Bitcoin

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Bitcoin

What does anyone know about this form of computer currency? It seems to be out there enough to be something, but I'm not sure what. What is the point? We have a local merchant offering to trade in bitcoin, which I guess is more for the publicity at this point. Moment to moment it fluxuates in value but the trend is to lower values. Why is this a good or useful thing?

Watson
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Re: Bitcoin

Watson wrote:What is the point?

Cutting the middleman!
Venus

Re: Bitcoin

How so? Yesterday a bitcoin was in the $845+USD range. Now it is about$820 USD and falling. Tomorrow it could be down by more or up. It seems you are not cutting the middleman, but more playing the consumer market, buying in low and hoping to spend it high.

Watson
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Re: Bitcoin

With the USD less than $800 and trending down. Assuming there is value in such a currency, who determines what that value is. Was$8 or 9 hundred an arbitrary wishful thinking value? Without the concrete standard of something to compare it to, like gold, we are left to find the value of consumer confidence. Who set this at any price? Based on what?

I expect a $5.00 bitcoin by the end of May, 2014. Then we'll have something to invest in. Watson Resident Member Posts: 4609 Joined: 19 Apr 2009 Location: Earth, middle of the top half, but only briefly each 24 hours. Re: Bitcoin Watson wrote:With the USD less than$800 and trending down. Assuming there is value in such a currency, who determines what that value is. Was $8 or 9 hundred an arbitrary wishful thinking value? Without the concrete standard of something to compare it to, like gold, we are left to find the value of consumer confidence. Who set this at any price? Based on what? I expect a$5.00 bitcoin by the end of May, 2014. Then we'll have something to invest in.

It is primarily not designed as an investment vehicle. The primary idea is to use it as an alternative currency. If, and that is a big if, bitcoins become mainstream it is possible it even becomes more stable than regular currency. I think the volatility is due because of the uncertainty about the future of bitcoins in a negative but also in a positive sense.
Venus

Re: Bitcoin

It's still very much a watch and see but more and more big companies are now embracing it as a legitimate form of payment and a safe trading currency. I suspect we're just seeing the tip of a monstrous iceberg and I'm curious to see how the major banks will respond. My guess is that leaning on governments to impose regulatory constraints will be their first line of attack but naturally they won't allow such regulatory constraints for themselves. They are self-regulating and thus beyond reproach.

Regards Leo
Obvious Leo

It seems to be established only in countries that have computers and internet. But it does have a uniform presence based on the USD (now at $793) , in Canada, Britain and Europe. And other counties, but these are the ones I'm following at the moment. Watson Resident Member Posts: 4609 Joined: 19 Apr 2009 Location: Earth, middle of the top half, but only briefly each 24 hours. Re: Bitcoin Short video on what it is? http://vimeo.com/63502573 Watson Resident Member Posts: 4609 Joined: 19 Apr 2009 Location: Earth, middle of the top half, but only briefly each 24 hours. Re: Bitcoin Watson wrote:Assuming there is value in such a currency, who determines what that value is. Was$8 or 9 hundred an arbitrary wishful thinking value? Without the concrete standard of something to compare it to, like gold, we are left to find the value of consumer confidence. Who set this at any price? Based on what?

Bitcoins are traded in a market like stocks are. Their value is literally whatever people are buying/selling them for. Here's a table of historical Bitcoin values.

For examples, I'd check out BitcoinCharts.com. The "Bid" and "Ask" columns show the values that people are currently willing to buy and sell at, respectively. A bitcoin's value on that market is somewhere in-between.

Right now it looks like Mt. Gox has people buying Bitcoins for 919.01002 USD each and selling them at 919.9 USD each, so they're worth somewhere between $919 and$920.

