Bitcoins (and other crypto currencies)

[Chip-mk1]

It's hugely busy, I just haven't had time to post here, as I still have no internet at home

Lots and lots of continued momentum, so it's all good to be honest.

Not from the public at large though IMHO, which is what it needs, not the nerds mining it, it needs actual ordinary people spending it reguarly, and I dont see that happening TBH.


Im still personally convinced the biggest thing making people lose faith is the sheer number of coins, shame it didnt just stick at only bitcoin.

 

[Addicted]

Not from the public at large though IMHO, which is what it needs, not the nerds mining it, it needs actual ordinary people spending it reguarly, and I dont see that happening TBH.


Im still personally convinced the biggest thing making people lose faith is the sheer number of coins, shame it didnt just stick at only bitcoin.

We shall see, tbh more and more places are allowing it as a payment method, and it's ever increasing in articles written in normal media (like the BBC etc), I agree there needs to be a big push though, and then it'll go from there!

 

[seb]

I bought acomputer today on scan.co.uk and on checkout bitcoin was an option of payment. First time i haveseen that on a proper mainstream website.

 

[Addicted]

I bought acomputer today on scan.co.uk and on checkout bitcoin was an option of payment. First time i haveseen that on a proper mainstream website.

Yep, it's actually quicker and easier than paypal too! (assuming you have the Bitcoin already)

 

[Chip-mk1]

Yep, it's actually quicker and easier than paypal too! (assuming you have the Bitcoin already)

And MUCH cheaper than paypal!

Its a shame that more people dont realise how awesome it actually is, although the lack of any form of backup or insurance or guarentees etc is pretty scarey to people who arent computer literate I realise.

 

[Gally]

Just fascinating. Spending imaginary money.

 

[Addicted]

Just fascinating. Spending imaginary money.

As we said before to you, actual FIAT these days also has no tangible value, coins are no longer made of expensive materials, and notes are just useless paper

Tbh, it makes you think how is it different to a bank account or paypal - you put money into it (the bank) and now its a number on your screen, I guess the difference is you can withdraw for cash from an ATM - though there are Bitcoin ATM's too !

 

[Chip-mk1]

Just fascinating. Spending imaginary money.

Is that really any different to when I do a bank transfer?
Thats purely electronic with no actual coins or notes involved either?

Its weird you seem to single bitcoin out as so different to other "imaginary" money, these days all currencies are, as they are no longer underpinned the way they used to be with gold etc.

 

[Chip-mk1]

lol.

snap!

 

[Gally]

I totally disagree. You're practically printing money using a computer. There is no insurances, no guarantees. I earn money, bit coin is like me buying a printing press that can make genuine £20 notes but only 2 a day.

Look banking isn't fool proof as we've seen but come on, lets not compare them just yet.

 

[The Psychedelic Socialist]

They call them cryptocurrencies, but they're not really. They're more like crypto-commodities.

Basically no-one accepts them as payment.

Someone like Scan is not accepting Bitcoin, they're using a payment processor who guarantees to give them the correct amount in pounds sterling. The payment processor bears the risk of sudden moves in the value of Bitcoin.

 

[Chip-mk1]

I totally disagree. You're practically printing money using a computer. There is no insurances, no guarantees. I earn money, bit coin is like me buying a printing press that can make genuine £20 notes but only 2 a day.

Look banking isn't fool proof as we've seen but come on, lets not compare them just yet.

You really dont get it all, you cant just decide to print notes, its a race to find them, if you want to compare it to anything, compare it to mining for gold to make coins from in the early days of currency, thats what it has similarities too.

Its actually things like pounds and dollars where a government can just randomly decide to print 50 billion more of them and hence devalue all the ones we've already earnt, so bitcoin is far better than pounds or dollars in that respect.

Dont you remember the "quantitative easing" which was just a fancy name for exactly that recently.

Or 1930s Germany where they just printed and printed notes, so everyones savings just devalued endlessly from the value of a house to the price of a loaf of bread in the space of a couple of years?!


