But wait, wasn't not having any central authority or law enforcement the central selling point of BitCoin?

Survival of the fittest, baby.

Golly it's almost as if there's no way to trace people stealing digital cryptocurrency when their only business address is a PO box on a tax dodge island.

Who would have thunk it?

It is inevitable. Talk all you like about good and bad, but it's going to happen anyway, because there is no authority interested in regulating BitCoin. Welcome to the law of unintended consequences in your decentralized peer to peer digital crypto-currency.

Just buy them.

That way you will minimize the time you spend thinking about this whole misguided idea, and you can move on with your life.

PS I think the market is going to decline sharply, so why not set up an account somewhere and put in a bid for 20 at $5?

That way you'll have all the fun of owning 5 pieces of useless internet history and you're only out a hundred bucks.

A rounding error.

Though it has to be said, people may start avoiding you if you harass them to download BitCoin software.

Yes, all the fanboys who have responded so far have correctly described what happened at Mt. Gox.

The one thing they neglected to mention is that there's no reason why "early adopters" of BitCoin (read: first in to the pyramid scheme / pump and dump) can't start selling their coin en masse and crash prices everywhere.

The market is very shallow, and a determined seller wouldn't need much to do this.

So: don't drink the Kool Aid. Think twice about how much money you want to "invest" in BitCoin. If you "believe" in it (I could say you're already lost when you have to start talking about faith) then consider converting $ to BTC when you need to spend them; and for whatever your actual business purposes may be.

Speculators are going to get their asses handed to them on a platter with bit coin, in my opinion. So. If you're a bitcoin billionaire (in dollar terms) later, please come back and laugh at me. And if you lose your money, don't bother. But don't say nobody warned you...

It shouldn't be that hard to "grok" (the expression is grating on me, but I'll get over it). The short answer is if you hold BTC you will gain if it strengthens against the dollar and lose if it weakens in dollar terms. Spending before a rise in BTC/USD is bad, but spending before a fall is good.

Say you bought 50 BitCoins at 1BTC/$10 on Monday, spent them on oh, say, 10 grams of cocaine @ $50 per, and the following day BitCoin 'strengthened' to 1BTC/$15, you will be sad and very wired.
Because if you had only waited a day, you could have had all that smack for just BTC33.3 (33.3*$15=$499.5) and you would have still had 16.7BTC left (16.7*$15=$250).

And the reverse is true, if you did the same deal and then BTC suddenly weakened to 1BTC/$5 on Tuesday, you would have had quite a bargain on all that charlie _ you now have $500 worth of coke, and the dealer is left holding lousy bitcoins. You could snort half, sell the other half for $250, and use that $250 to buy back your original 50BTC.

Anyhow, it's rational to hoard if you believe BitCoin will go up in dollar terms, and rational to dump if you think it will go down (I'm in the latter camp).

Keep it simple, mentally convert BTC to dollars and do your best to reason out whether you think BTC is going to rise or fall. Consider all you know about the amount of BTC out there and who may be holding it, versus the BitCoin economy and its potential to grow _ in short, whether buyers or sellers will be more eager in the future.

I'll resist more bashing BitCoin and just say the most important thing to decide is how confident you are about your opinion, how much you're willing to 'risk' on it.

PS for fun, run those same numbers and pretend you bought 100BTC on the first day, but managed to only spend your usual 50BTC/$500 worth on blow. The results may surprise you and introduce you to the benefits of 'hedging your bets.'

Try again with a new ticket number. If they don't hear from you for a while they mark your problem as "solved."

The squeaky wheel gets the grease. On the bright side, in the past month BTC hasn't crashed to zero.

A slightly more serious answer: try traveling in foreign countries for a while. You'll find out pretty quick that you'll tend to choose a reference currency or maybe two _ even in your head _ to see whether something is cheap or expensive.

In practical terms, in the United States that reference point is going to be the dollar in almost every scenario, the exception being that there's a real currency collapse, since the dollar hasn't had any serious competition (no, not even from gold) in any of our lifetimes. And in case of a dollar collapse, it's going to take people some time to figure out new reference points, and a lot of things more serious than the BitCoin experiment are going to be changing in the real world.

The only thing that's close to what you're imagining is that the BitCoin economy would become large enough that its exchange rate to the dollar would stop being so volatile. That's within the realm of the possible (but still unlikely in my view).

Fortunately for BitCoin dreamers, technology is on their side in that they can weather just about any volatility if BitCoin is truly destined for an enduring, if niche, place in the real economy. Computers will continue to do the 'price checking' for them, presumably by having a look at the current exchange rate at MtGox or whatever dominant forum for discovering spot prices emerges.

All of this is a major argument for keeping your real money in dollars as a store of value and changing into BitCoin only when you want to carry out a transaction. Unless of course you want to speculate on the future of BitCoin one way or another.

I'm not in the business of giving financial advice, but my opinion is that those who go "short" will do better than those that are "long" BTC vs USD.

Look at the facts: lots of people mining and hoarding, but hardly anybody spending or willing to hand over $ for BTC. That's a recipe for a sharp decline.

Another critical thinking test. I hope everyone passes.

Sad story

I'll keep this short. I think you are deeply confused.

"I think that those things create value, and alongside the cost to produce, with a healthy (bitcoin) market, should combine to create a conventional BTC value outside of its relationship to the USD or other traded currencies."

No matter *how* you define BitCoin (asset, commodity, currency, or total BS), it's always going to have some value relative to other currencies, assets and commodities. I would argue the correct value is 1BTC=$0.

If you're imagining that it will become the primary measure of value on Earth (the way the dollar is now, for most people), you need to put down the bong and back away from your computer before you damage yourself financially.

I think this says it all.

From the Whois:

Not a good sign that he's using a PO box in Saint Kitts and Nevis.

I hate to say it, but a fool and his money are soon parted.
   
Registrant:
 MyBitcoin, LLC
 Main Street
 PO Box 556
 Charlestown, Nevis
 KN

 Domain name: MYBITCOIN.COM


 Administrative Contact:
    Williams, Tom  abuse@mybitcoin.com
    Main Street
    PO Box 556
    Charlestown, Nevis
    KN
    +6499518329
 Technical Contact:
    Williams, Tom  abuse@mybitcoin.com
    Main Street
    PO Box 556
    Charlestown, Nevis
    KN
    +6499518329

I am shocked, shocked!

Hi. I'm Beryl, a BitCoin skeptic (a critic but not a troll).

Hope that doesn't mean I'll be banned:  I won't use any ad-hominem attacks, I promise, if nobody uses any ad-feminem attacks against me.

 

"For if you kill me you will not easily find another like me, who, if I may use such a ludicrous figure of speech, am a sort of gadfly, given to the state by the God; and the state is like a great and noble steed who is tardy in his motions owing to his very size, and requires to be stirred into life."