How To Use Bitcoin – The Most Important Creation In The History Of Man

[mhaze]

Isn't Western Union cheaper than that?

The ways to move money between countries and currencies are paypal, credit card transfer, western union, bank wire, and bitcoin. Each of these has various advantages and disadvantages, costs and fees. By far the cheapest is bitcoin, costing nothing, and the fastest, being instantaneous. This does not mean it should take the place of the other methods, they all have uses. I think over a few years, we might see something like bitcoin becoming the backbone of paypal, since it is more efficient than the way they do things. And many ebay style international transactions would be far better served with bitcoin. It doesn't matter really what you think, what matters is what the buyers and sellers DO.

.....It seems there are a few possible outcomes that include Bitcoin succeeding, but I think the people who see it as a way to sidestep government intervention are kidding themselves.

Precisely NO. Were the people who at the last moment before the bank seizures in Cyprus fled to bitcoin kidding themselves?

Hell no. Wealth always moves to safe havens, large or small amounts. Keep in mind when you use a blithe phrase like 'sidestep government intervention' that viewed internationally, there are both friendly and just governments as well as harsh and repressive governments. Both have abused the power of the purse by printing money and controlling it's use.

 

[Tyke]

Some might say that there is a risk that the bitcoins might lose value between the time I receive them and the time I cash them in but that's a judgement call. Given the price history to date, that seems like a risk well worth taking.

There's also the risk that major governments will pass legislation which will make Bitcoin transactions impractical or undesirable. HMRC in the UK has said it is looking into possible tax and regulation measures, as has the US government and the EU.

That kind of talk could make many Bitcoin holders start to twitch.

It's not my "job" to advocate bitcoin as a currency. I merely point out that it there can be some advantages to using it as a currency and the opportunities to do so have increased.

I didn't mean you, I was talking about the person in the article I read. Senior figure in a Bitcoin advocacy group.

You didn't answer the question I really wanted an answer to - at what point do you think people will start using it like a currency?

 

[Tyke]

By far the cheapest is bitcoin, costing nothing, and the fastest, being instantaneous.

We've been over this already. In real world scenarios Bitcoin isn't free and it's not instant.

Precisely NO. Were the people who at the last moment before the bank seizures in Cyprus fled to bitcoin kidding themselves?

Were those running Silk Road and MtGox? The FBI seized their Bitcoins regardless.

 

[ponderingturtle]

That was the best deal I could get at the time. Western Union can be used to send money overseas but that wasn't what I was trying to do.

If the banks want to treat their bigger customers better than others then that's their prerogative. However, I'm not going to use them if there is a cheaper alternative.

Some might say that there is a risk that the bitcoins might lose value between the time I receive them and the time I cash them in but that's a judgement call. Given the price history to date, that seems like a risk well worth taking.


It's not my "job" to advocate bitcoin as a currency. I merely point out that it there can be some advantages to using it as a currency and the opportunities to do so have increased.

If you have read some of my posts then you will know that I have consistently said that it is better to hold onto them than to spend them.

How else are you supposed to get get your drug money or fund terrorists. IT is to move money totally outside any law or tracking.

 

[Democracy Simulator]

How else are you supposed to get get your drug money or fund terrorists. IT is to move money totally outside any law or tracking.

Many people have already pointed out that this already happens with cash.

Also worth mentioning the vast sums of money that banks like HSBC have taken and moved around from drug gangs and terrorists.

 

[mhaze]

We've been over this already. In real world scenarios Bitcoin isn't free and it's not instant.

I'm not sure what you are trying to say or prove here. Let me explain. I can do a bank wire, but typically I must do it at one particular bank. So a sum is moved to there - not by a reversible instrument, but by ACH or cash or cashiers check. Then (watching the banking hours at send and recieve) I can pretty much know when it clears at the other end.

Doing this requires acceptance of the exchange rate and fees and percentages. So this is fairly complicated and requires some expertise to do it at minimum cost.

