[glesica]

It says to me that there is a large amount of speculation. As a currency, Bitcoin is basically useless except for illicit transactions (which are usually pretty inefficient anyway). Would you use dollars if the value of a dollar could change by hundreds of percentage points in a few months? No one would.

[eof]

Well your logic is obviously flawed, because people do use bitcoins for transactions and they have changed by hundreds of percentage points. "No one" is patently false.

Besides, illicit transactions are still transactions.

And.. you are just plain wrong. Bitcoin is also useful for buying many completely legal things. Including a VPN that can't be linked to your identity. (Illicit you say? What about a journalist in a repressive regime).

[glesica]

Illicit plus grey market and a few special cases. Fine, you win the Pedant's Prize for nitpicking. The point is that they don't make a good general-purpose currency. Just because they're awesome for buying drugs and secret VPNs doesn't mean very much in the grand scheme of things (most transactions, at least in the developed world, do not take place in the grey market).

Also, just because some people do something doesn't mean that there aren't strong incentives against doing that thing, and doesn't make a statement such as "people don't do that" false. It just means that there are exceptions, but when the exceptions don't affect the point it is common to ignore the exceptions in general conversation.

[shredfvz]

Money is ultimately just a standardized indicator of wealth with no intrinsic value on its own, a definition shared by both USD and BTC. The downside of USD being that it can be counterfeited, illegally by unscrupulous individuals or legally by the Federal Reserve (see: QE Infinity).

Regrettably, it's still super common for people to turn up their noses in disgust, claiming "Bitcoin Boogey Man, oh noezzz"!

I'm sorry, does the USD somehow not come with a Boogey Man? Because last I checked HSBC was caught with their pants down directly funding terrorism through shady business practices, Bernie Madoff is still in prison for running a giant Ponzi, the illegal narcotics trade is done mostly in USD, plus you have money laundering, and just about every crime conceivable being carried out in USD.

But wait, the Bitcoin Boogeyman!!!

Everyone come to look!

The USD is dirtier than Bitcoin by several orders of magnitude. It's been taking a full out mudbath every day of its life for the past several decades. It's just that the USD is all people know, so they assume it's squeaky clean, because how could it not be squeaky clean??

[glesica]

I personally don't care what people use it for. My point is that it is primarily good for illicit and "grey market" transactions, and really nothing else. You entire argument demonstrates that you missed my point completely.

Why would I buy a cheeseburger with Bitcoins? Say the cheeseburger costs 0.1 Bitcoins (today). Tomorrow, who knows what those (fractional) Bitcoins will be worth!

Dollars (or whatever) on the other hand are generally pretty stable. Currency fluctuations, on a day-to-day basis, are very, very small. Sure, there's the occasional hyper-inflationary episode (several South American countries have experienced these somewhat regularly), but that's the exception.

The problem is that Bitcoin is, at least at this point, more of a commodity that people trade when they can't (or don't want to) use traditional money. It is not a "currency" in that sense.

[bayesianhorse]

For one thing, currency instability for BTC is bigger, and secondly the primary use of BTC right now is making illegal income look legal.

[shredfvz]

* citation needed

[lmm]

Even in the presence of QE, the value of the USD remains more-or-less stable. I can go to bed confident that it's not going to cost me $10 to get a loaf of bread tomorrow. Bitcoin isn't and won't be useful to me as a currency until its value is stable.

[pantaril]

Bitcoin is currently indeed very risky to use as store of value as the market grows quite rapidly and the exchange rate fluctuates greatly. I expect that it will improve in the future and ultimately bitcoin will be better store of value then official currencies, because the savings will not lose the value ove years due to inflation.

But fortunately bitcoin has great use even today in its current state. It is great for sending or accepting money internationaly, quickly and without ridiculous transaction fees. This is something you can't do with official curencies and is IMO big part of the success bitcoin is experiencing.

[neilxdsouza]

Bit Coins represent trade in an Economy independent of the Rot Schild banks.

There is no proof that the 2007 financial crises was not orchestrated on purpose. There is also no proof that that 2007 financial crises was orchestrated on purpose.

