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Also remember that we're talking about a currency here, not a stock and the idea that such a new one can be valued at 20-30 times more than a USD is going to be a tough notion for many people to accept. Sure, rationally, the units shouldn't make a difference, but people are not especially rational. I don't think there's a good argument against moving the decimal place aside for the hassle it could create.
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Interesting. Through that lnk, I saw this. It would appear that it is illegal to trade a virtual currency for a physical item or service in China. I wonder how long before they crack down on that. The poor Chinese might find be the first to find out what it's like when the old guard fights back. Like mining world of warcraft gold and selling it for physical currency? |
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To all US citizens that support Bitcoins. Although Senator Schumer and Friends are helping the publicity of Bitcoins we still need to take action. Some of you just say "Whatever I doesn't matter they can't hurt Bitcoin exchanges will always be replaced" but the core issue is that it SHOULDN'T have to be replaced. MtGox is a perfectly legal institution, Schumer is just fear mongering people and blowing things out of proportion by trying associate "Bitcoins directly with Drugs" even though Bitcoin is used for a lot more things. Although some of you don't agree with the illegality of drugs at least bare with me. Bitcoin =/= Illegal Drugs. Don't let them push some baloney bill to ban/limit the use of Bitcoins in the US. It is just a regrettable side effect of money; if PayPal just happened to be used to buy drugs and the government didn't bother to work with them to stop it, but instead just decided to stomp PayPal out we would think that is ridiculous. I don't know what lobbyist pay Schumer and Friends but this is obviously just some strong arming against Bitcoin.
Send emails to your local Senators and Representatives to Schumer and to the Attorney General explaining to them the ridiculousness of what they are doing right now. It violates the fundamental values of capitalism and democracy.
A nice preliminary step, but again I'd be very surprised if any sort of anti-bitcoin bill gets drafted, let alone gets out of committee. You can bet Ron Paul will be yammering about it forever. |
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People hoard because they expect the value of Bitcoins to rise. So I have my theory: to fight this, Bitcoin prices should have a discount comparing to USD prices, even below production cost. You may think it doesn't calculate, but actually it does if you don't sell the Bitcoins immediately. The discount is the price you pay for getting currency that deflates by design.
You could do some calculations and predictions about deflation and how long you will keep Bitcoins, but psychologically, any discount would help - if people could trade USD to Bitcoins and buy your products cheaper.
Bingo. It also makes consumers not using bitcoins willing to use them and increases demand for Bitcoins, driving up prices. "Hmm, I could pay you 100 USD for a product, or I could go to an exchange, spend $70 to get bitcoins and then give them to you and get the product. It's a little hassle, but I'll do it to save 30%" Afterwards, that consumer's been setup with a bitcoin account and is better able to participate in future exchanges. |
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Market hasn't doubled in the last hour, bubble's bursting, time to sell. I'm packing up and going home.
Has anyone else had a horrible transfer time for Dwolla funds showing up in Mt. Gox? I sent funds in 4 hours ago from Dwolla and nothing's showing. If the flow of capital into the market is restricted, that alone is going to slow things down.
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Can anyone say $50?  $50 is now virtually guaranteed 1 or 2 days after this goes 'on air' tomorrow. Depends on the transfer times from dwolla! |
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What votes does bitcoin need anyway?
[/quote]
Only a vote of confidence from the free market.
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Frankly, I hadn't even planned on responding to him. It's pretty clear his/her mind is already made up.
[/quote]
For the hilarity of all of us, I highly suggest you do respond.
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Ask him to cite the law in question. Bet he can't or that the law doesn't apply to bitcoins.
Obviously buying and selling in bitcoins and not reporting gains to the IRS is tax evasion, but it's the "not reporting gains" portion that makes it illegal, not the bitcoins.
And who the hell reports income to the IRS on things they sell on craigslist anyways?
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yeah i get it, just wish i was able to get more. buy the time i get paid next week they could be out of my price range as i buy 10 oz of silver bi-weekly.
...you can always buy fractions of a coin. |
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Maybe $1000...that would pay for law school. |
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millions of people out there who aren't informed as you are now.
billions |
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My personal opinion is that when wall street truly gets it, the bitcoin speculative bubble will make the internet bubble look tiny in comparison.
THIS. Everyone bombard Jim Cramer on Mad Money and get him to talk about it. |
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Shifting the decimal really important, if only for psychological purposes. Many people have a very terrible understanding of math and simply do not understand working with numbers smaller than .01. Also, many people may reject the currency as being "overpriced" because a single currency being valued at more than $10 USD is unheard of, and decide not to enter the market. A rational person would purchase fractions of a bitcoin, but the important thing here is that most people are not rational. This probably comes as a shock to many bitcoin users who are of above average intelligence and surround themselves with above average friends and coworkers, but just head to your local DMV for an afternoon and try to imagine these people adopting the bitcoin. Perhaps it's a little different outside of America, but we need to keep the barriers to using bitcoin as low as possible.
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I think the questions you're asking about bitcoin are about the same as if it were gold or the Euro. I'm not a tax professional, but I'm pretty sure that if you make USD from currency speculation, you still owe tax. If you convert a company's revenue to Bitcoins and record this as an expense, the IRS may have you evaluate the USD value of your holdings at the end of the fiscal year when you go to pay taxes. I'm not completely sure, but the issues you're discussing are not novel to Bitcoins and the IRS has probably come up with a boatload of rules regarding currency speculation and non-dollar assets.
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They should design something like HD 7870 Bitcoin Edition for very fast mining  I know that sounds awesome, but what would be the real point? Every miner would buy the card and then the relative computational strength would stay the same. Everyone would generate the same number of coins. Right? It's sort of the Red Queen situation- you have to keep running as fast as you can just to stay in the same place. So long as bitcoins appreciate, it still makes sense. |
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Once the value of speculation is higher than the utility of bitcoin as a transacting currency, the bubble will no doubt burst.
Um, ain't that where we're at now? Speculative activity is far beyond purchasing goods and services right now. The value of the bitcoin will continue to rise as more individuals decide to enter the bitcoin economy and demand bitcoins. The user base and trade volume of the bitcoin is far below that of any major currency, commodity or stock. Most of the current user base understands this and the fact that if the bitcoin were to become a majorly used currency, its value per unit would have to be many times higher than it currently is given the quantity of bitcoins available (fixed) compared to fiat currencies (rising). So long as the current holders of bitcoins believe the value will continue to rise and new users enter the market, it will. The day you see people taking out mortgages on their homes to buy bitcoins is the day you probably should get out. |
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What new information is entering the system to drive price increases? Or is it being driven entirely by irrational exuberance/greater fools type speculation?
It isn't new information, it's new investors that have acquired that information. You should work on the assumption that anyone who is already part of the market invested as much as they feel comfortable to, according to your theory. On the other hand, the Bitcoin market hasn't reached full load yet, nowhere near that actually. Let's say it has achieved less than 1% of its user base as of today. I think you're dead on. The Efficient Market Hypothesis assumes that everyone has the same information available to them and hence the price responds immediately to match that information. Most people are not aware of the existence of bitcoins. |
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