Bitcoin transfers might take a longer or shorter time based on what stage of the process you begin and end at. If you start with the presumption that you will move the funds into somewhere like Mt. Gox with no prior account relationship, then that will take you a while.

But guess what? Starting accounts with banks with no prior account relationship and doing international transfers would take a while too.

Try to compare apples to apples.

Were those running Silk Road and MtGox? The FBI seized their Bitcoins regardless.

Huh? Cyprus has no relation to Silk Road, and MtGox has no relation to either.

....worth mentioning the vast sums of money that banks like HSBC have taken and moved around from drug gangs and terrorists.

I rather hate to put it like this, but a government move against bitcoin would be to keep such lucrative activities within the existing infrastructure.

My opinion is that bitcoin has a lot of potential for small transactions internationally - such as occur on Ebay. These are not handled efficiently by the existing systems at all. Why, just think of the potential if Nigerian scammers start using bitcoin!

 

[psionl0]

You didn't answer the question I really wanted an answer to - at what point do you think people will start using it like a currency?

Do you think I have a crystal ball or something? I might as well ask you when you think it's going to be banned.

 

[Tyke]

Do you think I have a crystal ball or something? I might as well ask you when you think it's going to be banned.

This is a forum isn't it? I'm just asking for your opinion.

 

[psionl0]

This is a forum isn't it? I'm just asking for your opinion.

That's not asking for an opinion. That's asking me to do fortune-telling. It's also a dishonest question ("when will people start ...") as it implies that nobody is currently using it to buy anything today.

Now if you want to question me about what I actually said .....

 

[Tyke]

But guess what? Starting accounts with banks with no prior account relationship and doing international transfers would take a while too.

To 99% of people Bitcoin isn't money, so the recipients have to go through the existing banking system to get something useful out at the other end. In a lot of cases it is slower and more expensive than just using the banks/FX/WU.

Huh? Cyprus has no relation to Silk Road, and MtGox has no relation to either.

My point is - your money isn't necessarily safe from the government because it's in Bitcoins (or cash, or crabsticks). It's a little harder for them to confiscate it, granted.

If I were of a conspiratorial bent I'd consider that given what we've heard lately about Prism and other signals intelligence programs around the world and backdooring popular encryption methods (allegedly), they might already know where your money is. Call me old fashioned, but when I want to keep something a secret, my first thought is not "Hey, I'll put it on the Internet".

My opinion is that bitcoin has a lot of potential for small transactions internationally - such as occur on Ebay. These are not handled efficiently by the existing systems at all. Why, just think of the potential if Nigerian scammers start using bitcoin!

I agree. That seems like one of the best niches for Bitcoin if it can become a stable currency.

BTW - does anyone know what the rationale is behind the $60 difference in price between BTC-e and MtGox?

 

[Tyke]

That's not asking for an opinion. That's asking me to do fortune-telling. It's also a dishonest question ("when will people start ...") as it implies that nobody is currently using it to buy anything today.

Now if you want to question me about what I actually said .....

You've already said yourself it isn't useful as a currency at the moment. When I say "start using it" I suppose what I'm asking is what conditions need to be met for it to become an accepted mainstream payment option. Will that happen at all - is that even the intention?

You spoke about a snowball-type effect of increasing transactions so presumably you think there's at least the possibility of it becoming a de facto "everyday" currency. Or have I read this entirely wrong?

 

[Puppycow]

Over $500 now.

http://preev.com/

 

[Belz...]

Over $500 now.

http://preev.com/

I think we're looking at a new collapse real soon.

Not volatile at all.

 

[psionl0]

You spoke about a snowball-type effect of increasing transactions so presumably you think there's at least the possibility of it becoming a de facto "everyday" currency.

The more people who use bitcoin to pay for things the more people who will be encouraged to do the same. You think that is illogical? The number of avenues where you can pay with bitcoin without converting to another currency are increasing. I don't know if a "critical mass" will be reached or if it will simply increase at a steadily growing rate and I can't give any future dates. Of course, the rapidly rising value of bitcoin puts a damper on the growing use as a currency.

