What are your thoughts on BitCoin?

[Symphony D.]

We're not. I've mostly talked about transferring money from a country to another country, not paying for something in another country while you are there.

I could buy an argument that BitCoin could be useful for sending money rapidly between two countries without any institutional service fees. That does indeed seem like the one thing it could be good for.

Now explain to me how to quickly and reliably turn BitCoin back into real money.

 

[Zelig]

Maybe it's because they're terrible:

No, it's because it doesn't behoove you to read things you don't like, remember?

You're more concerned about a few guaranteed percentage points on international purchases than you are about value-swings that can literally exceed the value of the order within the time it takes for the order to clear (either in your favor or against it).

Because it's more concerning, volatility breaks-even on average.

If you can't afford the relatively minor risk of currency drops, then go ahead and pay extra.

True, but that's not really the point I was making. To buy BitCoins you need a bank account (or even better, a PayPal account) in the first place. Credit/debit cards are useful in a wide variety of countries and are a natural extension from socking your money in a bank account. You pay transaction/exchange fees, yes, but I think that's worth the extra trouble BitCoins impose as they are, which I've already summed up for you.

Using BitCoins "just" as a medium of exchange, or claiming they're so useful because of that, seems all the more silly when you're actually expecting an awful lot vis a vis internet connection and the long transaction time. Plus the price volatility stuff Symphony already mentioned.

The only way I can see this not being a problem is if you did all of your business online and had it worked out so you transferred your money into BitCoins just for the transaction automatically and fluidly. I think you avoid some of the major issues there (except transaction time which is unavoidable). I totally buy that. But it's not a long-term solution. Eventually those service providers who handle your exchanges and transactions for you (and, for mercy's sake, also handle the blockchain for you) will charge fees of their own. Especially once they realize there's no reason that they can't.

All in all it doesn't strike me as particularly easy to use. That it'd be more useful for me than the ruble, I think, is irrelevant - I don't want to use the ruble anyway.

You don't need to make any significant portion of your business online. If I sell $100/m worth of services, which I get paid for in bitcoins, and I'm able to purchase $100/m worth of goods/services in bitcoins, I come out ahead in terms of fees.

It's actually really similar to paypal with CAD - withdrawals below $150 aren't free, and I have regular small payments and purchases with paypal - since I can't withdraw my money without paying a fee it's essentially stuck in "digital paypal dollars" that gets spent the next time I purchase something through paypal.

This is papering over the problem. I don't care if 10 minutes isn't very long compared to, say, the average human life span - but I do care that I can make that same purchase in 10 seconds with a debit card.

I'd put up with a 10 minute delay on buying games on Steam if I could save myself the currency conversion cost.

I've got a backlog of about 300 games I haven't played anyway, I can always download one of those while I'm waiting.

I know this is a shock, but real adults, as part of living expenses, routinely drop $1000 on things like rent or airline tickets or hotels or car rentals or even on disposable income purchases like clothes or electronics. $1000 is not some mythical, unreasonable, unworldly sum the average person moneyed enough to be abroad doesn't encounter.

So when you can lose $50 of the value of that $1000 on a purchase due to market volatility, it's kind of a big deal. P.S. no exchange rates do not fluctuate nearly this much with any regularity, don't even try that.

Real adults operate their finances on the expected cost of things and won't have their budget broken by a $1000 purchase that could randomly cost either $950 or $1050.

Since we're on the "utility abroad" argument, throw on the physical or opportunity costs of

Let's not, since they're not relevant to anyone considering bitcoins anyway. Let's use marginal costs which add up fractions of pennies.

I could buy an argument that BitCoin could be useful for sending money rapidly between two countries without any institutional service fees. That does indeed seem like the one thing it could be good for.

Now explain to me how to quickly and reliably turn BitCoin back into real money.

Well the best use case would be to figure out what stuff I need is purchasable with bitcoins before you send me the bitcoins, and then only send me that amount so that I can convert them directly into goods/services.

 

[Symphony D.]

Real adults operate their finances on the expected cost of things and won't have their budget broken by a $1000 purchase that could randomly cost either $950 or $1050.

So if someone just takes $50 from you, do you shrug your shoulders and write it off?

Well the best use case would be to figure out what stuff I need is purchasable with bitcoins before you send me the bitcoins, and then only send me that amount so that I can convert them directly into goods/services.

