Bitcoins?

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Serenity Sinclaire
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Re: Bitcoins?

Post by Serenity Sinclaire » Sun Jun 08, 2014 9:02 pm

Gavin Hird wrote:
Ozwell Wayfarer wrote:
So there is a general consensus that, at least right now, Bitcoins volatility is a problem holding it back from mass adoption. I do follow the issue quite closely and I have not heard of any reliable tools for merchants managing volatility. If you do know of them, I would be interested in links to further info.
Although the volatility is probably the main cause for holding back people at the moment, there is an inherent problem with the way Bitcoin is generated; the difficulty factor, where the demand will outstrip the ability to generate Bitcoin. Chart of the increase in difficulty. https://bitcoinwisdom.com/bitcoin/difficulty . If this trend continues the payback on hardware to generate the Bitcoin will be in the negative later this year, so for this reason alone it can fizzle out. https://bitcoinwisdom.com/bitcoin/calculator

Other crypto coins that does not have the same (flaw) built into it will probably fare much better, and will in my opinion become more successful in the long run.

That's not a problem. That's the entire point and foundation for how it is valued. Scarcity = value. That means in practical terms the market value will increase and bitcoin's programming to 7 decimal places makes it surpremely suited for a deflationary currency. The problem isn't with bitcoin; it's with people's traditional ways of thinking about money and denominations and quantities.

Regarding mining operations, yeah that's an issue they are all dealing with but it doesn't have anything to do with the mass adoption factor of mainstream use. Then again, the more demand increases, the more valuable the coins become so even though it's harder for them to mine, they still make more when they eventually do get the reward.

For everyone else:

If you have a suitcase with 21 million $100 bills, then a billionaire could buy them all up and destroy them and that's the end of it.

This is not how bitcoin works. There are only going to be 21million bitcoin...but there's no inherent denomination to it. The scarcity itself is what gives btc its value and no single person will ever own all 21million because of the way they are generated through "mining" - and the difficulty does increase. These are security protocols to prevent inflation - the massive psycho printing that any given government does...the more they print, the less it's worth.

That 21million are produced ever, the more demand for bitcoin increases, the higher bitcoin's value. That's why many are forecasting that once bitcoin pushes through the early adoption phase into mainstream, the demand for it will drive the price up into the thousands...$10k per bitcoin.

Scarcity = value.

Mining is using the computer's processing power to validate and confirm blocks of transactions "lottery" style. Because it's distributed across the entire network, nobody controls who gets the "winning' blocks. The random computer(s) that confirm the transaction blocks are rewarded with a decreasing number of bitcoin...those people will both hold their earnings and sell them on the market.

Again, this is not an 'inherent problem" with bitcoin - that's its entire strength and power making it superior to every currency known to man, including gold. :)
Last edited by Serenity Sinclaire on Sun Jun 08, 2014 10:00 pm, edited 1 time in total.
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Re: Bitcoins?

Post by Serenity Sinclaire » Sun Jun 08, 2014 9:54 pm

Deuce Halsey wrote:
Fair enough, I'll admit to being uninformed about Bitcoin. So it's possible for me to own Bitcoins without being involved with one of these exchanges? Because it sure is possible for me to own US Dollars without being involved with any currency exchange operation.
(Went through ID/Acct change, formerly serenity!)

It's absolutely possible for you to own bitcoin without going through the exchanges. There is localbitcoins.com where you can find people locally. However, coinbase is the more legitimate and secure exchange. Just because it's an exchange doesn't automatically mean it's a failure or robbery waiting to happen. If you go to Mexico from the US or Egypt, you will have to *exchange* one currency for another. That's all these exchanges do...switch out one for another. Coinbase is run by legitimate individuals who've invested heavily in bitcoin's success. It is based in California. MT Gox was a foreign exchange and the guy running it got greedy, or always was...they are not bitcoin and they do not represent all exchanges and all exchanges aren't shady operations.

It's actually a good thing gox happened because all the criminal element is being weeded out. There are exchanges that seem seedy that do lots of business and smaller ones who do large business...but coinbase is the popular legit one that has credibility. That doesn't mean an exchange can't be hacked ever, it really depends on how the exchange handles security protocol.

