delivery elsewhere.

What I normally end up doing is contacting the seller directly and explaining the situation, then they're usually happy enough for me to just send them a cash payment via Paypal, without any mention of delivery or whatever. That works, though it's clunky.

Just recently I was looking at "thinkgeek or whatever it's called, then noticed that nope, they don't ship to Malaysia. Ever.

All these things come down to not being sure it's really me, the worry of chargebacks and such. However with bitcoin it's like paying in cash, so there's no question of who you are or if you have the money.

Governments hate the idea, which is all the more reason to be supportive.




AC
Reluctantlyregistered Send private email
Friday, March 29, 2013
 
 
>>
Reading the Wiki page on Bitcoin begins to creep me out a bit
>>

My feelings exactly! But I cannot explain why I feel creeped out. Just that I feel somewhat uneasy and the first thing that came to my mind upon reading about it was, inexplicably, the scene from the Matrix, where endless arrays of humans are being harvested for energy.
ssware Send private email
Friday, March 29, 2013
 
 
A Nobel Prize winning economist has a well-considered criticism of Bitcoin: http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfetters/
Wyatt O'Day Send private email
Friday, March 29, 2013
 
 
> Governments hate the idea, which is all the more reason to be supportive.

I thought this was Business of software, not Business of 2600.

Common sense has jumped the shark here.
WannabeTycoon Send private email
Friday, March 29, 2013
 
 
I'm pretty sure as Bitcoin continues to mature, it will be possible to buy Bitcoin forwards to ensure stable conversion into your desired currency (if it is not possible already.)

For those who ask what governments can do to it, the only thing they can do to control the currency itself is:

1. Hack the "block chain" which is a worldwide database tracking each and every transaction. Then they can make it whatever they want. I'm not sure how much CPU power is needed but I'm sure a well-financed state actor could manipulate it, if needed.

2. Make the use of Bitcoin illegal. I think they already do this in part for certain software so I'm sure the logic would be "something something terrorist something something freedom" and poof, it's illegal to use Bitcoin.

Aside from hacking the block chain, it is literally impossible for a government to control the currency itself and they can only regulate around the use of the currency, which in itself is very exciting.
Bring back anon Send private email
Saturday, March 30, 2013
 
 
Paul Krugman? New York Times?

Well gee, I wonder what stance that statist gasbag shill for Big Government, Big Banks and fiat currency might take? Let me bother clicking that link.. Not.

This isn't the place for hot politics but if it was I'd point out how only the 'Austrian School' of economic thought predicted every one of the crashes and depressions, can explain WHY they happen - and can explain the primary role that fiat currencies play.

Why if this WERE the spot for economics and such I'd tell y'all to get ya butts over to the Mises Institute (mises.org) or Lewrockwell.com and learn how economics actually works. I'd say read anything by Rothbard, Mises, Rockwell or Hayek, just for starters.

Then I'd point to the dismal mess of the current economy as run by mainstream "thought" (I use the term loosely) and would giggle uncontrollably at taking advice from a political-prize winning shill like Krugman. That's the guy that... well I could write a book on that. Someone probably already has written a book on how often that guy's completely wrong about everything? I know there's a blog... here:

http://krugman-in-wonderland.blogspot.com/

Heck, if I really wanted to rattle some cages I'd suggest doing a search for 'Saddam Hussein, petrodollars"

Or if you want something more current you could read this:

http://www.caseyresearch.com/cdd/demise-petrodollar

Then you might start to get a feel of what's wrong with fiat currencies, quite apart from the fact they act as a hidden "inflation" tax, where the government/banks steal the value of your savings and cash by creating more money. And more money, and even more - and still get themselves $17 TRILLION dollars in debt?

You know, it would be hard to think of a WORSE system than the current fiat currencies? I don't know enough about bitcoin to throw my hat in there but it's certainly no worse that that mess.


Still, this isn't the place, so I'll shut up then. :o)


AC
Reluctantlyregistered Send private email
Saturday, March 30, 2013
 
 
Wow.


@WannabeTycoon
>> "Common sense has jumped the shark here."

I'm gonna have to agree with you.
Wyatt O'Day Send private email
Saturday, March 30, 2013
 
 
You can show a horse water.

Then it's up to them.


AC
Reluctantlyregistered Send private email
Saturday, March 30, 2013
 
 
Yep. I agree.
Wyatt O'Day Send private email
Saturday, March 30, 2013
 
 
I'm more interested in which bit/s you disagreed with..?



AC
Reluctantlyregistered Send private email
Saturday, March 30, 2013
 
 
">> "Common sense has jumped the shark here."

I'm gonna have to agree with you. "


1) Government agencies and the telephone companies are not allowed to record telephone conversations except on the basis of court orders that are granted on the basis of reasonable grounds for suspicion. Why is that?

2) ISPs are commanded to store IP and browsing  information on customers for years.

3) Mobile phone companies are compelled to retain SMS messages indefinitely as well as a record of which cells,  phones were in at all times and a listing of all calls. Why is that?

My gut feeling is that the reason is that 1) was then and 2) and 3) are now.
We are seeing a gradual erosion of the right to privacy.
Government want to know as much about  us they can, not least to be able to maximise the tax take.
People have become acclimatised to accepting greater and greater
intrusion in 'their own interest' (governement) or for 'their convenience' (big business).

Law enforcement agencies are always whining that they are having to fight crime with one hand tied behind their back and asking for more and more tools and powers.
So while in previous times you could go into a bank and open an account with minimal information. Today you need a passport, utility bill etc etc.

If Mail was invented today, all letters would be opened and scanned en route.

And then there's big business.
Supermarkets with their 'loyalty cards',
Facebook asking to have a look inside your email account.

Google already knows so much about us that it's tailoring search results for us individually.

Amazon ads for items they think will be of particular  interest follow people around the internet

Every other site you go to requires registration and asks for as much personal information as they think they can get away with.

Just last week it was pointed out how seemingly innocuous public facebook likes can be analysed and provide an amazingly accurate estimate of such things as sexual orientation.

Data analysts then busily add value by relating it all.

The erosion of privacy is not just continuing, it's accelerating.

Cash is the only way one can conduct a transaction that allows for privacy.  If government could eliminate cash today they would.

Rooting for bitcoin is not common sense jumping the shark.

Once we can pay anonymously people might start to realise that there's no good reason why the company your buying from should know anything more about you than your delivery addess and not even that if it's a virtual product.