As far as how the authorities might affect the future of bitcoin, anything short of outright prohibition isn't likely to put much of a damper on its price. The MtGox hacking in 2011 certainly caused a lot of confidence in bitcoin to be lost but in more recent times, the confidence seems to be more resilient. The seizure of the funds (not bitcoins) in MtGox's Dwolla account didn't do much long lasting harm to the price and neither did the seizure of the bitcoins from Silk Road.

As to whether a ban is likely, I wouldn't put anything past politicians but otherwise it doesn't seem all that probable. The authorities are usually more interested in ensuring that you pay taxes on your profits than stopping you from making a profit.

 

[psionl0]

I think we're looking at a new collapse real soon.

Either that or the price will reach $1,000 early next year.

 

[mhaze]

To 99% of people Bitcoin isn't money, so the recipients have to go through the existing banking system to get something useful out at the other end. In a lot of cases it is slower and more expensive than just using the banks/FX/WU......

Ah, no. I answered that. If a person has the ACH set up, same day or next day (depending on banking hours and time zones) translation bitcoin to currency. If he doesn't, like a first time user, delays should be expected.

....
My point is - your money isn't necessarily safe from the government because it's in Bitcoins (or cash, or crabsticks). It's a little harder for them to confiscate it, granted.

This is actually nonsense. Let me give you a very brief historical perspective. Any time a currency is in danger, money (wealth) flees to a safer haven. Any time a user/consumer has a choice of currencies, he chooses in his best interest (eg, wisely in an economic sense). Bitcoin exists as an alternative currency. Bitcoin will, thus, be used when and if needed.

A little harder to confiscate? Bullcrap. Look at the method used by the Cyprus government to steal the peoples' money. Basically one order sent to banks, and it was done.

Bitcoin would be roughly analogous to having jack booted soldiers go to everyones' homes and check under their mattresses for cash. Much, much more difficult.

....
If I were of a conspiratorial bent I'd consider that given what we've heard lately about Prism and other signals intelligence programs around the world and backdooring popular encryption methods (allegedly), they might already know where your money is. Call me old fashioned, but when I want to keep something a secret, my first thought is not "Hey, I'll put it on the Internet".


I agree. That seems like one of the best niches for Bitcoin if it can become a stable currency.

BTW - does anyone know what the rationale is behind the $60 difference in price between BTC-e and MtGox?

....
If I were of a conspiratorial bent I'd consider that given what we've heard lately about Prism and other signals intelligence programs around the world and backdooring popular encryption methods (allegedly), they might already know where your money is. Call me old fashioned, but when I want to keep something a secret, my first thought is not "Hey, I'll put it on the Internet".

Bitcoin data is not exactly 'on the internet'. It is in the block chain. Yes, there are access points in the internet to that >12gb database.

Bitcoin does not need to be on a computer. You can print the keys out and hide them. So no, "THEY" don't "already know where your money is."

....
If I were of a conspiratorial bent I'd consider that given what we've heard lately about Prism and other signals intelligence programs around the world and backdooring popular encryption methods (allegedly), they might already know where your money is. Call me old fashioned, but when I want to keep something a secret, my first thought is not "Hey, I'll put it on the Internet".


I agree. That seems like one of the best niches for Bitcoin if it can become a stable currency.

BTW - does anyone know what the rationale is behind the $60 difference in price between BTC-e and MtGox?

Mt Gox always rides higher for a number of reasons. They have an established respected presence and can handle sums which others cannot. Offhand say, >20k USD. But given that the total volume in btc is something like 50,000 per day, large sums dropped at a single moment will affect the price (50k/day is about 140 per 10 minute trading interval). 140 at say 1000 usd each is 140,000 USD, so dropping a sizeable fraction of that will affect the price during that trading interval.

 

[psionl0]

Look at the method used by the Cyprus government to steal the peoples' money. Basically one order sent to banks, and it was done.

That's not as bad as what the US authorities have managed to do. In one fell swoop they nullified the 4th amendment by declaring that property seizure cases are now "the state vs the property" so that the owner has no say in it.

