bitcoin ?

[AngryScientist]

what is this new system?

anyone care to explain a dumbed down version of how this system works?

do i need to get on-board now to be ready to buy campy-12 ?

[ultraman6970]

Is a virtual coin, people buy and sell the coin and that's what will set the market price (offer-demand), some merchants use that currency so you can buy with it.

Right now is stronger than dollar i believe.

You need to get a subscription with different brokers and buy some, if you are lucky as with shares you can get some money out of the transactions. IMO maybe is too late to get on board but who knows, the coin has been in circulation for several years now.

Campagnolo 12? people will get tired and 10 will be the winner IMO. 10 electronic is the way to go.

[MattTuck]

There are plenty of good summaries of it, so I won't get into the really technical side of things.

It is basically a distributed digital encrypted currency. There are a known and fixed maximum amount of 'bitcoins', which can be 'mined' using a computer. (Basically, run an intensive complex algorithm to solve a complex calculation, and you generate the bitcoins) Right now, I believe about 60% of all bitcoins that will ever exist have been 'mined' and now exist.

I would not buy bitcoins. Their value is based entirely on what someone else will pay for them. Which is not unlike gold. But gold has demand not just as a currency, but also as a raw material.

The recent volatility in bitcoin may be linked to distributed denial of service attacks on the bitcoin network.

[dgauthier]

MattTuck has it exactly right. For more info, a popular but somewhat oversimplified explanation is here:

http://www.youtube.com/watch?v=Um63OQz3bjo

I like this slightly more detailed explanation here:

http://vimeo.com/63502573

[xjoex]

The only real purpose of bitcoins is to pay for less than legitimate services.

Hackers use them to buy and sell services or goods like stolen credit card numbers, pii and etc...

Some people will tell you there is another use, but really there is not.

-Joe

[Ahneida Ride]

Once upon a time in a town very much like yours there was a casino. Actually, several casinos. But not too many. Just enough to make a nice living entertaining the local gentry.

Tradesmen in town watched the well-heeled come and go from the casinos wishing they could be like them.

Casino owners, never satisfied, lamented at their regular Sunday luncheon. "Making a living off the gentry is fine but there are too few of them. How do we get the many tradesmen in town to come to our casinos?"

One of them hit on a plan. "Why don't we pay our servants in chips? We can put their wages into the kitty to ensure they can cash them but perhaps a few might linger at the tables?"

Lo and behold, this worked. Most servants had never set foot in a casino but few could resist the allure of wagering a few chips before exchanging the rest for wages. Smart casino owners learned that if they clustered their low stakes tables near the exchange booth even more would play. Like the gentry, everyone who played carried vivid memories of their winnings and conveniently forgot about their losses.

The casinos expanded and all was well.

One payday a servant ran out of money while shopping, though he had a pocket full of chips. The grocer, who had never been to a casino, was happy to take them. He and his wife had a grand time. Before long chips were circulating all over town.

The casinos expanded and all was well.

Then one casino owner noticed that with so many chips in circulation there was no need to keep an equal amount of real money in the kitty to redeem them. Why not lend some of that real money out at interest? Who would ever know? Another casino owner realized that if he paid his servants in chips but only put half their wages in the kitty, none would be the wiser. A third found that it cost him nothing to express his gratitude to the mayor with a bag of chips after the mayor helped him with a zoning problem. The mayor, who never seemed short of chips, found that spreading these around to supporters worked wonders on Election Day.

Before long all of the real money in all of the casinos' kitties only covered ten percent of the chips circulating.

All was well until a terrible storm knocked down many homes in the town. Long lines of tradesmen formed at every casino looking to cash in their chips so they could afford to make repairs. But there wasn't enough money on hand to pay them all. What to do?

Casino owners gathered in the town hall. As crowds outside grew angry and the mayor cowered under his desk the richest casino owner stood up. "My friends," he said. "We must hang together or we will surely hang separately. Each of you must reach into your own pockets and come up with money to redeem these chips. I would be happy to cover any of you that are short in return for a mortgage on your casino."

And so the crisis passed. In time the big casinos gobbled up the little casinos, and all was well.

It turns out that many towns across the land had casinos just like this town, with owners just as clever and chips just as bountiful. When they learned of the run on the casinos' exchange windows they realized that the same thing could happen to them. So the largest and most powerful casino owners arranged a secret meeting on a secluded island.

