Bitcoin and other "Virtual Currencies"

[The Big Daddy C-Master]

I meant to talk about this on the board long ago, but I was reminded of it from someone just now.

Bitcoin to me seems like a modern trend more or less, it can definitely be useful in the short term as a type of "free money" that currently gets around some of the regulations and restrictions of our physical "fiat" currency (though this is changing).

The problem I have with it basically falls down to this:

"Real" currency should be backed by money to make it worthwhile and to make it last. The bitcoin is set up by some advanced code that isn't supposed to be breakable but we don't know how this will hold up. Another problem is that you'll have competing virtual currencies start showing to take a lot of the market. Money is money because it's limited.

A lot of what makes it popular right now is subject to change as time goes by. They are already starting to regulate bitcoing more and more as it's becoming more popular, which people who like "free" style money will come to be bothered by.

Not only that but it hasn't held the test of time, that said people who were in early were able to make a killing earlier on, I'm not sure how long that will hold up either.

So as currency it has flaws, it can be a decent investment in the short term.

This is all my opinion of course.

Here's a take on it in other words from both sides:

[WarMachineRhodey]

my main concern with bitcoin is when it flash crashed to 1 cent I think 2 or 3 years ago.
i
That speaks volumes about how unsafe and unstable btc is to be a currency that can be used to store wealth. Another thing about bitcoin is the lack of charge backs just in case your coins are stolen or you may have purchased an item accidentally. Speaking of stolen coins it seems you have to take some very lengthy measures to ensure your coins are not stolen by some hacker over the net i.imgur.com/YaoGgpn.png . That list alone shows the kind of measures needed to keep your btc safe which is very non user friendly. Not to mention that you could possibly lose all your btc if random hdd failure/corruption happens. It seems the main driver in the price of bitcoin seems to be pure market speculation since bitcoin isnt backed by anything.

[The Big Daddy C-Master]

Aug 19, 2014 15:44:18 GMT -5 WarMachineRhodey said:

my main concern with bitcoin is when it flash crashed to 1 cent I think 2 or 3 years ago.
i
That speaks volumes about how unsafe and unstable btc is to be a currency that can be used to store wealth. Another thing about bitcoin is the lack of charge backs just in case your coins are stolen or you may have purchased an item accidentally. Speaking of stolen coins it seems you have to take some very lengthy measures to ensure your coins are not stolen by some hacker over the net i.imgur.com/YaoGgpn.png . That list alone shows the kind of measures needed to keep your btc safe which is very non user friendly. Not to mention that you could possibly lose all your btc if random hdd failure/corruption happens. It seems the main driver in the price of bitcoin seems to be pure market speculation since bitcoin isnt backed by anything.

I agree with you. Bitcoin is largely a fad to me. It just seems like something that is popular today that will be gone tomorrow. The speculation makes it a short term trade investment.

There is no real "wealth" since it isn't backed by anything. It's everything fiat currency is but worse. The bitcoin lovers complain that fiat can't be trusted, but what makes bitcoin so trustworthy? That it has some code? Codes aren't perfect and they can be cracked.

There was also some thefts of it earlier this year. It seems to be ideal for that because of the inflated nature of it and the fact that it's all digital.


Bitcoin isn't as good a store of wealth as gold or silver to me.

How do you feel about it for transactions in the short term?

[WarMachineRhodey]

Aug 19, 2014 15:53:24 GMT -5 The Big Daddy C-Master said:

Aug 19, 2014 15:44:18 GMT -5 WarMachineRhodey said:

I agree with you. Bitcoin is largely a fad to me. It just seems like something that is popular today that will be gone tomorrow. The speculation makes it a short term trade investment.

There is no real "wealth" since it isn't backed by anything. It's everything fiat currency is but worse. The bitcoin lovers complain that fiat can't be trusted, but what makes bitcoin so trustworthy? That it has some code? Codes aren't perfect and they can be cracked.

There was also some thefts of it earlier this year. It seems to be ideal for that because of the inflated nature of it and the fact that it's all digital.


Bitcoin isn't as good a store of wealth as gold or silver to me.

