Bitcoin Forum

Bitcoin is going up in price because people believe it will be used as a medium of exchange and store of value. If they realise this wont happen it will collapse in price. So lets look at these two aspects.

1) Medium of exchange.

Bitcoin is only a medium of exchange when merchants accept it and hold onto it. Right now merchants are dumping bitcoin for dollars, so its not being used as a medium of exchange. This btw. also throws the transaction cost benefit argument right out of the window (spread).

Now will merchants ever accept bitcoin and hold onto them?
No.

Why?

a) Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains. Thus it cant function as a medium of exchange (same goes for gold btw.). Unless Government loses its control on its money monopoly this law wont be altered.

b) Governments will prohibt merchants from accepting bitcoins. Again: They will never give up their monoply on money.

2) Store of Value

After people realize that merchants are not adopting bitcoin and that it is not used as a medium of exchange, it will collapse in price. Will anybody store significant wealth in Bitcoin after this spectacular collapse? Not likely.

Also Bitcoin is a technology, that can be outcompeted by other altcoins. Your wallet can be hacked. The average citizen cant judge if the code can or can not be hacked and thus more bitcoins created. If you want to store wealth over a long period of time investing in a technology is not the best and easiest option. Also Bitcoin is not useful or wanted. If you ask a Bitcoiner what can I do with it they will say: dump it on the next guy it will go up in price! Gold and Silver where always wanted (jewlery and nowadays industry) and thats why they became MONEY in the first place! They have unique properties and everybody love to hold them in their hand. This will always be the case ensuring significant value and acceptance. Nothing like this can be said for bitcoins. Thus I dont believe bitcoin will function as a store of value in any significant way.

Conclusion:

I predict bitcoin to collapse in price (as it wont be used either as a medium of exchange nor as a store of value).

EDIT: The price increasing shows bitcoin is used as a speculative vehicle. It does not demonstrate bitcoins viability as a store of value or medium of exchange.

(Additional line of attack for governments: Government could come down hard on miners. They could make it illegal to mine bitcoins. Then bitcoin will lose all of its advantages compared to alternative cryptocurrencies. It will be a code like the rest of them.)

EDIT2: Also consider this post (on why bitcoin cant be money):
https://bitcointalk.org/index.php?topic=361037.msg3926046#msg3926046

and the FUD begins .....

Thanks for your detailed respone.

State why the above reasoning is false.

What government? All the governments in the world? They could as well make it illegal to sell alcohol or cigarettes, but it doesn't stop people from investing in these branches. You are thinking too much about things you just can't predict.

Just look at technological investment opportunities of the past 20 years, if you threw money into an early Microsoft, Apple, Google, Facebook, you got a lot out of it, if you did the same with Kodak - your loss. In the recent years Nokia and Motorola lost a lot of phone market to Samsung.

Its easy to predict that governments wont allow to be outcompeted by bitcoin. They have a money monopoly and thus will prohibit significant competition. Thats different than prohibiting alcohol as the merchant can accept dollars instead. No need to accept bitcoins. However alcohol is something you cant replace. Also alcohol is not where government derives its power from. Money is (inflation to finance its operation). It is already impossible for bitcoin to become a significant medium of exchange due to tax law.

Now regarding store of value I have explained why I think bitcoin is not suitable.

Read my actual text! Hint: The second bolded paragraph goes into detail why bitcoin wont be a store of value.  The first one was just to show that it will start off (trying to gain that status) in a bad position. Not more not less!!

You did not quote the full explanation.



A medium of exchange (like dollars, yuan or gold in ancient times) is used to exchange it for goods and services. If the merchant sells for dollars immediatley bitcoin cant be qualified to be a medium of exchange. Look at it this way: The merchant does not want your bitcoin but dollars. He accepts bitcoin only because he can get dollars by selling them. In this case dollar is the currency not bitcoin. If you would have sold for dollars and then used dollars to buy goods from the merchant it would be the same thing. Would you say in this scenario that bitcoin is a medium of exchange? Of course not!

I didn't get that point. If you buy something for dollars and then sell it for dollars, you still have to pay taxes. What am I missing here and what is the difference between dollars and bitcoins then?

The difference is that the "medium of exchange" is taxed.

For example: If the merchant accepts dollars and holds onto them and eventually uses them to buy new supply (i.e. sells dollars), he doesnt have to pay capital gains taxes on a possible increase in the dollars value. If the dollar trades higher versus the euro, the government does not force you to pay taxes on these exchange rate "gains".

However if the merchant accepts bitcoin and holds on them and eventually uses them to buy new supply (i.e. sells bitcoins), he will have to pay capital gains taxes.

The same is true for your average bitcoin holder. If he buys one bitcoin for 100 dollars and eventually buys products with the same bitcoin (which is now worth 500 dollars) he will have to pay capital gains taxes on the 400 dollar increase. He wont have to do this if dollars increase in value in comparison to bitcoins, euros or any other currency.

How can you make it illegal to mine?

Governments can pass laws that make it illegal to mine bitcoins. Simple. They can raide miners houses if need be. They can threaten you with death penalities if you mine despite it being prohibited. Again its just another line of attack that is unnecessary as you already have two major lines of attack (with one already being law, ie capital gains) to make sure it wont become a major medium of exchange as I discussed in the OP.

Now I see your point, but I don't think it would be serious obstacle really, if any. You will pay only if the exchange rate has increased, i.e. the exchange rate difference would only be taxed, right? If the exchange rate doesn't change, there is no additional taxation as I understand it...

You have no clue how this works , do you?
Do you think that a government imposing the death penalty for mining will last more than 1 week ?

No you have no clue how the world works. The monopoly of money is the most important power tool governments have. Wars have been fought to protect it. Again stop focusing on miners: Taxes on bitcoin are enough to kill its use as a medium of exchange.

Then why did you mentioned it? Just to make you post look smarter?

What a load of BS in the TT....

1a:
What's wrong with paying taxes and why will it kill bitcoin?
A country must get taxes to build roads and run the country. Taxes system might need an overhaul but it won't kill bitcoin.

1b:
This will change once the government understands bitcoin and has new methods of getting taxes to keep countries running.
Not all countries limit the use of bitcoin so this is nonsense. I can still buy pizza here in europe with bitcoin.
Also bitcoin is volatile, maybe they are protecting their merchants and economy. If a company or bank loses 50% of their money due to the bitcoin taking a dive it can easily kill a company. Who says they're doing it to keep their money "monopoly".

2:
Is 1b in different words.

3:
Bitcoin can only be hacked if public key cryptography is hackable. This can be done once quantum entangled quantum computers become mainstream.
If this happens every bank on the planet can be hacked with ease.
Since the greeks hundreds of years ago people have tries to solve the factorization of big numbers. No one has succeeded since so it's safe if you use it correctly.
The fun thing is that a bitcoin account, when no money has been spent from it, is even more secure. You will have to be able to find SHA-256 collisions too to find the public key.
On the other side bitcoin hasn't been hacked but nearly all banks in the world have.
And we can easily modify virtual currencies to withstand quantum computers. Look at Quark-coin.

Hey, you seem to have failed to address my point on taxation. If taxes on bitcoin you are talking about here boil down to the taxation of foreign exchange rate differences between Bitcoin and, say, dollar, this will surely not kill its use as a medium of exchange. I see no problem here and am waiting for your constructive answer..

Most govenments have banned hard-drugs .... look at the price :P

You are just babbling and have not read the thread.




Thats why you dont have competition in medium of exchanges. Everybody using alternatives has to pay taxes on the medium of exchange! That obligation also kills any anonymity you might have btw.!


No it will not change. Inflation is the most powerful way to tax. Inflation is only possible if government has control over money. Read your history.


Not very convincing for the average joe who wants to either store wealth in gold or bitcoins. Again you say it cant be hacked but you overestimate your own intelligence.

Also address theses points for the average joe: 1) What if my money is outcompeted by a different altcoin? 2) What can I do with Bitcoin except dumping it on the next guy? Silver I like, I can touch it, its used in industry, it looks great. 3) I cant be sure that the limit cant be broken. I have no trust. 5) I rather choose something stable thats not a technology to store wealth over long periods of time.

See you arrogantly assume bitcoin is the best way without ever considering that there are safer alternatives.

I have already replied to you see post above.

Again merchants cant use bitcoin as media of exchange because they would have to pay taxes on any gain in value of bitcoin itself which is much to cumbersome as it involves enormous paperwork. Thats why we have no competition in media of exchange. Again its one way the government makes sure only dollars are used, there are other ways as I have explained.

It's good that after 4 years someone finally stepped in and explained to us why bitcoin will fail. Thank you OP!  :-*

Is it you Anonymint?

What we would need to get around the capitol-gains tax issue is a Stable-value, High-velocity coin.  It would move from one person to the next sufficiently fast that people do not hold it for long enough to incur any gains.  Freicoin aims to do this via Demurrage, which reduces nominal coins held in all wallets 5% a year.  This would increase velocity and if we could find a way to keep valuations change to less then the rate of Demurrage (so far no crypto has found out how to be stable, it is the Holy-Grail) then their would never be any capitol-gains to pay and no death-by-taxation scenario.

Could you please provide a link? Can't find your answer to my post...

You may think as you please really, but I find your argument on taxing exchange rates differences very weak. It is simply beyond my understanding how Bitcoin may fail just because of some paperwork. It may actually fail in the end, but this apparently won't be for capital gains taxes. As to me, that would be equal to saying that an enterprise would go bankrupt just for gaining some surplus profit... How come?

If we have to pay capital gains, then we should be able to claim investment losses too.

The street runs both ways.

So, if you bought BTC at $1000, and now it's $700, and you bought 5 BTC, you can claim $1500 in loses on your taxes.

Congrats !

No that wont work. Any business has a significant pool of savings it does not want to spend immediatley.

Also your point about stable value is not really relevant as its mainly about the enormous paper work businesses would have to fill out. Even small gains will have to be reported.

Can the government prohibit me to use, for instance, dollars to pay people (if they agree) even if I am in italy?

Would such prohibition be compatible with the italian constitution? Is there something in such constitution that states that we in Europe must use as medium of exchange only euros?

As far as I am concerned the only thing that government can force us is to accept "state" money in repayment of debts. That is because there is no alternative.

Best regards,
ilpirata79

Reread the thread: They force us by expecting us to pay capital gains taxes on every media of exchange thats not government currency.

Why is that a problem? If bitcoin value increases compared to local fiat it's good for the merchant. They will pay capital gains which are ONLY a fraction of such gain. If they lose value or stay the same, no problem.

Best regards,
ilpirata79

Think again: If Bitcoin should become money it has to be stable. It wont increase the entire time. Even today we have a volatile market so I cant be sure if I gain or loose.

Hint: Its about the paperwork. Thats why we dont have competition in media of exchange.

That guy seems to be impossible to explain this. His argument is now reduced to the assertion that Bitcoin will fail because of paperwork businesses would have to fill out for exchange rate gains. I hope somebody would come here and explain it in detail whether it actually requires that much work and how often

Personally, I don't believe him but have no experience in this field to refute with competence...

No my argument is that bitcoin wont become a media of exchange because government enforces its monopoly on money with all its might.

Now one of the way it does so is by taxing other media of exchange (if you cant grasp that I cant help you).

Other ways are (as explained above):

1) Prohibiting merchants from accepting bitcoins 2) Raiding exchanges 3) Raiding miner networks

The list is endless.

Why do you think gold is not used as money? If the market before chose it to be money? Any guess.

You could just have said at the start without much beating about the bush that government would outright ban Bitcoin, and nobody would be arguing with you on that point. Though this has been discussed so many times here that you could hardly add anything new to the debate and that would be boring...

What paper work are you talking about?
As of now, you just have to declare your capital gains at the end of the fiscal year; that at least in Italy.

I don't see why things should be made more complicated in the future only for bitcoins.

Regarding the banning of bitcoin tout court by a single country (already been discussed as just pointed out), I think that that would be a big mistake for the country that is making such a decision, because its businesses would be damaged internationally with respect to other businesses that can accept bitcoins.

Best regards,
ilpirata79

Thats the first part. (The new part is that government has already killed bitcoin as a media of exchange due to tax laws. You dont want to understand this which is fine. )

The second part is about its acceptance as a store of value.

Also I believe transaction costs are high if its not accepted as media of exchange.

If you cant refute these points the value is effectively 0.

There can be no "guesses" about it. Currency backed up by gold (or any other asset limited in supply, for that matter) had been a cause of much headache in the past due to its deflationary nature. The problems with gold backed money finally culminated in the Great Depression of 1929. After that the gold standard to which you appeal here had been quickly abandoned by all states...

For merchants its complicated as they have to track the prices of bitcoin for each bitcoin they hold and sell. Why would a merchant want this? Again you keep assuming bitcoin will be adopted despite it being more complicated than government currency.

Why isnt gold used as money? Why is everybody using government money. Think about it. You are in love with bitcoin.

Learn history. Gold has been used as money for thousands of years.

Your interpretation of the Great Depression is incorrect but lets not go into this.

I am asking you why nobody is using gold (not gold standard!) as a media of exchange. (The answer is tax laws!, like bitcoin).

Who wants to carry gold with him? And how do you pay a keg of beer and some snacks? Ah yeah. Those !@#$%^&* tax laws!

Because it is heavy, cumbersome, liable to tear and wear as well as counterfeiting and defacing. Actually, it is you who have to study history here. Silver coins were primarily used as a means of exchange, at least in Europe (don't know much about other countries), gold was stashed away as a store of value above anything else except jewelry...

define: "governments" .Today all governments are just individuals prone to lobbies instead than political partys. If bitcoin will succed is because governments ar not nearly powerful as lobbies and markets. Governments have no way to make mining or btc exchange illicit without incurring in constitutional issues, of course that's not the case of china, the ceo of baidu created the last pump, for the next there is a single player who can without any doubt push the btc to 30.000 (having loaded bunches before) and his name is bezos.  

Service like BitPay help businesses transition from dollars to BTC, while removing the paperwork/record-keeping barriers you described above.  

A coffee shop I frequent here in Vancouver simply enters the dollar amount for my coffee, and BitPay generates a QR-code-based invoice that I scan with my phone and pay.  BitPay then converts these bitcoins to dollars and gives the coffee shop the *exact* amount they requested, minus a 1% fee (less than credit cards).  BitPay absorbs all exchange risk and eliminates any "currency-exchance / capital-gains" accounting.  It is *easier* for a vendor than getting set up with Visa.  


In the future, and as the bitcoin economy grows, it will become advantageous to *never* convert to fiat.  I have described "real-time" tax-collection systems for merchants such as coffee shops, in other posts.  Such systems could remit the VAT instantly as it is collected on each purchases.  Furthermore, the tax-authority could instantly credit the merchant with bitcoin payments to offset input tax credits against tax-deductible supplies like coffee beans or electricity bills.  In a world where all customers pay in bitcoin and all vendors accept bitcoin, it would be possible to pay your VAT taxes but never have to fill out another form again!

My point is that bitcoin will help to streamline government, making it more efficient, and restoring peoples faith in these institutions after the scandals from the recent financial crises.  

I have read the thread and you talk about "Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains. Thus it cant function as a medium of exchange".
You say that not being able to tax bitcoin will kill it.
In my country we pay taxes on gold and even bitcoin so it is possible and in my country bitcoin IS a medium of exchange. In neighboring contries this is also true. America isn't the whole world you know.
We have systems in place for verifying that taxes are paid. If you buy a house or car beyond your means and can't explain where the money came from and haven't paid taxes you have a problem.

Bitcoin is an open system and not anonymous. If you use your bitcoins your identity can be associated.

LOL you do know that inflation makes money worth less? Inflation happens because dumbasses print money so they have more. This is not tax this is devaluation of money to make your debts less and income greater. Tax is money taken from the population, inflation is printing money or money losing value.

I explain how it can be hacked and when it can be hacked. Did I say it cannot be hacked? I explained that banks are more vulnerable once the technology does appear.

