Do You Consider Bitcoin To Be A Serious Hedging Option?

[farang000999]

LR was a Western Union for criminals. Give cash, get cash. Or give cash, send it to illegal online business get something in return. It was centralized. People trusted it because the central authority was taking a small percentage and could continue doing so as long as they maintained their credibility. Criminals trusted LR because it was in LR's own interest to be honest.

No doubt, there will be an endless number of LRs started and shut down by authorities.

But Bitcoin is not the same because of it's lack of central authority and because MtGox is already stepping up and requiring identification. With Bitcoin, you just have to buy into a pyramid scheme and hope that you get out first. You have to know that major retailers will never accept Bitcoin. You have to know that there will be an infinite number of Bitcoin copycats and that there is an infinite amount of virtual money that can be created. And then you have to keep trading your REAL MONEY for make believe money that can't be spent anywhere in the real world besides BitCookie or BitScarf or donated to Wikileaks and you have to keep doing this because.... because.... wait why is this money that can't be exchanged for anything in the real world and can be issued in infinity going to maintain it's value again??? `

[farang000999]

Don't worry if you miss out on Bitcoin there is always Bitcoin2. Then Bitcoin3. Then Bitcoin4. Then FarangCoin.

[dave111223]

You keep on about infinite coins making Bitcoin worthless.

But in the past year we've seen 30+ alternative coins released (each with millions of billions of coins available) and has not affected the price of Bitcoin at all. So how many alternative coins will it take to bring the price down? 50, 100, 1000? IMHO the more alternative coins that are released the more it shows why Bitcoins are valuable because they have managed to gain a critical market share.

I have no doubt there will be a Bitcoin 2, Bitcoin 3 (we're currently on Bitcoin 0.8.2 so naturally it will progress to version 2.0 at some point) Your coins will still be valid on version 2.0

Edited June 5, 2013 by dave111223

[pdebuck456]

LR was a Western Union for criminals. Give cash, get cash. Or give cash, send it to illegal online business get something in return. It was centralized. People trusted it because the central authority was taking a small percentage and could continue doing so as long as they maintained their credibility. Criminals trusted LR because it was in LR's own interest to be honest.

No doubt, there will be an endless number of LRs started and shut down by authorities.

But Bitcoin is not the same because of it's lack of central authority and because MtGox is already stepping up and requiring identification. With Bitcoin, you just have to buy into a pyramid scheme and hope that you get out first. You have to know that major retailers will never accept Bitcoin. You have to know that there will be an infinite number of Bitcoin copycats and that there is an infinite amount of virtual money that can be created. And then you have to keep trading your REAL MONEY for make believe money that can't be spent anywhere in the real world besides BitCookie or BitScarf or donated to Wikileaks and you have to keep doing this because.... because.... wait why is this money that can't be exchanged for anything in the real world and can be issued in infinity going to maintain it's value again??? `

Why you keep saying that bitcoin is money that can't be exchanged for anything in the real world?

Firstly, it's still freely exchangeable into a variety of fiat currencies. Even directly in Thai Baht.

If exchange's get closed, people are still free to exchange it between each other. Even though it's an electronic currency, it is not centralized and nobody can take away the bitcoins you own from you. Unless maybe when they simply stop the internet.

You can actually exchange them like real gold coins, by meeting some live person and exchange them with him/her.

Ever heard of Silk Road Market? I think the sellers up there only take Bitcoins. Of course, whatever is sold up there is right on par with whatever got traded for LR$'s

And you even can top up your Thai mobile telephones (pre-paid), pay your post paid phone bills, pay a bunch of ISP's and even your Bangkok electricity bill...

Admittedly through an exchange which might or might not disappear in the future!

[pdebuck456]

36 to 28 over 4 years versus down 75% in a day.

Just gave an example with the supposedly biggest currency of the world.

People who bough Thai Baht or Thai Baht denominated assets pre '97 saw their assets go down well over 50% just by exchange rate. In just a few days! People invested in the stock market saw that compounded by another 75% drop in the SET...

And no, not a devaluation, but rather the market deciding how much a Thai Baht was worth!

[farang000999]

So I should buy Bitcoin so that I can then trade it back into another currency (for a fee) at some point? And why should I do that? Why would I need to or want to trade real money for bitcoin?

Look at it this way, people are buying the Bitcoin because ______________ .

A. they can use Bitcoin to conduct transactions that would otherwise be impossible or much harder without Bitcoin. Bitcoin is serving an important function.

