7 thoughts on Bitcoin

[mwag]

• If you base the value of the crypto-currency on the paper money value, you are doing it WRONG...

Everything in the world can be valued in terms of something else. There is no wrong or right about it, it's simply how it works.

I can say that computer monitor costs $150 dollars.

I could also say that computer monitor costs 41.66 gallons of gas. This is because today 41.66 gallons of gas costs $150 dollars (or 1 computer monitor).

All three things can fluctuate and change relative to each other. Tomorrow gas could cost more dollars per gallon, and if dollars per monitor remained stable you would be able to pay less gas for a monitor.

Of course we don't think this way because we simply price everything in the most common form of money we use daily, your local fiat. It's perfectly natural to price a new currency in your local fiat as well.

If you don't agree, sell me your house for 1 bitcoin. Don't base the value of that bitcoin on your local fiat, trust me, it's worth as much as your house.

[1715640562]

1715640562

[astutiumRob]

If you buy yen for gbp, yen value goes up, gbp goes down

Go and try that at your local amex ccy exchage - change all your USD into XYZ - see if they change the price ... they dont.

At some point so much will be invested in bitcoin that it's value will be 51% of the known global economy

If every bitcoin possible was already mined, at todays value, it'd add up to the debt of Mexico, under 1% of the global economy

The illegal drug market is the 3rd largest industry in the world, if major players in this realise the power of bitcoin

Professional criminals employ people much more clued-up than you about all of this - they're already using bitcoins

When the world economy is primarily bitcoin

Right ...

would a few miners running at home make enough to substitute the basic costs of living

No.

you could tell/convince your boss to pay you in bitcoin by saying something like "hey, if you want to save money, pay me xx less, but pay me in bitcoin" because you'll be saving xxx from not paying tax for your government

Income is (in most countries) still taxable, irrespective of the payment method.

the bitcoin doesn't need to be registered anywhere

You do understand that every bitcoin transaction can be tracked ?

he's just paying you less now.

No, he's just paying you in a different way.

Because the people won't be paying tax for the government

Is there a special name to this magical world ?

7. End of Inflation: When only bitcoin exists in the market inflation will end.

As the value of bitcoin changes over time, it has an "interesting" relationship to inflation - if you can buy all the ingredients for a loaf of bread for 0.0001 BTC and you sell the bread tomorrow for 0.00011 BTC (making 0.00001 profit or 10%) what will you do when to repeat the process now costs you 0.0002 BTC due to the change in value ... it's still "inflationary" ...

[koinnabber]

• If you base the value of the crypto-currency on the paper money value, you are doing it WRONG...

Everything in the world can be valued in terms of something else. There is no wrong or right about it, it's simply how it works.

I can say that computer monitor costs $150 dollars.

I could also say that computer monitor costs 41.66 gallons of gas. This is because today 41.66 gallons of gas costs $150 dollars (or 1 computer monitor).

All three things can fluctuate and change relative to each other. Tomorrow gas could cost more dollars per gallon, and if dollars per monitor remained stable you would be able to pay less gas for a monitor.

Of course we don't think this way because we simply price everything in the most common form of money we use daily, your local fiat. It's perfectly natural to price a new currency in your local fiat as well.

If you don't agree, sell me your house for 1 bitcoin. Don't base the value of that bitcoin on your local fiat, trust me, it's worth as much as your house.

I didnt mean it like that, what I mean is don't compare it to something that it is to replace. But not in its fullest sense either. Value of items always changes, but there needs to be a point at which something has a semi-absolute value in the future. I'm way too tired to try to explain exactly what it is I mean.

your gasoline theory is wrong, so is your monitor theory due to the fact that you dont have all of the specifics listed, and that is where the problem comes in.

I can get gasoline for cheaper if I go to a different gas station, yes that is how things "should" work based off of supply and demand, convenience, lazyness, skills, abilities, greed, etc.
There are several thousand different computer monitors out there, what is to decide that that particular one is worth $150, it could be an old worn out one... or a defective one, again... I can get that same one for cheaper somewhere else.

Money itself offers no gain to you... if nobody accepted it, it would be worthless...

Gasoline could be used in your car...
A monitor can provide you viewing pleasure...

Basically this is why bitcoin should'nt be compared to money.


What we need to do is create a need for bitcoin itself, a non-illegal one.


if I'm rambling on here, please spare me the comments, I really should'nt post with this level of sleep, however I don't want to forget to reply.

