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Bitcoin => Bitcoin Discussion => Topic started by: Imnotadoctor on May 27, 2011, 01:58:53 AM



Title: I think bitcoin is a great idea but my friend doesn't
Post by: Imnotadoctor on May 27, 2011, 01:58:53 AM

He says that the "no transaction fee" argument is a red herring, he thinks that the important issue is not the internal cost of transactions but the cost of getting my dollars converted into Bitcoins and then back out again. He argues that Mt. Gox charges 0.65% coming and going, and one also loses the 1% spread in exchange rate, for a total of 2.3%, before any fees charged by the financial institution from which the dollars originated and to which they are ultimately deposited, so it is not free.
 
He also thinks the biggest problem with BitCoins is the exchange rate.  On Mt. Gox the exchange rate has fluctuated 25% in the last twenty-four hours, so he thinks it is a bubble.  He say that the talk about BitCoin being a sound currency is a cover for a pyramid that must keep recruiting an ever-larger base in order to avoid collapsing, that now is all good but that the bubble won't expand forever and that at some point, the balance will swing to people cashing out, so the values of the bitcoins will decrease dramatically because they have no fundamental support, no government taxation authority backing them up, merchants who were accepting BitCoins will suddenly decide they shouldn't accept them any more.  People who are holding BitCoins suddenly become afraid they can't buy anything with them any more, so they try to sell them.  In a very short time (much shorter than it takes to inflate the bubble) BitCoins will crash right down  back to $0. 
 
So he keeps trying to persuade me to keep me out of this "pyramid scheme", and to not exchange my real money  for this "funny money".

Please tell me your opinions.
 


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: rezin777 on May 27, 2011, 02:05:44 AM
In before kiba sees bubble.  :o


Edit: Since I should add something useful to the post. I think you should read about Bitcoin, in your spare time, for a few weeks and decide for yourself. For me personally, Bitcoin is a no brainer. In my perfect scenario I own 1/3 Gold(Silver), 1/3 Land, 1/3 Bitcoin. I work hard and I get paid in Bitcoin and I spend Bitcoin to survive.

I am not a fan of my money being manipulated by someone else. In that respect alone Bitcoin comes way out on top of our other options. I don't want to get political, but the current debt money system is the one that is unsustainable.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: mewantsbitcoins on May 27, 2011, 02:06:58 AM
and moves this thread


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Imnotadoctor on May 27, 2011, 02:13:02 AM
and moves this thread

You guys are great help!  :D


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: FreeMoney on May 27, 2011, 02:33:26 AM
The free transactions is not a good selling point. For one it isn't completely true, and it isn't the breakthrough here.

If you think there is already a good money available then Bitcoin will seem silly. If you realize that all the monies we have access to have huge failings then Bitcoin seems amazing.

A money needs to be: divisible, fungible, durable, transferable, and scarce.

Government money fails because they always debase it by printing more, it is not scarce.

Gold is pretty good, but it is very hard to divide and recombine for normal people and it is expensive and risky to send it far away.

Bitcoin excels on every feature.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: bcpokey on May 27, 2011, 02:35:07 AM
Bitcoin is very very very new in the larger scheme of things, and as with all fledgling ideas competing with existing systems it comes with a lot of inherent risk. If you buy a bitcoin today, tomorrow it might be totally worthless (which is possible with anything, but is less unlikely with bitcoins). I'm not sure exactly what you and your friend are arguing over, is it making money via trading, or?

You don't have to use MtGox to trade USD->BTC->USD, there are direct trades via forums, irc (#otc), in person, etc. And ideally the system when large enough would allow you to merely go USD->BTC->Goods and Services. Or even just get paid in BTC and buy stuff with them. Of course that's a ways down the road obviously if ever.

So your friend is right, who knows if bitcoin will survive the growing pains any system must go through during its infancy, lots of people seem to have faith in it, you'll have to decide for yourself. It's less of a pyramid scheme than the USD though, which just happens to be more well established.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: zef on May 27, 2011, 02:36:45 AM
Conversion has high costs - This looks like a problem now because most people find it difficult to think of btc as an alternative money rather than some speculative stock. There would be no reason to have to convert from btc to usd or vice versa if there was a thriving marketplace(which i think will be there some day).  

I would agree with your friend that current prices and swings seem really speculative.  I would disagree that it's unsustainable or a pyramid scheme.  Again its difficult to think of bitcoin as money, not a penny stock or something along those lines. Bitcoins will always exist, even if everyone sells(somoene has to be buying), and the conversion to USD drops to near 0.  That would make the coin useless as an investment for your USD, and if that door closes, people will be stuck with btc and have to figure out something to do with it. Naturally the best thing to use it for is trade, and at that point the value will be determined by the goods that can be purchased rather than its conversion to USD(though that will happen anyway).



Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: marcus_of_augustus on May 27, 2011, 02:56:03 AM

Choose your friends wisely?


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: eturnerx on May 27, 2011, 03:36:20 AM
Choose your friends wisely?
Yes - and a wise choice of friend is somebody with opinions different yours and good reasoning behind their thinking.

Spur his interest by gifting him a BitBill?


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: bitjet on May 27, 2011, 04:06:57 AM

 and to not exchange my real money  for this "funny money".


Wait, you mean your going to exchange bitcoin for dollars?


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: kiba on May 27, 2011, 04:08:17 AM
http://bitcoinweekly.com/articles/comic-reaction-after-dramatic-rise-of-bitcoin-s-value Bitcoin Bubble!  :D


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: FreeMoney on May 27, 2011, 04:09:54 AM
Regarding exchange fees. As more and more things can happen inside the bitcoin economy you will need to pay the in and out less frequently. Also cheaper exchanges will tend to emerge over time.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Imnotadoctor on May 27, 2011, 04:15:28 AM
Thanks for your opinions.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Serge on May 27, 2011, 05:32:33 AM
UNITED NATIONS – The United Nations warned on Wednesday of a possible crisis of confidence in, and even a “collapse” of, the U.S. dollar if its value against other currencies continued to decline.
http://www.canada.com/news/dollar+could+collapse/4839011/story.html


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Jason Keith on May 27, 2011, 06:07:46 AM
Yes - and a wise choice of friend is somebody with opinions different yours and good reasoning behind their thinking.
Absolutely good advice here. Ideology alone is a poor way to choose friends. Some of my best friends are devout Christians but I can't think of any other anarchists I'd really want to spend time with. Most anarchists I've met and can think of are humourless dicks. Chomsky anyone? They have plenty of good solutions for a better, more just world but it's the redneck BBQs I'd rather be at.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: error on May 27, 2011, 06:19:33 AM
Yes - and a wise choice of friend is somebody with opinions different yours and good reasoning behind their thinking.
Absolutely good advice here. Ideology alone is a poor way to choose friends. Some of my best friends are devout Christians but I can't think of any other anarchists I'd really want to spend time with. Most anarchists I've met and can think of are humourless dicks. Chomsky anyone? They have plenty of good solutions for a better, more just world but it's the redneck BBQs I'd rather be at.

http://anarchyinyourhead.com/


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Sean on May 27, 2011, 06:30:18 AM
The exchange fees can really be thought as as a "Buy-In" fee.
There are no obligations to pay any fees once you have actually obtained your BTC.

It's the same with all currency mind-you, just go on holiday and suffer the great FX fees!


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: caveden on May 27, 2011, 07:49:29 AM
You can already buy amazon products (http://forum.bitcoin.org/index.php?topic=8864.0;topicseen) with bitcoins, with no fees.
People are already working for bitcoins (http://www.betabeat.com/2011/05/18/will-work-for-bitcoin-coder-says-most-people-just-using-it-as-an-investment-vehicle/), there are even sites for bitcoin job offers (http://www.bitcoinjobs.com/).

The conversion fees problem will eventually decrease. And, well, bitcoin is a much better money anyway... eventually what you save from inflation will probably compensate the conversion fees.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: rebuilder on May 27, 2011, 08:53:48 AM
While you can, at least historically, profit from speculating with Bitcoin, that's not what it was created for. Exchange costs matter less if you don't get stuck on the idea of cashing out. Bitcoin is a currency. Even if you think of it as an investment in and of itself, if it ever really takes off, there will be no point in trading BTC for other dollars - you'll be able to pay for things in BTC directly.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: db on May 27, 2011, 09:31:03 AM
In a very short time (much shorter than it takes to inflate the bubble) BitCoins will crash right down  back to $0. 

They might drop a lot but the only way for them to reach 0 is for no one to want to buy any from me after I, personally, have bought every single bitcoin.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: FreeMoney on May 27, 2011, 09:39:48 AM
In a very short time (much shorter than it takes to inflate the bubble) BitCoins will crash right down  back to $0. 

They might drop a lot but the only way for them to reach 0 is for no one to want to buy any from me after I, personally, have bought every single bitcoin.


Lol, we'll get in a bidding war around $1/21000 per coin.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: marcus_of_augustus on May 27, 2011, 10:05:29 PM
The exchange fees can really be thought as as a "Buy-In" fee.
There are no obligations to pay any fees once you have actually obtained your BTC.

It's the same with all currency mind-you, just go on holiday and suffer the great FX fees!