You can click on Mt. Gox's USD entry to get to this page showing the bid vs. ask distributions in the Market Depth charts toward at the bottom. Note that bid and ask distributions can't overlap, because if they ever did, transactions would occur until they ceased to overlap.
Natural ChemE
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Interesting, I have a real time http://preev.com/ market value of $800 +/- or that's what the claim is. I've been researching it and it is an interesting thing. I'm not sure what the thing is. Watson Resident Member Posts: 4609 Joined: 19 Apr 2009 Location: Earth, middle of the top half, but only briefly each 24 hours. Re: Bitcoin Watson, Preev.com claims that they use an average of several Bitcoin markets. Their current claim of $812\frac{\text{USD}}{\text{Bitcoin}}$ is pretty close to BitcoinCharts.com's listing for the 30-day average price on the largest Bitcoin market, Bitstamp, currently at $812.27\frac{\text{USD}}{\text{Bitcoin}}$. My guess is that they're probably doing a volume-weighted average of the top markets' current values and then rounding. Natural ChemE Forum Moderator Posts: 2744 Joined: 28 Dec 2009 Re: Bitcoin If you want to get one - maybe go to http://www.coinbase.com -- I think their utility will be expanding but one of the initial goals of bitcoins was to create a system the you can exchange currencies cheaply. SciameriKen Forum Moderator Posts: 1439 Joined: 30 Aug 2005 Location: Buffalo, NY Re: Bitcoin I have been watching the US$ value and it was down at about $800 then 36 hours ago, or so, it reached almost$900, but now it is back down at $765. That is a lot of play over the coarse of a few days. Watson Resident Member Posts: 4609 Joined: 19 Apr 2009 Location: Earth, middle of the top half, but only briefly each 24 hours. Re: Bitcoin Does this kind of currency, when used in a transaction, get around sales taxes? Interesting that something called a "coin" is worth$800. My only numismatic thought is that the U.S. penny has become ridiculous (paper dollar bills, too). Actually costs over a penny to mint one now. A nuisance coin - just round up or down on prices.

TheVat

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Re: Bitcoin

I don't think it gets around taxes any more than other forms of payment. It does avoid high bank charge card fees, or wire transfer fees.

Watson
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Re: Bitcoin

Watson wrote:I don't think it gets around taxes any more than other forms of payment. It does avoid high bank charge card fees, or wire transfer fees.

Sure for now it does, but once the bonus happy 'Doing God's work' folks gets into it it is going to be just like any other financial institution.
Venus

Re: Bitcoin

Why wouldn't Bitcoin sales be taxed?

I'd guess that if you went to Overstock.com and tried to buy $1,000 worth of stuff in Bitcoin then Overstock.com would: 1. Start with the$1,000 bill.
3. Convert the price to Bitcoins using the current Bitcoin exchange rate.
4. Charge the buyer that many Bitcoins.
5. Exchange the Bitcoins for USD via some Bitcoin market.
6. Declare the sales in terms of USD in their financial reports.
7. Pay sales tax on sales made in Bitcoin in USD.
Granted that, in practice, Bitcoin sales probably aren't taxed most of the time since they're
1. often under-the-table, and
2. always online.
Natural ChemE
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Re: Bitcoin

Very cynical Venus, but from what I've learned so far that is not likely going to be the case, being the same as the others, that is.

And the merchant would ring up your total, including taxes and you pay that amount. How you pay makes little difference how the tax is handled. At the end of the day the merchant just adds up the cash on hand, credit receipts and bitcoin and deposits each accordingly.

Hotels and stores often post an exchange rate if their cliental is likely to carry foreign currency. They could possibly post a bitcoin daily rate of exchange.

Watson
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Re: Bitcoin

Watson wrote:Very cynical Venus, but from what I've learned so far that is not likely going to be the case, being the same as the others, that is.

Not cynical, realistic.

This is more or less what I expect is going to happen when it gains more momentum:

1. Bankers start to lobby politicians.
2. Politicians suddenly become 'shocked' that bitcoins are used for drug transactions.
3. The press starts to print worrying articles.
4. Suddenly the DHS 'discovers' that bitcoins are used by terrorists.
5. President gets involved, the press, the TV, 'something' must be done!
6. Another 'patriot' bill is passed to regulate and integrate bitcoins in the banking world.
7. Goldman Sachs and cohorts buyout the major players using free Bernanke money.
8. A couple of people are rich now and show off their money, 'wow bitcoins are great'!
9. Case closed, the bankers own this thing now and can basically do whatever they want with it.
Venus

Re: Bitcoin

Preev.com lists Bitcoin at about $670\frac{\text{USD}}{\text{Bitcoin}}$ at the moment. Does seem to have dipped a lot lately.

