Bitcoin - a decentralised digital currency

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Similarly with gold, if gold returns to dominance as a currency, it will come along with intrusive mandatory searches of your property, to ensure that the wealth is properly taxed.

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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.

 

I have to disagree here. Police and armies, or more specifically the rule of law are relevant for enforcing the law of contract between buyers and sellers.

 

But police and armies can't enforce any value for a currency. A currency is worth the price that people are willing to pay for it in other currencies.

 

You may pay your taxes and purchases in dollars, or euros or whatever. So currencies have a transactional use.

 

But currencies also have a use as a store of value. And not only national currencies but also non currencies such as gold, silver, bonds, shares.

 

Just because people have to pay taxes in dollars does not mean they can't buy or hold gold, silver or paper securities. Or Bitcoins.

 

Right now some businesses are accepting Bitcoins. Others aren't.

 

For payments to people who don't accept Bitcoins, you trade your Bitcoins into whatever currency you require - Euros, Dollars, Pounds, Yen etc.

 

So Bitcoin is similar to gold as well as to national currencies. IE it can be a store of value as well as a means of payment.

 

Whether it will become a widespread means of payment in future as well as acting as a store of value remains to be seen.

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What you mean with "made money back"?

 

On bc24 it's been roughly steady at circa 54 EUR/BTC since 10 am this morning, surely?

 

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Is anybody running BTC mining software? Or is this just going to increase your electricity bills with no payback reward?

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What you mean with "made money back"?

 

Spiked at about 11am, which is when I purchased, and then it dropped. Now back up to about parity at which I purchased, so I'm back to a zero-loss position.

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Bitcoin value has almost doubled since 18/19 March.

 

So what has happened in just 4 days to cause this?

 

The Cyprus Euro crisis. Is that the reason?

 

If so, then when Cyprus is resolved, possibly next week, there could be a sudden sharp fall in the Bitcoin...

 

Dont want to cause any jitters, Im just thinking out loud.

 

Either way, a rise in value of almost 100% in less than a week is not solidly sustainable to my mind. It's more a bubble. Which can suddenly burst. The higher it goes, the greater the risk.

 

But I may be proven wrong...

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I have to disagree here. Police and armies, or more specifically the rule of law are relevant for enforcing the law of contract between buyers and sellers.

 

But police and armies can't enforce any value for a currency. A currency is worth the price that people are willing to pay for it in other currencies.

 

You may pay your taxes and purchases in dollars, or euros or whatever. So currencies have a transactional use.

 

But currencies also have a use as a store of value. And not only national currencies but also non currencies such as gold, silver, bonds, shares.

 

Just because people have to pay taxes in dollars does not mean they can't buy or hold gold, silver or paper securities. Or Bitcoins.

 

Right now some businesses are accepting Bitcoins. Others aren't.

 

For payments to people who don't accept Bitcoins, you trade your Bitcoins into whatever currency you require - Euros, Dollars, Pounds, Yen etc.

 

So Bitcoin is similar to gold as well as to national currencies. IE it can be a store of value as well as a means of payment.

 

Whether it will become a widespread means of payment in future as well as acting as a store of value remains to be seen.

 

I'm sorry, your understanding of the relationship between the state and the currency is rather off-kilter. Once you must pay your taxes in the currency, you must set about obtaining it. The conditions of obtaining it will one way or another establish convertibility with gold/bitcoins/etc. e.g., in order to sell your property, you also transfer the tax liability associated with it, which is---by force of law---denominated not in gold but in fiat. How many bitcoins will you pay to own a property for which you owe N dollars by owning and for which the police are coming to collect?

 

At that point, society rightly has the lever to affect prices across the economy.

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After following this thread and the ticker for the last couple of days, I also finally decided to jump on the bandwagon today and buy a couple of bitcoins (I used Bitcoin-24 and Giropay from my German account - went through immediately with no problems, costing 2% + 1.24 EUR). Not exactly the best time to buy I know, but better late than never (maybe...). Curious to see what happens now - I've probably jinxed it, so Editor Bob et al. beware! :rolleyes:

 

Ed Bob (and others), you mentioned storing yours offline, rather than in the Bitcoin-24 wallet, for security reasons. How did you do that? Is it via the withdraw function where you enter an e-mail address? At the moment I just have them in the wallet, but I didn't see anything about how secure that is (i.e. my password is obviously alphanumeric with symbols etc., but it's nothing crazily complex like I've read about for things like Brainwallet (40+ character passphrase and so on)).

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Bitcoin prices tend to flatten out, or even drop slightly, over the weekends. So don't get nervous if that happens again this weekend. The effect will probably be even more exaggerated over the long Easter weekend. It tends to surge again on Mondays and Tuesdays, once people's bank transfers start landing in the exchanges. Having said that, Bitcoin is highly unpredictable so anything could happen.

 

As for cold storage, there are two methods:

 

1) Install the bitcoin-qt client on your home computer. It takes about 4 hours to synchronise the blockchain initially.

Within that client create a receiving address (one is created automatically on installation anyway).

Then send the bitcoins from your bitcoin-24 online wallet to your home client's receiving address.

Once done, save the wallet.dat file to a USB stick and hide that away somewhere.

If you're using Windows then your wallet.dat file is here:

c:\Users\[your user name here]\AppData\Roaming\Bitcoin\wallet.dat

 

2) Make a paper wallet. This means retrieving the private key(s) for your bitcoin address(es) and printing these out.