Actually, the exchange fess are mostly generated by electronically "cashing out" of the fiat casino system. They don't like people leaving and throw up all kinds of road blocks (as does any other monopoly), that is what creates the fees mostly, as overheads due to cashing out costs incurred by the exchanges is passed on.

For example, if you find a trustworthy local person to trade cash for bitcoins the overheads and thus costs incurred by the transfer can be minimal.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: jerfelix on May 27, 2011, 11:44:34 PM
In a very short time (much shorter than it takes to inflate the bubble) BitCoins will crash right down  back to $0. 

They might drop a lot but the only way for them to reach 0 is for no one to want to buy any from me after I, personally, have bought every single bitcoin.


Lol, we'll get in a bidding war around $1/21000 per coin.
While I'm alive, it will never go that low.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: airdata on May 28, 2011, 12:19:34 AM
I'm hoping you're american and your friend also, like me.

If so, ask what he thinks about the economy of the united states, the federal reserve, and how the dollar has lost something like 95% of it's original value.



Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Imnotadoctor on May 28, 2011, 01:32:20 AM
I'm not from the USA.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Basiley on May 28, 2011, 01:54:42 AM
I'm not from the USA.
"nobody perfect" (c) "Some Like It Hot" movie.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: error on May 28, 2011, 02:44:47 AM
I'm not from the USA.

The euro is next.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: MoonShadow on May 28, 2011, 02:59:54 AM
I'm not from the USA.

The euro is next.

Bullsh*t.  The Euro is first.  There is nothing underpinning the European Economic Union or the Euro itself beyond faith.  At least the US FRN has an army with a single command structure.  The Germans can't tax Greece if they tell them to bugger off and go start their own national currency again, and France can't buy German goods if Germans do the same.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Imnotadoctor on May 28, 2011, 03:04:32 AM
I'm not from the USA.

The euro is next.

Ah, assumptions, what would be the world without them?, I love how a little debate started from that, I'm not from Europe.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: error on May 28, 2011, 03:22:51 AM
I'm not from the USA.

The euro is next.

Ah, assumptions, what would be the world without them?, I love how a little debate started from that, I'm not from Europe.

The currency in whatever geographic area you're in isn't far behind either.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Imnotadoctor on May 28, 2011, 03:25:50 AM
I'm not from the USA.

The euro is next.

Ah, assumptions, what would be the world without them?, I love how a little debate started from that, I'm not from Europe.

The currency in whatever geographic area you're in isn't far behind either.

Shit happens.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: rezin777 on May 28, 2011, 02:17:09 PM
I'm not from the USA.

The euro is next.

Ah, assumptions, what would be the world without them?, I love how a little debate started from that, I'm not from Europe.

The currency in whatever geographic area you're in isn't far behind either.

Shit happens.

Do you just let it happen to you? I buy umbrellas.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: eturnerx on May 28, 2011, 02:25:50 PM
Shit happens.
Do you just let it happen to you? I buy umbrellas.
I prefer corks, but umbrellas are okay in a pinch.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Mike Hearn on May 28, 2011, 02:33:14 PM
Yes, please don't describe Bitcoins as having "free transactions". It's not true and never has been true. They're paid for via inflation today and fees tomorrow.

There was a time when Bitcoin had no value at all and nobody was trading them. It bootstrapped itself out of that phase successfully, and it wasn't by people who wanted to make a quick buck then exit. It's very unlikely the economy would totally collapse.

The value vs the dollar though, could well drop a lot. Who knows.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Imnotadoctor on May 29, 2011, 12:57:33 AM
I'm not from the USA.

The euro is next.

Ah, assumptions, what would be the world without them?, I love how a little debate started from that, I'm not from Europe.

The currency in whatever geographic area you're in isn't far behind either.

Shit happens.

Do you just let it happen to you? I buy umbrellas.

Umbrellas to cover from shit?, Jesus, I don't what to be where you are.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: rezin777 on May 29, 2011, 01:06:34 AM
Umbrellas to cover from shit?, Jesus, I don't what to be where you are.

Works great, as long as you can see the shit coming. My nonsense answer was in response to your nonsense answer when you suggested that the break down of the worlds debt money system can be written off as "shit happens".


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Imnotadoctor on May 29, 2011, 01:26:09 AM
My nonsense answer was in response to your nonsense answer when you suggested that the break down of the worlds debt money system can be written off as "shit happens".

And why not? the way the macro-economy is managed it is going to happen sometime, and it is going to be a nasty situation, it was  lighthearted comment but I don't see the nonsense.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: rezin777 on May 29, 2011, 01:35:38 AM
My nonsense answer was in response to your nonsense answer when you suggested that the break down of the worlds debt money system can be written off as "shit happens".

