Bitcoin Forum

Three good new pieces today. The Bloomberg piece is currently on the Bloomberg.com home page and is the "chart of the day"

http://www.bloomberg.com/news/2013-01-28/bitcoin-s-gains-may-fuel-central-bank-concerns-chart-of-the-day.html (http://www.bloomberg.com/news/2013-01-28/bitcoin-s-gains-may-fuel-central-bank-concerns-chart-of-the-day.html)

http://www.gambling911.com/businessfinancial/major-us-facing-online-gambling-site-confirms-bitcoin-implemenation-012813.html (http://www.gambling911.com/businessfinancial/major-us-facing-online-gambling-site-confirms-bitcoin-implemenation-012813.html)

http://www.forbes.com/sites/jonmatonis/2013/01/28/government-ban-on-bitcoin-would-fail-miserably/ (http://www.forbes.com/sites/jonmatonis/2013/01/28/government-ban-on-bitcoin-would-fail-miserably/)

https://i.imgur.com/EqfRYzd.png

WOW Goebbels Step-Grandchildren Are Hidden Billionaires!!!

























Just kidding. ;)

Oh so delicious press. Things are about to get even more interesting.

Another good news: A Mega reseller hosting.co.uk/mega.php is no longer accepting PayPal and is now accepting Bitcoin.

I don't see bitcoin in the prices; where do I have to look?

Source?!?

Worth noting: this guy posts about Bitcoin in his byline a lot, so it's not like this particular article is that unusual.

The Bloomberg one is a big deal, though.

I just checked, it's true!

Was hosting.co.uk always accepting BTC or is this new?!

https://i.imgur.com/RI3RJhE.png

Matonis writes about Bitcoin all the time - but I mentioned it because his articles get parroted often and this one had a particularly fun headline that might make the rounds.

 ;D true ;D

Damn it. I smell the beginnings of a bubble. And I kind of promised to myself I wouldn't get involved in day trading.

can u be more specific?  is hosting.co.uk one of the resellers that got banned by Paypal or are they a separate reseller that independently decided to reject paypal and accept Bitcoin?

ok, look at it this way.  this is just the fundamentals asserting themselves.

They got banned and inserted bitpay afterwards from what i heard.

oh that's beautiful. just beautiful.  :D

Matonis articels are well written and can stand any journalistic investigation, in opposite to the doomsday writers ;). Thats important to me at least. When I occasionally tell somebody about Bitcoin I am more confident these days that a little google research won't let him think its all "dangerous stuff"... This was different a year ago, when I googled "Bitcoin" for the first time. Well, if you search for "Bitcoin" in other languages than english you might be dissappointed - so many nativ english speakers have no glue what that really means.

Motonis is great, he seems to understand what it is all about!

Too bad nobody can spell his name.

Oh yeah, that's great news!
All three articles are well written. No surprise with Matonis' here, but I am very happy that even Bloomberg got it right!

Gentlemen, it is beginning.
Maybe it began some time ago, but in short time everything will go nuts! :-)

Ente

Anyone know what gambling site gambling911 referes to ?

It's not any of the sites that were taken down by the us govt. previously ? If so, that would be hell of a way to pay back, if they dear doing so, or will we see another player. If one major player accepts bitcoin, the others will soon follow.

I think it will happen, because gambling sites are all about profits, and if there's a way to rise profit, you can be damn sure they will do it!

This would go oh-so beautifully with this:


*grins*

Ente

More pressure: ZeroHedge covers the BTC/central banks story. http://www.zerohedge.com/news/2013-01-28/chart-day-ecb-responsible-second-coming-bitcoin

http://imgs.xkcd.com/comics/argument.png

 :D

just had a chat with Max Raskin, the author of this article and sent him his first BTC ever as donation :-)

Well, looked into BTC news today and those are definitely some great things to hear!

Looks like the the previous crash is mostly recovered and wiped out. 

I keep asking what if BTC ever hits parity with Silver but this time obviously there's tons of awareness of BTC and demand, compared to the original bubble/crash.

Let's go to $20!

Bitcoin is the new gold.

+1  :D

really?  :D

Bitcoin is backed by mathematics. What's gold backed by?

Ha, maybe if bitcoin were heavy and hard to move and conceal large amounts of. Uh, and if it was easy to divide down to the microgram. Oh, and if you could back up gold.

Not a gold hater, but bitcoin >> gold.

Scarcity, its industrial uses and the fact that it looks nice?

But Bitcoinworld has CASASCIUS for all that cosmetic stuff. ;D

I'm all for bitcoin gaining popularity, but what happens when the established institutions start to take notice?  They're probably going to start a PR campaign against bitcoin, most likely overstating how easy it is for a user to lose their wallet.  Heavily implying that your bitcoins could be stolen by some malicious hacker at any time, with no possible chance for a refund.  Which, is a bit of bold faced lie.

Also the last time bitcoin got attention, there was a crash in the worth of bitcoin.

Just curious to see what people think will happen because of an company such as Bloomberg publishing a story like this.

The backing craze has to stop. Bitcoin is backed by nothing and has no intrinsic value - which is just about perfect for a money system.

