That's how most futures contracts are settled. Not many speculators expect a rail tanker of crude to show up on their driveway at contract maturity.
Yes, but nonetheless, in a real futures deal, a real tanker of crude does change hands. At some point you do own a real barrel of oil, which someone sells on your behalf.
From what I can tell, in the BC deal being discussed, you are *merely* betting on the market price; no real commodity is involved.
(Incidentally, I did once read a supposedly true story in which a trader screwed up, and a lorryload of some commodity or other arrived at their office. My Google-fu isn't up to finding it)
The price of BTC does not tend towards the cost of mining, each bitcoin [block] is not mathematically more difficult to mine than the last, and I'm currently mining with a single 7970 - and it costs me nowhere near twelve bucks to "mine a bitcoin".
I was wrong about the "mathematically more difficult than the last"; sorry. But it does get harder on average over time.
Per Wikipedia: "at least during the expansion of the Bitcoin base, its value, assuming competing suppliers, is equal to its marginal cost of production." (I haven't found the source, but I'm assuming if this was a contentious claim, it would be marked [citation needed], like other parts of the article).
If you claim you can get a bitcoin through mining for $5, then either:
- there is some kind of market failure going on; it will eventually correct itself
- you've failed to take some cost into account
Think about it: why would anyone offer to pay $12 for a BC, if they can be mined for $5?
What's a 'real futures contract'? Its just a contract between two private parties. It could be scribbled on a napkin an still be legal. Its an agreement to deliver some commodity at a future date for some fixed price*. It doesn't mean you have that commodity in your possession at the moment.
A 'real futures contract' is as you describe.
However, I think what's offered in TFA doesn't involve actual commodities. It is a contract along the lines of "You pay me the market value of 1 barrel of crude today, and I promise that in 6 months' time, I'll pay you the market value of 1 barrel of crude on that day."
As the GP says, it's hard to tell from reading the site.
If you're an airline, you buy fuel futures. You don't make a profit if the price of oil goes up, you get to buy the fuel for exactly the same price as before, so you make exactly the amount you planned to make.
Buying futures removes the risk of loss or reward of profit.
This is correct. But the Bitcoin deal discussed in TFA isn't a real commodity future. You don't buy a barrel of oil. You buy a contract which says "On [date] I promise to give you the market value of a barrel of crude on that day". They might finance this by themselves buying an actual future barrel of oil. Or they might finance it some other way; it's really none of your business. But, better make sure they're able to honour their debt when the day comes.
Some have said that this could be construed as illegal gambling. I don't know.
An airline *could* hedge their risks by buying a "virtual" future like this. Assuming airline fuel prices are correlated to crude prices - if crude goes up, you profit on the virtual future, if crude goes down you lose money. You can use the profits to pay for the dearer airline fuel; or you can offset the losses with the cheaper airline fuel.
Interestingly, if these virtual futures were available in small enough denominations, private motorists could use this approach to hedge themselves against fluctuating fuel prices too.
Of course, none of this has anything to do with Bitcoin.
When I can take bitcoins to the grocery store, the gas station, and buy my next iPhone with them, THEN they'll be money. Until then, I'll stick to dirty green paper and square plastic cards.
You can't take a Euro to an American grocery store, but it's still money. The ecosystem of companies accepting Bitcoin is small, but it does exist.
You're welcome to continue spending dollars rather than Euros or Bitcoin, but there's no need to deny that what's used in those other economies is money.
The bitcoins i've purchased at the beginning of the year have appreciated so much against the dollar, I can actually exchange them back into dollars and get an effective discount on those taxes now due.
That doesn't in itself legitimise the scheme. If the naysayers are right, and this is a bubble, it just means you've profited from the bubble before it bursts. Whether you profit long-term depends on whether you cash out before it bursts.
Similarly, I'm sure there are people who bought a house on a dodgy mortgage, sold it at huge profit, and got out of the property market, before that burst.
I don't know whether Bitcoin is a bubble that's set to burst. I do wonder why those who are confident that it is, don't short-sell.
Hmm. This reminds me, for some reason I was reading the blog of someone with alleged paranormal powers, who had decided not to engage with the James Randi foundation million dollar challenge. Their justification was that you didn't get $1M cash - you got $1M in bonds. It seemed like a spurious argument to me. I'd happily accept $1M in bonds.
