Slashdot Mirror
Ask Slashdot: Do You Still Trust Bitcoin?
Nerval's Lobster writes "It hasn't been a great week for Bitcoin. Cruise the Web, and you'll find stories from people who lost thousands (even millions, in some cases) of paper value when the Mt.Gox exchange went offline for still-mysterious reasons. (Rumors have circulated for days about the shutdown, ranging from an epic heist of the Bitcoins under its stewardship, to financial improprieties leading the exchange to the edge of bankruptcy.) But as one Slashdotter pointed out in a previous posting, Mt.Gox isn't Bitcoin (and vice versa), and it's likely that other exchanges will take up the burden of helping manage the currency. Even so, all currencies depend on a certain amount of stability and trust in order to survive, and Bitcoin faces something of a confidence crisis in the wake of this event. So here's the question: do you still trust Bitcoin?"
"You can't hide secrets from the future with math."
The Kruger Dunning explains most post on
that I ever trusted Bitcoin in the first place. I didn't.
How Bitcoin starts gaining a bit of traction and then goes straight to hell in a week.
Its a passtime, and a toy. I never did have any trust in it. It seemed ripe for running afoul of governments sooner or later.
The idea of wasting perfectly good electricity creating something of value out of nothing at all never head any of my interest, even when I did manage to buy a book with bitcoin once. (I earned the bitcoin by selling a piece of software that I wrote, so easy come, easy go).
Sig Battery depleted. Reverting to safe mode.
I never trusted Bitcoin.
Only to grow anew in the spring.... ...mark my words.
I am very small, utmostly microscopic.
i would rather see platinum, gold, palladium and silver made in to coins and used as currency, at least the government can not counterfeit it like they do with the USD (QE infinity)
Politics is Treachery, Religion is Brainwashing
I trust bitcoin itself just fine... it's the third party exchanges I don't trust.
This is like asking when you stopped beating your wife.
It assumes a positive that for most people doesn't exist.
Bitcoin was (still is...) an interesting experiment, and I watch it with interest. But trust? C'mon, that's like saying "do you still trust Windows 1.0?"
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
There is an adage that if something appears too good to be true then it usually is too good to be true. Especially concerned as to the absence of explanation for the Mt.Gox collapse: never a good sign
I've never trusted it. If I mine a coin I'll sell it, tout suite!
A feeling of having made the same mistake before: Deja Foobar
Let me answer your question with a question. Do you trust the US Dollar less because of the Leaman Brothers collapse? Trusting or not trusting a currency (virtual, or fiat) based on the actions of one player, regardless of how large, makes no sense. I believe in what Bitcoin is about, I trust it more than I trust the banks and government. I still need fiat money to pay my bills, but would prefer to live without the banks who have already shown to not be trustworthy.
Clearly Bitcoin's downfall was the cannibalization of gamer video cards for bitcoin mining and the related price increases of those cards. Gamer's know alternative currencies and bitcoin wasn't one they liked.
I got some sweet real estate to sell them!
(If at first you don't succeed, do it different next time!)
BitCoin, by nature, is as trustworthy as SHA256 which is used by TLS, SSL, PGP, SSH, S/MIME, and IPsec. So the math behind BitCoin is trusted by most of the world whether or not you are aware of that fact.
As a currency it is just as trustworthy as any other imaginary money system. It's value is highly speculative, like the NYSE. Nobody really trusts the NYSE just as you shouldn't trust the value of BitCoin.
That being said, cryptocurrencies have the potential to be more stable than fiat currencies. BitCoin may not be the final solution but behold as we are watching the future of money unfold. History is in the making.
Do I still trust bitcoin?
How much trust did you have in our financial system circa 2008, right after the financial meltdown?
After you watched the most notorious criminals of our time (a.k.a. bankers) get away with financial genocide and got to keep their jobs and their bonuses, how much trust should you have in the current system? We don't arrest or prosecute financial criminals. We reward them.
Sorry, but bitcoin is no more stable than any other currency. Only the criminals in charge want you to believe it is. And we pay them millions to do so, so might as well STFU about stability. We don't even give a shit about the current system to protect it from crashing again, much less any new ones.
Several reasons:
1) OK, has anyone - preferably someone with solid crypto/math credentials - ever audited the fscking crypto behind Bitcoin? Anyone? Not that I know of.
