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    Bitcoins (?!)
    #1
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    So this 'cryptocurrency' surged over $19,000 yesterday before settling at $15K. It's based on . . . nothing . . . or to be more accurate . . . pure speculation.

    Is this the new Dutch Tulip Craze, which must ultimately implode into nothingness? Perhaps it more closely akin to the Dot.com fizzle of the 00s.

    Anyway, it's pretty darned interesting to follow. One of the first transactions (2010 in Jacksonville, FL) was for two Papa John pizzas, which sold for 10,000 bitcoins. That same amount of bitcoins is now worth over $150,000,000 (yes, 150 MILLION dollars). In March 2011 a bitcoin was worth exactly a dollar.

    I'm flabbergasted. What's next for this 'concept'?
    Last edited by Atticus; 01-04-2018 at 08:40 PM.
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    #2
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    The NZ Herald reported that some guy sold his house and used the funds to purchase bit coins
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    #3
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    I cannot grasp the concept of imaginary/non-existent bitcoins.. How does you go about exchanging real currency for a bitcoin and how do you redeem it for real money?

    The Big Bang Theory had an episode on bitcoins purchased and stored on a missing laptop.
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    #4
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    Quote Originally Posted by lonewolf View Post
    I cannot grasp the concept of imaginary/non-existent bitcoins.
    That's why its called CRYPTOcurrency. No one over the age of 30 can figure it out, so all the millennials can laugh at us when they buy us out.
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    #5
    Quote Originally Posted by Atticus View Post
    Is this the new Dutch Tulip Craze, which must ultimately implode into nothingness?
    Unless crypto-currencies like Bitcoin soon become widely accepted for goods and services, it seems that this bubble is likely to end badly. Most young investors are buying them not for use as a currency, but as an investment in an asset (like tulip bulbs or gold bullion or a share of public company stock).

    Except that it has no inherent value like a physical asset, so driving the speculation is the belief that it will soon become widely accepted as a means to transact trade. (Rampant rumors that Amazon will soon be accepting it feed the frenzy). Although a few major online sites accept Bitcoin, it is apparently most popular as a currency with those who want to anonymously buy and sell illegal stuff (i.e. drugs or weapons), often on the Dark Web. My only brush with it was when a friend’s company had its network attacked, and they had to pay the ransom using Bitcoin.

    Quote Originally Posted by lonewolf View Post
    How does you go about exchanging real currency for a bitcoin and how do you redeem it for real money?
    There are Bitcoin ATMs out there (even in Oklahoma) that make it easy to convert cash to Bitcoin, and exchanges exist to both buy and sell.

    I am a financial guy, not an IT guy, and the subject has fascinated me of late. Some Wall Street brains are very keen on the technology behind Bitcoin (you may have seen the term “blockchain” in recent ads from IBM) which is expected to change the world in many ways even after the crypto-currency bubble bursts.
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    #6
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    Paper money also has no inherent value, currencies' value merely reflects the power that backs them up. Unlike most currencies whose strength are based on the muscle of their issuing government bodies, bitcoin is completely dependent on the non-organizational, interenet-based...people? I think unless the hackers' community collectively does something extraordinary to defend it, the bubble will burst.
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    #7
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    True, but paper money is not as volatile and is universally more spendable..
    Last edited by lonewolf; 12-11-2017 at 06:40 AM.
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    #8
    Quote Originally Posted by xw View Post
    Paper money also has no inherent value, currencies' value merely reflects the power that backs them up. Unlike most currencies whose strength are based on the muscle of their issuing government bodies, bitcoin is completely dependent on the non-organizational, interenet-based...people? I think unless the hackers' community collectively does something extraordinary to defend it, the bubble will burst.
    And even if there is a cryptocurrency that manages to gain long-term stable value and widespread acceptance for goods and services, how do we know if it will be Bitcoin and not something else? There are literally dozens of them out there, and some of them have superior characteristics compared to Bitcoin, particularly those that were designed to avoid Bitcoin's long transaction times, which run from hours to multiple days.
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    #9
    Quote Originally Posted by xw View Post
    Paper money also has no inherent value, currencies' value merely reflects the power that backs them up.
    A power which the makers of Bitcoin et al don't have. Even if you earn your entire income in gold, the government is going to demand income tax payments in its own currency. It's also going to demand property taxes, sales taxes, vehicle registration, driver's license fees, business license fees, and traffic fines in its own currency, so you're forced into acquiring and spending that currency to some extent. Bitcoin doesn't have the power to legislate its own demand like that.

    But if a government decides to issue its own cryptocurrency, and accept tax payments and fees and fines with it, that changes things a lot.
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    #10
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    Even though I am off the beaten track down here in NZ, I have a whole bunch of bit coins.

    With the imprinted resentment of George Washington, they are sometimes called two-bit coins, sometimes quarters.
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