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Author Topic: Bitcoin Businesses can make income :)  (Read 991 times)
the founder
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April 16, 2013, 12:24:32 AM
 #1

This is just a micro press release (not sure where to put it).

Bitcoin Businesses can generate income,   http://www.ounce.me just signed CampBX and Satoshi Dice for advertising.   We're getting paid in Bitcoins,  so in essence starting a bitcoin business can work.  If you go to Ounce.me you'll see their ads there.

Seriously this made me feel like there is a chance we can build bitcoin economy.




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April 16, 2013, 12:30:45 AM
 #2

http://market-ticker.org/akcs-www?post=219665

Destruction of BitCon-Accepting Businesses
By Karl Denninger - www.tickerforum.org
 

If you remember I wrote an article a few days ago entitled "BitCon: DON'T" in which I laid out the premise of what a currency should be.

A currency should permit one to express their preference for goods, services and time.  That is the essence of currency; it permits you to engage in the intercourse of goods and services without regard to what you produce or desire, provided that someone in the economy values your product or service.

That person could be in the next house over, the next town over or across the nation.  It doesn't matter.  So long as such a person exists you can transact.

A good currency also allows you to express time preference.  That is, your desire to buy tomorrow instead of today.

An ideal currency places no thumb on the scale for any of these preferences.  That is, its value is invariant over periods of time.  This is important for many people but for business use it can be essential, because many businesses take goods and "refine" them in some fashion.  A baker takes wheat and makes bread and pastries; to do so requires time, and he therefore ideally wants the value of currency he exchanges to remain stable during the time between his acquisition of wheat and the sale of the end product.  If it is not to remain stable he must know the rate of change with a reasonable degree of certainty so he can adjust his prices to match cost in real terms.

There is a further problem -- businesses in virtually all cases and individuals in many cases are subject to tax.  Taxes are a cost of doing business and therefore unknown variation in the value in invariant terms for a currency is therefore quite damaging to the ability to pay taxes.  If you can't pay the tax man you're out of business.

When governments adopted currencies and denominated taxes in a given one, they made possible business planning.  You could then accept anything but you priced your goods and services in that currency, whether you accepted only that or a whole host of things in payment.  This allowed you to stabilize your expected profit margin and thus know you could pay the taxes due to the government. 

Before this adoption farmers were frequently dispossessed of their lands by the Lord of the realm, who came through demanding payment of taxes in grain.  If you didn't harvest sufficient grain you were screwed and lost your lands.  But when payment was made in coin you could always go help on someone else's farm, milk their cows or engage in some other act that had value to someone, get the required coin, and pay those taxes.  This was a stabilizing influence in society.

Now here's the problem for BitCon:

Let's say you denominated one month of Internet Hosting in "1 Bitcoin."  You accepted payment.  Then, in the next few minutes, the value of that coin collapses as happened today.

What happens to you?  If your effective tax rate at the expected exchange rate was 25% it has now doubled.  There is every possibility you will be unable to pay the taxes due along with the rest of your fixed costs.

If that happens you're done.

This is why businesses should not take Bitcoin.

Sure, when the price was "only" going up it felt great -- it was free money!  You got paid 2 BTC for that hosting and guess what -- two days later you were laughing your ass off because you made a huge profit on the FX exchange.  If you cashed it, that is.

Nobody in their right mind knowingly takes FX risk with 50% swings in minutes in a common business context.  That's nuts.  If you're a trader and like speculating in commodities, then sure, have at it.  Just make sure that you're ok with the sort of dislocation you saw today, and while you're at it also make sure that you've not deposited funds into a roach motel where you can't get out when you want to -- that is, where there won't be a sudden appearance of "gates" or "limits" preventing you from exchanging back to some other currency and withdrawing the funds.

By the way, that little issue is likely to be a problem too.

Bitcoin is in my view not a currency since it posseses none of the required properties of currency.  It is a digital commodity with zero intrinsic value, much like Tulip futures were.  Tulip bulbs had actual tangible value, even if small, as they grew into flowers -- futures, on the other hand, had no tangible value at all.

When TulipMania collapsed the government deemed the futures an illegal gambling contract and voided them, incidentally.

You might want to think about that sort of risk too.

I have no intention of ever accepting an alleged "currency" that moves 20, 30, 50% or more in value over a short period of time and you shouldn't either.


 
 
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the founder
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April 16, 2013, 12:42:39 AM
 #3

I don't get it..  now I am getting slammed for accepting bitcoins...  on bitcointalk?

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April 16, 2013, 01:18:52 AM
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I think that is great your making money! but to say bitcoin business can make an income is kinda undercutting to the success of bitcoin. I been working on bitcoin projects full time and it is my only source of income. So has Erik and many other people on the forum. Again gratz! But remember there a ton of people that already been doing this so don't make this sound like a surprised.

