• Please be sure to read the rules and adhere to them. Some banned members have complained that they are not spammers. But they spammed us. Some even tried to redirect our members to other forums. Duh. Be smart. Read the rules and adhere to them and we will all get along just fine. Cheers. :beer: Link to the rules: https://www.forumsforums.com/threads/forum-rules-info.2974/

The BitCoin - Is It Real? - Does It Have A Future?

Reuben Goldberg

New member
Anyone using the BitCoin?

The Basics of Bitcoin

Bitcoin is a completely unregulated form of currency developed by an anonymous Japanese programmer (according to some apocryphal claims) as a completely digital, peer-to-peer payment system that is independent of national currencies (which, Bitcoin users argue, are all subject to the riskiness of the underlying country).

Bitcoins are rewarded throughout the day to a "Bitcoin miner" whose computer solves a series of algorithms quicker than other miners.

The puzzles become more difficult over time, so the calculations take longer and the computations require more computing power.

There will eventually be a total of 21 million Bitcoins (12.4 million are in circulation today) and we won't reach the point that they are effectively "mined out" until 2040.

The value of a Bitcoin is supposed to be market-driven, meaning they're worth whatever the two parties in a transaction value them as.

For example, in one of the original Bitcoin transactions, a "miner" bought two pizzas worth $25 for 10,000 Bitcoins. (The deal of a lifetime for the pizza seller -- as of this writing, those Bitcoins are worth $6.6 million.)

But as Andreessen admits in a New York Times article, "at this moment ... the value of Bitcoin currency is based more on speculation than actual payment volume." (In full disclosure, he later admits, "it is equally true that that speculation is establishing a sufficiently high price for the currency.")

Of course, euphoric speculation like this never lasts. As with the housing bubble's collapse and the dot-com bubble before it, Bitcoin prices are sure to drop -- a fact that should give one pause when considering whether or not to dabble in Bitcoins.


But There Are Even More Reasons to Think Twice

Economist Bryan Caplan recently speculated on reddit.com that if Bitcoin continues to grow in popularity, reaching the point that it begins to threaten national currencies, regulators will likely begin to crack down on Bitcoin.

There's already government suspicion. In October, the FBI shut down Silk Road (a popular Bitcoin marketplace), arguing that the website was facilitating transactions of illegal drugs and illicit goods and services. Then last month, the CEO of BitInstant (another Bitcoin exchange) was arrested on money laundering charges. If Bitcoin continues to be associated with crime, its popularity will fade.

It's for this reason that Bitcoin is effectively banned in Russia and China -- and more countries are likely to follow.

Of course, there's also the question of how to acquire (and eventually sell) Bitcoins. eBay's (EBAY) Paypal is "cracking down on Bitcoin sellers," according to Entrepreneur. Fidelity's (FNF) customers were briefly permitted to invest in Bitcoin trusts -- but the company has since withdrawn that ability. There are dozens of fixed-rate exchanges, but many are based abroad, so the security of your transaction isn't necessarily a guarantee.

And it's unlikely you'd be successful mining your own Bitcoins. The computers needed to run the calculations cost as much as $11,000 each, and it's difficult to locate data to mine. (Of course, that price is for a good rig. A cheap, hobbyist mining rig ... that's entirely doable too.) According to TechCrunch, it would take you "over three years to generate any coins," and by then, "the energy cost and equipment deprecation will eventually cost more than the actual Bitcoins are worth."
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
GOLD Site Supporter
I'm not using it.

It is real. At least as real as any other fiat currency backed by only faith. It is expanding in acceptance, although acceptance is still very rare.

Governments are now looking at ways to regulate it so it doesn't overtake their sovereign currencies, which proves that BitCoin is not only real, but a threat to fiat backed government notes.
 

Adillo303

Diesel Truck Fan
GOLD Site Supporter
Ruben, there is a lot there that I don't understand, and it is a pretty good explination.

what is most unclear is how one uses a Bitcoin. can't take it to a grocery store, it's value arbitrary so, what is the real difference between two people executing a transaction for any amount an agreed upon currency?

I recently read where some hackers drained silk road by using a known glitch.

finally, can anyone explain what mining a Bitcoin means?
 

Reuben Goldberg

New member
We should all be pleased that the fiat USD is under siege by another fiat currency (good riddance), but I seriously doubt if the BitCoin will survive. I don't particularly trust our government, but I certainly don't trust a currency subject to manipulation or outright hacking via the internet.

There are already too many articles about breaches of the BitCoin security features. Counterfeit USD's are one thing using sophisticated laser printers. But one incidence of counterfeit BitCoins and ALL confidence will be lost.

In the meantime, the initial players are likely to make huge sums off their original investment IF they cash out at the right instant.
 

