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[Bitcoins] don't go down!
The Ender
Registered User regular
Registered User regular
The above, ladies is gentlemen, is me. And I am laughing at you, because I have discovered the future of money, and I am leaving you suckers behind as I depart for a tomorrow full of private beaches, fast cars, gold plated billiards tables and sexually attractive persons.
That tomorrow goes by the name of Bitcoin!
...Wait, i think I have heard of Bitcoin before. Isn't it another get rich quick scam? Or rather, a collection of get rich quick scams?
Nonsense! Bitcoin is a literal revolution in money; it aims to replace that valueless fiat currency far too many of us use with something that has a much more tangible worth. Like, did you know that your money isn't actually backed by any physical commodity at all? That 20 dollar bill you have in your wallet is just worthless paper!
Actually, it's not made of paper. The old ones are linen, and now we have the new ones that are plastic based--
The point is that THE FED can just print off however many they want, and it'll all be worthless after THE GOVERNMENT collapses, which I am sure is something that's right around the corner! Now, you could just get prepared by starting to stuff your mattress full of canned beans & salt shakers as bartering assets, but trust me, you won't be able to fit as many as you think you could in there. Surely there must be a better way, what with the miracles of modern technology & innovation?
There is: Bitcoin.
So what the Hell is Bitcoin?
Bitcoin is a non-fiat, scarcity-controlled currency. It's generated by computer algorithms, so you know it's guaranteed to be better than any old-fashioned caveman money that is printed on paper--
Linen
Whatever. Bitcoins are created by Bitcoin Miners, using purpose-built computers with multiple GPUs and innovative cooling architecture. This video explains the process:
http://www.youtube.com/watch?v=CGRto5XRRUM...Err, oops. Wrong video. THIS video explains the process:
http://www.youtube.com/watch?v=JtWm7ivZfg4...Oops. No, uh, that's still not the right video. I'm still learning how these 'links' work; it's crazy how far along this Internet stuff has come. Okay, I think this one is the right video:
http://www.youtube.com/watch?v=Um63OQz3bjoThere we go. The more Bitcoins that are in circulation, the more difficult mining becomes. It's a scarce digital good! Pretty cool, huh?
...If it becomes harder and harder for each new 'miner' to obtain Bitcoins, doesn't this system have the same faults as a pyramid scheme? The first people to jump on board make some money, but anyone joining later is all but guaranteed to fail?
Of course not! New miners just have to become more an more innovative when it comes to mining. Here's a sampling of that innovation:
And that's just the tip of the iceberg, believe you me. And none of the miners of today have anywhere near as good an idea as I do for a rig (but of course I can't divulge that kind of trade secret here, in public. Of course, you may feel free to make an offer to purchase said information from me).
But mining's just small potatoes compared to the real way to get Bitcoins: savvy trading. Invent an investment opportunity of some sort that you think would be convincing for another Bitcoin user(s) and then cut off contact with said user(s) after they hand over the BTC. They can't even chargeback, because BTC does not go through any sort of tyrannical banking system!
That sounds like theft
Nonsense! Theft is when the GOVERNMENT takes your money at gunpoint. Convincing someone to give you Bitcoins is the market working as intended, with the good players beating the bad ones.
So, after i get some Bitcoins, can I just spend them at Wal Mart or what? Who accepts this stuff?
Unfortunately, for now, the GOVERNMENT his it's hands around the throat of decent business like Wal Mart, and so they will not accept BTC yet. But in a few years, trust me, these places with be begging & screaming for you to spend your BTC to buy Oh Henry bars and electronic talking Darth Vader.
Your buying selection will be a bit limited - mostly to child pornography and microwavable food - but I'm sure you will agree that this is a totally worthwhile sacrifice in order to use futuristic wonder money!
This is a thread for discussing the scam known as Bitcoin, and all the little scam babies it's spawned. It's about how a man named Bruce Wagner located a group of desperate, financially broken people to victimize and conned them into giving him what little money they had. It's about people so misinformed, so deluded, that they nailed a bunch of GPUs to a wooden frame, cooled them with a giant carpenter's shop fan, and proceeded to generate such huge electrical bills that their Bitcoin 'mining' operations were losing them money. It's about a dude who was so convinced of the purity of physical commodities that he used BTC to buy a pile of lumber, which he was never able to get tradesmen to buy from.
With Love and Courage
The Ender on
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All the better to pay your taxes with.
I am actually more willing to accept that Bitcoin is not a scam merely because it is deflationary. You can persuasively argue that normal fiat money has an intrinsically bubbly aspect, without any insult.
The problem is rather in arguing for what is the equilibrium long-run USD-BTC exchange rate. If these are perfect substitutes, then the rate is either zero or infinite. More plausibly, these are not perfect substitutes because they have uses unique to themselves (as legal tender, or for buying dubiously legal things - there is a nice symmetry here, isn't there?). But accepting that this is the case would entail accepting that Bitcoin has a future being as Disneyland funny money, a scrip acceptable in niches and then changed back to USD as soon the trade is done. That's not very glorious.
