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The Bitcoin (BTC) thread
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pheonix500000 Offline
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Post: #451
RE: Bitcoins up 60% in less than a month
(11-28-2013 05:44 PM)Sugar Wrote:  I'd rather have $7 billion US than every bitcoin in existence.

Dude lets be real here, with only ONE billion dollars you could make almost anything you want come true. look at the dude they had here recently that inherited 100mil from family, he's living the dream.
11-28-2013 06:46 PM
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JayJuanGee Offline
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Post: #452
RE: Bitcoins up 60% in less than a month
(11-28-2013 04:18 PM)Bricks Wrote:  BTC-E is a nightmare to get your money into. That is the reason for the price differential in my opinion.

Some really good arbitrage opportunity's there if you can get cash in.

Maybe BTC - E is better, once a guy has acquired some Bitcoins or other alt coins from some other means?


NO ONE has answered my question, yet.

Do you guys just wire the money from your bank into BTC - e through one of those services? B/c, if that is the case, then I will have to look at the fees for wiring at each leg... It seems that if a guy suffers various fees and delays, then calculates how much it has cost him to buy the Bitcoins, then by then it may NOT be worth it to attempt to sell the bitcoin at a higher rate through another service. The disparities in prices look like great opportunities for guys already plugged in (and that may be part of the explanation for the high volume of trading).


(11-28-2013 06:46 PM)pheonix500000 Wrote:  
(11-28-2013 05:44 PM)Sugar Wrote:  I'd rather have $7 billion US than every bitcoin in existence.

Dude lets be real here, with only ONE billion dollars you could make almost anything you want come true. look at the dude they had here recently that inherited 100mil from family, he's living the dream.

Even 5 million would make most guys considerably happy, if he knows how to live off of passive income and to live within his means. Even with conservative estimates, 5million would give a $12,000 per month passive income, without even touching the principle.
(This post was last modified: 11-28-2013 07:34 PM by JayJuanGee.)
11-28-2013 07:27 PM
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pants Offline
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Post: #453
RE: Bitcoins up 60% in less than a month
I bought bitcoin on localbitcoins, then I deposit bitcoin into BTC-e to buy alt-coins.
11-28-2013 07:42 PM
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Bricks Offline
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Post: #454
RE: Bitcoins up 60% in less than a month
(11-28-2013 07:42 PM)pants Wrote:  I bought bitcoin on localbitcoins, then I deposit bitcoin into BTC-e to buy alt-coins.

x2 for this
11-28-2013 08:28 PM
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JayJuanGee Offline
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Post: #455
RE: Bitcoins up 60% in less than a month
(11-28-2013 07:42 PM)pants Wrote:  I bought bitcoin on localbitcoins, then I deposit bitcoin into BTC-e to buy alt-coins.

Thanks Pants:

I think i understand your route of getting into the various Bitcoin and then alt coin investments.

Accordingly, your potential exit strategy would be to convert your alt coins back into Bitcoins on BTC-e, and then to sell those Bitcoins on localbitcoins or would you go another route for selling?

I think that I would be "in" these various crypto currencies for the long term (but who knows with this rapidly evolving situation), and no matter what a guy has to keep considering his exit strategy.

Accordingly, if the exit strategy gets blocked like the Dwolla exit did get blocked in May 2013, then a guy has to plan another exit strategy, no?

I have looked over localbitcoins, and it looks as if localbitcoin options are going to vary for guys depending upon where they live? However, since I am in Los Angeles, there are quite a few options for me. Maybe some RVF guy will end up selling me his coins.. ? hehehehe
11-28-2013 08:41 PM
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Satoshi Offline
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Post: #456
RE: Bitcoins up 60% in less than a month
(11-28-2013 08:41 PM)JayJuanGee Wrote:  I have looked over localbitcoins, and it looks as if localbitcoin options are going to vary for guys depending upon where they live? However, since I am in Los Angeles, there are quite a few options for me. Maybe some RVF guy will end up selling me his coins.. ? hehehehe

If there was an easy way for you to send me your dollars I could send you some now. However sending dollars and other fiat currency around the world is not easy or cheap. That's one of the advantage with bitcoins. You could send them wherever you want whenever you want. That's why all the exchange got so different prices. Some exchange is slow to get the dollars in, but getting them out is easier then some other exchange to that will give a lower price. As for mtgox who has been the biggest exchange holding 80% of the market in March but now that number is only round 25%. In mtgox there is problems to get the money out from the exchange, that gives a higher prices since no one wants to sell there bitcoins for dollars that you can't get out. Mtgox is based in Japan and that gives this problems to get the money out. I'm not 100% sure but I think the US banks is creating the problem. In localbitcoins you do the trade straight away cash for bitcoins or the other way around. Find someone with good rating and good price and meet in a safe public place, that would be the easiest way to buy bitcoins asap. The price varies on diffrent dealers on localbitcoins since they take different fee/profit.

