Bitcoin - a decentralised digital currency

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Hey Neal, I read that fastcompany article a few months ago and I thought to myself "I wonder whether those two Munich guys are on TT".

 

And here you are!

 

Pretty cool to be accused of having created bitcoin, even if you do think the concept is silly.

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I'm not really understanding the bitcoin-24 website in terms of withdrawing money.

 

This page seems to indicate that I can withdraw bitcoins for free, but I gather if I wish to convert it back to EUR, I need to pay 55 euro brokerage?

 

What's the difference between Parcel EU and the SEPA EUR?

 

My question boils down to this - let's say I wish to convert my bitcoins back to hard currency, what's the catch?

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To convert your bitcoins back to EUR in your German bank account you would pay a flat rate of 1.24 EUR.

 

The exact process is:

 

1) Trade your BTC for EUR within the bitcoin-24 market, there is no fee for this trade

 

2) Send your EUR from your bitcoin-24 account to your German bank account using a SEPA transfer, fee is 1.24 EUR regardless of amount

 

I don't know what Parcel EU is, but SEPA EUR is the standard European international transfer.

 

Bitcoin-24's bank account is in Poland, so your Euros are sent to/from there. It goes through overnight.

 

If you transfer before 5pm today, for example, the money will arrive by 5pm tomorrow, midday tomorrow if you're lucky.

 

Transfer after 5pm today (Thursday) and before 5pm tomorrow (Friday) and the money will arrive by 5pm Monday.

 

Transfer after 5pm on a Friday and the money will arrive by 5pm the following Tuesday.

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Thanks for that detailed response.

 

I saw that part about the 1,24 EUR once I clicked around the member area - have to say it's not the most transparent website at first glance.

 

Time to jump on that bandwagon and transfer some money now. :)

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More expensive at 1.49 EUR + 2%.

 

But the BTC value will probably go up more than that by tomorrow anyway!

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Good point. Didn't notice that. Got too giddy with excitement at investing in something that I have absolutely no understanding of.

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Neal J. King: Pretty cool to be accused of having created bitcoin

 

Editor Bob:

 

Yes, the most consequential effect is that I get a lot of Facebook friend proposals from folks with Cyrillic-alphabetical names. (When I get a rise in the request rate, I know to check Google to see if there has been an update to the articles.)

 

But no Bond girls, sadly.

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Hutcho:

 

Interesting computer-science concept; as an economic concept, it's fool's gold without the pyrite.

 

JOB:

 

I have been minding my own business in telecom. The patent of interest was an application of encryption/authentication protocols towards home-networking security. It had nothing to do with transactions.

 

So, not nearly as sexy, I'm afraid.

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Bubbly bubble boom BOOM. But if I'm wrong you'll be rich and I'll remain as always not-so-poor.

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No. But exponential growth doesn't necessarily mean bubble.

 

The world's population is growing exponentially (or was, until recently).

 

Moore's Law is exponential.

 

Price of gold during 2000 to 2010 grew exponentially.

 

None of those are/were bubbles.

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Well that hasn't been proven yet; both the world's population and the price of gold could yet crash and both have widely been predicted to.

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I think the whole Bitcoin concept is silly. It's a fiat currency without a country, police force or army to enforce its value. By contrast, if you look at USDs: As long as someone in the world owes the US government taxes, he will have to pay those taxes in USD or face unpleasant consequences for tax evasion.

 

Do armies or police forces make any difference to a currency? I can't see what they have to do with it.

 

Likewise taxes. In practice the quantity of dollars in circulation doesnt have much relevance to taxation. The US government increases the USD money supply through issuing government bonds as it needs in order to finance its spending. Taxation is a factor in determining how much Washington thinks it can spend, but its not a real limitation. The only limit is what the market for US government securities and for the US dollar on the foreign exchange markets will bear.

 

It all comes down to willingness to hold balances in dollars. If this willingness disappears, then the dollar will crash. It's a giant confidence trick.

 

As with all other currencies. And so also with the Bitcoin. But with one essential difference: the fixed Bitcoin mining alogorithm means that neither Washington nor anyone else can instantly create Bitcoins just to fund their own government spending. Politicians and bankers can't fiddle with it for their own purposes.

 

For currency holders, that means the Bitcoin has a big advantage over the dollar.

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It all comes down to willingness to hold balances in dollars. If this willingness disappears, then the dollar will crash. It's a giant confidence trick.

 

Armies and police forces are central to a currency. They ensure that you continue to participate in taxable economic relations. At the very last resort, you must pay your property taxes in dollars, and therefore you must hold a balance in dollars in relation to your property.

 

If a nontaxable currency becomes a dominant medium of exchange, it will come along with whatever the transhuman equivalent of a guillotine is, to ensure that collective goods are delivered.

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