While bitcoins technically aren't a scam, it's close enough to one because the way it's structured; every time a bitcoin is mined, it takes more time for the next one to be mined. Or in other words, the people that got in on the ground floor got the most benefits (and I imagine the majority of them have long since cashed out).
Also, they are unstable as heck. Just a week or so ago, bitcoins lost 20% of their value in one day. It's about as safe of an investment as lotto tickets, though that might be a little mean to the lottery.
Yeah except I dont want the government knowing I bought backdoor sluts 9 at the porn shop, so I use cash.
When you make something more easily traceable, You open up the ability for government to exploit it and use it against you, even if its something entirely legal and well within your right to do.
No.
The government honestly doesn't give two shits what porn you watch so long as it's legal. Disney on the other hand would love to hire/fire people depending on how they use their money.
The rational actors that make up the free market.
Note:If I ever own bit coins, it is going to be for a matter of minutes, and it is not something I have any interest at all in as an investment.
Not really, no. People will just have even less faith in it than bitcoin.
Our inflation is extremely low right now.
Given how many innocent people are put in prison each year already, I can imagine that number would only grow if government had access to your entire purchasing history because oh look the victim was tied up AND WHO BOUGHT 15 BONDAGE PORN VIDEOS 2 DAYS BEFORE THE CRIME? THAT MAN RIGHT THERE. GUILTY!
And I'm sure government would find ways to use it outside a court room, as well.
I will agree that employers are just as likely to fuck you over with the information if they could get their hands on it, however.
too fucking low
Assuming it impacts wages, moderate inflation is kinda a good thing unless you have a lot of cash.
Yes. This sort of traceability puts rather too much faith in government control. Its great for collecting taxes and preventing under the table earnings and hurting small time drug dealers. However the real fraud, like the tens of billions that took place as the cause of the '08 crash is already traceable, there just isn't enough accountability in the system.
So before I see joe taxpayer being forced to use more government-traceable currency, I'd rather see something done about the fraud and corruption in high finance. More surveillance isn't something I'm very keen on.
Or you can just use a company like Dwolla, which works like VISA except that it charges no fee for transactions under $10 and a flat 25 cent fee for transactions over $10.
From what I heard, bitcoins generate a new ID every time you do a transaction. Your old IDs don't expire, but you can use a new ID linked to the same wallet to remain anonymous.
The real flaw isn't holes in the anonymity. The flaw is that all this anonymity makes it impossible to detect fraud in the bitcoin market. I'm not an expert though, nor do I care to be, because bitcoins are dumb. If someone is running a pyramid scheme or a pump and dump scheme, it's impossible to detect, because you can't trace transactions to specific individuals.
It also means that the current market can be propped up by artificial trades. i.e., you can trade a billion bitcoins valued at $100 back and fourth between your wallets all day in order to prop up the price and the trading volume to make bitcoins seem more valuable then they actually are, and do it in a way that would be impossible for anyone to detect.
Would that even be illegal? I mean, you could set up a box that did nothing but create an incredible volume of trade, and that's going to do things to the perceived value, and then you can turn it off when want.
Can you short or option bitcoins?
There's absolutely no oversight or enforcement whatsoever, so this can absolutely happen. In fact it's entirely possible that it has happened many times already; like I mentioned earlier there was a day earlier this month where the value dropped by 20% in a single day (or rather, less than that. It only took a few hours). I imagine it's really easy to do when you have a currency that's so incredibly volatile. And it's not like the people who got scammed could sue! They have no idea who did it, and even if they did they'd have to get some sort of government involved which might as well be poison for the true believers in bitcoin.
They're super volatile right now. You would have to find an incredibly stupid person to take the other side of that trade. The stupid in the market isn't looking for hedges against the bitcoin losing value.
It's amazing how all the people who say that the US dollar is a scam are eagerly encouraging you to purchase their products for US dollars.
Including the bitcoin itself, where the goal is to either sell off the bitcoins for USD immediately and avoid the risk of the bitcoin dropping in value, or hold onto the bitcoin as an investment so you can sell it for US dollars later on. You can't label yourself as an alternative to US currency if your proposed solution is always one step away from US currency.
And heck, at least Goldline can claim that their product would be theoretically useful in an apocalypse if all the computers and the electricity shuts down. What happens with the bitcoin?
Oh, it's the Ron Paul argument, "Rich people get money first, so they're advantaged because they can spend it before inflation has a chance to kick in, which is how the wealth inequality gap is caused by the Federal Reserve!" Which ignores two things. 1) Rich people are not spending their money. They're hoarding it. 2) Inflation is constant, and applies just as much to the rich person. The advantage of the rich person is that he has more money period, not because of anything related to inflation.
