Bitcoins

[oh my florin]

Personally I think most of the current acceptance is purely a type of speculative investment considering the fluctuations however if banks begin investing which I highly doubt as Bitcoins would be exceptionally risky and marginal in terms of APRA. It is this type of speculative investment which caused the GFC in America but hey they might as well replace their Housing Boom with an even more speculative Cryptocurrency Boom.

I am not against the theory of it but it is too speculative for any bank or moderate to large firm to invest substantially in. It would also play havoc with the key role of the finance sector in terms of effectiveness of potential changes in monetary and fiscal policies.

[Fulvio]

purely a type of speculative investment

This is precisely what a large part of the Dogecoin community has against Bitcoin. The massive spike from virtually nothing to $1,200, and the subsequent crash, had virtually nothing to do with using it as a currency.

Dogecoin, OTOH, was, apart from the joke aspect, designed to work, and work extremely well, as a currency. Sure, you still get people who buy in in the hopes of getting rich, but the same can be said for any market. I just posted about Silver the other day for example, in this thread: http://www.reddit.com/r/dogecoin/comments/387ueh/so_you_think_the_doge_price_is_volatile_eh_check/

A currency works differently to a store of wealth, as we all should know. Every dollar in your pocket or bank account is worth less than it was yesterday, last year or last decade, and it will be worth less tomorrow. Its not designed to hold or increase in value, its designed to be used, and spent.

Cryptos are no different, and people need to understand that. The value of my Dogecoins, or my Bitcoins or any other currency I may hold lies in what I can do with them. Which is to pay anyone, anywhere, absolutely securely, basically for free, and in almost complete privacy. Almost, because every transaction is permanently recorded, and if I allow one transaction to be matched to me, every other transaction on that same wallet is open to inspection.

Compare this to using say PayPal, where its far from free, instant or secure. Where you are subject to the whims of a for-profit foreign corporation, which is known to feed data directly into various spy agencies.

I'll take cryptos any day, thank you very much. :angel:

[oh my florin]

But the thing is this currency is not backed by anyone or anything and being international it breaks so many economic theories that if it ever did become widespread it would ruin the global economy far faster and stronger than any prior economic collapse.

[Fulvio]

But the thing is this currency is not backed by anyone or anything and being international it breaks so many economic theories that if it ever did become widespread it would ruin the global economy far faster and stronger than any prior economic collapse.

Ummmm, you totally miss the point.



Cryptos don't need to be backed by some faceless guy doing shonky deals in a backroom, or sleazy politician pulling strings. Because they're backed by EVERYONE. They can't be tampered with on a whim like fiat currencies are. Perhaps you've forgotten the days when we'd wake up on a Sunday morning and find out that our dollar was now worth less than it was on Saturday, but that happened to everyone who had mortgages in Swiss Francs quite recently.

See, I think you're confusing market forces with economic controls here. Sure, the price of say Dogecoin spiked recently, then gave half the gains back, then spiked again, but its still worth 77% more than it was a month ago. So what? Look at the price charts for A$, Silver, Gold, Iron ore, or any share you care to name... they're all volatile. That's how markets work.

However, cryptos cannot be manipulated on a fundamental level. Tony Abbot can't wake up one day and say "I'm going to overprint all our money and make it a thousand times more" when we're talking cryptos. He can do this to the money in our pockets, and its been done more than once before... remember a wheelbarrow of Deutschmarks to buy a loaf of bread?

Now, if you think its a bad thing to have a stable currency, which holds its value simultaneously everywhere in the world, well, what can I say? I totally fail to see how that's a bad thing, or how it has any chance of leading to disaster.

Besides, like it or not, this stuff is definitely coming. Because the advantages and savings FAR outweigh any misguided fears and resistance. Everything new meets resistance. Remember how decimal currency was going to drive all the old people mad and lead to them losing their life savings? The media had a field day shoving cameras in little old ladies faces... but the meltdown never happened. And neither will this one.

The only major concern I have is that every vested interest on the planet is trying desperately to gain control of cryptocurrency for themselves.

http://www.coindesk.com/coindesk-guide-worlds-national-altcoins/

And now Ecuador, which banned Bitcoin and introduced its own crypto, is forcing all financial institutions to use it.
http://panampost.com/belen-marty/2015/05/31/ecuadorian-banks-must-adopt-official-electronic-currency-or-else/

See the trend here? Nobody is saying cryptos are bad. Quite the opposite. But what they're saying is any crypto ***I*** can't control is bad, so I'll make my own, then I'll force everyone I control to use it, and prevent them from using anything else. They want to centralise decentralised currency, with themselves at the center, naturally.