You REALLY dont understand how money works Gally if you think bitcoins is more liable to excessive "printing" than a normal currency!

With regards to no guarentees or insurances, have you tried to claim recently for dropping a couple of 50 quid notes? I'm guessing its not too easy either!

 

[Chip-mk1]

They call them cryptocurrencies, but they're not really. They're more like crypto-commodities.

Basically no-one accepts them as payment.

Someone like Scan is not accepting Bitcoin, they're using a payment processor who guarantees to give them the correct amount in pounds sterling. The payment processor bears the risk of sudden moves in the value of Bitcoin.

Yes, entirely this, this is the whole problem, there is no bitcoin economy, its just used as a way to transfer pounds and dollars and thats why its going to fail unless that changes, and like I said I think we are too soon.

There are two problems:
1) people not understanding the concept properly
2) all the endless "new coin" startups that just make a joke of the whole thing, the whole point of bitcoin was to be one world currency, not to be one of an even larger number of crypto-currency than we have currently of printed ones!

I am really starting to think the world isnt ready and its going to fall on its arse TBH but I will still follow it with interest.

 

[Addicted]

I totally disagree. You're practically printing money using a computer. There is no insurances, no guarantees. I earn money, bit coin is like me buying a printing press that can make genuine £20 notes but only 2 a day.

Look banking isn't fool proof as we've seen but come on, lets not compare them just yet.

But the Federal Reserve prints 85 billion USD per month, so what's the difference? It's neither government owned or helping the economy (forcasters are getting to the point of actually predicting collapses).

Coin generation, imo, is irrelevant as there is a finite limit, and once that is hit no more are generated - so you are only using what is in circulation.

Money itself is not insured, its down to the companies to reimburse and is therefore still the same as Bitcoin - once it's lost it's lost - someone pays for it somewhere!



I agree with Razzle, currently it's very much a commodity, and there is a slow but sure increases of acceptance, and this will continue.

Once there are enough companies on board, I think we'll start to see companies actually holding Bitcoin, rather than using payment processors - why hold it when you can't use it to buy stock.

 

[Gally]

You really dont get it all, you cant just decide to print notes, its a race to find them, if you want to compare it to anything, compare it to mining for gold to make coins from in the early days of currency, thats what it has similarities too.

Its actually things like pounds and dollars where a government can just randomly decide to print 50 billion more of them and hence devalue all the ones we've already earnt, so bitcoin is far better than pounds or dollars in that respect.

Dont you remember the "quantitative easing" which was just a fancy name for exactly that recently.

Or 1930s Germany where they just printed and printed notes, so everyones savings just devalued endlessly from the value of a house to the price of a loaf of bread in the space of a couple of years?!


You REALLY dont understand how money works Gally if you think bitcoins is more liable to excessive "printing" than a normal currency!

With regards to no guarentees or insurances, have you tried to claim recently for dropping a couple of 50 quid notes? I'm guessing its not too easy either!

You missed my point completely. You aren't earning currency, you're sitting in a room hoping to turn up a coin that someone in another room somewhere says is worth something.

I'm not talking about devaluing anything. I'm simply stating the idea seems very silly. I will also admit I do struggle to get my head around the idea because as you admit, the whole idea is out there.

Please read back my earlier questions in regards to mining, someone sitting in a room with a big computer. I understand if people mine too much of it, it devalues each coin?

The whole concept is baffling, it's always going to fail imo.

 

[Chip-mk1]

You missed my point completely. You aren't earning currency, you're sitting in a room hoping to turn up a coin that someone in another room somewhere says is worth something.

Can you describe how that is really any different to gold as a store of value for example in your mind?
I know gold has plenty of "uses" to0 like electrical contacts etc (and bitcoin has uses as well, like the rapid and free transfer of funds, which cant be done currently by any other reliable means), but most of it is literally just found and stored cause other people say its worth something.

I'm not talking about devaluing anything. I'm simply stating the idea seems very silly. I will also admit I do struggle to get my head around the idea because as you admit, the whole idea is out there.

