Bitcoin?

[Jethro Bodine]

I'm the first one to admit to being technologically challenged. If it were not for my assistant or my 14 year old daughter I'd have to get rid of all my gadgets.

I heard about this Bitcoin situation the other day and thought "What the hell is a bitcoin?"
Can someone please explain Bitcoins to me in plain English that a techno moron can understand as well as why they are better than other currency, the risk involved, and what happened recently?

That way when I'm at my private club this weekend, reclining in my favorite leather chair, sipping on a 20 year old scotch, pretending to read the New York Times or some other high brow publication and that obnoxious Thadeus Weatherstone comes by and says "Hey old chum, nasty bit of business that whole Bitcoin fiasco is, eh?", I'll have an intelligent answer.:nod:

Thanks

 

[Lo-ki]

It is an electronic currency "of the future"

Not in mine that's for sure

Loki

 

[sdw]

I'm the first one to admit to being technologically challenged. If it were not for my assistant or my 14 year old daughter I'd have to get rid of all my gadgets.

I heard about this Bitcoin situation the other day and thought "What the hell is a bitcoin?"
Can someone please explain Bitcoins to me in plain English that a techno moron can understand as well as why they are better than other currency, the risk involved, and what happened recently?

That way when I'm at my private club this weekend, reclining in my favorite leather chair, sipping on a 20 year old scotch, pretending to read the New York Times or some other high brow publication and that obnoxious Thadeus Weatherstone comes by and says "Hey old chum, nasty bit of business that whole Bitcoin fiasco is, eh?", I'll have an intelligent answer.:nod:

Thanks

OK here's the non-politically correct story on Bitcoin:

The Americans have their hooks into all of the banking and currency systems. If you try to take the money from selling drugs in Florida and move it back home, the Americans will seize it. If you try to take the Billions that you have skimmed from the International Aid sent by various suckers to put "Aisha" through school and send them to the Caymans, the Americans will seize it.

Obviously, something had to be done!

So, various criminal organizations set up "Bitcoin Exchanges" to manage, validate and distribute Bitcoins

Silk Road was set up where the Americans could get at it, so, the Americans seized it.

Mt Gox just had the criminal organization that runs it cash out. They had been skimming for years, but the media has decided that Bitcoin is the "next big thing" and they see the writing on the wall. Whenever the media pays attention to the "next big thing", they fail because people start paying attention. This is what happened with Bre-X, it's what happened with Nortel and it is clearly happening to Bitcoin.

This is why every "Great Opportunity" must be treated like a one way Bus ride over a Cliff. The people that get on at the beginning and get off before the final stop, WIN! The greedy people that jump in only a few stops from the final stop, Lose.

 

[Ms Erica Phoenix]

Mt Gox is why I never put any money into bitcoin. I have my hoard of PHYSICAL gold and silver sitting in my very heavy safety deposit box.

 

[hornygandalf]

Feel free to correct me or add to what I say here.
It is an electronic form of 'fiat' money in the form of a digital code. Fiat money being that which is created with nothing physical backing it (such as the US dollar and most other currencies). To create the code for the digital coin, takes a very complex algorithm and huge amount of computing power. And the more that are created, the more complex the algorithm is. The digital codes are verified as being genuine (and not a fake that someone made up) via complex mathematical problems that verify the validity of the digital 'coin.' All transactions with the bitcoin are also recorded and maintain. Transactions with bitcoins are all done with computers.

What has made it a fascination of so many is that there is no government or central bank that is controlling it (or regulating it). It is purely market-based and dependent on demand and supply. It is also anonymous, which is why criminals love it, and not tied to any particular geographic locality (as it is digital). It is highly volatile and the price differs between the different exchanges (where you by bit coins or convert them into real cash). In time, however, there may be legitimate electronic currencies emerge that do become widely accepted and don't have the problems that bitcoin has.

The idea apparently goes back to Thomas Edison (at least), who wanted to create an alternative currency outside of the Federal Bank/government controlled currency. Radical idea, but there are questions whether governments or central banks would allow an unregulated currency outside of their control for any length of period. The Mt. Gox incident is the kind of thing they actually like to see happen as it dissuades people from participating. China has already put restrictions on it there.