2) Even if the basic crypto is sound, what about the wallet software? Surprise, surprise, it seems this is how Mt Gox was attacked... And wasn't a TV talking head wallet hacked after he showed the number on the air? Oooops...
3) Any "market" where the majority of the "product" is owned by a very small group of people is not a free market - it's a cartel. And cartels usually are up to no good...
So, no, Bitcoin IMHO is not to be trusted.
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
Sure is, it clearly demonstrate how easy it is to get someone to invest in virtual money without any real substance. Sure, you could argue that you could convert real money (whatever that is, paper?) to bitcoin and lock it with some encryption and a unique footprint, but it's still pretty much a virtual currency that in theory means nothing, practically...it's what YOU put in it...that makes up the actual value - that is - if you can manage to get your money, once you received your payment from someone.
To me, this is an interesting experiment, one that I watch closely. I read about this guy who invested in Bitcoins in the early stages, he paid very little for them, and some years later...he was allegedly a MILLIONAIRE because of his forgotten Bitcoins, yay... All the wannabees who SO wished they had bought Bitcoins back in the early days, just to find out a few months later - that no one really want to recognize Bitcoin as a real valid currency, yes - I'm having a laugh.
What this world is coming to - is for you and me to decide.
Oh look, a bank-like entity failed and people lost money. Good thing the FDIC is there to--
Oops.
If cryptocurrencies are going to repeat the last 100+ years of economic history, can they hurry up and rediscover monetary policy too?
Visit the
What doesn't kill me, makes me stronger ! this saying surely apply for bitcoin.
This is juste a passing youth crisis, bitcoin will probably recover, the genie is out of the battle and nothing can put it back. Bitcoin will probably correct it's problems and continue it's march toward world domination .... fast !
There was money to be made at certain points, sure - and there may be more money to be made in the future. I'm sure some people have done quite well. But that doesn't mean any significant involvement with BitCoin going forward is a good idea.
Trusting "BitCoin" isn't exactly what's important. To invest in or use BitCoins significantly, you'll end up trusting other people - and how do you know to trust those people, especially as the stakes get higher and higher? Banking and securities trading have a web of trust and regulation that's been built out over centuries. There's failure states and scandals, sure, but you have reasonable tools to decide who to trust and how much.
What I see in people's experience with BitCoin is often a long string of red flags - difficulties doing withdrawals and transfers, huge fluctuations in value, varying exchange rates that nobody is able to arbitrage - all met with too few questions and far too much exuberance.
Let's not stir that bag of worms...
I trust that bitcoin will continue to be a currency with value and use until something else comes along that replaces it (and given BitCoins incumbent status as king of the cryptocurency world is I believe, unlikely in the near future. There are a number of 'altcoins' which each seek to improve upon BitCoin's core functionality in some way or another, but none of them have successfully come close to dethroning BTC).
Bitcoin has a lot of functional benefits as a system for transferring value, even if it is eventually determined that its volatility ultimately makes it unsuitable as a currency for conducting day to day business with. This is especially true when it comes to international transactions. Currently the fees for transmitting USD across international wires, not to mention conversion to local currency (if needed) are significant, and time consuming (I've oft seen quotes of international wires taking 2-3 weeks to complete, depending on where it's going and what not). On the other hand, a bitcoin transaction is instantaneous, and after roughly 60 minutes is pretty much irrevocably entered into the block chain so that there is no possibility of the funds being lost or otherwise delayed in transmit.
Now does this mean that I trust bitcoin to go up, or down, or sideways, or do anything else? Well, I'd like to say I'm hopeful for a strong future for the currency, and I trust that in the long run bitcoin will eventually stabilize as it matures more, but in the short term, we're still in the wild west so to speak.
In a bit of shameless internet panhandling, I accept Litecoin Donations at Lbd2oH9QsthD1GfuUXPyka12YxvWJYnBVf
What if you went to an Indian casino, exchanged your dollars for chips, and when you went to leave and cash out your remaining chips, they refused to exchange the chips for dollars, and instead decided to close shop. Would you still trust the dollar?
That's essentially analogous to what this article is asking. Maybe bitcoin has porblems. It's too volatile to be an effective unit of cost. Those are separate issues from the problems Mt. Gox is having.