But we do know that Goldman Sachs sold financial instruments to their clients which they betted against. When the clients lost that money the profiteers was Goldman Sachs.

1. If you assume that the Rot Schild banks owned the entire English economy since June, 1815 and, If you assume that the Rot Schild bank had a value of USD 1,000,000 at that time, growing at 5% per annum for 200 years it's value would be USD 17.2 Trillion.

If you also consider that the Federal Reserve has been leaking money into the shareholders of the FED at 6% of interest on bonds raised since 1913, and if Rot Schild banks were all part share holders in the founding banks of the Federal reserve this profit has been going to them.

If the Rot Schild banks were the major investors in Goldman Sachs, it would make sense for Goldman to loose their investors money and transfer it to their biggest investors directly through dividend.

We know from 1. above that the Rot Schild holdings should easily be USD 17 trillion + and that the valuations of the banks that went under was about USD 800 billion. Hence it is highly possible that the biggest investor in Goldman is bigger than all the rest combined.

The bitcoins are there for a reason much much more important I think.

[netrus]

I cannot completely follow you, but your number of 17.2 Trillion is off by the factor 1.000, and the fortune of the Rothschild family spread and resolved from generation to generation, as large family fortunes always do.

[neilxdsouza]

You are right about my calculation mistake.

However This site : http://www.ukpublicspending.co.uk has the UK GDP and national debt from at least 1750

In 1816, the GDP was 0.32 billion pounds. If you assume from 1816 the lending to UK govt bonds was the Rot Schild bank, the starting point of the Rot Schild base moeny that I took will be far more than USD 1 million. So I think you will arrive at a trillion any which ways.

The reason for this is that from that year going forward, the Rot Schild would have bought bonds from the govt (effectively lending them money) every year going ahead, giving them (the Rot Schilds) a passive income stream from then to now.

Each year a new income stream would have been added by loaning additional bonds, which was independent of the previous years income.

I don't know what numbers to plug in, perhaps that is left to someone more knowledgeable than me.

[Sayter]

Your thought exercise of $1 million turning into $17.2 trillion via 5% over 200 years only works if none of the money (including any of the interest) is ever touched or spent. It is an unrealistic assumption that ignores the complexities of reality.

Here are their recent financial reports if you're interested: http://www.rothschild.com/about_rothschild/financial_reports...

[mrb]

Bitcoins are an awesome general-purpose currency for electronically sending "money" to persons or businesses anywhere in the world, instantly. Say goodbye to: middle-men taking their high fees, currency conversion fees, bank holidays, wire transfers taking 3-5 days, wasting half an hour driving to a Western Union office, etc.

I think what you meant to say is that bitcoins don't make a good general-purpose day-to-day currency (yet). For example paying your hairdresser, paying at the supermarket, etc.

[guruz]

There is actually several bars in Berlin which are supposed to take Bitcoins.

https://en.bitcoin.it/wiki/Trade#Restaurants_and_cafes

I don't have an Android+Wallet App (I think you need that), so if anyone with such a phone wants to go with me there, I'm up for it :)

[casidiablo]

Google Wallet does not support Bitcoins, and I don't think they will support it anytime soon.

Google Wallet is just an easy way to manage your credit cards and, sometimes, pay using NFC.

[pyvpx]

I find your reply humorously telling -- wallet app means just that: a bitcoin wallet application. Google and it's associated services/applications are not the end-all be-all ;)

[acchow]

Nobody is saying Bitcoin is currently awesome and better than standard currencies. However, what is clear is its long-term viability.

You should ask yourself from where currency originates. What is its predecessor and was its acceptance ubiquitous. And take note that there was a period not long ago where saffron was used as "currency".

Also, though you may be intelligent, it would good to take a note from Socrates and consider that perhaps you don't know everything about every field.

[AlexMax]

> Nobody is saying Bitcoin is currently awesome and better than standard currencies. However, what is clear is its long-term viability.

This isn't clear to me at all.

There are a finite number of possible bitcoins, and once the last one is mined no new ones can be created. While it might be true that putting more USD into circulation causes the value of each individual dollar to go down, that's actually an incentive to spend money and create economic activity, instead of hoarding it hoping the price goes up.