It's always best though to use an exchange long enough to trade currency then move bitcoin into a wallet - blockchain.info is the most secure online wallet. Moving it off the computer entirely is the best security measure. Again, it requires the individual be responsible for protecting his assets :)

ETA: Oh, you know how you used an exchange in Second Life to buy and sell Lindens? You can do it that way if you prefer...I just remembered VirWox exchanges fiat and virtual for bitcoin...

https://www.virwox.com/?stage=2
Deuce Halsey wrote: So Bitcoins can't be hacked, but they can be stolen? Please explain the difference to me. Unless I can own Bitcoins independently of any Bitcoin exchange, I'm always susceptible to the thieves who may be running the exchange I'm using. Once my virtual cash has vanished, does it really matter if a hacker or a management crook stole it? Not to me. I'm still out the value of my missing virtual cash.
Bitcoin blockchain is protected by a decentralized distributed network of millions of computers...a single computer can be hacked but the entire network cannot...it's like saying "the internet is hacked" - and no it can't be hacked. Individual wallets containing bitcoin can be hacked as easily as any given computer can be hacked. If you don't want your stuff stolen, protect your computer and your valuables. If you do business online already, banking in particular, you're at as much risk of having your bank acct hacked via your own computer as you are having your kitely acct hacked. It's all up to you to protect yourself. Banks have security measures to protect themselves and clients but they're not invincible.

Bitcoin isn't automatically going to get hacked anymore than having a bank acct online automatically gets you hacked. The difference is that you can keep your information on a secure computer that only access the internet to do transactions and goes offline, not on your every day pc. You can print off your wallet and private key info and store it in a bank, on a flash drive, or where ever.

Again, exchanges per se aren't a den of thieves. Exchanges just exchange currencies. It's up to you to do due diligence and find an exchange you feel is credible. Coinbase has shown itself to be the leader in that role and doesn't have issues like gox did.

Deuce Halsey wrote: I have no idea what the future holds for Paypal or Western Union. But at least those organizations make their transactions in various existing national currencies that have real value in world economic marketplaces.
Bitcoin has global recognition and global value already...it's being used and accepted across the world. The CEO of ebay has just publicly announced he owns bitcoin and is actively involved in measures now to incorporate bitcoin for ebay. It's unknown whether paypal will follow suit but the bottom line is bitcoin as a payment processing/transfer system is superior to both PP and WU. If you sent money from one country to another through either of those, the fees would be insane. If you sent the same amount in bitcoin - whether it's .05cents or 50 million dollars worth, the fee would be about 5 cents. Because PP and WU make their money by charging insanely high fees, the only way they could compete is to stop doing the very thing that made them money.

Try it this way -

Bitcoin as a payment system: you exchange your local currency for a "slot" on the public ledger/blockchain. You instantly send that transaction to someone else anywhere in the world for pennies. The recipient then owns the slot on the ledger and may retain it privately (wallet) or exchange it back to his local currency. It's a medium of exchange. The "slots" themselves are essentially units of value on the blockchain...and right now at this post, the value of those slots (bitcoins) are at $655usd for a single btc slot.

In late March I bought my first bitcoin for $399. On that single transaction I made $259. I've gone on to buy more btc since then and it's gone up in value. :) Given some of the things slated to happen later in the summer, the forecast for bitcoin's price is that it surpasses $1k and potentially reaches 2500 per btc by the end of the year...and that doesn't count the inevitable "bubble" that shoots it on up there...but when it crashes again as bubbles always do, the new low would be over $1k.

And you don't have to buy whole bitcoin. I sent $25 worth to three people. They're now holding almost 40 bucks.
Deuce Halsey wrote:
As far as the future usage of Bitcoins, I believe you are deluding yourself. Virtual currency doesn't fit the mold of either type of commonly used and accepted currency as we know it today. It certainly isn't a commodity currency like gold or silver, that has innate value independent of its use as money. Nor is it a fiat currency, since it isn't backed by the "faith and credit" of any national government.
No it doesn't...and that's the very reason it is far more superior to all of the above. It is absolutely revolutionary. What we're all used to and conditioned by is having a central agency control the creation of currency and doling it out at high volume and charging interest and all sorts of things that essentially is no more than passing around debt. The coins and paper you hold do not have any intrinsic value unless they're actually made of silver and gold. Chances are they are not. So what you have could just as easily be plastic. It's not worth anything as an item. It represents the "idea" of value. It's all virtual currency at this point.