But I accept your reasoning to an extent. There's a tipping point where accepting bitcoins (with all the upfront investment in working out the process) becomes worth it for the additional business it brings in, if indeed it does so. Perhaps the first to benefit would be firms doing a lot of exports to consumers abroad.
Don't worry, the whole thing could collapse and Bitcoin holders will lose exactly nothing, unless they are foolish enough to accept Bitcoins as payment for physical-world goods and services.
Or unless they bought their bitcoins with domestic currency.
But lots of people here seem to be absolutely convinced that Bitcoins will ultimately turn out to be worthless. Why not short-sell them now, if you're so sure?
Recently BitInstant announced a BitCoin Mastercard. It might be vapourware.
But hypothetically, what if you paid your tax using a credit card, then you settled your credit card in Bitcoin? The credit card company take care of the back end mess.
That's built into the design of this pyramid scheme so the founders and early adopters can benefit far more than any marks that come into the scam at a later date.
It's true that early adopters benefit hugely, but I don't think that makes it a pyramid scheme or a scam. It was quite openly designed that way, in order to attract early adopters. You or I could have started mining back then; it wasn't a closed shop. If you'd mined (or bought) $100 of bitcoins when I first heard about it, hoarded them and sold now, you'd be $1100 up. But you couldn't have predicted that at time; you'd have been taking a risk. The inventors of BC want it to gain traction, so they wanted that early adoption risk to appear attractive.
If you spend $12 today on a bitcoin, then use it to buy goods worth $12, then in what way are you a mark? If you sell something worth $12 today using a bitcoin, then exchange that bitcoin for $12, in what way are you a mark? OK, in both those cases, there are fees to pay in the exchange. If you sell something for a bitcoin today, then use it to buy goods with a similar value, in what way are you a mark?
Perhaps he's perfectly happy with the status quo. If he doesn't perceive the things BC "solves" as being problems, then BC has nothing to offer him.
BC might cause the status quo to change, without itself becoming the ultimate solution.
By analogy: Windows 3.1 had a load of problems. Most people just assumed that's how PCs had to be, and tolerated it. Some people made Linux. Some people only realised that computers didn't have to be like Windows 3.1 when they witnessed Linux. Linux didn't oust Windows from the desktops of the world. But the fact that Linux did things like real multitasking, changing network settings without a reboot, solid window dragging, etc. pretty much forced MS (and others) to get those things into their OS.
Some people might believe that mainstream banks don't offer a satisfactory way to transfer money overseas. Those people might adopt Bitcoin as an alternative. If enough of them do this, it'll rouse the banks into improving their offerings. Competition is healthy.
As someone that values my time and certainly doesn't want to gamble on the value of some digital currency I would tell you to go take a hike on every one of your examples.
In the first example, I give you $120 worth of Bitcoins for nothing. There's no gamble there (except, I suppose, you're gambling that the market value drops to $5 in that time).
Are you really not going to do, say, the half an hour's effort it would take to claim that $120? Plus you get the intellectual value of finding out how it works.
I'm guessing half an hour's combined effort for your very first BC transfer, and conversion to dollars. Subsequent transactions, much much faster since you'd already be set up.
Is it even possible to make money mining them? Why on earth would people do it? It can't really be feasible unless they already had a crunch box or something.
Currently people are paying a bit over $12 for a Bitcoin. I suspect it would cost you a little less than $12 on average in electricity and other costs, to mine a single BC -- if you did it particularly efficiently. The difference is profit.
Or you could hoard what you've mined, gambling on continued deflation, and sell it for a lot more than $12/BC in future. The risk, of course, being that it collapses and you've spent that money for nothing.
I don't really see anything compelling about your example. If you want me to do some work for you and we agree on the price, I would prefer not to receive payments in bitcoin - it's a hassle for me. Certainly I would want to be compensated for that hassle - if I bother at all - so using bitcoin for that transaction would be a disadvantage to you.
Let's say I have a large reserve of Bitcoins. Perhaps I've been mining them, or perhaps I've been selling alpaca socks online. Whatever.
If I want to spend those, I either convert them to dollars, or spend them directly with vendors who accept them. If I'm buying something from you, and you ultimately want dollars, one of us has to accept the hassle/cost, and will want compensating for it. So it falls to which of us considers the conversion cost highest.