Which is a shortsighted recipe for disaster. We already have two 'Aussie' coins. If the government adds a third, how long do you think it would be before we have VicCoin and QldCoin, let alone SydCoin and PerthCoin and a hundred other shitcoins? NABcoin? Check. ANZcoin? Definitely... Because while you can't trust the bastards, you can absolutely predict how they're going to think.

Thing is, it doesn't have to be like that. We have a couple of solid cryptocurrencies already, and all it takes is mass adoption to push back against the dark forces. Because even if you only have one wallet, with a hundred Dogecoin or a few satoshis in it, you're waaaaaaay ahead of all the Luddites with their heads buried in the sand. And we all know that burying your head in the sand turns you into a great bike rack, right? :diablo:

[SULLA]

BEWARE!!

Bitcoin (and the many copycats) is a fad and will result in huge losses for those who spend big dollars to own these 20 - 30 - 40  or so digit cyberspace numbers to own.

It can never be a hard coin and when the power goes off how and where will one claim its value?

What is it backed by?
Gold, silver, copper, dog excrement?
the Internet?

It is just a variation of a fiat currency/money having only a perceived value without any true intrinsic value!


I have SULLACOINS for sale.

Only $1000.

Soon I will have toulla coins for sale and agappi coins and voulla coins.

Please send me your cash and I will send your 40 characters of gibbersish that you can cash in at a local.....

[oh my florin]

But the thing is this currency is not backed by anyone or anything and being international it breaks so many economic theories that if it ever did become widespread it would ruin the global economy far faster and stronger than any prior economic collapse.

Ummmm, you totally miss the point.



Cryptos don't need to be backed by some faceless guy doing shonky deals in a backroom, or sleazy politician pulling strings. Because they're backed by EVERYONE. They can't be tampered with on a whim like fiat currencies are. Perhaps you've forgotten the days when we'd wake up on a Sunday morning and find out that our dollar was now worth less than it was on Saturday, but that happened to everyone who had mortgages in Swiss Francs quite recently.

See, I think you're confusing market forces with economic controls here. Sure, the price of say Dogecoin spiked recently, then gave half the gains back, then spiked again, but its still worth 77% more than it was a month ago. So what? Look at the price charts for A$, Silver, Gold, Iron ore, or any share you care to name... they're all volatile. That's how markets work.

However, cryptos cannot be manipulated on a fundamental level. Tony Abbot can't wake up one day and say "I'm going to overprint all our money and make it a thousand times more" when we're talking cryptos. He can do this to the money in our pockets, and its been done more than once before... remember a wheelbarrow of Deutschmarks to buy a loaf of bread?

Now, if you think its a bad thing to have a stable currency, which holds its value simultaneously everywhere in the world, well, what can I say? I totally fail to see how that's a bad thing, or how it has any chance of leading to disaster.

Besides, like it or not, this stuff is definitely coming. Because the advantages and savings FAR outweigh any misguided fears and resistance. Everything new meets resistance. Remember how decimal currency was going to drive all the old people mad and lead to them losing their life savings? The media had a field day shoving cameras in little old ladies faces... but the meltdown never happened. And neither will this one.

The only major concern I have is that every vested interest on the planet is trying desperately to gain control of cryptocurrency for themselves.

http://www.coindesk.com/coindesk-guide-worlds-national-altcoins/

And now Ecuador, which banned Bitcoin and introduced its own crypto, is forcing all financial institutions to use it.
http://panampost.com/belen-marty/2015/05/31/ecuadorian-banks-must-adopt-official-electronic-currency-or-else/

See the trend here? Nobody is saying cryptos are bad. Quite the opposite. But what they're saying is any crypto ***I*** can't control is bad, so I'll make my own, then I'll force everyone I control to use it, and prevent them from using anything else. They want to centralise decentralised currency, with themselves at the center, naturally.

Which is a shortsighted recipe for disaster. We already have two 'Aussie' coins. If the government adds a third, how long do you think it would be before we have VicCoin and QldCoin, let alone SydCoin and PerthCoin and a hundred other shitcoins? NABcoin? Check. ANZcoin? Definitely... Because while you can't trust the bastards, you can absolutely predict how they're going to think.

