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Photographer
Tony Lawrence
Posts: 19,068
Chicago, Illinois, US


Mar 31 13 10:02 am  Link  Quote 
Photographer
Stephen Dawson
Posts: 29,246
Toronto, Ontario, Canada


I wonder who got all the $$$ from the initial float of bitcoins?

And how much money laundering is performed using bitcoins?

I do like the idea, though.
Mar 31 13 10:08 am  Link  Quote 
Photographer
Peter Claver
Posts: 26,657
Toronto, Ontario, Canada


I don't see what the point is. I accept Canadian and American dollars. I don't accept rubles, dinars, drachmas or pounds sterling. Why would I accept bitcoins?
Mar 31 13 10:26 am  Link  Quote 
Photographer
Tony Lawrence
Posts: 19,068
Chicago, Illinois, US


Peter Claver wrote:
I don't see what the point is. I accept Canadian and American dollars. I don't accept rubles, dinars, drachmas or pounds sterling. Why would I accept bitcoins?

There are several advantages.   Did you watch the video?

Mar 31 13 10:33 am  Link  Quote 
Photographer
Peter Claver
Posts: 26,657
Toronto, Ontario, Canada


Tony Lawrence wrote:

There are several advantages.   Did you watch the video?

i did. Don't see the advantages. What good does it do me that offsets the extra work required to accept them?

Mar 31 13 10:51 am  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Stephen Dawson wrote:
And how much money laundering is performed using bitcoins?

For pretty much every less-than legal action using bitcoins, just replace "bitcoin" with "us dollar" or any other currency and ask yourself the same thing. Just to illuminate how non-exceptional bitcoin is in this regard

This isn't aimed at you, I'm just taking advantage of the context.

Exhibit A) Article about money laundering
ask yourself, "How much money laundering is performed with US dollars" as if HSBC didn't just launder 7 billion us dollars

Exhibit B) Article about bitcoin theft raising concerns about viability of bitcoin
ask yourself "How much theft occurs using US dollars"

Exhibit C) Bitcoin Exchange "hacked"
ask yourself "How many times have online banking accounts been hacked" and the answer is that it is a 150 million dollar problem annually in the USA.

Exhibit D) Bitcoin users are buying drugs anonymously
at this point, it should be pretty self explanatory. Do you live in a world wear drug transactions are not taking place by other means?

its all very obvious after putting it out there, but many people never thought about it

Mar 31 13 10:59 am  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Peter Claver wrote:
i did. Don't see the advantages. What good does it do me that offsets the extra work required to accept them?

It takes one minute to be able to accept bitcoins.

Creating a wallet 10 seconds.

https://www.bitaddress.org/

Just remember the address that gets created. When you want to RECEIVE bitcoins from someone, tell them the address (not the private key though)


other advantages over other online payment methods:
1) bitcoin transactions are not reversible, unlike paypal/ebay, credit card transactions
2) in comparison to cash transfers between banks, bitcoins have no settlement time. Bank account transfers between banks (ACH transfers) takes 2-3 business days, and do not happen on non-business days, so with a transactions really take 3-5 days, where bitcoin takes 0. Bank account wire transfers take 1 day, and internationally they make take over a week due to a country's Anti-Money Laundering verifications. And with brokerage accounts cash transactions have an ADDITIONAL three day settlement time. Bitcoin, as of today, can take 2 hours to "confirm" a transaction.

Mar 31 13 11:11 am  Link  Quote 
Photographer
Peter Claver
Posts: 26,657
Toronto, Ontario, Canada


R A V E N D R I V E wrote:

It takes one minute to be able to accept bitcoins.

Creating a wallet 10 seconds.

https://www.bitaddress.org/

Just remember the address that gets created. When you want to RECEIVE bitcoins from someone, tell them the address (not the private key though)


other advantages over other online payment methods:
1) bitcoin transactions are not reversible, unlike paypal/ebay, credit card transactions
2) in comparison to cash transfers between banks, bitcoins have no settlement time. Bank account transfers between banks (ACH transfers) takes 2-3 business days, and do not happen on non-business days, so with a transactions really take 3-5 days, where bitcoin takes 0. Bank account wire transfers take 1 day, and internationally they make take over a week due to a country's Anti-Money Laundering verifications. And with brokerage accounts cash transactions have an ADDITIONAL three day settlement time. Bitcoin, as of today, can take 2 hours to "confirm" a transaction.