Why do people put their money on bank accounts? Ow because they can smell and touch it right? What's the difference between money on a bank or in a bitcoin wallet?
1) What if the Euro outcompetes the Dollar? Ow that's happening right now ....
2) You can't touch money in your bank account. Money is paper with a promise on it also no intrinsic value.
3) You mean the 21 million coin limit? Other coins forked from the bitcoin have hit the limit and it works. Well the dollar has no limit since it's being printed by the thousands and this isn't something average joe has a problem with.
4) You can't count cos you missed 4 :D
5) Yeah choose the stability of the dollar. :)

Did I say bitcoin is the best? No bitcoin is a good medium in it's first years of development. It will take time for stability.
Bitcoin has it's problems but atleast it's an open system so you can see every transaction.
You talk about safer alternatives, yes there are safer alternatives but what's stopping a bank from protecting your bitcoins for you?
Bitcoin has the possibility for being safe it will take time. Your comparing the first few years of bitcoin with hundreds of years running fiat money. You can't expect it to get to a mature level without going through a rough patch.

This is the post I was waiting for. That argument for bitcoin to fail because of some paperwork looked fishy right from the start. I just could not take it serious. If anything, such things usually could be fixed pretty fast...

1) You just describe a method that moves the costs of paperwork from the business to the customer.

2) You are going down the deep end. Government wants you to use and hold onto their currency so that they can inflate and steal purchasing power. Collecting taxes is not going to solve that problem.

I dont see how converting fiat to bitcoin and then bitcoins back to fiat (spread) PLUS the paperwork will be viable (less costly than credit cards).

So you imagine the merchant having to manually write down on a piece of paper about each bitcoin (or even fraction of) he/she receives or sells ... ok... if that's your argument, I am done.

Best regards,
ilpirata79

There are entire businesses apparently that specialise in removing this hassle. Again these costs plus conversion from fiat to bitcoin back to fiat (spread) costs are quite enormous.

Again that was just one way government make transacting in bitcoins costly.

The other way to kill bitcoin as a medium of exchange is straight out prohibiting businesses to accept bitcoin. Again they like their money monopoly.

hint: electronic gold.

reason why nobody uses eletcronic gold: government enforces its monopoly (see gold money, liberty dollar)

bitcoin is not going to be an exception. you have not made the case.

ways government could undermine medium of exchange value:

1) prohibit merchants using it 2) costly tax laws 3) raiding miners 4) prohibiting exchanges

List is endless.

Store of value like gold?

I dont think so, see OP.

Even if these services can reduce the cost by using economy of scale, the cost is still present. Add that to the cost of exchanging fiat for bitcoins and you have high transaction costs.

Also my main argument is again that value as a medium of exchange wont be it, as governments can prohibit its use, close down exchanges, raid miner networks.

So whats left might be the store of value argument. Again I have addressed this already. I dont believe its a viable alternative to something like gold or silver.

Finally someone with common sense.

Any Altcoin is as good as Bitcoin as a medium of exchange.

Interesting is that only few people are using them as a medium of exchange. On one side no one wants to spend theirs, as they could be worth more tomorrow. On the other side, apart of some enthusiasts, no vendor wants to accept them as they are too volatile.

I believe that the high volatility is damaging Bitcoin. Bitcoiners love it, as they made a lot of money. I would have prefered a more slower and constant rise, 2%-5% p.a., or even flat. This would have made adoption more easy.

Any person with some sensibility for risk will not touch Bitcoins until they are stable for at least a year. The big price increase over the last a few weeks and now the upcoming crash are damaging the future of Bitcoin.

Currently it is only seen as a "get rich quick" scheme, and I don´t believe that this was its purpose.

Bitcoin is a disruptive technology.  The social, political, tax, and welfare systems in place will be forced to adapt.  You are trying to pigeon-hole bitcoin into the current system, and I think this is what is preventing you from imagining the future: bitcoin is a game changer. 


 >> You just describe a method that moves the costs of paperwork from the business to the customer.

Are implying that all citizens would be required to track their entry and exit points into bitcoin in dollar terms and pay capital gains on the difference?  This is a worthwhile debate and I look forward to seeing guidance issued by various tax authorities on issues like these.  Here's my take:

Bitcoin makes VAT easier to collect but capital gains tax much harder to collect.  If you attempt to collect tax on bitcoin gains, then you must also allow taxpayers to write-off bitcoin capital losses.   This system would be very easy to cheat in favour of the tax payer and very hard to police by the tax authority.  People hoping to minimize their capital gains on bitcoin could easily obfuscate their trail (in fact it would be hard not to): how is anyone going to know what exactly Sam bought with her bitcoins, or the exact price she bought them off of Joe?  Furthermore, such a system would be ripe for abuse: less scrupulous people could easily "create" paper trails to appear as though they took an enormous capital loss in bitcoin trading.  They could then use this to write off other capital gains in an unfair way. 

On the other hand, people would pay VAT seamlessly with bitcoin, and would have very little incentive or ability to avoid it.  Merchants would love it, because the real-time tax systems I described would eliminate headaches.  Tax-authorities could shrink because the blockchain could be audited in real time and payment would be automatic (no collection issues).   


 >> You are going down the deep end. Government wants you to use and hold onto their currency so that they can inflate and steal purchasing power. Collecting taxes is not going to solve that problem.

Do you imagine "them" as this cohesive group of people plotting to make your life miserable?  The government (aka "they") are just a bunch of unique individuals trying to make a nice life for themselves and those close to them.  I agree that the system in place steals purchasing power through inflation--most people do.  But to imply that everyone in government drools over the thought of stealing your purchasing power is juvenile.  Everyone knows there is corruption in places, but still most people in government are just like you or I.  They dislike crazy banking fees and they worry about reckless government spending affect their purchasing power in retirement. 

The inflation problem is *systemic*.  With the current Federal Reserve system, it is politically easiest to "print money and worry about it tomorrow."  This is not a conspiracy.  This is just people kicking the can down the road. 

Bitcoin forces governments to be accountable.  This is better for everyone. 

Is it so difficult to understand. You will need to record the USD/BTC rate on every transaction. Here the problem starts, which exchange rate are you using ? The Goxed or the Stamped one ? Don´t forget the timestamp of the transaction needs to be matched with the price at the point of exchange of goods. Just imagine you would do 100 transactions as a merchant a day....

After a week you then cash out 50%. You will need to calculate the average rate USD rate you received the coins, to determine the profit you have made by accepting them.

A week later you will need to cash out another 10%. You have had another 100 transactions, meaning your average price has changed again....

I would not want to do this unless this is automated.... This can be very messy. And if you do one mistake the taxman will surely come around and will have a look at all transactions you have done...




 

These are tired arguments from the point of view of First World Westerners.




1) Medium of exchange.

"Bitcoin is only a medium of exchange when merchants accept it and hold onto it."

Not true. It' a medium of exchange when ANYONE accepts it. Not just businesses.  Bitcoin was already an effective medium of exchange before anyone even knew what btc was.


"a) Governments have already effectively made it impossible for people to use bitcoin as a medium of exchange, as they expect taxes to be paid on bitcoin gains. Thus it cant function as a medium of exchange (same goes for gold btw.). Unless Government loses its control on its money monopoly this law wont be altered."

Maybe, some governments.  Not ALL governments. Your argument assumes that all governments will collude to scheme to preserve the status quo. I doubt that this will ever happen, as evidenced by the world's tax havens holding out to provide a shelter for wayward wealth.


"b) Governments will prohibt merchants from accepting bitcoins. Again: They will never give up their monoply on money."

Maybe, maybe not. Some countries, such as Ecuador, don't even have their own currency. WTF do they care.  And the governments may not have a choice, as Cyprus hinted at.  If people think a local currency is shit or untrustworthy, they will flee to a different asset. Why not a digital asset that can be banked in the blockchain and retrieved from anywhere on earth?  Beat's taping 100 ounces of gold to you body and then trying to get through an airport metal detector.

"2) Store of Value

After people realize that merchants are not adopting bitcoin and that it is not used as a medium of exchange, it will collapse in price. Will anybody store significant wealth in Bitcoin after this spectacular collapse? Not likely."

Your whole argument seems to hinge on ALL merchants failing to adopt, and ALL governments colluding to ban bitcoin.  BTC has spectacularly collapsed 6 times in 2013, and will probably collapse 6 more in 2014.  It's risky, yet people are drawn to it like, well, gold!  Yet it's easier to manage than gold/silver, easier to trade, more private, more fun, more interesting, and it's in a limited quantity unlike Fiat and even Gold/Silver (they keep digging up more of that shit after all!).

Regarding miners.... yes, Governments might be able to threaten miners, but they can mine over a proxy. Or they can ship their miners to North Korea if necessary and operate from there. There are technological ways around the problem. And again, your argument hinges on ALL countries getting together to prohibit mining everywhere in the world.  Miners could be located on international waters, if necessary.  The problem is not insurmountable.

If Governments are as succesfull in stopping btc as they are in collecting internet taxes, then btc should be safe for a long time.
I don't think the entire future of BTC hinges on it replacing the dollar. There are many benefits it can provide even if that doesn't happen. 

I think BTC will continue to rise, and will easily surpass $2000 in 2014 as these benefits are discussed and understood, even against the backdrop of posturing by a few big bully governments.

porc:  Governments do not gain from inflation.  Governments borrow money at interest like everyone else (though they generally have excellent credit) and the Bond rates reflect the inflation rate, what ever desire investors have for the security of a Treasury bond, they will subtract the rate of inflation from their offer.  So while the government pays back every Treasury bill with dollars that are reduced in purchasing power they pay MORE dollars then they collected so it is a WASH at best.

People need to get off this idiotic belief that inflation (particularly at <2%) is a huge Wealth transfer mechanic.  It is not, but INTEREST IS, the average working man pays HALF his salary to pay for Interest embedded in the cost of everything he consumes, he loses mere pennies to Inflation and it's not even the government that even gets thouse pennies.  The Inflation-is-theft meme is quite literately the MATRIX that has been pulled over your eyes to conceal the truth, that you are a slave to USURY, a usury so pervasive that most of you people would fight to defend it.

What you say are the problems we already have today (and had yesterday), there is nothing new. Then how do we handle them right now and how is Bitcoin different from any other foreign currency we have to work with? These problems are technical issues only. If such a need does arise, they will be fixed pretty soon through automation and what not. Do you think that payment systems like Visa or MasterCard or whatever are less intricate inside?

A merchant, i.e. someone who is selling, must buy from their suppliers.

If the merchant takes BTC and their supplier does NOT, then thy must convert to another currency, one which their supplier will accept.

As more business and people take BTC as payment, a self-reinforcing process begins, in which BTC will become more accepted, as it is more accepted.

See how that works. We call it positive feedback.

This is why you see what you seen now.

K

My (layman) understanding of capital gain tax laws is that you have to pay capital gain taxes only if you buy the asset for a certain amount of dollars, then sell it for a bigger amount of dollars. In the example above it is not the case since the asset (bitcoins) is not sold for dollars but spent directly for buying goods. If this understanding is wrong, I am interested by sourced rebuttals.

Finally someone understands. Exactly! Its enormously messy and increases cost considerably. Taxing the medium of exchange is one of the main reasons we dont have competition in the medium of exchange market. If everyone was free to use what ever medium of exchange he wanted we would have already switched to more desirable alternatives like digital gold. One of the main reasons we use the dollar is because it is the only medium of exchange that is not taxed.

1) Yes. The need to pay capital gains tax is one of the main reasons we don't have competition in the media of exchange market. If there would be competition, people would already be using digital gold or silver. However, the need to pay capital gains tax on every transaction makes the legal use of such media incredibly complicated and expensive. Some countries do not allow losses to be written off. This, however, is not the main point: Even if you are allowed to write of losses the sheer amount of paperwork needed to document every bitcoin increase and decrease effectively kills off any competition to the dollar. The dollar is the only media of exchange which is not taxed (at least in the US, same for other countries, its always the government currency).

Real world example: If an individual buys something for his bitcoin he will have to pay capital gains tax. For example, one stewardess was an early adopter of bitcoin and bought a ticket to space from Richard Bransons Virgin Galactic. Now the government could find out her identity (via virgin galactic) and ask her if she paid capital gains on her bitcoin stake she used to pay Virgin Galactic. Same goes for Virgin Galactic. Now you could make an example of her (show trial) in order to scare off individuals who might have used bitcoin and evaded taxes. You can also make an example of businesses who are easy to track.

However, this is only part of the argument I made in the OP. Other ways (new laws not yet on the book) of killing off the media of exchange competition (like bitcoin, gold, silver etc.), is to prohibit their use or acceptance by merchants (GoldMoney, Liberty Dollar for example; the creator  of Liberty Dollar (Nothaus) was labelled a domestic terrorist, real world example of a public show trial btw.). Thus, bitcoin will not function as a media of exchange.

2) You have to remember being a successful business and having lots of customers is a public act. Every company files tax returns and balance sheet statements. Now if you show lots of revenue you have to show lots of transactions to justify this revenue and pay capital gains taxes if these transactions are in bitcoin. The government can simply look at your bank account to see if you have corresponding transactions in its government currency. If your bank account does not show transactions because you used your bitcoin account they know whats up. So, again they will want to see a huge amount of paperwork regarding capital gains and bitcoin that must in their view go along with your revenue.

Again, its not about the tax you pay, but about making it annoying for merchants to transact in bitcoin. If current capital gains law is not annoying enough they will find other methods like out right prohibiting bitcoin use (labelling anyone who does transact in bitcoin a terrorist, see Liberty Dollar) or use "soft force" via paperwork regulation to make bitcoin uncompetitive (like capital gains tax law).


I think you are totally off base. Politicians care about power and maintaining their power. Control over money and inflation is one of politicians most powerful instruments to finance their operation. Is it bad for the economy? Yes. However, price increases can be blamed on evil business men who are greedy. Printed money can be used to pay off debt, to finance close buddies who will give you special privileges, dolling out money to important voter segments needed for reelection without raising taxes and so forth. So, your statement that they like low transaction fees more than this enormous power is false. Read history and you will know. Protecting oneself against inflation is easy, its only the people saving in dollars that are affected (thats why they want you to hold dollars so they can steal your wealth if need be). Politicians know how to buy land, stocks and other hards assets to protect their savings.

Again, thinking Bitcoin will replace the dollar monopoly is naive. Now if it does replace the dollar monopoly, we still have to ask the question if it will be the dominant media of exchange and store of value, after all there are alternatives.

Now my thesis again is that it will be prohibited to use bitcoin as a media of exchange just like they closed down Liberty Dollar or Gold Money and in China this other alternative currency (forgot its name). China made a move on bitcoin already.

Bitcoin will be outcompeted by Gold regarding the store of value aspect.

I dont know where you are from, but where Im from you pay taxes if you gain money commercially no matter if its BTC, USD, AUD or EUR. If I buy something private I dont pay taxes, wether I pay with BTC, USD, a local currency or chicken. So this point is invalid.

U.S give most BTC to China and takes most real money of the Chinese people.  Give nothing for real money !!!
It is tactical general impoverishment of China.

http://fiatleak.com/

I bet that if bitcoins are nothing you must have a lot of them right?

Another idiotic thread .... ::)

If i could have 1 BTC for every thread like this when the price crashes, i would be banging Kimdarshian and driving a Maserati.

Exactly!  "Politicians care about power and maintaining their power," in order to make a better life for themselves and those close to them.  We're saying the same thing, porc, you just need to think bigger: bitcoin is a disruptive technology that will eventually break certain social/political alliances.  

Bitcoin gives politicians the opportunity to "opt out" too.  If they see bitcoin as the inevitable winner, what are they going to do?  They are going to buy it privately while towing the party line that it should be regulated!  But since they have a vested interested in the success of bitcoin, all regulation will be watered down in a way that actually strengthens bitcoin.  When bitcoin is strong enough, they will jump ship and be welcomed with open-arms.  

 ;D ;D ;D ;D ;D ;D ;D ;D ;D ;D

Yes we are have the same premise, that politicians will act in order to increase their power which is their main motivation.

However, you believe that  politicians cant stop bitcoin and thus will embrace it. I believe that politicians can and will stop bitcoin in order to defend their money monopoly. I have already explained to you in detail, why the power over money is such an enormously powerful tool for politicians.