Fiat is the absolute worst thing a currency should be...backed by faith and credit of a government that robs its people, creates debt into the trillions, and impoverishes the people while printing up billions for their own personal use. The problem is whenever they turn on the printing press and make more copies of those bills, each of those bills, while still whatever denomination, is worth less and less. That's the reason you need more of it to buy less stuff.

Bitcoin solves that problem entirely through the scarcity of volume and limited, automated supply. No single entity owns it. Everyone who holds it owns it. It's essentially the same principle as the internet.

Would you prefer a "fiat" internet with a single government entity deciding how much internet you can use and what you can use it for or do you prefer the decentralized version we have here...that everyone and nobody controls...and leaves it up to you how you spend your internet time, where you spend it, how much you pay for it, and how secure it is?

Because of this built in solution, and the fact it can be used as a medium of exchange and a currency, people have recognized by the millions how valuable and revolutionary it is and will become in time. We're in the early adoption phase...kinda the same place we were in internet terms back in the mid 1990s.

Remember when people tried to tell you how email would change everything and how on demand services and communications would change the world...and you need a computer rig to get on the internet...and you said BAH hell with that...nobody's going to do that when they can just go down to the post office and mail a letter...

Another difference is the ledger of transactions is public...unlike your bank's ledger. You have no clue right now whether your bank is even going to be solvent tomorrow...you don't know what's happening behind the scenes or how much money they have or how many problems they have or what's been stolen or hacked. You don't know that they're not being swallowed up in another banking takeover about to go bankrupt.

With bitcoin, since YOU are your bank, and the ledger is public, you never have to worry that you'll wake up tomorrow to the news your bank imploded and they put a freeze on your assets and a limit on withdrawals and that to offset disaster, they're confiscating your funds.

If you want to see the ledger, visit blockchain.info. You can also download the bitcoin client and run it on your own computer and see all the transactions. They're "pseudonymous" - the transaction key and the amount are public, not the identity of the user or what was spent for. Try that with your bank :D

People who recognize the problem and that the banks and FED and governments are the real thieves have been shifting their fiat currency into a secure decentralized digital currency at an exponential rate...which brings us to this:
Deuce Halsey wrote: I'm sorry, but the whole thing strikes me as a bunch of nerds standing around covering their ears and and repeating their mantra, "Bitcoins are really money because I say they are!" All I can say is good luck with that.... you're gonna need it.
Actually, that's the entire way any "money" or "currency" comes into being...the only reason people say USD is money is because people say it's money.

And the number of people who have accepted "I say it's money, therefore it's money" has provably increased at an exponential rate while global currencies are all dropping in value. Visit https://blockchain.info/charts and have a look at the growth.

Add to that these people you seem to think are basement dwelling nerds just trying to get funny money to be real...and try again:

Aside from The Pirate Bay and 4Chan who absolutely do accept/trade in bitcoin, we have these: Overstock.com, Dish network, wordpress, reddit, zynga, paypal/ebay here shortly, Tesla motor company, ok cupid, Etsy, Tiger Direct, Li Ka-shing - Asia's richest man, various members of the US senate, Euro Pacific Precious Metals, several subway restaurants, local restaurants, and even Virgin Galactic. That's right...the commercial vacation ride to space at a whopping quarter of a million price tag now embraces BITCOIN payments.

Then we have the Facebook twins who registered/applied for an ETF on the stock exchange and Wall St is waiting to see if the SEC approves. If so, we'll then see Wall Street money investing in bitcoin which will only skyrocket the price and value of bitcoin.

So yeah, these people are all nerds in their own way but...hey...if you want to know what happens when a bunch of basement dwelling nerds get together and create the world's only secure decentralized deflationary currency, then look around you.

Or...you go rent Revenge of the Nerds and see how it plays out on a smaller scale! :mrgreen:
Last edited by Serenity Sinclaire on Sun Jun 08, 2014 10:15 pm, edited 3 times in total.
Serenity Sinclaire
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Re: Bitcoins?