By the way one government owned chaina telecom operator just started to accept them. Not to pay the bills but to buy new phones. Anyone in Vancover can buy them in a ATM there and more of this ATMs are shipping. All the latest new have been good.

Ignore the chatbox on BTC-e. Of course as bitcoin gets a higher value the other cryptos will as well.
11-29-2013 03:51 AM
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HD668B Offline
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Post: #457
RE: Bitcoins up 60% in less than a month
I'm a pro trader, I do this for a living.

And I love the idea of bitcoins. But in reality it's not working.

Peter Schiff explains exactly my point:



(This post was last modified: 11-29-2013 05:02 AM by HD668B.)
11-29-2013 05:01 AM
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Fathom Offline
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Post: #458
RE: Bitcoins up 60% in less than a month
Need some help. I signed up for Vault of Satoshi and went through the verification process, but giving them money is way too much of a hassle. They have three ways. One is deposit cash in a Bank of Montreal branch, which is out for me 'cause I'm not in Canada. Second is wire transfer, for which they'll charge me $15. Third is certified check, for which my bank will charge me $10.

Are there no other more convenient ways to buy cryptocurrency, or is everyone dealing with these fees? If there is no better way, I'll go ahead and do a certified check.

AB ANTIQUO, AB AETERNO
11-29-2013 12:03 PM
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Tex Pro Offline
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Post: #459
RE: Bitcoins up 60% in less than a month
(11-29-2013 05:01 AM)LÉtranger Wrote:  I'm a pro trader, I do this for a living.

And I love the idea of bitcoins. But in reality it's not working.

Peter Schiff explains exactly my point:




How is it not working?

And Schiff gets destroyed in the comments to that video.
11-29-2013 12:15 PM
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JayJuanGee Offline
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Post: #460
RE: Bitcoins up 60% in less than a month
(11-29-2013 12:03 PM)Fathom Wrote:  Need some help. I signed up for Vault of Satoshi and went through the verification process, but giving them money is way too much of a hassle. They have three ways. One is deposit cash in a Bank of Montreal branch, which is out for me 'cause I'm not in Canada. Second is wire transfer, for which they'll charge me $15. Third is certified check, for which my bank will charge me $10.

Are there no other more convenient ways to buy cryptocurrency, or is everyone dealing with these fees? If there is no better way, I'll go ahead and do a certified check.

Actually a flat fee of $15 would NOT be bad, especially, if a guy were going to make a high volume transaction, such as $3,000 or more. For example, if the transaction is $3000, then that is .5%, which is NOT bad.

Certainly, a flat fee creates an incentive to do fewer transactions with higher lump sums, and a set percentage creates an incentive for frequent smaller transactions.



(11-29-2013 12:15 PM)The Texas Prophet Wrote:  
(11-29-2013 05:01 AM)LÉtranger Wrote:  I'm a pro trader, I do this for a living.

And I love the idea of bitcoins. But in reality it's not working.

Peter Schiff explains exactly my point:

How is it not working?

And Schiff gets destroyed in the comments to that video.



Personally, I do NOT see that Schiff is destroyed in the comment section of the video. I think that a lot of smart people are having difficulties predicting where these crypto currencies are going and whether they will crash.

Accordingly there are a lot of arguments for and against, and Schiff makes a lot of good arguments that likely play into mainstream fears.

Surely, when Bitcoins are hyped and while various crypto currencies are going up and while they seems technically and logically feasible to be the next best thing(s), since sliced bread, a lot of people are excited and optimistic.

I'm working on getting in (even at what seems to be a late date); however, I am considering these various currencies and investment options and cashing out to be technically very confusing and burdensome. In spite of these various technical difficulties, confusion and burdens, the price is still rising - and mostly only geeks have figured it out - and even then, probably half of the geeks, such as me (i'm probably a quasi-geek), are confused.

Likely we need to admit that a lot of us are investing in these crypto currencies on faith that this investment and cashing out process will become easier once various additional aspects of these crypto currencies go mainstream... actually, we are hoping, praying and gambling that they will go mainstream, rather than being shut down by regulation and/or governmental / mainstream corporate interference.
11-29-2013 01:13 PM
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Satoshi Offline
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Post: #461
RE: Bitcoins up 60% in less than a month
(11-29-2013 01:13 PM)JayJuanGee Wrote:  Personally, I do NOT see that Schiff is destroyed in the comment section of the video. I think that a lot of smart people are having difficulties predicting where these crypto currencies are going and whether they will crash.

Accordingly there are a lot of arguments for and against, and Schiff makes a lot of good arguments that likely play into mainstream fears.

Surely, when Bitcoins are hyped and while various crypto currencies are going up and while they seems technically and logically feasible to be the next best thing(s), since sliced bread, a lot of people are excited and optimistic.

I'm working on getting in (even at what seems to be a late date); however, I am considering these various currencies and investment options and cashing out to be technically very confusing and burdensome. In spite of these various technical difficulties, confusion and burdens, the price is still rising - and mostly only geeks have figured it out - and even then, probably half of the geeks, such as me (i'm probably a quasi-geek), are confused.