[oleganza]

Define "hoarding". Who exactly suffers from it? Especially in case of Bitcoin where nobody forces you to even care about it (unlike gov-issued legal tender).

[ragmondo]

I just put together an Android App to display physical merchants that accept bitcoin. Yes I agree the data is a bit sparse right now but I am populating it as I find lists of merchants (and you can also submit your own business if you want). The app is here : https://play.google.com/store/apps/details?id=com.ragmondo

[Houshalter]

Well it has a use even in normal transactions since you can avoid any kind of fees or hassles with a centralized service like Paypal. And in the end it doesn't matter if it becomes that mainstream or not. Exchanging between currencies is becoming more common for online shopping and presumably it wouldn't cost that much for the services that do it to support bitcoin too.

[mtgx]

What makes you think it won't become the defacto digital currency in the future, and thus a "general-purpose currency"?

You may say that's just a baseless speculation, but not any less than yours.

[kybernetikos]

Bitcoin would make a horrible official currency for a country (inability to control the money supply, enforced deflation which discourages investment, easy for capital to flee). However, as a 'second currency' it has a lot going for it, security, fast, cheap, easy transfers between people across the world. I could see it becoming the worlds international 'second' currency.

[mayneack]

Vpns are a gray market? Does not wanting my car searched imply that I have illegal things in it?

[laumars]

Bad analogy as bitcoins wouldn't stop your VPN host from being searched.

In fact, if we're completely honest, paying for a VPN with bitcoins doesn't mean your identity is hidden anyway. All it would take is one connection record in one log file and you're exposed.

[lenazegher]

>Bitcoin is also useful for buying many completely legal things. Including a VPN that can't be linked to your identity.

The "can't be linked to your identity" part depends entirely on how you get your BTC in the first place.

If you buy them with cash from a guy on the street who has no idea who you are, fair enough.

If you buy them from an exchange by making a deposit from your bank account, the level of anonymity you enjoy depends entirely on how much you trust the exchange. They know your real name and the wallet you used to receive the BTC. If they share this information with anyone, a sufficiently motivated attacker can trace the BTC to their ultimate destination (the wallet of the VPN firm). If you launder the BTC through a few intermediary wallets first, I suppose you might have some plausible deniability, but if you're a journalist in a repressive regime how much is plausible deniability worth?

[celticninja]

Coin mixers exist and can obfuscate the origins of the coins.

[bayesianhorse]

Bitcoins are almost useless for legal and non-illicit transactions. Paypal is cheaper than bitcoins in these situations, if you account for the astronomical currency risk and thus the premium bitcoin-traders and shops accepting btc have to charge in order to not go out of bussiness in an eyeblink.

[pantaril]

That's not true. If i'm not mistaken, paypal charges percentage of the ammount recieved to all merchants recieving money. Also, fees are charged for any international transfer and paypal can disable your account and freeze your funds on a whim.

On the other hand, i don't know what "astronomical currency risk" are you talking about. Merchants accepting bitcoin are not forced to keep their balance in bitcoins. They can exchange it for dollars or other official currency every hour if they wish so. They are not affected by the volatility of the bitcoin exchange rate as you probably asume.

[shredfvz]

There's 0% chargeback risk with Bitcoin, and 0% risk of fraud. Counterfeit is impossible.

These factors substantially reduce the cost of selling goods and services with Bitcoin.

[glesica]

There's also no way to recover your Bitcoins if they get stolen (as many, many people have discovered already). My credit card on the other hand, can be made whole again with a simple phone call to my bank (YMMV, please no stories about banks being big meanies).

[illuminate]

"There's 0% chargeback risk with Bitcoin" That is problematic for much of what currency is used for.

"and 0% risk of fraud" This is completely untrue, because it assumes the motives of both sides of a transaction.

[nym]

False. I pay my coworker back for lunch with bitcoin.

[NickNameNick]

You do realize bitcoin is not anonymous...

The act of conducting a transaction posts the wallet id's of the participants to the global ledger, and associating wallet id's to real identities is far from impossible.