Honestly I've always considered Bitcoin to be backed by anything and everything that people are willing to sell for BTC. So that would make it backed by a basket of commodities (PMs, honey, coffee, etc...) and services. Sounds pretty sound to me.

Thralen

That's a perfectly acceptable way of looking at things, provided you also consider USD to be backed by the US economy.

Actually I consider the USD to be backed by the world economy. The petro dollar is the only thing keeping the USD afloat (although it may be replaced by an agri dollar instead). If the rest of the world decides that the USD isn't worth having any more, then the USD is sunk. It'll be around for a while after that happens (not if, but when) but as for its value? It might be cheaper to use singles as toilet paper at that time.

Thralen

Gold's value is backed by around 4000 years of history.  I like bitcoin and its potential, but let's not let hubris get out of hand.

Relevant reading:
http://www.fin24.com/Economy/Brics-move-to-unseat-dollar-as-trade-currency-20120325

Here is some more news from today:

http://www.zerohedge.com/news/2013-01-28/chart-day-ecb-responsible-second-coming-bitcoin (http://www.zerohedge.com/news/2013-01-28/chart-day-ecb-responsible-second-coming-bitcoin)

http://www.wealthwire.com/news/finance/4464 (http://www.wealthwire.com/news/finance/4464)-Bitcoins Pose Major Threat to Central Banks

http://maxkeiser.com/page/2/ (http://maxkeiser.com/page/2/)--For a primer on all things Bitcoin, of course, you will have had to watch Keiser Report, the ONLY international financial news programme to have covered it:

I'm just poking some fun into the arbitrary "this currency is backed by X..." discussion. I enjoy asking goldbugs who are critical of a digital what they think their gold is "backed by." Hopefully it gets them thinking about what exactly makes currency valuable. I also stack PMs, so I can totally understand why it's tough to see the same level of value in a digital currency.

I bet on parity with gold within much less than a decade !

???

1 BTC = 1 Gold what? Oz? Ton? Liter?

Yeah, gold has some usefulness as a conductor and at looking pretty, but in the end, most of its bullion value comes from the same place as the value of any other currency on the planet: the bizarre self-fulfilling prophecy called "confidence in future value". It's just that gold is an order of magnitude older than any modern currency, which means that even though it's not current money, it's the literal gold standard for confidence in future value due to historical evidence.

Of course, if nanotechnological alchemy ever gets invented the only thing you'll be able to trust to give you scarcity is mass and math. But that's a big "if". ;)

physics

edit: and printed fiat is backed by chemistry (the special print ink and so on)

Continued with this line of thought, I assume toilet paper is backed by shit ?

It's not just age and history.  Silver, gems, and seashells were used long before gold, yet are now demonetized.  Consider why this is so:

There is more evidence available from physics, economics, and psychology, etc., to justify the "confidence in future value" of gold than anything else.

Gold's unique properties, which create its unparalleled inherent utility, are not "bizarre" or a "self-fulfilling prophecy."

The backing process must end somewhere; it cannot be turtles all the way down. 

The only way to stop the infinite regression is with a self-backing money of intrinsic value.

The same reasoning applies to bitcoins.

When you get all confused, simply repeat Gengix's Mantra:

"Gold is closest to money from a physical perspective.  Bitcoin is closest to physical gold from a monetary perspective."

https://i.imgur.com/1dtLNSN.png

See that point in the middle?  That's where inherent utility becomes intrinsic value.  And vice versa.

How about a new comparison thread? Bitcoin is on parity with an X made of gold... Currently it looks to be a "Disney Dee Bee Pin" (Whatever that is).

http://i.ebayimg.com/t/DISNEY-DEE-BEE-SOLID-GOLD-DISCOVERY-QUEST-THINKEE-PIN-/10/!BkdmhLgCGk~$%28KGrHqYOKiYEsnul0o3%29BL%28oQtBeH!~~_35.JPG

Personally, I'm holding out for a gold toilet.

http://stellakheine.files.wordpress.com/2011/08/solid-gold-toilet-for-the-rich.jpeg?w=253&h=300

Pah, a toilet

if an Gold Object, than I go for the real deal:

http://mimg.ugo.com/201008/54944/cuts/gold-death-stars_288x288.png

A solid gold death star, muahahaha.

But enough OT picture spamming now

iCEBREAKER, I suspect we're working under conflicting definitions.

If silver is "demonetized", so is gold. Seashells ain't scarce anymore, and historically were used by cultures that got physically steamrolled later (so their cultural norms didn't control). Gems ain't fungible or scarce.

Which properties do you mean? Is it just the scarcity/fungibility/divisibility trifecta? Because it seems to me like, to some extent, those are required for something to function as money at all.

Disagree, although that's possibly because we're using different definitions of "backing".

To me, "backing" is one source of confidence in a currency's future value - that it is guaranteed by some trusted authority to be exchangeable 1:1 for some good that's already considered valuable. So, silver certificates are backed by silver, because silver is already considered valuable and the government promises to give you silver if you turn in a silver certificate. Liberty Reserve was backed by gold because NotHaus promised that you could redeem them for gold in his Idaho warehouse. You could even say that stock ETFs are backed by their stock basket.

