Does a Bitcoin have a value if it can’t be tied to a government backed currency? I can’t imagine that there would be much use of Bitcoins, if it was suddenly impossible to convert it into some traditional currency. Does anyone post cost in Bitcoins (e.g. 1 burger will cost .001, not adjusted daily based on an exchange rate)
If that’s the case, if Bitcoins are unable to stand alone, is it really a currency, or is it more like share of stock. I can resell it, I can trade it for goods or services, I can give it away, but it only has a value by relating it to a traditional currency.
Captain Jackass reporting for duty to lead the platoon.
I’m irate at the concept. what a colossal waste of effort. I’m also offended about the disproportionate amount of media resources devoted to something so inconsequential.
I have less interest in “stolen bitcoins” than I would about stolen fairy dust.
On the more serious side, any thread about bitcoins must, I think, circle back to the underlying issue; to wit, is this concept even worthy of discussion? Perhaps I’m wrong and it is, but given the platoon of reasonably intelligent people here who simply don’t “get it,” it is clear the discussion should continue until more of us jackasses are convinced. I’ll keep an open mind.
The market establishes the value. Without the miners, there could be no market. Therefore, the mining is essential to the value, but it does not determine the value.
Correct: they only serve to make the market work. This, of course, has value. But it does not set the value for the bitcoins: the market does.
Bingo. Without miners, no market. Without a market, no value. But the miners do not create the value. They create the conditions that allow people to value the coins.
True, except that game tokens have a central authority, and that authority could artificially impact the value (e.g., inflating it by making too many).
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There are only three possible futures, however. The first is that none but the smallest possible circle of users will ever consider Bitcoins of value, creating a microeconomy not much different from that of stamp, coin, autograph and Ferrari collectors.
The second is that the whole [del]experiment[/del] [del]practical joke[/del] phenomenon will collapse of its own accord because amorphous, anonymous, baseless entities can’t create fiat value.
The third is that Bitcoin will grow every accretion, limitation and characteristic of existing currencies, out of utter necessity - making it an interesting economic option but hardly the revolutionary/government-breaking/masses-empowering savior it’s made out to be.
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Sherlock homes famously said that if you rule out all the alternatives, whatever remains must be true. This is proof that Sherlock was an idiot, because it’s rare that we can truly iterate all the alternatives.
How about a fourth alternative: a substantial number of people choose to use bitcoins, for various reasons. Without being regulated by any centralized authority, and without being subject to inflation. (What other accretions and limitations and characteristics are you referring to?)
(BTW, nobody here claims it’s “revolutionary/government-breaking/masses-empowering”. It’s just a unit of exchange that’s decentralized. It won’t feed the masses or invent hoverboards. If you want to debate those issues, find an opponent. I see none here.)
Or a fifth alternatve, which is that it will be outlawed by enough governments that the black market is too limited for it to be particularly meaningful? Perhaps that’s subsumed by your first, but I bet there are more alternatives, as well.
The financial system is crucial to the value of the dollar, but it does not establish the value of the dollar. The market does this. Of course, without the financial system, there would be no market. Still, there is a huge distinction between what sets the value and what sets up the means for the value to be set.
This is true of all currencies. They’re only as good as they can be exchanged for goods or other currencies. Bitcoins are not special in this regard.
Do pro sports annoy you too? 1/3 of the daily TV news is taken up on this inconsequential pastime, far more than on the occasional bitcoin story. But oddly enough, people are interested in sports, so it gets covered.
Bitcoins are interesting because they offer a decentralized, fixed, and (somewhat but not really) anonymous currency. Don’t you find the economical and political ramifications of that interesting to discuss? Frankly, I don’t think the geopolitical ramifications would be large. For example …
It would be nice to be able to get wealth out of a closed economy. Do bitcoins permit this? Well … yes but not really. [discuss]
Do bitcoins threaten fiat currencies? Hardly. (If anyone disagrees, I’m all ears.) [discuss]
Could bitcoins permit money laundering? My guess is that they could make it easier, but I’m not quite sure how that would work. If there were cash-to-bitcoin ATMs everywhere (with no way for police to watch them), then perhaps. I can’t quite come up with a plan, but i’m not as clever as the typical criminal mastermind. [discuss]
Are bitcoins appropriate for a national economy or a world economy? NO! They don’t grow with the size of the economy, so they’d be deflationary. (Note: above someone said that bitcoins are deflationary. Well, … not exactly. They would be if they were the basis of an economy, but I don’t see that happening. They are non-inflationary, in the sense that the supply is fixed.) I am not an advocate of a fixed money supply for a national economy, and frankly, I think anyone who has isn’t thinking clearly. [discuss]
Note that all these discussions are interesting regardless of whether there actually is a bitcoin system or not.
Anyway, if you don’t think these are interesting discussions, then … well, find another thread. Or show us why these questions are uninteresting, if you must.
Because I can walk into a store, and the sign says that I can buy a 2 liter of Coke for $1.99.
Can you find a sign that says that same bottle costs .0025 Bticoins, or do you see a sign saying that you can pay in Bitcoins, using some exchange rate.
Dollars, Euros, Yen, all have value because we all agree that they do. Bitcoins have value because we all agree they are worth $600 today. Just like we’ve agreed that a share of Coca-Cola stock (KO) is worth $38.24 right now. Stocks and Bitcoins only seem to have value when referenced against another currency.