The lack of widespread adoption of the BitCoin is well-established. That isn't what I asked. Let me repeat myself: explain to me how to quickly and reliably turn BitCoin back into real money.

 

[Crezth]

This isn't really a useful way of looking at this, as explained previously, since the value of 1 Bitcoin is really high. So 5 USD is basically <1%, that's not really big.

Oh, I see. Right. My bad.

Remember how we talked about transferring money from me to Zelig? My bank says this would take 5 work days.

Is that so? I guess you can't beat bitcoin for that, then. I still wouldn't purchase takeout with bitcoin, but I'll concede transcontinental exchanges do seem to give bitcoin an edge.

I'd put up with a 10 minute delay on buying games on Steam if I could save myself the currency conversion cost.

Hey, more power to you. Just don't pretend it's a feature.

You don't need to make any significant portion of your business online. If I sell $100/m worth of services, which I get paid for in bitcoins, and I'm able to purchase $100/m worth of goods/services in bitcoins, I come out ahead in terms of fees.

It's actually really similar to paypal with CAD - withdrawals below $150 aren't free, and I have regular small payments and purchases with paypal - since I can't withdraw my money without paying a fee it's essentially stuck in "digital paypal dollars" that gets spent the next time I purchase something through paypal.

I'm not really sure what this has to do with transaction time or the technological hard-limits of bitcoin? Maybe I'm just really not understanding. Maybe you could rephrase.

 

[dutchfire]

Now explain to me how to quickly and reliably turn BitCoin back into real money.

Use one of those exchange thingies.
Otherwise, thuisbezorgd.nl?

 

[dutchfire]

Is that so? I guess you can't beat bitcoin for that, then. I still wouldn't purchase takeout with bitcoin, but I'll concede transcontinental exchanges do seem to give bitcoin an edge.

And as Mise mentioned earlier, a good thing about Bitcoin is that it means competition for the banks, which means they've got an incentive to improve their own service. I think the main reason these international transactions are so slow and expensive is just because the banks previously could afford being inefficient, since the market wasn't very competitive. Hopefully Bitcoin means banks will clean up their act.

 

[Symphony D.]

Use one of those exchange thingies.

The ones that are routinely proven to be scams or are hacked, that have no guarantee of not just running off with the money, and that routinely have waiting lists in excess of a year because they don't have the cash on hand to cash-out? How does that fit the definition of either "quick" or "reliable?"

Otherwise, thuisbezorgd.nl?

So I just want to make sure I have the story straight: the best argument this thread can muster for BitCoin is that it's useful for transferring money from one country to another to spend as soon as possible on the very few things that can be purchased by BitCoin, such as pizza in the Netherlands.

Basically everything else about it, such as replacing fiat currency, a new source of speculatory wealth, etc. is disavowed as being terrible and/or unrealistic. Is that correct?

 

[Zelig]

So if someone just takes $50 from you, do you shrug your shoulders and write it off?

If some of my stocks drop one day and cost me $50 I shrug my shoulders and write it off.

The lack of widespread adoption of the BitCoin is well-established. That isn't what I asked. Let me repeat myself: explain to me how to quickly and reliably turn BitCoin back into real money.

Don't turn it into real money, figure out what stuff I need is purchasable with bitcoins before you send me the bitcoins, and then only send me that amount so that I can convert them directly into goods/services.

I'm not really sure what this has to do with transaction time or the technological hard-limits of bitcoin? Maybe I'm just really not understanding. Maybe you could rephrase.

Your point was ease-of-use - things like paypal have significant ease of use issues (in the form of fees for smallish sums) which have essentially the same effect as the primary ease-of-use issues with Bitcoins (lack of acceptance.)

I don't think the technological limits are a particularly big deal, they're mostly problems for bitcoin as an ecosystem, not bitcoin for an individual.

So I just want to make sure I have the story straight: the best argument this thread can muster for BitCoin is that it's useful for transferring money from one country to another to spend as soon as possible on the very few things that can be purchased by BitCoin, such as pizza in the Netherlands.

Basically everything else about it, such as replacing fiat currency, a new source of speculatory wealth, etc. is disavowed as being terrible and/or unrealistic. Is that correct?

No, this thread is about how criticisms of bitcoins are unfounded and relevant to most other currencies.

 

[dutchfire]

The ones that are routinely proven to be scams or are hacked, that have no guarantee of not just running off with the money, and that routinely have waiting lists in excess of a year because they don't have the cash on hand to cash-out? How does that fit the definition of either "quick" or "reliable?"

