Bitcoins

[The Mad God]

http://bitcoin.org/en/

 

I recently heard about bitcoins and the idea fascinates me. Anyone have any experience with them? Opinions? Thoughts?

[Kamen Rider Kuuga]

It's all an alien conspiracy to make us use virtual money, and when we finally switch to it, they'll flood the world economy with it. With everything in shambles, they'll move in AND TAKE OVER THE WORLD!

[UberWanderer]

i heard a good deal about them, but never really did anything with it. probably worth looking into (just my opinon)

[Captain Cobra]

Purely speculative until the price stabilizes.

[AKM]

^^ Agreed.  Not interested.  What happened to the good old fashioned gold standard?

[canderes]

Yeah after the you know what got taken down people thought the government was using the bitcoins they confiscated to spike the price of these (or liquidate) things. It's hard to believe that the price doubled so many times in the last few weeks. China is buying up alot of it, but I would also wager that there are banks in the US driving the price up until the cat bounces. It will die once they start to tax it or centralize it if that is even possible. Most the other offshoots of this will fail because the people setting them up have so much of it premined ~70-90% that if anyone put money into them all the value would go to the people who already hold it; there's no growth, probably litecoin or feather might have some but everything else is just trying to jump on the bandwagon with the thing already in someones hands. The people who were there when these things were less than a dollar are probably already gone. Only hardcore speculators with a ton of money to burn are left now. I remember someone saying Bernanke should be in charge of bitcoin I found that hilarious because he would find a way to inflate it even if the supply never changed. Investors don't care about gold because it is for value storage; they love these unstable things because they can drive the price up as much as they want. It is unregulated so you can expect some insider dealing with this since no one monitors this market.

[shugah]

What happened to the good old fashioned gold standard?

 

It was killed by the US goverment in 70s on purpose.

Bitcoins are as speculative as penny stocks.

 

[Mumin]

Weee, another bubble generator! 

[Captain Cobra]

Buttcoins are the way of the future, maaaaaaaaaan.

[Kamen Rider Kuuga]

Man, like, since it's made by computers and stuff, like, the MAN can't control it, man. So it's like, the most free of money, man!

[akroma3310]

What's not to love about a currency that goes from being valued at $4 to $1200 over the course of year? On a more serious note, Bitcoin suffers from a number of problems: liquidity, security, volatility, and user flexibility.

 

Money is what money does, and currently Bitcoin is little more than an investment vehicle, if I remember correctly, the vast majority of Bitcoins are held by speculators hoping the value will increase. So, what does this ultimately mean for those of us wishing to spend Bitcoin for goods and services? Does Amazon accept mutual fund shares as payment? I don't think so. Security is another issue.

 

The simple fact is the majority of people do not back up their data, because the public & private encryption keys necessary to initiate a transfer of Bitcoins are stored on your PC, it's possible to lose your Bitcoins if this information is destroyed or stolen. This is a smaller concern than the liquidity issue, but let's not kid ourselves, we all make mistakes and forget to back up data occasionally.

 

Volatility is obvious, the currency is hardly a stable one. The real winners here are those individuals who purchased or 'mined' a large quantity of Bitcoins before their value exploded. The chance of those individuals losing large sums of money is slim to none, but those who arrived late in the game, buying individual coins at $800.00 each, stand to lose much more. User flexibility in my opinion is the largest hurdle Bitcoin has to overcome, and it may be insurmountable.

 

The nature of a Bitcoin transfer is not conducive to major retail shopping. Imagine a major retailer, such as Amazon, having to sort through every incoming transaction one-by-one! A program could be developed to do this automatically, but that would be risky, as Bitcoin transfers are not like credit card payments, they cannot be reversed. If you're interested in my last point, which I doubt I explained well, download a Bitcoin wallet and poke around. It's a free program, but you'll see what I mean when I say they're not conducive to major retailers.

 

Individuals claiming Bitcoin will bring down the dollar? They're either mad or have a vested interest in seeing the value rise.

[LordJerle]

Looking at the exchange prices now, it kinda makes me wish I'd invested in it a couple of years ago when I first heard about it.

[shugah]

Looking at the exchange prices now, it kinda makes me wish I'd invested in it a couple of years ago when I first heard about it.

 

As with illiquid shares, to get rich you'll need a fool with real convertible money to buy it from you at such price levels.