You give me a price in dollars, and a price in bitcoins. In your BC price, you factor in conversion cost, hassle, and if you like, costs for reassuring yourself that there's nothing "fishy going on".
I weigh up the cost of converting to BC and paying you in dollars, or giving you the BC direct (whereupon you convert), and take up whichever deal I prefer. My costs might well be different from your costs. I might be in a different country; my VISA card might have silly charges; all kinds of possibilities.
What would be irrational of you, would be to refuse to accept BC at any price.
I've not jumped into BC myself -- I have not yet encountered a situation where I would want to. But there isn't about the principle that stops me.
By analogy, I frequently pay for stuff using Paypal credit, purely because I have that credit from selling a few things on eBay. It's a small convenience for me. For some people, it's a large convenience, and with those customers companies that accept payment via Paypal have a commercial advantage.
Yeah but gold can actually be used to make stuff. It has value by itself.
Yes, but that only accounts for some of its market value. Gold would be cheaper if it was only used for jewellery, electronics, etc. - it's use a store of wealth pushes the price up - since people hoard it.
I know next to nothing about bitcoins, but what happens if someone decides to do a "scientific experiment" on BitCoins that has access to one of the worlds most powerful supercomputers? Say if in the name of science, social experiments, or unregulated currency and the effects of mass input of them (or simply to make a few bitcoin bucks themselves) and dedicates the full power of one, or more, of those to the crunching of numbers for a little while. What happens then?
Market effects mean that the value of a bitcoin tends towards the cost of mining one. Current market price is a bit over $12. The people doing serious mining are likely to be spending just a little less than that (on hardware, electricity, admin, etc.) -- just enough less that the enterprise is worth their while.
There is enough money in this now, that the serious miners are doing it very, very efficiently -- they are in an efficiency arms race with their competitors. Your supercomputer isn't likely to be able to do it more efficiently.
If you did some mining today on your home PC, you could expect it to cost you more than $12/BC on average. That cost fluctuates, as each Bitcoin is mathematically more difficult to mine than the last, Moore's Law makes computing cheaper, global energy prices fluctuate, etc.
One valid concern, is theft of computing power. Say a university faculty member with access to that supercomputer uses it to mine Bitcoins that he keeps for himself. For each BC he produces, he's stealing $12 (and rising) from the university.
Or, someone programs a botnet to mine BCs and send them home. They would be increasing millions of people's electricity bills, and receiving a similar value of BC in return - so effectively, distributed theft.
Just to expand on the AC reply to you, $12.38 is the current weighted average price on https://mtgox.com/.
Mt.Gox is an exchange - it simply connects compatible offers to one another. i,e, "I want to buy 100 BC at any price below $12.40/BC" is compatible with "I will sell up to 200 BC at any price above $12.35". Mt.Gox charges commission for each trade of course.
So if you had 1 BC, it's realistic that you could trade if for ~$12 right now.
If I offered you 10 bitcoins right now, for nothing, would you take them?
I'm going to assume a "yes", since for the small effort of learning the tools and paying a transaction fee, you could convert them into about $120.
If you quoted me $100 for some web consultancy, and I offered you 20 bitcoins instead, would you accept? I would hope you'd say yes, since you could convert them to $240, which gives you a lot of extra money to compensate for whatever tax complications it makes for you.
Going the other way, if I quoted you $200 for a lawn mowing contract, but said I'd accept 10 bitcoins instead - would you pay me in dollars or bitcoins? The rational thing to do would be to buy some bitcoins and use them to pay me, since it would cost you ~$80 less.
All of the above assumes that we're both doing everything above-board.
Now, the figures above are unlikely because the margins are so large, but think about how far those margins could shrink, before you become unprepared to use Bitcoins and go for the better deal for you.
Evidently some people value bitcoins, because you they are actively offering to buy BC for cash. As long as those people exist, you'd be dumb not to accept BC if they're worth more than the cash alternative. You may not trust them to hold their value: so by all means, cash out quickly.
Look.. if I buy a gallon of milk that I will drink for the next week, that is not gambling. If 2 days from now the store has a sale, then I can buy more milk for the sale price.. but the price of the gallon I already bought does not change.
I think this discussion is all about defining gambling. You could certainly argue that your milk purchase is a gamble. If you buy a gallon of milk today, intending to drink it tomorrow, then you win the gamble if the price goes up tomorrow, and you lose the gamble if the price goes down.