Please read back my earlier questions in regards to mining, someone sitting in a room with a big computer. I understand if people mine too much of it, it devalues each coin?

The whole concept is baffling, it's always going to fail imo.

you CANT mine too much of it, thats actually impossible, because the system keeps altering the hardness of mining in order to make the next coin more difficult to find.

So if you went out tomorrow and built the worlds biggest super computer that was 10 times more powerful than everything else put together, you wouldnt increase the rate at which coins were mined, as they would just automatically becoming harder to find as a result.

Again, much like gold, there is a finite amount of it out there, so if you find more of it then others cant so the total amount availble to be found doesnt actually change.

 

[@Spoonie]

you CANT mine too much of it, thats actually impossible, because the system keeps altering the hardness of mining in order to make the next coin more difficult to find.

This.

 

[Ex-User (19928)]

Gally the way to think of it is comparing Bitcoin to gold like chip says.

Yes you can mine it. But you can mine gold. Gold has a current value all over the world. If you dug down in your garden and suddenly found 10000 tons of gold. It would become less valuable unless you withheld it and didn't tell anyone. If you tried to sell it, you would probably fill the demand quite easily and have to resort to selling for less. Making the whole currency worth less.

Same applies to BTC. However by it's nature there are only a finite number of them (I don't know if anyone knows how many though).

It has a value because people are speculating, and trading with it. I think there must be a massive money laundering issue with it since I'm not aware of any way to combat that? If one day we take up BTC as a main currency (let's face it, less money going through the banks merchant systems means more opportunity elsewhere however how do you regulate it??

With regards to the other coins, it's almost like they're different metals to BTC's gold (that is me propagating the notion that BTC is the best coin). Stuff like Bristol coin or whatever they came out with recently is like IMO saying "look guys, I found a new metal, it's called Tin. Who wants to help mine it?!"

Again there's only a finite number of them, but I don't think the world needs Bristol coin very much, so why would anyone pay anything for it.

I don't think there's a place for it in main society at the moment, and who's to say bitcoin banks won't emerge? Where they offer a bit more insurance on transactions in exchange for a transaction fee.

 

[Addicted]

Gally the way to think of it is comparing Bitcoin to gold like chip says.

Yes you can mine it. But you can mine gold. Gold has a current value all over the world. If you dug down in your garden and suddenly found 10000 tons of gold. It would become less valuable unless you withheld it and didn't tell anyone. If you tried to sell it, you would probably fill the demand quite easily and have to resort to selling for less. Making the whole currency worth less.

Same applies to BTC. However by it's nature there are only a finite number of them (I don't know if anyone knows how many though).

It has a value because people are speculating, and trading with it. I think there must be a massive money laundering issue with it since I'm not aware of any way to combat that? If one day we take up BTC as a main currency (let's face it, less money going through the banks merchant systems means more opportunity elsewhere however how do you regulate it??

With regards to the other coins, it's almost like they're different metals to BTC's gold (that is me propagating the notion that BTC is the best coin). Stuff like Bristol coin or whatever they came out with recently is like IMO saying "look guys, I found a new metal, it's called Tin. Who wants to help mine it?!"

Again there's only a finite number of them, but I don't think the world needs Bristol coin very much, so why would anyone pay anything for it.

I don't think there's a place for it in main society at the moment, and who's to say bitcoin banks won't emerge? Where they offer a bit more insurance on transactions in exchange for a transaction fee.

21 Million is the max BTC ever, and you can assume probably 1%+ are "forever lost".

Bitcoin banks also exist (though the main one has just shutdown due to security issues and theft), but there's another slowly making way forward.



New regulations and classifications of Bitcoin are being created weekly by different states/countries around the world, whether it is adopted by the mainstream is unknown, but it certainly has it's benefits (as well as some drawbacks, but the pros far outweigh the cons).

 

[Gally]

Hold on, how can you stumble upon another type of coin? Maybe I need pictures of this s**t because it's getting more ridiculous by the day.