We've heard several anecdotes of people selling Bitcoin for money in this thread, so apparently the problems aren't as big as you make them to be..

So I just want to make sure I have the story straight: the best argument this thread can muster for BitCoin is that it's useful for transferring money from one country to another to spend as soon as possible on the very few things that can be purchased by BitCoin, such as pizza in the Netherlands.

Obviously, it would be a good thing for Bitcoin if more people accepted Bitcoin. Time will tell if this happens. If pizza salesmen in the Netherlands can accept it, American pizza salesmen might follow suit.

Basically everything else about it, such as replacing fiat currency, a new source of speculatory wealth, etc. is disavowed as being terrible and/or unrealistic. Is that correct?

These things have never been a point of contention in this thread, as far as I can see.

 

[Crezth]

Your point was ease-of-use - things like paypal have significant ease of use issues (in the form of fees for smallish sums) which have essentially the same effect as the primary ease-of-use issues with Bitcoins (lack of acceptance.)

I don't think the technological limits are a particularly big deal, they're mostly problems for bitcoin as an ecosystem, not bitcoin for an individual.

Yeah but I don't advocate PayPal. I'm sorry if I didn't make that clear. What I mentioned PayPal for was because you can use PayPal to get BitCoins. At any rate, PayPal transactions clear a lot faster than BitCoins, and I find it hard to believe that the kind of BitCoin service that would all-in-one it enough to make BitCoins fast and easy wouldn't have fees of its own!

As for the tech problems, yeah they do mostly apply to BitCoin: The Economy. But speaking personally, the 10 GB starter download and the 10-minute transaction times make it an unattractive prospect (also, there's nothing I want that I can buy with BitCoins). Although I admit I've been tempted to participate for sheer scientific curiosity, I just can't be bothered to.

Obviously, it would be a good thing for Bitcoin if more people accepted Bitcoin.

I think this is objectively false. The only reason BitCoin works so "well" is because not enough people are using it/have used it to exacerbate the worst technological shortcomings.

 

[Symphony D.]

We've heard several anecdotes of people selling Bitcoin for money in this thread, so apparently the problems aren't as big as you make them to be.

A few anecdotes do not an economy make. Yes, some Norwegian guy bought an apartment; every single article goes out of its way to avoid talking about how he actually cashed out. A secret economy is not a convenient one.

No, this thread is about how criticisms of bitcoins are unfounded and relevant to most other currencies.

I thought it was an opinion thread on BitCoin, judging by its title. Okay. Explain to me how BitCoin's structural problems, such as:

1. an inability to scale due to the P2P nature of the blockchain, wherein linear growth of transfers will create exponential or geometric growth of blockchain updates
2. an inability to scale in transaction size*
3. a current (and foreseeable) inability to convert to currencies in widespread usage
4. a difficulty in limiting market volatility given the decentralized nature of the operation
5. no backing beyond the faith of its true believers
6. no way of ensuring the reliability of the exchanges
7. a wild disparity in value between the different exchanges
8. widespread institutional disdain
9. the inevitable decline of the currency after 2040 (at best) due to the limited volume of BitCoins and their inevitable loss or destruction eroding the market cap of the economy
10. mining being increasingly unprofitable

are unfounded and relevant to other currencies. I have raised these issues several times. I have not received a straight answer as to why they are unfounded.

* To wit:

Bitcoin's own wiki says it's an artificial limit, and that they could easily raise it to 2,000 transactions per second if they saturate an 8 Mbps internet connection, but they would still be confirmed in 10 minute blocks. Visa processes 11,000 transactions a second at peak times, such as the night before Christmas. Keep in mind Bitcoin wants to be the dominant world currency, so it needs to be Visa, Mastercard, Paypal, Western Union, ACH Transfers, and wire service.

 

[dutchfire]

I think this is objectively false. The only reason BitCoin works so "well" is because not enough people are using it/have used it to exacerbate the worst technological shortcomings.

Computers get exponentially better in time.

 

[Symphony D.]

Computers get exponentially better in time.

The Singularity will save BitCoin?

 

[Crezth]

Computers get exponentially better in time.

True enough, but you said it would be a good thing if more people accepted BitCoin. That, by itself, is a bad thing - other factors mitigating those negative consequences notwithstanding.