However, by that definition, everything financial is a gamble. Putting money in a savings account is a gamble. Having a pension is a gamble. Buying shares is a gamble. Buying stocks is a gamble.
Attaching this loaded word "gamble" to these transactions doesn't really help us decide whether they're harmful or beneficial to society.
The difference is that Apple users are not paying for this app. It comes with the new iPhone.
With Apple, you're paying for a hardware/software package. It's nuts to talk about it as if you're paying for the hardware and the software is free. You've paid for the software, and you have an expectation that it will be of a certain standard.
Not everyone makes heavy use of maps, so this might not be a big deal for them. For me (on Android) maps is a huge proportion of what I use my phone for.
Yes, it does seem that way. On American web sites I see recipes that include ingredients like "One jar pasta sauce" or "one can mushroom soup". So even many Americans who choose to cook, are directed to cook using processed ingredients.
Not that I'm opposed to labour-saving options. But I can't see how using a jar of pasta sauce (containing added salt, sugar, preservatives, etc.) is better than chopping and softening an onion, and chucking in a can of tomatoes (normally no added ingredients)
By the way, if I was really trying to eat cheaply, I'd live on homemade dahl, bombay potato, home-made chapatis. It's nice enough to eat for fun - I tend to make two batches at once, each with a different pulse. Starting with dried pulses is cheapest.
I costed it once; I think it came to 35p for a large portion consisting of two kinds of dahl, bombay potatoes plus a couple of chapatis. That's 50 US cents, but of course you can't just do that conversion because food prices vary geographically.
Dahl: Onion, spices, pulses, tinned tomato (optional) Bombay potato: Onion, potato, spices, tinned tomato Chaptis: flour and water
I don't know what ingredients are cheapest where you live - but something healthy will be.
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Bitinstant claims to be, well, instant.
I guess if Bitcoin grows, competition will lead to faster/cheaper exchange services.
That's how most futures contracts are settled. Not many speculators expect a rail tanker of crude to show up on their driveway at contract maturity.
Yes, but nonetheless, in a real futures deal, a real tanker of crude does change hands. At some point you do own a real barrel of oil, which someone sells on your behalf.
From what I can tell, in the BC deal being discussed, you are *merely* betting on the market price; no real commodity is involved.
(Incidentally, I did once read a supposedly true story in which a trader screwed up, and a lorryload of some commodity or other arrived at their office. My Google-fu isn't up to finding it)
Ugh.
The price of BTC does not tend towards the cost of mining, each bitcoin [block] is not mathematically more difficult to mine than the last, and I'm currently mining with a single 7970 - and it costs me nowhere near twelve bucks to "mine a bitcoin".
I was wrong about the "mathematically more difficult than the last"; sorry. But it does get harder on average over time.
Per Wikipedia: "at least during the expansion of the Bitcoin base, its value, assuming competing suppliers, is equal to its marginal cost of production."
(I haven't found the source, but I'm assuming if this was a contentious claim, it would be marked [citation needed], like other parts of the article).
If you claim you can get a bitcoin through mining for $5, then either:
- there is some kind of market failure going on; it will eventually correct itself
- you've failed to take some cost into account
Think about it: why would anyone offer to pay $12 for a BC, if they can be mined for $5?
What's a 'real futures contract'? Its just a contract between two private parties. It could be scribbled on a napkin an still be legal. Its an agreement to deliver some commodity at a future date for some fixed price*. It doesn't mean you have that commodity in your possession at the moment.
A 'real futures contract' is as you describe.
However, I think what's offered in TFA doesn't involve actual commodities. It is a contract along the lines of "You pay me the market value of 1 barrel of crude today, and I promise that in 6 months' time, I'll pay you the market value of 1 barrel of crude on that day."
As the GP says, it's hard to tell from reading the site.
Huh?
If you're an airline, you buy fuel futures. You don't make a profit if the price of oil goes up, you get to buy the fuel for exactly the same price as before, so you make exactly the amount you planned to make.
Buying futures removes the risk of loss or reward of profit.
This is correct. But the Bitcoin deal discussed in TFA isn't a real commodity future. You don't buy a barrel of oil. You buy a contract which says "On [date] I promise to give you the market value of a barrel of crude on that day". They might finance this by themselves buying an actual future barrel of oil. Or they might finance it some other way; it's really none of your business. But, better make sure they're able to honour their debt when the day comes.