And if a convenient anonymous alternative for SMS is born, people will vote with their feet there too.

I am rooting for anonymous everything. That's the way the world was before passports and Bank accounts and information technology and I'd quite like it back that way.
Drummer Send private email
Saturday, March 30, 2013
 
 
I agree ideologically with Bitcoin. Fervently, in fact.

But as a practical matter, WTF does Bitcoin have to do with running an mISV? You're creating a lot of additional work in order to accept a form of payment that perhaps 0.01% of your customers would even know anything about.
WannabeTycoon Send private email
Saturday, March 30, 2013
 
 
@WannabeTycoon

>>
Most people on this board have enough problems just keeping the lights on and operating a solvent business by accepting real funds.
<<

True enough

>>
WTF is Bitcoin going to solve?
<<

None in particular, other than what some have pointed out as its potential. But then I wasn't really asking it to solve a problem, I was merely asking if anybody here was accepting them. I've been considering doing so.

>>
This question is really stupid.
<<

See above.

>>
I thought this was Business of software, not Business of 2600.
<<

I'll answer your question with a question: "
What do payment processors have to do with the business of software?

Don't get upset or anythink - I'm just tweaking you a bit.
Patrick Hughes Send private email
Saturday, March 30, 2013
 
 
@WannabeTycoon

Actually it appears that it is a relativelty simple matter to set up an account to accept payments - perhaps even easier than PayPal. And speaking of 0.01% how much of a share in payments did PayPal have when it got started, and how much skepticism surrounded it?

In fact there are some well known on-line vendors that do accept them: http://mashable.com/2013/03/29/bitcoin-vendors/
Patrick Hughes Send private email
Saturday, March 30, 2013
 
 
Drummer "I am rooting for anonymous everything."

When everything is anonymous - it is a heaven for terrorists and criminals.

As for Bitcoin, I don't understand how one could accept them to sell something. 2 months ago it was $20/btc, now it's $70/btc and no one knows what it will become tomorrow. It's a bubble and its price can drop to 0 any time.
Kuzmitskiy Dmitry Send private email
Sunday, March 31, 2013
 
 
Gadzooks, you mean the price fluctuates the way other currencies do?

Best avoid it then.

By the way, what currency are you measuring it in? Not the US dollar, which has lost over 90% of its purchasing power in the last 100 years or so and which is now at parity with the Canadian and Australian dollar?

Best to avoid them things. They fluctuate in value 0_o



AC
Reluctantlyregistered Send private email
Sunday, March 31, 2013
 
 
@AC the USD doesn't fluctuate, silly rabbit. It approaches 0 as t->∞
Bring back anon Send private email
Sunday, March 31, 2013
 
 
"goes to 0"

You had one job Anon, one job.
Bring back anon Send private email
Sunday, March 31, 2013
 
 
@Drummer:

"Cash is the only way one can conduct a transaction that allows for privacy.  If government could eliminate cash today they would."

Some are already on their way, of course because of money laundering, tax evasion, international crime and terror, yada-yada-yada.

http://www.tumbit.com/news/articles/6262-spains-new-tax-law-bans-cash-payments-of-more-than-2500.html

http://www.businessweek.com/magazine/italys-cap-on-cash-payments-12082011.html

http://lewrockwell.com/slavo/slavo59.1.html
Secure Send private email
Sunday, March 31, 2013
 
 
I don't agree with Paul Krugman on much, but he is right about the Bitcoin.  Money has no intrinsic value, it is a chit or marker for a promise to exchange something of value for something else.  You could read J.K. Galbraith's "Money: Whence It Came, Where It Went" for a very good explanation of what currency is from another economist.  Bitcoin currency is a scam, a zero-sum game that is will ultimately make everyone that holds them losers.  Andy's reference to Tulipmania is a good one.
Howard Ness Send private email
Sunday, March 31, 2013
 
 
@Howard N€$$  ;)

The 'evidence' you hint at to discredit bitcoin relates to currencies in general.
If you'd been around when they first brought in paper money I can guess what your views would have been.
All money is a zero sum game. If I buy something from you today and it's available for less tomorrow, you made a good bargain to the exact extent that I made a bad one.

If a country's economy goes down the toilet for whatever reason its currency becomes devalued. If a government goes on a printing spree the currency gets devalued. If a country experiences political upheavel, people try to get their money out resulting  in an oversupply on the foreign exchange markets and the currency is bid down.

Wouldn't you be the 'lucky' man if your grandad had stashed away a fortune in sterling cash 60 years ago.
Or, there's land, fancy investing in some real estate in Zimbabwe?

Bitcoin is a world currency, its value isn't tied to the fortunes of a single country. Bitcoin thus gives protection in a manner analogous to having a diversified portfolio.

Bitcoin isn't at risk of oversupply, there's a hard limit on the overall supply.
Like gold bitcoin is a store of value the demand for which will vary.
Like gold it's portable only more so. And then there's the anonymity.
Drummer Send private email
Sunday, March 31, 2013
 
 
It used to be called political economy instead of political science for a reason, political and economic systems cannot be separated, a change in one sphere affects the other sphere.  Without the power of a government behind it, a currency is worthless.  Willingly or otherwise, we forego inherent personal rights in return for the protection of the state.  Enforcing the transfer of value in a financial transaction is one form of protection, basically protecting citizens from theft.  Now that you have been warned about the true nature of Bitcoins, if you accept them as payment, no one else is responsible for your loss.
Howard Ness Send private email
Sunday, March 31, 2013
 
 
"Money has no intrinsic value, it is a chit or marker for a promise to exchange something of value for something else."

Well I'll repeat that this isn't really the place for such discussion but I can't help taking the opportunity to explain what real money is, compared to fiat currencies.

You claim that money has no intrinsic value is correct to a point. One can even go so far as to say gold has no intrinsic value, only the value placed on it by market participants. You can see then that "intrinsic value" is a relatively meaningless term.

Money came about as being an exchangeable commodity.

That could be gold, silver, sea shells, or even cattle, but it was a commodity, ie something of value, exchanged for other things. What made it special was that it was so readily and easily exchangeable.