1) doesn't seem like much of an advantage to me
2) What about when I want real currency out? How long does it take? How much does it cost?  What other ways can I get money for bitcoins that don't use the very services that you outline above (paypal, bank transfers, etc)?

I can't buy groceries or pay pretty much anything I owe with bitcoins. So they're as useless to me as Kazakhstani tenge.  Seems easier to just take dollars and be done with it.

Mar 31 13 11:57 am  Link  Quote 
Photographer
Digitoxin
Posts: 13,343
Houston, Texas, US


What is the exchange rate back into USD and how is it calculated?

How is the money supply (and I use that term in the economic sense) determined and how does expansions and contractions in local economies effect bit coins, bitcoin inflation or deflation, and exchange rates to other currencies?
Mar 31 13 12:07 pm  Link  Quote 
Photographer
Orca Bay Images
Posts: 32,233
Lodi, California, US


R A V E N D R I V E wrote:
other advantages over other online payment methods:
1) bitcoin transactions are not reversible, unlike paypal/ebay, credit card transactions

How is that an advantage? I like having the possibility of recourse if the transaction goes bad.

Mar 31 13 01:45 pm  Link  Quote 
Photographer
Tony Lawrence
Posts: 19,068
Chicago, Illinois, US


This is very new.   Its not for everyone.   There are pros and cons.   When digital cameras first appeared I told my friends very shorty film was done.   Currently I sell crap on Ebay and I accept Paypal as my method of payment from people.   There is a fee to use PP.   Bitcoin is much cheaper.   https://en.bitcoin.it/wiki/Myths
Mar 31 13 02:06 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Orca Bay Images wrote:
How is that an advantage? I like having the possibility of recourse if the transaction goes bad.

you have the same recourse as with cash.

as a MERCHANT there is absolutely no possibility of frivolous chargebacks, or paypal/cc company siding with a consumer and withdrawing from your account without even contacting you, or freezing your account.

in the current landscape of online payments (ie paypal monopoly), this is very very well timed, as the fraudulent reversals are much more of a problem than any altruistic goal the payment processors ever pretended to have.

Mar 31 13 03:22 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Peter Claver wrote:
1) [not an advantage]
2) What about when I want real currency out? How long does it take? How much does it cost?  What other ways can I get money for bitcoins that don't use the very services that you outline above (paypal, bank transfers, etc)?

I can't buy groceries or pay pretty much anything I owe with bitcoins. So they're as useless to me as Kazakhstani tenge.  Seems easier to just take dollars and be done with it.

1) a payment processor could be developed that did allow for reversing transactions. Bitpay or Bitwallet already insures against the volatile nature of the cryptocurrency. Bitcoin inherently doesn't allow for reversing transactions just like cash doesn't inherently allow for reversing transactions.

2) the most liquid bitcoin exchange MtGox is coming to America, as of, oh last month March. Actually they are moving all their Canadian and North American clients to a new exchange so that they don't have to deal with FATCA regulations.

so this is a developing area.

MtGox was the best and cheapest way to get Bitcoins back to cash electronically in your fiat bank account. It had an arbitrary fixed dollar limit that was annoying (much like paypal etc). Hopefully the US domiciled subsidiary/partner won't have any thing like that.

All other ways on other exchanges just had 1 or 2% fees and varying wait times, and were also services I personally wasn't familiar with and dont know about trust for them. (so if one exchange didn't have the withdrawal method you wanted, you could just transfer your coins to the exchange that did in a very short matter of time)

There is also a rapidly expanding over-the-counter bitcoin exchange market. See https://localbitcoins.com/ In New York City there are plenty of postings of people willing to exchange cash for bitcoins daily. It can be faster for some to get money to the exchagnes that way. Once you have bitcoins in a wallet address you can transfer them to any exchange or anywhere else instantly. So for speculating on cryptocurrencies, cash exchange in person is faster (and less traceable) since the exchange accounts funded with cryptocurrencies (where there was no cash conversion) have no ID verification or anything.



