Phil Deakins Posted February 25, 2014 Share Posted February 25, 2014 Today's news: A major Japanese bitcoin broker simply shut up shop owing hundreds of millions of dollars to their bitcoin users. A lot like that SL bank did. As a resukt, the value of bitcoins halved in a day. I wonder what our resident forum bitcoin advocate thinks about that. So much for bitcoins. Link to comment Share on other sites More sharing options...
mikka Luik Posted February 25, 2014 Share Posted February 25, 2014 I tried leaving messages offering a bailout at par (1 to 1 in L$) but sadly....I think I might have to change it to 100 to 1... Link to comment Share on other sites More sharing options...
Phil Deakins Posted February 25, 2014 Author Share Posted February 25, 2014 Naa. 1 to 1 is far and, if you don't have enough L$ to buy them all, send the sellers to me Link to comment Share on other sites More sharing options...
Medhue Simoni Posted February 25, 2014 Share Posted February 25, 2014 Personally, I laugh that so many are irrationally against something they do not understand. Maybe they love their owners, or are just unaware of the manipulations that go on. It really makes no difference to me what happens with bitcoins. It's irrelevant. The process has started and that is all that matters. If nothing else, it makes people more aware of how our currencies are manipulated. I accept bitcoins on my website and always will, as long as it is around, or some other digital currency. I have no reason not to accept it. IMHO, these crazy moves are just a symptom of the nature how thing have come about. More people horded bitcoins in the beginning, and few merchants accepted it. Now, we have more and more merchants accepting it, while those horder are selling, or panicking, to try and get some value. It's likely the price will stabilize over the coming month, but I would not expect it to reach 1200 again, which is a good thing. As the volume of trading get larger, the price will better reflect a stable value. It's all about the volume of transactions. Link to comment Share on other sites More sharing options...
Conifer Dada Posted February 25, 2014 Share Posted February 25, 2014 It looks like the price has now regained most of its losses, on the same day, which to me is far more surprising than the origibal losses, given that the biggest Bitcoin exchange has apparently defaulted. I'm no expert but Bitcoin looks like a decidedly dodgy investment and one day it will probably collapse to become worthless. In the future there will probably be a global e-currency that will be widely used for day-to-day transactions - but I don't think Bitcion will be it. Link to comment Share on other sites More sharing options...
Medhue Simoni Posted February 26, 2014 Share Posted February 26, 2014 Here is a video with 2 people that understand Bitcoin and the bitcoin market. They explain things and recent events. Link to comment Share on other sites More sharing options...
Amethyst Jetaime Posted February 26, 2014 Share Posted February 26, 2014 Interesting vid , but the cheerleader in it has a personal stake in bitcoin's success because it's his job, Of course he's going to put a spin on it all and say everything is all peachy keen and "pay no attention to the man behind the curtain" If you want to accept bit coins as payment, it's your choice. But this didn't make me want to jump on the band wagon or make me trust bitcoins. Link to comment Share on other sites More sharing options...
Medhue Simoni Posted February 27, 2014 Share Posted February 27, 2014 There is no trust needed. There is nothing to trust in. It's just some code. Now, you can say you don't trust the exchanges, which is fine, then don't use them. An exchange is not needed at all. The whole point is, you don't have to trust any1, like we do with the dollar or euro. Like the guy said, the best way to earn bitcoins is to sell something for it, and accept them as a merchant. For me, there is no risk. I sell digital goods, if there is a problem, I don't have manufacturing cost to make up on a sale, hence I lose nothing if the transaction goes bad. Me, I've only has a couple of sales that were purchased with bitcoins, both went thru with no problem, but I will likely buy more, just for the heck of it. As an investment, it is interesting, but also very risky. You could win big, or lose most. That said, you can buy in at any level, and get any amount, so to have a little, just in case, is more than worth it. Notice also, the guy didn't hide his affiliation, as he doesn't need to. Link to comment Share on other sites More sharing options...
Innula Zenovka Posted February 27, 2014 Share Posted February 27, 2014 Large amounts of virtual money vanish and a large virtual bank ceases trading.. why am I getting a sense of deja vu? Link to comment Share on other sites More sharing options...