Likely we need to admit that a lot of us are investing in these crypto currencies on faith that this investment and cashing out process will become easier once various additional aspects of these crypto currencies go mainstream... actually, we are hoping, praying and gambling that they will go mainstream, rather than being shut down by regulation and/or governmental / mainstream corporate interference.

Other cryptos grows because bitcoin does. If the bitcoin price goes up 20-100times there is a lot of value there. People find it it be a good idea to but one or two procent into other cryptos as a longshot. Have a look here and look at the market cap: http://www.cryptocoincharts.info/v2/coins/info
Market cap for bitcoin is 14.000.000.000$. Litecoin is the next biggest at 890.000.000$. That is a huge difference. Bitcoins price is built on speculations, and the same goes for the other crypto coins.

The difficulty to get money in and out is because of banks and governments putting restrictions. Nothing else.
11-29-2013 01:35 PM
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Fathom Offline
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Post: #462
RE: Bitcoins up 60% in less than a month
(11-29-2013 01:13 PM)JayJuanGee Wrote:  
(11-29-2013 12:03 PM)Fathom Wrote:  Need some help. I signed up for Vault of Satoshi and went through the verification process, but giving them money is way too much of a hassle. They have three ways. One is deposit cash in a Bank of Montreal branch, which is out for me 'cause I'm not in Canada. Second is wire transfer, for which they'll charge me $15. Third is certified check, for which my bank will charge me $10.

Are there no other more convenient ways to buy cryptocurrency, or is everyone dealing with these fees? If there is no better way, I'll go ahead and do a certified check.

Actually a flat fee of $15 would NOT be bad, especially, if a guy were going to make a high volume transaction, such as $3,000 or more. For example, if the transaction is $3000, then that is .5%, which is NOT bad.

Thanks for helping out the new guy. I've gone with certified check, only cost me a $10 fee from my bank. Buying PeerCoin with a few bucks I can afford to lose.

AB ANTIQUO, AB AETERNO
11-29-2013 03:02 PM
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JayJuanGee Offline
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Post: #463
RE: Bitcoins up 60% in less than a month
(11-29-2013 03:02 PM)Fathom Wrote:  
(11-29-2013 01:13 PM)JayJuanGee Wrote:  
(11-29-2013 12:03 PM)Fathom Wrote:  Need some help. I signed up for Vault of Satoshi and went through the verification process, but giving them money is way too much of a hassle. They have three ways. One is deposit cash in a Bank of Montreal branch, which is out for me 'cause I'm not in Canada. Second is wire transfer, for which they'll charge me $15. Third is certified check, for which my bank will charge me $10.

Are there no other more convenient ways to buy cryptocurrency, or is everyone dealing with these fees? If there is no better way, I'll go ahead and do a certified check.

Actually a flat fee of $15 would NOT be bad, especially, if a guy were going to make a high volume transaction, such as $3,000 or more. For example, if the transaction is $3000, then that is .5%, which is NOT bad.

Thanks for helping out the new guy. I've gone with certified check, only cost me a $10 fee from my bank. Buying PeerCoin with a few bucks I can afford to lose.


I'm new too - at least to the various maneuverings of the crypto-currency world. Smile

I was thinking about wire transfer b/c of the convenience factor - unless the certified check has the same effect - that it arrives in the same amount of time.

Actually, if I were able to get prices like those, then I would be inclined to make bulk investments into BTC-e; however, so far I have NOT been able to figure out the fees associated with various transaction options.

(11-28-2013 01:34 PM)JayJuanGee Wrote:  How are you guys funding your BTC-E account?

The options are:

Interkassa.com
Perfect Money
OKPAY
EgoPay
InternationalWireTransfer
Ecoin
Epese

I imagine that there are different fees with each of these services.



(11-29-2013 03:02 PM)Fathom Wrote:  Buying PeerCoin with a few bucks I can afford to lose.

Fathom: I caution you NOT to let the cost of each coin affect which of the crypto-currencies that you decide to invest - b/c all of them seem to be considerably divisible. So, in that regard, you should be considering the potential upsides to the coin and the risks of the coin, rather than how much each one actually costs.

Ultimately, you may be correct about choosing PeerCoin over others; however, your being right, will NOT be b/c of the price of each coin.. but for some other reason(s) (such as the coin having had been undervalued - I am NOT sure if that is the case with any of these coins... b/c a lot of us are speculating to a considerable degree - for example, one person said that he could NOT imagine PP coin being successful, merely based on the name... which there could be some truth to the public appeal of the name factoring into widespread adoption).
11-29-2013 03:20 PM
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Post: #464
RE: Bitcoins up 60% in less than a month


11-29-2013 05:06 PM
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HD668B Offline
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Post: #465
RE: Bitcoins up 60% in less than a month
(11-29-2013 12:15 PM)The Texas Prophet Wrote:  
(11-29-2013 05:01 AM)LÉtranger Wrote:  I'm a pro trader, I do this for a living.

And I love the idea of bitcoins. But in reality it's not working.

