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Bitcoin and Thoughts from Bill Gates

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Re: Bitcoin and Thoughts from Bill Gates

#51

Post by dcc1 »

ewoodrich wrote: post #19
dcc1 wrote: post #13

Earlier quoted context omitted.

They are wrong, the blockchain is public, it is very likely that a bitcoin like technology be used by state actors in future to create tightly controlled currencies! Imagine a state being able to charge sales tax at the point of each transaction! Or more disturbingly know exactly who buys what for how much and when if tied together with government issued ids and wallets. Or instantly calculate taxes due on income. It…

> instantly calculate taxes due on income Uh, sign me up? The political complications of tax reform aside, return free filing would save millions of hours required for tax preparation, and it is estimated that between 8 and 60 million taxpayers would not need to file a return at all. And for the rest it would streamlined. Of course, the IRS already knows 90% of your income information, without Bitcoin, because of 109…

Which is how state controlled bitcoin like currencies will be pushed onto people, claiming it would save time/money etc, be more safe and secure etc.

Tho' I highly doubt bureaucrats in IRS or similar would rollover so quickly and put themselves out of a job!

Giving the state (or 3rd parties) even more control over currency and every day use that could be gained by a state run bitcoin like currency is very scary proposition IMHO giving them even more power.

Re: Bitcoin and Thoughts from Bill Gates

#52

Post by dcc1 »

nols wrote: post #14
dcc1 wrote: post #9

Earlier quoted context omitted.

Well it is an innovative technology/platform that ranks up there with HTTP, html, tcp/ip, usenet, bittorent Nothing as interesting has come out since 90s, all we had since are "social networks" and "flappy bird" sigh

And smart phones, public GPS, public TOR, hybrid cars, HDMI, blu-ray, Wikipedia, widespread broadband, the Human Genome Project, etc. To pretend that no good tech innovations have come out since the 90s is just willful ignorance.

Notice how I listed internet/network related technologies (HDMI/blueray/ HGP etc are not)

Re: Bitcoin and Thoughts from Bill Gates

#53

Post by hft_throwaway »

mahyarm wrote: post #49
hft_throwaway wrote: post #11

I think this is a lousy defense of Bitcoin. I cringe whenever I read "oh it's new technology of course people will be scared!" or worse yet, "you must be jealous because you didn't get in on the ground floor." I think it's a really cool technology but the economics don't make a lot of sense. There are a few major issues I see: -What problem does it solve? Many claim that it's a more efficient way to transfer money, b…

The thing is, the average consumer DOES NOT have access to with 30bps currency exchange fees. They don't have the access you do as an HFT guy does. For retail currency exchange and international transfers, especially for international remittances, the fees, paperwork, delays and bullshit are very high. To do an international wire transfer from the US to Canada for example, costs $25-$50 and has a %3 currency exchange…

The average consumer can do far better than 30 bps on currency trades, even on something like an Interactive Brokers account. Retail guys probably see tighter prices than HFTs do, to be honest, since FX is an OTC market and generally speaking, broker-dealers will give tighter pricing to uninformed traders than informed speculators.

Anyway, let's say we're at a dollar amount where fees and rates really add up to something substantial. To move $100k from USD -> BTC -> CAD we have to pay:

-Bitstamp exchange fee of 24 bps

-Walk Bitstamp ask book to do $100k USD worth is ~$629 vs. a mid-market price of $627.93: 17 bps

-Walk VirtEx bid book to do $111k CAD worth nets $645 vs. a mid-market price of $672.5: 95 bps

-Pay VirtEx exchange fee: 150 bps

That puts you at 2.86%, plus any slippage on execution due to price moves in BTC while you transfer it, fees to take money out, and risk that one of these exchanges steals your money. You also have risk that the rates between the two markets don't track the exchange rate precisely, since high fees create an impediment to arbitrage that would drive prices to be more efficient. Why take that risk vs. using a regulated bank? For small transfers you might be able to eek out some savings, but your time is probably more valuable than saving 10s of dollars.

And yes, you could work orders on both exchanges or trade in slices to try to avoid paying up the full spread, but that's extra work and incurs more risk. The average guy sending money from the US to Canada doesn't want to play execution trader all day.

Re: Bitcoin and Thoughts from Bill Gates

#54

Post by dllthomas »

nhaehnle wrote: post #32
dllthomas wrote: post #29

Earlier quoted context omitted.

"Bitcoin requires thousands of times (or more) more computational power to do a single transaction than any centralized currency system I can think of." Is that really the case? I'm quite sympathetic to the view that it might be, either presently or in the long run (an arms race where attackers and defenders are on the same footing can't get cheaper due to improved technology), but there are expenses in the current s…

there are expenses in the current system that bitcoin avoids Which expenses would that be that are genuinely avoided while maintaining feature parity, rather than merely avoiding the feature that is bought by those expenses in the traditional system? For example: Of course not having to worry about chargebacks and related fraud makes Bitcoin potentially cheaper than the existing credit card system. On the other hand,…

If you wish to actually move reserves in the current system (be they in the form of stacks of USD, gold, T-bills, &c), you need to secure them in transit. Securing BTC in transit may cost more than billing a credit card, but it costs substantially less than hiring a Brinks truck.

Re: Bitcoin and Thoughts from Bill Gates

#55

Post by VMG »

hft_throwaway wrote: post #47
VMG wrote: post #40

Earlier quoted context omitted.

It's safer to buy Bitcoin on coinbase and use those to make online payments than buying online by submitting your credit card information.

I just tried making an order on Tiger Direct which came to $137.94 and they want 0.2208 BTC. You can buy BTC on Coinbase at $628.41, so it would cost me $138.75 or a 58 bps surcharge over paying with my credit card, where I get 1% cash back, so really more like a 158 bps surcharge, plus I have to pay Coinbase immediately through my bank vs. having 30 days to float the balance on Amex interest-free. How is it safer? I…

In this example there is no upside for somebody who doesn't already have Bitcoin. But there are other instances where Paypal or other payment providers are not available or charge high fees.

Re: Bitcoin and Thoughts from Bill Gates

#56

Post by dllthomas »

Retric wrote: post #42
ewoodrich wrote: post #15

Earlier quoted context omitted.

I've thought that Bitcoin (or more likely, a future crypto currency) might be better served as a transaction backbone for payment processors, banks, and the like. It could still be used for transactions between two individuals, but the bulk of transactions would be for routine inter-bank processing. This would have an effect of stabilizing the exchange rate, and could replace Fedwire/ACH for a large portion of transa…

The USD is already a digital currency. The Fed keeps a ledger of how much USD every bank has and transactions between banks, which enables banks to go back and forth between hard cash and digital currency. Note the Fed does not know how much each account has but that's the banks job. From a banks perspective there is no reason to change things. They can trust checks from random people as long as the Fed clears the tr…

It's partly digitized. There's still quite a bit of shipping dollars around.

Re: Bitcoin and Thoughts from Bill Gates

#57

Post by Retric »

dllthomas wrote: post #56
Retric wrote: post #42

Earlier quoted context omitted.

The USD is already a digital currency. The Fed keeps a ledger of how much USD every bank has and transactions between banks, which enables banks to go back and forth between hard cash and digital currency. Note the Fed does not know how much each account has but that's the banks job. From a banks perspective there is no reason to change things. They can trust checks from random people as long as the Fed clears the tr…

It's partly digitized. There's still quite a bit of shipping dollars around.

There are also physical Bitcoin's: https://www.casascius.com/

You could argue that the physical bitcoins simply represent digital ones but the same can be said for USD as they are numbered. Coins are not currently numbered but represent a small fraction of the overall money supply.

http://www.wheresgeorge.com/wild.php

Re: Bitcoin and Thoughts from Bill Gates

#58

Post by dllthomas »

Retric wrote: post #57
dllthomas wrote: post #56

Earlier quoted context omitted.

It's partly digitized. There's still quite a bit of shipping dollars around.

There are also physical Bitcoin's: https://www.casascius.com/ You could argue that the physical bitcoins simply represent digital ones but the same can be said for USD as they are numbered. Coins are not currently numbered but represent a small fraction of the overall money supply. http://www.wheresgeorge.com/wild.php

You don't ever need to ship physical bitcoins, though. You can just digitize and transfer them. Which is preferred can be decided on the fly, which is quite a different situation than USD.

Personally, I'm not very convinced that physical bitcoins will really be meaningful: 1) cost of production is probably large compared to transaction fees, 2) counterfeiting issues. But I could easily be wrong there.

Re: Bitcoin and Thoughts from Bill Gates

#59

Post by Retric »

dllthomas wrote: post #58
Retric wrote: post #57

Earlier quoted context omitted.

There are also physical Bitcoin's: https://www.casascius.com/ You could argue that the physical bitcoins simply represent digital ones but the same can be said for USD as they are numbered. Coins are not currently numbered but represent a small fraction of the overall money supply. http://www.wheresgeorge.com/wild.php

You don't ever need to ship physical bitcoins, though. You can just digitize and transfer them. Which is preferred can be decided on the fly, which is quite a different situation than USD. Personally, I'm not very convinced that physical bitcoins will really be meaningful: 1) cost of production is probably large compared to transaction fees, 2) counterfeiting issues. But I could easily be wrong there.

Ahh, this is the important point USD start as digital currency. When the fed 'makes money' they are not talking about physical objects. (There are other views of the money supply that include IOU's as money but that's something of a side issue and can also apply to bit-coins or stocks when someone shorts it.)

More importantly the physical dollars only go into circulation after removing a digital dollar that already exists.

Re: Bitcoin and Thoughts from Bill Gates

#60

Post by dllthomas »

Retric wrote: post #59
dllthomas wrote: post #58

Earlier quoted context omitted.

You don't ever need to ship physical bitcoins, though. You can just digitize and transfer them. Which is preferred can be decided on the fly, which is quite a different situation than USD. Personally, I'm not very convinced that physical bitcoins will really be meaningful: 1) cost of production is probably large compared to transaction fees, 2) counterfeiting issues. But I could easily be wrong there.

Ahh, this is the important point USD start as digital currency. When the fed 'makes money' they are not talking about physical objects. (There are other views of the money supply that include IOU's as money but that's something of a side issue and can also apply to bit-coins or stocks when someone shorts it.) More importantly the physical dollars only go into circulation after removing a digital dollar that already e…

None of that changes the fact that there is substantially more need to ship around physical stores of value with USD than with BTC. It's not just banks, it's every merchant accepting cash.
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