Peace!
[/list]

[Jobe7]

(btw, i'm not 'fighting', just enjoying the discussion, and of course clearing up the understanding in my own head

Re: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tax-Responsibilities-of-Bartering-Participants


From what I understand from this,

Say, if you employed me and paid me in bitcoin, we'd both have to state it. Then pay tax appropriately? Yet, if I have no cash, how would I pay tax? would they insist that I pay the market value in fiat (of the total value I had earned)?

Probably, hope so. And that's part of the plan as far as I understand Satoshi.

Eventually they would realise that the £1,000 in tax (random number)  I'd paid 2 months ago was only worth £700 now (as I'd still be getting paid the same amount in bitcoin as the value of fiat continued to drop). Sooner or later they'd realise they need to tax in bitcoin to avoid a massive loss.

At this point they adopt bitcoin as taxable itself. Which ever government does this first (when bitcoin is much bigger) would avoid losses first, and thus gain power over the other countries of the world, until the others follow suite.

Inevitable.

[brancao]

I think we're going to hit an (arbitrary, psychological) tipping point when the price of 1 BTC equals the price of 1 (troy) ounce of gold - currently around 1,500-1,600 USD.

When that moment comes, I think a certain percentage of people who invest in gold will suddenly "see" that BTC shares many similar useful properties, but BTC has much better "versions" of these properties (eg, you can put multiple copies of your wallet on pendrives, paper, brainwallet; you can take it on a plane or encrypt it and email it to yourself, etc.)

So I envision a certain percentage of gold holders switching some of their holdings to bitcoin.

[MagicBit15]

I read "most" of the posts above, and here is my take on crypto-currency (any type)

People give them value, people keep the power.

---- Thoughts on using Crypto-Currency as a replacement to current currency

• Until you purchase something point-to-point with bitcoin (100% transaction) you can be tracked down, even still then you can be tracked down to some extent.
• Eventually you will purchase something for x.xx bitcoins / litecoins ... not the $$ value of the coins (this defeats the whole crypto-currency theme).
• If you base the value of the crypto-currency on the paper money value, you are doing it WRONG...

The value of the currency needs to come from the currency itself, once you can trade the currency for the good directly without converting its physical value, it has not done its job.[/li]
[/list]

---- Thoughts on using Crypto-Currency in conjunction with paper currency

• Paper currency fluctuates in value as does crypto-currency, this un-stable system can make people money and it can also lose people's money (both crypto and paper) solely on speculation or emotions/fear. This makes the money "soft" and weak in times of turmoil and despair.
• Crypto-currency can be controlled similar to that of bittorrent traffic. Governments can analyze the traffic that your sending on the internet and tell what IP addresses are using crypto-currency, or are a node at least. Using new acts that the government (US) has enacted due to "Terrorism" (I have my feelings about terrorism, I will not discuss it here [not a terrorist, fyi]) the government could get search warrants and search your home. Place you on a list that you don't want to be on. Potentially be held for conspiring to commit Terrorism... SAD!
• There are some positives to having multiple currencies, both paper and Crypto, The main being that if you maintain your lifestyle bby using paper currency and only use crypto for your extra purchases like vacations, etc. you can create a slightly better life for yourself. You deserve it!!!! Most people that don't agree with what it is we are trying to do either rely on the government to give them money or rely on people that rely on the government to work in their companies for a low wage to only line their pockets more.

anyhow, there is more positives and negatives... just something to give a different angle on someone's views.

Peace!

Very well constructed post!! However, you are horrible confused on a few of those things...

[Bohemian_Lady]

5. Don't Support Government Wars (DSGW): When employers the world over realise how this systems blows away all current existing employment payment system. Right now, you could pay anyone you employ in bitcoins, they could then use those bitcoins to pay for food, stuff, etc (via loads of bitcoin sites now), just change a little to cover bills. Keep as much as you can in the bitcoin world, then you only need to declare whatever you have changed into fiat cash, maybe so little that you don't have to pay any tax at all. And you could tell/convince your boss to pay you in bitcoin by saying something like "hey, if you want to save money, pay me xx less, but pay me in bitcoin" because you'll be saving xxx from not paying tax for your government to kill people with. You can stop paying tax and have your government throw you jail.

Ummm only if your getting paid under the table. Since most employers automatically take out taxes and any legit contractor reports to the IRS you would still have to do your taxes. Nice try though.

[Jobe7]

You: Go and try that at your local amex ccy exchage - change all your USD into XYZ - see if they change the price ... they dont."

Dude .. you have heard of Wall Street right? the Stock exchange?