Thing is, it doesn't have to be like that. We have a couple of solid cryptocurrencies already, and all it takes is mass adoption to push back against the dark forces. Because even if you only have one wallet, with a hundred Dogecoin or a few satoshis in it, you're waaaaaaay ahead of all the Luddites with their heads buried in the sand. And we all know that burying your head in the sand turns you into a great bike rack, right? :diablo:

No fulvio I get the point but you are don't get mine in terms of economic principles and problems you have with it being international and in demand however it breaks economic safeguards such as inflation, international competitiveness, exchange rate, fiscal policy, monetary policy and business cycle smoothing which would account for at least 80% of any economic theory in history.

I don't view my self as against innovation in fact I am all for it but there is a difference between meaningful innovation and just speculative and useless innovation (remember Enron or how about sub-prime home loans?)

Your point on a currency which is internationally accepted is misguided look at what the Euro has done to Europe with the GFC it has utterly destroyed any type of monetary policy intervention as you have countries like Germany who were doing well then you have Spain and others who are economically shot which if individual nations a devaluation of the currency through exchange rates would lead to full employment however how do you devaluate an international currency in domestic terms? It can't be done. Interest rates which moderate demand and supply is destroyed as how do you charge interest on a currency which is international but entirely speculative.

Look at shares they are backed by a companies assets, money by the central bank, precious metals by the metal itself however crypto currencies are nearly completely speculative and backed by what? numbers on a screen?

In terms of risks it would threaten every single economy that largely adopted it so I fail to see the magnitude of savings that you propose being significant enough to offset this major risk.

Frankly it would take days to type out responses for each economic impact it would have tho if you want to confine it to one or two economic principles I would be happy to explain them. e.g. monetary policy, fiscal policy, exchange rates etc

[Fulvio]

I have SULLACOINS for sale.

Oh dear... :dodgy:

At least do some research before attempting to troll, mate.

[Ozcoins]

Fulvio,
What is the difference between a "bitcoin" and others that you referred to as "shitcoin"?
How does someone tell the difference?

[trout]

Fulvio,
What is the difference between a "bitcoin" and others that you referred to as "shitcoin"?
How does someone tell the difference?

I think all of them have a nasty smell about them Mate :angel:

[Fulvio]

Fulvio,
What is the difference between a "bitcoin" and others that you referred to as "shitcoin"?
How does someone tell the difference?

Bitcoin was the first cryptocurrency, created anonymously by 'Satoshi Nakamoto' in 2008, and released as open source in 2009.

There are, in many peoples' opinion, several flaws in Bitcoin's design, so since the source code was available, people started working on alternative ways to do things. The first was Litecoin, forked by Charles Lee at Google in 2011.

Since then, some 500 more coins have been created, mostly forked from Litecoin, though not all (there's a really cool animated chart out there somewhere which shows the timeline and genealogy of the various coins). Unfortunately, many of these coins were scams, significantly pre-mined by the creators, who then dumped them and vanished with the cash. Others were just plain dumb, either technically or in the underlying philosophy.

When Jackson Palmer from Adobe in Sydney and Billy Markus built Dogecoin in 2013, they did it as a joke, a commentary on the proliferation of what were known as 'shit' coins, because of the flawed ground they stood on. So they build the currency to have 100 billion coins mined in a year, plus 5 billion more every year in perpetuity, as their way of highlighting the silliness of the situation.

This went against everything that other currencies took as gospel. No other coin was deliberately inflationary, and no other coin at that point was designed to be so low in value. Bitcoin peaked at $1200 each, with a market cap around the $10 Billion mark, mainly on the back of first adopter status, and the drug trade. Plus, no other coin took itself so un-seriously. A cute dog meme on a coin? Seriously? And yet, it all resonated, and the rest, as they say, is history.

The way things stand now, of you look at https://coinmarketcap.com/ you will see that apart from the top 10, most of the rest have very little support.

In my opinion, there's room for maybe 4 serious long term currencies:

• Bitcoin, because its the elephant in the room.
• Dogecoin, because its the one with the strongest community, developer team, fastest transaction times and the low valuation makes it easy to play with safely.
• Dash (formerly Darkcoin), because there is a real need for a truly untraceable currency. Other coins are semi-anonymous, in that once you  can link an address to a person, you can trace every transaction they ever made, with that plus any linked addresses.
• NuBits, because its pegged to the US dollar, and therefore has a static valuation which removes exchange risk.

Litecoin, which most people call the 'silver' to Bitcoin 'gold', I don't think is a serious long-term contender, on technical grounds, and also on the weakness of its community. Its a slow coin, although faster than Bitcoin's 10-minute block times, it has a weaker dev team than either Bitcoin or Dogecoin, and its really pointless in so many ways. For most people, starting with doge, then buying into BTC when the need to buy 'serious' items arises is pretty adequate.