If you want to sound semi-intelligent about it, comment that it sounds like another case of tulip bulbs (Amsterdam in 17th century, another case of investment mania).

 

[NataliaBijoux]

False.. all bitcoin transactions are not done via computers.
They do have bitcoin ATM's now.

 

[hornygandalf]

Ms Erica, you are one very smart woman!! Physical gold and silver has always been worth something and likely always will be!!! Nobody really knows who created Bitcoins and they're backed by nothing. Way too much risk for me!![/QUOTE

A problem with physical gold and silver is that governments on occasion like to make it illegal for people to own (US from the 1930s, except for a small amount) or will even seize it. Also dependent on demand and supply. I prefer silver over gold as it does have industrial uses as well as the being a precious metal, however, it is also a highly manipulated market. Gold is only worth what the market and manipulators decide it is worth. And silver, in my opinion, should be valued much higher than it is now. There are different views regarding their value as an investment. They don't produce anything or pay dividends. They depend on market demand. But there are certainly periods when they have outperformed other assets in value (and other times they haven't)

The first proof-of-concept bitcoin was created by a developer by the name of Satoshi Nakamoto in 2009. Not a lot is known about him. Bitcoins may be backed by nothing physical, but so are most currencies. it is questionable with the US government really own a fraction of the gold reserves it claims to have, but even then, there is no link between that and the currency.

 

[hornygandalf]

False.. all bitcoin transactions are not done via computers.
They do have bitcoin ATM's now.

The ATM's are linked by computers and go through the same verification process as I understand it. Not a computer in the conventional sense, but still linked in the same way. And Vancouver was where the first Bitcoin ATM was established.

As there is supposedly an electronic record of every transaction with a bitcoin, it would be hard to have transactions outside of a computer network.

 

[sdw]

False.. all bitcoin transactions are not done via computers.
They do have bitcoin ATM's now.

Bitcoin ATMs accept real Canadian or American dollars and give you a serial number of Bitcoins stored in - - - wait for it - - - Mt Gox

When you want to buy something, the seller has to also have a Bitcoin wallet at Mt Gox or another Bitcoin Exchange, or you have to go back to the Bitcoin ATM and see if inputting the serial number of your Bitcoin will result in real Canadian or American dollars being given to you.

http://www.bitcoiniacs.com/

 

[NataliaBijoux]

I was merely stating you don't have to sit in front of your computer to buy, sell or send bitcoins. You can use the ATM to do transactions

 

[here4fun]

I see no difference between bitcoin and a ponzi scheme.

 

[hornygandalf]

I know the gold and silver market is heavily manipulated. I don't by silver to make money off it, its more like a security blanket for me lol. The diamond industry is even more manipulated than gold and silver...just thought I'd throw that out there.. Most currencies are at least more stable than bitcoin. I trust bitcoin about as much as I trust the us government..and IMO they're definitely full of $hit about their gold reserves and pretty much everything else they say.

I don't think you will go far wrong buying silver at its current price, as long as you are willing to be patient. And the diamond market is a complete con... if you look at De Beers has done. Wonderful case of manufactured demand. I've used them as an advertising case study in the past.
I think we are pretty much in agreement based on the things you've said

 

[sdw]

Well, 5% of Bitcoins just disappeared into various offshore accounts. Mt Gox has declared bankruptcy
http://www.cbc.ca/news/world/bitcoin-exchange-mt-gox-files-for-bankruptcy-1.2554834
http://www.reuters.com/article/2014/02/28/us-bitcoin-mtgox-insight-idUSBREA1R06C20140228

 

[overdone]

I see no difference between bitcoin and a ponzi scheme.

there isn't, it's exactly the same

 

[Ms Erica Phoenix]

Ms Erica, you are one very smart woman!! Physical gold and silver has always been worth something and likely always will be!!! Nobody really knows who created Bitcoins and they're backed by nothing. Way too much risk for me!![/QUOTE

A problem with physical gold and silver is that governments on occasion like to make it illegal for people to own (US from the 1930s, except for a small amount) or will even seize it. Also dependent on demand and supply. I prefer silver over gold as it does have industrial uses as well as the being a precious metal, however, it is also a highly manipulated market. Gold is only worth what the market and manipulators decide it is worth. And silver, in my opinion, should be valued much higher than it is now.