To retrieve the private keys using the bitcoin-qt client you do the following:

menu -> help -> debug -> console -> type: dumpprivkey [bitcoin address]

Save the private keys to a text file, print them out, and keep in a fireproof safe.

Some people have their private key engraved on the inside of a ring and kept on their finger.

 

All this is fairly technical. There's a good learning curve to bitcoin. So I'd recommend playing around with very small amounts initially. And do lots of reading of The Bitcoin Foundation website, the bitcoin wiki, as well as the article in Wikipedia. Once you're comfortable, and think you understand it, then invest a decent amount. And even then, only invest what you can afford to lose. It could crash to zero by lunchtime. Target price, however, is ~$100,000/BTC, and provided there are no catastrophic technical failures then I think it'll get there in a small number of years.

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Bitcoin value has almost doubled since 18/19 March.

 

The Cyprus Euro crisis. Is that the reason?

 

If so, when Cyprus is resolved, there could be a sharp fall

 

I thought the same which is a bit of irony from my angle. I just dont want to bring on an argument with my friend although he is the king of conspiracy at times.

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It's not necessarily a bubble, it could be just exponential growth.

 

If you look at the price chart on a logarithmic scale it's clear.

 

Of course it's growing exponentially at the moment. Human beings are quite good at (in)voluntarily promoting exponential growth, as we are highly intelligent social animals finely tuned for pack behaviour. It's normally stupid for the individual not to follow the pack, whether it is because of a fire or a black friday special deal as soon as enough people engage in an action everybody takes notice and BOOM.

 

I like Kurzweil's ideas, but you just can't apply them to everything as it suits you, and I doubt that's what he intends. Economic bubbles are related to technical/scientific progress yes, in that they rely on more and more people with their resources jumping on the bandwagon. The difference is that technical progress (as many other things like housing or Apple shares) has an intrinsic value by itself so has a practical bottom barrier of worth. Moreover, it is accumulative, which means that after a period of crisis or loss of interest you can resume more or less from where you stopped. I don't see these characteristics applying to Bitcoins, as I don't see them applying to the Dutch tulip bubble. Yes, there's a frenzy right now and people feel like they're losing out if they don't jump in (just look at some posts in this thread) and some will inevitably make money by selling at the right time, but I expect the value of a Bitcoin to drop again to a few cents, like a tulip.

 

Anyway, buy me a beer if I'm wrong?

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exponential growth doesn't necessarily mean bubble

 

For what reasons are most people buying Bitcoins right now?

 

To hold for the longer term, or because price is rising and they want to sell again in the short term?

 

If the latter, then Bitcoin risks falling heavily again.

 

Right now today Bitcoin price is dithering, trying to continue rising, but not able to sustain. Currently at $73.

 

I like to see a bit of consolidation. When an asset only knows one direction it looks like a bubble.

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Well, I bought because I heard it'd make me rich. And if they don't reach the $100k as promised I'll be mightily displeased! ;)

 

Nah, but my reasons were pretty much as summed up above: it's an interesting project and I'm curious what'll happen. I don't intend to sell them in the near future. I might make a bit of money, I might lose it, but I still have money that I can afford to lose sitting around in Germany doing not very much, so I figured this'd be as good a thing to do with a small part of it as anything else. :)

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Me too. I want the $100,000 Bitcoin price promised for 2015.

 

Glancing at the transaction ticker on bitcoinity.org, the transactions on Mt.Gox are mostly for small amounts, and the majority for very small amounts eg under 10 Bitcoins worth.

 

I think the transactions probably fall into two main categories:

 

curiousity: people trying Bitcoin out for first time,

 

and bandwagon: people buying because the price is going up.

 

The small transaction values suggest that those buying at the moment are still very cautious about Bitcoin.

 

I should get a job as a financial analyst in the City.

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Some article around Bitcoin ->

 

Money Laundering

 

Selling House for Bitcoins

 

011 possible hack

 

I like the concept but I think that wherever you have the transmission or exchange of money/value you will have governments & criminals (sometimes the same thing!) also interested and that will (IMHO) ultimately be the downfall of this currency, short to medium term, or until the authorities start regulating it, wanting in, wanting their cut, it will be profitable but in the next few years more interested players will try to get their cut whether or not they deserve/earned it.

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Target price, however, is ~$100k/BTC, and provided there are no catastrophic technical failures then I think it'll get there in a small number of years.

 

Bitcoin must surely be in for some profit taking after the massive rises these last few weeks.

 

Which will mean pressure on price to fall.

 

Serious question to Editor Bob or anyone else that likes: what is this "target price of ~$100k/BTC"?

 

Whose target price? And on what basis?

 

Interesting discussion about various aspects of Bitcoin here:

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I'm on a mobile currently so can't check, but off the top of my head, target price $100k is based on bitcoin capturing 1% of the global economy. $1m would be 10%. I might be off by a factor of ten or two, but you get the gist.

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$100,000/BTC = 1% of all world transactions.

 

Here's the article in question that this forecast is based on:

 

The target value for bitcoin is not some $50 or $100 it is $100000 to $1000000

by Rick Falkvinge, founder of the Swedish and first Pirate Party.

 

http://falkvinge.net/2013/03/06/the-target-value-for-bitcoin-is-not-some-50-or-100-it-is-100000-to-1000000/

 

EDIT: Im always wary of such articles and statements. They may be true - nor not. People holding Bitcoins have an interest in talking the market up.

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