This news seems to be breaking: Silk Road 2 loses $2.7m in bitcoins in alleged hack, BBC News. However it sounds like the Silk Road 2, like the original Silk Road, is mostly into illegal stuff. Natural ChemE Forum Moderator Posts: 2744 Joined: 28 Dec 2009 Re: Bitcoin Yes it was down by more but has come up a bit. Definitely sounds like a risky place to hold your money. Especially if the banker is not responsible for the loses. So someone steals all these bitcoins, exposing a vulnerability in the system. People lose confidence in the currency and the value drops. Now no body wants them, making the stolen money hard to exchange for real money. So they stole something of value and in doing so, they rendered their prize near worthless. Watson Resident Member Posts: 4609 Joined: 19 Apr 2009 Location: Earth, middle of the top half, but only briefly each 24 hours. Re: Bitcoin I have found this news story about Bitcoin that you may find interesting, Watson: Bitcoin: Be prepared for the rise of digital currency, adopters say CBC News, February 15, 2014 http://www.cbc.ca/news/canada/hamilton/ ... -1.2537391 weakmagneto Active Member Posts: 1380 Joined: 23 Feb 2012 Blog: View Blog (6) Re: Bitcoin Or maybe not so much....... http://www.nytimes.com/2014/02/25/busin ... .html?_r=0 MtCox, the largest trader is closed for a few reasons and the value in dropping like a bitcoin off a cliff. Down to about$500 from about $1200. Watson Resident Member Posts: 4609 Joined: 19 Apr 2009 Location: Earth, middle of the top half, but only briefly each 24 hours. Re: Bitcoin I wonder Watson have you come to a conclusion about the Bitcoin? What is is designed for? I hope you understand now that it was designed not for speculation but as an alternative form of money to trade for goods and services. Venus Re: Bitcoin No I have no opinion or conclusion about original intent, or ultimate best uses. I am just following it with a casual interest. I gather it was not intended as an alternate form of money, but as an alternate to credit cards. I'm not watching it for speculative value. I'm watching to see if there is a stable value. As a form of money to buy goods and services, it looks risky. Imagine going to your bitbank and getting a$600 coin out, and the next day you go shopping and fine your bitcoin is worth $500? It may not have been design for speculation, but at this point that is the only value it does seem to have. Watson Resident Member Posts: 4609 Joined: 19 Apr 2009 Location: Earth, middle of the top half, but only briefly each 24 hours. Re: Bitcoin Watson wrote:I gather it was not intended as an alternate form of money, but as an alternate to credit cards. .... .... It may not have been design for speculation, but at this point that is the only value it does seem to have. Sorry, but I think you still do not understand what bitcoins are and how they are currently used. Venus Re: Bitcoin The advantages are to get money to someone immediately, over long distance with low or no fees, instead of say Western Union. Or to use it instead of credit card and avoiding those Heavy fees. Most of us would not be buying into bitcoins, now at$513, knowing they were worth $620 just a day or two ago. What's in your wallet? So why don't you enlighten us, on the Bitcoin, according to Venus. Watson Resident Member Posts: 4609 Joined: 19 Apr 2009 Location: Earth, middle of the top half, but only briefly each 24 hours. Re: Bitcoin Watson wrote:So why don't you enlighten us, on the Bitcoin, according to Venus. I already told you many posts ago what it was, apparently that zapped right over your head. It is ironic, you opened a posting asking what it was, you got an answer but you did not do anything with it and then first you criticize the speculative aspects and later on you did not talk about anything else than the speculative aspects as if that was the whole points of bitcoins. And no for the second time, it is not like a credit card, and yes people use it and no it is not primarily designed for speculation purposes. It's OK, I am sure you will get it in a few years ;) Venus Re: Bitcoin Lovely chatting with you Venus, but look at the time.... Watson Resident Member Posts: 4609 Joined: 19 Apr 2009 Location: Earth, middle of the top half, but only briefly each 24 hours. Re: Bitcoin If you had gone to the local bitbank yesterday and got a coin for$513, you would be pleased no doubt to see it is now \$570 in your e-wallet. Just a cool almost 10% appreciation in just 24 hours. Could easily go the other way in equally dramatic fashion.

Watson
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