How do you exchange them for hard cash?
It's an interesting idea but I suppose at the end of the day if you convert it back to hard cash you still have to explain to the ATO where the stack of cash came from. Otherwise it's a bit like a form of bartering. Suppose it has potential for the online community though.Most trading is done Using MtGox, you have to trade via LR (Liberty Reserve) another type of virtual currency however well established and with some legitimacy...its a very round about way of trading and a bit of a pain in the ass.
To trade BC you would need an LR account to put USD into and take LR out of, you trade the LR for BC and vise versa on the MtGox exchange or one of the other new exchanges....that's how it worked back in Jan/Feb i must admit i haven't been keeping up with all the changes.
Its very much a open currency with no regulation or organisation so change can happen quickly.
What I still don't understand after reading that web page is why would anyone consider this to be worth anything?
Interesting. If one were interested in investing in something related to bitcoin, I wonder what opportunities there are out there? I mean, are there any companies on the ASX doing bitcoins?
Why is fiat currency worth anything? All it is is a bit of paper? I'd rather have bitcoins than USD where politicians and bankers are destroying the currency.
There will only ever be 21 Bitcoins. ATM there are around 6 million bitcoins in existence so the value of all bitcoins in existence is only around 50 million despite them trading at 8USD each, in the scheme of things they are very scarce. If everyone in Australia wanted a bitcoin right now there would only be enough for ~.25 each.
If you think of how many countless billion there are floating around the world not much needs to go into bitcoin for the price to continue to rise.
I am in no way affiliated with them, but I have bought coins from https://bitpiggy.com/ and it went fine for those wondering how to buy them from Australia.
I think bitcoin will fail pretty quickly.
Supporters of bitcoin say that it works just like fiat money, but its supply is limited by the 21m cap, whereas governments can print money that reduces the value of the fiat currency.
That is true but is missing the big picture. The supposed 21m bitcoin cap doesn't actually offer any real protection. Sure, bitcoin itself will not create any more dollars, but what is stopping any other imitators starting the same thing?
Yes, government prints money that devalues the currency. But what is important to remember is that government is the only one who can print more money. With e-currency, anyone can print more money! And that's supposed to offer better protection than government fiat money? There are no regulations or authorities involved. I bet you there are hundreds of programmers out there testing beta of their own currencies already.
Gold holds its value because it has a finite supply and cannot be 'printed'. If you and I can create gold out of thin air, what would be the value of gold be?
The higher the value of bitcoin, the faster and better the competitors will be. The seed of Bitcoin's failure is planted at the very moment it becomes successful.
Now if only I can short bitcoin - the chart is looking like a classic bubble.
I think bitcoin will fail pretty quickly.
Supporters of bitcoin say that it works just like fiat money, but its supply is limited by the 21m cap, whereas governments can print money that reduces the value of the fiat currency.
That is true but is missing the big picture. The supposed 21m bitcoin cap doesn't actually offer any real protection. Sure, bitcoin itself will not create any more dollars, but what is stopping any other imitators starting the same thing?
Yes, government prints money that devalues the currency. But what is important to remember is that government is the only one who can print more money. With e-currency, anyone can print more money! And that's supposed to offer better protection than government fiat money? There are no regulations or authorities involved. I bet you there are hundreds of programmers out there testing beta of their own currencies already.
Gold holds its value because it has a finite supply and cannot be 'printed'. If you and I can create gold out of thin air, what would be the value of gold be?
The higher the value of bitcoin, the faster and better the competitors will be. The seed of Bitcoin's failure is planted at the very moment it becomes successful.
Now if only I can short bitcoin - the chart is looking like a classic bubble.
Why is fiat currency worth anything? All it is is a bit of paper?
I can see where you are coming from, but I disagree. Your argument seems to consist of 2 points. More can be created out of thin air and a better alternative will come along. More can't be created as I explain below and your if you think a competitor may be better, which it may well be, then you must think the idea has merit?
There is nothing stopping someone starting a competing currency. In fact bitcoin is open source so you could start your own little seperate currency if you wanted. No one would use it unless it provided tangible benefits over the current bitcoin though. If bitcoin fails it may be because of a better alternative crypto currency, but I think it is inevitable that a currency of this type will succeed. Competing currencies of this type may not be a bad thing just like multiple currencies in the real world isn't a bad thing.
It's not the case that anyone can print an e-currency. It has to be an accepted form of exchange, which bitcoin is becoming, before anyone cares. Any currency to rival bitcoin would have to have real advantages over it to be adoapted. Bitcoins can be "mined" until the 21 million is reached, this is analagous to mining gold from the ground untill it has been exhausted and in the case of bitcoin, mining serves to distribute the currency in it's early stages. You can't make more bitcoins after 21 million unless you make a new currency, however each coin has up to 8 decimal places so they can be practically used no matter what their value.
1 is a bit of a mystery to me. Do you have any information on how bitcoin started as an acceptable form of exchange? At some point in time it made a quantum leap from having no value to having some value. How did that happen? Only then it can become an acceptable form of exchange.
The price of bitcoins has doubled in a week for anyone interested.
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