Medhue Simoni Posted February 27, 2014 Share Posted February 27, 2014 Here is my prediction. If Bitcoin fails, it will be because of a flaw in the code, not because the market rejected it. There will always be a want or need for a digital currency like Bitcoin. I can understand why some1 might compare bitcoins to lindens, but there is nothing at all similar between the 2, other than that are both digital. LL could learn quite a bit from the technology tho. Because of it's embedded security features, LL would not have many of the problems they have dealt with in the past year. There are good reasons why LL shut down the independent linden exchanges. LL also wouldn't need a 5 day wait period on payouts. Lindens actually have more similarities to the dollar than it does to a bitcoin. To really understand what bitcoin represents, you have to know something about how fiat currencies, like the dollar, work. Originally, the dollar was backed by gold. It actually said "redeemable for gold", and the constitution mandated that only gold or silver could be money, which is why the dollar was backed by gold. See, when your currency is backed by a commodity, your government can't easily just print more of it and devalue the currency. Even our coins were made of silver. In 1965, all silver was removed from our coins. In the 1970s, the dollar was completely decoupled from gold. Since then, the US government has printed money like crazy. If you want to understand just how much the dollar has declined in value, all you have to do is compare the price of gasoline right now to the price in 1960. See, most people think the price of gas has gone up alot, but the reality is that gasoline is actually cheaper than it was in 1960. Back then, you could buy a gallon of gasoline for 1 quarter. That quarter was 98% silver. If you had that same quarter today, you could still buy a gallon of gasoline, and probably get a cup of coffee. Bitcoin is a hedge against inflation. That is the point of it. Created for the common man to avoid the tyranny of their governments. The theory is, that if there is no central controllers, no1 can inflate the value of it. When you see the value of bitcoin spiking and crashing, that is the natural processes of the market trying to figure out the price. It will take quite a long time to figure out the price. 1 of the reasons why gold was deemed money by the market, is because of the long history it has in the market, and how stable the price is. When the price of gold spikes, it is not gold moving in value at all, it is the dollar, or euros, or whatever, that is changing in value. Over time, the true value of bitcoins will become much more obvious, and all speculation on the currency will fade away. If any1 had paid attention to the debates that sparked up around bitcoins spiking to $1200, the arguments were that traders were treating bitcoins as if their were gold. Since those debates, the price has been cut in half, and more and more merchants are accepting them. To me, it all makes sense. Now, we'll see what kind of an impact the merchants have on the value. There are also bitcoins kiosks being installed in strategic areas of the world. Link to comment Share on other sites More sharing options...
Medhue Simoni Posted February 27, 2014 Share Posted February 27, 2014 A good, educated critique of Bitcoins would be to argue that it is not gold, or silver. This argument shows that bitcoins have no inherit value. A bitcoin supporter would argue that the dollar has no inherit value anymore. They would also argue that bitcoins has an inherit value, which is the value to the user because of it's easy of use, and lack of fees. I see and understand the Austrian arguments, but I'm all for experiments and testing theories. If nothing else, to those that understand, bitcoin is an extremely interesting experiment, and I can be involved at whatever level I like. Link to comment Share on other sites More sharing options...
Perrie Juran Posted February 27, 2014 Share Posted February 27, 2014 Medhue Simoni wrote: A good, educated critique of Bitcoins would be to argue that it is not gold, or silver. This argument shows that bitcoins have no inherit value. A bitcoin supporter would argue that the dollar has no inherit value anymore. They would also argue that bitcoins has an inherit value, which is the value to the user because of it's easy of use, and lack of fees. I see and understand the Austrian arguments, but I'm all for experiments and testing theories. If nothing else, to those that understand, bitcoin is an extremely interesting experiment, and I can be involved at whatever level I like. The Dollar still has one inherit value the Bitcoin does not. I can pay my taxes with it. Link to comment Share on other sites More sharing options...
