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    Bitcoin

    Greatest achievement since the internet? It's genius. Despite some concerns about deflation, I'm ready to buy one. I wish I would have done it a year ago when I thought of it. 5000% return would have been nice.

    Even if you're a non-believer.. if you think it's a bad investment.. it's still going to change the idea of currency.
    Last edited by quick release; 02-04-2014 at 06:42 PM.
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    I still don't get it. It's pretty dumb to me.

    Reminds me of when everyone had Beanie Babies.

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    Quote Originally Posted by Morphinity View Post
    I still don't get it. It's pretty dumb to me.

    Reminds me of when everyone had Beanie Babies.
    LOL. If you don't get it then how could you say it's dumb?

    Seriously. There's almost no downside. Even if it doesn't work out for some reason, the idea of cryptocurrency is going to change the world.
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    Been trying to read up this new system and find out what its all about. So is this form of a monetary system completely devoid of the central world banking system?

    I read one of their facilities is in Iceland, where the Artic air is the perfect coolant to cool the hundreds of servers it takes to operate this one facility.

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    Quote Originally Posted by quick release View Post
    LOL. If you don't get it then how could you say it's dumb?

    Seriously. There's almost no downside. Even if it doesn't work out for some reason, the idea of cryptocurrency is going to change the world.
    Please, explain it to me and why do we need it?

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    Cryptocurrency is great, but Bitcoin remains a gamble and has tremendous short term and long term risks. I would've loved to have hopped on the train for a couple bucks a while ago, like some of my friends have, but at the current rate I'm not interested anymore from an investment perspective.
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    Quote Originally Posted by I am Scags View Post
    Been trying to read up this new system and find out what its all about. So is this form of a monetary system completely devoid of the central world banking system?

    I read one of their facilities is in Iceland, where the Artic air is the perfect coolant to cool the hundreds of servers it takes to operate this one facility.
    It's really hard to comprehend. In this case, you're referring to the data miners. There is no "they" in the traditional sense because no one group or person or facility runs bitcoin. The entire idea is that the power of all of the computers in the community run Bitcoin with software. The closest thing I can think of is like when you download a torrent and there are seeds.

    Data miners basically are dedicated machines (in some cases simply a small chip in usb form and in some cases giant servers like in Iceland) that validate transactions. It's voting. The machines are doing calculations to validate these transactions and essentially voting with their CPU power. Every 10 minutes, the last 10 minutes of transactions are validated in blocks. Then whatever "data miners" helped solve this particular block is awarded 25 bitcoins (roughly equal to $20,000 right now) which are generated out of thin air as soon as this block is solved. Sometimes it's split in "pools" so your little usb data miner setup can make a couple cents for helping. This happens every 10 minutes. But the generation of Bitcoin will go down over time. And by 2040, no more will be created.
    ‎"...the common and continual mischiefs of the spirit of Party are sufficient to make it the interest and duty of a wise people to discourage and restrain it... It opens the door to foreign influence and corruption, which find a facilitated access to the Government itself through the channels of party passions."
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    Bitcoins value is completely on the backs of the people who bought it and spend all day talking it up on the internet lol
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    Quote Originally Posted by Jules View Post
    Cryptocurrency is great, but Bitcoin remains a gamble and has tremendous short term and long term risks. I would've loved to have hopped on the train for a couple bucks a while ago, like some of my friends have, but at the current rate I'm not interested anymore from an investment perspective.
    What do you consider to be the tremendous short term and long term risks?

    For me, the short term is the volatility. Intermediate/long term my concern is deflationary spiral. Hoarding of Bitcoin because it is expected to rise in price due to the fixed amount that will exist.
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    Quote Originally Posted by Patrick Bateman View Post
    Bitcoins value is completely on the backs of the people who bought it and spend all day talking it up on the internet lol
    The spike in value sure. You're looking at it as a stock or commodity. It's neither.