You have not explained to me 1) why bitcoin is more valuable to a politician than a money monopoly 2) If 1) is not the case why you think politicians cant or wont stop bitcoin in order to protect their money monopoly.

I never said bitcoin might not be useful for society. I am saying that the value judgement of the politicians is different than our value judgement.

This is where you lost me.  The merchants don't have to hold onto the BTC for bitcoin to have been used as a medium of exchange.  The BTC purchaser exchanged their bitcoins for a product regardless of the actions of the merchant after the fact.

The idea is that at first most merchants immediately convert 100% to fiat currencies as hopefully more and more merchants adopt bitcoin (users of bitcoin driving the economy forward).  At some point enough players are accepting bitcoins for payment that some merchants can afford to keep some percentage of sales in BTC to then pay suppliers or for services necessary for their business (merchants driving the economy forward).  This then cycles and continues to grow the bitcoin economy in a positive re-inforcement loop that ideally ends with majority of participants only converting small percentages to fiat or none at all.  It all has to start where we are now though.

Not to say that things will actually evolve like that, nobody knows how far this new economy will grow.  However I think it's a bit myopic to completely rule out fiat convert merchant adoption today as any sort of potential progress and conclude it's game over.  This is the first part of the process, we'll know if it works or not with time.

1) If you sold your bitcoin for dollars and used dollars to buy from the merchant would you qualify bitcoin as a media of exchange? Of course not. Now if the merchant does it for you because he does not want your bitcoins but dollars its the same scenario.

The merchant accepts bitcoin not because he wants bitcoin (again he dumps for dollars) but because he knows that bitcoiners are wealthy customers that would like to transact in bitcoin and that there is little competition for these customers at the moment.

The dumping of bitcoins by the merchant creates transaction costs (spread) that makes transacting in bitcoins expense.

2) No its not a gradual thing. You either hold onto bitcoin or you dont. Again the merchant can profit by having wealthy customers with no competition. He has not endorsed the use of bitcoin as currency unless he holds onto it.

There is a huge psychological hurdle to accept bitcoin, because bitcoin itself is not valuable. I explain this in more detail in this thread https://bitcointalk.org/index.php?topic=364207.0 (https://bitcointalk.org/index.php?topic=364207.0).

If this was the main stumbling block to failure for bitcoin I'm fairly certain someone would write some software for businesses that track your wallets and customer's BTC purchases to calculate this for you and then pre-fill whatever form you need at the end of whatever period this needs to be paid (yearly I'm assuming).

Remember one of the things that makes bitcoin such a leap forward is that it is programmable money.  As long as there is sufficient incentive these light technological hurdles will be coded for in due time.

Nobody will ever pay their taxes because there is too much paperwork... oh wait actually I do it all by myself with no training thanks to turbo tax every year.

I'm sorry but I think you'll have to hang your hat on something else other than paperwork as far as Bitcoin's doom.

Except that it's NOT the same scenario.  In one scenario there is a merchant that a bitcoin holder can buy from using bitcoins (thereby increasing the perceived value of holding bitcoins), in the other there isn't.  More merchants accepting bitcoin should attract more bitcoin users, thus likely convincing more merchants to accept bitcoins thus potentially leading to the positive reinforcement cycle I've laid out in my last comment.

On top of that coinbase converts first million in sales for free so no "spread".  From what I've seen even the other services that charge do it for fees lower than CC processors anyway.

Of course it's a gradual thing.  It's taken years to go from 0 merchant adoption to where we are now.  Are you telling me that assuming continued growth and popularity of bitcoin people won't continue to feel more and more comfortable holding on to it?  It's what has been happening so far.  Some merchants didn't accept or hold bitcoins that do now, it's only a question of whether this trend continues or not.

Also the decision to convert sales to fiat or not is not a binary one.  You can set a sliding scale of whatever percentage you want converted for each transaction.

If the transaction costs are not cheaper than digital gold we have no reason to accept bitcoin. Again capital gains paperwork is soft force to make bitcoin uncompetitive vs the dollar. If that does not work because economy of scale has reduced the cost of transacting in bitcoin government will find other methods. You are confusing my argument (government wants to protect its money monopoly) with one example of how it does that (taxing the medium of exchange).

Bitcoin already has problems with acceptance and transaction costs are the only plus factor. I explain it in more detail in this thread: https://bitcointalk.org/index.php?topic=364207.0 (https://bitcointalk.org/index.php?topic=364207.0)

Sorry I'm not familiar with "digital gold" so I have no frame of reference for your comment.  Have a link?

As I said the paperwork side can be automated away (or already is) and so will be a negligible cost and the exchange fees are either competitively low or free.

I don't see "taxing the medium of exchange" as a viable threat to bitcoin at this time, though I'd be willing to entertain some figures that demonstrate it is if you have some.

dear porc,

as gold is bitcoins are a store of value before beeing an everyday currency. Why? because people like to be safe: if you are very rich you do not trust in banks or goverments, you hoard gold aside of other assets but you have to build a caveau if you want to keep gold safe and someone can still steal it. instead you can hide several copies of your btc wallet everywhere. That's why cryptocurrency is the MOST safe value store ever. Probably btc will never be everiday's money just because it's a too good value store, that does not mean it will not grow exponentially in price.

http://en.wikipedia.org/wiki/Gresham%27s_law

A) No. Accepting bitcoin for payment means holding onto them. The merchant has already calculated the average spread costs and priced these costs in his products.  If you buy with bitcoin and calculate all the costs (spread buying spread selling for dollars) you will not be competitive and thus bitcoin cant become a medium of exchange as its only benefit are its transaction cost. Thus merchants dumping means the rejection of bitcoin.

B) Its not a gradual thing. You either decide to convert X amounts of dollars into bitcoin or you dont. You either hold dollar or bitcoin.

"After people realize that merchants are not adopting bitcoin and that it is not used as a medium of exchange, it will collapse in price. Will anybody store significant wealth in Bitcoin after this spectacular collapse? Not likely."

that's a completely wrong assumption. Bitcoins will be used as a medium of exchange like diamonds, but they will be converted in faster currencies, fiat or not, for everyday shopping. Bitcoins will be hoarded because they are SAFER, that's a strong point, than all other options and portable. It' does not matter that they are useless in terms of consumption (like jewelery).

A) Again, what spread costs are you talking about?

B) Adoption (the decision to hold bitcoins) on a large scale is a gradual process, it started at 0 and has grown over the years, this is in fact a perfect example of something happening gradually.  As confidence increases some might even increase their stake of sales held in bitcoin gradually over time.  Not even sure why how gradual it is for a singular participant to choose to hold bitcoin or not would be in contention.

Yes. But I dont think it is a good store of value versus gold.

I have explained this in the second paragraph under heading 2):


Now let me explain this paragraph in more detail (a lot of people seem to have missed it).

Definition store of value: To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved. WIKI

Now lets look at useful: 1 Bitcoin of course is not useful in and of itself. So already we have a problem. However lets broaden the term to mean that bitcoin is useful when  others accept it for payment of goods and services or if I can convert it to currency (dollar) which is accepted for these goods and services.

Now you already said that bitcoin wont be a media of exchange (which I believe is correct as government will prohibit it). This leaves us with bitcoins only use: its ability to be traded into currency. So all you have left basically is an artificial agreement to use it as a store of value and accept its worth. Its totally artificial and thus NOT predictable nor suitable. People could decide not to accept nothing (bitcoin) for something. People could decide to use a different cryptocurrency. Many people might lose trust in the code or not even begin to trust it.

Gold is fits the definition perfectly. Its reliable usefulness is that its pretty and not everybody can have this form of pretty (rare). This value judgement by society has been established since the dawn of man and cant be replaced. So its much more suitable than bitcoin for storing value over lets say a 15 year period.

Funniest thread ever IMO

There's a US couple who are currently LIVING off BTC, i.e. paying bills, rent, buying food etc. with only BTC.

If I were a coffee beans producer and lived like this couple in that all my necessities could be bought with Bitcoin, I might reasonably think to sell my beans to coffee shops for Bitcoins. If the coffee shop then sells the coffee for Bitcoins, there is an end-to-end transfer of only Bitcoins - no capital gains tax needs to be calculated or paid because there is no increase in capital from currency exchange.

This is the future us early adopters are expecting. The market is young now because it's not widely accepted, but we feel that it can and will be.

yes btc could be replaced by other peer to peer crypto currencies, but the whole capitlization of cryptos is going to explode. And btc will be the leader in the first place. The value of gold itself relies on some kind of inertia.

no btc cannot be hacked if you buy a new pc and you open your principal wallet just in case of big transactions. An uber safe protocol is definitely cheaper and safer than building a caveau.

No, there is no strict need of jewelery in gold. You can wear false gold without anyone noticing, you can alsa wear wonderful copper jewels, but gold is rare. Prices of gold have big swings, but grow on the long term, in no way at this point the value of btc will go to zero, to much difficult to destroy the whole organism. So, because btc are rare, hoarding will restart in cycles in the very same way it did from 2009. No need of btc as an everyday currency for this behaviour.

You have not addressed my point. What can I do with my Bitcoin once you have transferred them to me?

I believe I have addressed this point, how about a reply to those of us who have mentioned the fact you ONLY need to pay capital gains tax if you refuse to continue trading with Bitcoins?

watch it like the dragon fefnir in the Nibelungen saga and fell rich. What do you do with dollars in china? you do not spend it and they have not any practical use. But dollars are a reserve currency (store of value) because are backed by some important power. The computing power backs btc as the most powerful network, and it's going to increase over time.

1) Ply provide your quote that answers following question: What can I do with my bitcoin once you have transferred one to me?

2) I have explained in detail why capital gains have to be payed on bitcoin (read the thread). "Only pay capital gains tax if you refuse to continue trading with Bitcoins". This is incorrect. If you trade your Bitcoin for goods the law views this as selling your bitcoin. The selling of your bitcoin triggers capital gains tax. Again: Thats why nobody is using alternative media of exchange.

The dollar has value because the US government forces US cititzens to trade with it and accept it for payments of debts. It also expects taxes to be paid in dollar. If this forceful enactment was not backing the US dollar it would have no value and would not be used as a media of exchange.

The miners are a cost to bitcoin. I fail to see how they give bitcoin value. Again what can I do with a bitcoin once you transferred it to me?

Yes but you do not pay taxes in dollars in china. But china has north of 1 trillion dollars reserves. It's enough that SOMEONE BIG ENOUGH accepts bitcoin for whatever use we know the btc hoarders community is going to double every 3 months becoming as large and as difficult to move than US governement, why all this people should renounce to the unique safety and rareness of this asset? Only a governement war against bitcoin could succed, and also in this case some value will be left. What can we say about this value left one hundred years later? coludn't hoarding restart? That's what's happening since 2009, why should it change? every regulation, taxes, etc. is just an approval of the existence of btc, and EVERY RARE ASSET WITH SOME STEADY DEMAND IS A STORE OF VALUE. Why? because at some time ther will be hoarding of that asset and self renforcing demand. Look at the chart of gold... Copper is beautyful and useful, but not rare so the use value is not important   In every case btc we have really a lot of time before any real bubble, we have to reach at least 500 billions market cap to end the ponzi scheme base. So, have a good ride!

You make a lot of good arguments here.   

I'll tell you about mining:  Mining is a side effect for maintaining a kind of transaction list.  The fact that they get 25 BTC every 8 minutes doesn't add value to bitcoin but it does give us a maximum price.  If Bitcoin rises too high, people can buy mining equipment and make a profit mining.  This maximum goes up with difficulty (lower returns per Hash) and it goes up with time (lowering block reward).  Since there are so many miners maintaining the transaction list, "block chain", we can rely on this with great certainty.  That is why miners add value to bitcoin, even though you could say they also take away by inflating the supply.

sdp

The US government forces US citizens to trade with dollars. The Chinese can take their dollars and buy goods the Americans produce. The American producer has to accept the paper dollar (that for itself has no value) because government is pointing a gun at him.  Basically nothing (paper dollar) becomes something because the US government walks into the shop with me with guns and "convinces" the shop owner that I can trade Nothing (my paper dollar) for Something (his goods).

Now what can I do with bitcoin once you transferred it to me?

I wonder if we apply the term "market cap" to things like copper and iron if these values would be greater than that of gold.

Take the number of kilograms in reserves in the world times their price per kilogram = market cap.

you can buy almost everything, do not you? what you are saying is misleading there are no cops in the shops. You do not need violence to emit currencies, you can just be a bank. If there will be, and it will, rich people owning both bitcoins and other assets in no way the value can go to 0. So it is a store of SOME value, given the rareness cyclical hoarding comes, that's a fact and depends all on the portability and safeness of this asset, which are REAL values no other asset can show. It does not matter if a btc is worth 1 dollar or thousand, it's a safe store for a million dollars wealth, that's enough. That's different from tulip mania because tulips are not inherently a safe storage, we can't say the same of all other bubbles. Paradoxically having no backing asset but just an excellence in cryptographic safety makes this bubble a no bubble or the perfect bubble, as you wish. Only security issues definitely matter.  

Why exchange something for nothing? I dont care if nothing is rare. Its still nothing.

If Bitcoin has no value for you (as you said earlier), it doesn't mean the same for other people. I have already tried to explain you this, but you just said it was irrelevant. It may be irrelevant to you, but you simply can't just as easily dismiss the opinion of all those people who think otherwise. The world doesn't start at you, nor does it end at you...

I am glad that nothing (thing of no value) is rare. If it would be plentiful it might waste space (something). Now at the moment people pay something for nothing because they think tomorrow the nothing will be worth more something.

Now some say: I can transfer nothing cheaply. Well incurring something (cost) for sending nothing is a waste not a benefit.

Stop talking bullshit really. If you don't value something (thing of no value in your terms), it doesn't mean that everyone is of the same opinion. Is this really so hard to understand? It is the subjective value that ultimately matters here...

Something is thing of value. Nothing is thing of no value. (my terms).

You didnt explain why bitcoin is valuable! I explained to you why people want gold and dollar. You said bitcoin is rare and thus valuable. Well that is a description of its quantity not bitcoins value. If I say a deadly insect is rare do you think its valuable? Of course not.

Dollars in your bank account. i.e electronic money existing only as records in some obscure database, are nothing and thing of no value according to your logic, right? If so, could you please transfer all these things of no value to my bank account?

Did you even read the thread? I have explained to you already why dollars are valuable. Fact is: you cant say why bitcoin is valuable because a bitcoin you transferred to me HAS!!! no value.

Water has value. Food has value. Nobody will discuss this. Sometimes it costs more (desert) sometimes less (rainforest). But it has VALUE!

Now Bitcoin? Its NOTHING and you know it! Thats why you are saying: Look at the dollar, it has not value too (which is incorrect).

Its like the fat boy saying: Yes I am fat but other boys are fat too, so its ok.
You say: The dollar has 0 value so it is ok that bitcoin also have 0 value.

Its not ok. And your comparison is false as dollars have value.

Valuable means you can assign a value to it. If there are only 100 of these insects, I expect a museum might pay you for one, yes.

Stop diverting. What is bitcoins value? You know it has 0 value but dont want to admit it, as you want to dump it on the next guy.

First of all, you're confusing me with someone else, because I never said that bitcoin is rare and thus would be valuable. Secondly, people would want dollar and gold because dollars and gold have importance to them as means for the achievement of their desired ends. That's what subjective value actually means...

You explain that USD has value because you HAVE to be able to exchange dollars for food, water etc.. Bitcoin has value by the same token, in that you can exchange it for food, water, ie things we all agree are valuable (we need them to survive).

Now, a government COULD say it's illegal to trade with Bitcoins, but people could still trade it for food and water etc if they really wanted to. And that's presuming a country declares it illegal which I think a lot of people believe is unlikely.

Again abstract statements that pretend like bitcoin is in the same league as dollars and gold.

Gold is valuable because it is pretty and nice to look at. Thats why people want it.

Dollars are valuable because government forces people to accept them for payment of goods/debts.

Bitcoin is valuable because???