Innula Zenovka Posted February 27, 2014 Share Posted February 27, 2014 One of my main problems with the Bitcoin is that it's so volatile as compared with currencies like the US dollar, the Euro and the Pound. If there is a way to hedge Bitcoin transactions, I don't know of it and, if there is a way to do it, then the costs are going to have be very high precisely because of the volatility I'm seeking to insure against. So long as most people have to use national currencies to settle most of our bills, I can't see the attraction of using a medium where, when you invoice someone at 30 day terms, you're taking a complete punt on what the invoice amount is going to be worth when the customer pays you (and he's got the same problem, since he's no way of knowing if he wouldn't make a considerable saving by buying his bitcoins tomorrow rather than today). If Bitcoins represent only a small proportion of your total turnover, that's one thing and you can probably afford to have a bit of a flutter with them, but, to my mind, as things stand they're too volatile to be much practical use and, because of this volatility, the methods we use to protect ourselves against changing currency and commodity prices either aren't available or are going to be too expensive. I'd also worry that, precisely because Bitcoins are a small and unregulated specialist market that few people understand, if a futures and options market does develop around this currency, it's going to be wide open to exploitation by unscrupulous traders. Link to comment Share on other sites More sharing options...
Medhue Simoni Posted February 27, 2014 Share Posted February 27, 2014 Great points! Although, I think you are thinking about the transaction wrong. The value of bitcoin is based on other currencies. So, if you are billing some1 30 days later, you are billing them in the amount of dollars, or whatever currency you are using, compared to bitcoins. So, if the value of a bitcoin changes, you are still billing them for the dollar, or whatever currency. It is just the total amount of bitcoins that changes. This is why most merchants cash out their bitcoins as soon as they recieve them, to make sure they get the full amount back in their normal currency. On my website, I don't list how much the product is in bitcoins, I list it in dollars. If some1 buys from me and uses a different currency, then the amount is calculated based on the going rate. It is no different with bitcoins. Of course, unless I needed the money right away, I'd likely hang on to every bitcoin I get, just to take part in the experience, and possible buy other things I might need with it. To me, I accept that bitcoins are volitile. How could it be any other way? There are millions of factors that are playing a part, and the volume of transactions is still quite low. Every day more and more merchants are accepting them. Everyday, it seems, some big bitcoin event happens. It's almost remarkable that it has stayed as stable as it has for this past year. Over time, the market will find an actual price for bitcoins, but I don't expect that for a good 5 years or more. Link to comment Share on other sites More sharing options...
Medhue Simoni Posted February 27, 2014 Share Posted February 27, 2014 Perrie Juran wrote: Medhue Simoni wrote: A good, educated critique of Bitcoins would be to argue that it is not gold, or silver. This argument shows that bitcoins have no inherit value. A bitcoin supporter would argue that the dollar has no inherit value anymore. They would also argue that bitcoins has an inherit value, which is the value to the user because of it's easy of use, and lack of fees. I see and understand the Austrian arguments, but I'm all for experiments and testing theories. If nothing else, to those that understand, bitcoin is an extremely interesting experiment, and I can be involved at whatever level I like. The Dollar still has one inherit value the Bitcoin does not. I can pay my taxes with it. I see that as a negative. lol Link to comment Share on other sites More sharing options...
Pussycat Catnap Posted February 27, 2014 Share Posted February 27, 2014 Unregulated currency is unregulated. There should be no surprise at any fiasco or scandal that therefore ensues. Link to comment Share on other sites More sharing options...
Medhue Simoni Posted February 27, 2014 Share Posted February 27, 2014 Pussycat Catnap wrote: Unregulated currency is unregulated. There should be no surprise at any fiasco or scandal that therefore ensues. Unregulated just means that the consumer needs to do their research. Personally, I don't need the government to be my caretaker. I'm an educated, intelligent person that can take complete care of myself. And, actually the market does have inherit regulations, which benefit both parties in every transaction. More often than not, those regulators agencies get corrupted and work against the public, not for them. By relying on a regulatory system, you are blindly trusting in something that deserves no trust at all. Any large corporation knows, all you have to do is spend some money and you can easily control the regulatory system. In most cases, the regulations distort the market and push investments into areas that are unsustainable, hence causing a crash. Link to comment Share on other sites More sharing options...
Kwakkelde Kwak Posted February 27, 2014 Share Posted February 27, 2014 Medhue Simoni wrote: In most cases, the regulations distort the market and push investments into areas that are unsustainable, hence causing a crash. That's quite a claim, without any references. Link to comment Share on other sites More sharing options...