    Sure you can use it for investments' sake and you can have your opinions about what the value will be in a couple years or months or days. But that's not the main focus here. The focus is changing the idea of currency as we know it today.
    ‎"...the common and continual mischiefs of the spirit of Party are sufficient to make it the interest and duty of a wise people to discourage and restrain it... It opens the door to foreign influence and corruption, which find a facilitated access to the Government itself through the channels of party passions."
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    Currency is fine as is, it's not like there's any major problems facing it. I can send someone USD as quickly as I can send them bitcoin, and only one of these can be used at places other than the trendy local coffee shop
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    Quote Originally Posted by quick release View Post
    What do you consider to be the tremendous short term and long term risks?

    For me, the short term is the volatility. Intermediate/long term my concern is deflationary spiral. Hoarding of Bitcoin because it is expected to rise in price due to the fixed amount that will exist.
    The short term issue is the relatively unproven technology and all the involved risks - like the risk of hacking or inflation, difficulty spending or investing the value into common currency, and more - and obviously how much of a rollercoaster ride the value has been. Jimmy puts it in a crude way, but it works because a dedicated amount of people currently believe in it, but there are plenty of examples where eventually the value and system collapse with the arrival of something new or because progress stagnates. That's probably the biggest long term issue, that there are literally no guarantees and not even a sheet of paper to prove it.

    Of the few things you mention in the opening post, the most obvious one is your willingness to invest. I was simply sharing that I wouldn't look at Bitcoin as an interesting short term investment anymore. Could it work out well? Surely. Is there a serious possibility your investment vanishes? That too.

    If I had to currently invest in something - as in, forced to not keep it in a savings account - I would buy a classic car or explore the art market for artwork with a stable value over the last ten to twenty years. Cryptocurrency is fun, but I'd never bank on it to make me very much.
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    Quote Originally Posted by quick release View Post
    It's really hard to comprehend. In this case, you're referring to the data miners. There is no "they" in the traditional sense because no one group or person or facility runs bitcoin. The entire idea is that the power of all of the computers in the community run Bitcoin with software. The closest thing I can think of is like when you download a torrent and there are seeds.

    Data miners basically are dedicated machines (in some cases simply a small chip in usb form and in some cases giant servers like in Iceland) that validate transactions. It's voting. The machines are doing calculations to validate these transactions and essentially voting with their CPU power. Every 10 minutes, the last 10 minutes of transactions are validated in blocks. Then whatever "data miners" helped solve this particular block is awarded 25 bitcoins (roughly equal to $20,000 right now) which are generated out of thin air as soon as this block is solved. Sometimes it's split in "pools" so your little usb data miner setup can make a couple cents for helping. This happens every 10 minutes. But the generation of Bitcoin will go down over time. And by 2040, no more will be created.
    I got no f'n clue what I just read.

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    Quote Originally Posted by Jules View Post
    The short term issue is the relatively unproven technology and all the involved risks - like the risk of hacking or inflation...

    The inflation risk doesn't make any sense to me. It's deflationary currency by nature. Matter of fact, other similar currencies like Litecoin have embedded code that gives reward for spending.. Unless you mean really short term.

    ...difficulty spending

    More of an expectation than a short term risk. Obviously you can't spend this anywhere just yet. Although Overstock.com, tigerdirect, etc is a good start.

    ...or investing the value into common currency

    Not sure I understand what you mean.

    , and more - and obviously how much of a rollercoaster ride the value has been.

    Surely a short term concern.

    Jimmy puts it in a crude way, but it works because a dedicated amount of people currently believe in it, but there are plenty of examples where eventually the value and system collapse with the arrival of something new or because progress stagnates.

    True. This is a risk I agree with. Although I don't think anything comes close to Bitcoin right now and it would take years for it to catch up.

    That's probably the biggest long term issue, that there are literally no guarantees and not even a sheet of paper to prove it.

    Not true. There are places, especially in Europe, where you can have it insured. You can get physical representations of your Bitcoin and have it stored at safe facilities, etc. Not really much different in this sense than any other form of currency.

    Of the few things you mention in the opening post, the most obvious one is your willingness to invest. I was simply sharing that I wouldn't look at Bitcoin as an interesting short term investment anymore. Could it work out well? Surely. Is there a serious possibility your investment vanishes? That too.

