Earlier quoted context omitted.
Btc is as real a currency as it gets, I bought VPSs with it just like I have bought them by unsafer payment methods in the past (supplying credit card info). Although more common in the trading of digital commodities, you can buy physical goods such as clothes and pizza with it, depending where you live. It just doesn't enjoy widespread adoption outside the digital world yet.
It isn't a currency, it's just another payment method. Your provider will exchange the bitcoins for a real currency to pay their employees and taxes.
Bitcoin Surges Past $400
251–260 of 260 posts
Re: Bitcoin Surges Past $400
#252Earlier quoted context omitted.
Btc is as real a currency as it gets, I bought VPSs with it just like I have bought them by unsafer payment methods in the past (supplying credit card info). Although more common in the trading of digital commodities, you can buy physical goods such as clothes and pizza with it, depending where you live. It just doesn't enjoy widespread adoption outside the digital world yet.
> I bought VPSs with it Wow! A VPS! Something that 99% of the population has no use for. How about paying rent, medical bills, utilities, phone bill, groceries, tuition, gas, car payment, car insurance, car maintenance, tolls, daycare, taxes... you know, the kind of things that real people actually care about. > just like I have bought them by unsafer payment methods in the past Bitcoin is by far the most unsafe meth…
I guess you missed the "it just doesn't enjoy widespread adoption outside the digital world yet" part. Suggested reading:
https://en.wikipedia.org/wiki/Currency https://en.wikipedia.org/wiki/Fiat_money
>bitcoin offers zero protection and zero recourse if your money is stolen or lost due to a crash/virus/hack/forgot to backup my wallet before formatting (and when this happens, the user is always blamed, duh, you should have bought a trezor!)
That has nothing to do with Bitcoin, but with the user habits and possibly his operating system choice. If you go out taking pictures of your credit card and posting on Twitter (as a lot of people do), don't check your account balance often (as a lot of people do) and constantly let strangers have your credit card info (as a lot of people do online) then you'd say that's an issue with credit cards? No, it's an issue with the person's habits.
>With a credit card none of this happens, and if money is somehow stolen from your credit card, the card is quickly deactivated and the victim is fully reimbursed for any fraudulent charges.
That is by design, as it avoids several issues* with money held or processed by banks or any other institution. It's a trade off, sure, but when it comes to my money I rather trust myself to keep sane habits than trust the payment processing website, the bank AND the gov. not to screw me.
* It can't be stolen nor lost if properly stored, unlike the info you must supply when purchasing with credit card (see Ashley Madison and others). Nor can you have your account frozen, like when buying with Paypal or wire transfer (if the bank or gov. find it suspicious), nor are there chargebacks in case you are a seller (if you wait the appropriate number of confirmations)...
Re: Bitcoin Surges Past $400
#253Earlier quoted context omitted.
> I bought VPSs with it Wow! A VPS! Something that 99% of the population has no use for. How about paying rent, medical bills, utilities, phone bill, groceries, tuition, gas, car payment, car insurance, car maintenance, tolls, daycare, taxes... you know, the kind of things that real people actually care about. > just like I have bought them by unsafer payment methods in the past Bitcoin is by far the most unsafe meth…
I guess you missed the "it just doesn't enjoy widespread adoption outside the digital world yet" part. Suggested reading: https://en.wikipedia.org/wiki/Currency https://en.wikipedia.org/wiki/Fiat_money >bitcoin offers zero protection and zero recourse if your money is stolen or lost due to a crash/virus/hack/forgot to backup my wallet before formatting (and when this happens, the user is always blamed, duh, you shoul…
> I guess you missed the "it just doesn't enjoy widespread adoption outside the digital world yet" part
Nah, I didn't miss it, I just don't think it matters. It's like saying "my solar powered car is as real as it gets, just yesterday I drove it down the block, it just doesn't enjoy more than a 10 mile range". Well ok... then it's not as real as it gets, it's a toy and not very practical since it can't be used to get to work, school, hospital etc.
> That has nothing to do with Bitcoin, but with the user habits and possibly his operating system choice.
In practice it has everything to do with bitcoin since permanent loss of funds is only a risk with bitcoin. Those behaviors you describe are not analogous to the problems of bitcoin. Just storing money as bitcoin puts it at risk of permanent loss. If you take out 100 credit cards and never check your balance you are still covered for every conceivable fraud scenario (and in many situations the bank will tell you that you've been a victim before you even realize it). With bitcoin you are never covered regardless of your vigilance or best practices. You can be an expert user and simply make a typo and send your money to the wrong address and then you're screwed. The general public doesn't have the time, patience, or technical skills to decide which OS is the most secure for storing money, especially when bitcoin itself doesn't actually provide any novel benefits for most people.