Some have said that this could be construed as illegal gambling. I don't know.
An airline *could* hedge their risks by buying a "virtual" future like this. Assuming airline fuel prices are correlated to crude prices - if crude goes up, you profit on the virtual future, if crude goes down you lose money. You can use the profits to pay for the dearer airline fuel; or you can offset the losses with the cheaper airline fuel.
Interestingly, if these virtual futures were available in small enough denominations, private motorists could use this approach to hedge themselves against fluctuating fuel prices too.
Of course, none of this has anything to do with Bitcoin.
When I can take bitcoins to the grocery store, the gas station, and buy my next iPhone with them, THEN they'll be money. Until then, I'll stick to dirty green paper and square plastic cards.
You can't take a Euro to an American grocery store, but it's still money. The ecosystem of companies accepting Bitcoin is small, but it does exist.
You're welcome to continue spending dollars rather than Euros or Bitcoin, but there's no need to deny that what's used in those other economies is money.
The bitcoins i've purchased at the beginning of the year have appreciated so much against the dollar, I can actually exchange them back into dollars and get an effective discount on those taxes now due.
That doesn't in itself legitimise the scheme. If the naysayers are right, and this is a bubble, it just means you've profited from the bubble before it bursts. Whether you profit long-term depends on whether you cash out before it bursts.
Similarly, I'm sure there are people who bought a house on a dodgy mortgage, sold it at huge profit, and got out of the property market, before that burst.
I don't know whether Bitcoin is a bubble that's set to burst. I do wonder why those who are confident that it is, don't short-sell.
Hmm. This reminds me, for some reason I was reading the blog of someone with alleged paranormal powers, who had decided not to engage with the James Randi foundation million dollar challenge. Their justification was that you didn't get $1M cash - you got $1M in bonds. It seemed like a spurious argument to me. I'd happily accept $1M in bonds.
But I accept your reasoning to an extent. There's a tipping point where accepting bitcoins (with all the upfront investment in working out the process) becomes worth it for the additional business it brings in, if indeed it does so. Perhaps the first to benefit would be firms doing a lot of exports to consumers abroad.
Don't worry, the whole thing could collapse and Bitcoin holders will lose exactly nothing, unless they are foolish enough to accept Bitcoins as payment for physical-world goods and services.
Or unless they bought their bitcoins with domestic currency.
But lots of people here seem to be absolutely convinced that Bitcoins will ultimately turn out to be worthless. Why not short-sell them now, if you're so sure?
Recently BitInstant announced a BitCoin Mastercard. It might be vapourware.
But hypothetically, what if you paid your tax using a credit card, then you settled your credit card in Bitcoin? The credit card company take care of the back end mess.
That's built into the design of this pyramid scheme so the founders and early adopters can benefit far more than any marks that come into the scam at a later date.
It's true that early adopters benefit hugely, but I don't think that makes it a pyramid scheme or a scam. It was quite openly designed that way, in order to attract early adopters. You or I could have started mining back then; it wasn't a closed shop. If you'd mined (or bought) $100 of bitcoins when I first heard about it, hoarded them and sold now, you'd be $1100 up. But you couldn't have predicted that at time; you'd have been taking a risk. The inventors of BC want it to gain traction, so they wanted that early adoption risk to appear attractive.
If you spend $12 today on a bitcoin, then use it to buy goods worth $12, then in what way are you a mark?
If you sell something worth $12 today using a bitcoin, then exchange that bitcoin for $12, in what way are you a mark?
OK, in both those cases, there are fees to pay in the exchange.
If you sell something for a bitcoin today, then use it to buy goods with a similar value, in what way are you a mark?
I'd +1 if I could because this is interesting.
But why isn't anyone offering this in conventional currencies? Is it because it would be classed as illegal gambling?
And if so, isn't it just as illegal in Bitcoin?
Your (in)action perpetuate the status quo.
Perhaps he's perfectly happy with the status quo. If he doesn't perceive the things BC "solves" as being problems, then BC has nothing to offer him.
BC might cause the status quo to change, without itself becoming the ultimate solution.