Terry Dehko had $35,000 seized from his bank account by the IRS simply because the shopkeeper was depositing less that $10,000 into his bank account when he made his deposits. (Might be trying to skirt the anti-money laundering laws).

Adding insult to injury, federal civil forfeiture law does not even grant me a hearing before or soon after they snatched my account. They’ve had my money for 10 months. I’ve been forced to spend thousands of dollars on lawyers just to get a hearing before a judge. Even more bizarre, under civil forfeiture, the government’s case is not against me, but against my property. This is why the official case has the ridiculous name, United States of America v. $35,651.11 in U.S. Currency. This is not just absurd; it’s unconstitutional.

http://www.washingtontimes.com/news/2013/sep/26/dehko-bullied-by-the-irs/

Governments are doing more to make bitcoin look attractive than any bitcoin proponent could.

 

[mhaze]

That's not as bad as what the US authorities have managed to do. In one fell swoop they nullified the 4th amendment by declaring that property seizure cases are now "the state vs the property" so that the owner has no say in it.

Terry Dehko had $35,000 seized from his bank account by the IRS simply because the shopkeeper was depositing less that $10,000 into his bank account when he made his deposits. (Might be trying to skirt the anti-money laundering laws).

Governments are doing more to make bitcoin look attractive than any bitcoin proponent could.

I think I'll disagree on the relationship of government seizures as presented being related to universal government seizures.

All the government need to do is pronounce some banks to be uncreditworthy (eg government regulators set the standards, then 'pronounce some illiquid' of course ignoring other, favored ones) then the customers in those banks find their balances above 100K or 250K, whichever the current limit of FDIC insurance is, have vanished.

This is the general consensus as to how to handle 'banking failures' in the future by the European Union. I think it's the way the US would go too.

The banks deemed insolvent would be taken over by the FED, and the US government would then take their excess deposits. Or they might just leave them in operation, as puppet and puppet master, and take their excess deposits.

 

[psionl0]

I think you might have the government-bank relationship backwards. The Cyprus solution was all about bailing out the banks - not the government.

 

[Tyke]

The more people who use bitcoin to pay for things the more people who will be encouraged to do the same. You think that is illogical? The number of avenues where you can pay with bitcoin without converting to another currency are increasing. I don't know if a "critical mass" will be reached or if it will simply increase at a steadily growing rate and I can't give any future dates. Of course, the rapidly rising value of bitcoin puts a damper on the growing use as a currency.

The rising value is a killer. Imagine you're on 60 day payment terms with a supplier - they were at $200 when you made your order, now you owe $600 worth. It's impossible to do business like that.

I don't think you're being illogical, I just don't think it's solely a matter of scaling up the number of transactions, but also of how those transactions are conducted, between whom, and whether or not it's worth changing.

If we say for the sake of argument that Bitcoin is stable but still unregulated, is it worth accepting Bitcoin if you're, for example, a high street chain? There's extra expense for them in adopting the new system, but what are the advantages? I mean aside from losing out to those people who will refuse to shop there out of spite because their Bitcoins/gold dubloons/crabsticks aren't accepted as currency.

As far as how the authorities might affect the future of bitcoin, anything short of outright prohibition isn't likely to put much of a damper on its price.

It's funny you should say that because I just did a search and apparently the Thai government have banned it.

The MtGox hacking in 2011 certainly caused a lot of confidence in bitcoin to be lost but in more recent times, the confidence seems to be more resilient. The seizure of the funds (not bitcoins) in MtGox's Dwolla account didn't do much long lasting harm to the price and neither did the seizure of the bitcoins from Silk Road.

I'd be interested to know what that confidence is based on, in the main part.

As to whether a ban is likely, I wouldn't put anything past politicians but otherwise it doesn't seem all that probable. The authorities are usually more interested in ensuring that you pay taxes on your profits than stopping you from making a profit.

Quite, but it's probably harder to determine whether you paid the right taxes or not if you're using something like Bitcoin.