I think bitcoin is a great idea but my friend doesn't

[Imnotadoctor]

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.
 

[rezin777]

In before kiba sees bubble.  


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.

[mewantsbitcoins]

and moves this thread

[Imnotadoctor]

and moves this thread

You guys are great help! 

[FreeMoney]

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.

[bcpokey]

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.

[zef]

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).

[marcus_of_augustus]

Choose your friends wisely?

[eturnerx]

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?

[bitjet]

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

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

[kiba]

http://bitcoinweekly.com/articles/comic-reaction-after-dramatic-rise-of-bitcoin-s-value Bitcoin Bubble! 

[FreeMoney]

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.

[Imnotadoctor]

Thanks for your opinions.

[Serge]

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

[Jason Keith]

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.

[error]

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/

[Sean]

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!

[caveden]

You can already buy amazon products with bitcoins, with no fees.
People are already working for bitcoins, there are even sites for bitcoin job offers.

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.

[rebuilder]

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.

[db]

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.