Gold tends to become the #1 most exchangeable commodity because it fulfills every requirement:

Easy to divide (you kill a cow if you divide it)
Small and light compared to its value
Doesn't rust or rot - holds value over time, for savings etc
Easy to confirm its real and easy to recognize
Limited and steady supply

Nothing is perfect and you CAN fool some people with brass or have a short-term glut if you find a new mine or whatever but generally you can see why gold is head and shoulders above any other such commodity. And yes, it's useful, being one of the world's best conductors of heat and electricity, a never-rusting metal that's 'soft' as metals go but still a hard substance, sought after for its beauty etc etc.

Paper money starts as a warehouse receipt, a chit of ownership of the real thing stored securely at a 'bank' or some such.

It's easier to carry a slip of paper that says "A big stash of heavy coins" than it is to carry a big stash of heavy coins, so people would exchange the receipts instead, leaving the actual gold untouched in the bank.

The problem starts when low-life thieving bankers start issuing - and spending - receipts for gold that isn't there. Today we call this "fractional reserve banking".

Imagine being able to print your own money? Great scam if you can get away with it, so naturally kings and governments get in on it, "licensing" their "central" bank to do just that. Obviously they dress it all up in jargon and paper trails, claim the bank is 'private' when it suits them, 'government-backed' when that suits instead etc etc. But basically that's what it is, printing their own 'money'.

Naturally not everyone likes the idea, so they force you to use their "money" via "legal tender" laws and demanding such "money" for the payment of tribute ("taxes").

It's one huge scam, where they tax you not so much directly, not by taking even more money from your paycheck or with a bigger tax demand  - but by stealing the VALUE of your money by producing more and more of it.

Doesn't matter if you bury it in a hardened steel vault 30 ft underground, below 20 ft of concrete - they can steal the value, not the physical paper or notes. There's no hiding.

They call this process "inflation" - and they blame YOU, business people, and your "market forces" and "capitalism" for creating "inflationary pressures". Then they call for even more "regulations".

I know many of you reading this already know and understand (and I've had a similar rant here once before) but it's amazing how few people really understand this stuff.

Heck, I still meet people who honestly think the US dollar is backed by gold held in Fort Knox!

Nope.

Not since 1971.

When the rising cost of living forces you to raise your prices, to keep up with others raising theirs, the politicians love to point at YOU, business people, and accuse you of 'creating inflation'. So at the very least you should understand what inflation really is.

Back to bitcoin. A major argument is it's "not backed by a government/central bank".

Well name me a currency that IS?

Take the dollar again, as an example. It's NOT backed by gold today, it's backed by "the full faith and credit" of the US gov. What does that even mean?

Faith is just faith, so is "credit"; it's just faith. People still believe in it, even though there's no gold backing anymore. So how are they "backing' the currency? By promising to print or digitally produce even MORE of it, reducing the value still further? Well that's nice, isn't it?

Or they can raise interest rates (only in their own country) which is rather like pushing on a string. My point is, fiat currencies aren't really "backed" by anything either.

Bitcoins aren't really gold, they aren't backed by anything, they're mostly just digital, you need to exchange them with your local currency to pay tribute and compared to other currencies or commodities they can fluctuate in value. So in that sense they're identical to other currencies then.

Where they differ is that they are not controlled by a central bank or inflated as a form of stealth tax, in fact the total volume is limited. They're an open-source peer-to-peer digital currency open to anyone in any country, bypassing the regulations used to control and feed on you.

Naturally governments the world over will scream "Child porn! Terrorism!" or even, heavens forbid, "Tribute evasion!"

Is it a 'scam'? Nope. The code is open-source and legit, according to peeps who understand such things (not me). If you want to see an outright scam look at the US dollar, the UK pound, the Euro etc.

Go ahead, take a UK Pound Sterling note, go to the Bank of England and ask for your 1.0lb of sterling silver? Go to Fort Knox and wave some 'dollars' about? Best of luck with that.

Is the bitcoin a "bubble"?

Oh heck yes!

Bubbles are where people buy something purely because the price is rising, not because they value the thing per se. Same as happened with houses etc.

The question wasn't "Should I throw my life savings into bitcoins, then wait for an even bigger sucker to sell them to?", it was simply do any of us take them as payment? There's no reason not to take them as payment then exchange them for your local "money", just like you would any other foreign currency.

So with all that said, what interests me:

Are there 'shopping carts' out there set up to deal with bitcoins?

Is that an opportunity for software people?

Are there any other specific friction points or problems that could be solved with software or SaaS online?

Seems to me you can either stand around, hands on hips and declaring "Well that'll never work" or you can figure out how to help it work, thus tapping into a new billion-dollar industry that few people have even heard about yet?

Or not,  *shrug*

Just don't insult us by declaring both:

"Bitcoin is ideological bullshit from techies."

followed by:

"I agree ideologically with Bitcoin. Fervently, in fact."

Because that's just embarrassing.



While writing I notice Howard has posted that government "backs" fiat currencies by "power".

Well that's just a polite term for force isn't it? As a libertarian I reject force and violence except in defense, so forgive me if I don't find that argument particularly compelling as a reason to avoid a currency which does NOT depend upon such threats.

Anyway, back on topic, how can we help?



AC
Reluctantlyregistered Send private email
Monday, April 01, 2013
 
 
I am neither for or against BitCoin, I am simply interested, and I am going to ask a simply and genuine query:

Whats to stop someone from creating an exact replica (or more replicas) of the BitCoin system? As I understand, its just a mathematical/algorithmic system to generate coins, trails, etc.

So anyone can replicate this system using different crypto keys, servers, etc and sway/market/convince people to use this new system instead: MyBitCoin.

Is there any inherent limitation that prevents others from doing this?
ssware Send private email
Monday, April 01, 2013
 
 
How could there be anything  to stop that happening.
Drummer Send private email
Monday, April 01, 2013
 
 
>>
 How could there be anything  to stop that happening.
>>

@Drummer - So you don't consider that to be a threat against the inherent value of the "limited" supply of Bitcoins?

If other people start using SomeOtherBitCoin, my BitCoins would become devalued or worthless.

So, in other words, BitCoin's advantages deriving from it being "limited in supply" are simply not there.
ssware Send private email
Monday, April 01, 2013
 
 
I'm no expert but I would have thought that first mover status is a huge advantage for bitcoin. Why would you buy any other when bitcoin already exists?
Drummer Send private email
Monday, April 01, 2013
 
 
What's stopping anyone from going ahead and creating "MyPayPal"?

