Bitcoins

padington

I believe that it's highly possible one day economists will divide time into two sections - 'Before Bit Coin' and 'After Bit Coin'.

padington

sabretoothtigger wrote: »

^^ The wild west had literally streets paved with gold in some cases, theres no such basis for migration here

Er ... Tell that to wiki leaks and the silk roadsters.

grey_gym_sock

you can be cynical about the BoE's and the government's motivations, too, but using sterling still makes sense in many situations. the same may go for bitcoin.

i don't see it's in the interests somebody holding a lot of bitcoins to destabilize it. it's in their interests to leave most of their holding untouched until it (maybe) becomes much, much bigger.

merlingrey

grey_gym_sock wrote: »

i don't see it's in the interests somebody holding a lot of bitcoins to destabilize it. it's in their interests to leave most of their holding untouched until it (maybe) becomes much, much bigger.

Like south sea bubble?

That was shares owned by the people who pushed it and they used insider trading to move in and out of the market.

Remember they own a large capital base, when they sell other people get out and the loser money adds to the capital base, they can repeat it for a certain amount of time until the faith gets lost or they get found out.

When you see it drop big then go back up half that capital was just the scheme owners moving in and back out to secure their profit.

It's the oldest trick in the book, goes back centuries.

grey_gym_sock

well, there's been a bubble, and the debate is partly about whether there's also something of substance behind it. with some bubbles there is, with others not.

there are certainly plenty of ppl involved who believe, or hope, that it will be something of substance. there are others who are just playing the market.

the exchange is a thin enough trade it wouldn't require any action from the biggest holders to generate the volatility we've been seeing. so i'm dubious about pointing the finger at them.

padington

'By any standards, the criminal narcotics industry ranks among the wealthiest and most powerful multinational business conglomerates in the world, grossing an estimated $500 billion a year. To put this into perspective, U.N. Secretary General Koffi Anan recently claimed that the illegal narcotics industry is greater than the global oil and gas industry and twice as large as the overall automobile industry'.


http://csis.org/programs/transnational-threats-project/past-task-forces/-global-narcotics-industry

merlingrey

grey_gym_sock wrote: »

well, there's been a bubble, and the debate is partly about whether there's also something of substance behind it. with some bubbles there is, with others not.

there are certainly plenty of ppl involved who believe, or hope, that it will be something of substance. there are others who are just playing the market.

the exchange is a thin enough trade it wouldn't require any action from the biggest holders to generate the volatility we've been seeing. so i'm dubious about pointing the finger at them.

Well it wouldn't just be them they no doubt have hedge funds (most likely offshore non-regulatory firms) that either covered their initial cost base and/or own a significant ownership.

The problem is that fundamentally due to human nature it can never be a medium of exchange since you would never wish to spend something you believe will be worth more in the future.

If it was made legal tender and had regulation then you cannot swap out of it because it is your own spending currency, as was the case for gold, nobody swapped gold for £'s then turned £'s into gold because 0.2354 troy ounce was exactly £1 (one ounce being £4.25 fixed as a national and not publicly traded asset).

But most people would see that destroys the original point and concept of the bitcoin, if it is nationalised vs public.

So it just becomes a virtual commodity that is 50% owned by hedge funds and creators.

grey_gym_sock

merlingrey wrote: »

The problem is that fundamentally due to human nature it can never be a medium of exchange since you would never wish to spend something you believe will be worth more in the future.

that's hardly an absolute bar. sometimes ppl sell an investment which they think will go up in value, because they need the money, or think they've found a better alternative investment.

there are ppl running businesses on thin margins, which could be much more profitable if they cut out most of their banking/payment charges.

there are ppl who want to make payments with more privacy (for good or bad reasons).

all these ppl have transactions they want to carry out. if they can see a better way to carry them out with bitcoins, they may well do that. they won't all abandon their original plans and hoard bitcoins instead (though a few might).

grey_gym_sock

merlingrey wrote: »

they no doubt have hedge funds (most likely offshore non-regulatory firms) that either covered their initial cost base and/or own a significant ownership.

initial costs would have been very low. and i don't think hedge funds have showed any interest until much more recently.

merlingrey

grey_gym_sock wrote: »

that's hardly an absolute bar. sometimes ppl sell an investment which they think will go up in value, because they need the money, or think they've found a better alternative investment.

there are ppl running businesses on thin margins, which could be much more profitable if they cut out most of their banking/payment charges.

there are ppl who want to make payments with more privacy (for good or bad reasons).

all these ppl have transactions they want to carry out. if they can see a better way to carry them out with bitcoins, they may well do that. they won't all abandon their original plans and hoard bitcoins instead (though a few might).

You missed the critical point, neither gold or stocks are a medium of exchange, gold USED TO BE but became a public traded asset on an exchange after 1971, before that it was fixed price(flat) and national.

Swapping stocks or commodity for your local currency is not a medium of exchange, it's just selling something you own.

You might as well have said cars, carrots, bread whatever, same difference.

As for reducing cost, again human nature.

Suppose i owe you £500 and i say to you the following:

"rather than give you £500 i am going to send you 252 shares of vodafone"

Now you might agree to that since vodafone is fairly stable, but bit coin? come on it can move 10% the wrong way in seconds, this promotes hoarding, companies will want to hold on to coins they made losses on and then dump them for a profit if they see a spike.