I understand the mining idea but you still have the physical property and Gold is of coursed used all over the world for different things. Please understand i'm not discussing the value or the de-valuing of it, i'm discussing the very idea of a made up and non physical currency that is made/found using a computer in a bedroom.

 

[Gally]

21 Million is the max BTC ever, and you can assume probably 1%+ are "forever lost".

.

So you're telling me there can only ever be 21m bitcoins mined, ever? Please explain to me how that as a currency can work?

 

[Addicted]

So you're telling me there can only ever be 21m bitcoins mined, ever? Please explain to me how that as a currency can work?

Having a finite amount is what makes it worth something, ok it doesn't exactly promote spending (because if demand increases then price should theoretically go up) - but we're not at a point really where it needs to be hoarded. Again, it comes back to being similar to gold - a finite resource once used as a currency!

If it gets to a point where more is really required (which won't happen until at least after all of the initial 21m has been generated), then it can be done. But in all reality why would you need more?

 

[Chip-mk1]

So you're telling me there can only ever be 21m bitcoins mined, ever? Please explain to me how that as a currency can work?

Because each one has smaller units.

The smallest is a satoshi, and if you assume a bitcoin value of 1 million dollars (so total worth of 21 trillion, enough to be useful worldwide) a satoshi would be worth 1 cent.

if that ever wasn't enough, you could start using tenths of a satoshi or hundredths.

 

[Gally]

Ah fukc off, it's bullshit! Listen to what you're saying, it's insane!!!!!!!

 

[Addicted]

Not sure if serious or trolling (or ignorant ), that escalated quickly!

 

[Chip-mk1]

It is theoretically sound, much more so than the concept of easily forged paper money TBH

 

[Gally]

Not sure if serious or trolling (or ignorant ), that escalated quickly!

Was more a joke towards Chip's addition of smaller bitcoins. Anyhoot i'm out.

 

[The Psychedelic Socialist]

I've yet to see a convincing argument in favour of its use as a currency though which takes into account its deflationary nature.

There's precious little incentive to spend what you accumulate as it (should) have a tendency to increase in value due to the finite money supply.

This is entirely unlike any other currency (post abandoning the gold standard I suppose).

 

[rctempire]

Maybe I should have left this thread alone.

Anyway - Scotcoin

 

[Gally]

Hi, i'm back.

Did someone think up bitcoin? Developed a programme? Software et al?

 

[George182]

https://bitcoin.org/en/faq

 

[Chip-mk1]

I've yet to see a convincing argument in favour of its use as a currency though which takes into account its deflationary nature.

There's precious little incentive to spend what you accumulate as it (should) have a tendency to increase in value due to the finite money supply.

This is entirely unlike any other currency (post abandoning the gold standard I suppose).

The deflationary nature encourages saving in the same way that interest above inflation does in a bank and that's never caused a problem to people still spending their money.
It's not an issue at all IMHO.

 

[The Psychedelic Socialist]

The deflationary nature encourages saving in the same way that interest above inflation does in a bank and that's never caused a problem to people still spending their money.
It's not an issue at all IMHO.

But isn't that because £ is a currency and is used to settle debts, buy goods and services etc. and the supply can also be regulated by the central bank (e.g. quantitative easing).

As Bitcoin is essentially just a commodity / security for the time being, there's no incentive to use it today as it will be worth more tomorrow.

God knows I'm sitting on some coins and have no intention of spending them.

 

[Chip-mk1]

But isn't that because £ is a currency and is used to settle debts, buy goods and services etc. and the supply can also be regulated by the central bank (e.g. quantitative easing).

As Bitcoin is essentially just a commodity / security for the time being, there's no incentive to use it today as it will be worth more tomorrow.

God knows I'm sitting on some coins and have no intention of spending them.

Yes the problem is that people are so convinced they will go up loads that they arent spending them, and hence its not really getting used as a currrency when then makes it worthless really, so its a bit of a vicious circle, what everyone who has bitcoins needs, is for everyone else to use them, but to keep hold of your own, lol.