Peter Schiff explains exactly my point:




How is it not working?

And Schiff gets destroyed in the comments to that video.

I repeat I love the idea of bitcoin in theory, but in practice its not working, and let me explain you why.

First, lets look about the practical application.
-People are buying for the wrong reason = speculation. Just look at the title of the thread "bitcoin up 60% for the month". I am not buying gold to become rich, all I want, is to protect my capital. Agaisnt USD devaluation or the recent Euro crisis. If the current western economy goes worst and worst, I dont want loose all my capital because my US, Euro or Japanese Yen bank account is worth nothing.

-Secondly, as I said, I want protect the money I made by my hardwork. But with the current bitcoin volatility, how can I sleep well knowing that everyday, my hard earned money fluctuate 10-20-30% ????

-Thirdly, as Peter said, bitcoin is after all a currency, for people to buy and sell. Again with the high current volatility, you cannot even use it as currency! Let say I want to buy a classic car from somebody by using bitcoin, because it is indeed a safest transaction than just handing over cash or wiring money. Well because of volatility, there is something we call spread, its simply the difference between the price to buy bitcoin (ask) and the price to sell (bid). So if I want make a transaction today, I might have to buy bitcoin at 1300$ because thats what the seller ask. 5 minutes later, when I want send that money to the car seller, he might have to sell that same amount to 1200$, so we just lost almost 10% just by buying and selling!

Now you asked about the video I just posted, wich covers the most important factor in the difference between Gold and Bitcoin = intrinsic value. You see gold as value for itself for many different reasons. Because there is demand for jewelery. For electronic. For chemical reasons. And also because it has historical value, Gold was deemed as valuable for thousand years.

Now where is the bitcoin instrisic value? It is a completly digital invention, its not backed by anything. The only difference with the Dollar, is that there is not a Federal Reserve who can print it freely. So yes its better than the Dollar, but that pretty much ends here.

EDIT: lets not forget about the recent bitcoin troubles :
-Hacking. I can mention dozens of cases where people or business lost all because of a digital security breach. Just google "bitcoin hacked". Or read about Bitcoinca. Or BIPS. Or Tradefortress. Or Bidextreme. Or Bitcash.cz. Or Instawallet. Or Mybitcoin.

-Panic drops: did everybody already forget about the crash that occured in April ? Bitcoin was at 260$, and dropped instantly to a below 80$ after some dude started giving away bitcoins on reddit.
(This post was last modified: 11-30-2013 08:10 AM by HD668B.)
11-30-2013 07:37 AM
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Satoshi Offline
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Post: #466
RE: Bitcoins up 60% in less than a month
(11-30-2013 07:37 AM)LÉtranger Wrote:  Now where is the bitcoin instrisic value? It is a completly digital invention, its not backed by anything. The only difference with the Dollar, is that there is not a Federal Reserve who can print it freely. So yes its better than the Dollar, but that pretty much ends here.

It's better than the dollar so that is enough for most people. It is built on the fact that it never will be more than 21 millions, so it will always have a value. Because its unique like gold. There is other coins out, but it's only copies with modifications.
11-30-2013 10:05 AM
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Ensam Offline
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Post: #467
RE: Bitcoins up 60% in less than a month
The problem is that until you can pay your taxes in bitcoins you'll always have to convert a portion of your transactions in bitcoins to dollars to pay local taxes. Also any court judgements will be denominated in the local currency. As others have pointed out the volatility of bitcoins means that even if both parties are willing to conduct the exchange entirely in bitcoins at least one party is going to be taking a currency risk when they convert bitcoins to sovereign currency in order to pay taxes.
11-30-2013 10:20 AM
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Fathom Offline
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Post: #468
RE: Bitcoins up 60% in less than a month
(11-29-2013 03:20 PM)JayJuanGee Wrote:  Fathom: I caution you NOT to let the cost of each coin affect which of the crypto-currencies that you decide to invest - b/c all of them seem to be considerably divisible.

Thanks for that mental correction, JJG, I hadn't thought of that. I think I'll put most of the money in Bitcoin and leave a small percentage to play around with.

AB ANTIQUO, AB AETERNO
11-30-2013 12:26 PM
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reaper23 Offline
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Post: #469
RE: Bitcoins up 60% in less than a month
in order to conduct real transactions you'll need a hedging intermediary to facilitate the transaction it seems. once you agree on a price you have certain time period to conduct the transaction and the hedger takes the vol risk for a fee.

i bought something this way however and it didnt work out for me

after i received the shipment i disputed it and my money was returned. except what was returned was equivalent USD of the purchase price not absolute BTC. at current levels that works out to a $1900 discrepancy.
11-30-2013 12:54 PM
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phoenix101 Offline
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Post: #470
RE: Bitcoins up 60% in less than a month
(11-30-2013 10:05 AM)friheten Wrote:  It's better than the dollar so that is enough for most people. It is built on the fact that it never will be more than 21 millions, so it will always have a value. Because its unique like gold. There is other coins out, but it's only copies with modifications.