Even the dollar has problems with corruption and cronyism involving the treasury, the fed, wallstreet, and too big to fail banks, that doesn't mean that an indian casino deciding to steal your money is due to any weakness in the dollar. That's just a business failing to uphold a promise either through theft or incompetence.
Mt Gox is a financial institution that didn't have it's shit together. Yes it dealt in bitcoins. It also dealt equally in dollars and other currencies (i.e. because it was an exchange). That doesn't mean it the dollar or bitcoin is weak. They still could be, but it's not because of Mt. Gox.
I'm married to my drum kit, you insensitive clod!
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
Yes.
Then again if you have a lot of value stored in it you better take good care of your identifications. As with GPG keys and such ..
One could ask: after Bernie Madoff how could you ever trust a fund manager again?
At some point Visa or Bank of America will start exchanging bit coins and change very high fees. They will have the same internal controls they use for the rest of their business. We don't need any innovation. The old processes work today and will work in the future. We need some company who knows how to run a transactional financial service to set up a service for bit coins. This does not exist today.
its value is pegged to "real" money.
if it never or rarely converted to government backed cash, then it is viable. goods and services for bitcoins. that's a closed loop system that can be completely independent of all the players its purporting to avoid.
but since people are buying into and cashing out and even SPECULATING with real currency, then you have an achilles heel.
the point at which conversion happens IS regulated and guarded by government players and is actually and IDEAL place for governments to actually sabotage the entire endeavor if they wanted to.
so until bitcoins slash any and all ties with real currencies and certainly until it loses all DEPENDENCE on them, they are just a new forex player that is highly unstable and insecure.
I speculate that the real story behind mT Gox is not the one they are telling us. My guess is that back when bitcoins were worth pennies that Mt Gox needed a bridge loan to cover a shorfall in revenues wrt to expenses. I imagine they gave themselves a loan from their holdings intending to pay it back from downstream revenues. But then bit coin went 10,000 fold in exchange rate and they could never pay back the 400 million that was now due. Their only hope was to either wait for the market price to drop, or to act like a ponzi scheme where they paid demands out of other depositors money. All of which they could do because they controlled the coins. Even if they paid everything back but $4000 of an original bit coin loan, that would now be worth the 400 million they are short. Perhaps they also boofed the maliabile ID too at some point, but they would have easily detected that instantly because their total assets would be different that their total liabilities. Unless of course they already had a deficit in assets that was masking that.
Some drink at the fountain of knowledge. Others just gargle.
Bitcoin is, by design, unregulated and unregulatable. That gives it strengths - the feds cannot seize your funds effectively, nor can your spending be monitored effectively. But it also gives it weaknesses - namely, the "banks" and other financial institutions are not inspected or insured, meaning they can "fail" rather easily either through mishap or malice.
Anyone who thought that something like this wouldn't happen is a fucking idiot.
But the fact that it could, and did, happen, just means the system is operating as designed, flaws and all. If you think the design was good, well, this doesn't change anything. If you think it was bad, now you have proof that one of the flaws can actually manifest, but that still doesn't automatically mean those flaws outweigh the benefits of the system.
Now, there is a good argument to be had about just how bad that flaw is. But so far we've had very few Bitcoin failures, too few IMO to really predict how frequently they will occur in the future. So that argument isn't going to be settled for a long while.
As for me, I'm still more concerned about speculators than about failing or fraudulent exchanges. I'll join up with cryptocurrencies once the waves of speculative investors die down - I trust them enough as currencies, but as an investment they're a horrible gamble.
Bitcoin now functions as a wonderful scam perpetuated by electricity retailers, and so far is yielding impressive returns for those investors.
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
If so, how can the fall of a centralization point lead to such a loss
Please excuse my ignorance, but there is something I do not get here...
What I don't trust is the servers that people store their coins/cash on. I transfer my BTC and cash in and out as needed. I invested in BTC. I mine BTC. I support BTC.
Anyone who reads any technology sites should know by now that computer systems are woefully unsecured. Why would anyone leave a few million bucks (or 20 for that matter) sitting on someone elses system.
The real irony of the exchanges disappearing is that people want an unregulated currency. Well, guess what comes along with unregulated currency? If you promote unregulated currency you had better be prepared to do the work yourself to deter theft, ponzi scheme or whatever snakes lay in the grass.
Saying that MtGox "proves" Bitcoin isn't trustworthy is like saying Bernie Madoff "proved" dollar bills aren't trustworthy.