#bitcoin-otc is a rapidly expanding market for people wishing to exchange in bitcoin only. lots of consumer goods there, like craigslist.

http://bitcoin-otc.com/vieworderbook.php



if you find something about bitcoin is illiquid, like you mentioned: buying groceries, then you have just revealed a complete business opportunity that is an open field for the taking if you wanted. Online food and grocery delivery services like Seamless, Delivery.com and Fresh Direct could easily accept bitcoins, where brick and mortar places would have difficulty adapting until a payment processor changed their mind.

blockchain.info shows where transactions are happening.

https://blockchain.info/inv/00000000000 … a7c0e64dba

despite what anyone said about anonymity, all bitcoin transactions are public, lots of information that can be cross referenced. but nobody knows who owns a wallet, and IP addresses can be masked.

Mar 31 13 03:37 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Digitoxin wrote:
What is the exchange rate back into USD and how is it calculated?

How is the money supply (and I use that term in the economic sense) determined and how does expansions and contractions in local economies effect bit coins, bitcoin inflation or deflation, and exchange rates to other currencies?

Right now it is $92/usd purely on supply and demand

up from $33 last month

this is where it gets into the algorithm itself, I'll just start typing and see what happens:

in simplest terms it just comes down to market cap. How many coins exist right now, and how big should the bitcoin economy be with current demand. Right now there are a little over 10 million coins mined, so the market cap is a little over 1 billion usd. (10 million x $92)

If bitcoin is to even pretend to be some alternate currency of global commerce, then its market cap will have to be much greater than 1 billion, and 1 bitcoin will have to in turn be much more expansive than it is today. I'm not going to throw any numbers around but you can do the math.

There are a finite number of bitcoins that can be mined It is 21 million and only 3600 coins can be mined in an interval, the amount of coins that can be mined in that interval also decreases over time, no matter how many miners there are. So although 10 million have been mined already, it will be another decade before the next 10 million coins are mined, and this will approach the final amount basically all the way till 2141. The incentive to continue mining though is that miners also process transactions, and get rewarded from this as well.

back to supply and demand and bitcoin pricing. there are already plenty of traders and speculators of bitcoin and they all have correlations about what they think causes bitcoin's price. But the last rally was a creature of the free market: Unrest in Europe causing a flight to liquidity. This was traditionally a flight into buying precious metals, but throughout the Cyprus mess gold sold off and stagnated, while cryptocurrencies rallied. Cryptocurrencies are more liquid than precious metals and in a flight to liquidity its simply more intuitive.

Mar 31 13 03:51 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


ok class any other questions smile


despite the potential liquidity advantages, there are real drawbacks to bitcoin that I am seeing addressed in other cryptocurrencies and would like to see addressed in bitcoin somehow before they really take off

but nobody in this forum has brought them up tongue
Mar 31 13 03:54 pm  Link  Quote 
Photographer
Digitoxin
Posts: 13,343
Houston, Texas, US


R A V E N D R I V E wrote:
Right now it is $92/usd purely on supply and demand

up from $33 last month

Historically, Can you tell me what healthy existing currency has escalated against the dollar by 3x in any one month period?

Tulips.

Apr 01 13 09:20 am  Link  Quote 
Photographer
Stephen Dawson
Posts: 29,246
Toronto, Ontario, Canada


Digitoxin wrote:
Tulips.

+1

Apr 01 13 11:08 am  Link  Quote 
Photographer
Guss W
Posts: 10,588
Clearwater, Florida, US


R A V E N D R I V E wrote:
...
Right now it is $92/usd purely on supply and demand

up from $33 last month
...

So if I borrowed a bitcoin to get me through to payday, I could end up paying several hundred percent interest if I were not being paid in bitcoins.  I don't think this is going to work out.