Spending euros in the US has the same problem. They’re worthless to me unless I go to a bank or currency exchange and get US dollars. Their value, to me, is only when referenced to what I can get for them in US dollars.
The difference between euros and bitcoins for me is I can go to the Euro zone and spend those euros as currency in their own right.
It’s unlikely bitcoin itself will become a standard currency in the physical world, but it’s not outside the realm of possibility that some crypto-currency (though probably not bitcoin itself) could become a valid alternate online currency, if only to make transactions across currency zones easier.
No, but I sure as Hell wish they’d find a way to tell me tomorrow’s weather in less than 10 minutes.
I guess I’m just getting too much internal resistance to the whole idea to consider any of those interesting questions seriously. I’ve been reading quite a bit over the past week or two about bitcoins, trying to keep an open mind, but I keep coming back to “this can’t be taken seriously by anyone, right?”
I suppose it’s more of my blinders than a real problem with this new idea that will solve the problem of ___________.
Yes, you can. They are few so far, but growing in number. Will it ever be a big player at the local 7-11? Probably not, but there are coffee shops that take bitcoins already so anything’s possible.
I’m not sure it’s “unworkable” as much as unnecessary. There certainly are questions about security that might make it seem unworkable to many, but I’m willing to assume those problems can be resolved. Maybe it does just come down to a “risky undertaking without clear benefit or necessity.” We’ve got all kinds of investments if you’re looking to speculate. We’ve got all kinds of currency if you want one you can put your trust in. We’ve got commodities for other investment and speculation purposes. We also have credit cards, traditional checks, wire transfers, and IOUs. Bottom line, I’m skeptical that enough people see value in this idea that it would ever catch on. I admit, I’m not in the target demographics. I don’t even understand paypal, (which is perhaps the same kind of thing)
Credit cards are the worst payment method ever conceived. Every time you use one, you are giving the other party literally everything they need to take arbitrary amounts of money out of your account – and that information remains usable for years. It’d be difficult to design a less secure system even if you set out to do so deliberately, and I’m not even exaggerating here.
The other three options you mention are not even applicable for the purpose of making on-line purchases in a typical web commerce scenario.
So there’s a pretty strong demand for something better, and while Bitcoin isn’t the only contender, it definitely does address a legitimate need.
No one is holding a gun to your head forcing you to buy Bitcoin. Or are you saying no one should ever do anything with their own money “risky without a benefit or necessity that is evident to Procrustus”?
How do you feel about scientific experiments?
Then why not economic experiments? Would you be happier if it was called “ExperimentalCoin”?
My credit cards only hold me liable for up to $50 of a fraudulent transaction, and that’s a worst-case scenario. I monitor my credit card balance regularly, and if there are any irregularities I immediately call them and let them know. I like using credit cards as transactions because the credit card company acts as a buffer between myself and a potential scammer/thief. Wouldn’t debit transactions be less secure?
That’s not security, that’s mitigation of the problem after-the-fact. It’s like the difference between being insured against burglary and having sturdy locks which prevent your house from being broken into in the first place.
The way the credit card system works, it’s like if whenever you want somebody to send you a package, you give them your house key so that they can walk in and place it on the kitchen table. So after a few years there’s hundreds of people who may still be walking around with a copy of your key. “Oh, but it’s hardly a problem at all, I go through my home regularly and if I notice anything missing, I immediately inform my insurance company and most of the time they are very nice about it and they pay up right away!”
Why should you be held liable for even one cent, for a problem which you have basically no control over? I mean, if you’re at a restaurant and the waiter looks particularly shifty-eyed and untrustworthy, I guess you can choose to pay in cash that time, but what are you going to do, perform a security audit on the computer system of every website you might want to shop at?
Depends on how the payment works. Generally when I pay with a debit card at a store, I insert the card into a terminal, it shows me how much I am being asked to pay, I enter my PIN and press ‘OK’. The shopkeeper doesn’t end up with a copy of the card which they could then use to make other payments in my name. I only need to trust my own bank and the company which operates those payment terminals; I don’t need to trust every clerk at every store I shop at. There’s the risk of skimmers of course, but they can be spotted with a bit of vigilance, and they certainly require a lot more technical effort on the side of the crooks than merely writing down a customer’s CC number after he hands you the card.
Here in NL we have iDEAL, which is a payment system developed by a group of banks and supported by most Dutch webshops. When you want to pay, you get redirected to a site operated by your bank, where you confirm the payment by inserting your bank card into a little device and typing in a few numbers. This is a lot safer than CC because again, you only need to trust the iDEAL system and your own bank, you don’t need to trust the operator of every webshop you want to do business with. I’m sure other countries have their own alternatives, but there doesn’t seem to be an international standard yet.
Crazyhorse, you still haven’t answered Tastes of Chocolate’s question. Those are all places that accept bitcoins for ordinary purchases, but none of them posts prices in bitcoins. If I walk into that Subway, I can pay $5 for a footlong, or I can pay an amount of bitcoins equivalent to $5 at today’s exchange rate. If I go to the same Subway tomorrow, the price for that footlong will still be $5, but the price in bitcoins will be different, because the exchange rate will be different. Bitcoins are accepted, but the prices are not in bitcoins. Yes, this is the same situation as trying to use euros at an American sandwich shop, but with the euros, I can go to a different sandwich shop somewhere else in the world where the prices are in euros, and where the price in dollars will fluctuate with the exchange rate. Is there anywhere in the world where this is true of bitcoins?