Conmen trick people into giving them money and then run off with it. That doesn't say anything about the financial value of the currency itself.
Mt. Gox disappearing is good for BTC. From what I've been reading, people who left their money in Mt. Gox accounts have mostly been blaming themselves for trusting an untrustworthy organization. The signs were all over the place that people should pull their money out. And judging by the decline in volume at Mt. Gox, it seems most people did already. And observers need to know that these exchanges are not secure places to keep their money.
Anyone who willingly lets someone they hooked up with over the internet hold hundreds of thousands of dollars of their money should know the risks involved.
This is rather like that old one about are you still beating your wife?
.
to NOT be used as money and instead become something useful.
There is an adage that if something appears too good to be true then it usually is too good to be true. Especially concerned as to the absence of explanation for the Mt.Gox collapse: never a good sign
Mt. Gox collapsed because they had fewer Bitcoins than the sum of all the balances of the accounts.
Imagine if Mt. Gox had 25 BTC, but they had 5 users total with a balance of 10 BTC each. That's a total balance of 50 BTC, which is double what MT. Gox actually has. That's Bad News Bears (Walter Matthau).
Mt. Gox got in that position because the people running it were stupid.
A commonly cited reason is the recent "attack" exploited a flaw in their software. Bitcoin transactions have an ID associated with them, but this ID can be changed. It is NOT an ID you want to use if you want to track a transaction. Mt. Gox and some other exchanges / pools relied on this ID, and some people were exploiting this by claiming that a transaction was not credited when it really was. When Mt. Gox / the pool looked shit up by the ID they'd see the user was right and they would credit them again. Of course, this "attack" was obvious to anyone with a brain, and even the morons without a brain figured out something was up when it happened a second or third time.
But Mt. Gox did NOT go down because of this "attack". Mt. Gox went down because they spent (or stole) more than they took in through fees, plain and simple.
Money, or more specifically, currency has value only because others will accept it in exchange for goods or services. The reason why these pieces of paper, plastic, and base metal the governments of the world call dollars, euros, yuan, yen, francs, etc., etc. have value is not because those governments say they do but rather because those governments will accept them in payment of taxes, fees, and other amounts of money owed to them. From that one fact all else follows.
So, let's follow the logic, Bitcoins are not issued by any governments. Furthermore, as far as I know, no government will accept them as payment for taxes or fees. However, because there exists an exchange for the buying and selling of Bitcoins using government-issued currencies, they have value but only relative to the values of the other currencies. You can think of it in another way, Bitcoin is almost exactly the same as buying gold and silver bullion coins. Because no government uses the gold standard anymore or issues gold or silver coins for general circulation, the value of gold and silver in relation to the dollar or the euro, for example, also varies.
But the value of Bitcoins also is dependent upon the security of the place they are stored. If your Bitcoin wallet can be easily picked, you are going to value them less. You will view dollars deposited in a bank whose deposits are not backed by the government in a similar light. This happened during the Great Depression when people kept their money in their mattresses and other places. While a mattress may not be a secure place to store money, people viewed their mattresses as more secure than the banks that were going bust left and right at that time. The same can be said about gold. You can buy gold and pay someone else to store it securely, someone with insurance. But I can keep it myself under my proverbial mattress if I choose. And the same can be said about my 401K retirement account. It's with a reputable brokerage (well, if you can use that word to describe Wall Street shysters) and my account is backed by insurance. I expect it to be there when I need it. But I can if I choose get everything on paper and put it with the gold to keep it company. But Bitcoins do not exist physically. There is nothing I can stuff under the mattress. And there lies the ultimate problem I think.
Well, the largest Bitcoin exchange is dead, 3/4 million Bitcoins have gone missing, and those who owned them are now out of luck. Do I trust them? What do you think?
It's really quite a simple choice: Life, Death, or Los Angeles.
The US dollar is backed by the US government. Bitcoin is backed by zip.
Mark my words.
I am very small, utmostly microscopic.
Fiat currency and backing are different things. All fiat currency is unbacked, but just because a currency is unbacked, doesn't make it fiat.
Backed currency relies on the physical properties of the universe to create scarcity (i.e. anything backed by a physical thing is inherently limited). Fiat currency relies on the authority of the state to create scarcity (i.e. only the state is allowed to print money). Cryptocurrencies like bitcoin rely on mathematical principles to create scarcity. Bitcoin is not backed; it's also not a fiat currency.