B. they think Bitcoin is going to go up in value and plan to sell it when it does (speculating)

I mean, I understand why child pornographers and drug dealers would be interested in Bitcoin but what about normal people? You are advising me to buy bitcoin (for an exchange fee) then I sell it later (for another exchange fee) so that I can buy stuff priced in THB or USD. What is the point?

Edited June 6, 2013 by farang000999

[dave111223]

So I should buy Bitcoin so that I can then trade it back into another currency (for a fee) at some point? And why should I do that? Why would I need to or want to trade real money for bitcoin?

Look at it this way, people are buying the Bitcoin because ______________ .

A. they can use Bitcoin to conduct transactions that would otherwise be impossible or much harder without Bitcoin. Bitcoin is serving an important function.

B. they think Bitcoin is going to go up in value and plan to sell it when it does (speculating)

I mean, I understand why child pornographers and drug dealers would be interested in Bitcoin but what about normal people? You are advising me to buy bitcoin (for an exchange fee) then I sell it later (for another exchange fee) so that I can buy stuff priced in THB or USD. What is the point?

Bitcoin is useful in transaction where the item you are selling cannot be retrieved in the event that the buyer tries to stiff you.

For example if I have a domain name worth $1000, and someone wants to buy it (from another country), Bitcoin (with the option of an Escrow) would be the ideal payment method.

If they paid me with traditional means (such as Credit Card or Paypal) they might reverse the charges after I transferred the domain to them; it will be almost impossible for me to recover the domain, or the funds.

If they paid with me a wire transaction is would be expensive, slow, and still the possibility that they were using some kind of stolen account and the bank is going to take the money back off me at some point.

With Bitcoin I don't need to care who they are, where they're from, why they want the domain, if they've stolen someones money; It doesn't matter one bit to me, once I've got the coins in my wallet they are 100% mine, and I can transfer the domain without reservations.

Edited June 6, 2013 by dave111223

[RogueLeader]

So I should buy Bitcoin so that I can then trade it back into another currency (for a fee) at some point? And why should I do that? Why would I need to or want to trade real money for bitcoin?

Look at it this way, people are buying the Bitcoin because ______________ .

A. they can use Bitcoin to conduct transactions that would otherwise be impossible or much harder without Bitcoin. Bitcoin is serving an important function.

B. they think Bitcoin is going to go up in value and plan to sell it when it does (speculating)

I mean, I understand why child pornographers and drug dealers would be interested in Bitcoin but what about normal people? You are advising me to buy bitcoin (for an exchange fee) then I sell it later (for another exchange fee) so that I can buy stuff priced in THB or USD. What is the point?

Are pornographers and drug dealers the only people interested in privacy then?

[CobraSnakeNecktie]

So I should buy Bitcoin so that I can then trade it back into another currency (for a fee) at some point? And why should I do that? Why would I need to or want to trade real money for bitcoin?

Look at it this way, people are buying the Bitcoin because ______________ .

A. they can use Bitcoin to conduct transactions that would otherwise be impossible or much harder without Bitcoin. Bitcoin is serving an important function.

B. they think Bitcoin is going to go up in value and plan to sell it when it does (speculating)

I mean, I understand why child pornographers and drug dealers would be interested in Bitcoin but what about normal people? You are advising me to buy bitcoin (for an exchange fee) then I sell it later (for another exchange fee) so that I can buy stuff priced in THB or USD. What is the point?

Bitcoin is useful in transaction where the item you are selling cannot be retrieved in the event that the buyer tries to stiff you.

For example if I have a domain name worth $1000, and someone wants to buy it (from another country), Bitcoin (with the option of an Escrow) would be the ideal payment method.

If they paid me with traditional means (such as Credit Card or Paypal) they might reverse the charges after I transferred the domain to them; it will be almost impossible for me to recover the domain, or the funds.

If they paid with me a wire transaction is would be expensive, slow, and still the possibility that they were using some kind of stolen account and the bank is going to take the money back off me at some point.

With Bitcoin I don't need to care who they are, where they're from, why they want the domain, if they've stolen someones money; It doesn't matter one bit to me, once I've got the coins in my wallet they are 100% mine, and I can transfer the domain without reservations.

I think you can use an escrow service with most payment types. I have used escrow.com with paypal

Even with the basic conflict resolution services of Visa and Paypal with documentation there is decent outcomes. I have been credited even when the other party was trying to rip me off. Just keep good records.

Without escrow service what recourse does a bitcoin transaction have?

[farang000999]

You guys are describing why it is good for the seller but that would suck for the buyer. I get to buy something with zero recourse! Yippee!