But currency confidence can come from other sources. USD, for example, functions as a currency because it's fungible, divisible, and (relatively) scarce, and people are confident they can buy stuff with it tomorrow. It's not "backed" by anything, other than, perhaps, anti-debt (that is, the government guarantee that if you are in debt, including tax debt, you can throw dollars at the debt to extinguish it). But people have confidence in its buying power (out of habit, the presence of an established economy, and if nothing else, tax obligations), so they use it and it works.

Gold's got scarcity, divisibility, and fungibility, and people are confident it'll still be worth a lot tomorrow. Why are they confident it'll still be worth a lot tomorrow? Because it's been worth a lot for as long as anyone can remember, because the scarcity is defined by physical law, because culturally we think of gold as a symbol of wealth, and because it has some (niche) practical use that would make it useful even without its monetary properties. But I'd argue that those non-monetary practical uses constitute only a small portion of what makes it valuable in the eyes of people in general. It's mostly psychological, cultural, and based on its history of past value.

Central banks never stopped using gold as money.  They buy/trade/hoard gold and count it on their balance sheets.  Not so for silver.

I'm using Aristotle's 4-pronged definition of a good money, requiring it to be durable/portable/fungible/independent.


The US dollar is backed by oil.  Demand for dollars is solely a function of the fact that our paper statelets (Saudi Arabia, Kuwait, etc.) only accept US$ for oil.

Absent petrodollar hegemony it will collapse.  This process is already well underway.

Gold is backed by gold, via fungibility.  The circularity is a feature, not a bug.

"Backed by" has nothing to do with confidence.  Backing refers to a guaranteed exchangeability.  EG, I could issue bonds backed by worthless Zimbabwe dollars, or seashells.

Agreed. One could even theorise that the history of colonialism and empire is really the history of currency running out of places to hide  :)

The ruling class Arabs getting the dollars also get security guarantees, keeping their puppet regimes safe from the oppressed citizens.  That's the deal.

Dollars buy less gold, cars, TVs, and phones every day.  Those goods are also for sale in other currencies.  The artificial demand for US dollars is due only to petrodollar hegemony.

The US has not run out of places to conquer.  You need to keep up with developments in Africa.

Backed By != Valuable Because

Backed By = Guaranteed Exchangeable For

There is often some overlap, but don't let that confuse you.   ;)

Gold is real and you can hold it in your hand and most importantly it does not need electricity or the Internet to exist. If there is any shortage of electricity to power computers or other devices needed to get to bitcoins or to run the servers it needs to run the block chain or the Internet then bitcoin no longer exist. Gold has been treasured for centuries because if its durability, something bitcoin does not have as long as it depends on electricity and the Internet to survive.

It depends on one computer with one copy of the blockchain surviving until the internet is brought back up if you have your bitcoins backed up on paper.

These are not unsolved problems either. Mesh networking is surely on the way and limited power independence will arrive in good time (without the need for government to throw money at it, I'll add).

Bitcoin is real and you can hold it in your brain. And I'd argue that bitcoins are more durable than gold. (Can you make backup copies of your gold?) The bottom line is that people who claim that gold is better than Bitcoin because it's "physical" are confusing cause and effect. Gold's corporeal nature is a bug, not a feature. But it was that corporeal nature that enabled gold to function as a decentralized money (what you really care about). Decentralization is critical to prevent manipulation / debasement by a centralized issuer. But that decentralization came at a cost: gold is (from a modern perspective) terribly inefficient as a medium of exchange. On the other end of the spectrum, modern electronic fiat is a much more transactionally efficient money. But that just trades one problem for another (and larger) one. Centralized currencies give tremendous power to the issuer. And power corrupts. Bitcoin is not revolutionary because it's "digital" or "virtual" (so are the vast majority of dollars). And Bitcoin is not revolutionary because it's decentralized (so is gold). Bitcoin is revolutionary because it's BOTH.

You also can't eat gold. If things get so bad that the Bitcoin network is inoperable, you'll be taking your sackful of gold (you bought real gold and not certificates, right?)  over to the neighbors to trade for food and they'll shoot you as a threat (and then take your gold). Water, food & ammunition are hedges against such a scenario (though there's a slight issue with that third one at the moment).

That's why its good to have a large quantity of Bitcoins, but at the same time have some gold and silver buillion (one ounce coins) to spend in an emergency if the Internet is unavailable for a period of time. For example, after an EMP (electromagnetic pulse).

Exactly. Diversification is the key. We watched that "Doomsday Preppers" series recently and couldn't believe the people who prepared for one specific type of event to the exclusion of any others, often when it would only take a slight modification to their strategy to be more generally prepared. Hyper-focus and obsession need to be guarded against.

Gold isnt scarce once you look beyond our tiny planet. A single smallish asteroid could contain far more gold than can ever be mined on earth. Eros alone is estimated to contain 20,000 million tonnes of gold and similar amounts platinum and other metals. And there countless such asteroids. All those gold bugs better hope Deep Space Industries and its competitor (forgot the name) dont go anywhere.
But whatever they end up mining up there, it wont be bitcoins :)