By analogy: Windows 3.1 had a load of problems. Most people just assumed that's how PCs had to be, and tolerated it. Some people made Linux. Some people only realised that computers didn't have to be like Windows 3.1 when they witnessed Linux. Linux didn't oust Windows from the desktops of the world. But the fact that Linux did things like real multitasking, changing network settings without a reboot, solid window dragging, etc. pretty much forced MS (and others) to get those things into their OS.
Some people might believe that mainstream banks don't offer a satisfactory way to transfer money overseas. Those people might adopt Bitcoin as an alternative. If enough of them do this, it'll rouse the banks into improving their offerings. Competition is healthy.
As someone that values my time and certainly doesn't want to gamble on the value of some digital currency I would tell you to go take a hike on every one of your examples.
In the first example, I give you $120 worth of Bitcoins for nothing. There's no gamble there (except, I suppose, you're gambling that the market value drops to $5 in that time).
Are you really not going to do, say, the half an hour's effort it would take to claim that $120? Plus you get the intellectual value of finding out how it works.
I'm guessing half an hour's combined effort for your very first BC transfer, and conversion to dollars. Subsequent transactions, much much faster since you'd already be set up.
Is it even possible to make money mining them? Why on earth would people do it? It can't really be feasible unless they already had a crunch box or something.
Currently people are paying a bit over $12 for a Bitcoin. I suspect it would cost you a little less than $12 on average in electricity and other costs, to mine a single BC -- if you did it particularly efficiently. The difference is profit.
Or you could hoard what you've mined, gambling on continued deflation, and sell it for a lot more than $12/BC in future. The risk, of course, being that it collapses and you've spent that money for nothing.
I don't really see anything compelling about your example. If you want me to do some work for you and we agree on the price, I would prefer not to receive payments in bitcoin - it's a hassle for me. Certainly I would want to be compensated for that hassle - if I bother at all - so using bitcoin for that transaction would be a disadvantage to you.
Let's say I have a large reserve of Bitcoins. Perhaps I've been mining them, or perhaps I've been selling alpaca socks online. Whatever.
If I want to spend those, I either convert them to dollars, or spend them directly with vendors who accept them. If I'm buying something from you, and you ultimately want dollars, one of us has to accept the hassle/cost, and will want compensating for it. So it falls to which of us considers the conversion cost highest.
You give me a price in dollars, and a price in bitcoins. In your BC price, you factor in conversion cost, hassle, and if you like, costs for reassuring yourself that there's nothing "fishy going on".
I weigh up the cost of converting to BC and paying you in dollars, or giving you the BC direct (whereupon you convert), and take up whichever deal I prefer. My costs might well be different from your costs. I might be in a different country; my VISA card might have silly charges; all kinds of possibilities.
What would be irrational of you, would be to refuse to accept BC at any price.
I've not jumped into BC myself -- I have not yet encountered a situation where I would want to. But there isn't about the principle that stops me.
By analogy, I frequently pay for stuff using Paypal credit, purely because I have that credit from selling a few things on eBay. It's a small convenience for me. For some people, it's a large convenience, and with those customers companies that accept payment via Paypal have a commercial advantage.
Yeah but gold can actually be used to make stuff. It has value by itself.
Yes, but that only accounts for some of its market value. Gold would be cheaper if it was only used for jewellery, electronics, etc. - it's use a store of wealth pushes the price up - since people hoard it.
I know next to nothing about bitcoins, but what happens if someone decides to do a "scientific experiment" on BitCoins that has access to one of the worlds most powerful supercomputers? Say if in the name of science, social experiments, or unregulated currency and the effects of mass input of them (or simply to make a few bitcoin bucks themselves) and dedicates the full power of one, or more, of those to the crunching of numbers for a little while. What happens then?
Market effects mean that the value of a bitcoin tends towards the cost of mining one. Current market price is a bit over $12. The people doing serious mining are likely to be spending just a little less than that (on hardware, electricity, admin, etc.) -- just enough less that the enterprise is worth their while.
There is enough money in this now, that the serious miners are doing it very, very efficiently -- they are in an efficiency arms race with their competitors. Your supercomputer isn't likely to be able to do it more efficiently.
If you did some mining today on your home PC, you could expect it to cost you more than $12/BC on average. That cost fluctuates, as each Bitcoin is mathematically more difficult to mine than the last, Moore's Law makes computing cheaper, global energy prices fluctuate, etc.