USD is also "backed" by natural resources and (taxing powers over) a massive, productive workforce. BitCoin in it's current incarnation to me seems to be the tulip craze for our time.

[Image: 280px-Tulip_price_index1.svg.png]
(This post was last modified: 11-30-2013 01:28 PM by phoenix101.)
11-30-2013 01:26 PM
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Tex Pro Offline
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RE: Bitcoins up 60% in less than a month
For the sake of fairness, I will mention some problems with bitcoin:

-If it succeeds, it will be used to store wealth (think digital gold), buy expensive items & transfer large amounts of money -- not as a daily currency. The reason for this is that bitcoin has a scalability issue. Currently only 7 transactions a second can be processed by the bitcoin network. This obviously could not carry worldwide trade, or even the trade for the USA at peak usage. The solution around this is the creation of "super nodes", but this comes with its own problems. Super nodes would charge a premium fee to process transactions quickly and would have some monopoly power of the network. Satoshi Nakamoto (the architect of bitcoin) warned that in order for bitcoin network to work, it needed to be distributed in its processing power or else one powerful and dishonest node could mess things up.

-What are the major holders of bitcoin going to do with their holdings? There currently are early adopters who hold more than 100,000 bitcoins. If even one of them tried to liquidate all of his or her bitcoins, the price of bitcoin on the exchanges would plunge. So far, we haven't seen this happen because everyone is expecting their price to shoot way up, but who knows. If the price of bitcoin stays flat for a long period of time, it could spook the major holders of bitcoin to try and liquidate their entire holdings of bitcoin, sending the price of bitcoin spiraling downward.

-The price of bitcoin is manipulated to a certain extent. What the general public doesn't know is that the exchanges for bitcoin have limits on how much money and/or bitcoins you can withdrawl from the exchanges on a given day. Furthermore, certain exchanges, like Mt.Gox, have been reluctant to allow withdrawls of money from their exchange due to insufficient funds or fear of a "run on the exchange." Also, major holders of bitcoin are probably pumping the price up by bidding up the price on certain exchanges to encourage the idea the bitcoin can only go up in value.

-How will taxation and regulation of bitcoin work? Currently there is very little guidance on how taxes in bitcoin will work. Are they considered capital gains or regular income? What documentation will need to be provided for tax purposes? Etc, etc, etc. Also, reporting requirements and other financial regs are non-existent. If bitcoin succeeds, then there will be a rush to find ways to prevent tax evasion and money laundering, and I am not sure how this will affect the price of bitcoin since the whole allure of bitcoin is that is is an a crypto-currency.

-The transactions on bitcoin are not as difficult to track as some people think. The blockchain is public and so the flow of transactions in bitcoin are not that hard to track. This could pose problems if a government decides to go after bitcoin. The good news is there are ways to "wash bitcoins" and make them harder to track, but the knowledge of this is not widespread and requires some level of tech savvy.

-There needs to be much more security for bitcoin wallets in order for it to have mass appeal. There already are computer viruses that exist that will hack you computer and send the bitcoins in your wallet to another address (the hacker's). Iris scan technology, fingerprint technology, voice recognition technology, second factor authorization in order to transfer bitcoins out of a wallet, etc need to be made in order provide a high level of safety that bitcoins are not stolen by hackers. If bitcoin becomes much more popular, I am sure that entrepreneurs will design much more secure wallet and storage options for bitcoin, but for now this is lacking.
(This post was last modified: 11-30-2013 01:31 PM by Tex Pro.)
11-30-2013 01:28 PM
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JayJuanGee Offline
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Post: #472
RE: Bitcoins up 60% in less than a month

Texas Prophet:

It was nice to see the second video, in which Schiff had to bounce his ideas off someone who is also very intelligent and articulate about the speculation subject. Even though neither of them claim to be very technically sophisticated, their discussion highlights various mainstream fears. The public can only handle so much technicality, anyhow. BTW - it seems to me that Molyneux had many better and more sophisticated arguments as compared with Schiff – because in essence Molyneux was able to articulate the grey areas about this, and Schiff seemed to be advocating in a more black and white manner – like he wants to be right. Sure, Schiff is smart, but frequently these kinds of market speculations are NOT black and white. Schiff seems like a smart enough guy, and I wonder if he may be investing a little on the side in Bitcoin? He talks as if he is NOT, even though since he argues so intensively, he seems knowledgeable enough that he should invest at least a little.


(11-30-2013 07:37 AM)LÉtranger Wrote:  I repeat I love the idea of bitcoin in theory, but in practice its not working, and let me explain you why.

L’Etranger:
I am going to go through several of your points – NOT to argue with you, but to highlight areas in which it seems to me that you are being too NEGATIVE – in a sort of absolutist way, and really you probably could concede that NONE of us really know where this is going or the future of Bitcoin or other cryptocurrencies.