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April 16, 2013, 01:23:12 AM
 #5

http://market-ticker.org/akcs-www?post=219665

Destruction of BitCon-Accepting Businesses
By Karl Denninger - www.tickerforum.org
blah blah blah

Quit spamming this shitty blog, we've heard it all before.

Tulips! Volatility! Hoarding!

Take your scare-mongering clickbait and kindly GTFO. What does any of this rambling garbage have to do with OP anyway?

OP: congrats on contributing to the nascent bitcoin marketplace.
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April 16, 2013, 01:50:41 AM
 #6

Perhaps you have not seen my article about what currency should be.

A currency should be shiny, flexible, waterproof, aromatic and tasty.

Bitcoin is none of these. That is why it will fail.

First seastead company actually selling seasteads: Ocean Builders https://ocean.builders  Of course we accept bitcoin.
Seastead talk at http://seasteadtalk.org
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April 16, 2013, 02:02:54 AM
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Perhaps you have not seen my article about what currency should be.

A currency should be shiny, flexible, waterproof, aromatic and tasty.

Bitcoin is none of these. That is why it will fail.

Oh look someone else shilling a blog!

Perhaps i haven't seen it?

You're right! I don't have a clue who the fuck you are!

Once again, OP, congrats on actually contributing to the economy, instead of being a parasite.
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April 16, 2013, 02:05:04 AM
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http://market-ticker.org/akcs-www?post=219665

Destruction of BitCon-Accepting Businesses
By Karl Denninger - www.tickerforum.org
 

Hey Pangia, thanks for the link to your blog post, no sarcasm.  I desperately seek alternative points of view. You have an interesting point of view, and by your poignant use of bold italics, I can see you are very passionate about striking fear into the hearts of bitcoiners.  You seem very angry and opposed to alternative currencies, which came as a surprise to me given you are posting this on bitcointalk. But I guess what better place to save the sinners than the Las Vegas strip, right?

Ironically, your book Leverage spins the story of cheap money collapsing the economy as well.  I guess, to continue the analogy of the street preacher, damned if you do damned if you don't! I would have penned you as a alternative currency supporter but I guess that's not the case.

Your main point, or at least what you deemed the fatal flaw, is that bitcoin is a pyramid scheme that benefits early adopters. The main flaw with this argument is that you are focusing on exchange value of a currency that has been in existence for less than 4 years and only been used popularly for the last year. Of course the exchange rate is all over the place, have you seen the queue at MtGox for new accounts? Do you realize how many people are adopting the technology?  It's called price discovery and it's very real and it's happening now. In regards to your pyramid scheme thoughts, how is this any different to the California gold rush? Or, thinking of There Will Be Blood, early oil drillers? Early adopters always benefit more than late adopters.  The idea is to create an economy within bitcoin because only when moving money in and out is when you are subjected to the exchange rate. How is the fact that early adopters mined more coin more than late adopters signs of a pyramid scheme?  It's a currency, not Herbalife. I don't get more coin for people I bring in; the exchange rate my fluctuate, but it doesn't affect my btc holdings.

Your solution to the economic insanity of the world, as stated in the end of your article "BitCon: Don't", is to mitigate change with the same politicians that are drunk from the alcohol of central bank money. I may be an cautious optimist, but this made me laugh.

But, if you do indeed seek improvement in the world, why not collaborate on ideas to improve this technology?  What would you do with bitcoin differently that would make it better?

"It is a mistake to suppose that any technological innovation has a one-sided effect. Every technology is both a burden and a blessing; not either-or, but this-and-that." -Neil Postman Technopoly
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April 16, 2013, 02:06:15 AM
 #9

This is just a micro press release (not sure where to put it).

Bitcoin Businesses can generate income,   http://www.ounce.me just signed CampBX and Satoshi Dice for advertising.   We're getting paid in Bitcoins,  so in essence starting a bitcoin business can work.  If you go to Ounce.me you'll see their ads there.

Seriously this made me feel like there is a chance we can build bitcoin economy.





Did they approach you or did you approach them?
the founder
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April 16, 2013, 02:09:15 AM
 #10

This is just a micro press release (not sure where to put it).

Bitcoin Businesses can generate income,   http://www.ounce.me just signed CampBX and Satoshi Dice for advertising.   We're getting paid in Bitcoins,  so in essence starting a bitcoin business can work.  If you go to Ounce.me you'll see their ads there.

Seriously this made me feel like there is a chance we can build bitcoin economy.





Did they approach you or did you approach them?

1 approached me,  after he signed.. I figured it's viable and I approached the other.


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