Just because you're paranoid doesn't mean there isn't an invisible demon about to eat your face
Guess what... bitcoin price is arguably still trending up.
All you have to do is look at the logarithmic graph.
And frankly, logarithmic is the only way to view it, considering the exponential price movement.
Here's the data: http://bitcoincharts.com/chart...
Bram Stolk http://stolk.org/tlctc/
"Do you still trust bitcoin" can be translated as "are you a potential mark for this pyramid scam I'm part of".
Dear Mark,
A simple "Fuck you!" would have sufficed.
...vanishes into thin air again.
No, I don't trust Bitcoin. Never really did.
People can still speculate in Magic The Gathering trading cards. And Beanie Babies and all other sorts of ways of getting rich.
Doesn't the fact that it survives mtgox's collapse without regulation and without any bail outs show that it is more stable than the dollar?
Any guest worker system is indistinguishable from indentured servitude.
There's a distinction between the currency and the bank or other place you store your currency in. I can trust the currency while not trusting my bank, usually that results in my pulling my money out and putting it somewhere I do trust. That's actually one of the reasons we have the FDIC today in the US: at one point banks proved so untrustworthy that literally 90% of the country was trying to pull their money out to stuff into their mattress. We've been close to that happening again not too long ago. It's no surprise that we're running into the same thing with Bitcoin exchanges. It'll only get solved when, whether by technical or regulatory/legal means, the Bitcoin exchanges have a sufficiently hard time getting out of having to pay account holders their account balance and are required to have sufficient reserves to give confidence in their ability to do so. Right now the only place I'd trust to store Bitcoins is my own computer. Fortunately, that's possible.
As far as the currency goes, right now no I wouldn't trust it to retain it's value. It's spiked too hard and too high. That spike combined with exchange problems says to me it's going to be too volatile to trust until it settles down again.
YES! At any time i trust more mathematical concept than a goverment agent of any kind.
Loaded what now?
Bitcoin? No thanks.
I try to avoid investing in pyramid schemes and lottery tickets.
Mit der Dummheit kämpfen Götter selbst vergebens
It assumes a positive that for most people doesn't exist.
I know what you mean, but there are several Bitcoin fanbois on /. as well....was it really a bad assumption?
Just look how bad I got trolled & downmodded when I dared ask if Bitcoin had peaked & questioned MT Gox's credentials
I started out as a +1 then my +1 modifier, and got modded all over...over 10 mods both directions +/- ending with a neutral
Here's a less trollface logged-in user, one of many on that thread, that tried to tell me how stupid I was for asking those questions: http://yro.slashdot.org/commen...
And now...wow...look at the top comments...everyone seems to have seen this "coming a mile away"
But really, /. is just so big...point being...it was reasonable for /. editors to assume that a sizable portion of /. users would have trusted Bitcoin.
Thank you Dave Raggett
If you don't like my theory then then consider a less benign but equivalent Short sale angle. If you are confident Bitcoin is going to lose value then you "borrow" all the bit coin entrusted to your exchange and sell it on another exchange for dollars. Then when the price falls you buy it back. Shorting are a common practice to leverage huge gains from little investment and are a good way to get in real trouble fast if the price goes up instead.
Some drink at the fountain of knowledge. Others just gargle.
Fixed the title for ya!
The fact that Bitcoin goes backwards with regards to monetary policy is a feature, not a bug, according to its proponents. It seems that most people who are Bitcoin advocates do not have a very good knowledge of financial history. There is this belief that back in the day when we had currency that was backed by, or composed of, precious metals that we never had any financial problems. They believe that all our financial woes are a new thing, and that by moving back to an older monetary policy things would be better.
This is just typical âoenever wasâ syndrome. You see it from various people for all kinds of things: they look back to a glorious past where everything was better, in other words a past that never was. You frequently see this in relation to crime, schools, and social things like that, this is just the financial version.
Then of course there are people who the lack of regulation is a bonus for because theyâ(TM)re criminals, con artists, and things like that. A currency with no government regulation, no tracking, and no way to reverse transactions is an absolute boon for those that wish to rip others off. So they quite like Bitcoin as it is.