Case in point. You keep saying that Bitcoin is NOT working – and that language is just TOO strong for the situation. Surely, Bitcoin is a very young concept / investment – but to assert that it is NOT working – takes away from your claims. Maybe you really mean that you want to state that you have a lot of problems with it and that you want to predict its downfall, which is probably more accurate description of what you are saying. At this point, it is very difficult for anybody to claim either that Bitcoin is or is NOT working, and likely the more persuasive arguments is that Bitcoin IS working because a lot of people are getting rich – and it is funny that the fraud and corruption claims have NOT been more widely spread – especially given the amount of money and/or profits involved.




(11-30-2013 07:37 AM)LÉtranger Wrote:  First, lets look about the practical application.
-People are buying for the wrong reason = speculation. Just look at the title of the thread "bitcoin up 60% for the month". I am not buying gold to become rich, all I want, is to protect my capital. Agaisnt USD devaluation or the recent Euro crisis. If the current western economy goes worst and worst, I dont want loose all my capital because my US, Euro or Japanese Yen bank account is worth nothing.

People are buying for both speculation and hedging against these other currencies. I don’t think that this is an all or NOTHING investment because it is very doubtful that any of those other currencies are going to implode all together in a major catastrophe – until various alternatives are present to take their place… and the crypto currency world seems to be allowing for some channeling of that hedging.




(11-30-2013 07:37 AM)LÉtranger Wrote:  -Secondly, as I said, I want protect the money I made by my hardwork. But with the current bitcoin volatility, how can I sleep well knowing that everyday, my hard earned money fluctuate 10-20-30% ????
I think that this kind of volatility is more stressful when a guy is NOT sufficiently diversified in his investments. NO ONE should invest too much of his assets into volatile assets – unless he wants to go crazy or unless he is especially tolerate of extreme risk. Sometimes if a guy does NOT have anything then, he is more willing to put all into volatile assets. My personal strategy is to invest ONLY as much as I am willing to lose in volatile assets – and FEW of us probably can rest assured that we are completely secure or diversified…. And personally, the richer a guy is the more comfortable he can feel about the extent to which he is able to diversify his assets.



(11-30-2013 07:37 AM)LÉtranger Wrote:  -Thirdly, as Peter said, bitcoin is after all a currency, for people to buy and sell. Again with the high current volatility, you cannot even use it as currency! Let say I want to buy a classic car from somebody by using bitcoin, because it is indeed a safest transaction than just handing over cash or wiring money. Well because of volatility, there is something we call spread, its simply the difference between the price to buy bitcoin (ask) and the price to sell (bid). So if I want make a transaction today, I might have to buy bitcoin at 1300$ because thats what the seller ask. 5 minutes later, when I want send that money to the car seller, he might have to sell that same amount to 1200$, so we just lost almost 10% just by buying and selling!

Again, a guy is NOT going to want to deal exclusively in something that is volatile; however, as Bitcoin becomes more stable, it will be easier to deal with it. Certainly there are ways to agree upon how to lock in the price at a given time, and likely one of the parties will feel that he lost when the price is fluctuating so much. All asset classes are somewhat volatile, and certainly a large majority of assets are NOT as volatile as the current state of crypto currencies.





(11-30-2013 07:37 AM)LÉtranger Wrote:  Now you asked about the video I just posted, wich covers the most important factor in the difference between Gold and Bitcoin = intrinsic value. You see gold as value for itself for many different reasons. Because there is demand for jewelery. For electronic. For chemical reasons. And also because it has historical value, Gold was deemed as valuable for thousand years.

Now where is the bitcoin instrisic value? It is a completly digital invention, its not backed by anything. The only difference with the Dollar, is that there is not a Federal Reserve who can print it freely. So yes its better than the Dollar, but that pretty much ends here.

I think this is where the second video above (posted by Texas Prophet) of Schiff and Molyneux illustrates that Schiff is being a bit dogmatic about this intrinsic value question.

First of all Schiff is talking as if we live in a world in which currencies are backed by gold and silver and other tangibles, when in fact world currencies have NOT been backed by gold for about 40 years. Surely, when currencies are drawn into question, then there is some value in their being backed by something. Currently, various world currencies are ONLY backed by the full faith and credit of each of the governments that back their currencies – which also goes to the overall assets within the control of the government, and surely, the US military amongst other factors plays some backing role regarding the US currency.
Second, Molyneux articulated a few intrinsic value aspects of Bitcoin that is NOT possessed by gold or by other government backed currencies, such as open source, transparency, mobility, verification, escrow and a few others. In essences, there are shades of gray in the various intrinsic values of these various currencies (whether crypto or hard currencies), and while we are transitioning between these various asset classes, the extent to which they are valued is going to fluctuate.
Third, you say bitcoin is NOT backed by anything, which is too simplistic. Currently, bitcoin is backed by a bunch of geeks, an open source backbone of scarcity and nearly $14 billion in market cap value (and currently, the 26th largest currency in the world, which certainly is subject to change)




(11-30-2013 07:37 AM)LÉtranger Wrote:  EDIT: lets not forget about the recent bitcoin troubles :
-Hacking. I can mention dozens of cases where people or business lost all because of a digital security breach. Just google "bitcoin hacked". Or read about Bitcoinca. Or BIPS. Or Tradefortress. Or Bidextreme. Or Bitcash.cz. Or Instawallet. Or Mybitcoin.