Apr 01 13 12:12 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Digitoxin wrote:
Historically, Can you tell me what healthy existing currency has escalated against the dollar by 3x in any one month period?

Tulips.

this currency has a tiny market cap of 1 billion usd at these prices. if anyone was going to pretend it was a viable currency in a trillion dollar currency trading industry the value of one base unit simply has to be higher

but I neither would be surprised if it was $2 again in a sell off as it has always been highly volatile.

I am synthetically short selling bitcoin too..... and I'll be laughing all the way to the bank during a cryptocurrency crash.

Apr 01 13 12:29 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Guss W wrote:
So if I borrowed a bitcoin to get me through to payday, I could end up paying several hundred percent interest if I were not being paid in bitcoins.  I don't think this is going to work out.

I wouldn't recommend doing that unless you were trying to short sell bitcoins.

bitcoin payment processors are insuring against price changes between transaction times. why someone would borrow a bitcoin for a payday loan? evaluate your lifestyle for why you are taking a payday loan. they are usurious with real cash.

people that accept cryptocurrencies have generally been doing their accounting in usd, and adjust exchange rates for their goods/services pretty rapidly, even in returns and reimbursals.

Apr 01 13 12:31 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Digitoxin wrote:
Tulips.
Stephen Dawson wrote:
+1

my bitcoin hedge is going crazy too. I created a pair trade between bitcoin and another currency that diverged in price when bitcoin rallied. and they are converging now.


Dawson I see you are skeptical but you are a speculator too right? Lots of ways to trade this volatility, who cares about the  merits of the underlying asset :]

Apr 01 13 12:40 pm  Link  Quote 
Photographer
Stephen Dawson
Posts: 29,246
Toronto, Ontario, Canada


R A V E N D R I V E wrote:

Digitoxin wrote:
Tulips.

my bitcoin hedge is going crazy too. I created a pair trade between bitcoin and another currency that diverged in price when bitcoin rallied. and they are converging now.


Dawson I see you are skeptical but you are a speculator too right? Lots of ways to trade this volatility, who cares about the  merits of the underlying asset :]

I would call myself a trader, not a speculator.

I lost more than a few sheckles in the dot.com meltdown, and lost a few more with Nortel. I prefer to stay with things are tangible.

I accept that I missed making some good money going short on Facebook and Apple.

I am happy to stick with my oil and uranium investments. And my BCE has done quite nicely recently.

Apr 01 13 01:09 pm  Link  Quote 
guide forum
Photographer
Robb Mann
Posts: 10,275
Baltimore, Maryland, US


Peter Claver wrote:
I don't see what the point is. I accept Canadian and American dollars.

I don't accept rubles, dinars, drachmas or pounds sterling. Why would I accept bitcoins?

So, Canadian Dollars are better then Rubles? wink

Apr 01 13 06:34 pm  Link  Quote 
Photographer
Guss W
Posts: 10,588
Clearwater, Florida, US


Volatility is not a desirable characteristic of a real currency.
Apr 01 13 06:43 pm  Link  Quote 
Photographer
netmodel
Posts: 6,786
Austin, Texas, US


question: where does all the bitcoins come from?
Apr 01 13 07:08 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Guss W wrote:
Volatility is not a desirable characteristic of a real currency.

there are currently no market makers to absorb buying or selling pressure

any large bidder/seller can move things pretty easily




but yeh right now these prices are pretty stupid. actively seeking a way to go short...