As for most of the rest of the top 10, they're either proprietary, centralised, or derivatives. Ripple, for example, has more in common with Visa or MasterCard than it does Bitcoin. Great for banks, who are now adopting it for interbank transfers, but pretty useless as a working currency for mere mortals.

Then you have things like Counterparty and Dogeparty, which are tokens rather than currencies. They allow you to spend them to create a set of tokens which you specify the parameters of. So for example, we could create 'ACF points' with say a thousand or a million or 100 billion tokens in the set, then give them away or sell them to members. They would be fully transferrable, and redeemable for some value down the track. The standard example given would be for a fundraising event, say a function where admission, drinks, food, raffle tickets, etc would be obtainable with tokens prepurchased and/or collected and exchanged between attendees.

Doge remains the best entry level coin. Partly because of the community, which is amazingly helpful and generous. But also because it survived a number of disasters that would have killed off any other coin. A year ago, speculators pumped its value to about six times what it is now, then deliberately crashed it and walked away with about $50 million. https://coinmarketcap.com/currencies/dogecoin/ Despite this, and a couple more 'pump and dumps' since, people haven't abandoned the currency, which consistently ranks 2nd or 3rd in total daily transactions. Plus, the developers are working consistently, pulling the best new ideas out of Bitcoin, and adding their own innovations.
But the only real way to know how it all works is to try it. Getting a wallet, especially an online or paper wallet, is painless. Getting a few cents worth of coins is dead easy too. Faucets pay out small but consistent drips for a few clicks, services like linkslap.me pay more substantial amounts for useful work, people tip anyone who's new and appears genuine, and the currency is pretty easy to buy as well, even in small amounts. At 20 cents per thousand at the moment, a dollar goes a long way.
Because these currencies are all fundamentally the same underneath, learning how to use one pretty much sets people up for using the others. Exchanges such as CoinSpot, which is local, or Cryptsy in the US, which is the biggest, allow trading between different currencies cheaply. Since all trading is basically the same, this is also a way to learn skills useful for Forex, Stock markets, commodities, etc, without having to risk thousands.

The other big thing is that unlike services like Paypal, payments are instant, basically free (there's a 1 doge fee per 1k transaction size), semi-anonymous and absolutely irreversible, anywhere in the world. Anyone who's ever been bitten by a Paypal chargeback will appreciate that last one.

And as for that nasty smell... don't worry about it, that's just some old freshwater fish that's been left in the sun too long. :diablo:

[trout]

And as for that nasty smell... don't worry about it, that's just some old freshwater fish that's been left in the sun too long. Diablo

hehehe
Don't you worry about this old fish Mate. :ok:
I'll still have my fist full of fifties when you are wondering where the hell all your digital currency has vanished to :laugh2::dance:

[Fulvio]

I'll still have my fist full of fifties when you are wondering where the hell all your digital currency has vanished to

Just like grandpa still had his barn full of buggy whips when everyone else was driving around in their new cars wondering where their horses went, eh?

http://money.cnn.com/news/newsfeeds/articles/globenewswire/10137645.htm

[Ozcoins]

Fulvio,
First off, thanks for the long response to my question about different types of crypto coins.  However, I think your answer illustrates one of the problems with people accepting them. "It takes too much effort".  Too much effort to learn about them.  People are lazy. They won't put any effort into anything unless they get something out of it and if they don't see something they are getting out of it, take up will be small. I have a bit of interest in then,  but am generally skeptical,  so I have not actually done anything.   I think most people won't even have any interest. ...
How long do you think it will be before the "fist full of fifties" will be as useless as the buggy whip you are comparing them to?

[Fulvio]

"It takes too much effort"

You're right, to a point. As a group, people are indeed lazy. But I've been down this path before. I used to haver family members snigger at me for wasting time and money on computers 40 years ago. "But what can you DO with them?" they'd cry. Well, every one of them is now surrounded by computers, aren't they? Same story with mobile phones, iPads, and all manner of new technology.

And its not just tech either. When's the last time you wrote a cheque? About 15 years in my case. Remember the outcry over direct debit of wages? And the switch from cash to cheques before that?

All new things require brainspace and effort. That's a given. Look around this forum... compare the quality of the photos now to what they were years ago. People have put in a tremendous amount of effort to improve their skills, and learn to use new hardware and techniques.