There have indeed been many such attempts, some more successful than others.

Likewise with bitcoin my understanding is there have indeed already been off-shoots. They're just not as popular, don't get talked about so much and thus are not approaching any kind of critical mass.

However once again we're back to the "How is that any different from other currencies?" When the Euro first came out it was laughed at too. Besides, I LIKE the idea that if bitcoin screws up its so easy for alternatives to compete with it.

As a result of this thread I've just opened an account at bitpay.com. My understanding is any bitcoin balance is automatically and DAILY transferred into your conventional bank. That means you're never exposed to more than one day's worth of BC earnings - but potentially you ARE exposed to a growing market.

I'll look into it some more and poke around some but it seems to me you should just look at it as a foreign currency. Unless you actually want to trade and speculate like ForEx there's no need to maintain a high balance.


AC
Reluctantlyregistered Send private email
Monday, April 01, 2013
 
 
"So, in other words, BitCoin's advantages deriving from it being "limited in supply" are simply not there."

This is like saying that printing Zimbabwe dollars devalues the US dollar.
Yes, you can make your own system, but it will not be Bitcoin, it will be another currency. Such alternatives already exists by the way.

I'm looking at Bitcoin from entirely practical perspective. It can help make a couple of sales more and placing the button takes a minute if you use Coinbase or something similar.

And I'd like to keep some cash into this currency (probably very little for now). Yes, it's risky, but what's not. We've seen plenty of Cyprus-like events in the past to know everything is risky. A little diversification doesn't hurt.
handzhiev Send private email
Monday, April 01, 2013
 
 
There's a lot of ignorance about basic macroeconomic concepts in this thread. Take Howard's advice and pick up a book that explains these concepts clearly. I haven't read J.K. Galbraith's "Money: Whence It Came, Where It Went". The macro-econ books I had at university were drier than a pile of kindling, and always trying (and failing) to be "non-partisan".

Galbraith's wit would likely make this topic more approachable.
Wyatt O'Day Send private email
Monday, April 01, 2013
 
 
Ignorance?

The books you read at university are the exact same "economics" that failed to predict any of the busts and recessions, fail to explain market forces by attempting to treat human nature as a simple science and which have led the world economy into the pig's ear it is today.

But hey, someone's who's "witty" might explain it better?

Here's a classic example of the difference betweens the current mainstream Keynesian 'economics' with the Austrian School (which doesn't have much to do with Austria nowadays):

http://www.youtube.com/watch?v=lYkFYdLTTw8

Laffer is the guy behind the 'Laffer Curve" you read about at school. He is the definition of the modern, textbook economist, using the same shill for the state "economics" you 'learned'.

His opponent is just a guy who follows Austrian economics, and happens to be pretty wealthy and runs a trust fund or something, Peter Schiff.

Note this was back in 2006, also note the opening question:

"Why do you think a recession is coming...?"

You should also note that I'm not lauding Schiff per se; he just happens to be an articulate advocate for Austrian Economics (ASE)

I've been reading the material of the ASE at the Mises Institute for over 10 years, maybe 15  - but do tell me again about the funny book I should read, so I can understand the basics?

OR, just for giggles, we could avoid the ad-homs and discuss the business opportunities?



AC
Reluctantlyregistered Send private email
Tuesday, April 02, 2013
 
 
Reluctantlyregistered Send private email
Tuesday, April 02, 2013
 
 
Alright, John Galt, I'm not getting into a political argument with you. There are more fruitful uses of my time.


>> "OR, just for giggles, we could avoid the ad-homs [...]"

Ad hominem doesn't mean what you think it means.



>> "[...] and discuss the business opportunities?"

I agree. Patrick, and anyone else, should do a cost benefit analysis of Bitcoin before using it.
Wyatt O'Day Send private email
Tuesday, April 02, 2013
 
 
Thanks everyone for your input. Hadn't intended to stir up a hornet's nest.
Patrick Hughes Send private email
Tuesday, April 02, 2013
 
 
Sorry but this is just too good to not share:

"The growth of the Internet will slow drastically, as the flaw in "Metcalfe's law"--which states that the number of potential connections in a network is proportional to the square of the number of participants--becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."

Paul Krugman 1997

I should add he followed that with:

"As the rate of technological change in computing slows, the number of jobs for IT specialists will decelerate, then actually turn down; ten years from now, the phrase information economy will sound silly."


I rest my case.




AC
Reluctantlyregistered Send private email
Wednesday, April 03, 2013
 
 
Computers and the information age fading away?  I do not think so.

I recall a statement of reproductive biology -- possibly a bit garbled by me as the field is not one I know much about -- that sexual selection selects for more sexual selection.  Computer use seems to work about the same way.

Sincerely,

Gene Wirchenko
Gene Wirchenko Send private email
Wednesday, April 03, 2013
 
 
AC, you are resting a case built from tissue paper.  Krugman is an economist in the Keynesian mould, making his mark by writing about international trade and finance, and commenting (like so many academics who feel the need to diversify) on just about anything political.  As you point out, he is out of his depth when commenting on the effects of unregulated global networking of computing devices.  Which has absolutely nothing to do with Bitcoins or currency markets, or even the risks involved in accepting payment in a currency that only has the security of the greed and gullibility of individuals to back it up.  Poking fun at Krugman's prophesying about the Internet is not an argument in favour of Bitcoins.

You (and anyone else who has read this thread) have been warned that accepting Bitcoins as payment for anything is risky in the short term and will be a total loss in the long term.  The percentage of the world's population that will be left holding worthless Bitcoins is going to be small, no matter what, and the lists of similar scams before and after this one are quite long.  With a bit of luck, no one will die from accepting Bitcoins. 

"There's a mark born every minute, and one to trim 'em and one to knock 'em"  If I can knock a mark or two, I'm satisfied.
Howard Ness Send private email
Wednesday, April 03, 2013
 
 
"sexual selection selects for more sexual selection"
Not my field either, but I can see parallels in other fields where processes take illogical paths in order to perpetuate themselves.  For much clearer language, I copied "The sexual selection concept arises from the observation that many animals develop features whose function is not to help individuals survive, but help them to maximize their reproductive success." from http://en.wikipedia.org/wiki/Sexual_selection

So, you might be right that we find new ways to use computers in order to continue making use of computers.  The Internet was phenomenally successful in getting people to use computers.  The cell phone has been less successful in promoting computer use, although you might make the argument that computers made the cell phone successful.
Howard Ness Send private email
Wednesday, April 03, 2013
 
 
Actually I believe across the entire continent of Africa the mobile phone is THE internet computer of choice.

