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Bitcoin falls from $266

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Re: Bitcoin falls from $266

#481

Post by waps »

Cushman wrote: post #412
kragen wrote: post #391

Earlier quoted context omitted.

First, the word of the powerful is worthless, because power corrupts. People might keep their word because they're honest, or because they're accountable, but the "most powerful organization in the history of civilization" is by definition not accountable, and being an organization, neither is it honest. Second, the US government doesn't give its word that dollars are usable for anything other than paying dollar-deno…

The very concept of debt, of exchange, is one enforced by the United States. If the United States says that I owe a million dollars or none, that is just as true whether it is measured in gold, or hens, or the capricious will of the Federal Reserve. What matters is the power of the United States to force me to pay, and that power is unparalleled by any other entity that has ever existed. To say that the word of the U…

That only really goes for people on American soil. Of course, most governments that owe money to the US are in such deep shit that they couldn't pay the cleaning lady next week without a new loan this week. New loans tend to be problematic if you don't pay interest on your current loan.

Re: Bitcoin falls from $266

#482

Post by waps »

thatthatis wrote: post #469
tvladeck wrote: post #357

Earlier quoted context omitted.

not 100% true. you have to pay taxes in dollars. the currency is backed by the value of not going to jail.

I've seen a lot of good arguments on the value/worthlessness of fiat currency, but I'd never seen fiat currency defended as having the value of not going to jail. That's an amusing and on its face compelling argument.

Actually this rule isn't limited to taxes. EVERY debt you may have in the united states HAS to accept a pre-agreed dollar amount as payment in full.

The value of the dollar is "guaranteed", in theory, by the law that states that anything for sale inside the borders of the united states can be bought for dollars, without exceptions.

As to how guaranteed that makes a dollar, that is a matter of opinion. It is a lot better than Bitcoin imho.

Re: Bitcoin falls from $266

#483

Post by STRML »

drcross wrote: post #330
wcoenen wrote: post #201

Earlier quoted context omitted.

> On the contrary this is just the most pronounced in a series of recent coordinated DDOS / aggressive selling attacks designed to (successfully) inspire panic. The bitcointalk forums and /r/bitcoin are full of paranoia like this. After months of stress trying to divine market patterns, people see market manipulation and conspiracies everywhere. The simple truth is that there was an agressive bubble. The doubling per…

The person who announced the implementation date of a security change should be fired on the spot. This is security 101.

They are shockingly unfit to be the largest exchange in a billion dollar market. They are amateurs at best.

Re: Bitcoin falls from $266

#484

Post by jonnathanson »

derefr wrote: post #443
jonnathanson wrote: post #340

Earlier quoted context omitted.

In the long run, yes, there could be a bright future for BTC. In the short run, there are several big challenges, liquidity being a huge one. When it comes to BTC, the activities of speculators/hoarders, and the activities of free exchange and commerce, have shown themselves to be in direct opposition so far. The "store of value" and the "medium of exchange" are not mutually exclusive, of course, but for the time bei…

> It's not yet clear whether BTC is a currency, a buy-and-hold investment vehicle, or some schizophrenic combination of the two. Where is gold on that spectrum? As far as I can tell, Bitcoin seems to have all the properties of gold (except that it's easier to transport.) I'm pretty sure that gold is not considered to be a "currency" in any sense in the modern era; it's traded as a commodity, like oil. But people stil…

"Bitcoin seems to have all the properties of gold"

It's an interesting analogy, though there are a few key differences. Gold is a physical good, it has industrial uses, and it can be made into other materials and value-added goods (jewelry, etc.). There's no intrinsic value to gold (aside from the aforementioned industrial uses), other than the fact that it's rare, shiny, and resistant to tarnish.

Once the world moved away from the gold standard, gold ceased to function like a currency and started functioning almost strictly as a commodity. The distinction between the two depends on liquidity, which depends on how freely gold can be converted for goods and services in most markets (it can't).

Interestingly, most people who buy "gold" don't actually take possession of the material; they buy and sell contracts based on gold, or they buy and sell funds invested in gold-mining operations. The idea that people can just buy strips or bars of gold, and use them to transact, is theoretically true, but practically very difficult.

[On a side note: quite a few of the people buying "gold" under the auspices that it'll hold its value if/when a Great Depression, WW3, nuclear apocalypse, etc., takes place, would be in for a rude awakening if such a scenario came to pass. Most of them don't have the actual metal, and they almost certainly wouldn't be able to access it if the shit hit the fan].

Re: Bitcoin falls from $266

#485

Post by kragen »

Cushman wrote: post #412
kragen wrote: post #391

Earlier quoted context omitted.

First, the word of the powerful is worthless, because power corrupts. People might keep their word because they're honest, or because they're accountable, but the "most powerful organization in the history of civilization" is by definition not accountable, and being an organization, neither is it honest. Second, the US government doesn't give its word that dollars are usable for anything other than paying dollar-deno…

The very concept of debt, of exchange, is one enforced by the United States. If the United States says that I owe a million dollars or none, that is just as true whether it is measured in gold, or hens, or the capricious will of the Federal Reserve. What matters is the power of the United States to force me to pay, and that power is unparalleled by any other entity that has ever existed. To say that the word of the U…

This may be news to you, but debt and exchange still take place internationally, have taken place internationally since long before there were superpowers, and also take place in zones where no law is enforced.

As for the word of the United States, I'm guessing you've never been to an Indian reservation.

Re: Bitcoin falls from $266

#486

Post by mrb »

coldtea wrote: post #450
mrb wrote: post #396

Earlier quoted context omitted.