Say why you think Bitcoin has value!!

Calm down a little. I'm trying to explain you where the mistake you are making actually is. If you don't want to hear what I say you, then it is no use discussing it any further...

USD only is accepted because of force. Why would you need force? Because a dollar is nothing.

Now a Bitcoin is nothing as well but without force.

If a merchant asks you: Why should I accept bitcoin? You: I dont know its worth nothing but maybe some other guy will accept nothing for something.

If a merchant asks me: Why should I accept your dollars? Me: Because if you dont government will lock you up.

See the difference.

You don't need force to agree something is worth something, otherwise what is the value of gold? Exactly as you say - it has value because it's pretty to look at, not because someone is forcing you to USE it. And we use fiat because we trust our government will ensure it stays a medium we can exchange for essentials to survive, not so much because we're FORCED to.

Read before you write! I am talking about dollars which are nothing and how they become something (by government force). Now gold is something because it looks pretty. Why is bitcoin something?

You are correct: I dont need force to agree that something is worth something. But I do need to be forced by government to agree to nothing (dollar) is worth something (goods). Get it? How is the bitcoin community going to convince me that nothing (bitcoin) is worth something??

These are not abstract statements, the economic theory behind them has its origins as early as the Middle Ages. Since the 19th century it has been thoroughly developed and is now accepted by most economists as the only one coherently explaining the real life economic phenomena related to valuation...

Do you really think that you are the only one who tried to question its findings or the cleverest among them?

Ah, I think I understand your point of view now. You're absolutely right, Bitcoin has zero value because on its own it isn't useful. But then if you value things only on their use, how 'useful' is gold to you when you can only survive on it if someone else gives it value? What if you had a bunch of gold and everyone decided they didn't think it was valuable? A farmer will not trade his crops with your gold and you would starve.

Bitcoin doesn't have value because it exists, it has value because it's useful. If you review the merchants accepting Bitcoin you will see how useful it is, thus why it has value.

1) Medium of exchange.

A medium of exchange, is simply a platform (currency) used to exchange value. Bitcoin is a unarguably a medium of exchange as it is, however you are right in your conclusion that bitcoin currently is too volatile to be used as both a Medium of Exchange AND as a Store of Value. Traditionally, currencies have been used as both, because it is the norm, and it is a functional system. However, with a system like bitcoin in effect to cover one aspect, and temporarily another system, like the US Dollar, to cover the other aspect, you have a functioning system that operates just as well, if not potentially better.
 
a) Governments have not effectively made it impossible for people to use bitcoin as a medium of exchange. You are expected to pay taxes on bitcoin gains, as you are expected to with any capital gains. It is the same percentage, and it is the same laws that bind you to your rights through law. This is how the world works.

b) Governments won't prohibit merchants from accepting bitcoin. If you knew the first thing about in-depth politics, you would know that the stake is too high. Effectively, the government is controlled by the people. We are the voters, no matter how corrupt the system inside might be. If bitcoin grows exponentially, it will gain a massive fan-base and world-wide admiration as a new technological wonder. If the USA (example) were to ban the use of bitcoin for merchants, the decision alone would be widely regarded as a direct confrontation of the entire publics belief, and thus politicians will grasp at the opportunity to use pro-use of bitcoin as their marketing plan, and easily win the election come next term. The USA knows better than to put themselves up for risks like this. There simply is not incentive to block bitcoin for merchants, nor will there ever be.

2) Store of Value

This entire point is now made invalid, considering the explanation above.

As for bitcoin as a technology, it can indeed be outcompeted by other altcoins. This is where the open, free and democratic aspect of cryptocurrencies come in to play. It is the foundation of any healthy system. However, i find it extremely unlikely at this point, that any type of altcoin will surpass bitcoin in momentum, unless something comes along with groundbreaking new features that simply out-compete bitcoin by a massive margin.

Your wallet is as absolutely safe as you would like it to be. With the continuation of development on bitcoins infrastructure, which is an ongoing project, we all aim to make the use and adoption of bitcoin less time consuming, easier, safer and less demanding in general. Assuming bitcoin will fail because "your wallted can be hacked" is simply ridiculous.

As for bitcoins actual value. There are a ton of people who assume bitcoin has absolutely no intrinsic value, because it is not "directly backed by anything" - However, most of these people are technologically incompetent people who do not realize the true value of information technology and it's respective system. The platform, the system, the blockchain, is what has value. The very core of bitcoin's structure, and it's ever-increasing infrastructural development, is what contains value. Does not the city of New York hold value? Of course it does. Does not Facebook hold value? Of course it does. They are two widely different "businesses", in that one is purely material and the other is not, however both hold value in their own way. - Just because bitcoin does not hold "traditional intrinsic material value" does not mean it is not backed by something. Another argument some people make is that bitcoin is only worth what people belive it is worth, and thus it is worthless. This argument is flawed beyond reason. The more infrastructure and general development bitcoin gains, the more people believe it is worth, and thus the volatility will even out and stabilize somewhat over time. It is not until we reach the "equilibrium price" that bitcoin can truly 100% stabilize as a modern, global currency, though. Rome was not built in one day.

Conclusion

I predict bitcoin will continue to fluctuate from week to week, however continuously growing in the long-term, both through price as well as infrastructural development and wide-spread adoption. There will be times of growth, and there will be times of decline. However, in the long hold, bitcoin will revolutionize the world of economics, and will either be the precursor to, or the main content of, a completely changed financial system.

First of all, what you are talking about here ("pretty and nice to look at") is correctly called subjective value, because it exists only in the heads of humans, not by itself. And why do you think that all people universally find gold pretty and nice to look at? Secondly, Zimbabwean dollars are also a legal tender and can be used for payment of goods/debts. But no one wants to deal in with them. Why? Because their subjective value is next to nothing, and people try to get rid of them as soon as possible...

Ok now we are getting somewhere. Golds value is that it is pretty. Now sometimes pretty is not priced highly in the market (if everyone is starving). That is a different issue. Its like this with every luxury good. Might there be extreme scenarios when even the farmer is starving and does not want to trade food for gold/silver. Yes. But its unlikely.

Now Bitcoin is worth nothing. Why would anybody ever accept nothing for something?

This is why Bitcoin cant work.

Yes. Absolutely no difference between Gold and Gold 2.0

Bitcoin is valuable (or has value, if such form suits you better) to those people who find the properties inherent to it useful for the achievement of their aims. These are security, deflationary nature, fixed supply and limited number of coins ultimately possible to mine. Probably, there are some other properties that contribute to its subjective valuation by people, but these will suffice. Once you get the hang how things actually work with respect to valuation, everything will become clear and easily comprehensible...

From what you have said, dollars were worth nothing when they first started too. But everyone decided to agree they were worth something and then allowed the government in those early days to use them etc.. They are a standard exchange now because they are established. Bitcoins COULD work and equally they could fail in which case they would be worth nothing. But a lot of us don't think that will happen.

1) No they formulate it incorrectly. They say: Dollar had value (back in the day) because it was backed by gold. And gold has value because it is pretty to look at. So the dollar bill itself has no value (nothing). It derives its value because it is a claim on gold (back in the day it did).

Now bitcoin is like the dollar bill (actually worse because you cant burn it to create heat). It is nothing. I cant do anything with a bitcoin. Now you say well true, but its backed by the miners. Well that does not add value. I cant redeem the miners and sell them can I? Now some bitcoiners will say: Well you can transfer bitcoin cheaply. Well just because I can transfer nothing cheaply (what a waste I have after all transferred NOTHING) does not mean that nothing thus is something. Its still nothing. If the bitcoin arrives at my place I can still not do anything with it can I?

2) The comparison to facebook is totally flawed. I can do stuff with facebook. What can I do with bitcoin? Nothing.

 

No its different. Initially we used gold and silver as money. They were something. But because it was cumbersome (gold silver are heaving, typical for somethings ;) ) we started trading paper claims on gold and silver (dollars, aka money substitutes). These where something because they where backed by gold.

Now Nixon (I think it was him) removed the gold backing and effectively made dollars nothing. But he replaced gold with government force. We have to accept dollars and thus we trade something for nothing. This would never happen in the free market. This is why Bitcoin wont succeed.

Now i am 100% confident you are an absolute troll. There is no way someone who has the competence to know what bitcoin is, actually makes those assumptions and claims that you do. You can do stuff with facebook, but you can't do anything with bitcoin? Are you seirous? - I'll let you take a breather and come back on this one, because i genuinely don't believe you are completely incompetent.

Edit: Read this: https://bitcointalk.org/index.php?topic=363779.0

It is beyond my understanding why to are so desperate trying to convince us that the Bitcoin is worth nothing.

Unless you have an agenda and are paid by bankers or something alike, which I could understand,
why don't you just leave this place ? You will NOT convince us that $900 = 0 whatever you say.

Everything is worth something on this planet, even dirt or sand, or shit (some country use it to be converted into gas).
Whether you agree on the current pricing of these thing or not is irrelevant.
You don't make the market's prices.

Tullips (at they had some value) where once enormously expensive. Does that mean that Tulips where worth their price?

Of course, if you found someone to buy it.

You say bitcoin has value. You say I have to just read this post to understand:


1) He agrees with me that Bitcoin has no value for itself (like for example water that quenches thirst, food to feed my children). This statement is obviously true, as I cant do anything with 1 bitcoin.

2) He says the network of miners gives bitcoin value (how? the bitcoins are not a claim on the mining equipment. I cant sell the mining equipment or take it in my possession. Again dollar bills once where a claim on gold that I could take in my possession).

3) He says "the networks value is derived from its ability to send value instantly and dirt cheap".

Now when he refers to "sending value" he is talking about bitcoins. Because after all you are sending bitcoins. However as he has established in the first part of his first sentence "Bitcoin has no (intrinsic) value". So he is contradicting himself.

To summarize the information he gives us: 1 Bitcoin has no value (=nothing) and this absence of value can be sent at a cost.

Now how exactly is this convincing?

As I said previously: Incurring costs (energy which is something) to send nothing does not make nothing valuable. It is a waste of energy.

Why would somebody buy nothing (bitcoin) for something (goods)?

ok: lets say we are in 17th century and you are a merchant.
I'm a magician and i tell you that i can sell you a magic paper with some unique proprieties:
1 everything you write ther will stay forever
2 everybody in the world can check the content.
there is no way to destroy or alterate this paper.

Do you think this is worth something more than a tulip?

In case of tulips, history has just proven that people did buy them.
In case of Biotcoins, it seems that they are buying them too.

You are just showing that markets are often irrational. Congratulations.

But here is the thing : they don't have to be rational.
Ok what's next ?

"who find properties inherent to it useful for the achievement of their aims."


Well obviously people believe (aims?) that bitcoin can be a 1) medium of exchange and 2) store of value.

 I have already established why both of these functions require! certain properties to be present, that bitcoin does not have.

1) Any widespread media of exchange that ever existed, always had inherent value (something). The reason for this is that people will only exchange something for something. NOBDODY! wants to exchange something for nothing. Bitcoin has no inherent value (examples of inherent value: water thirst, food hunger, house shelter, gold, art decoration/pretty/ industry). Thus bitcoin has already failed in this aspect.

2) If nobody wants to exchange something for nothing (bitcoin), bitcoin cant be a store of value.

"To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved." WIKI

Bitcoin is not useful now and therefore wont be useful in future. Thus it fails to meet the requirements of a store of value as well.

Again you have not made an argument against my position.

Now right now people pay for Bitcoin because they think it will go up in price. This might be the case, but it will revert to its inherent value: 0.

I have already given a specific list of bitcoin properties that people here usually consider useful for attaining their ends. These properties give Bitcoin subjective value to those who need them. Is this really so hard to understand? And please stop conjuring up what was not written in my post and trying then to refute what you just concocted. This looks really ugly...

Good that you are telling what is useful and what is not :) Get a new account and try again ;)

There is no inherent value to anything as far as human valuation is concerned. Each man has his own conception of value (that is why it is called subjective value in the first place) over anything. If it were otherwise, no exchange would ever be possible at all. People exchange goods only because their subjective valuation of the goods that change hands differs...

To paraphrase Eric Voorhees,
Bitcoin is unfortunately the name of two things.

1) it is the name of the Bitcoin protocol, which describes how the block chain, mining, etc. works.
This protocol performs some useful functions that no other money system can currently match. (Fast cheap transfer to any where in the world, robust etc etc) The Bitcoin protocol clearly has a value, and the value comes from its utility.
2) The Bitcoin protocol has been implemented to allow transfer of a digital currency, this currency is also called Bitcoin. A Bitcoin has no intrinsic value and is commonly misuderstood to be what Bitcoin is all about.

AHAHAHAHA,

For some reason that response made me laugh my arss off.

Its so fitting, and true.

Nice one PandP!

repeating the tired arguments of a bitcoiner I have refuted up thread already.

Yes value is subjective, but you cant explain to me what I CAN DO WITH BITCOIN. Get that?

Water has value as I can quench my thirst. Food has value as so I dont starve to death. Nobody will say: Ohh needing to drink water (any form of liquid) to survive is subjective. Some people dont need to drink. You just hide behind this subjective value theory (which is correct insofar as it says that value judgements change from individual to individual) but can not state 1 thing I can DO with bitcoin.

I can state one thing I can do with gold (jewelry, its nice to look at for most people). What can anybody do with bitcoin in any situation? Say 1 thing?

1) What is the value of the bitcoin protocol? To what extend does the bitcoin protocol give bitcoin value? 2) no disagreement here.

As far as modern economics is concerned there is no such notion as intrinsic value. It does really exist in finances but it has very specific usage which has nothing do with what is being discussed here. To say that Bitcoin as a currency doesn't have intrinsic value would automatically imply there is something which has such value. This is false

Where? Show that piece now. I think you can't even fancy what real refutation looks like...

Stop with the intrinsic value bullshit. Cant you see it? Our value judgements are to a certain extend unalterable. We always want water and we always want food as we depend on these things for survival. Again for every thing I can list some use case.

I WANT YOUR SUBJECTIVE VALUE STATEMENT. WHAT CAN I DO WITH A BITCOIN? WHY IS THE BITCOIN VALUABLE FOR YOU?

Why cant you answer this question. Why do you continue to talk about intrinsic value. I dont care about intrinsic value. I want to know WHY you think 1 Bitcoin is valuable?

Thousands of people have all answered the question about gold value: They all think its pretty and thus they want to make jewelry out of it or they like to look at a gold bar. SIMPLE.

Again: What is your personal value judgement about bitcoin? What can I do with it? Why do you think it has value?

You can exchange it for something you value from those who value it higher than what they exchange for it (provided you have it in the first place). Does it really require so much effort to understand this?

Don't repeat your posts and stop shouting

No. Exchanging it for something does not make bitcoin valuable. I am asking why somebody would exchange a bitcoin for something?

Why has the bitcoin value.  "Because I can dump it on the next guy" does not address the question. That sounds like a pyramid. Nobody actually wants bitcoin. They all just want to dump it on the next guy.

The guy who you want to dump it on asks the question: Why should I take it? What can I do with it? If your answer is: Bitcoin has 0 value, but you can get others to exchange something valuable for it hopefully is the same as admitting that it is a pyramid.

Have you ever heard about the law of marginal utility? If you are thirsty and hungry at the same time, then a bottle of water will be more valuable to you than any food, but once you have satisfied your thirst, you would be happy to exchange a second bottle of water for some food. How can this ever be possible if our value judgments were hard to change? If you had a million bottles of water, then what value would they be to you?

Because they value it higher than what they exchange for it. Why should I repeat this again and again and how many times will this take till you finally get it?

Even if it IS a pyramid, this doesn't change a thing. At the moment of the exchange he who buys bitcoin values it higher than what he gives in exchange for it, otherwise the exchange simply wouldn't happen. You just can't get away from this fact, whether you like it or not. It is subjective value that matters here. Why it is valued I have already explained earlier...

The bitcoin protocol and bitcoins per se cannot be seperated when you talk about intrinsic value. Bitcoins cannot exist outside the protocol and the protocol has no meaning without bitcoins.

Yes.

