#269216 - 04/18/14 05:20 AM
Bitcoin: What's the Appeal?
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Pooh-Bah
Registered: 04/01/10
Posts: 1629
Loc: Northern California
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Here's the best and shortest explanation I have found about Bitcoin: http://youtu.be/l9jOJk30eQsI still don't fully understand it. I saw this video of a guy getting bitcoins from a kiosk. I thought this video was a spoof at first. Actually, is it a spoof? http://youtu.be/apBrIEZeU2UAnyway, is anybody here using Bitcoin? What's the appeal for you?
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If you're reading this, it's too late.
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#269221 - 04/18/14 03:13 PM
Re: Bitcoin: What's the Appeal?
[Re: ireckon]
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Sheriff
Carpal Tunnel
Registered: 12/03/09
Posts: 3840
Loc: USA
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Good video. I still don't fully understand it. I saw this video of a guy getting bitcoins from a kiosk. Actually, think of it as an automated currency exchange. Cash goes in, bitcoins go into a bitcoin wallet. Or you give bitcoins to the owner of the machine electronically, and cash comes out. Bitcoins have no physical representation. Anyway, is anybody here using Bitcoin? What's the appeal for you? I do not and have never owned any bitcoins. If I had been more foresightful, I would have gotten in early, when it was much easier to mine bitcoins, and applied as much computer hardware towards bitcoin mining that I could afford. Late February of this year would have been a good time to cash out. Governments are starting to wake up to the potential disruptive effect bitcoin can have on fiscal policy, tax collection, and surveillance of money movements. Expect more regulation soon.
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#269224 - 04/18/14 04:36 PM
Re: Bitcoin: What's the Appeal?
[Re: haertig]
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Addict
Registered: 05/23/08
Posts: 483
Loc: Somerset UK
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IMHO, bitcoin is a possible alternative to government issued paper money and might well retain purchasing power in a future in which paper money was rapidly inflating to worthlessness.
A merit of bitcoin is that governments cant print more of it.
It is however a new idea and might well fail or decline in value. It would be most unwise to put more than a small percentage of ones money into something so new and untried.
A SMALL holding of bitcoin is arguably sensible, just as one might might prudently keep a modest stash of foreign banknotes.
Similar arguments apply to a modest holding of gold.
Foreign banknotes, gold, or bitcoins, should IMHO be regarded as insurance or as doomer preps and not as investments. They pay no dividend, and carry risks of loss, theft, or devaluation.
Could be valuable though if ones national currency lost value or became inaccessible.
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#269225 - 04/18/14 05:19 PM
Re: Bitcoin: What's the Appeal?
[Re: ireckon]
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Pooh-Bah
Registered: 09/15/05
Posts: 2485
Loc: California
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I don't own any, but to me, the use of cryptography to create a secure form of digital money fascinates me.
And on more of philosophical/political level, the possibility of having a medium of exchange whose creation is not controlled by central authorities--and all that this possibility implies--also has an appeal to me.
Not going to happen, though. Or certainly not unless something catastrophic happened to force through major changes in our monetary system. Perhaps some petty dictator suddenly discovers the world's largest oil reserve and decides to sell the oil only in Bitcoin--a new petro-e-dollar, if you will. It would probably take something crazy like that to really gain traction. Of course, said petty dictator would be taken down in short order by...well, we all know this how story line goes.
But for the majority of folks with serious skin in the game, I don't think Bitcoin is seen any differently by them than flipping houses. It's just another "thing" to buy low (or mine low) and sell high in a reasonably short period of time.
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#269229 - 04/18/14 08:14 PM
Re: Bitcoin: What's the Appeal?
[Re: ireckon]
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Pooh-Bah
Registered: 04/01/10
Posts: 1629
Loc: Northern California
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I just saw a video of some guys who went to a kiosk, inserted about $650 US, and got their bitcoins. They went and bought a taco from a food cart. The next day they came back to the kiosk to see how many bitcoins they had left in U.S. dollars. They had $560 left, and the kiosk was unable to give that cash back. http://youtu.be/vnm4xFC2xNoI superficially understand the explanations of how bitcoins work, but where the rubber meets the road, bitcoins look and smell like a scam. That disconnect causes me to revisit the explanations and wonder if the explanations are wrong or if something HUGE is missing from the explanations.
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If you're reading this, it's too late.
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#269230 - 04/18/14 08:20 PM
Re: Bitcoin: What's the Appeal?
[Re: ireckon]
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Old Hand
Registered: 05/29/10
Posts: 863
Loc: Southern California
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A bitcoin is the only non-goverment issued fiat money. As such it's a perfect international online currency. But it also lacks the security of a goverment backed currency. So if you get a three quarters of a million bitcoins stolen, you're largely SOL.
_________________________
Hope for the best and prepare for the worst.
The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane
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#269231 - 04/18/14 08:25 PM
Re: Bitcoin: What's the Appeal?
[Re: ireckon]
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Geezer
Registered: 06/02/06
Posts: 5357
Loc: SOCAL
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I'm not sure it's a scam per se, but OTOH when peeps in the bitcoin world talk about "mining" bitcoins, I have no idea what that means. Miners "mine" gold, silver, copper, iron et al... How do you mine bitcoins? Once mined, how are they spent?
Hmmm, maybe it is a scam...
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Better is the Enemy of Good Enough.
Okay, what’s your point??
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#269232 - 04/18/14 08:33 PM
Re: Bitcoin: What's the Appeal?
[Re: ireckon]
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Sheriff
Carpal Tunnel
Registered: 12/03/09
Posts: 3840
Loc: USA
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Bitcoin is not backed by anything other than people believing that it has value. You could make that same argument about government-issued fiat money, but enough people believe in (for example) the US Dollar that its value is pretty well established. One of the problems with bitcoin is that it's far more volatile in value than government-issued currency. The best explanation of bitcoin mining I've seen is in the first video link posted by ireckon above. In short: bitcoin mining uses progressively more complex and computationally expensive cryptographic calculations to create new bitcoins and process transactions. If you prefer a more thorough textual explanation: New bitcoins are generated by a competitive and decentralized process called "mining". This process involves that individuals are rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange.
The Bitcoin protocol is designed in such a way that new bitcoins are created at a fixed rate. This makes Bitcoin mining a very competitive business. When more miners join the network, it becomes increasingly difficult to make a profit and miners must seek efficiency to cut their operating costs. No central authority or developer has any power to control or manipulate the system to increase their profits. Every Bitcoin node in the world will reject anything that does not comply with the rules it expects the system to follow.
Bitcoins are created at a decreasing and predictable rate. The number of new bitcoins created each year is automatically halved over time until bitcoin issuance halts completely with a total of 21 million bitcoins in existence. At this point, Bitcoin miners will probably be supported exclusively by numerous small transaction fees.
Edited by chaosmagnet (04/18/14 08:33 PM)
Edit Reason: correcting my own grammar
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#269233 - 04/18/14 09:23 PM
Re: Bitcoin: What's the Appeal?
[Re: Russ]
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Pooh-Bah
Registered: 03/13/05
Posts: 2322
Loc: Colorado
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I'm not sure it's a scam per se I agree. In a few years people will probably not be looking back at Bitcoin saying, " What a scam that was!" More likely, they'll be saying something like, " Weeelllll, it sounded like a good idea at the time..."
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