And why not? the way the macro-economy is managed it is going to happen sometime, and it is going to be a nasty situation, it was  lighthearted comment but I don't see the nonsense.

OK. The reason I thought it was a nonsense answer is because you were originally asking for opinions about Bitcoin. Some people suggested that it's superior over the current system and when you said, "shit happens", I got the impression that you didn't really care. I care about the shit happening and I'm trying to come out the other side without being covered in shit (which is why I use Bitcoin)!   ;D


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: Imnotadoctor on May 29, 2011, 01:41:07 AM
My nonsense answer was in response to your nonsense answer when you suggested that the break down of the worlds debt money system can be written off as "shit happens".

And why not? the way the macro-economy is managed it is going to happen sometime, and it is going to be a nasty situation, it was  lighthearted comment but I don't see the nonsense.

OK. The reason I thought it was a nonsense answer is because you were originally asking for opinions about Bitcoin. Some people suggested that it's superior over the current system and when you said, "shit happens", I got the impression that you didn't really care. I care about the shit happening and I'm trying to come out the other side without being covered in shit (which is why I use Bitcoin)!   ;D

Fair enough, and again thanks for all the opinions in this thread.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: PabloW on May 29, 2011, 02:50:37 AM
Tell your friend to try and be positive, because all the scene that you just described its all based on negative actions  ;)


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: REF on May 29, 2011, 03:02:15 AM
Mt. Gox charging a fee is the same thing as a stock broker charging you a fee when you buy or sell stocks. Mt. gox is a middle man looking to make money....

If you dont accept bitcoin as a form of currency then it will look like a pyramid scheme to you. If you accept it as money then "buying" bitcoins is exactly exchanging currencies when visiting a foreign place. Which by the way there are investors and trades who do try making money by exchanging money back and forth between standard day currencies.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: jerfelix on May 29, 2011, 10:04:41 AM
Mt. Gox charging a fee is the same thing as a stock broker charging you a fee when you buy or sell stocks. Mt. gox is a middle man looking to make money....

The beauty of a decentralized currency is that if you think MtGox is too expensive, you are free to perform deals without the middle man.  I can buy and sell Bitcoins to my family and friends, with no fee whatsoever. 

The bid/ask spread is a little high right now, but the .65% transaction fee seems pretty cheap.  But as zillions of Bitcoins change hands, if that .65% fee proves to be too expensive, then someone will step in and offer a competing service for half the price.

FYI, the 30 day transaction history shows that $5.7 Million transactions took place.  So the Mt Gox owner pocketed $37,000 last MONTH for this valuable service (less costs, of course).  Not bad for a side project, and if you are looking to make a few bucks on Bitcoins, set up a competing exchange with half the fees!  It can't be that tough!


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: rebuilder on May 29, 2011, 11:12:21 AM

FYI, the 30 day transaction history shows that $5.7 Million transactions took place.  So the Mt Gox owner pocketed $37,000 last MONTH for this valuable service (less costs, of course).  Not bad for a side project, and if you are looking to make a few bucks on Bitcoins, set up a competing exchange with half the fees!  It can't be that tough!

Apparently it is quite tough, since there are competing exchanges yet Mt Gox is overwhelmingly the most popular. What would it take for another exchange to gain popularity. I mean what could a competing exchange offer, not what Mt Gox might do wrong.

Is there another exchange that acts as escrow in the way Gox does? I think that's a big part of the appeal, only having to trust the exchange,  not the people you're trading with.


Title: Re: I think bitcoin is a great idea but my friend doesn't
Post by: jerfelix on May 29, 2011, 01:21:00 PM

FYI, the 30 day transaction history shows that $5.7 Million transactions took place.  So the Mt Gox owner pocketed $37,000 last MONTH for this valuable service (less costs, of course).  Not bad for a side project, and if you are looking to make a few bucks on Bitcoins, set up a competing exchange with half the fees!  It can't be that tough!

Apparently it is quite tough, since there are competing exchanges yet Mt Gox is overwhelmingly the most popular. What would it take for another exchange to gain popularity. I mean what could a competing exchange offer, not what Mt Gox might do wrong.

Is there another exchange that acts as escrow in the way Gox does? I think that's a big part of the appeal, only having to trust the exchange,  not the people you're trading with.
I didn't mean to trivialize how tough it would be to compete against Mt Gox.  When I made the comment, I was thinking more about how easy "technically" it would be to program an exchange.  Surely a similar program to Mt Gox's could be written for thousands of dollars.

It's the trust thing that Mt Gox has over the other exchanges, and how easy they made it to conduct transactions.  From a US-centric perspective, I'd think that if Charles Schwab or eTrade set up an exchange, with escrow, and easy money transfers to and from your current account, they could easily pick up that kind of money (37K/month and growing).