When I was working in the industry selling metals, I bought some with every paycheck. I would budget, plan, and depending on the spot price that day, buy between 8 and 10 ounces. I have one ounce bars, 10 ounce bars and a lot of Silver Maple 1 ounce coins. The big slide for gold and silver started mid-March or so last year: at one point silver was at almost $40 an ounce and gold was at nearly $1900. As long as things staying 'interesting' in the world (War in the Crimea, anyone?) geopolitically, I expect to see gold and silver continue to climb back up close to where they were. I always suggest that people start with silver. It's small numbers, it's affordable for anyone. At $25 an ounce, ladies, it's worthwhile to start stashing it away a little bit at a time. Once it's back up to $40, sell a few bars and buy yourself something pretty! When my last car died, I went to my favourite spot to sell some; 100 ounces later, I had a 'new' car.

 

[mcdude]

there isn't, it's exactly the same

Except that *any* of the crypto currencies don't rely upon getting new people into the scheme. So yeah, it's exactly like that :doh:

The amount of misinformation in this thread is astounding. You can just say "I don't like it" instead of perpetuating false information.

 

[sdw]

Except that *any* of the crypto currencies don't rely upon getting new people into the scheme. So yeah, it's exactly like that :doh:

The amount of misinformation in this thread is astounding. You can just say "I don't like it" instead of perpetuating false information.

In some ways Bitcoins are a Ponzi scheme. Ponzi schemes are all about the greedy deluding themselves into thinking that there is a retained and increasing value. If a person looks at the rise in value of a Bitcoin once there was the ability to place ATMs - If you go to http://bitcoincharts.com/charts/ and ask for a 1 or 2 year chart you will see that the value of a Bitcoin went from close to 100 USD to close to 1100 USD and the major part of that increase was from Oct 2013 to Jan 2014. Today, there are a lot of people that want to sell Mt Gox Bitcoin, but there are not many buyers no matter which Bitcoin Exchange. The one day chart sort of looks like Nortel or 360 Networks as the simple minded souls think they are getting a bargain AFTER the company has already gone bankrupt. It took about 2 weeks for 360 Networks to 0 out and months for Nortel to trade in the pennies.

 

[hornygandalf]

When I was working in the industry selling metals, I bought some with every paycheck. I would budget, plan, and depending on the spot price that day, buy between 8 and 10 ounces. I have one ounce bars, 10 ounce bars and a lot of Silver Maple 1 ounce coins. The big slide for gold and silver started mid-March or so last year: at one point silver was at almost $40 an ounce and gold was at nearly $1900. As long as things staying 'interesting' in the world (War in the Crimea, anyone?) geopolitically, I expect to see gold and silver continue to climb back up close to where they were. I always suggest that people start with silver. It's small numbers, it's affordable for anyone. At $25 an ounce, ladies, it's worthwhile to start stashing it away a little bit at a time. Once it's back up to $40, sell a few bars and buy yourself something pretty! When my last car died, I went to my favourite spot to sell some; 100 ounces later, I had a 'new' car.

Smart woman. Silver is a lot more volatile (more manipulation going on), but fundamentally I think it is also the better investment. Silver gets consumed in all kinds of industrial applications. Gold doesn't (or very little of it). And the supply of silver appears to be tighter than the supply of gold. In the past, a number of currencies were backed by silver rather than gold.

 

[overdone]

Except that *any* of the crypto currencies don't rely upon getting new people into the scheme. So yeah, it's exactly like that :doh:

The amount of misinformation in this thread is astounding. You can just say "I don't like it" instead of perpetuating false information.

stop new people from joining and lets see what happens, lol

 

[hornygandalf]

Except that *any* of the crypto currencies don't rely upon getting new people into the scheme. So yeah, it's exactly like that :doh:

The amount of misinformation in this thread is astounding. You can just say "I don't like it" instead of perpetuating false information.

The value of currencies are also based on demand and supply (unless they are fixed or managed in some way), so it could also be said (I'm stretching it a bit here), that the US dollar is also a Ponzi scheme. The reason for the parabolic rise of bitcoin was because of new people getting in. The rise of any currency will typically be because of increased demand for it (unless it's value is changed by government intervention).