Bitcoin versus other monies.

[Truthseeker]

The author of this essay http://www.lewrockwell.com/2013/12/g...about-bitcoin/http://libertarianstandard.com/2013/...an+Standard%29

Many Turkish businesses will take many monies: dollars, euros, roubles, etc. In Argentina black market exchanges will exchange pesos for dollars or euros, or vice versa.


Are bitcoins money? I concede the regression theorem does not apply http://www.garynorth.com/public/11844.cfm So, no, not money? I suspect the theorem should not be used, but I am yet unable to explain why not.

[onefour1]

I'm not real familiar with the bitcoin but it is my belief that many transactions today are delayed intentionally so as to hold your money for the gain of interest (time value of money) and thus causing transactions to last longer than they really should. Especially banking transactions.

[Catholicity]

I'm familiar with the bitcoin. It was invented specifically for the buy and sell of illegal substances, parahpanelia and black market items. Its used primarily on the dark internet. Purchasers invest in hidden accounts using their currency, and then proceed to purchase in the bitcoin. After the subsequent arrest of the kid who ran the silk road (and the bitcoin's primary marketer) the internet currency crashed and became virtually worthless because 75 percent of its market was worthless. Because of why it was invented, it needs a second look as for the reason one would invest in it. Think about it. It was invented for the buy sell and trade of inherently illegal and evil items. My assesment is No.

[Christianbookworm]

So, it's pirate gold?

[Truthseeker]

I'm familiar with the bitcoin. It was invented specifically for the buy and sell of illegal substances, parahpanelia and black market items. Its used primarily on the dark internet. Purchasers invest in hidden accounts using their currency, and then proceed to purchase in the bitcoin. After the subsequent arrest of the kid who ran the silk road (and the bitcoin's primary marketer) the internet currency crashed and became virtually worthless because 75 percent of its market was worthless. Because of why it was invented, it needs a second look as for the reason one would invest in it. Think about it. It was invented for the buy sell and trade of inherently illegal and evil items. My assesment is No.

Sorry, but you are wrong. It's often used for legit purposes. Your argument is not much better than arguing the dollar is evil because it's used to purchase drugs, anyway. When the government shut down the Silk Road, the Bitcoin-dollar exchange rate did fall all the way from around $1230 per bitcoin on December 4 to around $500/bitcoin on December 18. But the rate quickly bounced up to test its high. Now it's around $920 to 1 bitcoin. If you want a historical chart in a webpage rated safe by Norton try this http (scroll down)://www.xe.com/currencycharts/?from=XBT&to=USD&view=1Y Caveat: the rate varies from source to source, because there are many places to exchange dollars for bitcoins or vice versa.

[Catholicity]

wow are you off. A bitcoin was worth in USD as of December 2013 50 us dollars. On some stock exchanges its a little higher. And yes the argument holds. While its not Illegal in the US, it is in China and in other countries to use it due to its high rate of purchase for Child Pornography. According to the FBI it has a high rate of association with illegal purchase, theft of money, and instability. Its not desirable at all

[Irate Canadian]

wow are you off. A bitcoin was worth in USD as of December 2013 50 us dollars. On some stock exchanges its a little higher. And yes the argument holds. While its not Illegal in the US, it is in China and in other countries to use it due to its high rate of purchase for Child Pornography. According to the FBI it has a high rate of association with illegal purchase, theft of money, and instability. Its not desirable at all

Bitcoin itself is not a bad concept. However, the problem lies with it being completely anonymous. Due to its allowance of anonymity, it had a higher rate of usage in the criminal underworld then in actual day to day life. I'm also pretty sure that Bitcoin had a higher exchange rate then $50 in December.

[Sam]

wow are you off. A bitcoin was worth in USD as of December 2013 50 us dollars. On some stock exchanges its a little higher. And yes the argument holds. While its not Illegal in the US, it is in China and in other countries to use it due to its high rate of purchase for Child Pornography. According to the FBI it has a high rate of association with illegal purchase, theft of money, and instability. Its not desirable at all

Cath,

The Bitcoin conversion rate in December was significantly higher than $50 USD. You might be thinking of what I believe are called "microbits," or bitcoins split among many different investors. Here's an exchange chart for Bitcoin from November 2012:

[Truthseeker]

It's always theoretically possible for people to disdain any given thing. Hence, the theoretical floor for any given thing is zero. I don't think that saying that the floor for Bitcoin is zero, is saying anything worth paying much attention to. I do realize that I should warn putting your dollars in Bitcoins is quite risky. Risk only what you can afford to lose.

[KingsGambit]

The NBA's Sacramento Kings announced that they will be the first professional sports team to accept Bitcoin at their arena, and reports are that other teams (none named publicly) have also been considering doing the same thing. I see this as a harbinger for more legitimate uses short term, though I am not particularly optimistic on its staying power.

http://money.cnn.com/2014/01/16/news...s/nba-bitcoin/

[Sam]

It's always theoretically possible for people to disdain any given thing. Hence, the theoretical floor for any given thing is zero. I don't think that saying that the floor for Bitcoin is zero, is saying anything worth paying much attention to. I do realize that I should warn putting your dollars in Bitcoins is quite risky. Risk only what you can afford to lose.

[Truthseeker]

The value of any given thing, like its beauty, is in the eye of the user or beholder. IOW, value is never more than subjective. I may value an apple more than you do in certain circumstances, while you value an orange more than I do.

Bitcoin, in contrast, isn't backed by resources or even standing governments. It's market value is driven purely by the willingness of a small group of people to treat Bitcoins as valuable.

But don't forget the expanding network of computers that the Bitcoin community has forged. That is a more-or-less tangible resource.