> It's a trade off, sure, but when it comes to my money I rather trust myself to keep sane habits than trust the payment processing website, the bank AND the gov. not to screw me.
That's your right and I'm glad bitcoin exists for you, but it's simply wrong to suggest that bitcoin is safer, it's not. If you trust yourself to keep your bitcoin secure, more power to you, but statistically speaking your money is still less safe as bitcoin than as a bank balance. It's like saying that driving your motorcycle cross country is safer than flying because you trust yourself not to crash. I'm happy that you can be your own bank and I think that it's cool as hell that this is possible because of an emergent econony based on open source software, but bitcoin is not practical, useful, and least of all safe for most people.
Re: Bitcoin Surges Past $400
#254Earlier quoted context omitted.
But there is no difference between kiwi fruits or fiat currencies: people wanting them is what gives them value. In the case of bitcoins, people want them not to pay taxes, but because cryptocurrencies offer benefits that only them can provide, so people see value in that.
Fiat currency is just a number. Who would want a number? It's taxes that create demand. The problem with the supposed usefulness of bitcoins is that the interesting part is the technology, but the numbers are irrelevant. You can make a transaction for 1 bitcoin just the same that you can make it for 0.0001 bitcoin. Now matter how you dice it, ultimately the number has no real value.
Taxes are just one small part of the demand. The economy makes up the rest of the demand, and it accounts for a much larger share. Even companies that are not US-based and do not pay US taxes can and do demand US dollars, eg. a Chinese company exporting goods to the US and receiving payments in dollars.
The US government income (federal, state and local taxes) was $1 trillion in 1988 [1]. I picked this year because it is hard to find up-to-date data for the next number: the amount of dollar transactions was estimated at $1.7 trillion per day in 1988 [2]; this is $620 trillion per year. So taxes represented only 0.16% of all dollar transactions. At most you can argue that 0.16% of the value of the dollar comes from its use to pay taxes, but the bulk of its value comes from the economy using 99.84% of it.
Still not convinced? Here is a thought experiment. What if for every dollar owed in taxes, the government asked to be paid instead 1 grain of rice? Would it suddenly make the dollar worthless? No! People would continue using it because many other people already use it to transact trillion of dollars every year. They know it is a liquid asset that can be exchanged for anything, and this is what gives it value.
[1] https://books.google.com/books?id=POjfDvabbpwC&pg=PA1&lpg=PA...
[2] https://books.google.com/books?id=F8DSBwAAQBAJ&pg=PA144&lpg=...
Re: Bitcoin Surges Past $400
#255The Bitcoin dream of it being accepted by banks and replacing fiat currency will never come true, especially since financial institutions are focusing on blockchain technology as opposed to Bitcoin. This recent price increase will possibly be viewed as a dead cat bounce.
What people like you who raise this argument forget is that the success of a blockchain is intertwined with the success of whatever currency/reward is granted to the miners who make the blockchain work. So if Bitcoin's blockchain is adopted by banks, then Bitcoin the currency will succeed. And if banks adopt another blockchain, then the currency of that blockchain will succeed. It is literally impossible to have a fu…
Hey mate,
I feel like it has been ages since the two of us have talked bitcoin. Hopefully you've made some cash in the recent run up. Funnily enough we're both in NZ at the moment though I'm just here in Auckland for the week before heading back to Sydney so no overlap. I'd love to revisit some of our topics from last year though to see which ones each of us were right about. I have a feeling though it's a pretty even split.
Enjoy your travels. My wife and I did our own at northandsouthnomads.com and give me a shout on my email in my profile. I did always enjoy our debates.
Re: Bitcoin Surges Past $400
#256Earlier quoted context omitted.
Fiat currency is just a number. Who would want a number? It's taxes that create demand. The problem with the supposed usefulness of bitcoins is that the interesting part is the technology, but the numbers are irrelevant. You can make a transaction for 1 bitcoin just the same that you can make it for 0.0001 bitcoin. Now matter how you dice it, ultimately the number has no real value.
Taxes are just one small part of the demand. The economy makes up the rest of the demand, and it accounts for a much larger share. Even companies that are not US-based and do not pay US taxes can and do demand US dollars, eg. a Chinese company exporting goods to the US and receiving payments in dollars. The US government income (federal, state and local taxes) was $1 trillion in 1988 [1]. I picked this year because i…
Comparing the sum of economic transactions to government income is not relevant. Just as with anything in economy you have to think in the margins (marginal demand, marginal tax rate, etc.) I'm not saying that taxes are the only demand. USD has value! It doesn't matter if you are Chinese! I have another thought experiment: imagine that the US (or any other country, you can think of a small country as it will be more evident) decides to issue a second currency, but you can't pay federal taxes with it and there is no fixed exchange rate to the USD (notice that it's not a bond, it has no maturity).