Apr 02 13 03:06 pm  Link  Quote 
Photographer
Peter Claver
Posts: 26,657
Toronto, Ontario, Canada


Some interesting news:

MtGOX hacked:

http://www.bbc.co.uk/news/technology-22026961

(interestingly MtGOX stands for Magic the Gathering Online eXchange)

also.. instawallet was hacked and is now offline:

http://www.techweekeurope.co.uk/news/mt … ack-112070


The whole things seems very.... fragile.
Apr 04 13 08:11 pm  Link  Quote 
Photographer
R A V E N D R I V E
Posts: 15,867
New York, New York, US


Peter Claver wrote:
Some interesting news:

MtGOX hacked:

http://www.bbc.co.uk/news/technology-22026961

(interestingly MtGOX stands for Magic the Gathering Online eXchange)

also.. instawallet was hacked and is now offline:

http://www.techweekeurope.co.uk/news/mt … ack-112070


The whole things seems very.... fragile.

and Nasdaq lagged during Facebook's IPO leading to millions in damages. That event, just like on MtGox, was also due to people "creating and cancelling orders"

No points for MtGox because it lags every day though... but DDOS is not a hack. It means the system administrators are incompetent in dealing with traffic. There are plenty other liquid bitcoin exchanges and the OTC market.

instawallet is irrelevant. no cryptocurrency holder trusts the exchanges, you don't hold your stuff in the exchanges. Unlike with the stock market and your brokerage account, you can move cryptocurrencies in and out of the exchanges within a matter of seconds and minutes. (in comparison to a 3 days ACH transfer + a 3 day settlement time before you can trade)


If you ignore the news you are uninformed, if you pay attention to the news you are misinformed

Apr 04 13 09:15 pm  Link  Quote 
Photographer
OTB Images
Posts: 7
London, England, United Kingdom


May 28 13 09:50 am  Link  Quote 
Photographer
Looknsee Photography
Posts: 21,178
Portland, Oregon, US


Not at this time.
...  Is it regulated?
...  Is it insured?
...  Is it secure?
...  Does it protect me from identity theft?
...  How easy is it to convert to cash?
...  Can I use it to pay for groceries or rent or...?

May 28 13 09:54 am  Link  Quote 
Photographer
Shot By Adam
Posts: 5,631
Las Vegas, Nevada, US


The more videos and tutorials I watch about bitcoins the more confused I get about bitcoins. So I have a few questions about it:

1. If the concept of using bitcoins is for me to be able to pay for or transfer money to someone around the world as a universal currency, it seems as though the highly volatility rate of the bitcoin value relative to my domestic currency value means what I am paying for can change dramatically in value depending on what day of the week it is.

2. For example. Let's say I want to hire a programmer in Australia to do a project for me. He wants to be paid in bitcoins rather than me pay through a more standardized system, such as Paypal. He tells me the price to do the job is 10 bitcoins. So today, 1 bitcoin is worth $75USD so, in my mind, I'm paying $750 USD for this job. Currently, the conversion is about 1:1 from USD to AUD. He starts work and he's done in 30 days, but in that time news spreads like wildfire about bitcoins and everyone wants to get some. Since there is a finite supply of bitcoins on the market and the demand now goes up, the price of a bitcoin soars to $125 per bitcoin. Now, for me to pay for my contracted work, it's going to cost me $1,125.00 instead of $750, which is way outside my budget. Plus, the contractor just got a $325 bonus because the currency soared. Now what? It doesn't seem very fair. But If I decided to just wire the money to him, the bank would do the conversion for me. Easy Peasy using the "old system".

3. I keep hearing that it is like digital cash, but just like storing real cash, you have no real recourse should it be stolen. Imagine a burglar is planning on hitting a house on my street. He randomly picks mine and breaks in while I'm out at dinner. If I stuff $10,000 in my mattress and a burglar just happens to get lucky and hit the one house with the cash, he hit payday and I'm out $10K. It's not traceable, and even if the crook gets caught, he can hide the money so I'll still never get it back. That's why I use a bank, to secure the money. Even if I use a safe-deposit-box, it's still prone to thievery. I know people keep referring to Cypress as an example of why the banks don't work, but there is a lot more to it than that. A LOT more. Now, swap "cash" for "bitcoin" and you have the same problem, only a lot worse. In the case of the crook, he got lucky and hit the house with the cash in the mattress, but he just as well could have hit the house that was empty inside too. With bitcoin, a hacker looks at every digital wallet as a payday just as the real crook looks at every house on the street knowing that they all have mattresses with cash inside, not just one luck of the draw. So when a hacker steals your bitcoins, where are you going to go to complain? What recourse do you have? You don't.