And my question to bitcoiners is still unanswered: What can I do with bitcoin? What is its value?

In before: I can dump it on the next guy.

What can you do with Bitcoin? Conduct trade with others and/or hold onto them as a store of value. What is Bitcoin's value? The value is determined by market demand.

There will only ever be 21,000,000 Bitcoins, so their value can never be diminished by inflation of the supply. Trade conducted exclusively in Bitcoin isn't subjected to taxes. What is it worth to have a medium of exchange that can't be devalued and that some 3rd party doesn't feel entitled to help themselves to whatever share of that they want? The day is coming when it's going to take a LOT of government fiat to convince anyone to part with their BTC.

1) Dumping BTC on the next guy does not give BTC value.
2) if there is no value, BTC can not function as a store of value.
3) price is not an indication of value. Over the long term the market will price value correctly. Over the short term wild fluctuations can lead to high prices for things with little (tulips) or no value (BTC).
4) Scarcity is a word describing the availability/ quantity of something. It cant be equated with value (deadly insects are not valuable to you but scarce).
5) False you have to pay capital gains taxes on bitcoin gains in dollars. If you dont sell them for dollars but trade them for a good this counts as a sell.
6) I dont share this opinion (I do think fiat will collapse, but bitcoin will collapse as well).

Apparently many people disagree with you that the bitcoin protocol has no meaning without bitcoins because people are willing to pay 40 bucks for litecoins using the same protocol.

Fact is, the scarcity argument that BTC is limited to 21 million is a complete and utter myth. It can be replicated a gazillion times over with the exact same properties, just called by a different name.

How absurd would it sound if you applied this false btc scarcity logic to something like gold. If tomorrow, someone invented material that looked and behaved like gold, the exact same properties, etc with an unlimited amount that can be created but called it Koalapuss instead of gold, would gold be scarce anymore ? Obviously not, the price of gold would plummet to zero.

I can see value in the bitcoin protocol. Bitcoin itself is worth nothing. Zilch. It is no different then litecoin or quarkcoin or tulipcoin. And all of them are worth nothing because they can all be run on the same bitcoin-like protocol and therefore an unlimited supply of these 'coins' can be created.

When this finally dawns on people, watch out. You'll be seeing bitcoin suicides. Whether intentional or not, this has all the makings of a grand pyramid model. In a hundred years, btc might be talked about similar to how tulipmania is mocked now.

Bitcoin and Litecoin work on the same protocol? So you mean I can send you LTC to your BTC address?


BTC is still limited to 21 million even if there are 21 million other altcoins in existence.


If you could produce something with the exact same properties as gold, it would be gold. But you are right in that case the value of gold would likely fall ... If you could produce unlimited bitcoins the same would happen. But that's (currently) not possible, because it would work on a different blockchain an therefore cannot be the "exact" same.


You are right that all coins are crypto currencies, but they don't have equal properties, therefore are not interchangeable.


We will see what the future holds. It's true that btc could fail, but I wouldn't bet on it...

porc -

Your appraisal of Bitcoin from the outset is flawed.

You've based your conclusions on the wrong observations - observations which are incidental to the fundamental nature of "money" and not central to it.

Cryptocurrencies are a *token*. A token of value. Their utility value to the economy is in functioning as a form of money. They have no other utility value. Conversely, there is no other technology available to man which can fulfil this function in an electronic trading environment. For this reason alone they have value.

The fact that they are not spendable in Tescos or Wallmart is incidental to this. I can't spend a lump of Gold either.

Lets now look at the non-electronic environment and see how it compares.

In the "physical" world, Gold is basically a physical Bitcoin. Its primary use is a "token" or "placeholder" for value. It has very little utility value other than this function - to operate as a peer to peer form of money that does not require a counterparty - i.e. the physical equivalent of a "Bitcoin". It is not backed by anything, has few industrial uses to speak of, but has certain properties (basically scarecity and resistence to counterfeiting) which allow it to function as money.

Since it is not backed by anything, we say it has "intrinsic value" - or put another way, it represents the last element in a call chain of trust.

In an electronic trading environment such as the internet, there is a need for a transmittable entity which can perform the function of money that gold did in the physical. Banks do not actually transmit "money" - they just increase a number in one account and decrease it in another. There's no sense in which anything is actually "transmitted" in this process and since the whole operation is so arbitrary it requires a huge amount of counterparty involvement to give "value" to those arbitrary numbers.

Bitcoin on the other hand is the genuine article - it is a uniquely identifiable electronic entity which is transmittable through the public network without the need for a counterparty.

If you don't appreciate the collosal implications of this for money, the banking system and the economy in general, then fair enough. Nobody realised that travel agents were dead in the water the day the World Wide Web was invented either. But those implications are academic - not a question of subjective value, market value, popularity or whether you can "spend" them or not.

Yes they are willing to pay money to use a clone of the bitcoin protocol as well. That's in favor of my argument not against.

Why woud they want to do that?

Once mining becomes unprofitable, there is no point in outlawing it.

While mining is still profitable, it adds to the bitcoin supply and hence lowers the value of coins in people's wallets. You get bitcoin inflation, just as governments printing causes inflation of ordnary currencies.  This will make bitcoin less attractive.

Moreover, the government will profit by taxing the miners' income.

1) Dumping Gold or Gold 2.0 on the next guy does give value.
2) Therefore both are functioning as a store of value
3) Price is an indication of value. Over the long term you will be quiet. Very quiet.

Stop this 'inherent value' BS! There is no such thing. There is no value before these things (Water, Gold, Gold 2.0) are used by somebody/something external .

Peter Schiff is spreading the same BS, and most Bitcoiners have heard this BS for years.
http://www.youtube.com/watch?v=mFcTJAQ7zc4

1) I think it is central. Without value, the medium of exchange will not be accepted.
2) As I have said before: Without beauty it would never have become money. The money function is dependent on its beauty, as without beauty, nobody would have accepted gold in the first place. Bitcoiners want me to believe, that scarcity is enough.
3) See I dont have to have trust that people accept gold. Its beautiful. People always wanted it and always will. This knowledge is why it is great money. With bitcoin that is backed by nothing (like you state), I do need trust that nothing is accepted for something in the future. I also have to trust that Bitcoin is not replaced by litecoin or some future technology. I dont think its suitable for these reasons.
4) Interesting point. If the nothing would be backed by something, the transfer technology would have value. Right now you are transferring nothing (BTC) at a cost. Normally we would call that a waste.

1) It is accepted already.
2) Gold 2.0 is valued also for its cryptologic beauty and for many reasons more. (cryptology; from Greek κρυπτός, "hidden, secret")

Gold was accepted as money in the first place because it was demanded by organized violence of the state (priests and warlords).
It still has no value in the rainforest, where humans are not enslaved by the state mafia.

 I'd like to point out that this is not true. Otherwise I have no stake in this argument. /leave

porc do you have anything positive to say about bitcoin?

Yes. It is one of the most successful pyramids that ever existed.

So, no, you don't have anything positive to say about it.  Thanks, that's what I thought.

No, the Gold Pyramid existed a bit longer. Of everything that you are talking about in this thread, the opposite is true.

I don't think so : if I make paintings and sell them, it's NOT going to make Picasso's paintings value decrease.

When you understand that the future value of everything you don't personally consume is dependent upon mass psychology, you understand that all investments are pyramid schemes.  It's just a matter of getting on board with the best of the schemes.

Incorrect.  For one, it will not have the same raw hashing power, which is the backbone of bitcoin.

You're talking about "currency" here, which can be a very distinct definition from "money". Bitcoin is money - unlevered "base" money in the sense that it isn't backed by anything (which is what gives it it's value, same as gold). Currency is something which proxies for money and is traded on a day to day basis for goods and services.

That fact tends to put some people in a state of cognitive dissonance which is why they start threads like this on discussion forums. (The words "horse" and "stable door" spring to mind).

Bitcoin's future does not revolve around being accepted at retail outlets any more than Gold's does.

Maybe you should go and trade some Bitcoin on the open exchange markets for a while - you'll soon find out it has value ! :)

Lol.

Read the damn thread.

I have addressed this already. Bitcoin cant be a store of value as it has not value. Bitcoin cant be a media of exchange, as it has no value.

Again read the thread. Your arguments have been refuted already.

"Maybe you should go and trade some Bitcoin on the open exchange markets for a while - you'll soon find out it has value ! :)"

So the value of bitcoin is that I can dump it on the next guy?

Again reread the last few pages.  

What good is a commodity you cannot convert into another form?  You could argue that anything which cannot be used to directly purchase something will get "dumped on the next guy" when it is converted into an alternate form to make a purchase.

Don't waste your time. Some people learn only the hard way, and some are not capable of learning at all until you literally beat the crap out of them. You could just as well talk to a bot with the same level of success and intelligence...

You are a troll. Everybody knows that Bitcoin is already stored; it is already used as a media of exchange, because it has value.

I think you mean it doesn't have value "for you".

That's not the same thing as it having not value "for markets" :)

You appear to have started this thread from a sense of frustrated cognitive dissonance - i.e. you can't understand why something that you personally can't see any value in can be traded for so much money. Although your sense of confusion has been amply induldged on here, it isn't really our problem.

I suggest you buy at least 1 bitcoin right now as insurance. That way you won't have to be standing with your pants around your ankles in 12 months time when the price is at $10,000 ranting about why it has "no value" :)

Money needs to have certain properties and one of them is that it needs to have value in and of itself.

Golds inherent value: its great to look at and we like to touch it. humans loved the look of this metal since dawn of man.

What can I do with Bitcoin except dumping it on the next guy?

ABSOLUTELY NOTHING!

LET THAT SINK IN! I can do ABSOLUTELY NOTHING with a Bitcoin except dumping it on the next guy.

Thus it cant be money.

Now what is frustrating to me, is the delusion/ crowd think fellow libertarians are falling in to. This is a pyramid and lots of people will get hurt.

Cassandra ! Cassandra !

So you're saying that money derives its value from "aesthetics".  I don't think thats what they teach in business school.


Well that is kinda what people generally do with money. It's not any use for anything except....exchange ! (Or, as you put it "dumping it on the next guy").

http://www.valuewalk.com/2013/12/bitcoin-compared-to-3d-printing-by-hendry/


Are you my old teacher by any chance ? You sound familiar.

That's the opposite of inherent and intrinsic. It is external usage. Are you blind?


Dump, transfer, barter, donate, destroy, store ...
Are you blind?


ANYTHING



It seems that you are hurted by the fact that you missed the train. Give up. Nobody will believe your fairytales.

What can I do with Bitcoin EXCEPT DUMPING IT ON THE NEXT GUY?

ABSOLUTELY NOTHING.

Fairytale of bitcoiners: People will in future (even though this has never happened in history over a prolonged period of time) EXCHANGE SOMETHING FOR NOTHING.

Well if you say so. You wont be dumping your NOTHING on me thats for sure.

Hey, people here at first tried to explain you in serious how matters stand in reality, now they are just making fun of you. If you don't catch up, they will next ignore you...

Imagine if you went to your bank and asked for stock advice.

Bank: Buy Stock Pyramid

You: why?

Bank: Well it will go up in price and you can dump it on the next guy.

You: Does Stock Pyramid have value?

Bank: No. Absolutely no value. But you can dump it on the next guy at a higher price.

Would that be convincing to you?

Apparently since you are buying bitcoin.

Dump, transfer, barter, donate, destroy, store ...
Are you blind?

Transferring something does not give it value.

Dump, transfer, barter, donate, destroy, store ...
Transferring it out of Argentina/Cyprus does give it value.
Are you blind?

The hallmark of Pyramid. Get more people involved, pass it (nothing) on to the next shmuck. 99.99% of btc owners are in it strictly to make a quick profit. The opposite of how money originated.

This could drag out for awhile, though. The tulip craze lasted nearly a decade, the greatest scam of all time Social Security for 70+. I own tulipcoins myself (quite bullish short term lol), any suckers left ? Step on up..

That was a single event. It crashed only once. That's a difference to Gold 2.0.

http://www.miraed.net/parallelhistory/Burst%20of%20Tulip%20Mania.jpg

I get the impression that it comes down to politics.  Does a government control its central bank or vice versa?  If you believe the first part, you can hope that your elected officials will support bitcoin because all of the good things *they* say about it.  If you believe vice versa, the current president whose real boss is the Federal Reserve will see bitcoin as a problem to mitigate. 

I wish I could disagree with you (proc) with confidence.  If you want to convince proc, you need to convince him on this point.  I, for one, am not prepared to make a convincing argument against this premise.  Or we just call each other crazy and solve nothing.

The technology behind cryptocurrencies and it's value as a financial tool to society has nothing to do with politics, tulips, its market price or any other of these arbitrary and ill-defined criteria constantly being trawled up in these debates.

In particular the comparison with tulips and constant obsession with it's market price is a total distraction from the technical innovation which cryptocurrencies bring to modern finance which is clear and unambigious.

That is that they facilitate direct asset transfers between peers *without the need for a counterparty*.

The only "tool" that society has had up till now which can do this is Gold. It's not a question of value and whether or not Bitcoin / Gold etc have *value*. Its a question of *function*. Monetary function.

For example, I cannot just "email" you electronically  $1000. I need to go to a bank and ask them to do it. Even when the bank does it, they are not actually "transferring" anything of value - they are just changing a number in one account and incrementing it in another. The number that ends up in the receivers account only has "value" because of the counterparty endorsement it has. It has no intrinsic value of its own - if it was just a number I typed into a spreadsheet it would have no market value.

Gold on the other hand, has a market value whether it's sitting in a bank vault or buried in a mountain. It does not require counterparty endorsment - only market endorsement because it is a non-counterfeitible generic form of money.

Bitcoin is likeways independent of counterparty endorsement. I *can* email you (or transfer to your "wallet") $1000 in Bitcoin without requiring a counterparty. It therefore performs a monetary function - the same one that gold does - and that is why it has market value, the same as gold did. Porc's nonsense about shiny metals and attractiveness are not the reason Gold can function as a store of value. The reason for that is that is has the right properties that enable it to perform a certain required function in a non-barter economy.

An electronic trading platform on the scale of the internet has a need for a form of money that can perform the same function that gold did in the pre-electronic era. Public-Private key cryptology is the obvious basis for such a technology and hence cryptocurrencies were born.

Again, cryptocurrency's viability has nothing to do with their market "value" - it has to do with their technical function. Markets later decide what that function is worth to the economy. Please drop all this nonsense about price, tulips, crashes and shininess of metals - the macro economic impact of cryptocurrencies on the future of finance goes way beyond any of that and will likely be felt for centuries.

I can assure you, the clocks will not be turning back now that this stuff has been invented.

"monopoly money" (fiat), I mean worthless piece of paper and number in computer, printed at will around the world..
This shit has to go, and will colapse by itself by hyperinflation and a lot of suffering for humans of the planet.
The mathematic behind Fiat is doomed to fail, inflation and bankrupcy are build into this unsustainable system.

After the historic world-fiat colapse to come, peoples will be more interrested in a much much better mean of exchange, wich have better matematic principle.

Bitcoin will not worth fiat anymore, they will worth buying power.

I bet fiat colapse will happen before bitcoin collapse, so there shoul not be any major Bitcoin collapse !

1) "facilitate asset transfers between peers without the need of counterparty"

BTC is not an asset as it has no utility. That I can transfer it does not make it money. Because money has to actually be valuable itself, otherwise no value can change hands.

2) "The only "tool" that society has had up till now which can do this is Gold. It's not a question of value and whether or not Bitcoin / Gold etc have *value*. Its a question of *function*. Monetary function."

The function he described in 1) is not fulfilled by the Bitcoin network, as transfers and even between individuals without use of a bank (which is risky), but it transfers NOTHING. And that is the problem. BTC has no intrinsic value. Its transfer is not useful as nobody will accept it.

He basically is saying that money is anything that is scarce and can be transferred. That is totally incorrect. Money commodities themselves need to have value.

Also to function as a store of value, it needs to be predictable. BTC has no value and nobody knows if litecoin might be used tomorrow and something else the next day. All of the wealth people stored in bitcoin (for example your dad who worked hard his entire life) would vanish, once a new coin comes along.