 

[useless]

And as Mise mentioned earlier, a good thing about Bitcoin is that it means competition for the banks, which means they've got an incentive to improve their own service... Hopefully Bitcoin means banks will clean up their act.

 

[Cutlass]

I don't think anyone here is advocating use of Bitcoin as long term store of value, or speculating on Bitcoin. There are better alternatives available for value-storing purposes (as long as you don't live in China), and in terms of speculating it is pretty equivalent to betting on gold prices or sports matches.

Actually, the reasoning behind the fixed quantity of bitcoin is to preserve it's store of value. Many of the advocates keep whining about the US$ having 7% annual inflation and losing 100% of it's value in the last century. They don't understand market volatility and speculation in terms of changes in a currency's value, only quantity.

 

[Zelig]

I thought it was an opinion thread on BitCoin, judging by its title. Okay. Explain to me how BitCoin's structural problems, such as:

1. an inability to scale due to the P2P nature of the blockchain, wherein linear growth of transfers will create exponential or geometric growth of blockchain updates
2. an inability to scale in transaction size*
3. a current (and foreseeable) inability to convert to currencies in widespread usage
4. a difficulty in limiting market volatility given the decentralized nature of the operation
5. no backing beyond the faith of its true believers
6. no way of ensuring the reliability of the exchanges
7. a wild disparity in value between the different exchanges
8. widespread institutional disdain
9. the inevitable decline of the currency after 2040 (at best) due to the limited volume of BitCoins and their inevitable loss or destruction eroding the market cap of the economy
10. mining being increasingly unprofitable

are unfounded and relevant to other currencies. I have raised these issues several times. I have not received a straight answer as to why they are unfounded.

* To wit:

1. This is false.
2. If we're just going to quote from the bitcoin wiki: "Assuming no upgrades to lightweight/SPV clients, so just batch verification, we can reach 40,000 transactions per second which is far beyond the traffic levels of the entire credit card system. And with ed25519 we could go up to nearly half a million transactions per second - with todays hardware!"
3. This is false.
4. This isn't a problem if it isn't used as a storage of value.
5. This is true of any currency.
6. I don't know what you mean?
7. This is true of any currency.
8. Confirmation bias.
9. This isn't a problem if it isn't used as a storage of value.
10. Okay?

Actually, the reasoning behind the fixed quantity of bitcoin is to preserve it's store of value. Many of the advocates keep whining about the US$ having 7% annual inflation and losing 100% of it's value in the last century. They don't understand market volatility and speculation in terms of changes in a currency's value, only quantity.

I generally ignore people who whine about a non-worthless thing having lost 100% of its value.

 

[Symphony D.]

I'm going to focus on this one for now:

3. a current (and foreseeable) inability to convert to currencies in widespread usage

3. This is false.

And I'm going to return to this for the third time: explain to me how to quickly and reliably turn BitCoin back into real money.

A concrete answer, if you would please. Preferably in an easy to follow format.

 

[Archbob]

The 1st two points are are going to be inevitably true. You can't make more bitcoins so if you lose your Harddrive, the Bitcoins are just going to drop out of circulation, causing rapid deflation. With other currencies, you can just replace lost bills by printing more. That is a huge problem. The blockchain its going to limit scaling.

Right now you basically have a highly volatile currency that's not accepted at most places and mostly used by people to purchase illegal stuff. I doubt it'll really become a major worldwide currency player anytime.

 

[Samson]

I'm going to focus on this one for now:



And I'm going to return to this for the third time: explain to me how to quickly and reliably turn BitCoin back into real money.

A concrete answer, if you would please. Preferably in an easy to follow format.

I have not done it, but a quick search gives:

https://www.bitstamp.net/help/how-to-sell/

If you own some bitcoins and would like to sell them and get money, this is what you need to do. First thing is to load your Bitstamp account with bitcoins. To do this you must be logged in to your account, click deposit button and select method bitcoin. You will be given a unique approximately 34 alphanumeric characters long deposit address that will serve you as an address for receiving bitcoins to your account. Once you have your account loaded with bitcoins you will need to go to buy/sell page and place sell order. You can easily do that by placing instant sell order which will automatically sell your bitcoins at highest price offered on the market. You can also place limit order, where you will need to set the price at which you are willing to sell your coins. Once you successfully sold you bitcoins you can now withdraw your funds in USD or EUR currency.