People who actually like new monetary policy? Well weâ(TM)ve all avoided using Bitcoin because we recognized it for the problem it is. So donâ(TM)t expect to see any changes. The problems with it that you quite rightly see his major flaws, the proponents see is a good things.
It is simple, what is the zombie survival guide to you? There are other older books like it, I had one about what to do after nuclear war.
But to some such books are emergency guides on how to deal with disaster, to others they are a wet dream they wish would come true tomorrow.
Same with the collapse of the world banking system when GOLD.... BITCOINS will become THE currency of choice. They don't predict it will happen as much as they desperately wish it to become true. You are dealing with the fantasies of people who WANT to see the world BURN.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
So a currency that is supposed to untraceable and outside government control, is safeguarded by the same law it is claiming to be outside the control off.
Makes sense.
Bitcoin user: Police officer, I have hidden a fortune from the IRS and now someone abskonded with it, I have no proof of any of this of course because bitcoins are untraceable and there is no paper trail by design. Do something.
Police officer: Mwahhahahahahah! Wait, let me call the IRS, you just after all gave testimony to a police officer you have a fortune, they don't care if you no longer have it, you still have to pay taxes over when you had it. ahahhahahahhahahaaa! Donut time!
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
I didn't ever trust it either. The idea is nice enough but where lots of money is to be had, crooks gather. And I am not smart enough to play chicken with them. Banks have crooks too? Sure but they deal with billions, my bank account is of no interest to them whatsoever. Saved by poverty.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
But on the other hand, I didn't trust it before so recent events haven't decreased my trust in it.
Bitcoin has been gaining traction for a long time. Did you notice the run from $5 to $1200?
Do you understand the implications of that run?
Lets say you purchased a bit coin at $5 back in the day and you sold it a couple of months ago for $1200. Where did the exchange get the $1200 to pay you? What happens if lots of other bitcoin holders want dollars all of a sudden?
Bitcoins may work as a transactional intermediary. You immediately (or recently) convert traditional currency to bitcoins, purchase something with bitcoins and the seller immediately (or soon) converts bitcoins to traditional currency. However it can not work as an investment vehicle. The exchanges can only pay out the amount of traditional currency they have taken in from bitcoin purchases or fees they have charged in traditional currencies. That $5 to $1200 run should be setting off all sorts of warning bells. The bitcoin investment game is a great example of the Greater Fool Theory", from wiki:
"The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by the often irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price. Or one may rationally have the expectation that the item can be resold to a "greater fool" later."
That $5 to $1200 run is nothing to brag about, it encourages the speculative investment game that will destroy bitcoin's credibility.
how can we be sure that an exchange won't be hacked?
There is a simple way out of the mess ... do NOT keep your coins in the exchanges.
I have offline wallets - yes, chip based wallets that keep my virtual currencies from prying parties.
I'll hook them up online when I need to use them to load or unload the virtual currencies - mostly, to convert the virtual currencies into real world assets.
Muchas Gracias, Señor Edward Snowden !
How are you supposed to buy things from online stores with gold? File off some shavings into an envelope and mail order stuff from online? Are we really going to all carry gold and silver coins in our pockets when we go shopping? Gold isn't really useful as a currency if it is just sitting in a vault.
You are mistaken, gold in a vault was effectively an everyday currency until about 40 years ago. The problem of carrying around gold and silver coins was solved a long time ago.
Paper currency used to represent a specific amount of gold or silver sitting in a government vault. Various U.S. bills used to say "silver certificate" on them. They could literally be exchanged for silver dollar coins if you wanted to. As recently as 1964 $1, $5 and $10 bills were silver certificates.
When people refer to the "gold standard" they are referring to a standard by which a currency equates to a specific amount of gold sitting in a government vault. In the U.S. this was done as recently as 1971.
What is the advantage of doing this over bitcoin? Sure the price of bitcoin is highly volatile. The price of gold is highly volatile as well. If you tie the dollar to gold, the dollar becomes volatile as well.
You are mistaken. Gold itself is not very volatile. It is the exchange rate between gold and a particular currency that may be highly volatile. When a particular free floating currency suffers a loss of confidence it takes more of that currency to purchase gold. If confidence can be restored to the currency then it will take less of that currency to purchase gold. Note that free floating currencies can behave independently. Free floating currency A can experience a loss of confidence and the price of gold in currency A will go up. Simultaneously free floating currency B can be experiencing no loss in confidence and little to no change in the price of gold when purchased with currency B.
