Slashdot Mirror
BitCoin Gets a Futures Market
fireballrus writes "There is one more way to use your BitCoins rather than buying weed or socks. Recently, a Bitcoin Exchange called ICBIT quietly introduced a futures market, obviously using Bitcoins as its main currency. Gold futures trade roughly at 137 BTC/tr.oz and Sweet Crude Oil at 7.3 BTC/bbl. This may play a positive role in the Bitcoin economy which needs more ways to actually use coins instead of mining them." While this sounds intriguing, I'd like to hear a good case for why BitCoin makes sense in this context.
So you use this, and you either lose or gain bitcoins. That seems like a circular system where bitcons beget bitcoins. That is NOT a "use" for bitcoins, not when the end result is ideally more bitcoins.
You don't get it? Really? Seriously?
Replace the word "bitcoins" with "dollars" in your above statement, and you'll see it suddenly makes perfect sense.
Of course, it makes about as much "sense" as printing billions more dollars in order to fix what's currently broken, but hey what do you expect when greedy fuckers are in charge with zero regulation...
And I expect nothing less out of the bitcoin world.
It ain't the zero regulation that caused the problem - the problem was over-regulation where the regulations were written with government-industry collusion to protect the interests of the big players and screw everyone else.
Of course, that always is going to happen when you get powerful self-serving governments and large corporations. Amazingly, adding lots of government regulations didn't work - look at how now Obama is letting Wall Street get away with literal theft. John Corzine and a few billion disappearing dollars ring any bells?
Be a helluva lot better in the long run to get the government OUT of picayune regulation, let the crooked banks actually FAIL, and toss the crooks in jail.
But we're a few hundred million dollars a year in bribes, errr, campaign contributions from that ever happening.
And don't kid yourself - Obama got more money from Wall Street than McCain did.
Yes, there's a lot of people who are in Bitcoin because of become-a-billionaire-overnight fantasies. But you remove all that and you're left with a really fascinating system that should appeal to everyone on Slashdot. It's a mix of cryptography, freedom of speech, computing, networking, finance, economics, and even politics -- most of us here dig that stuff.
Get over the hype and take Bitcoin for what it really is: a fascinating experiment that has, so far, withstood the amazing barrage of publicity, hacking attempts, legal uncertainties, and remains valuable for reasons completely contrary to everyone that says it's worthless. It may become worthless one day, but consider the possibility that Bitcoin is disproving all your wildly oversimplified assumptions about what makes something valuable. It is completely different, and there's plenty of reasons to believe that it could succeed as much as it could fail.
Why does gold have value? Nothing is backing gold. Yet it has value, mainly because of its properties: scarcity, fungibility, density, beauty, etc. Bitcoin is really quite similar but some different properties. Ease of transfer over the internet, fungibility, scarcity, storage efficiency, near-anonymity and built-in escrow.
I don't think it's any more ludicrous for Bitcoin to have value than it is for gold to have value. And in the end, when I want to sell WoW weapons, buy webserver space, or play a few games of poker online, why would I use gold, credit card or paypal, which all require me to remember log-in creditials, give away information and/or pay a bunch of third party fees. There's plenty of value in being able to pay people across the world, instantaneously, without sacrificing your privacy, and without paying any fees. Why is that not valuable? Seriously... quit focusing on the get-rich-quick kids, and start appreciating Bitcoin for it's unique properties and philosophy.
Incorrect. The major currencies, especially the dollar, are based on the threat of extreme violence. If you live in America, 1) you are forced to accept dollars at face value for services and trades. And 2) you are not allowed to counterfeit them. If you try, expect black SUV and helicopters, people breaking down your door at 6am, being slapped around a bit, and then put in jail for a good chunk of your remaining life.
As a gauge of current popular interest, the fact that not a lot of people are actually using them for anything is a big negative. Slashdot should be reporting things that interest its readership.
Nice strawman. Real currencies are recognized and backed by governments, bitcoin is only a pretend currency, like monopoly money. It may in fact be illegal, if it tries to substitute for legal tender, in various parts of the world.
No, bitcoins are like property, and can be stolen like property. That means they can have value, but it doesn't make them like money.
The US dollar is the only currency you can pay US taxes with and the only currency the US government issues debt in, so as long as the US government exists, there is a guaranteed demand for US dollars.
I know, I know, "But the US is about to implode any day now!" And if it does, the entire world economy will go with it. BitCoin depends on the Internet and the Internet depends on a functioning economy. BitCoins won't do you any good if your ISP and your power company are bankrupt.
So in any realistic scenario where BitCoins have value, so does the US dollar. However, it's entirely plausible that BitCoin will fail but not the dollar. Congress could prevent law-abiding businesses from dealing in BitCoins, shutting down the major exchanges and effectively isolating BitCoin from the traditional financial system. The illicit market would still exist, so you'd still be able to convert cash to BitCoins to buy drugs with... but most people will just buy drugs with the cash directly.
If you have more expenses because you bought more things, which needed to be produced, then you print more dollars. Hence dollars increase more or less as GDP increases.
The entity responsible for printing those dollars gets something for nothing. They print millions of dollars (for essentially no cost), and exchange those for goods and services. They didn't work hard to earn those dollars.
This is inflation... it isn't "useful", and it makes your dollars go down in value over time. The only real good thing about inflation is that in limited amounts, it encourages spending instead of hoarding.
Bitcoins are not actually generated by doing useful work and even worse the system is made to reward disproportionately the early adopters of the system.
Dollars are also not generated by doing useful work. They are generated by a printing press, which is not doing anything inherently useful. I don't really see why rewarding early adopters is a bad thing.
Look at their predicted number of bitcoins in the system to figure it out yourself.
Bitcoins can be subdivided to 8 decimal places, or currently about 1/100,000th of a cent in US dollars. Any deflation that occurs can be handled well into the future.
All my liberal friends think I'm a conservative, all my conservative friends think I'm a liberal.
No doubt.
Futures and derivatives are NOT "capitalism". They are gambling. Pure and simple. This has been one of the main downfalls of banks and Wall Street, directly contributing to the 2008 debacle.
We should not base our economy on fake money. Investment is fine. And all investment is "gambling" to a certain extent... at least if it's done honestly.
BUT... speculation and derivatives are PURE gambling. It's nothing more than a government-sponsored casino.
You're both wrong. The banks wanted to make money. Since both the property market and the packaged loan markets were going up, any bank that didn't loan out like crazy stood to be less profitable, and hence not do as well on the market themselves. The government opened the door to bad loans through lax regulation and no checks on leveraging. The banks responded to what market pressure and the drive to be the most profitable loan institution would normally do. The lack of transparency just made it all the worse.
I swear they give me mod points to shut me up.
So if someone refuses to accept my dollars I can call in an airstrike on them?
Well, Saddam Hussein was planning to switch to the Euro....