Much of India too.

Now at first glance you may say "Pft, that's no real market".

You'd be right - under the current system of relying on Visa, Mastercard or Paypal. Bitcoins however have tiny processing fees and are basically cash, so identify theft and all that becomes meaningless.

In short, bitcoins and mobile phones have the potential to open up a new market of literally a billion or more people.

They don't have to all speak English and own a phone, they just need to know someone who does.

Also, consider China. 1.2 billion potential customers you wouldn't normally touch with a long pole, as few processors would accept them. The very word "China" is a red flag - but paying cash? A Chinese bitcoin is as good as anyone else's.

Regarding Krugman, I couldn't resist sharing that. It was posted today on the blog I mentioned earlier. :o)

Howard, you talk about 'scam' and 'risk'?

I'm not a bitcoin advocate per se, in fact have learned more about bitcoins from this thread and subsequent sniffing around than I ever did before. I already know enough to comment on those 2 points though:

Scam - how can it be scam? Who is scamming who? Have you inspected the source code? I ask because others who know about programming (I don't) say it's legit. There will eventually be a maximum of 21 million 'coins', each of which can be divided by up to 8 decimal places. The security is effectively unbreakable at this time, every transaction is public and the system is open source.

I'm not really sure where a scam could come in?

Risk - I've already pointed out you can set things up to immediately pay any bitcoins into your favorite local currency, so you never need to have more than one day's takings in bitcoins (and presumably you'd be taking other currencies too).

It's only risky if you throw a lot of money at it by buying coins and then hanging onto them. Heck, I won't leave ANY currency in my Paypal account for too long, as they're famous for freezing accounts. What's the difference?

Just think of them as a volatile foreign currency.



AC
Reluctantlyregistered Send private email
Wednesday, April 03, 2013
 
 
"how can it be scam?"
Have you ever performed magic?  The key to performing magic is distracting your audience.  Cryptography, mining, online wallets, in fact everything on this FAQ page https://en.bitcoin.it/wiki/Myths are distractions.  The value of any currency depends on the enforcement of a promise to provide something of value in exchange for the currency token.  As soon as the holder of a currency token is unable to get real goods or services with it, it is worthless.  No one knowingly accepts currency that is at risk of becoming worthless when another currency with less risk is available.  It's the currency trader's version of the Prisoner's Dilemma, if you can't be certain that someone else will accept Bitcoins for payment, why would  you accept it for payment yourself?

Unless a state with the power to back up Bitcoin transactions with real goods and services decides to adopt the Bitcoin as its currency, those transactions are simply a race to find someone gullible enough to accept Bitcoins in exchange for something of real value.  Even if a state did adopt a virtual currency, it would adopt its own, instead of "buying" an existing virtual currency by giving holders of it goods and service in exchange.  Therefore anyone who is holding a virtual currency that is not already backed by a government with the ability to support the nominal value of that currency is holding something worthless.  The key is that a promise that cannot be enforced is worthless.

Eventually, it will be impossible to find gullible marks to get something of value from in exchange for Bitcoins.  Based on how some people are hoarding Bitcoins for speculation, and the volatility of market prices (i.e. nominal value) for Bitcoins, that time is quickly approaching.
Howard Ness Send private email
Wednesday, April 03, 2013
 
 
*blink*

I'm not sure if we have quite the same meaning of the word 'scam'.

The people behind bitcoin don't sell you the digital coins; you buy them off other people or "mine" them yourself, using your PC's CPU.

What do you mean here, when you say "enforcement"?

"The value of any currency depends on the enforcement of a promise to provide something of value in exchange for the currency token."

The free market primarily works on an exchange basis, not an enforcement basis. Enforcement is for situations such as someone not making payment after services rendered, which is covered under contract law. With bitcoins it's like paying cash, so there's no question if someone will or won't pay.

Flipped around, there IS potential that you could pay, and then not receive your goods. Is that what you mean, that your local government wouldn't uphold the contract because part of the exchange was bitcoins?

If following their own laws they would do, because you've simply made a barter arrangement, which can still be a binding contract. For example of BP gas stations offer loyalty points then they do indeed have to follow their own terms and conditions. If they say they'll give you a toaster for 10,000 pts then a toaster you're entitled to. They can't Just say "Nah, we were taking the pee, BP points aren't really worth anything". 10,000 of them are worth a toaster, that was the arrangement.

The other thing to remember is bitcoins are NOT dependent upon any one state, not to defend them, enforce them, ban them or anything else. They're truly international.

Ultimately the value of anything is entirely down to the high bidder buying it. For you these digital coins are worthless, right now others see them as worth $90 or so each. The correct price is $90; high bid wins.

The value of dollars has absolutely tanked against some currencies, or against gold (from $35 per oz to about $1500 or so). They can still be used as a unit of exchange, you just need a lot of them if you want to buy gold.

I think you're absolutely right to warn against speculating with them. That's just gambling and I wouldn't advise speculating on the yuan or the ringgit either - but *anything* can be a bubble in that sense, even tulip bulbs. Are tulips a scam?

It's good that you're trying to warn people of the dangers, I just think you're looking at things from the wrong angle.




AC
Reluctantlyregistered Send private email
Wednesday, April 03, 2013
 
 
"Is that what you mean, that your local government wouldn't uphold the contract because part of the exchange was bitcoins?"
Well you have the bitcoins, so the contract has been upheld.  If you agree to sell your cow for magic beans, it's a legitimate contract.  The problem is when you try to pay for something else with them.  If a government wants to offer currency in exchange for goods and services, it has to guarantee that the bearer of that currency can exchange it for other goods and services at a later date.  That's how it "enforces" the value of the currency.

If that guarantee is not as reliable as it is for other available currencies, it will be replaced with those other currencies.  In Canada there is enough Canadian Tire money being exchanged to prefer it over bitcoins.  With bitcoins, the only security behind the currency is greed (the perceived potential to profit from increasing exchange rates created by an artificially constrained supply) outrunning the fear of being stuck with worthless currency.  Otherwise, logical people acting in their own best interests will conduct their transactions with a more reliable currency.  How else can the American government increase the money supply so much without devaluing its currency?