Post by Serenity Sinclaire » Sun Jun 08, 2014 9:57 pm

Ozwell Wayfarer wrote:
Serenity Sinclaire wrote:RE volatility - this is more hype and parroting than reality. The market price fluctuates but the market value is steadily (if not exponentially) rising. Merchants who get set up properly will have that problem handled through the conversion calculator at point of sale. They would convert it anyway until it's more widely adopted or they would only deal in bitcoin because it's still a store of value unto itself. People are too conditioned to assume bitcoin has to be paid back in national currencies as if the national currencies are "real" money and bitcoin is a token or fake money.

It is not those things. It IS money. It has more value than any national currency, especially the USD.

The store of value, or building wealth can be had by buying bitcoin and holding onto it as the market value increases and the price rises.

There have long since been applications and procedures in place to handle the market price fluctuation for merchants so they continue to exchange bitcoin to other currency...else no merchants would be accepting them even now. In short, the fluctuation isn't an issue for merchants which is why more and more of them are adopting bitcoin and accepting it. :)
I understand peoples enthusiasm for Bitcoins I really do. I snapped up a load of them a few years ago and made a pretty penny from it all, but as a merchant I cant see myself accepting them for payments anytime soon. It is true that if you put Bitcoin up against any other national currency its volatility speaks for itself. This is because people are not using it as a currency right now but as a short to medium term investment. People treat it like a commodity rather than a currency.

Bitcoin (just like "normal" money) is only whatever the majority perceive it to be. If we google "bitcoin volatility", here are the top hits.....

http://www.sfgate.com/opinion/openforum ... 505664.php - Is Bitcoin a viable currency? - Its probably too volatile.
http://www.forbes.com/sites/timothylee/ ... fatal-one/
http://www.coindesk.com/bitcoins-volatility-no-other/

I think the first article hits the nail on the head - "Basically, bitcoin lacks a mechanism for setting the supply equal to the demand. That is needed in order for bitcoin to maintain its value.

History is replete with examples of what happens to currencies with fixed supplies. When governments tie their hands in the supply of their currencies, much like bitcoin has done, the value fluctuates."

For me, that is the real issue at play here.

So there is a general consensus that, at least right now, Bitcoins volatility is a problem holding it back from mass adoption. I do follow the issue quite closely and I have not heard of any reliable tools for merchants managing volatility. If you do know of them, I would be interested in links to further info.

Merchants are already setting up payment protocols for accepting bitcoin into the hundreds of thousands.

If you're a merchant, please check out Bitpay.Com and contact someone there. They can help you get set up and overcome the market volatility problem (that really doesn't have to be a problem outside investors and traders...your national currency value is also volatile and fluctuates all over the place too...and you haven't had too much of an issue there, huh? :)
strannik zipper
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Re: Bitcoins?

Post by strannik zipper » Wed Nov 04, 2015 7:38 am

So this thread is caught up in needless controversy. Not everyone wants or needs bitcoins, but some of us do. But here is the easy way to do it:

YRgrid (yrgrid.com) already uses bitcoins as a currency via microbitcoins (uBTC). They make it easy to obtain and use in-world. They are soon to make it possible for hypergridded avatars to use uBTC in-world. More imporantly, they are connected to Podex. I see Podex currencies as more usable than the Virwox OMC. I can exchange currency from my grid (digiworld digitz) and YRgrid uBTCs.

If Kitely would allow trading of KCs on Podex along with several other grids, then the KC would gain a lot of utility without exposing Kitely to the hassles or regulatory risks. Then we could still get KCs into uBTCs as we need (or Digitz or other grid currencies). I have to admit that when it came time to choose a grid, I went with one that had a Podex traded currency, despite Kitely's advantages.

How about it Ilan?

http://www.podex.info/p/info-for-grid-owners.html
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Ilan Tochner
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Re: Bitcoins?

Post by Ilan Tochner » Wed Nov 04, 2015 8:14 am

Hi strannik,

Making Kitely Credits a tradable currency (regardless of who manages those transactions) would force us to comply with the various burdensome regulatory requirements concerning virtual currencies that exist in the United States and other countries where people use our services. It would also make us a much easier target for fraud. We are very much aware of the various liabilities a convertible virtual currency would create for us and so I think it will be very unlikely that we would change our policies about what can and can't be done with KC in the foreseeable future.
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