[farang000999]

So I should buy Bitcoin so that I can then trade it back into another currency (for a fee) at some point? And why should I do that? Why would I need to or want to trade real money for bitcoin?

Look at it this way, people are buying the Bitcoin because ______________ .

A. they can use Bitcoin to conduct transactions that would otherwise be impossible or much harder without Bitcoin. Bitcoin is serving an important function.

B. they think Bitcoin is going to go up in value and plan to sell it when it does (speculating)

I mean, I understand why child pornographers and drug dealers would be interested in Bitcoin but what about normal people? You are advising me to buy bitcoin (for an exchange fee) then I sell it later (for another exchange fee) so that I can buy stuff priced in THB or USD. What is the point?

Are pornographers and drug dealers the only people interested in privacy then?

I guess there are also terrorists, arms dealers, hit men, hackers selling private information, and various other fraudsters.

I am not understanding the whole, "I can finally buy a pizza without giving my name" gimmick.

Edited June 6, 2013 by farang000999

[dave111223]

You guys are describing why it is good for the seller but that would suck for the buyer. I get to buy something with zero recourse! Yippee!

Which is why you can use an ecrow service such as http://btcrow.com/ funds are only released to the seller after both parties approve. If there is a dispute then btcrow listens to both sides and decides who gets the funds.

Edited June 6, 2013 by dave111223

[dave111223]

I think you can use an escrow service with most payment types. I have used escrow.com with paypal

Even with the basic conflict resolution services of Visa and Paypal with documentation there is decent outcomes. I have been credited even when the other party was trying to rip me off. Just keep good records.

Without escrow service what recourse does a bitcoin transaction have?

Paypal/Visa arbitration sucks. With bitcoin you can use to use a dedicated escrow service where they specialize in arbitration and will actually listen to both sides without any bias as a truly neutral 3rd party.

Regarding Paypal with escrow.com here's what it says on their website:

Both Buyer and Seller must be located in the United States, online trackable shipping must be used, and the transaction amount must be less than $5000 USD in order to use the PayPal option

Not very useful to us. Edited June 6, 2013 by dave111223

[RogueLeader]

So I should buy Bitcoin so that I can then trade it back into another currency (for a fee) at some point? And why should I do that? Why would I need to or want to trade real money for bitcoin?

Look at it this way, people are buying the Bitcoin because ______________ .

A. they can use Bitcoin to conduct transactions that would otherwise be impossible or much harder without Bitcoin. Bitcoin is serving an important function.

B. they think Bitcoin is going to go up in value and plan to sell it when it does (speculating)

I mean, I understand why child pornographers and drug dealers would be interested in Bitcoin but what about normal people? You are advising me to buy bitcoin (for an exchange fee) then I sell it later (for another exchange fee) so that I can buy stuff priced in THB or USD. What is the point?

Are pornographers and drug dealers the only people interested in privacy then?

I guess there are also terrorists, arms dealers, hit men, hackers selling private information, and various other fraudsters.

I am not understanding the whole, "I can finally buy a pizza without giving my name" gimmick.

No, you aren't, are you?

Do you think you should try or shall we just give up?

[Heng]

Realistically though, considering what digital currencies are... and how they can exist and can be traded and transported virtually anywhere... it's unlikely that any central government will be able to ever rein it in.

Compare to the failed global war on narcotics... they can't even rein in a situation that involves large volume physical goods (and not to mention often equally large volumes of cash).

I don't think its comparable at all. If central governments decide to do something about digital currencies they don't need to "rein them in". All they have to do is make people lose confidence in the currencies and these schemes will quickly collapse. Remember, there is nothing backing these currencies other than peoples faith in them.

We live in a physical world, and digital currencies are worthless unless they at some point can be changed into "real" money. A very public action by the authorities to freeze real world bank accounts connected to e.g. Bitcoin transactions (while investigating for money laundering), and people will be clambering all over each other to try and get their money out of the digital currency.

Sophon

What the government won't be able to do (again, all IMO) is get rid of the 'demand' to illegally transfer money... just like the demand for narcotics. Okay, so they go after all of the official exchanges first. How do they then target the black market exchanges? Any kind of foreign exchange shop, from the mom and pop shops to the wholesale operations that don't advertise can be a Bitcoin exchange... it's just one more currency to add to the list. And actually, a good portion of the world's wealth is already more digital and physical. I'm sure 'they' will try... but it'll be about on par with trying to make people lose confidence in offshore banks in third world countries. Sure, some people will be scared away... but well, they're most certainly still there and thriving.