 The US dollar says "In God we trust", for the bitcoin it should be "In an endless supply of greedy, stupid people we trust."  You can rail against statist, dictatorial politicians and financiers all you want, but when it comes to putting food on my table and a roof over my head, I'm not counting on always being able to take advantage of other people's greed AND stupidity.
Howard Ness Send private email
Wednesday, April 03, 2013
 
 
OK, you said:

"If a government wants to offer currency in exchange for goods and services, it has to guarantee that the bearer of that currency can exchange it for other goods and services at a later date.  That's how it "enforces" the value of the currency."


My first question is to ask if you're aware Nixon broke the contract to exchange dollars for real gold? Mainstream economists like to call it "closing the gold window" because that sounds better than "printed too many dollars and then said 'Screw you!' and refused to hand over the gold when people became rightfully suspicious that he didn't have any'.

Bitcoin has never promised it can be exchanged for anything, so it's less of a scam than dollars in that sense.

Secondly, as a libertarian my eyes go funny at the notion of a government, any government, offering "currency in exchange for good and services".

Typically governments demand, at gunpoint, that you give THEM currency, in exchange for their "services". But yeah, they do spend the cash afterwards...

But again, when you say they guarantee you can buy stuff with it, the truth is the complete opposite, isn't it? They constantly devalue the currency by producing more of it. The only reason it doesn't seem so bad is because the market is so productive it seems to keep up, mostly. Really though, look at the price of things say 10 years ago, 30 years ago, and look at the prices today? Obviously the dollar is NOT acting as a good store of value.

You also said:

"If that guarantee is not as reliable as it is for other available currencies, it will be replaced with those other currencies."

Well again this is the opposite. Are you familiar with Gresham's Law? Bad money drives out good - people will tend to use the money they DON'T trust first, in order to get rid of it, while hoarding the good stuff.

(which may explain why some people are hoarding their bitcoins!)

Then you said:

"With bitcoins, the only security behind the currency is greed (the perceived potential to profit from increasing exchange rates created by an artificially constrained supply) outrunning the fear of being stuck with worthless currency."

That's... that's so wrong I'm not sure where to start. Firstly their security comes from the encryption methods, which is itself WHY their supply is "artificially constrained". Really the constrained supply is inherent in the design; that's a major POINT of the currency, to avoid any government being able to inflate the supply as a stealth tax.

It's not a bug, it's a design feature.

The point about greed is somewhat inflammatory but also pointless, because ALL currencies are 'backed by greed' in a sense.  I think you're again looking at it as a speculator, a pyramid scheme whereby late arrivals are left with nothing.

Again it's kind of the opposite. The early adopters were buying something of no value because there were no merchants and few even knew what bitcoins were. In contrast the longer they're around and the more merchants that accept them, the more valuable and stable they become.

I'm sure there IS speculation and that some people are buying them purely with the intention of selling them at a profit. Just like they do with stocks, commodities, other currencies and yep, tulips. That's human nature; it's not part of the design or intention of this currency.

I don't recall the exact words but essentially I saw a comment recently that sums up my own view - 'Bitcoins are valuable, because the ability to send nearly instant cash payments to anyone, anywhere, for anything IS valuable.'

It's valuable to the end user, and that ultimately is what determines the value of anything.


AC


PS: I'll answer this bit - "How else can the American government increase the money supply so much without devaluing its currency?"

3 reasons.

1. The extra money isn't circulating, as the first receivers are hanging onto it. When it does circulate it will take awhile for all prices to adjust and rise - which is the point of inflating! If all prices instantly rose to take into account new money then the new money would be entirely meaningless. The idea is the politically-connected cronies that get it first can spend it at full value. By the time we get it, prices have gone up so it means nothing that our wages have gone up. We're not richer, we're just trying to keep up.

In the current situation those cronies are hanging on to it, so prices, and wages, haven't gone up as much as you'd normally expect - yet.

But yes, they are going up.

2. The dollar is the world's reserve currency and favorite currency. I live on Borneo but still accept American dollars. It's close to being an international currency and as such the huge world market can absorb change with slow, gradual effects. But again, look at longer time frames and inflation clearly IS happening, the dollar IS devaluing.

3. In order to maintain the advantage of being able to print the world's reserve currency the American government uses trade threats, diplomacy and outright military force to try and maintain the petrodollar. That has generally worked until now but it's crumbling as we speak.

Much of this was covered in a link I gave earlier, lemme find it...

http://www.caseyresearch.com/cdd/demise-petrodollar

The more I look at bitcoins the more I like 'em, :) However at this stage I'm more interested in accepting them in payment. I'm not so interested in buying them, as the price is indeed volatile at the moment and I'm not into gambling.


A.
Reluctantlyregistered Send private email
Thursday, April 04, 2013
 
 
"If a government wants to offer currency in exchange for goods and services, it has to guarantee that the bearer of that currency can exchange it for other goods and services at a later date.  That's how it "enforces" the value of the currency."

How can the US government guarantee that I'll be able to spend my dollars for hamburgers at McDonalds?  Isn't it McDonalds decision whether to accept dollars or not?

It seems the dollar has value simply because we (the population) have all decided that it seems to be a good medium.  If we all decided to abandon the dollar and trade with something else, could the government stop that?  There is/was talk of oil being priced in something other than dollars.  Can the US government force that not to happen?

Value is in the eye of the beholder.  A currency is only as valuable as the faith the buyers and sellers have in it.  If all countries decide to dump all of their dollars, you can be sure many others holding dollars would quickly dump them as well and try to switch to another currency as fast as possible, knowing that the value would drop.  China could drop the value of the dollar by simply dumping them.  Think about what that implies.
Doug Send private email
Thursday, April 04, 2013
 
 
>> China could drop the value of the dollar by simply dumping them.

If China was to try to sell off its dollar denominated loans at firesale prices I guess that would have a pretty bad effect on Chinese wealth but all it would do to the US would be to make different people the holders of dollar denominated debt.
So I think it would be worse for China than the US
Drummer Send private email
Thursday, April 04, 2013
 
 
@Drummer

Yes, it would be bad for China, so I doubt they'll do it.  But the concept of flooding a market place which causes value to drop (what I think would happen) demonstrates that there really isn't an intrinsic value to the dollar -- it's worth what the buyers and sellers think it's worth, nothing more, nothing less.
Doug Send private email
Friday, April 05, 2013
 
 
Drummer, it's not so much the loans, priced in dollars, it's the dollars they already hold.