"It's all well and good that a few wealthy casino owners had both the will and the resources to weather the chip run. But what if it happens on a larger scale? Only a national solution will keep all of our casinos solvent in times of panic. Gather up your chips, boys, it's time to visit our friends in the capital."

And so a National Casino Reserve was formed to assure the people that a lender of last resort always stood behind every casino guaranteeing that their chips could be redeemed. The government also proclaimed that all taxes must be paid in chips instead of real money, passing a modest new tax on the incomes of only the most wealthy. Chip use exploded.

To protect people from fraud a law was passed making it illegal for casinos to manufacture their own chips. Only the National Casino Reserve Board could do that. The total number of chips in circulation would be controlled by the National Casino Reserve Board Chairman, who would also tell every casino how much real money they had to keep on hand to redeem chips.

A wise and prudent National Casino Reserve Board Chairman was chosen who swore a mighty oath guaranteeing that there would always be plenty of chips to keep every tradesman employed, every casino owner wealthy, and every politician happy.

And they all lived happily ever after.

[Louis]

Right now is stronger than dollar i believe.


Uman, have you been celebrating International Pot Day a bit too much? If the value of the dollar were to fluctuate as much as bitcoins have been the world economy would be in way, way worse shape than it is today.

Bitcoin is used primarily by folks pornography rings and small-time tech-savvy drug dealers who want to hide their tracks.

If you want to understand exactly how they're created be prepared for a long computer geek-session.

[MattTuck]

and, the Feds are now involved. http://gawker.com/feds-seize-assets-of-worlds-largest-bitcoin-exchange-506790294

[Louis]

I'm sure all the conspiracy theorists will jump on this one - obviously the Feds want to be the only players in the money creation game.

(That's a joke, btw)

From what I hear, Bitcoins are used mostly to finance illegal activity, so I have no problems with the govt shutting down that particular form of banksterism.

Of course the biggest crooks of all are too big to take down, and their K-street lobbyists have more money to throw around than the Mt Gox lobbyists, but that's a story for another financial crisis...

[dancinkozmo]

we should all jump on the bandwagon and start our own currencies !!

wonder how much a kirk frameset would cost in "kozmo-bux" ?

[Louis]

we should all jump on the bandwagon and start our own currencies !!

wonder how much a kirk frameset would cost in "kozmo-bux" ?

I think the cost in Kirk Koins (aka Dave Dollar$) is probably more relevant.

[thirdgenbird]

What's the ratio of Stanley Nickels to Schrute Bucks?

[FlashUNC]

I don't get it. It's like buying Wal-Mart gift cards and using those as currency.

[thirdgenbird]

I don't get it. It's like buying Wal-Mart gift cards and using those as currency.

If there was only a finite amount of gift cards and no central publisher.

(In a simplified manner)

[nrs5000]

Has anyone figured out how to short bitcoin yet?

[Louis]

I don't get it. It's like buying Wal-Mart gift cards and using those as currency.

No, the WM cards are still based on $ value and the promise of WM to allow you to trade the card for product of that value. Bitcoins are created in complicated system involving computer run time. (check Wikipedia for a detailed explanation.)

[thegunner]

Has anyone figured out how to short bitcoin yet?

yeah - ddos attacks on the exchanges (if you look at the past few dips, they weren't traditional 'shorts' but rather attacks on the exchange)

that said, i don't think bitcoin is going away - to those of you arguing on the gold backing of the dollar, sorry but that hasn't been a valid argument since WWII...

[FlashUNC]

No, the WM cards are still based on $ value and the promise of WM to allow you to trade the card for product of that value. Bitcoins are created in complicated system involving computer run time. (check Wikipedia for a detailed explanation.)

But you're still converting one form of fiat currency for another backed by, what exactly? It might be finite, but that doesn't mean it's a solution for a problem.

[Louis]

But you're still converting one form of fiat currency for another backed by, what exactly? It might be finite, but that doesn't mean it's a solution for a problem.

You're not necessarily converting it into US $ if you live in a "universe" in which the stuff you want can be traded for bitcoins: Mr Green (not anyone on this forum of course) grows some pot and sells it to Mr. Black who pays with bitcoins (because they can't be traced). Mr Green then turns around and pays Mr Blue and renews his online kinky porn subscription for another year. From what I've read it's mostly an underground economy currency. I'm no expert, but I think that's what I've read online about it. At some point folks will want to trade it for real $, but the more folks out there willing to accept it the easier it is to never have to covert them to US$ (or whatever). I'm not an economist or business expert, so my understanding of all this may be off base.