It's all academic of course.... with digital currencies though, I think we'll be able to see it all 'happen' pretty quickly either way.

But schemes like Bitcoin cannot exist if only people doing illegal transfers use them. The illegal transfers has to be hidden in a mass of legal transactions for it to make any sense to use them for illegal transactions.

Sophon

They are already hidden to a certain extent. Each transfer is just another electronic transmission no different than email. It doesn't even matter if you take a large percent out at each end of the deal... for the bad guys, they are already prepared to physically lose cash shipments.... paying a % on each end means nothing to them.

Someone mentioned Western Union... it'd be interesting to see know of much of their transfers are used for illegal purposes. With digital currencies, pretty much anyone with a computer or phone can do what WU does. The only thing IMO that could hinder this thing would be getting rid of physical cash from the economy. Good luck with that one.

[farang000999]

I think you are looking at Bitcoin from the perspective of just holding it for a few minutes in order to anonymously send money from A to B like a digital WU. In which case, you don't even care if Bitcoin is $1000/coin or $1/coin it serves the same purpose as a highway. But bitcoin is not setup for that purpose. For bitcoin to work, people will need to actually want to hold bitcoin instead of cash this way you can use it as a highway. Of course, bitcoin is designed to be deflationary which is supposed to reward hording, of course, it is also the ideal model to run a pyramid scam. Luckily, time will tell who is right. One thing to look out for though is that the Bit Bugs used to be Gold Bugs and made all the same crazy claims about gold as they did Bitcoin and that has hardly played out the way they imagined.

[Heng]

I think you are looking at Bitcoin from the perspective of just holding it for a few minutes in order to anonymously send money from A to B like a digital WU. In which case, you don't even care if Bitcoin is $1000/coin or $1/coin it serves the same purpose as a highway. But bitcoin is not setup for that purpose. For bitcoin to work, people will need to actually want to hold bitcoin instead of cash this way you can use it as a highway. Of course, bitcoin is designed to be deflationary which is supposed to reward hording, of course, it is also the ideal model to run a pyramid scam. Luckily, time will tell who is right. One thing to look out for though is that the Bit Bugs used to be Gold Bugs and made all the same crazy claims about gold as they did Bitcoin and that has hardly played out the way they imagined.

hi there F000999, you're right, that's what I'm looking at in this particular example. It's a tool just like anything else. And for a tool to 'work' it only has to serve a purpose, it doesn't necessarily have to have multiple broad reaching universal uses. I've mentioned that I wouldn't hold Bitcoins for more than a few minutes (with BTC, you can literally keep to that policy). However that's not so different from the way people view a lot of different currencies. Most of my income is in Baht and US$, but I prefer to keep my long term savings spread out among a basket of currencies.

I do agree that it does have high abuse potential... but so do briefcases and duffle bags of cash.

[dave111223]

Interesting summary on BBC "Click" http://www.bbc.co.uk/news/technology-22817522

[dave111223]

Almost all bitcoin activity in Thailand is considered illegal: https://bitcoin.co.th/trading-suspended-due-to-bank-of-thailand-advisement/

[mccw]

Almost all bitcoin activity in Thailand is considered illegal: https://bitcoin.co.th/trading-suspended-due-to-bank-of-thailand-advisement/

School boy error!

They were first given advise to just get on it and leave the bank out of it.

Then they decided to go back and put their own business out of operations.

[mccw]

Probably a big loss of face to be called back out in front of all your peers to be told how wrong you had been to not call it a currency. So they shut the whole thing down.

[jbrain]

Exchange rate very volatile in the past 3 months I notice

[RogueLeader]

It's a volatile currency. Only the foolish or the sure would hold on to it for longer than it takes to make a purchase

[farang000999]

Silk Road closed. Why did the guy running it choose to live in San Francisco?

[farang000999]

Ross William Ulbricht...in connection with operating the Silk Road website, solicited a Silk Road user to execute a murder-for-hire of another Silk Road user, who was threatening to release the identities of thousands of users of the site.

I guess he watched a lot of Breaking Bad.

[RogueLeader]

Ross William Ulbricht...in connection with operating the Silk Road website, solicited a Silk Road user to execute a murder-for-hire of another Silk Road user, who was threatening to release the identities of thousands of users of the site.

Allegedly. I wouldn't trust a single word anyone says in connection with this case. If you read the right subreddit, it appears that Ulbricht isn't Dread Pirate Roberts.

Edited October 16, 2013 by RogueLeader