How do you feel about it for transactions in the short term?

bitcoin works pretty much the same way fiat does except without regulations to somewhat keep the criminals inline. without any sort of regulation btc is like the wild wild west. the recent mtgox thing showed how the bitcoin crowd was a bunch of hypocrites. They want no govt regulation but when someone steals their coins they then want the govt to step in, pursue and punish those that were responsible for theft of their unregulated currency.
In the short term maybe bitcoin has a place but it still has the problems of no charge backs. I really cant see how people use bitcoin to say purchase something from another personal seller like someone off ebay and not be concerned that if the seller was a scammer then there is nothing that could be done to reverse the transaction. The bitcoins have just simply been stolen and there is nothing that could be done since there is a lack of rules and regualtions.  I agree with you that eventually the btc code will be cracked but i dont know if it will before or after btc and other crypto becomes irrelevant.

[The Big Daddy C-Master]

Aug 19, 2014 16:05:37 GMT -5 WarMachineRhodey said:

Aug 19, 2014 15:53:24 GMT -5 The Big Daddy C-Master said:

I agree with you. Bitcoin is largely a fad to me. It just seems like something that is popular today that will be gone tomorrow. The speculation makes it a short term trade investment.

There is no real "wealth" since it isn't backed by anything. It's everything fiat currency is but worse. The bitcoin lovers complain that fiat can't be trusted, but what makes bitcoin so trustworthy? That it has some code? Codes aren't perfect and they can be cracked.

There was also some thefts of it earlier this year. It seems to be ideal for that because of the inflated nature of it and the fact that it's all digital.


Bitcoin isn't as good a store of wealth as gold or silver to me.

How do you feel about it for transactions in the short term?

bitcoin works pretty much the same way fiat does except without regulations to somewhat keep the criminals inline. without any sort of regulation btc is like the wild wild west. the recent mtgox thing showed how the bitcoin crowd was a bunch of hypocrites. They want no govt regulation but when someone steals their coins they then want the govt to step in, pursue and punish those that were responsible for theft of their unregulated currency.
In the short term maybe bitcoin has a place but it still has the problems of no charge backs. I really cant see how people use bitcoin to say purchase something from another personal seller like someone off ebay and not be concerned that if the seller was a scammer then there is nothing that could be done to reverse the transaction. The bitcoins have just simply been stolen and there is nothing that could be done since there is a lack of rules and regualtions.  I agree with you that eventually the btc code will be cracked but i dont know if it will before or after btc and other crypto becomes irrelevant.

If bitcoin is cracked in code it will be useless. Unlike the dollar we don't have legions of morons who will lend us money on the "faith" that we'll pay them back even as we're drowning in debt.

We all know people are hypocrites, they want the ups and none of the downsides. The problem I have with all of this is that the government shouldn't be able to do what it's doing with *our* money, but it does anyways. This is why I think people need to find other ways to safe house their money, I just don't think bitcoin is suitable. It seems worse than fiat to me.

People are saying it's fool proof but we'll have to see about that. There have already been substantial thefts of it. Some people have made big money investing in bitcoin early though.

[zerosd]

Aug 19, 2014 14:55:31 GMT -5 The Big Daddy C-Master said:

The problem I have with it basically falls down to this:

"Real" currency should be backed by money to make it worthwhile and to make it last. The bitcoin is set up by some advanced code that isn't supposed to be breakable but we don't know how this will hold up. Another problem is that you'll have competing virtual currencies start showing to take a lot of the market. Money is money because it's limited.

I'll chime in with agreement with most of what everyone says.


Money is money because it is limited *and* it has some inherent value. Either something that has a use- like salt back in the day, or metals- or alternatively because someone guarantees to back it (fiat money), you can always be sure you can at least use that currency with them. It has a way to turn it into a service or other thing of value.

Like you say, real currency should be backed by money, and bitcoin isn't. It merely costs value to make (in electricity) and has a code. Even if the code is never cracked, if people don't want to take it, it has no inherent way to turn it back into something of value and it loses all value. If the code is cracked, people won't want to take it and it loses all value.


 A possible future digital currency could maybe have something of real value, but bitcoin? Isn't it. It's a mathematically interesting thing that currently has some value because people think it does and if they ever think it does, there is no way to get it back.