Me: At some point so much will be invested in bitcoin that it's value will be 51% of the known global economy -
You: If every bitcoin possible was already mined, at todays value, it'd add up to the debt of Mexico, under 1% of the global economy"

You seem to think that bitcoin will stay the same value? If you understand inflation, then you'll understand that it doesn't stay same value, especially NOT if 51% the worlds fiat was invested into it ..... Jeebus. Atm, just over $500,000 (half a million) is 'invested' into bitcoin (overall transactions and trade 'through' bitcoin is much higher). When $100 billion is invested into bitcoin, how much do you think 1 bitcoin will be worth then? hm? 7 cents years ago with hardly anything invested, nearly $50 now with half a mil invested.

It doesn't take a rocket scientist to see where it's going

You: Professional criminals employ people much more clued-up than you about all of this - they're already using bitcoins

Urm, so, you don't know about the huge money laundering scandal with HSBC these last few months? they got caught laundering $100's of millions for mexican drug cartels (gawd knows how much they DIDNT get caught with, and the other banks). Apparently, the professional criminals that deal with the global banks and $100's of millions of dollars are NOT clue'd up about all this as you or me. (google 'hsbc money laundering').

On tax (again ) - I'm probably wrong then about other countries, in the UK you can work voluntary for anyone, anywhere, and accept whatever in pay. Maybe if its HUGE amounts you have to declare it (I imagine you would need to), but I was thinking more along the lines of the normal average day persons wage. Ye, anyway, in the UK, you need to declare any fiat pay you receive, nothing else, but when you're earning over xxx amount you have to pay tax, and there's a higher band which is at £40,000+ (I could be wrong on that amount).

So, I can work part time for one job, get paid, not have to pay tax because its under the amount required. But if I do more random work, or extra hours, then I have to declare any extra (fiat) earnings, and again, if that amount is over xxx amount I have to pay tax.

But, I can do that same work part time, do other jobs, get paid in bitcoin and there is legal no requirement for me to declare that bitcoin. IF I change any to fiat, THEN I need to declare that, as earnings. But if it's kept within the 'bitcoin world' then there is no legal requirement for me to state anything about it (in the UK).

Now .. when the tax man comes knocking, I'd happily state what I'm doing and done (maybe not all of it ), and I'd hopefully encourage them to think about taking bitcoin on board

Me:the bitcoin doesn't need to be registered anywhere
you: You do understand that every bitcoin transaction can be tracked ?

You do understand that there is no way for you to find who owns an address, unless they tell you, right? Prove me wrong.

Me: he's just paying you less now.
You: No, he's just paying you in a different way.

Simple math - If I pay you £2,000 for 1 months work. Then the next month I pay you £1,900 (in bitcoin), then I have paid you 5% less. I don't know how else to explain this one...

Me: Because the people won't be paying tax for the government
You: Is there a special name to this magical world ?

Yes, it's called the future.

Me:7. End of Inflation: When only bitcoin exists in the market inflation will end.
You: As the value of bitcoin changes over time, it has an "interesting" relationship to inflation - if you can buy all the ingredients for a loaf of bread for 0.0001 BTC and you sell the bread tomorrow for 0.00011 BTC (making 0.00001 profit or 10%) what will you do when to repeat the process now costs you 0.0002 BTC due to the change in value ... it's still "inflationary" ...

You're a bit silly really aren't you ...

Your bread is now worth 0.00011, because the ingredients got more expensive (maybe bad weather, etc). But what about a car? a house? a flight on holiday? the bus fair?

Have they all gone up in price because the bread is more expensive? No. They havn't have they. When prices go up in shops, your bus fair stays the same, a drink, etc.

The VALUE of bitcoin at 21 million will remain the same. It can NOT be inflated at that point. Well, that's a slight lie, the only 2 ways would be, 1 - if people lose bitcoins permanently (increasing the value). 2 - if 51% of the users (population at that time) agrees to allow for introduction of a set amount of new coins (to replace those lost), which would then devalue the bitcoin.

----

You sir, need to learn more about economics. And hey, I'm a criminologist and politician, and I know this stuff, so ye, less silly thoughts and trying to be patronizing (cause I'll only do it back), and more learning economics. Try this page - http://onlifeandliberty.com/

[Jobe7]

"Ummm only if your getting paid under the table. Since most employers automatically take out taxes and any legit contractor reports to the IRS you would still have to do your taxes. Nice try though."

Sounds different in the US than the UK, see my above post for my similar reply

[Jobe7]

"Basically this is why bitcoin should'nt be compared to money."

Indeed (the explanation below is for others)

One of the most important things (I believe THE most important, and people will understand why in times to come), is that bitcoin exists 'above' fiat, and I think it's definitely fair to say gold as well (for reasons as someone stated above).