One valid concern, is theft of computing power. Say a university faculty member with access to that supercomputer uses it to mine Bitcoins that he keeps for himself. For each BC he produces, he's stealing $12 (and rising) from the university.
Or, someone programs a botnet to mine BCs and send them home. They would be increasing millions of people's electricity bills, and receiving a similar value of BC in return - so effectively, distributed theft.
Just to expand on the AC reply to you, $12.38 is the current weighted average price on https://mtgox.com/.
Mt.Gox is an exchange - it simply connects compatible offers to one another. i,e, "I want to buy 100 BC at any price below $12.40/BC" is compatible with "I will sell up to 200 BC at any price above $12.35". Mt.Gox charges commission for each trade of course.
So if you had 1 BC, it's realistic that you could trade if for ~$12 right now.
I think an argument can be built this way:
If I offered you 10 bitcoins right now, for nothing, would you take them?
I'm going to assume a "yes", since for the small effort of learning the tools and paying a transaction fee, you could convert them into about $120.
If you quoted me $100 for some web consultancy, and I offered you 20 bitcoins instead, would you accept? I would hope you'd say yes, since you could convert them to $240, which gives you a lot of extra money to compensate for whatever tax complications it makes for you.
Going the other way, if I quoted you $200 for a lawn mowing contract, but said I'd accept 10 bitcoins instead - would you pay me in dollars or bitcoins? The rational thing to do would be to buy some bitcoins and use them to pay me, since it would cost you ~$80 less.
All of the above assumes that we're both doing everything above-board.
Now, the figures above are unlikely because the margins are so large, but think about how far those margins could shrink, before you become unprepared to use Bitcoins and go for the better deal for you.
Evidently some people value bitcoins, because you they are actively offering to buy BC for cash. As long as those people exist, you'd be dumb not to accept BC if they're worth more than the cash alternative. You may not trust them to hold their value: so by all means, cash out quickly.
So can you buy food and clothes with Bitcoins or not?
You can buy dollars with Bitcoins, and you can buy food and clothes with dollars.
You may well be able to buy food and clothes directly with Bitcoins somewhere, but the preceding sentence makes that academic.
Look.. if I buy a gallon of milk that I will drink for the next week, that is not gambling. If 2 days from now the store has a sale, then I can buy more milk for the sale price.. but the price of the gallon I already bought does not change.
I think this discussion is all about defining gambling. You could certainly argue that your milk purchase is a gamble. If you buy a gallon of milk today, intending to drink it tomorrow, then you win the gamble if the price goes up tomorrow, and you lose the gamble if the price goes down.
However, by that definition, everything financial is a gamble. Putting money in a savings account is a gamble. Having a pension is a gamble. Buying shares is a gamble. Buying stocks is a gamble.
Attaching this loaded word "gamble" to these transactions doesn't really help us decide whether they're harmful or beneficial to society.
The difference is that Apple users are not paying for this app. It comes with the new iPhone.
With Apple, you're paying for a hardware/software package. It's nuts to talk about it as if you're paying for the hardware and the software is free. You've paid for the software, and you have an expectation that it will be of a certain standard.
Not everyone makes heavy use of maps, so this might not be a big deal for them. For me (on Android) maps is a huge proportion of what I use my phone for.
Yes, it does seem that way. On American web sites I see recipes that include ingredients like "One jar pasta sauce" or "one can mushroom soup". So even many Americans who choose to cook, are directed to cook using processed ingredients.
Not that I'm opposed to labour-saving options. But I can't see how using a jar of pasta sauce (containing added salt, sugar, preservatives, etc.) is better than chopping and softening an onion, and chucking in a can of tomatoes (normally no added ingredients)
By the way, if I was really trying to eat cheaply, I'd live on homemade dahl, bombay potato, home-made chapatis. It's nice enough to eat for fun - I tend to make two batches at once, each with a different pulse. Starting with dried pulses is cheapest.
I costed it once; I think it came to 35p for a large portion consisting of two kinds of dahl, bombay potatoes plus a couple of chapatis. That's 50 US cents, but of course you can't just do that conversion because food prices vary geographically.
Dahl: Onion, spices, pulses, tinned tomato (optional)
Bombay potato: Onion, potato, spices, tinned tomato
Chaptis: flour and water
I don't know what ingredients are cheapest where you live - but something healthy will be.