[The Big Daddy C-Master]

Feb 8, 2015 1:28:47 GMT -5 zerosd said:

Aug 19, 2014 14:55:31 GMT -5 The Big Daddy C-Master said:

The problem I have with it basically falls down to this:

"Real" currency should be backed by money to make it worthwhile and to make it last. The bitcoin is set up by some advanced code that isn't supposed to be breakable but we don't know how this will hold up. Another problem is that you'll have competing virtual currencies start showing to take a lot of the market. Money is money because it's limited.

I'll chime in with agreement with most of what everyone says.


Money is money because it is limited *and* it has some inherent value. Either something that has a use- like salt back in the day, or metals- or alternatively because someone guarantees to back it (fiat money), you can always be sure you can at least use that currency with them. It has a way to turn it into a service or other thing of value.

Like you say, real currency should be backed by money, and bitcoin isn't. It merely costs value to make (in electricity) and has a code. Even if the code is never cracked, if people don't want to take it, it has no inherent way to turn it back into something of value and it loses all value. If the code is cracked, people won't want to take it and it loses all value.


 A possible future digital currency could maybe have something of real value, but bitcoin? Isn't it. It's a mathematically interesting thing that currently has some value because people think it does and if they ever think it does, there is no way to get it back.

There's also the aspect of how theft friendly it is. You don't have to physically pick it up, you can just steal it digitally. This has already happened and I don't think that currency was completely returned.

Not to mention the government now wants a slice of the pie and on top of that bitcoins are slowly going down anyways.

[zerosd]

Feb 8, 2015 3:00:15 GMT -5 The Big Daddy C-Master said:

Not to mention the government now wants a slice of the pie and on top of that bitcoins are slowly going down anyways.

Of course they do. If it's a currency, it gets taxed. The only ones that don't are the ones without value.


Btw, another problem with it- people treating it like a commodity. If holding on to something gets you money without action.... then you don't spend it, and thus it's not filling the role of currency. And a lot of the proponents try and push it because they think it's investment nature is a good thing. (Btw, I have a friend who made a lot of money by recognizing it as a speculator boom. Got in, let it get high, got out before it fell. He never thought there was anything to bitcoins themselves, just the latest speculator boom like tulips waayy back in the day, or dot com stocks in companies without a solid business plan in the early 90s).

An inherently deflationary currency (like Bitcoin is supposed to be) is a poor currency that cuts down on economic activity.

A currency that goes up and down (like Bitcoin actually is) results in an economy that goes in starts and stops as everyone tries to time their buying accordingly.

A currency that goes down for good (like Bitcoin could very possibly become) is, well, not in use any more ^^

The idea currency is very stable, slightly on the inflation side, but nothing like how Bitcoin acts.

[The Big Daddy C-Master]

Feb 8, 2015 3:20:45 GMT -5 zerosd said:

Feb 8, 2015 3:00:15 GMT -5 The Big Daddy C-Master said:

Not to mention the government now wants a slice of the pie and on top of that bitcoins are slowly going down anyways.

Of course they do. If it's a currency, it gets taxed. The only ones that don't are the ones without value.


Btw, another problem with it- people treating it like a commodity. If holding on to something gets you money without action.... then you don't spend it, and thus it's not filling the role of currency. And a lot of the proponents try and push it because they think it's investment nature is a good thing. (Btw, I have a friend who made a lot of money by recognizing it as a speculator boom. Got in, let it get high, got out before it fell. He never thought there was anything to bitcoins themselves, just the latest speculator boom like tulips waayy back in the day, or dot com stocks in companies without a solid business plan in the early 90s).

An inherently deflationary currency (like Bitcoin is supposed to be) is a poor currency that cuts down on economic activity.

A currency that goes up and down (like Bitcoin actually is) results in an economy that goes in starts and stops as everyone tries to time their buying accordingly.

A currency that goes down for good (like Bitcoin could very possibly become) is, well, not in use any more ^^

The idea currency is very stable, slightly on the inflation side, but nothing like how Bitcoin acts.

The problem is people looked at bitcoin as a way to have a "free currency" away from the government. It didn't work.

Currency goes up and down all of the time, especially with the government printing so much of it. Same thing happens with dollars.

Bitcoin just doesn't have the wide use as the dollar and is not the world reserve and it's doom. The dollar is fiat and isn't backed by anything either.