3)  "Even when the bank does it, they are not actually "transferring" anything of value - they are just changing a number in one account and incrementing it in another. The number that ends up in the receivers account only has "value" because of the counterparty endorsement it has."

No the bank transferred dollars. They have no intrinsic value but I can exchange them for something because government forces the shop owner into accepting nothing (dollar).
Counterparty endorsement of the bank does not give dollars "value".

4) "Bitcoin is likeways independent of counterparty endorsement. I *can* email you (or transfer to your "wallet") $1000 in Bitcoin without requiring a counterparty."

Yes we can exchange nothing directly I get it. But what we exchanged only has a price, because we agree to exchange nothing for something. However this agreement is artificial as NOBODY WANTS BITCOIN FOR ITSELF. GET IT IN YOUR HEAD. NOBODY WANTS A BITCOIN. THAT WE CAN TRANSFER NOTHINGS NOBODY WANTS between each other in a clever way does not CHANGE that fact.

And we HUMANS always WANTED GOLD FOR ITSELF. THIS IS THE GUARANTEE GOLD HAS: IT SAYS I WILL ALWAYS BE BEAUTIFUL AND PEOPLE WILL ALWAYS WANT ME.

BITCOIN HAD NOT SUCH GUARANTEE. Get it in your head. BITCOIN ONLY HAS A PRICE BECAUSE WE AGREE THAT NOTHING IS SOMETHING. Without this agreement BTC is useless and thus the network is useless. Because the entire value of the bitcoin network is dependent on an artificial agreement we cant compare it to gold, as our brains always loved gold for ITSELF. There is not artificial agreement.

You totally failed to see the real ENDORSEMENT that stands behind gold: REALITY! Reality that humans like shinny things thus will give you something they value for shinny things. Thus gold can be used as a store of value and medium of exchange. NO HUMAN wants A BITCOIN BTCBTCBTCBTCBTCBTCBTC

Right.

https://images.weserv.nl/?url=i.imgur.com/hxbnOZo.png&fnr


Massive FAIL

Sorry porc, that's not the "real" endorsment that stands behind gold at all.

At any rate, it doesn't work in modern trading environments because it's a hunk of useless metal that can't travel through wires.

It looks to me like you're trying to convince yourself that BTC has no "value" and not doing a very good job of it. It constantly amazes me how people can keep banging their head off the ***it has no value, it's all an illusion*** wall while year after year markets continue to confound this appraisal.

Be advised that BTC is now trading for around $1000 PER Bitcoin. If you think that's "nothing", be my guest but the market is not conforming to the porc dictionary of value-based commodities. Maybe it'll drop to zero one day and then you'll be vindicated but don't hold your breath or you'll be doing a lot of typing on forums like this one.

Maybe "getting a life" might be a better option in the meantime.

Everybody watch this.

All is explained.

http://www.youtube.com/watch?v=qHUPPYzzZrI

 bitcoin is a shining thing.
Let's try to understand  why people like shining objects. I think is radically a form of comunication: jewels like wampum shells, are worn so you can see it from far. If you have a commodity which is visible from far an so is possible to desire it for somebody who looks, you'are just advertising for it. Maybe your advertising works becaus you are a powerful, violent king, but maybe advertising needs no testimonial. If you adveritse for a commlodity, this commodity gets  medium of exchange value. Bitcoin is an internet based viral advertising campaign for a commodity, so it's a very shining, visible from far object. That's why (given the two other proprieties of rareness and indestructibility ) it's a good store of value.

I wouldn't actually call bitcoin is a shining thing. On the contrary, it allows you to hide your money and your identity (though your mileage may vary) from some prying eyes and ears...

"Money loves silence, and big money loves deathly silence"

I want to end my contribution to this thread with this post (that I have posted in my other threads already, but also sums up the last pages of this thread, ,the first pages being intervention and regulation by government):


Remember: Intrinsic value is one of the essential properties of money, that allows it to fulfill its functions. Without intrinsic value, gold could not fulfill its monetary role. You want to seperate golds intrinsic value from its monetary value, however that is impossible, as without intrinsic value gold has NO monetary value. The reason you insist on seperating these two aspects of gold, is because you want to believe that bitcoin can function as money despite its lack of intrinsic value.

Now lets look at the functions of money, in order to appreciate, why it HAS to have intrinsic value.

1) Store of value.

 To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved. WIKI

Now what would happen, if in future nobody would accept my gold as payment for goods and services. Well, I could make jewelry out of it and wear that jewelry or I could decorate my house with it.

What happens when nobody accepts my BTCs? Well, I could do ABSOLUTELY NOTHING with my BTCs in this case. So already we see, that bitcoin actually has enormous counterparty risk, as it is only worth what somebody is willing to pay for it. If nobody wants my BTCs I am left with ABSOLUTELY NOTHING (i.e. bitcoin).

Now obviously I want to have a high degree of certainty, that somebody will want to exchange my store of value with other valuable things, as otherwise I would have an excess of one resource, that I would be stuck with.

What is golds guarantee in this regard? Well, it says: I am beautiful, people have loved my look since dawn of man, and have thus always been willing to accept me as payment for other valuable goods and services. Thats REAL backing.

What is BTC guarantee in this regard? Well it says: I am worth nothing, but people have agreed to exchange me for something, because they want to save transaction costs, and because they like exchanging me peer to peer (no third party or bank). Now without reading futher how convincing does that sound to you (pretend like you have never heard of BTC, or that BTC has collapsed in price)? Lets continue: In future people might not accept nothing for something. In future they might switch to a different coin, that is technologically superior (thus my wealth is stored in myspace and suddenly facebook comes along) or more popular for other reasons (altcoin inflation). In future the transaction costs might explode due to prohibitive regulation, so that the artificial agreement to exchange something for nothing collapses. In future, maybe people will prefer real backing over backed by nothing, especially if real backing can be transferred electronically (digital gold). In future people might think that it was crazy to accept nothing as payment, just to safe on transaction costs. In future there might be reputable trustees, and people might regain trust with third parties. In future maybe people decide that instant payment is not that important to them, as money is fungible. In future people might realize that bitcoin is not anonymous and that it is not internet or gold 2.0. Bitcoin might stay highly volatile as the believe in an artificial agreement (with huge counterpary risk) is extremly volatile.

Now from my perspective the situation is even worse: Right now people are ONLY accepting nothing for something, because they strongly believe that nothing will go up in price (after all it has been going up in price in the past, so it must be true for the future Wink). Eventually some early adopter will want to cash out, and if there is nobody there to take his position, the price will fall through the floor.

So I believe, that bitcoin because it does not have value, cant be relied upon as a store of value. It is entirely dependent on the counterparty honoring an pseudo agreement. So bitcoin actually has enormous counterparty risk. Gold is a great store of value, as people will always accept it because it is beautiful. It is burnt into our brain. It has no counterparty risk, because the counterparty cant help but love and accept it (like with food and water).

Thus intrinsic value is ESSENTIAL for one of moneys core functions: store of value. Money value cant be seperated from intrinsic value, as it is DEPENDENT on it.

2) Medium of exchange

Same arguments apply. Right now people exchange something for nothing, due to an artificial pseudo agreement (transaction costs, peer to peer if you ask bitcoiners). I believe its even worse: Right now people ONLY accept it because it is going up in price. As soon as it crashes, people will stop accepting it, as it is irrational to agree to exchange something of utility for something of no utility in order to save transaction costs.

That's the point where I stopped reading.

yes it does, but we have to think about the origins of money, gold was choosen because of it advertising effect at those times the only way to advertise was via clothes and fetishes. Now we have the net, and cryptocurrencies make the net itself their form of advertising.

I thank pork for this useful conversation, but i think he is plain wrong given he thinks money has to have some use value different from acceptance. Gold is absolutely useless, he might have said in other times, and with good reason. But if we focus on the reason why gold was choosen (or wampum shells) it's because "useless" means undestructible, one of the 3 proprieties of a good store of value. (and bitcoin DOES HAVE this important prorpiety).

It seems that behind satoshi there is Nick Szabo.     http://www.ibtimes.co.uk/articles/527078/20131203/satoshi-nakamoto-nick-szabo-bitcoin-creator-revealed.htm
 i tfind usefeul his paper on th origins fo money (especially when it talks about the adoption of wampum shells).http://szabo.best.vwh.net/shell.html

I want to end my contribution to this thread with this post.

I just want to remind to anybody who is taking the time to carefully present arguments in this thread, that even if porc is not listening to you, you are not wasting your time, since other people like me are interested in these arguments. This thread provided me with good insights about the viability of bitcoin, and as a result I'm more convinced than ever of its great future.

Actually, I was not writing in all these threads for that guy exclusively since it has become pretty evident pretty soon that his agenda was not to get the hang of the things...

No. porc and I argued recently (https://bitcointalk.org/index.php?topic=360763.msg3868247#msg3868247) on the anonymity point.

I agree with his very strong point about capital gains (or VAT in UK and arguably else where) taxes due on Bitcoin but not on legal tender. I disagree with his other points and specifically I think anonymity can defeat the government (https://bitcointalk.org/index.php?topic=365141.0) (but Bitcoin doesn't have it).

He doesn't yet see there is fight coming on anonymity. You either bend over and take in the ass from a bankrupt world (current debt is $150 trillion (https://bitcointalk.org/index.php?topic=365141.msg3931705#msg3931705)) or you go anonymous.

The S-curve, logistic model can not apply to Bitcoin (https://bitcointalk.org/index.php?topic=322058.msg3919517#msg3919517). Alternative link (https://bitcointalk.org/index.php?topic=366214.msg3919693#msg3919693).

That does not prove you are different people. I have had arguments with my sock puppet before. Usually he agrees with me, but there was one time he was just being difficult and argumentative while playing the devil's advocate.


You can use bitcoin to hide all or some of your money, but it is also quite easy to show off how much you have using bitcoins, just point to an address with a large balance and sign something using the private key for that address.

You need some education (https://bitcointalk.org/index.php?topic=322058.msg3916390#msg3916390).

Lol. Surely you can analyze our writing styles. Please don't hold me responsible for what porc says. I will clearly state where I agree and disagree with him.

His intellect is reasonable but not at my level. So it should be clear we are not the same person.


You really can't for the most part. Because your anonymity depends on what the other users do (https://bitcointalk.org/index.php?topic=360763.msg3889895#msg3889895) since it is only valid if a process of elimination isn't going to work.

Yeah. You're the smartest person here round. At least i figured that out with my lowlevel iq :)

@knarzo:

Some monkeys would rather the group dies than for one monkey to be admitted to be a natural leader.

Those groups perish.

(implication is I won't be joining your group)

I'm happy that those doom and gloom glorifying folks, NWO racists, religious wackos and people like you, which are experts on everything and think to know everything but spending a lifetime on a forum trying to proselytize, will never join the group i'm in. At least we agree on this ;)

That's an interesting point. But I can't get if your are talking about the price or the "adoption", i mean: a speculator "adopts" bitcoins iff he buys them once, it doesn't matter if he sells them after.  And that should be S shaped.

Also "hoarding function" should be S shaped, where hoarding means truly belive in long term prospects of bitcoin and do not sell  under a very high price.

We need a model of demand/supply, given this two S shaped extremes. Just thinking loudly.

Incorrect (https://bitcointalk.org/index.php?topic=322058.msg3916390#msg3916390).

sorry, but if you are pointing there on a non constant regression line (like rpitelia's) this, i think, does not affect the overall s shaped quality of the curve... I'm a newbie here so i like to share thoughts. Very interesting matter, indeed.

Its a matter of perspective, some see it as a medium of exchange, others as a pseudo-commodity that can be held / traded for real currency, in the latter case it is seen as a form of investment and in this way its capability to act as a medium of exchange with merchants bears little relevance. By analogy, merchants do not use gold or other commodities as a medium of exchange, yet they have value.


Pretty sure someone has corrected you on this point already, there is no single central world bank that regulates currency, as such all major governments would have to be on board to destroy the use of cryptos, in any case your proposition is baseless, there is no way for you to know governments are going to ban bitcoins.


Cool, so basically you're scared, in that case sell your bitcoins and move on ?

NB: It is and has always been the people who provided the impetus for the development and evolution of bitcoins and cryptocurrencies, these people have been staunch supporters of anarchy and anonymity, they have never relied on any government for assistance. Therefore so long as the people will it, use of crypto currencies will rise, but if the people are fearful of governments or a centralized power in general, that fear will allow those in power to walk over those who support such a movement, and destroy cryptos. If you do believe in the movement, and do believe in cryptos you should remain positive and do whatever you can to promote them, if you are only in it to make money, well, I hope you lose it all.

"Give me control of a nation's money and I care not who makes the laws."  Mayer Amschel Rothschild


1) Method 1: Prohibition of alternatives and showcases

"The Liberty Dollar (ALD) was a private currency produced in the United States. The currency was issued in minted metal rounds (i.e. coins), gold and silver certificates and electronic currency (eLD). ALD certificates are "warehouse receipts" for real gold and silver owned by the bearer. According to court documents there were about 250,000 holders of Liberty Dollar certificates.[1] The metal was warehoused at Sunshine Minting in Coeur d'Alene, Idaho, prior to a November 2007 raid by the Federal Bureau of Investigation (FBI) and the Secret Service.[2] Until July 2009, the Liberty Dollar was distributed by Liberty Services (formerly known as "National Organization for the Repeal of the Federal Reserve and the Internal Revenue Code" (NORFED), based in Evansville, Indiana. It was created by Bernard von NotHaus, the co-founder of the Royal Hawaiian Mint Company.[3]
In May 2009, von NotHaus and others were charged with federal crimes in connection with the Liberty Dollar and, on July 31, 2009, von NotHaus announced that he had closed the Liberty Dollar operation, pending resolution of the criminal charges.[4] On March 18, 2011, von NotHaus was pronounced guilty of "making, possessing, and selling his own currency".

"Attorney for the Western District of North Carolina, Anne M. Tompkins, described the Liberty Dollar as "a unique form of domestic terrorism" that is trying "to undermine the legitimate currency of this country".[28]

http://en.wikipedia.org/wiki/Liberty_Dollar

2) Method 2 (soft force): Killing off media of exchange competition via capital gains tax law:

Germany:

"After a parliamentary inquiry, Germany has clarified its position on Bitcoin. The federal ministry of finance recognized Bitcoins as “units of account” — the cryptocurrency is therefore be considered as “private money”. That’s why, according to Die Welt, the government stated that there wouldn’t be a tax exemption on commercial activities that use Bitcoins. In addition to paying capital gains tax, Bitcoin users should now pay sales tax (VAT) as well."

Capital gains tax in Germany: 25%

http://techcrunch.com/2013/08/19/germany-recognizes-bitcoin-as-private-money-sales-tax-coming-soon/

US:

"Did you know that almost everything you own and use for personal or investment purposes is a capital asset? Capital assets include a home, household furnishings and stocks and bonds held in a personal account. When a capital asset is sold, the difference between the amount you paid for the asset and the amount you sold it for is a capital gain or capital loss.
Here are ten facts from the IRS about gains and losses and how they can affect your Federal income tax return.

1) Almost everything you own and use for personal purposes, pleasure or investment is a capital asset.

2) When you sell a capital asset, the difference between the amount you sell it for and your basis – which is usually what you paid for it – is a capital gain or a capital loss.

3) You must report all capital gains. "

http://www.irs.gov/uac/Ten-Important-Facts-About-Capital-Gains-and-Losses

Although there are some offshore bank accounts that advertise as tax havens, U.S. law requires reporting of income from those accounts, and willful failure to do so constitutes tax evasion.

http://en.wikipedia.org/wiki/Capital_gains_tax#United_States

The devil is in the details, bro:

A federal grand jury brought an indictment against von NotHaus and three others ...charged with one count of conspiracy to possess and sell coins in resemblance and similitude of coins of a denomination higher than five cents, and silver coins in resemblance of genuine coins of the United States in denominations of five dollars and greater, in violation of 18 U.S.C. § 485, 18 U.S.C. § 486, and 18 U.S.C. § 371; one count of mail fraud in violation of 18 U.S.C. § 1341 and 18 U.S.C. § 2; one count of selling, and possessing with intent to defraud, coins of resemblance and similitude of United States coins in denominations of five cents and higher, in violation of 18 U.S.C. § 485 and 18 U.S.C. § 2; and one count of uttering, passing, and attempting to utter and pass, silver coins in resemblance of genuine U.S. coins in denominations of five dollars or greater, in violation of 18 U.S.C. § 486 and 18 U.S.C. § 2.[24]

Bitcoins aren't actually coins (smh)

Its a showcase! Its not about counterfeiting; its about enforcing the dollar monopoly (""a unique form of domestic terrorism" that is trying "to undermine the legitimate currency of this country").