-Panic drops: did everybody already forget about the crash that occured in April ? Bitcoin was at 260$, and dropped instantly to a below 80$ after some dude started giving away bitcoins on reddit.

These are all good to know and shed light on potential downsides to value, and so far NONE of these troubles have been so severe as to crash the value because this week Bitcoin is still rising (along with almost all of the other 30+ crypto currencies).


(11-30-2013 10:20 AM)Ensam Wrote:  The problem is that until you can pay your taxes in bitcoins you'll always have to convert a portion of your transactions in bitcoins to dollars to pay local taxes. Also any court judgements will be denominated in the local currency. As others have pointed out the volatility of bitcoins means that even if both parties are willing to conduct the exchange entirely in bitcoins at least one party is going to be taking a currency risk when they convert bitcoins to sovereign currency in order to pay taxes.

This transferring back and forth is a transitional issue. At this point, there seems to be NOT a lot of ways to spend Bitcoins, and they are NOT easy to get, either. I find this a very BIG pain in the ass and a big learning curve is fairly steep. These technical and transferring back and forth issues may or may NOT get resolved, but it is NOT necessarily a permanent problem – especially if more Bitcoin payment systems evolve. Govt entities could choose to accept payment by other means, eg. Bitcoin – even though that day is likely far into the future, if it were to take place. It used to be that Govt.s would only take checks, and then converted to online payments, including credit cards, in many cases. Someday, I may be able to pay my parking ticket in bitcoins or my parking meter.. Smile



(11-30-2013 12:26 PM)Fathom Wrote:  
(11-29-2013 03:20 PM)JayJuanGee Wrote:  Fathom: I caution you NOT to let the cost of each coin affect which of the crypto-currencies that you decide to invest - b/c all of them seem to be considerably divisible.

Thanks for that mental correction, JJG, I hadn't thought of that. I think I'll put most of the money in Bitcoin and leave a small percentage to play around with.

I find a lot of this dealing with exchanges and various currencies to be frustrating as fuck to try to figure it out. I ONLY have so much time, and it is moving so fast and it is NOT easy to tread. There may be the ideal world and the practical world of just too difficult to figure it out. I barely have my toe in the door (which is a little over $2000), and I have a little more than 50% in Bitcoin and the other 45% or so spread evenly through 7 other crypto currencies). I am considering continuing $1,000 a week for the next 8 weeks - and possibly longer and hopefully some kind of similar distribution of the investment – but who knows.. At this point, I am just attempting to establish a diversified cryptocurrency portfolio and to learn more about cryptocurrencies along the way. Even at my projected rate, I should only have about $10,000 into crypto currencies by the end of January. I do have more dollars that I could invest, but I am planning to start out in a paced manner. Some people prefer to go all in, but currently, I do NOT have that much confidence in this whole situation, and I would be comfortable (though still a bit upset) with losing all of my investment, if it were to come to that.
(11-30-2013 12:54 PM)reaper23 Wrote:  in order to conduct real transactions you'll need a hedging intermediary to facilitate the transaction it seems. once you agree on a price you have certain time period to conduct the transaction and the hedger takes the vol risk for a fee.

i bought something this way however and it didnt work out for me

Yeah, this is bullshit, and hopefully these kinds of matters get worked out.

I do NOT like the inconvenience of having to plan to meet someone, but with localbitcoins, I found someone that I can meet, and so far, we have agreed to go with whatever is the current price at the time of our meeting. Even though I live in LA and there are a quite a few local buyers and sellers, there is still some inconvenience and scammers and logistical issues.



(11-30-2013 12:54 PM)reaper23 Wrote:  after i received the shipment i disputed it and my money was returned. except what was returned was equivalent USD of the purchase price not absolute BTC. at current levels that works out to a $1900 discrepancy.

I think that this can be even bigger bullshit, yet I think that is part of the explanation why people can get scammed, but legitimate buyers and sellers want to make the transaction fairly quick and irreversible. Hopefully, better systems are going to develop to deal with these problems;however, in the short term, there are probably going to be a lot of scammers because the money is getting really big.


(11-30-2013 01:26 PM)phoenix101 Wrote:  
(11-30-2013 10:05 AM)friheten Wrote:  It's better than the dollar so that is enough for most people. It is built on the fact that it never will be more than 21 millions, so it will always have a value. Because its unique like gold. There is other coins out, but it's only copies with modifications.

USD is also "backed" by natural resources and (taxing powers over) a massive, productive workforce. BitCoin in it's current incarnation to me seems to be the tulip craze for our time.

