Bitcoin?

[Pat Barry]

Wouldn't a Bitcoin be like currency? You use the bitcoin to "purchase" something tangible, right? (I don't know what). If there are a limited number of Bitcoins then their individual value can go up or down. The value is in terms of what you get for it. Lets say you are buying a woodworking tool with Bitcoin. If the value of a Bitcoin skyrockets, then you will need less Bitcoins to purchase that tool. If the value of the Bitcoin goes down, then you will need more Bitcoins to purchase that tool. That's all basic stuff. There are people who speculate on the future value of Bitcoins and there is a marketplace to capture and manage that speculation. Lets say Bitcoin is a stock. The value of the stock goes very high - so much so that not many people can afford the stock price, so Bitcoin company decides to do a 1:2 or 1:10 split. This happens all the time with stocks. Now your $1700 Bitcoin may be only worth $170 after a 1 for 10 split. Now lets say that woodworking tool cost 1 Bitcoin ($1700) before the split. After the split the same tool will cost you 10 Bitcoins (still $1700). Its easy to make the jump that you don't need dollars anymore, just like we no longer need gold or whatever was the basis for bartering before that.

I agree that its foolish (for me) to speculate on the future value of a Bitcoin, but that doesn't mean its not a useful tool for performing transactions.

How soon, for example, will LV advertise tools in their catalogs in terms of Bitcoin value? Maybe never, maybe they will always advertise in CAD?? Maybe though, they will accept payment in Bitcoin based on the spot market price of a Bitcoin. Maybe even the grocery store will. Why not?

[Wade Lippman]

I agree that its foolish (for me) to speculate on the future value of a Bitcoin, but that doesn't mean its not a useful tool for performing transactions.

You can give prices in eggs, and even pay for them in eggs (assuming anyone is willing to accept them) but that doesn't make eggs currency.

Admittedly eggs break and spoil, so they are probably a bad choice for transactions, but you can't prove you paid anyone in bitcoins, so that makes them nearly worthless for transactions.

[Pat Barry]

....you can't prove you paid anyone in bitcoins, so that makes them nearly worthless for transactions.

Are you sure about this Wade? It seems strange that this would be true. It seems this would make them 'play money' and I don't think that is the case at all. I need to do more research.

[Edwin Santos]

Are you sure about this Wade? It seems strange that this would be true. It seems this would make them 'play money' and I don't think that is the case at all. I need to do more research.

Pat, I'm not sure you need any more research.

Here's what comes to my mind - Let's say there was a Macroeconomics discussion forum frequented by economists and financial professionals. And let's say that forum had an Off Topic sub-forum where some of their users started up a thread on woodworking. I would bet the Sawmill Creek members would find parts of their woodworking thread as comical as the economists might find parts of this one.
Edwin

[John Llewellyn]

Pat, I'm not sure you need any more research.

Here's what comes to my mind - Let's say there was a Macroeconomics discussion forum frequented by economists and financial professionals. And let's say that forum had an Off Topic sub-forum where some of their users started up a thread on woodworking. I would bet the Sawmill Creek members would find parts of their woodworking thread as comical as the economists might find parts of this one.
Edwin

Pat I do understand your economics cross reference concerning Bit Coin and you are correct. My son has been involved in Bit Coin and Alternative coins shortly after it became a "geeks thing". He is 35 and the biggest issue he finds is peoples misunderstanding or ignorance of the concept or even why it was started. I have watched it's growth and with my son's insight helping me understand it. May I suggest everyone take time and research the history and "understand it". I am not for or against it but the concept is very interesting and as a 69 year old I had to want to be open minded to even accept the content. As my Mother always said. "ignorance is bliss". Just my opinion as I see our financial institutes failing us and becoming very rich off us just using our own make believe cash system.

Something to remember our world continuously evolves, we older or not informed have a harder time catching up.

Have a great day and better tomorrow.
John

[Wade Lippman]

Are you sure about this Wade? It seems strange that this would be true. It seems this would make them 'play money' and I don't think that is the case at all. I need to do more research.