In any case, there is no need for thought experiments with bitcoin. Reality will show you and me if bitcoin has any sustenance. I think it's an amazing technology, but bitcoins themselves have no value (in the long term).
Re: Bitcoin Surges Past $400
#257Earlier quoted context omitted.
Taxes are just one small part of the demand. The economy makes up the rest of the demand, and it accounts for a much larger share. Even companies that are not US-based and do not pay US taxes can and do demand US dollars, eg. a Chinese company exporting goods to the US and receiving payments in dollars. The US government income (federal, state and local taxes) was $1 trillion in 1988 [1]. I picked this year because i…
Comparing the sum of economic transactions to government income is not relevant. Just as with anything in economy you have to think in the margins (marginal demand, marginal tax rate, etc.) I'm not saying that taxes are the only demand. USD has value! It doesn't matter if you are Chinese! I have another thought experiment: imagine that the US (or any other country, you can think of a small country as it will be more…
"Comparing the sum of economic transactions to government income is not relevant. Just as with anything in economy you have to think in the margins (marginal demand, marginal tax rate, etc.)"
My comparison is very relevant. It means if taxes did not have to be paid in dollars, then with all else being equal there would be 0.16% fewer dollar transactions. Not a big change.
You talk about marginal tax rate, but I think you meant tax rate. (Marginal tax rate has nothing to do with our discussion). If tax rates where doubled, then taxes would account for not 0.16% but 0.32% of dollar transactions in my 1988 example. Again, not a big change. And yes in practice marginal demand of the dollar would skew this percentage somewhat, but it would still be insignificant.
You did not answer if you were convinced by my thought experiment, are you?
About your thought experiment: what you describe has actually happened many times in history, and many of these currencies had a floating exchange rate and could not be used to pay taxes, see https://en.wikipedia.org/wiki/Private_currency Turns out they had value, like Bitcoin.
Re: Bitcoin Surges Past $400
#258Earlier quoted context omitted.
What people like you who raise this argument forget is that the success of a blockchain is intertwined with the success of whatever currency/reward is granted to the miners who make the blockchain work. So if Bitcoin's blockchain is adopted by banks, then Bitcoin the currency will succeed. And if banks adopt another blockchain, then the currency of that blockchain will succeed. It is literally impossible to have a fu…
Hey mate, I feel like it has been ages since the two of us have talked bitcoin. Hopefully you've made some cash in the recent run up. Funnily enough we're both in NZ at the moment though I'm just here in Auckland for the week before heading back to Sydney so no overlap. I'd love to revisit some of our topics from last year though to see which ones each of us were right about. I have a feeling though it's a pretty eve…
Hey I did not know you were an Aussie. My travel blog is ~3 weeks out of date; we are in Thailand at the moment :) I do not have much time to spend online these days since traveling keeps us very busy, but you can shoot me an email if you want to discuss anything.
Re: Bitcoin Surges Past $400
#259Earlier quoted context omitted.
Hey mate, I feel like it has been ages since the two of us have talked bitcoin. Hopefully you've made some cash in the recent run up. Funnily enough we're both in NZ at the moment though I'm just here in Auckland for the week before heading back to Sydney so no overlap. I'd love to revisit some of our topics from last year though to see which ones each of us were right about. I have a feeling though it's a pretty eve…
Hey I did not know you were an Aussie. My travel blog is ~3 weeks out of date; we are in Thailand at the moment :) I do not have much time to spend online these days since traveling keeps us very busy, but you can shoot me an email if you want to discuss anything.
Canadian actually just live down here now. We did Chiang Mai for ~8 months this year. Enjoy your travels.
Re: Bitcoin Surges Past $400
#260Earlier quoted context omitted.
Don't discount how much nefarious actions can drive bitcoin prices. Much of the $1000 bubble is discussed in terms of mtgox and "willie", but the initial peak was triggered by another driver which was the first large wave of cryptolocker infections. It goes without saying I'd stay well clear of bitcoin still though.
You are working with a limited view of Bitcoin price history if you think there have only been two prior bubbles or peaks. There have been something like 6 Bitcoin 'bubbles' and busts since 2011. The very first major bubble is attributed to Senator Chuck Schumer in June 2011 advertising to the world that you could buy drugs with Bitcoin on silk road. That took the price from $1 to $32 before crashing. http://www.reut…
I remember that summer. Such a beautiful and simple time for bitcoin. I frantically unloaded the bitcoins I bought at $8 when the price crashed from $30 at around $15/coin, withdrawing my entire initial investment and feeling bummed about not getting out when the getting was good.
Then in a few months the 2 coins I kept were worth hundreds apiece.