    Oh I'm willing to invest (talking 1 or 2 coins here) because I believe in it and have done ample research. Short term investment? Idiotic. It could stabilize in the near future at $200 USD. But long term again, the fixed amount makes it so the value will likely eventually climb steadily (not 100% but likely to).

    If I had to currently invest in something - as in, forced to not keep it in a savings account - I would buy a classic car or explore the art market for artwork with a stable value over the last ten to twenty years. Cryptocurrency is fun, but I'd never bank on it to make me very much.
    Personally I would like to own a couple bitcoin and a couple ounces of gold. Maybe some land, a classic car would be good too.
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    Quote Originally Posted by quick release View Post
    It's really hard to comprehend. In this case, you're referring to the data miners. There is no "they" in the traditional sense because no one group or person or facility runs bitcoin. The entire idea is that the power of all of the computers in the community run Bitcoin with software. The closest thing I can think of is like when you download a torrent and there are seeds.

    Data miners basically are dedicated machines (in some cases simply a small chip in usb form and in some cases giant servers like in Iceland) that validate transactions. It's voting. The machines are doing calculations to validate these transactions and essentially voting with their CPU power. Every 10 minutes, the last 10 minutes of transactions are validated in blocks. Then whatever "data miners" helped solve this particular block is awarded 25 bitcoins (roughly equal to $20,000 right now) which are generated out of thin air as soon as this block is solved. Sometimes it's split in "pools" so your little usb data miner setup can make a couple cents for helping. This happens every 10 minutes. But the generation of Bitcoin will go down over time. And by 2040, no more will be created.
    Well for example the giant servers in Iceland, who owns and maintains them? The article I was reading in the NY times last week was specific with Iceland, and even there I couldn't get a concrete answer on the whole thing, or understand it completely. Some entity has to own and maintain them.

    And for example, how do you actually cash these things out?
    Sorry if I'm sounding like a block head on this, but it still goes over my head.

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    Quote Originally Posted by Blue Heaven View Post
    I got no f'n clue what I just read.
    lol
    Same, sort of..

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    Quote Originally Posted by I am Scags View Post
    Well for example the giant servers in Iceland, who owns and maintains them? The article I was reading in the NY times last week was specific with Iceland, and even there I couldn't get a concrete answer on the whole thing, or understand it completely. Some entity has to own and maintain them.

    And for example, how do you actually cash these things out?
    Sorry if I'm sounding like a block head on this, but it still goes over my head.
    The servers in Iceland are owned by an independent company that is making money. They call it data mining because it is very similar to mining a precious metal for instance. Those servers are the drills. The computing is the act of drilling. And the bitcoin is the gold.

    You cash them out the same way basically you would sell your gold for cash. There are exchange companies that accept your bitcoin and give you USD or whatever currency you want.
    ‎"...the common and continual mischiefs of the spirit of Party are sufficient to make it the interest and duty of a wise people to discourage and restrain it... It opens the door to foreign influence and corruption, which find a facilitated access to the Government itself through the channels of party passions."
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    Sounds like when I was a kid and IOUs were in MBDs.

    Make.
    Believe.
    Dollars.

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    Quote Originally Posted by Pete View Post
    Sounds like when I was a kid and IOUs were in MBDs.

    Make.
    Believe.
    Dollars.
    Aren't our dollars now just as make believe? Actually more so if you consider that they're supposed to be backed by gold which they are not any more. And the government prints money willy nilly. Having a definite amount of something makes it a more concrete currency than USD or your MBD
    ‎"...the common and continual mischiefs of the spirit of Party are sufficient to make it the interest and duty of a wise people to discourage and restrain it... It opens the door to foreign influence and corruption, which find a facilitated access to the Government itself through the channels of party passions."
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    Quote Originally Posted by quick release View Post
    Aren't our dollars now just as make believe? Actually more so if you consider that they're supposed to be backed by gold which they are not any more. And the government prints money willy nilly. Having a definite amount of something makes it a more concrete currency than USD or your MBD
    Not when it's not widely recognized as having value.

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