The whole point of it is that it is totally anonymous. When you pay a ransom in bitcoins, you have no idea who is getting the payoff; it is totally untraceable. If you don't know who you paid, you obviously can't prove you paid them.
I suppose it is not that different than paying in cash, but who would do a significant transaction in cash with someone they don't trust?

I am so sad Edwin considers me ignorant of economics.

[Pat Barry]

The whole point of it is that it is totally anonymous. When you pay a ransom in bitcoins, you have no idea who is getting the payoff; it is totally untraceable. If you don't know who you paid, you obviously can't prove you paid them.
I suppose it is not that different than paying in cash, but who would do a significant transaction in cash with someone they don't trust?

Yes, I think it is exactly like cash. All the transactions are tracked and recorded. The peer to peer transaction is processed and verified by the system. I still see no reason for me to use Bitcoin however as long as the dollar still works.

[Curt Harms]

Yes, I think it is exactly like cash. All the transactions are tracked and recorded. The peer to peer transaction is processed and verified by the system. I still see no reason for me to use Bitcoin however as long as the dollar still works.

You might if you didn't want "the powers that be" to be able to reconstruct your actions and associations through access to your financial records. Remember that "the powers that be" also get to decide who are criminals and who are good citizens.

[Wade Lippman]

You might if you didn't want "the powers that be" to be able to reconstruct your actions and associations through access to your financial records. Remember that "the powers that be" also get to decide who are criminals and who are good citizens.

And something that serves no purpose except to conceal criminal activity is good because it facilitates crime. Extraordinary.

[John Llewellyn]

And something that serves no purpose except to conceal criminal activity is good because it facilitates crime. Extraordinary.

So does "cash", do you think criminals use a bank account for an illegal transaction.

[Wade Lippman]

So does "cash", do you think criminals use a bank account for an illegal transaction.

Well, it is pointless to argue with that!

[Curt Harms]

And something that serves no purpose except to conceal criminal activity is good because it facilitates crime. Extraordinary.

It depends on how you define criminality. Remember that George Washington, Thomas Jefferson, Benjamin Franklin et. al. were considered criminals by the government in place at the time. The same is likely true in places like Russia or Mainland China today.

[Art Mann]

Bitcoin is already used as a medium of exchange, without any of it being converted to dollars. It works just like money for some groups and individuals. There is nothing to prevent it from becoming more popular as a medium of exchange, not just a bogus investment. It would behave just like dollar bills except a computer keeps up with how much you own. That is what Dan may have been trying to get Wade to understand.

As it is now, we are rapidly becoming a cashless society. That is to say you can't buy or sell anything without the government being able to know all about both sides of the transaction. That bothers me as much as the government keeping records of my phone calls. I could see that Bitcoin could be used to circumvent this potentially serious violation of privacy.

[Wade Lippman]

It was $19,000 in December when the OP was made.
It fell sharply and fluctuated between 10,000 and 6,000 for most of the year.
In the fall it was oddly stable at $6,500 for a few months.
A week ago it well to $5,500 and has been stable for a week.

[Van Huskey]

It was $19,000 in December when the OP was made.
It fell sharply and fluctuated between 10,000 and 6,000 for most of the year.
In the fall it was oddly stable at $6,500 for a few months.
A week ago it well to $5,500 and has been stable for a week.

I am on a college football forum with a very healthy money sub forum. There were some VERY early very vocal proponents of Bitcoin, for years the mantra of the vocal minority was IDIOT, IDIOT, IDIOT which last year changed to FREAKIN GENIUS MILLIONAIRES, now it is back to IDIOT, IDIOT, IDIOT. I felt bad for the many I saw finally cave and buy-in (some in a big way) at the $16k+ price point. One was a reasonably close friend and while I am sure it isn't the only reason he is being divorced, now he only has half his stuff and half his overpriced ones and zeros.

BTC is a great and scary idea all at the same time and though I didn't read all the thread and thus may be echoing as long as cryptos are used primarily as speculative investments they will never gain traction as a viable currency. The ridiculously high volatility will never fly as a currency.