Gold > fiat (uncorrupted) > bitcoin.
horse > car > plane

transportability.

Fiat spent on buying gold inflates gold and deflates the fiat.
The same as fiat spent on buying bitcoins inflates bitcoin and deflates the fiat.

Fiat spent on other fiat, deflates the primary, inflates the secondary (stock exchange, global market, blah blah blah), hence why your money goes up and down in value with regard to other currencies. If you change £10,000 today to $, you will not get the same amount if you did it 50 years ago, or in 50 years time.

50 bitcoins is worth 50 bitcoins and will remain so.

If I trade you 50 bitcoins today for 50 bitcoins, and in 50 years time I trade you 50 bitcoins again, they will still be worth 50 bitcoins.

Bitcoins are immune to self inflation because they are capped.

"What we need to do is create a need for bitcoin itself, a non-illegal one."

Indeed, it is in the 99% best interest to continue to make markets/businesses involved with bitcoin and try to keep as much bitcoin in the bitcoin world as possible.

Hence the being 'paid in bitcoin', it takes your 'wage labour' out of the fiat world, out of the control of the banks, where YOU are your own bank.

[mwag]

would they insist that I pay the market value in fiat (of the total value I had earned)?

Yes, finally you understand.

[kooke]

What happens in a scenario where Internet service goes down? There have been several instances in the past year where countries lost access to the net for a while.

[Jobe7]

"What happens in a scenario where Internet service goes down? There have been several instances in the past year where countries lost access to the net for a while."

What countries do is 'block' your internet. There's ways around it. And it wouldnt 'delete' your bitcoin.

Your bank account hasn't been 'deleted' any time you're blocked from anything.


"Yes, finally you understand."

Unfortunately you fail to understand the concept of 'voluntary' work. And IF you ever got paid in anything like bitcoin, please let us know how it goes when you state it to your tax office

And as I've tried explaining (a few times now) to you (and I give up after this time, if you still don't grasp it). If you're paid in bitcoin (a set amount of bitcoin), then go ahead, tell your taxman, I hope you do, cause I would also. And then eventually your local tax office will realise their fiat is decreasing in value constantly whilst your steady wage is not. Sooner or later, a state would catch on and realise their massive losses due to inflation and would realise they'd need to tax you in bitcoin to avoid that loss. That is a good thing.

[Netprofits]

A new can only reply?  This is nutty.

[Gabi]

Countries blocking internet?

It is not a problem, because in space we have tons of satellites! Good luck country, try block satellites lol

[astutiumRob]

Unfortunately you fail to understand the concept of 'voluntary' work. And IF you ever got paid in anything like bitcoin, please let us know how it goes when you state it to your tax office

They could pay you in Popcorn and used DVD's - you'd still have to declare it, it would still have a value, and you'd still be liable for tax.

[ButchHashidy]

3. Global Prohibition: The illegal drug market is the 3rd largest industry in the world, if major players in this realise the power of bitcoin before the end of prohibition the bitcoin value will take a MAJOR jump, and the world will notice. Which will happen first?

Can't come soon enough.  America's "war on drugs" has become the longest war in American history.

[sasquat]

is it possible that LTC comes over BTC?
like LTC costing U$50 and BTC U$40...

[henq]

Hi,


1. Counter Balance: The fiat system adopted and now exists within a counter balance system. If you buy yen for gbp, yen value goes up, gbp goes down. Same the whole world around, these currencies exist side by side, they counter balance each other. Yet bitcoin exists above them all. Bitcoins counter balance is the fiat system itself. When bitcoin value goes up that is because the fiat system has invested itself in it.



6. Economic Growth: Because the people won't be paying tax for the government to start wars and give to their bank buddies, people will have more money to spend, which will give growth to small and big businesses alike (whichever become part of bitcoin sooner will benefit most, especially from the increase in bitcoin value), which will give rise to more jobs, etc, etc, encouraging other businesses to take on bitcoin as they see their bitcoin neighbors booming with growth.

#1: Good observation. When something goes up in value, always something else must become less valuable. When ppl start buying bitcoin and / or gold in droves, paper money's value dwindle. Ultimate, we get hyperinflation.  Game over for fiat money. But we need a debt system, so maybe Ripple or similar will rise as a consequence.

#2: I would say : "Because the people won't be paying the hidden inflation tax for the government to start wars..." I suspect we wil have tax forever, but wars are always payd by the stealth hidden tax called inflation. (Sometimes in payed in advance by twin sister Deficit Spending)