The point of a gold standard is that a currency's purchasing power is more stable. The amount of money is limited by the amount of gold a government possesses, the government can't just print more money and devalue the currency. Plus it encourages a government to keep trade somewhat balanced, unbalanced trade equates to exchanging gold between countries and deflating one currency and inflating the other.
BitCoin didn't break. MtGox failed. It was obvious to anyone that did any research in the last year they they were going to fail. For around a year they took months to make bank transfers to their customers. How much more of a clue do people seriously want?
Do I still trust BitCoin? Yes! A hell of a lot more than the conventional banking system actually. What I don't trust is scumball companies who pay their customers 6 months late.
A vulnerability in a router or e-mail provider is not the end of the world, but a money system has to be something that is extremely trusted and reliable.
Did I ever trust bitcoin ? No I didn't. Nothing has changed. Scary how easy people can trust a new system they don't have a clue about.
I don't know about trust. Bitcoin is a speculative market, and it will probably always be like that, because the characteristics of bitcoin make it a commodity and not money. I can't see it ever being used directly as money (i.e., without going through a "real" currency such as dollars).
Why do you assume we ever did, you insensitive clod!?!
Just like I don't trust the USD. That doesn't stop me from using it or investing with/in it.
Some common sense can go a long way, I didn't lose my ass when the markets tumbled in 07-08, and I sure as hell didn't put all my eggs in the bitcoin basket - or mtgox for that matter. My money doesn't stay in an exchange very long, anywhere.
Do You Still Trust Bitcoin?
I never trusted bitcoin in the first place. WAY too much risk and provides me precisely zero advantages for any financial transaction I'm likely to engage in.
Bitcoin has been gaining traction for a long time. Did you notice the run from $5 to $1200?
Beenie babies had a similar run a few years back. Eventually the bubble collapsed. No different here in all likelihood. And bitcoin hasn't been doing anything "for a long time". It's been around less than 5 years and there are VERY few things that go up 240X in 5 years that are based on sound economic fundamentals. It hasn't been around long enough for that to be possible. Just because something gains a lot in value in a (very) short amount of time, does not mean that it will sustain that valuation or that it is anything more than a fad. Come back to me in 20 years and we can talk about it "gaining traction for a long time".
Of course. Do you stop trusting the dollar because someone was able to steal 50 Million dollars from a bank in Zimbabwe (Yes they use US dollars as currency).
Just saying :-)
Uh yeah, and speaking of history, perhaps we could bring back the Glass-Steagall Act that should have been left intact.
A form of that regulation has been put back in place though I agree Glass-Steagall never should have been messed with.
I find it comical that you think current monetary policy actually works.
It DOES work insofar as it is able. The problem is that monetary policy, while important, should not be relied upon exclusively to manage the economy - we need sensible fiscal policy too. Congress refuses do do much of anything (sane) regarding fiscal policy so the only tool we have in the bag right now is monetary policy which is significantly dictated by the Fed. We have the monetary policy we do because until congress actually does something, it is the best (and really only) option available. All the people who dislike the Fed really should be upset that congress has essentially abdicated their control of the economic policy of the US by their refusal to compromise and pass sane financial legislation.
Most of the people with large bitcoin fortunes are early adopters, and frankly why shouldn't early adopters be rewarded for taking a risk on something that ultimately may not pan out.
What risk? They "mined" some bitcoins by using some spare processor cycles on their PC and then convinced a bunch of folks that it was valuable currency. They exposed themselves to essentially zero financial risk aside from a bit of opportunity cost. At least to get a large pile of dollars you typically have to actually take some real risks unless you win the lottery.
Thu 2/27/14 8:56 am. A secret internet currency promoted by criminals? ... What's not to trust!
You don't have to transfer actual gold, you can transfer a note backed by a bank or government that guarantees a fixed amount of gold. Such a note can be exchanged physically, or electronically if it's held by a reputable 3rd party (such as a bank or a government) under an account in one's name.
True but that causes problems with exchange rates over time and has a variety of significant and very real logistical problems.
OH WAIT I JUST DESCRIBED UNITED STATES DOLLARS ON THE GOLD STANDARD
Yes you did. What you did not describe is why it ultimately failed. The gold standard failed for some very good reasons. It limits economic growth because the supply of capital cannot grow (or shrink) with the economy. It eliminates monetary policy as a tool to mitigate recessions. It makes re-balancing exchange rates and currency devaluation problematic. There are all kinds of short term volatility problems. There are quite a few reasons why not a single country in the world uses the gold standard anymore.