Lastly, bitcoins have changed in value huge amounts over time. At one point they were 25 cents/bitcoin, now they are about $90 per bitcoin. In time that may go to hundreds of dollars in bitcoins or more. So how do you fractionize it? If I need to pay you for something worth $30 USD but one bitcoin is worth $150, how do I pay you with a fraction of a bitcoin? Are there bitcents?
May 28 13 10:46 am  Link  Quote 
Photographer
sublime LightWorks
Posts: 6,061
Atlanta, Georgia, US


No.
May 28 13 10:50 am  Link  Quote 
Photographer
Carlos Occidental
Posts: 10,546
Glendora, California, US


I only know what I've read in this thread .  This is the first time I've even heard the term. 

Sounds kinda great..  I'm sure curious how they'll be valued when huge swings of economy happen.  Are they going to end up being another precious metal?  Or what? 

But, sounds great so far!  I'd sure hate to accept 5 coins at $93.00 a coin one day only have them devalued to $50.00 a coin a month later.  That would pretty much end the happiness for me.
May 28 13 01:54 pm  Link  Quote 
Photographer
Jonny Melvin
Posts: 84
Oakland, California, US


Tony Lawrence wrote:
https://www.weusecoins.com/

prices do not go up - the value of the dollar goes down. Can you remember when a dollar had value......
Soon we will have no choice as the dollar is replaced with the new digital currency. This will last for awhile and then we will go back to the gold standard, with a new currency which will not be coined in the USA

May 29 13 06:58 am  Link  Quote 
Photographer
Jonny Melvin
Posts: 84
Oakland, California, US


Stephen Dawson wrote:
I wonder who got all the $$$ from the initial float of bitcoins?

And how much money laundering is performed using bitcoins?

I do like the idea, though.

The FederalRreserve will earn big money when the switch becomes mandatory and the dollars are traded at 10 % of the value at the time of the switch over.
Bitcoins are not going to last becouse you will find that there are wizards that are able to steal the money and you will never see your money again. Sure you can switch it from one bank to another but can you draw it out and place it in your pocket?

May 29 13 07:02 am  Link  Quote 
Photographer
Jonny Melvin
Posts: 84
Oakland, California, US


netmodel wrote:
question: where does all the bitcoins come from?

Obama signed it into law last year and the Federal Reserve is working with the IMF to optimize the screwing of the people when the switch over takes place

May 29 13 07:05 am  Link  Quote 
Photographer
Farenell Photography
Posts: 17,956
Albany, New York, US


Even though Bitcoin defeated a federal seizure of one of their exchanges, they still remain under intense scrutiny for their money laundering operations & further actions or regulations will probably happen down the road (at least according to this Washington Post article):

http://www.washingtonpost.com/business/ … story.html
May 29 13 07:13 am  Link  Quote 
Photographer
Jonny Melvin
Posts: 84
Oakland, California, US


Farenell Photography wrote:
Even though Bitcoin defeated a federal seizure of one of their exchanges, they still remain under intense scrutiny for their money laundering operations & further actions or regulations will probably happen down the road (at least according to this Washington Post article):

http://www.washingtonpost.com/business/ … story.html

excellant news,thank you

May 29 13 07:31 am  Link  Quote 
Photographer
AdelaideJohn1967
Posts: 12,589
Adelaide, South Australia, Australia


Why don't retailers accept bitcoins?
May 29 13 07:31 am  Link  Quote 
Photographer
Farenell Photography
Posts: 17,956
Albany, New York, US


Jonny Melvin wrote:
excellant news,thank you

Its excellent news for the users now. But there's growing evidence that terrorist networks are ALSO using it. & where counter-terrorism is concerned, the first round is never the knockout round.

Even the Swiss are starting to play ball, as they just announced today. Although in that context, they're throwing US tax cheats overboard.

http://dealbook.nytimes.com/2013/05/29/ … y-laws/?hp

May 29 13 07:50 am  Link  Quote 
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