Perrie Juran Posted February 27, 2014 Share Posted February 27, 2014 Kwakkelde Kwak wrote: Medhue Simoni wrote: In most cases, the regulations distort the market and push investments into areas that are unsustainable, hence causing a crash. That's quite a claim, without any references. You just have to remember Two Cows Economics: SOCIALISM You have 2 cows. You give one to your neighbour COMMUNISM You have 2 cows. The State takes both and gives you some milk FASCISM You have 2 cows. The State takes both and sells you some milk NAZISM You have 2 cows. The State takes both and shoots you BUREAUCRATISM You have 2 cows. The State takes both, shoots one, milks the other, and then throws the milk away TRADITIONAL CAPITALISM You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income ROYAL BANK OF SCOTLAND (VENTURE) CAPITALISM You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new president of the United States , leaving you with nine cows. No balance sheet provided with the release. The public then buys your bull. SURREALISM You have two giraffes. The government requires you to take harmonica lessons. AN AMERICAN CORPORATION You have two cows. You sell one, and force the other to produce the milk of four cows. Later, you hire a consultant to analyse why the cow has dropped dead. A GREEK CORPORATION You have two cows. You borrow lots of euros to build barns, milking sheds, hay stores, feed sheds, dairies, cold stores, abattoir, cheese unit and packing sheds. You still only have two cows. A FRENCH CORPORATION You have two cows. You go on strike, organise a riot, and block the roads, because you want three cows. A JAPANESE CORPORATION You have two cows. You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk. You then create a clever cow cartoon image called a Cowkimona and market it worldwide. AN ITALIAN CORPORATION You have two cows, but you don't know where they are. You decide to have lunch. A SWISS CORPORATION You have 5000 cows. None of them belong to you. You charge the owners for storing them. A CHINESE CORPORATION You have two cows. You have 300 people milking them. You claim that you have full employment, and high bovine productivity. You arrest the newsman who reported the real situation. AN INDIAN CORPORATION You have two cows. You worship them. A BRITISH CORPORATION You have two cows. Both are mad. AN IRAQI CORPORATION Everyone thinks you have lots of cows. You tell them that you have none. No-one believes you, so they bomb the ** out of you and invade your country. You still have no cows, but at least you are now a Democracy. AN AUSTRALIAN CORPORATION You have two cows. Business seems pretty good. You close the office and go for a few beers to celebrate. A NEW ZEALAND CORPORATION You have two cows. The one on the left looks very attractive... Link to comment Share on other sites More sharing options...
irihapeti Posted February 27, 2014 Share Posted February 27, 2014 Perrie Juran wrote: A NEW ZEALAND CORPORATION You have two cows. The one on the left looks very attractive... you meanie !!! is true tho a bit. The most unattractive cows like in no milk get sent to the freezing works and then get eaten. Is not good to be a unattractive cow here Link to comment Share on other sites More sharing options...
Medhue Simoni Posted February 28, 2014 Share Posted February 28, 2014 Hilarious! Especially the Indian 1. Link to comment Share on other sites More sharing options...