Many countries stockpile dollars not as money but as 'oil tokens' (petrodollars) because you have to use dollars to buy oil. If countries DON'T need dollars to buy oil then there's an awful lot of "spare" dollars around. 

Once countries use them to start buying other stuff you'd find more dollars on the open markets, lowering their value...

As people see the value dropping that would speed up the pace that people would try and get rid of them quickly (bad money drives out good). That would lower their value even more...

That could easily trigger panic buying, where people desperately try to get rid of their dollars, buying anything, including other currencies, just to prevent themselves losing out as the value drops.

That results in people not wanting to accept dollars, at which point they become worthless internationally.

That's the stage where governments change the name (zollar, bolla, dullar etc) or print new notes with extra 0's and 00's - think 'Zimbabwe'.

In a way it's a good thing, a kind of clean-start reboot, if being financially raped can be considered good? At least it can, or should, mean a real recovery is possible. Until next time - think 'Argentina'.


AC
Reluctantlyregistered Send private email
Friday, April 05, 2013
 
 
Petrodollars refers to the money oil producing nations earn from selling oil, not to US dollars other countries supposedly 'keep around' in order to buy oil. 

That money is then both spent on day to day stuff and invested internationally in all sorts of assets such as property, equities, Government stock and even things like bloodstock and football clubs.
A which point it's no longer a dollar asset but one denominated in Swiss Francs or Euros or whatever.
So if the Arabs sell Manchester City football club to an English buyer
and take their money out of the country, that's going to raise the supply of the £ on the foreign exchange market.
Drummer Send private email
Friday, April 05, 2013
 
 
Technically the term was coined to mean that, however it order for the oil-producing (selling) country to RECEIVE the petrodollar the BUYING country needed them in the first place - so it's a distinction without a difference.

The reason the US pushed the petrodollar system onto OPEC was not so that Saudi Arabia would receive dollars but to ensure that everyone else would NEED dollars.

The result is that many nations hoard dollars as their 'reserves' (money for a rainy day, such as needing a lot of oil for a war or something).

If you know the value of the dollars that make up your reserves is going down that encourages you to get rid of them. That can easily become a vicious circle - and there's no doubt the dollar's value would plummet if NOT needed for buying oil.



AC
Reluctantlyregistered Send private email
Friday, April 05, 2013
 
 
Bitcoin hit $200 today. Better have a dynamic dollar-to-bitcoin pricing. One $30 product I had priced at  1.5 bitcoin in January now costs $300. I'm too lazy to update the code.
Darren Send private email
Monday, April 08, 2013
 
 
Just broke the $260 point on Mt.gox..

Obviously a bubble of sorts. Interesting to see where it goes.

The inherent value in bitcoins was really driven home to me while trying to buy some. Figured it wouldn't hurt to buy $100 worth and if it went to $0.00, well hey, no need to cry.

It could be fun, right?

Then faced a rather crazy process of trying to figure out how to deposit some cash into an exchange - and which exchange? I finally picked Bitstamp.net.

My normal bank's online system was NOT helpful and when I found the correct place it left me unsure what I was doing. Is there any way they could withdraw funds, without asking me, like Paypal can? I dunno, my bank's site doesn't exactly make things clear.

The process is also split across multiple pages, so you don't know what's coming next. That created some FUD, as the exchange gave me a specific number to mention, to ensure the funds went into my account specifically. The bank asked for any 'clearing' number I may have been given, to go in the 3rd line of the exchange's bank's *address*? So was the "reference number" the "clearing" number  - or not? I dunno?

It seemed crazy to put my personal reference number into the physical address field of a bank, yet if that WAS the number I'd just be sending them money without saying who from? What?

Finally I decided what the heck, I'd stick that number in there, then see what the next page says? At that point I was faced with selecting a pre-existing recipient who didn't exist, so had to create a new one. Easy, right? Just give their details? Nope...

Seems my bank had to phone me, then I had to punch in a code displayed on my online banking screen. OK already...

Except it didn't work. I think because my phone number has an extra '0' in it, not needed from outside the country. So then I get a message saying I now have to wait a WEEK before trying again.

To me this makes it very clear where the value is - because if this were a bitcoin operation I could just ask "What's your wallet number? OK, wait a minute... the money is in your wallet."

Done.

If you can't see the value in that then you're not looking hard enough!



AC
Reluctantlyregistered Send private email
Wednesday, April 10, 2013
 
 
AC, did you read about the Instawallet debacle?
Racky Send private email
Wednesday, April 10, 2013
 
 
"Bitcoin is undergoing a classic correction after quintupling in price over the past 30 days. The currency, which was trading as high as $265 earlier today on Mt. Gox, plummeted and is now trading at around $150."

--http://techcrunch.com/2013/04/10/bitcoin-crash/

(stay tuned...)
Racky Send private email
Wednesday, April 10, 2013
 
 
I did hear about Instawallet, yes.

I've also heard of other thefts, however I don't stop using dollars just because some bank got robbed.

I'm very happy about this 'crash', as hopefully the price will stay lower while my bank makes me wait for my next opportunity to spend my own money...

Over on arstech Cyrus Farivar was crowing how he sold his some time ago, when the price peaked at around $32. I think this comment sums things up nicely:

 "Ouch. Cashed out at $32, price increased a month later to $260 and now reporting on a crash to $130."

The value of bitcoins dropped once before, from that $30 peak - but it recovered. I think it's a very good sign that despite obvious panic-selling the price this time did NOT drop to $0.00. So that's twice it's had a bad crash but nope, nobody "lost everything".

If you bought back in January @ $10 you're still giggling like a schoolgirl at $130 (and right now it's back up to $173).

Still violatile as all heckery, so yep, you certainly would need some on-the-fly conversion!

It's fascinating to watch, I absolutely love the concept and - if governments leave it alone for long enough - it really could turn into a Paypal killer.



AC
Reluctantlyregistered Send private email
Thursday, April 11, 2013
 
 
We added support for accepting Bitcoin payments a few days ago for our photo book generation service but it hasn't made any impact on sales yet. :)

http://www.poyomi.com/bitcoin
Gorazd b Send private email
Thursday, April 11, 2013
 
 
AC, I'm sure people have and will make money (lots) from playing off the bucking bronco of bitcoin.  It just comes down to how much of a gambler one is.  To each his own.  I tend to resonate more with what I seem to recall Warren Buffet saying when asked about how to become richer:  "Don't lose money." 