[eof]

It is nearly impossible if I play satoshi dice with my coins for a while via TOR before spending them, or.. I buy them via cash through localbitcoin.

[ankeshk]

Here is a chart that shows bitcoin trade volume vs transaction volume. It gives a good idea of speculation vs demand. http://blockchain.info/charts/tx-trade-ratio

(This article may help in understanding the chart: http://codinginmysleep.com/measuring-bitcoin-speculation/)

The chart shows that the rise is not due to an insane rise in speculation.

[rishimoko]

> Bitcoin is basically useless except for illicit transactions

I'd never spend my bitcoins on drugs or gambling. That's what the rapidly devaluing dollar is for. Recall that the US dollar is Narco Currency #1 on the planet.

Bitcoins are useful as leverage due to their rapidly expanding (and sometimes deflating) value. I bought my first bitcoins for ~$3 two years ago and held them, even through the first spike and afterwards. I bought more btc at $5-12 as they were floating along last year.

I recently traded some of my btc for hard assets, gold and silver. I then sold some of the gold to a friend and bought more bitcoins.

Useless? No, Bitcoin is a very useful tool. It's the email of money.

[laumars]

> Bitcoin is a very useful tool. It's the email of money.

I hope not because email should have been replaced a decade ago (no native end-to-end nor encryption. Node-to-node encryption (eg SSL) isn't standard let along the default, no native support for binary objects and base64 MIME increases files sizes by ~30%, and the mess of plain text and half supported HTML across the plethora of clients make designing mailshots a complete nightmare so there should be some sub-standard of HTML that is both secure and universally supported.

[icebraining]

What exactly would be the point of native end-to-end encryption over PGP? The problem with email encryption is solving the authentication part, not the encryption itself.

[laumars]

    > What exactly would be the point of native end-to-end encryption over PGP?

Basically just universal compatibility with clients and ease of use.

It's a bit how you could have all your important Word documents in a password protected compressed archive. But having password protection and zip compression native in OOXML is more convenient for users and guarantees than anyone with an OOXML compatible office suite has support to open the same documents (baring authentication of course).

    > The problem with email encryption is solving the authentication part, not the encryption itself.

It's both. Emails are typically transmitted in clear text so having something having them encrypted by default is a huge step up. (a bit like how people should be moving away from FTP and using SFTP, or SSH instead of telnet).

[yaix]

> email should have been replaced a decade ago

Like HTTP should have been replaced by AOL, right?

[laumars]

No. And I resent the fact that you couldn't be bothered to read past my first sentence.

The e-mail protocol (and I'm talking about the entire stack, from SMTP to the client's handling) is old and really not best suited for the modern way we send documents and modern security concerns. Which was the crux of my point.

So I'm not talking about replacing the paradigm nor ownership, just it's the implementation.

[kybernetikos]

Actually, with modern software bitcoins are among the easiest way to transfer money between people. I load up my phone app, point it at the relevant QR code and the money is transferred securely and quickly, usually with no transaction costs. If I want to receive money, I can just give the person my QR code (or show them on the screen of my phone) and they can give me money just as easily.

I have been wishing for my bank to give me this kind of service for a long time, but still no sign of it happening.

[bayesianhorse]

Easy, maybe. Cheap, no. The costs associated with the currency risks are huge, and you ignore them at your own peril.

[kybernetikos]

If you buy and hold certainly. While bitcoin is pretty volatile, you can turn dollars into bitcoins and then transfer them or transfer them and turn them into dollars quickly enough that the risk is pretty small.

Sure, holding bitcoins is a risky proposition - like holding gold, or anything else of similar volatility.

[kiba]

According to an unscientific bitcoin community survey, only 9% used bitcoin to purchase narcotics. 53% of uses were for donation.

[turtlepower]

And yet 99% of bitcoins in circulation have traces of cocaine on them.

[bayesianhorse]

The surprising thing about that survey is that even 9% actually admitted to felonies...

[wolfpackk]

high volatility is natural for all new currencies, as volume continues to increase then volatility will decrease.

[derrida]

I was wondering what your reasoning behind this was. Do you have any past examples to support this assertion? Or do you base this position on some prior principles?