It has, in other words, no floor.

Once again, true but essentially immaterial.

And that is the primary element in assessing Bitcoin's risk factor.

No. I'm not sure I can explain why its exchange rates are so volatile, but that's not the reason--it can't be.

You can't say Bitcoin is risky without acknowledging the wild and unpredictable swings in its value.

But you can say the same about speculating in the financial markets.

And you can't understand those swings

Who could explain why the Dow is up and the Nasdaq is down on a given day?

OK, so you think Bitcoin will turn out to be just a fad. OK.

Just noting that Bitcoin has some specific flaws that should keep most people from putting money into that market right now.

Pray tell what those flaws are.

[Sam]

The value of any given thing, like its beauty, is in the eye of the user or beholder. IOW, value is never more than subjective. I may value an apple more than you do in certain circumstances, while you value an orange more than I do.

But don't forget the expanding network of computers that the Bitcoin community has forged. That is a more-or-less tangible resource.

It's not a resource for Bitcoin, at least not one inherent to Bitcoin. Nearly all of those computers have been repurposed to mine Bitcoins and they can, with little or no change, be used for other purposes.

Once again, true but essentially immaterial.

No, it's quite material. Understanding that Bitcoin lacks any inherent value and is backed by no indirect resources other than a consensus of opinion among a small set of investors is crucial to understanding the risks involved with the currency. Again, you can't agree that investment in Bitcoin is risky without understanding this fact. Otherwise, what makes it a risky investment? It's not like a company's stock, which is linked to how well the company performs. Bitcoins can't underperform or overperform.

No. I'm not sure I can explain why its exchange rates are so volatile, but that's not the reason--it can't be.

It certainly can be and, apart from more compelling explanations, I'm inclined to believe it is the primary explanation. Gold's turbulent market swings can be similarly explained: when fear rules the market, gold develops a bubble. When the market stabilizes, the bubble bursts. Gold prices correct to more closely match its actual utility.

But you can say the same about speculating in the financial markets. Who could explain why the Dow is up and the Nasdaq is down on a given day?

OK, so you think Bitcoin will turn out to be just a fad. OK.

Pray tell what those flaws are.

[Truthseeker]

But for a hammer to have value to someone, in his mind there must be an idea of what the hammer can be used for, to begin with. Even so, the hammer may have no value to him, unless he wants what can be built with the hammer.

I'm quite sure many people don't own anything like hammers. It's not unreasonable to say that all the hammers in the world are worth nothing to those people. At least they would not pay anything for even a low-price hammer, unless they have the idea of selling it for a marked-up price later.

Let's imagine a child playing with his toys and none of these can be used for hammering purposes. I can say that the child values his toys, and does not value any hammer even if his dad happens to own one and leaves it on the floor near the toys.

It's not a resource for Bitcoin, at least not one inherent to Bitcoin. Nearly all of those computers have been repurposed to mine Bitcoins and they can, with little or no change, be used for other purposes.

No, those are not components of the Bitcoin network of computers, at least in that when the day of the 21 million bitcoins arrive, the mining devices become useless for mining purposes and the network can continue to function as now.

No, it's quite material. Understanding that Bitcoin lacks any inherent value and is backed by no indirect resources other than a consensus of opinion among a small set of investors is crucial to understanding the risks involved with the currency. Again, you can't agree that investment in Bitcoin is risky without understanding this fact. Otherwise, what makes it a risky investment? It's not like a company's stock, which is linked to how well the company performs. Bitcoins can't underperform or overperform.

I will not argue any more the point that any investment theoretically has no floor--you can lose all your investment or speculation funds. And again yes Bitcoin is rather risky.

It certainly can be and, apart from more compelling explanations, I'm inclined to believe it is the primary explanation.

Let's quit this point here, I do not want to argue that any more.

Gold's turbulent market swings can be similarly explained: when fear rules the market, gold develops a bubble.

No, a bubble starts when people get greedy. To be sure, there is the fear that the train is leaving the station without you. Hmmm maybe that's what you meant? I don't think so.

When the market stabilizes, the bubble bursts.

No, it's the beginning of when people are made to see they have gotten greedy.

Well, a good many people make very good livings explaining why the Dow goes up or Nasdaq goes down on a given day. Indeed, just listening to "Marketplace" on NPR will give the layperson a quick rundown of market forces driving the exchanges.

All too true. Let me warn you, you're wasting time listening to such trivia.

I don't understand, they would not speculate in them unless they WERE interested? I would advise that the more experience in speculation coupled with reading the best art-of-speculation books, the better.

[nico]

I have mixed feelings about bitcoin. First, it is now showing signs of a serious bubble. You can deny it all you want but there is a huge bitcoin frenzy going on right now. Have you seen the prices of the HD 7950? I bought one for $160 after $20 rebate in August of last year. Now they're over $450.00. The bitcoin mining market has exploded and many individuals have invested in ridiculously huge operations to get in on the cash flow. I'd be more inclined to take part of the prices weren't so high and wildly erratic. Many developers are in a race to create the best number crunching machine used solely for the purpose of hashing. I think it's a false gold rush.

Next, precious metals will always have high barter value. However, we and every other developed country in the world runs on fiat currency. Our fake dollars are supported entirely on faith in the American economy. The whole point of bitcoin is to stick it to the man and operate contrary to our centralized currency which the Fed dictates without law and without congressional oversight. It's decentralized and governed by pure capitalism. Zero regulation, all market currency as opposed to the Fed's complete regulation, manipulative market currency.

I like the idea of bitcoin because I don't like the Fed. But I think that might be the only reason, really.