In the end, I just find it funny that people are trading something like cryptography strings.  (I know, I know, it's no weirder than trading pieces of paper or fields in a bank database).
Racky Send private email
Thursday, April 11, 2013
 
 
Andy Brice Send private email
Sunday, April 14, 2013
 
 
Andy, I've seen many such articles (Google alert set) and like many it misses the point.

For example saying he lost money, well yes, it was obviously going through a bubble. Looking at longer-term patterns you would expect BTC to be around $50 per coin at this time, trending up. At this moment it's still around $100 and gyrating up and down.

He says it will never be a currency until you can buy sandwiches with them, having spent his own buying a pizza?

Aside from the feasibility of folding his pizza in half and calling it a sandwich, he's really rather missing the point.

On the sandwich basis Japanese yen aren't really money, because you can't walk into a London shop and buy a sarnie with those either, or USD, or krona or baht or ringgit or any other national currency.

Same applies to gold or silver.

Bitcoin is Internet money, not national currency.

Paypal was set up because while shops could accept credit cards normal people couldn't (and still can't). Yet Paypal is NOT available in over 60 of the world's 200 countries and they ARE a centralized thing that can be leaned on. For example try donating money to Wikileaks through Paypal?

Bitcoin means you can send, or receive, without the hassles and charges, to any country, to anyone.

It's Paypal without the:

*Political Abuse
*Frozen Accounts
*High Fees
*Country Restrictions
*Item Restrictions
*Etc

For example there are a number of things you're not allowed to use Paypal for, including guns, porn - or bitcoin.

But in the spirit of simply placing interesting links, here's a couple you may find eyebrow-raising:

http://techland.time.com/2012/04/10/canadian-government-considers-completely-digital-currency/

Yes, as the giveaway URL suggests, the Canadian government wants to introduce an entirely digital currency. They already have software competition winners:

http://mintchipchallenge.com/

How long before someone creates a software 'wallet' that handles BOTH 'mintchips' and bitcoins?

Lemme find a suitable link about the other thing, something I heard about a long time ago and why I immediately thought of Africa and India for bitcoin...

http://www.nextnature.net/2008/12/cell-phone-minutes-the-next-currency/

These URLS take all the surprise out of it it but yeah, for a long time various parts of Africa have been using cell phone credit as cash.

So on one continent we have spontaneous adoption of a purely digital currency by the people, far away on another continent we have a government trying to introduce a purely digital currency, simple for it's benefits over normal cash.


But bitcoin, an already established decentralized open source digital currency that's divisible down to 8 decimals, never been hacked, is restricted in volume and has quadrupled in value over just a few months?

Why that's a pyramid scheme of hacked and popped ponzis scheme bubbles  that could never possibly take of because it's a ponzi scheme of hackery and bubbles and everyone will lose all their (inflating) money!

Crazy idea. Almost as daft as that international 'net' thing the kids are talking about.

...




AC
Reluctantlyregistered Send private email
Sunday, April 14, 2013
 
 
Reluctantlyregistered Send private email
Sunday, April 14, 2013
 
 
Addressing the very first question of Patrick at the top of this thread, we have been accepting Bitcoin for almost 2 years. The motivation was simply that receiving money from half of the world remains incredibly costly (paperwork, fees, delays ...).
Joannes Vermorel - Lokad Sales Forecasting Send private email
Sunday, April 14, 2013
 
 
I'm not for or against Bitcoin. But I think speculating on the value of bitcoin is very risky - it feels like a Tulipmania type bubble to me. Much more risky than speculating on national currencies (except perhaps the Zimbabwean dollar).
Andy Brice Send private email
Sunday, April 14, 2013
 
 
Well even Forex is risky for speculating too.

Certainly anything that goes up more than 1000% in a matter of weeks is going through a bubble. However look at something like this:

http://bitcoincharts.com/charts/mtgoxUSD#tgCzm1g10zm2g25

and, presuming that link works, you can see it's bubbled before. The overall trend though, is up.

I'm expecting it do follow a similar pattern as before, sliding back down to something like $30-$60, somewhere like that, then start bubbling up again. That's great if you want to speculate but to me the real value is how they force people to think about what money is, what governments and central banks to to create inflation and all that - and they're a darn fine way of making secure yet simple payments. :o)



AC
Reluctantlyregistered Send private email
Sunday, April 14, 2013
 
 
Reluctantlyregistered: "He says it will never be a currency until you can buy sandwiches with them, having spent his own buying a pizza?"

He did mention it was cumbersome and expensive.  It is not enough to be able to do it; it has to be fairly easy.

Sincerely,

Gene Wirchenko
Gene Wirchenko Send private email
Monday, April 15, 2013
 
 
It's cumbersome because it's hard to buy the things in the first place.

Once you have them spending is trivial. You just need their address and they can be created as visual code things (QR code) so you can simply point your phone at it.

The concept and the system itself I have no problem with, in fact I think it's a work of genius. Right now it does seem the various exchanges and associated services are somewhat immature and failing to cope with sudden peaks of interest.

Over the last week or so I must have read at least 50 articles on 'BTCs'. There's an awful lot of misinformation and misunderstanding out there - for example some generally reliable sources seeming to think Bitcoin was invented by the Winklevoss twins... *facepalm* It's been mostly bad publicity (ponzi scheme! drugs! Hacking!!!) but certainly an awful LOT of publicity.

Give it a year or two to settle, for external services to get more polished and robust, and aside from another bubble it has serious potential, at least as internet money or in areas without much banking.

And such an elegant concept! I keep reading about the "meaningless" mining - but the mining is what runs the system!

Can you walk into a shop and buy a sandwich with a bitcoin yet? No. And I can't do that with a British pound or US dollar either.

I'm in Malaysia.



AC
Reluctantlyregistered Send private email
Monday, April 15, 2013
 
 
>at least as internet money or in areas without much banking

If it really takes off, I'm sure big business will find a way to muscle in on the actions.
Andy Brice Send private email
Monday, April 15, 2013
 
 
Gone 6AM here, off to bed. Just want to express my sadness and condolences to those in Boston.


Alan
Reluctantlyregistered Send private email
Monday, April 15, 2013
 
 

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