Just asking. I know absolutely nothing about it, though it intrigues me.
15 comments:
PeppermintPanda
said...
The bit coin is an interesting object ...
While I don't want to get into the mathematics of it, the number of bit-coins that can actually exist is limited and (as a result) the value of bit-coins is more closely related to gold than it is to fiat currencies.
Even though I think they are over-valued at the current time, I have less difficulty understanding why people want bit-coins than understanding why people are buying government debt.
One way is find someone to make a bet with on the exchange rate on a predecided future date. Might be the only way. I dont think any institutions will trade in bitcoins.
Bitcoin is digital gold. Due to the lack of universal use of the currency (not until you have a bitcoin esque debit card that most businesses use will that happen) it is being used as a commodity. You can't alter it's value with a fiat currency, but with drug money and ease of transaction it would appear bitcoin is going to last a long time.
I liked David Friedman's explanation of it when he was interviewed by Mike Shanklin over on YouTube. I first learned about Bitcoin in an online conversation I had with someone who claimed that one could even deal drugs on the site.
The trouble is, too many people tend to think of it as "like dollars, but better, because it can't be inflated by the Fed". It's really more of a "like gold, if there were nothing at all you could do with gold, except hedge against inflation, and nobody had ever tried that before the current decade".
Even officially nonconvertible currencies are better than this...at least if you're holding RMB and you're in China, you can buy stuff with it. If you're holding bitcoin, pretty much the only thing you can do is hope that, when it comes time for you to buy something, you'll be able to find somebody willing to pay you for it, and a means of exchanging it for money. (Whereas with actual gold, it's a pretty safe bet that whatever passes for money in the time when you're trying to exchange it, there'll be somebody willing to exchange some of it for gold.)
Oh sweet. I minted a few hundred bitcoins back when it was brand new and they were trading for pennies. Then I forgot about them for a while. Last time I checked they were at about $7, and I almost sold them then. Glad I kept them. Thanks for the news update! What would your economics advice be at this point? :) sell?
Captain, you of all people should be rooting for Bitcoin, though maybe not buying it at today's prices. Bitcoin's success would defund the Welfare State -- see my comment at the MR article.
I don't know to much about how bitcoin works but some people who do seem to think it is a good idea. I wouldn't put your life savings in it or anything like that, but maybe wait for a pullback to put a litte in it. I think that it does have real uses like staying anonymous and as of the time being, governments can't do anything about it (yet). And while I don't use or sell drugs, I think the demand for something like the drug trade could keep bitcoin from going to zero so long as governments around the world continue the their stupid drug wars.
Not being a stock market person, if you are askin ghow people make money off of when (or if) bitcoins go down, people offer mining contracts based on mining capacity of their rigs over say, a 3 month or year or longer at the current rate. The miner wins if the value of bitcoins goes down.
I would think you would love bitcoins. They ae like gold spendable on the internet. All transactions are tax free too!
15 comments:
The bit coin is an interesting object ...
While I don't want to get into the mathematics of it, the number of bit-coins that can actually exist is limited and (as a result) the value of bit-coins is more closely related to gold than it is to fiat currencies.
Even though I think they are over-valued at the current time, I have less difficulty understanding why people want bit-coins than understanding why people are buying government debt.
Check out Don Harrold at the Day Trade Show - I'm not sure if he ever found out how.
https://www.youtube.com/watch?v=BE0xVaLGjgk
One way is find someone to make a bet with on the exchange rate on a predecided future date. Might be the only way. I dont think any institutions will trade in bitcoins.
Mencius Moldbug's take:
http://unqualified-reservations.blogspot.jp/2013/01/how-bitcoin-dies.html
Betting against government force is like betting against the Fed. You may get lucky, but the penalty for being wrong is much more severe.
Bitcoin is digital gold. Due to the lack of universal use of the currency (not until you have a bitcoin esque debit card that most businesses use will that happen) it is being used as a commodity. You can't alter it's value with a fiat currency, but with drug money and ease of transaction it would appear bitcoin is going to last a long time.
I saw a graph of the bitcoin and the chart looked like it was going straight up.
To my knowledge there is no external exchange. It would be like shorting the rembi.
(Shorting the rembi would probably be a good tactic -- if you could).
I liked David Friedman's explanation of it when he was interviewed by Mike Shanklin over on YouTube. I first learned about Bitcoin in an online conversation I had with someone who claimed that one could even deal drugs on the site.
The trouble is, too many people tend to think of it as "like dollars, but better, because it can't be inflated by the Fed". It's really more of a "like gold, if there were nothing at all you could do with gold, except hedge against inflation, and nobody had ever tried that before the current decade".
Even officially nonconvertible currencies are better than this...at least if you're holding RMB and you're in China, you can buy stuff with it. If you're holding bitcoin, pretty much the only thing you can do is hope that, when it comes time for you to buy something, you'll be able to find somebody willing to pay you for it, and a means of exchanging it for money. (Whereas with actual gold, it's a pretty safe bet that whatever passes for money in the time when you're trying to exchange it, there'll be somebody willing to exchange some of it for gold.)
It already had one bubble that crashed in the short time it has been around. That's one volatile hot potato. With no intrinsic value.
Better to buy commodities index fund of somthing similar, for an "inflation hedge" rather than that.
Oh sweet. I minted a few hundred bitcoins back when it was brand new and they were trading for pennies. Then I forgot about them for a while. Last time I checked they were at about $7, and I almost sold them then. Glad I kept them. Thanks for the news update! What would your economics advice be at this point? :) sell?
Captain, you of all people should be rooting for Bitcoin, though maybe not buying it at today's prices. Bitcoin's success would defund the Welfare State -- see my comment at the MR article.
I don't know to much about how bitcoin works but some people who do seem to think it is a good idea. I wouldn't put your life savings in it or anything like that, but maybe wait for a pullback to put a litte in it. I think that it does have real uses like staying anonymous and as of the time being, governments can't do anything about it (yet). And while I don't use or sell drugs, I think the demand for something like the drug trade could keep bitcoin from going to zero so long as governments around the world continue the their stupid drug wars.
Not being a stock market person, if you are askin ghow people make money off of when (or if) bitcoins go down, people offer mining contracts based on mining capacity of their rigs over say, a 3 month or year or longer at the current rate. The miner wins if the value of bitcoins goes down.
I would think you would love bitcoins. They ae like gold spendable on the internet. All transactions are tax free too!
we are do for a pull back read about it on my blog
http://fullmargin.blogspot.ca/2013/03/bitcoin-rally-stalls-is-it-ready-for.html
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