Medhue Simoni Posted February 28, 2014 Share Posted February 28, 2014 Kwakkelde Kwak wrote: Medhue Simoni wrote: In most cases, the regulations distort the market and push investments into areas that are unsustainable, hence causing a crash. That's quite a claim, without any references. Well, let's go over the last big crash, from a libertarian perspective. Government incentivizes homeownership with FHA and HUD loans. They back Frannie and Freddie. They also insure bank deposits up to 250k. Every 1 of these causing distortions in the markets. They then put pressure on banks to give out more homeload, and they lower restrictions on qualificatons on homeloans. All of a sudden, any1 can buy a $200k home. That demand drove production in new homes, further feeding into an unsustainable market. Yes, the banks were complicit, but most of the initial banks that sold those homes knew they were holding bad crap, and sold it immediately. Just the immediately selling of the loan should set off fire alarms in any rational person's head. When I bought my first home, I was only 23 and it was 1994, but had a steady work history and brought in more than enough to cover the monthly payment. My house was also extremely cheap, as it was before the boom. That bank made me jump through hoops. My credit had to be imaculate. I even had to drive 45 mins to Ypsilanti(next to UofM) to pay off a $5 debt that my old college said that I owed them for the cork board in my dorm. Seven years latter, some moron wanted to buy my house for more than twice what I paid. You bet I sold it to him. I'm the only person I know that didn't get screwed in the housing debacle. The signs were obvious. It was the governments interference that started the ball rolling. Every1 else, was simply reacting to the governments incentives. The only thing the regulations did was take away the risk that each of those businesses would have incurred. Look at who really lost in the whole deal. Only the common man lost. The biggest banks in the world used our money to secure themselves while screwing every1 else. With the money we paid the banks, we could have bought every single 1 of those loans, and saved every1 down the line. Instead, they saved the largest, most destructive corporations that ever existed, and allowed us, and our children to pay for it. See, the point was not to save the nation, or the people. The whole point was to further impoverish the people. Whether intentional, or not, that will always be the direction of government policies, because the way governments grow and government employee get raises, is to make the problem worse. Link to comment Share on other sites More sharing options...
Innula Zenovka Posted February 28, 2014 Share Posted February 28, 2014 Medhue Simoni wrote: Although, I think you are thinking about the transaction wrong. The value of bitcoin is based on other currencies. So, if you are billing some1 30 days later, you are billing them in the amount of dollars, or whatever currency you are using, compared to bitcoins. So, if the value of a bitcoin changes, you are still billing them for the dollar, or whatever currency. It is just the total amount of bitcoins that changes. This is why most merchants cash out their bitcoins as soon as they recieve them, to make sure they get the full amount back in their normal currency. Clearly I am misunderstanding, then. If I bill someone in £s and exhange any bitcoins I receive for pounds as soon as I receive them, what's the advantage to anyone of my accepting bitcoins in the first place? I can see it probably saves my overseas customers something on transaction costs as compared with their buying pounds, but are there any other advantages I've missed? Link to comment Share on other sites More sharing options...
Kwakkelde Kwak Posted February 28, 2014 Share Posted February 28, 2014 I could reply from a sceptic point of view and say those loans were given with the reason to make a quick buck. Sell loans you can't earn back, make them look pretty or hide them in a package then quickly sell them on, losing the risk and keeping the commission. In that case the government insurance makes no difference since the initial bank never used it, nor did the second or the third. Good government regulation could have prevented this. I don't have any in depth knowledge of the US housing market, but plenty of economists see deregulation as "contributing to the crisis". That's not the point though. The point is you give one example to back up a claim that "In most cases, the regulations distort the market and push investments into areas that are unsustainable, hence causing a crash." I'm sure you can come up with plenty more, but I can come up with countless examples where free market simply does not work. It's not that black and white. Link to comment Share on other sites More sharing options...
Qie Niangao Posted February 28, 2014 Share Posted February 28, 2014 Innula Zenovka wrote: Medhue Simoni wrote: Although, I think you are thinking about the transaction wrong. The value of bitcoin is based on other currencies. So, if you are billing some1 30 days later, you are billing them in the amount of dollars, or whatever currency you are using, compared to bitcoins. So, if the value of a bitcoin changes, you are still billing them for the dollar, or whatever currency. It is just the total amount of bitcoins that changes. This is why most merchants cash out their bitcoins as soon as they recieve them, to make sure they get the full amount back in their normal currency. Clearly I am misunderstanding, then. If I bill someone in £s and exhange any bitcoins I receive for pounds as soon as I receive them, what's the advantage to anyone of my accepting bitcoins in the first place? I can see it probably saves my overseas customers something on transaction costs as compared with their buying pounds, but are there any other advantages I've missed? Presumably because it makes bitcoin advocates feel good about themselves. Which, in fact, isn't a bad reason to do it. The customer is always right, etc. It's just a question of whether there are enough bitcoin afficionados feeling gratified enough to justify the overhead of accepting bitcoin. (And media attention notwithstanding, trade in bitcoin for goods and services is about as popular as bartering pork bellies.) Link to comment Share on other sites More sharing options...
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