 

[The Psychedelic Socialist]

Yes the problem is that people are so convinced they will go up loads that they arent spending them, and hence its not really getting used as a currrency when then makes it worthless really, so its a bit of a vicious circle, what everyone who has bitcoins needs, is for everyone else to use them, but to keep hold of your own, lol.

With the volatility inherent to BTC though it simply cannot act as a currency as it's a near useless store of wealth in anything other than a speculative manner.

Compare the exchange rate of USD to GBP over the last year to that of USD to GBP.

The value of the dollar has dropped by about 10% against the pound from its peak while BTC has lost nearly 60% from its peak.

 

[Chip-mk1]

With the volatility inherent to BTC though it simply cannot act as a currency as it's a near useless store of wealth in anything other than a speculative manner.

Compare the exchange rate of USD to GBP over the last year to that of USD to GBP.

The value of the dollar has dropped by about 10% against the pound from its peak while BTC has lost nearly 60% from its peak.

Thats because its a new currency and a new concept though, its not implicit within the technology, its just the nature of the fact that its total capitalisation currently is tiny compared to pounds or dollars. If it grows in popularity the price will stabilise a lot more and then it will be more suitable to use as a currency.
If it gets to a million or so per coin, which is where it needs to be to compete with dollars, then its price wont vary much day to day as it will have a much larger capitalisation with a lot more inertia to price movements.


This is the problem, we know where we are now with it, and we know where it needs to be, its just the getting it there that is the issue.

 

[The Psychedelic Socialist]

Thats because its a new currency and a new concept though, its not implicit within the technology, its just the nature of the fact that its total capitalisation currently is tiny compared to pounds or dollars. If it grows in popularity the price will stabilise a lot more and then it will be more suitable to use as a currency.
If it gets to a million or so per coin, which is where it needs to be to compete with dollars, then its price wont vary much day to day as it will have a much larger capitalisation with a lot more inertia to price movements.


This is the problem, we know where we are now with it, and we know where it needs to be, its just the getting it there that is the issue.

Hmmm, I'm not convinced myself yet, but I'm clearly no expert.

My broad worry is that it needs to somehow transition from being a get-rich-quick scheme for the early adopters into something useful that it would be worthwhile owning as a currency rather than as a commodity.

Increased capitalisation and trades (IIRC someone's setting up an HFT platform for BTC) will help with this but it still needs to find a use away from the miners and speculators. Until that happens it has much more in common with a dot-com stock than it does with a legitimate currency that can be used to settle debts / pay taxes etc.

In fact, the more I think about it, the more Bitcoin seems to have in common with something like a traded derivative. It has value because people assign it a value, but it doesn't represent anything physical and is not backed by a sovereign nation. It's price is quite volatile and whilst you could (in theory) decide to accept it as a payment you would want to convert to a normal currency immediately and it's overwhelming use is as a means of wealth creation through speculation.

 

[Chip-mk1]

Agreed, its value at the moment is purely speculative, what it needs to have a true and certain value, is to be the only currency in the world, not that it will ever happen to that extent, or at least to be widely in use as a currency in its own right.

As long as people are saying "what is todays exchange rate against the dollar" and then buying and selling coins with dollars/pounds just to hold its not actually a currency IMHO.

I dont care day to day what a pound is "worth" against a dollar etc, to me its just a pound and i know what I can or cant buy with a pound, until people feel that way about a BTC (which im sure its most likely they wont ever TBH) then its NOT a currency.

All the places taking it at the moment, are just using it as a transfer mechanism for dollars, they arent using it as an actual currency, they dont price an item in bitcoins, they price it in dollars and then convert at time of sale.

 

[McGherkin]

This actually happened. Sponsoring a NASCAR team through Dogecoin.
http://ftw.usatoday.com/2014/04/nascar-doge-dogecoin-dogecar-josh-wise

 

[Sargara]

^ He actually qualified too and finished top 20 lol
http://www.foxnews.com/leisure/2014...ise-on-dogecar-dogecoin-and-talladega-finish/