Wouldn't transferring some bitcoins from your phone be more convenient than bringing a selection of gold and silver coins whenever you plan to buy something?
Kind of a strawman argument. The real question is whether transferring bitcoins is more convenient than transferring dollars from my phone. Frankly I can't really think of any meaningful advantages to bitcoin compared with dollars especially once you account for all the costs and the risks.
The mathematics of bitcoin are sound enough.
And you are a mathematician with an expertise in cryptography? You've looked at the code yourself to verify? You've examined peer reviewed literature which tests the encryption systems? You are somehow certain that the cryptography is immune from reasonably foreseeable technology and the math is bulletproof?
The issue I have with it is the possibility of hacks.
That is certainly the more immediate risk but hardly the only concern one ought to have with bitcoin.
This issue--my inability to know that my coins are secure--has made me reluctant to buy them in the past.
The reason I haven't bought any bitcoins is because I have no use for them. Bitcoin allows me to do nothing I can't already do, doesn't save me any money, nobody I know personally uses them, no companies I do business with accept them and I have little interest in speculating on something so unpredictably volatile. (I have the stock market for that) I also don't have any ideological issues with the dollar significant enough to make me want to use something else.
In the computers that manage the wallets, not so much.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Barter is the way of the future. How many goats for that Lexus?
still implies i ever did trust bitcoin
governments aren't great but i know anyone will take a fiver if you hand it to them hand me a bitcoin token i'll laugh at you and probably keep it anyway
Do you still trust bitcoin? Do you still beat your wife? Bitcoin is just like 7 Up. Never had it, never will. I prefer the Real Thing.
Do you even lift?
These aren't the 'roids you're looking for.
How many banks have failed in the US in the last 30 years? Some of them very big banks. Yes, it's true that the government does cover some of those losses, but not all of them. We've had the Savings and Loan collapse, the hedge fund collapse, the 2008 meltdown and there will be more to come. I personally lost thousands of dollars in the 2008 collapse and have really never recovered from it and no one bailed me out. So do I trust bitcoin? As much as I trust any currency, which is not much. It's all a risk, pick your poison.
Comment removed based on user account deletion
The big difference is FDIC. If my bank goes pfft, my money is insured. If Mt Gox goes pfft, my bitcoins go pfft. I don't consider banks to be inherently trustworthy either, but the government has a huge interest in keeping people happy, since a total economic collapse will screw them too. Nobody has an incentive to keep Mt Gox's victims happy, including Mt. Gox.
Slow down, cowboy! It has been 4 hours since you last posted. You must wait another few hours.
And to less of a point then most might think....
http://www.zerohedge.com/artic...
google "32 trillion offshore needs IRS attention"
see subject line
This is like saying Nike is bankrupt and closing. Do we still have faith that we should be using shoes?
The US govt is $16 trillion in the hole on the books, with future obligations
much much higher then that.
The US has a massive trade deficit because the plutocrats shipped offshore what
they could, then bribed the congress critters to create 100+ different types of
immigrant visa, and leave the border wide open in spots.
So having faith in the US government is much like having faith in a sock puppet.
google "32 trillion offshore needs IRS attention"
The problem here is that bilkcoin has no elasticity mechanism, because of its die-hard libertarian economic philosophy.
Currencies like the dollar use elasticity (money creation) to deal with such crises.
I wouldn't consider an exchange stealing money from idiots a crisis that would merit devaluing the currency for everyone (while letting the exchange keep their ill-gained profits). And guess what - no one else with a brain would either. That's why everyone fucking hated the bank bail outs.
If you own Bitcoin and put your trust a third party to hold them, then you are missing point. Store your Bitcoins in an open source wallet like bitcoinarmory.com and you can be certain that offline cold storage and an m-of-n paper backup will keep your Bitcoin secure from theft, a house fire, or even forgetting your own pass phrase.
Even with the recent shenanigans, I still trust BitCoin more than I PayPal (well, a bit more anyways).
Do you still trust your credit card?
Star Trek transporters are just 3d printers.
https://en.m.wikipedia.org/wik... is implemented
Casteism