Early adopters were able to acquire hundreds of thousands of bitcoins for themselves (There are ten million bitcoins total.). If you have hundreds of thousands of bitcoins, then you would be stupid not to scam the system in the way I described in order to create the perception of demand and to discourage people from cashing out.
Regarding your second question, no one is going to do those things because bitcoins aren't secure (in the financial sense). You don't even have a credit system in the bitcoin world. The idea of a currency system that has no concept of credit is absolutely laughable.
Well, it's traceable between two wallets. Put a third wallet in the transaction, and you need the cooperation of every party in the chain to fully trace the bitcoin back to its origin.
I largely agree with you: the problems with bitcoin are more social than technological. It's a currency favored by people who reject transparency, centralization, and authority.
I hypothesize that what gives bitcoin its value is the ability to convert it into high-demand goods that you can't get any other way - primarily, illicit drugs. Otherwise, there wouldn't be any reason to bother converting other currencies to it.
the "no true scotch man" fallacy.
Right.
But unless you can do something with that currency that you can't do with any other currency (for instance, pay your federal US taxes or buy oil) or convert that currency at a stable rate to something useful (like a currency you can use to pay your federal US taxes or buy oil), then it's going to be just as unstable as bitcoin.
(Not really addressing this post to you, ronya; just more to the thread at large.)
the "no true scotch man" fallacy.
The problem with bitcoins is that it's built by people who are technologically brilliant, but who have no concept of monetary policy. It reminds me of the time when Slashdot ridiculed the iPod launch because they tried to interpret the product from the lens of a tech enthusiast Which is why all of the "here are theoretical ways to hack the bitcoin technology" arguments are pointless. It's much easier to attack it on the human side of the equation.
Anyway, having spoken to bitcoin enthusiasts, it seems that they can't come up with a single legitimate use where the bitcoin is better than regular money. Even if you're only doing something slightly illegal, like pirating movies over a VPN, there's no real reason for bitcoins. Because while it might be possible for them to go after you based on your payment information, chances are you're not worth the effort.
The only reason to use bitcoins is for either doing something highly illegal, or because you're greedy and naive and you want in on the latest ponzi scheme in order to get rich.
You can't actually use traditional currency to pay for anything online. You're using Visa or Paypal and supporting their decidedly political policies.
So, if I were put to the question and had to come up with one single thing it can do better, well, it's pretty much right there on the label, isn't it?
There have been multiple cases now where the exchanges have been hacked and all the bitcoins stolen, and then the resulting mass sale of coins a few days later usually sinks the value to near nothing per coin.
and I think once an exchange turned out to be a scam and just walked away with all the money, but I can't quite remember the details on this one.
That's a problem with the corporations. It doesn't justify an entirely new currency with a variable exchange rate.
It's entirely possible to create your own alternative to VISA if you don't like their fees and their practices. In fact, one guy in Iowa managed to do exactly that.
http://www.businessinsider.com/this-28-year-old-is-making-sure-credit-cards-wont-exist-in-the-next-few-years-2011-11
If my goal is to find a form of online payment to avoid the 3-4% that VISA charges, I'm not going to bother going with a currency that generally fluctuates in value by 20% every day and has no chance at getting chargebacks if the merchant rips me off or if someone steals my wallet.
You're thinking of mybitcoin, which simply disappeared. Supposedly they came back and promised to return 51% of the bitcoins they stole, but I don't know if they ever did.
Bitomat is a famous example where they lost 17,000 worth of bitcoins (currently valued at $750k) because they stored the entire database on the cloud, but didn't pay $10 extra for persistent storage. Meaning that the entire wallet for the entire company was basically stored in the RAM of an active application, but not on an actual hard drive if the computer went dead. Then they restarted the machine and lost everything.
Or, at least that's what they claim. It's entirely possible that they simply walked off with $750,000 worth of bitcoins and made up a story. Since bitcoins are anonymous, we have no way of knowing for sure.
http://siliconangle.com/blog/2011/08/01/third-largest-bitcoin-exchange-bitomat-lost-their-wallet-over-17000-bitcoins-missing/
I don't care which of these two is true. Either is simply amazing.
God I love Bitcoins. It's like a giant "I'm an idiot" flag.
Combined with the "first guy in gets more faster" aspect of the process, it means that we each have to make our own form of digital currency, so that we can each get the most of that particular currency. It's not just a pyramid scheme, it's a pyramid made of pyramids. This is 4th dimensional stuff here.
IOS Game Center ID: Isotope-X
If that were the case, then the only people who would stick with bitcoins are either a) scammers intending to cheat other people and take advantage of the greater fool theory, or b) people looking to buy child pornography or illegal drugs, where the financial risks of losing money are far outweighed by the legal risk of heading to a PMITA prison.