How does this impact cryptos? Well, a lot of people saw the light early, and climbed aboard. They're pushing, pulling and prodding others, and the technology itself, into the future. Its not quite critical mass yet, but it will be, and when it takes off, the transition will be as dramatic as everything else has been. From cars to planes to phones to faxes, once the early adopters lay the groundwork, everybody else falls like dominoes. Even, eventually, the luddites.

I just believe its better to be on top of the wave rather than have it bear down on you. The view's so much better from up there.

How long do you think it will be before the "fist full of fifties" will be as useless as the buggy whip you are comparing them to?

I don't think cash will ever disappear. There are far too many criminals for that to happen. But I do think we're going to start seeing the costs of cash increasingly being passed on. Because there are enormous costs involved, in the production, transport, storage and use of cash. Once there is sufficient uptake of the alternatives, you will start to see fees and charges nibbling away at that fistful of fifties. And then, once it starts to cost you an extra 10% or more to use it, most people will just stop, leaving the diehards marginalised. Its all happened before.

Cryptos won't be the total replacement, at least not in the forseeable future, for one very good reason. They can't be manipulated.

People in power have as their primary objective to REMAIN in power. Whether they're politicians, bureaucrats or enforcers, they like telling us what to do, when and how to do it, and penalising us we don't. And power relies to a large extent on money. That's why most politicians are corrupt.

A currency that the powerful cannot control damages their ability to exert their will. That's why China and other totalitarian states banned Bitcoin, and that's why several states want the benefits without the loss of power, and are therefore creating their own. Again, its all happened before.

The thing is, this time, there really isn't anything that governments can do. They can't shut it down, they can't block it, they can't impound, confiscate or otherwise interfere with the network or the flow of payments. Not without switching off the entire internet anyway. All they can do is interfere at the interfaces, where crypto meets fiat. They can force banks to close accounts of people trading in cryptos, they can block credit card transactions and the like, but they can't stop you creating a wallet, because that's just math. And they can't stop you receiving payments into that wallet, or sending payments from it.

So its not going away, that's for certain. Everything else, well, that depends entirely on how many people get involved, and how quickly.

And there's something else to consider.

We're a minority. Australia, like much of the developed world, already has lots of options in place. Paywave to name one. ATMs on every street corner. Universal access to banking, forced on us by direct credit of benefits, mostly.

But out there, where the vast majority of the human race lives, these things are not even a pipe dream. Vast numbers of people are unbanked, and not just in remote regions. In cities where banking IS available, the costs are astronomical, again because of the excercise of power. They charge 40, 50, even 100 percent because they can. And they will continue to as long as possible.

Cryptos give these people a way to sidestep the corruption and the fees. Every year, for example, expatriate African workers pay over $2 Billion in fees on the money they send home to feed their families. The banks are literally stealing food from the mouths of babes. What do you think will happen when these people wake up that there's a better way?

"Ah, but they don't have computers", I hear you say. Well, yes and no, but that's why I'm working on alternative approaches. Paper wallets don't need computers. And I'm working with some developers on a way to not only sweep the total contents of a wallet, but also to spend an arbitrary amount from it, and to do it from a USB stick which can be used on public devices. Given that you can get cardboard USB sticks for a few cents, the potential is huge. And this is not the only project under development. Sending payments by SMS for example. Mobile phones are becoming ubiqitous in many undeveloped countries, because they do away with the need to build infrastructure. And we know we can send Dogecoin by SMS, we did it 18 months ago. This will happen, for sure.

So the question isn't really about when will Trout reverse his position like he did on slabs. And its not about the few hundred people in here, or the few million in Oz.

The question is, what will happen when two billion people wake up one day and say "why didn't we think of this before?". That's when you'll see a paradigm shift.

[trout]

when will Trout reverse his position like he did on slabs

If I ever loose my Love for Cold Hard Cash and I can be guaranteed that my wealth is absolutely safe and accessible Australia/World wide.
More importantly it has to be accepted as well if not better than the AUD.
Also there has to be NO crazy fluctuations in its value and remains "stable" over a long period of time.
Maybe just maybe I may nibble at the edges :ok:

At the moment NONE of these parameters are achievable with any of the digital currencies.

As far as the slabbing goes, That was a leap of faith and it took me some time to get around to the idea and how to be mildly successful doing it.
Trouble is all the profit goes into slabbing my collection coins and acquiring more for the same.
Maybe this digital currency WILL be the way of the future but I recon I will be feeding the worms long before it is the "Norm" :ok: