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Virgin Galactic to accept Bitcoin [video]

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Re: Virgin Galactic to accept Bitcoin [video]

#91

Post by wmf »

qnr wrote: post #78
scott_meade wrote: post #6

"she paid in bitcoin, which was transferred into actual dollars "so there's a fixed price ... [and] we can actually pay her money back, if she changes her mind" Seems no different than if the buyer had sold her Bitcoin and paid Virgin Galactic in cash. The real trick will be when they can accept Bitcoin, keep the Bitcoin, and make any refunds and adjustments in Bitcoin.

Let's say you accept bitcoin but immediately convert it to USD. In future one of your suppliers also decides to accept bitcoin. Now you can pay your supplier directly without the USD conversion step. This wouldn't have happened without you actually deciding to accept bitcoin in the first place. I don't see any other way to bootstrap a new currency.

If you hold BTC for any amount of time between when you get paid by the customer and when you pay the supplier you're taking a huge risk.

Re: Virgin Galactic to accept Bitcoin [video]

#92

Post by fat0wl »

VMG wrote: post #60
fat0wl wrote: post #32

Earlier quoted context omitted.

Think about it man, if the Bitcoin delusion ends it is worth nothing. In a gold-backed online currency if it failed the users could just be beneficiaries of the trust. I'm not saying this is the ideal solution because I think maybe a completely fiat digital currency COULD work, just not with the Bitcoin scheme. And I'm not saying Bitcoin can't work in the long-run. I'm saying it's not working NOW. It is not performin…

You don't understand the point of Bitcoin. There can't be a decentralized digital currency that is backed by real-world assets. Who guarantees that you're Egoldcoin is worth an ounce of gold?

Eh I shouldn't have even bothered with this argument because look... I wouldn't give a s__t about "eGold" either.

(Credit Cards || Google Wallet) > All this junk

The only reason I bothered with the gold argument is because Bitcoin's volatility is its downfall. If it were pegged to a real-world asset this would essentially be solved. But credit cards already do this -- they are pegged to bank accounts.

Re: Virgin Galactic to accept Bitcoin [video]

#93

Post by fat0wl »

mrb wrote: post #89
fat0wl wrote: post #41

Earlier quoted context omitted.

Eh I'll be honest I'm not sure exactly how the gold standard works but I'm pretty sure it's priced individually against many currencies, whereas Bitcoin's whole pricing system is fantastical. I'm pretty sure Bitcoin just takes it's sticker price (whatever it's currently been bid upto) and then does a bunch of arbitrary currency conversions. Again, I THINK this, do not know... but i THINK if you took the amount of gol…

"I'm pretty sure it's priced individually against many currencies" No, it is not "priced". Nobody sets an "official price" for gold. Every actor in the market who sells and buys gold is free to set his own price, via "asks" and "bids" in the market. This is what gst highlighted for you: Bitcoin functions exactly like gold, their value fluctuates freely on international and national markets via trading, and nothing el…

What I meant by priced individually isn't that a price is "set" I meant people buy & sell gold in a number of currencies, such that each has an exchange rate that isn't interpreted by conversion to a fiat currency then checking the exchange rate for that.

I don't know too much about gold though so I'll let the convo go. To be honest I think CreditCards are where it's at & the small fees involved are to provide consumer protection so I don't mind.

If Bitcoin reaches a comparable infrastructure I'm sure they'll be charging fees for everything too (the exchange services already do, no?).

Re: Virgin Galactic to accept Bitcoin [video]

#94

Post by mrb »

fat0wl wrote: post #93
mrb wrote: post #89

Earlier quoted context omitted.

"I'm pretty sure it's priced individually against many currencies" No, it is not "priced". Nobody sets an "official price" for gold. Every actor in the market who sells and buys gold is free to set his own price, via "asks" and "bids" in the market. This is what gst highlighted for you: Bitcoin functions exactly like gold, their value fluctuates freely on international and national markets via trading, and nothing el…

What I meant by priced individually isn't that a price is "set" I meant people buy & sell gold in a number of currencies, such that each has an exchange rate that isn't interpreted by conversion to a fiat currency then checking the exchange rate for that. I don't know too much about gold though so I'll let the convo go. To be honest I think CreditCards are where it's at & the small fees involved are to provide consum…

"such that each has an exchange rate that isn't interpreted by conversion to a fiat currency then checking the exchange rate for that"

Actually, it is interpreted by comparing gold's price with exchange rates. When gold is, say, underpriced in yen on chinese markets when compared to its price in US dollar on american markets, this creates a condition where "arbitrage" is possible. So people who see this buy it up on the chinese market and resell it on the american market, making a profit. This naturally re-aligns the price of gold in various markets with exchange rates. The exact same thing is done by Bitcoin traders, and forex traders, and commodities traders, etc.

Re: Virgin Galactic to accept Bitcoin [video]

#95

Post by walden42 »

lambda wrote: post #30
cs702 wrote: post #9

It seems that with every passing day, another prominent institution or business starts accepting Bitcoin for payment, Virgin Galactic being the latest example. In just a few years, Bitcoin has gone from experiment to global phenomenon. I wouldn't be surprised if in coming years at least some bitcoin users start measuring their wealth in bitcoins, and therefore also evaluating exchange rates, not in terms of how many…

No, the volatility has been entirely in BTC. Volatility should more accurately be measured against actual real-world goods that you can buy. Since pretty much all actual goods are priced in currencies other than BTC, with the BTC price merely set based on the current exchange rate with the currency that the goods are bought at, it's BTC that's volatile, not the USD. This kind of volatility is actually really harmful…

> It's pretty dumb to actually spend bitcoins if you could just hold onto them and sell a week or two later at twice the price

Similarly it's pretty dumb to hold on to dollars if you know you could double them in a week by buying bitcoin. The ideal solution is to spend bitcoin and immediately replenish them by exchanging USD to bitcoin. That way, you still have the same amount of bitcoin and simultaneously more bitcoins are going into the economy.

> The volatility is valuable for speculators, but could be ruinous if you were trying to run a business based on it.

Immediately converting to fiat removes the risk. The beauty is you get to decide what you want to do with them.

Re: Virgin Galactic to accept Bitcoin [video]

#96

Post by dragonwriter »

nilkn wrote: post #47
lambda wrote: post #40

Earlier quoted context omitted.

Because it loses value slowly enough. That's the whole "stability" part. Holding onto USD for a year or two doesn't lose a significant amount of value, so you can save up effectively and plan on what you will be able to buy with it at the end. And you can put it in an interest bearing bank account or invest it to further offset or counteract the effect of inflation for longer-term savings. Unstable currencies you gen…

> Because it loses value slowly enough. Yes, I agree and stated as such in my post. My point is that I don't think you're pointing out a fundamental flaw in bitcoin. Deflation in a currency is not a deal breaker. Bitcoin is volatile right now because it is so young. People are predicting it will reach a huge market capitalization, which would necessarily entail a huge USD price per bitcoin because there are so incred…

> Deflation in a currency is not a deal breaker.

Its pretty much a deal breaker in the use of currency as a the general medium of exchange and pricing. Its not a deal breaker in its use as a store of value, obviously, but that's more about being an investment vehicle than a currency.

> As the currency stabilizes and more and more use cases emerge

What I'm missing here is any explanation of why we should expect bitcoin volatility to stabilize.

Re: Virgin Galactic to accept Bitcoin [video]

#98

Post by [deleted] »

dragonwriter wrote: post #63
nilkn wrote: post #59

Earlier quoted context omitted.

That's a fine idea, but few people will do that in practice because they don't want any risk at all in losing the money they're saving for those things. People generally invest for the very long-term, like retirement, not for things like house downpayments.

> few people will do that in practice because they don't want any risk at all in losing the money they're saving for those things. Many people do it in practice. Stuffing dollars in your mattress is "saving dollars". Loaning money at interest who will aggregate it with other money and invest in productive assets is an indirect investment in productive assets other than dollars.

[deleted]

Re: Virgin Galactic to accept Bitcoin [video]

#99

Post by fat0wl »

mrb wrote: post #94
fat0wl wrote: post #93

Earlier quoted context omitted.

What I meant by priced individually isn't that a price is "set" I meant people buy & sell gold in a number of currencies, such that each has an exchange rate that isn't interpreted by conversion to a fiat currency then checking the exchange rate for that. I don't know too much about gold though so I'll let the convo go. To be honest I think CreditCards are where it's at & the small fees involved are to provide consum…

"such that each has an exchange rate that isn't interpreted by conversion to a fiat currency then checking the exchange rate for that" Actually, it is interpreted by comparing gold's price with exchange rates. When gold is, say, underpriced in yen on chinese markets when compared to its price in US dollar on american markets, this creates a condition where "arbitrage" is possible. So people who see this buy it up on…

eh it's hard for me to keep going with this argument because Bitcoin's pricing is so made up, but i'll try.

I wasn't saying gold doesn't have an exchange rate. I was saying it DOES have one for EACH currency (allowing this arbitrage scenario) and that's part of what makes it strong. My impression of Bitcoin was that they simply price it in Yen or USD or whatever is their best market, then convert from THAT currency into whatever other currencies they want through the real-world exchange rates of existing currencies, in order to display it with a unified favorable price.

However, these arguments aren't even worth it really since the price is so varied from exchange to exchange that let's face it -- the numbers are pretty much all distorted BS regardless of how the prices are determined. All they represent is real-time bids. It's like watching a big eBay auction on nothing and claiming the true value of the item is evidenced by the current bid.

Re: Virgin Galactic to accept Bitcoin [video]

#100

Post by Aqueous »

bunderbunder wrote: post #51
nilkn wrote: post #36

Earlier quoted context omitted.

> It's pretty dumb to actually spend bitcoins if you could just hold onto them A similar question can be asked about USD: why would you ever save it instead of spending it immediately, since it's only going to lose value over time due to inflation? Of course, the difference right now is that the deflation rate in bitcoin is much higher than the inflation rate in USD. But clearly, if bitcoin ever becomes a major curre…

> A similar question can be asked about USD: why would you ever save it instead of spending it immediately, since it's only going to lose value over time due to inflation? The answer to this question lies at the heart of why economists generally believe a little inflation is better than no inflation nowadays. That little bit of inflation makes it more attractive to invest money in things that increase one's ability t…

Then the hope is that economic productivity increases at such a slow rate that the BitCoin isn't appreciating in value quickly enough to make it irrational to spend one.

Just like monetary policy attempts to set inflation at such a rate (~1%) that it isn't irrational to save, but it is slightly more rational to spend.

I think, though, that if everyone agreed, BitCoin could eventually change to borrow some concepts from PPCoin, and restart the production of currency, once it reached a plateau of adoption. It isn't impossible to change the current production limits - just difficult. At that point BitCoin would probably splinter into two currencies, one which has a deflationary monetary policy and one which has an inflationary one.

At that point - is it still a libertarian currency? We've just traded one governing body - the US govt - for another - the BitCoin Foundation.

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