This is very interesting to me. Im new to the whole bitcoin thing. Im looking at these posts and I see what you are saying.

Im reading both sides and really trying to comprehend which side has a leg up on the other in their forcasting of the future.

You are right, no one is debating that they have control of the money now. But just because wars have been fought, this doesnt mean that the players and rules wont change. They always have, as youve read your world history.

1
Before the internet they had a pretty good hold of the information that flowed in mass. Thats changed. Maybe someone with a server has been executed, but you didnt see it take down that information revolution. You can downplay it if you want, but we all know that the internet changed the world. Heck, if someone was explaining to me in 1990 what the internet would become, Id would have said the same thing you are now. But they are not about to start killing miners, so we can let that one go.

2
Medium of exchange
So these merchants arent going to want to do the paperwork on their extra profits, and the piece of those profits that go to the government? I say they will do the paperwork gladly if they make a SECOND profit just because they used bitcoin as the medium of exchange. They would rather keep the dollar and give away the profit from the bitcoin, because some of that profit is going to the government? That didnt make sense to me either. ??

3
Store of vaule
The problem will be the opposite? They may horde it BECAUSE they make extra money by dealing in bitcoins. So I think the store of vaule problem, the way youre explaining it isnt going to be it.

4
There are many concerns I think we all have about bitcoins. I just havent seen them brought up here except the point that bitcoin could fall to another crypto. That is possible I guess. The reason Im planing on buying bitcoins (I dont have any yet Im poor as of the moment- 1B7YJ965v5KfZpLs7PDWWeZVYYwMtgsDzE     lol )  Im going to invest in them because they are used like the dollars in your example. People use Bitcoin to buy cryptos rite now. That wont last forever, but neither will The Money Monopoly either. At the very least it must change sometime. Why not now? We got the Information from them and look what we have here. IDK They just sound a little closer to me than you. But Im the new guy.

Read again. That was not the point. Speculators need to move to the best investment as price of BTC peaks. Read that part.

This:


Also, Bitcoin has no utility (https://bitcointalk.org/index.php?topic=351712.msg3934640#msg3934640) (except perhaps as the government coin).

Oh God so what should we do, i was going spend lot of money to purchase mining hardwares

I explained it in the OP! Governments protect their monopoly.


Somebody just clarified Chinas position regarding bitcoin:



You are naive. More countries will follow suit.

and those countries will suffer the consequences of their "Fiat inflation"

Mine the anonymous coin. Click my name, click read my latest posts. Then study.

Mining the anonymous coin wont help.

Lets say this guy lives in the US and the US makes it illegal to mine in the future.

Now if he buys mining equipment and starts the mining process, he will consume energy.

Government officials can go to the energy supplier and check any house that has a high electricity bill.

They will knock on his door and take him into custody.

Microhydropower. Lowest cost energy you can buy. We will change the world. Research it.

Porc join us. Don't succumb to the socialist hell. Humans with a functioning brain stem, time to wake up while you still can.

P.S. You are correct about the Technocracy coming with Smart electric meters that track everything you do. Those who stay in the socialist hell are going to be controlled zombies.

We can't trust you, can we ?

Yawn, great example, believe what you will, if you can provide a reasonable argument indicating bitcoin will collapse I will respond in kind, however you are just posting random tidbits of news that are neither new nor ground breaking, neither do you bother researching the other side of the argument; what governments support BTC ? what are their views ? Research both sides and then let me know.

p.s.

I loved this, lol

I refuted that incorrect interpretation (https://bitcointalk.org/index.php?topic=360763.msg3968173#msg3968173).

So gold is valuable because it's nice to look at. Well, that does sound reasonable and removes that pesky human subjectivity from the equation... You know what else is really pretty?

Tulips. Damn,  those blooms are just beautiful.

See you on the moon guys, you, in a refurbished Apollo, I, in my shiny 10 bedroom intergallactic starship with maximum improbability drive.

"Money is not an abstract unit of account, divorceable from a concrete good; it is not a useless token only good for exchanging; it is not a "claim on society"; it is not a guarantee of a fixed price level. It is simply a commodity. It differs from other commodities in being demanded mainly as a medium of exchange."

MURRAY ROTHBARD

"Norway's director general of taxation, Hans Christian Holte, said the currency "doesn't fall under the usual definition of money." The Norwegian government instead decreed Bitcoin to be an asset upon which capital gains tax can be charged. Bloomberg News says profits from Bitcoin will fall under the wealth tax, and that losses can be deducted. Holte also said there will be a 25 percent sales tax for businesses."

http://www.theverge.com/2013/12/15/5214772/bitcoin-not-real-money-says-norway-government

Lol. Another government using the tactic I predicted. Pay capital gains taxes on your gains= prohibiting bitcoin as a medium of exchange.

which kind of commodiy?
1 a rare
2 a useless/superfluous one
3 a "shining"/visible/autoadvertising one

If you do not get that historically this kind of commodities were choosen, you do not get bitcoin.

 Absolutely useless "money" as it is a lousy store of value and its only advantage (low transaction costs) is being killed by capital gains taxes and regulation. Capital gains taxes and regulation are a death threat to bitcoin.

Bitcoin: useless tokens masquerading as money. What a joke.

sorry, you see any legal alternative to capital gains taxes? The market is comparasion between alternatives.

As long as capital gains taxes are on the book, we wont have media of exchange competition. Not that bitcoin tokens would win out. Real money (gold silver and maybe platinum) that can be transferred digitally is the way of the future. Real money can only come, once the public realizes that government is not the answer. Maybe some people will back digital money by some other resource.

as long as we have a GAIN, taxes ar not a problem.

False. Reread the threat. There is a reason why we dont have media of exchange competition.

These "low transaction costs" were a joke from the beginning, as nobody wants to hold onto bitcoins (tokens masquerading as money).

The spread (buying and selling bitcoins for dollars) and high volatility result in high! transaction costs guys.

I explained this in the OP already. And dont assume that the volatility will stop: Artificial agreements to trade useless tokens that nobody wants, for goods are always volatile. Its in the nature of this artificial agreement (I have adressed this already: https://bitcointalk.org/index.php?topic=361037.msg3926046#msg3926046). Also, most of the people buying bitcoins are speculators, buying because they think they will get rich.

volatility depends on market participation. With 400 billions market cap we'll have a foreign currency like volatility. For sure.

You wont reach this market cap (at least not for a sustained period of time, I could only imagine a blow off bubble top). Worthless tokens will never become money, as they dont fullfill the requirments of money. I have adressed this already:

https://bitcointalk.org/index.php?topic=361037.msg3926046#msg3926046

You could earn real money, porc. Will gold ever give you such an opportunity to get rich? If you knew in advance that bitcoin price would skyrocket (bubble or no bubble), would you then take this chance or rather continue to sling mud at bitcoin here?

How many people before this year were saying we would never reach $100 for a sustained period? Yet we did, now if you offered to buy a bitcoin for $100 people would laugh at you.

You keep saying that "Worthless tokens will never become money, as they dont[sic] fullfill[sic] the requirments[sic] of money.", maybe your requirements for money are wrong? In the hard sciences (chemistry, physics, etc), if we observe facts which do not match our theory then we change our theory, we do not throw out empirical observations.

Yes Bitcoin was a great  (pyramid like) scheme, that one could have profited from as a speculator. However I only buy when I see REAL VALUE and I only SAVE in real money. Now I dont see any of this in bitcoin (as I said I think the price will collapse as I dont think bitcoin will become money).

Yes. At the moment I dont see any facts that disprove my opinion. I only see a speculative mania (that might continue for a while, who knows).

If bitcoin does become what you hope it will, I will have to correct my theory. However I am as strongly convinced that  bitcoins are (worthless)tokens not money as you are that bitcoins are money not tokens.  

To summarize: Where you see adoption I see a speculative mania.
                         Where you see money I see worthless tokens.
                         Where you see value I see high prices (and no value).
                         Where you see scarcity I see abundance.
                    

But now we see that gold lost a third of its last winter highs (silver even more than that). How on earth can you consider those shiny metals as having real value really? A few years ago silver got nearly as high as $50 per ounce. It was a perfect bubble right then that you preach against now. And this year it fell even below $18 per ounce...

How come, porc?

I dont look at price to determine underlying value.

Do you buy bullion (or coins for that matter) or stick to some derivatives? I remember you also said that you have some stock in miners, right? Do you buy them without respect to price too?

Don't forget that those prices are quoted in the inflating currency of USD, so the loss of purchasing power is even greater than what is reflected in the price of these metals.

I buy bullion and coins. Again, I said that I dont look at price to DETERMINE value. However I do look at price once I have determined underlying value, to see if it is higher or lower than my determined value. I did buy a considerable amount of miners. However I also hold physical metal as that is a vital part of any precious metal portfolio.

I dont care if you buy the metals, as I think that nobody can pump anything over the long term. Either I am right or wrong. So if you dont want to buy precious metals but bitcoin I dont care, as I can buy more metal at a cheaper price.

So you are actually a goldbug?

This explains a lot... What would you do if your government decided one day to confiscate to buy from you all those shiny pieces of metal at some fixed price?

You see what you are looking for. What would adoption look like to you? I see an increasing number of people around the world using bitcoins for an increasing number of things.

What would money look like to you? I traded something for bitcoins, after some time I traded those bitcoins for something I wanted. That looks like it is functioning as money.

What would value look like to you? Right now I check my balance and I see I have X bitcoins. I can choose to hold those X bitcoins or trade them for Y. The person selling Y seems to agree with me that those X bitcoins have a value of Y.

I really fail to see abundance here. Maybe you could expand on that?

Well I have stored my metals at a secure place nobody knows about.

Also: I dont know why you call me a gold bug. I just like real money and distrust fiat. I also have investments in asia stocks.

Well, I could turn it around and say: You see what you are looking for. As I said, I see it as a speculative mania. I have nothing more to add.


Well, just because some small number of people did what you refer to, doesnt mean its real money. I have adressed already, why I feel bitcoin is not real money (https://bitcointalk.org/index.php?topic=361037.msg3926046#msg3926046).


Just because somebody agrees with you that something has value, doesnt mean it actually has value. Its like saying: It has a price today, so why does it not have value. Enron also had a price once.



21 million plus numerous altcoins people can switch to is absolute abundance, especially if nobody wants the damn tokens.

I have explained already, why I feel bitcoin is not scarce: https://bitcointalk.org/index.php?topic=366523.0

Do you really hope that they don't know that you possess some metal? A few guys here insist that even bitcoin is not anonymous whatever (and what they say might actually be so, I just dunno), then why do you think the fact that you buried your gold in the backyard of your home will somehow help you? They won't come after gold, they will come after you!

If it looks like a duck and quacks like a duck...

Lol at you trying to argue that gold that can be stored outside of the country at unknown locations is less anonymous than the totally transparent bitcoin.

There are only 21 million coins on the longest cryptographic blockchain. The blockchain upon which they rest is a key characteristic which constrains their abundance. This is like claiming gold is not scare because it is just an element, and look how much of these other elements we have sitting around!

Try to read the links.

It doesn't matter where it is stored, you will show that place yourself or go to jail if you persist (or just happen to forget where you squirreled away your stash). In any case you won't be able to sell it without a chance of being caught for illegal activity

And if it is stored outside of the country, then it is no more physical than gold certificates or whatever...

Having the metals stored in a secure place does not help you any if it is illegal to trade things for that gold, or transport the gold (how are you going to sneak it through checkpoints on the highway, security at the airport?). It would actually be easier for the government to stop people using gold than for them to stop bitcoins.

Nobody KNOWS I actually have gold. Get it in your head. Also, I will be long gone, before a dictatorial government gains such power. There were many warning signs before Hitler actually killed his political enemys. Many people (like Thomas Mann) fled Germany because they could see what was happening.

Anyway, we are arguing a point, which is not relevant. I dont believe bitcoin will be money, even in a free market. Simple.

Aha, I looked at the link and I see your problem. You tried to make up your own definition of scarcity and then argue using your own definitions of other words why bitcoins cannot fit into that box. This is something like a strawman argument. If you want to have decent debates, you must agree to use the same definitions for words as everybody else uses.

Black markets will accept gold/ silver coins. Bitcoin wont be accepted as it is not anonymous, and anybody holding bitcoins can EASILY be traced. So much easier than when you trade physical things. Governments couldnt have asked for a more transparent system than bitcoin (maybe thats why the US senate liked it?).



Its easy to cross a border by foot. Also as I said, it is important to store gold in countries, where you have a safe political climate.

Lol at you believing it is hard for the government to stop bitcoin: ITS TOTALLY TRANSPARENT.

Again we are arguing a point that is not relevant: I dont believe bitcoin is money, and it wont be successful even in a totally free market.

No. The term is from wikipedia and a generally accepted definition by most economists. Again if nobody wants the damn things, they are not scarce. Also the numerous alt coins people might switch to is a problem ignored by bitcoiners.

Well, I have a different opinion,
Bitcoin will not fail. It has been helping people with transactions for the past 4 years, and it became very popular.
As more and more people adopt bitcoin, it will continue to thrive, no matter what governments think. ;)

Clearly people want the damn things, since there are people paying to get them. So they have a demand, so they are scarce. And I addressed the point about altcoins already a couple posts ago, since that is where I thought you were going with the scarcity argument when you first brought it up. These arguments have been debunked many times before.

Well we will have to wait and see. Right now people want them as a speculative vehicle. I get that.

The altcoin argument has been debunked in the sense that network effects and miners support bitcoin. However, dont underestimate migration to other coins that are more popular, with MINERS AND USERS.

My abundance comment refers to the fact, that if nobody wants them they arent scarce.

Again, we dont have to discuss the probability of this. I believe bitcoin wont be money and you believe it will. I have layed out why I dont believe it will already (https://bitcointalk.org/index.php?topic=361037.msg3926046#msg3926046). There is nothing more to discuss.

China doesnt sound "supportive" of bitcoin, like anonymint wants you to believe.  ;) To me it sounds like Method 1, I referenced earlier: prohibition.

http://forexmagnates.com/china-bans-payment-firms-from-working-with-bitcoin-exchanges/

The People’s Bank of China (PBOC), the Chinese central bank, has today banned payment companies from doing business with bitcoin exchanges.

The PBOC met with most of the top Chinese third party payment providers this morning and digital currency was an important part of the discussion. According to sources claiming to be close to the institution ,the PBOC in no uncertain terms, directed third-party payment firms to not do any business with bitcoin exchanges in China, so they were told by people who attended the meeting.

Upon encountering these rumors on Chinese internet forums the financial newspaper “National Business Daily” (link in Chinese) contacted the PBOC and the leading third party payment providers in China, Alipay and Tenpay and they all confirmed the reports.

The PBOC now explicitly requires that banks, and payment companies will not provide payment and settlement services to Bitcoin, Litecoin and other peer to peer currency trading sites. For payment companies that already made business with Bitcoin Exchanges , they should end their business cooperation; withdrawals of balances should be completed before the Chinese Spring Festival (January 2014), and new payment services are not allowed.

On December 5th the PBOC banned banks in the country from engaging in financial transactions in Bitcoin but left private clients to make their own decisions, leaving a space for supports of the digital currency to claim it can still operate in. Today’s action can almost completely stop Chinese demand for Bitcoin as individuals will not be able to purchase it using banks or third party payment providers.