"They don't, but that's because Euros/Yens are backed by foreign governments" . No, that is not the reason. Replace "Euros/Yens" with "gold" in my sentence, and my point stands with gold being backed by nothing . Basically the US government is totally fine with side markets that they cannot control directly and that exist in parallel with the USD (whether it is EUR, gold, Bitcoin, whatever). Your other argument also…

> No, that is not the reason. Replace "Euros/Yens" with "gold" in my sentence, and my point stands with gold being backed by nothing. For one, the US government has banned gold for decades. So it's not that "OK" with it. It also closely monitors gold deals for money laundering purposes. Not to mention that there are governments all over the world that still forbid the private gold ownership. > Basically the US govern…

Your argumentation attempts to compare Bitcoin to the fact there is a very real possibility that the US government will declare gold illegal again in the future... I am sorry but this makes me see you as a lunatic. If you believe that about gold, you may just as well believe they will make wearing red shirts illegal on Wednesdays. No amount of arguing will make you change your mind.

You say euros and gold are "bad examples", but I could cite tons of other examples. For example the US perfectly allows holding and trading in all (virtually all?) foreign currencies including countries it has strained relationships with (Iranian rial, Burmese kyat, etc) and these countries have economies as large as, if not larger than Bitcoin. And because none of these foreign exchanges or currencies are illegal, I doubt Bitcoin will be made illegal.

I await your reply explaining in a convoluted way why each and every foreign currency or commodity is somehow a "bad example", and why the US would allow them but not Bitcoin.

Re: Bitcoin falls from $266

#487

Post by mcherm »

jessriedel wrote: post #296
mcherm wrote: post #277

Earlier quoted context omitted.

Um, no. The US dollar is backed by US law guaranteeing that it must be accepted as payment for all debts and by US law requiring taxes to be paid in USD. All of which, as the parent post points out, is dwarfed by the backing provided by all the merchants, banks, and consumers in the world who are using USD today. The corner grocery store in Pottsville, PA backs the USD by accepting it as payment for frozen pizza and…

> The US dollar is backed by US law guaranteeing that it must be accepted as payment for all debts I believe this doesn't stop people from creating special obligations through contracts that are denominated in other currencies. It more means that if I run over your mailbox and a judge orders me to compensate you, I can use dollars.

Precisely. It means that if you sue me for ANY reason (including failure to live up to my end of a contract) the state will allow me to pay in dollars.

Re: Bitcoin falls from $266

#488

Post by mcherm »

danudey wrote: post #339
mcherm wrote: post #277

Earlier quoted context omitted.

Um, no. The US dollar is backed by US law guaranteeing that it must be accepted as payment for all debts and by US law requiring taxes to be paid in USD. All of which, as the parent post points out, is dwarfed by the backing provided by all the merchants, banks, and consumers in the world who are using USD today. The corner grocery store in Pottsville, PA backs the USD by accepting it as payment for frozen pizza and…

> The US dollar is backed by US law guaranteeing that it must be accepted as payment for all debts If you're referring to the 'legal tender for all debts public and private' clause on the notes themselves, that means that it can be used for such purposes, not that it must be accepted. If we agree that I'll do your deck and you'll give me your car, you can't just say 'I want to keep my car, here's some cash instead'.

> it can be used for such purposes, not that it must be accepted

Before the contract is agreed to, the parties can make any arrangement they want, including agreeing to pay in bitcoins. But if one party fails to deliver and they wind up in court, then the court (as kragen pointed out) will almost never require them to deliver the item, the court will instead require that the victim be compensated and will allow dollars to be used to compensate them.

Now, if bitcoins were worth $250 each at the time the deck got painted and are only worth $160 each by the time the court case completes, there is a fairly good chance that the court will demand the $250 price be used to determine what the compensation should be.

Re: Bitcoin falls from $266

#489

Post by Domenic_S »

kragen wrote: post #391
Cushman wrote: post #359

Earlier quoted context omitted.

The dollar is backed by the word of the most powerful organization in the history of civilization. If that doesn't have value, what does?

First, the word of the powerful is worthless, because power corrupts. People might keep their word because they're honest, or because they're accountable, but the "most powerful organization in the history of civilization" is by definition not accountable, and being an organization, neither is it honest. Second, the US government doesn't give its word that dollars are usable for anything other than paying dollar-deno…

That's just the tin foil talking.

Look at it this way if you must: the rich and the powerful, in the US, have vast amounts of wealth stored in USD and USD-demoninated instruments. It is therefore in their best interests to preserve the value of the USD, or at times slightly inflate it.

The risk of your second paragraph cuts both ways. If the euro collapses tomorrow, you might need only US$13 to pay that debt.

Re: Bitcoin falls from $266

#490

Post by Domenic_S »

mcantelon wrote: post #421
altcognito wrote: post #418

Earlier quoted context omitted.

Frictionless? Isn't the very definition of how bitcoin is secure the opposite of frictionless? It derives it's value from friction.

I was referencing the fact with Bitcoin micropayments are practical because there are no transaction fees.

The main friction IMO is exchanging fiat currency for btc. It's ridiculous. Sign up for gox, send a bunch of private identifying documents (to a site that's been hacked), send a wire transfer, wait a week... craziness.

I wanted to buy $10k of btc last week @ ~$100, I didn't have any open accounts anywhere, so I used coinbase... which limited the amount I could buy. I ended up with 0.2 BTC, which didn't post in my account until late last night.

Looking at today's quotes, it probably for the best.

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