[Image: 280px-Tulip_price_index1.svg.png]

Phoenix:

I like the graph that you provide, and I agree that you are correct that USD is backed in those various ways. However, Bitcoins and other crypto currencies are much more sophisticated than tulips.
11-30-2013 02:47 PM
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RE: Bitcoins up 60% in less than a month
Who here is mining? Which currency are you mining?
11-30-2013 04:15 PM
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RE: Bitcoins up 60% in less than a month
(11-30-2013 07:37 AM)LÉtranger Wrote:  I repeat I love the idea of bitcoin in theory, but in practice its not working, and let me explain you why.

First, lets look about the practical application.
-People are buying for the wrong reason = speculation. Just look at the title of the thread "bitcoin up 60% for the month". I am not buying gold to become rich, all I want, is to protect my capital. Agaisnt USD devaluation or the recent Euro crisis. If the current western economy goes worst and worst, I dont want loose all my capital because my US, Euro or Japanese Yen bank account is worth nothing.

The price increase can be attributed to speculation. If the spring spike is any indicator of a pattern, it should crash back down to the low hundreds soon. There are end users as indicated by the silk road case. End use probably has been a couple of billion dollars to date.

(11-30-2013 07:37 AM)LÉtranger Wrote:  -Secondly, as I said, I want protect the money I made by my hardwork. But with the current bitcoin volatility, how can I sleep well knowing that everyday, my hard earned money fluctuate 10-20-30% ????

Volatility can be protected through futures. There are already BTC futures markets. Someone needs to build a platform where sellers can lock in their conversion price at the time of sale.

(11-30-2013 07:37 AM)LÉtranger Wrote:  -Thirdly, as Peter said, bitcoin is after all a currency, for people to buy and sell. Again with the high current volatility, you cannot even use it as currency! Let say I want to buy a classic car from somebody by using bitcoin, because it is indeed a safest transaction than just handing over cash or wiring money. Well because of volatility, there is something we call spread, its simply the difference between the price to buy bitcoin (ask) and the price to sell (bid). So if I want make a transaction today, I might have to buy bitcoin at 1300$ because thats what the seller ask. 5 minutes later, when I want send that money to the car seller, he might have to sell that same amount to 1200$, so we just lost almost 10% just by buying and selling!

Futures/insurance is the solution.

(11-30-2013 07:37 AM)LÉtranger Wrote:  Now you asked about the video I just posted, wich covers the most important factor in the difference between Gold and Bitcoin = intrinsic value. You see gold as value for itself for many different reasons. Because there is demand for jewelery. For electronic. For chemical reasons. And also because it has historical value, Gold was deemed as valuable for thousand years.

This puts a price floor on the currency. That is useful if you wish to avoid something becoming worthless. A BTC exchange that supports gold would be desirable in this case. You could just convert to BTC when you needed it.

(11-30-2013 07:37 AM)LÉtranger Wrote:  Now where is the bitcoin instrisic value? It is a completly digital invention, its not backed by anything. The only difference with the Dollar, is that there is not a Federal Reserve who can print it freely. So yes its better than the Dollar, but that pretty much ends here.

The most important part of BTC, besides being deflationary, is that it can be transferred to anyone, anywhere, at anytime with out any barriers. I can write a computer program that sends and receives BTC to pay a bill or do something automatically without any human involvement at all. You can kind of do this now with the existing electronic banking system but in the back it is dependent on humans (and fuck them for not making banks open 24/7/365.)

Of course anyone could fork the BTC source code and have a new currency do the same -- perhaps one backed by gold or USD. There is nothing preventing the existence of thousands of BTC clones.

(11-30-2013 07:37 AM)LÉtranger Wrote:  EDIT: lets not forget about the recent bitcoin troubles :
-Hacking. I can mention dozens of cases where people or business lost all because of a digital security breach. Just google "bitcoin hacked". Or read about Bitcoinca. Or BIPS. Or Tradefortress. Or Bidextreme. Or Bitcash.cz. Or Instawallet. Or Mybitcoin.

-Panic drops: did everybody already forget about the crash that occured in April ? Bitcoin was at 260$, and dropped instantly to a below 80$ after some dude started giving away bitcoins on reddit.

Security is probably the biggest issue of all, assuming there are no flaws in the source code. If you protect your coins with a simple password, they will vanish within under an hour. If you can't practice true PC security then your BTC are always at risk (mobile devices are a whole other area.) Because BTC are so valuable, and the transaction is irrevocable using BTC makes you a target.

The exchanges are even weirder (though there are professionals finally coming in, e.g. coinbase.com.) Its as if a once in an era genius created BTC, and then what followed immediately was dumb people. I actually suspect Mt Gox may be a pyramid scheme, but that is another story..

I have never bought and do not own any BTC. Until recently it was basically a tool for money laundering. Now the US government has figured out it is a perfect paper trail for finding criminals, and I we are seeing more high quality, legitimate companies participating.

Buy it if it crashes hard again.
12-01-2013 10:12 AM
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RE: Bitcoins up 60% in less than a month
(12-01-2013 10:12 AM)babelfish669 Wrote:  Buy it if it crashes hard again.

That didn't take long. Who bought the top?
12-01-2013 03:18 PM
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