I'm seeing chinese people withdrawing money from banks to purchase bitcoin through OTC/localbitcoins.com, and create a bank run  ;)

Bitcoins are useless tokens masquerading as money.

Like I said in the OP: After people realize its not being adopted as a media of exchange the price collapses and nobody will store wealth in bitcoin after this (and for many other reasons).

Many new adopters are being burnt for good.

Lol. Bitcoin is so transparent, government could not have asked for more. Keep dreaming. Gold is much more anonymous. Have fun with your tokens.

CIA probably created bitcoin as a way to deal with the world after the collapse of the fiat currency experiment, which is inevitable.

You are so stubborn in repeating again and again the same things that I started thinking you are being paid by paypal or some banks to do that...
you will not succeed...

ilpirata79

When bitcoin will collapse in price?

Wait a minute, so, then if your thesis is that BTC will collapse in price, then what is your explanation of why it went up in price from $.01 to $100 and then over $1000??

How do you define a collapse? Collapse back to $100? I doubt that will happen, and even if it did, I don't think it would matter one bit. It will just shake out the weak hands, setting up for the next rally.

Collapse back to a penny per BTC? Highly doubtful, unless an attack takes out the network, and even then, there would be enough hashing power on the network to make such an attack incredibly costly and tough to execute.

Yawn. These threads are a dime a dozen.

Keep hashin' and don't worry about it.

Tommorow at 4am CST

TROLOLOLO  ;D
some people here need to RKO themselfs....

Its about to go up, just wait for MtGox..

Sometimes, when I look into these old threads that resurfaced for some reason, I wonder if those people who made those age-old-posts are still around. What have they seen? They are so far away in that Dec. 2013 past. How have they lived? What have they felt? Were they happy? I love me some good history-thread!

When it loses its reserve status

True, just MtGox can raise the bitcoin prices.

You're yourself history now. RIP. But bitcoin ain't and is still kicking... ;D

Very rare that the first one ends up being the one that stays.

I can't see why BTC would be any different

These times obviously haven't yet come, to substitute bitcoin with something else which would be much better... 8)

There is no reserve value for bitcoin..

He probably meant its value as a means of hoarding (i.e. store of value)... 8)

Because low mining factor, now is about 2.5 cent/Gh at 24h

http://img835.imageshack.us/img835/9904/blt7.jpg (http://img835.imageshack.us/i/blt7.jpg/)View Screen Capture (http://img835.imageshack.us/i/blt7.jpg/)

@igorr,

Stop posting the same shite graph over and over, it makes you look stupid retarded. Bitcoin is NOT going to collapse any time soon; in fact, I'd wager 10 BTC that it's going to flourish and thrive.

http://img835.imageshack.us/img835/9904/blt7.jpg (http://img835.imageshack.us/i/blt7.jpg/)View Screen Capture (http://img835.imageshack.us/i/blt7.jpg/)

This is just chart with Lin regresion indicator,

Why are you angry ?
Where is the problem ?

It's typical of any experienced technical analyst to reference a multitude of time frames. But hey, we don't come to the bitcointalk speculation sub-forum to hear from experienced traders do we?

Try zooming out on that chart. You might just find we're actually in a long-term up trend. I don't know. Just a crazy thought.

I drew a similar conclusion, there is a valid downtrend in bitcoin prices.     Downtrends are normal, there is no rule they'd last until zero.   At some point there is an event and/or large volume and the trend is broken then we move on

Just one indicator is not significant to draw conclusions.   Try weekly bars for greater accuracy, closing prices give strongest direction over time




Thats a win/win bet!  ;D



Please tell me who validates governments.    BTC is a valid alternative to dollars and it will be in future, competition is the threat.   If they can hold dollar markets in the USSR despite that government, I think we presume this is not a real good reason for failure of btc now
http://russiapedia.rt.com/of-russian-origin/fartsovshchik/

LOL!!!

Just starting to read this thread.....

"Death penalty for mining???" Hahahahaha. Seriously dude, you need to stop watching so much TV crap. Well, maybe if you are North Korean we understand why you shd be worried about it.

Merchants are increasingly adopting bitcoin and there's a huge hole Grand Canyon size in your points regarding merchants: the tipping point comes when merchants start paying other merchants with bitcoin. So twofold effect: merchants are driving most of the adoption and the value chain bitcoin integration will further reduce the need to cash out to dollars.

What we mostly need is a consumer-driven killer app but they are already some initial bridges with fiat: bitcoin-enabled debit cards.

Good point. Trend can anytime change at all and people used to see btc's growing they are gonna used to its falling price, IMHO.

As for the Govern, I think, they can't destroy it as it is not national financial instrument but international one and no need to remind how difficult to make countries to unite for one purpose as everyone wants to make benefits from anything and has diff points on view, especially about financial development.

Can anyone tell me why a safer secure money will not be accepted? I don't think these points take into consideration the huge benefits that come along with this currency. "It's a bubble, it won't last" . I believe that bitcoin can function as a currency, the government just wants to know how to control it before they stop "taxing" it. But once they do that taxes will be imposed regardless.

I think it will take longer than most people on here would like to believe. Most people, your average Joe on the street, won't give two shits about bitcoin. I would bet you that if you stood on the street in a typical town with a paper wallet containing 1 BTC you would have trouble giving it away for free. Mark Dice had trouble giving away a solid 1oz gold coin FFS (search youtube for Mark Dice Free Gold Coin). People are stupid.

The smart people will lead the way, but it will take many years. The masses will follow later, maybe in ten years or so, possibly longer, depends on when the world fiat currencies collapse, which will likely be within ten years anyway, so who knows... :D

Having said all that I think bitcoin will land on the moon some day.

skipped a few pages...something you can send anywhere in the world that is fast,secured,cheap,portable,convenient. Something people can gamble/invest/trade on exchanges like stocks and currency but better because you are your own investment company no middle person/s handling your asset/money(bitcoins)...I also think it is a store of value..many average or poor people cannot buy gold, silver and jewelry to store their wealth, even if you see gold or silver many people can be deceived by fake precious metals while crypto currency cannot be faked..bitcoin is a technological revolution like the printing press(the powerful church can't stop it).

well i don't understand why things should be made more complicated in the future only for bitcoin

1 - this is not true. As long as merchants accept BTC then BTC is a medium of exchange.

You could make the same argument about dollars since many large companies buy short term treasury bonds with the majority of their BTC.

2 - as of not BTC is not a store of value. It's price is much to volatile. It will likely be a store of value in the future as more of the public starts to accept and use bitcoin.

With the above being said neither of these points has anything to do with the future of the price of bitcoin.

Your "accusations" are true to almost every investment.

I dont want to say I told you so, but the price has indeed collapsed since I started this thread at the highs in December 2013.

However it is not over yet. It will go down to single digits and lower (eventually zero is a fair valuation).

If you want a summary of my reasoning read the my first post and this one:

https://bitcointalk.org/index.php?topic=361037.msg3926046#msg3926046

So you are telling me because bitcoin price drop from 31$ to two, it can't recover?

Wait a moment... I saw this before.

It lasted a year.

Is the collapse now?

It would be important to understand why it rose to 32, perhaps more than why it dropped to 2.

Each bubble in bitcoin's history is can be explained as the opening of a new market -- either a new use, or a new community of users separated from previous markets by some barrier -- language, geography, profession, socioeconomic status, whatever.

Most bubbles had a fast rise, a crash, some oscillations, and then settled at a steady level substantially higher than the previou stady level.

The famous 2011 bubble, that started soon after 2011-04-01, at 0.5 $/BTC, began like the others; however, after the oscillations died out, instead fo settling to a steady state, it started to decay eponentially.  By 2011-11-09 is was down to 2 $/BTC; however, if a new bubble had not started at that time, it would probably have continued to drop until the pre-bubble level d 0.5 $/BTC.

The Nov/2013 buuble behaved in a similar fashion, but we have an explanation for it: it was created by the opening of the Mainland Chinese market, and it deflated during 2014 because the Chinese lost interest in bitcoin, since they could not use it for anything except gambling in the exchanges.  Now the last Chinese day-traders are dumping BTC to play in the Chinese stock market, which is booming.

So the question is: what was the "market" that created the 2011 bubble, and why did that market evaporate?

high chance yes, it won't fall much farther, better to buy now those cheap coins

I think jorge hit it right on the nail with:

"It would be important to understand why it rose to 32, perhaps more than why it dropped to 2.

Each bubble in bitcoin's history is can be explained as the opening of a new market -- either a new use, or a new community of users separated from previous markets by some barrier -- language, geography, profession, socioeconomic status, whatever.

Most bubbles had a fast rise, a crash, some oscillations, and then settled at a steady level substantially higher than the previou stady level.

The famous 2011 bubble, that started soon after 2011-04-01, at 0.5 $/BTC, began like the others; however, after the oscillations died out, instead fo settling to a steady state, it started to decay eponentially.  By 2011-11-09 is was down to 2 $/BTC; however, if a new bubble had not started at that time, it would probably have continued to drop until the pre-bubble level d 0.5 $/BTC.

The Nov/2013 buuble behaved in a similar fashion, but we have an explanation for it: it was created by the opening of the Mainland Chinese market, and it deflated during 2014 because the Chinese lost interest in bitcoin, since they could not use it for anything except gambling in the exchanges.  Now the last Chinese day-traders are dumping BTC to play in the Chinese stock market, which is booming.

So the question is: what was the "market" that created the 2011 bubble, and why did that market evaporate?"

I'd like to know the answer to the question.

i think because a lot bad news at this begin of januari

What does everyone consider a collapse in price. BTC hovered in the low 100's for half a year so maybe we are jumping the gun screaming collapse.

It has  collapsed many times, and it recovery quickly.

i really hope it... because i need increasing of BTC :(.. i have only 5BTC  from 400USD/1 BTC :(

This time looks like it is different.
The recovery certainly wasn't quick.  :)

Yes: In the beginning of a pyramid there are still plenty of new fools you can convince to buy from you your hot potato (i.e. your bitcoin).

Eventually however the pyramid cant be sustained anymore, as no new fools can be found to bail out the old ones.

This is what happened to bitcoin: It skyrocketet (with temporary corrections) and now has collapsed, burning a unprecedented number of people. Due to the extensive coverage of the rise and crash of bitcoin, and the significant number of people who now sit on losses, it is very unlikely that the pyramid can be inflated again.

It occurred to me that there is a simple way to predict the price of bitcoin.  

Start with the equation V = U + R*P, where

V is the amount of money (or money equivalent of goods and services) disbursed by new investors (in $/day);  
U is the amount of money (or money equivalent of goods and services) collected by holders who are divesting ($/day;
R is the block reward volume, now 3600 (BTC/day); and
P is the current price ($/BTC).  

From that we get P = (V - U)/R.

Now you only need to predict V and U.  ;D

You have invested in a pyramid and come up with some formulas??? Come on!! Open your eyes. This ship will sink. I said it when it was above 1000 dollars, and I will say it again at 200 dollars.

Of course you come here celebrating your "prediction". The question is, will you be here admitting defeat once BTC goes back up, or will you quietly disappear until another bubble burst cycle happens claiming to be a magician that predicts the future? duh.

I don't find any specific reason that Bitcoin will collapse in price in coming period of time. I believe it will be reaching to a new level in next 5 to 10 years. Mostly people are not aware about it yet but as their awareness level will go high the same will go with Bitcoin too

No i don't think bitcoin will collapse , it have a bright future and within few years it will be used by many people !!!

Bitcoin is being accepted more and more across the globe, which means they have more people using it. I personally don't think it will drop like you said, but reading your post gave me 2nd thoughts. Thanks

Each individual have their own calculations, if you see years back when Bitcoins started, it has less value, down the line in a few years, it climbed to high steep which was never imagined by any financial geeks. Bitcoin has the real future, since it is secured, reliable and Transparency. Also it will have tremendous real value when we control the measures in the bitcoin mining flows.

These guys just cannot be saved. I have a similar friend and I couldn't explain him why Bitcoin has value. He would always say "It's only useful to get dollars" and "it has no intrinsic value". He can't see beyond that. I eventually gave up and said fuck it, but I hope he doesn't cry me about how he didn't buy now in 5 years.

I don't see bitcoin can colapse below 150$, but I can see steady price for a year and then another balloon to 2k$.
If it's not gonna happen in the next year, then in 2 years. It's just the matter of time.

Man this thread is so old, and the OP is out of line, in 2013 of course people have worried about Bitcoin's collapse.

But we are in 2015, over 80.000 merchants use it and politicians also accept it for campaign bribery donations, so it will survive and thrive in the coming years  :D

1. Bitcoin is used in the transaction to pay for the goods, that is the definition of the medium of exchange, so you are wrong.

1a. They have not made it impossible. Because it exists.

1b. Prohibition would be a drag, but they have not done it. They do not have a monopoly on money, only soft and hard currency controls sometimes. The fact that they do not hold a monopoly, is the reason why other fiats take over when they mismanage.

2 Store of value, the one and only function of money, exists because people want to hold them. Transactionability is necessary for the store of value function. It is futile to store something of no value for direct use if you can't trade them when you want.

2xx Altcoins: Go ahead, we want free market, private money, all the altcoins you care to invent. The market will decide what is the best money. For me, bitcoin is best.

2yy Not useful; I agree, they must be traded for something useful. Not wanted? They are wanted conditionally, for example someone wants bitcoin this moment on finex if they can get some for 247.47 USD, four of them, to be exact.

Conclusion, government attack on miners; well they are not omnipotent, there must be somewhere on the globe where you can operate a mining rig occulted.

Conclusion xx: That referenced post is a wall of text.

Man, you sweep up truckloads of bad arguments from the floor. And you need to structure  your posts better if you insist on numbering, I get cognitive dissonance from trying to navigate your post.

I agree on the pyramid view, it is a pyramid, all money is. But one pyramid will stand, the best pyramid, and it will stand until something better comes along, maybe forever.

Why the fuck do I respond to these old posts? Focus, erdogan.

FUD is generally a strategic attempt to influence perception by disseminating negative and dubious or false information. An individual firm, for example, might use FUD to invite unfavorable opinions and speculation about a competitor's product; to increase the general estimation of switching costs among current customers; or to maintain leverage over a current business partner who could potentially become a rival.

Do you believe that bitcoin ever fail ? I assume that you are not convinced with what he has said, if your assumption is correct, then honestly me to think the same that, there is no way that bitcoin will give out its value so easily, we must note that being in crisis situation, Greece is going to installed the First Bitcoin ATM Machine in their production environment. They finally came to know the real value of Bitcoin Gold.

Bitcoin is the medium of exchange
The exchange ultimately resumed services after admitting that about $5 million worth of bitcoins had been stolen :o
If bitcoins are stolen continuously it will affect global economics in the future.  :)

I think the future of any company, product or a person can only be predicted. Prediction with a right or wrong, a yes or a no solution provided only 50% chances of something happening. Bitcoin is a god damn revolution, it is here to change things and we are its supporters. Lets jump the hurdles together.

Or not!!!
Really does not matter I know one thing
There will be people who will lose but will be people who will benefit
So everything will be fine.

As the use of bitcoin expands, its acceptance also expands with it. With more acceptance and supply and demand taking place equally, the currency will grow. The price will increase too accordingly.

I don't agree with you. Bitcoin has more potentiality ! And it'll never collapse in price  :-\

well the risk is always there, we can only say that the chance that bitcoin will succeed is greater than the one which can lead it to its died

worst case bitcoin will remain for a nice market, it will never die, because there is nothing that can replace it for that nice market

bitcoin has been used as speculative investment from the day the first transaction has ever happened. it has been a medium of exchange and store of value even back then in the early days. it was not an average joe who were making the market back. it is the speculation that drives the market, in the early days even more so. bitcoin will be big not because people will buy burgers with it. no, it is the big players that will drive it to at least intel valuation levels (currently x42).

Undergoing projects work on such drawbacks to protect bitcoin from stolen. :)
It will come soon in future. ;D

Are you sure?  The first transaction, AFAIK, was Satoshi sending some coins to Hal Finney for test. I don't think that there was much investment in bitcoin until demand for use as the SilkRoad currency drove the price up.