Reuben Goldberg

New member
finally, can anyone explain what mining a Bitcoin means?
Adillo, sounds pretty fishy to me, but here it is. My advice? ... stay the hell away. Of course I could be dead wrong and missing a unique and lucrative opportunity.

Because stealing or 'creating' BitCoins takes very little investment. Just a dangerously deep knowledge of the cyber world. Gold is mined using vastly expensive physical 'work', and chemists still don't know how to create it cost effectively. Mining or creating BitCoins? ... not so much.






How I Mined for Bitcoins: Buzzfeed's COO Simplifies Cryptocurrency Creation

by CNBC Jan 6th 2014 3:43PM



2d2db960d9ca4b90895d2a267ade8094.jpeg
AP/Rick BowmerBy Jon Steinberg, President & COO, BuzzFeed

Over the holidays, I spent many hours reading up on bitcoin, and I was struck by just how large the ecosystem and variety of players was. Putting aside the debate around bitcoin's value, I think there is no debate that this is an intriguing and very very interesting space.

As an investor, I'm bullish but cautious, as a hobbyist I can't stop reading about it.

(By way of disclosure, I own a very small number of bitcoins. Also I'll tell you about a bunch of services I've played with but I can't vouch for them beyond a cursory examination. There are certainly fraud and theft concerns in the bitcoin universe, so caveat emptor.)

A few aspects of the ecosystem that I'm currently studying for the pleasure of it are: hobby mining rigs, mining pools, software, and professional mining hardware and shares.

Hobby Rigs

You need tremendous computing power "to mine" bitcoins in an efficient manner. This is because it takes a lot of time and electricity for a computer to perform the calculations to crack the math problems that result in new bitcoins. However as a hobbyist, you can turn just about any computer into a "mining rig."

My friend Kane Hsieh came over this week and built this rig with me. (And my "with me," I mean he was kind enough to install everything while I asked questions.)

Here's what it looked like:
bitcoinminingrig.jpg
CNBC, Jon Steinberg, Instagram
We used a $25 dollar RaspBerry Pi computer running Linux and those USB keys with the bitcoin logo are Icarus processors. They are specialized processors for mining bitcoins. [ame="http://www.amazon.com/ASICMiner-Block-Erupter-USB-Sapphire/dp/B00CUJT7TO/ref=sr_1_2?ie=UTF8&qid=1388853371&sr=8-2&keywords=bitcoin"]Amazon lists a version of these too[/ame].

For what it's worth, Kane says that setting up a small mining rig is a great way to get some hands-on learning about bitcoin but warns that small rigs are almost never profitable.

Mining pools

Because we have such a small computer, we joined a "mining consortium." This allows us to combine our small bits of work mining coins with a network of many others.

Here is our mining rig just starting to work after connecting to the consortium; we chose Eclipse:
bitcoindecrypt.jpg
CNBC, Jon Steinberg, Instagram

Software

There are countless programs that can be used to mine coins. We chose cgminer, which is very popular, but with names like Bitminter, Easyminer, and BTCMiner there are lots of choices.

There are also plenty of places to buy, sell, trade and hold your bitcoins. Mt.Gox is the one of the largest exchanges and Coinbase is one of the easiest and most mainstream, recently closing financing rounds from Union Square Ventures and Andreesen Horowitz.
 
Last edited:

Reuben Goldberg

New member
More from yesterday. Of course billions of USD's are stolen everyday thru credit card fraud and identity theft. So I guess you take yer chances.


Bitcoin, a virtual currency that’s not designed to last

Lokeshwarri SK
wallstreetdaily.com/Free-Report

Amid growing regulatory scrutiny of criminal activity, Bitcoin's existence as a legitimate currency is likely to be short-lived

Charlie Shrem, CEO of BitInstant, who became a millionaire by buying Bitcoins for $5 while still in college, was arrested recently for money-laundering; Mt. Gox, the oldest Bitcoin exchange, had to suspend payouts due to a technical glitch; and Russia has explicitly said that the use of Bitcoins is illegal. It is apparent that the most popular virtual currency in circulation is feeling the heat as it increasingly comes under regulatory scrutiny.

Yet there are many who continue to believe that Bitcoins are a godsend and the perfect antidote to global currencies such as the dollar, the yen and the euro that can be printed by governments at will. Geeks populating cyberspace visualise a futuristic world where the only currency in circulation is Bitcoin. And many are wringing their hands in frustration at a missed opportunity.

Governments and central banks are doing a tight-rope walk while dealing with this phenomenon. They do not want to scotch a promising financial innovation but it is obvious that regulatory control will have to increase if virtual currencies are to become more widely accepted and used.

It is naïve to hope this virtual currency − which was created in 2008 by an unidentified individual known only as Satoshi Nakamoto (who has done a disappearing act since then) − will be the medium of exchange anytime in the near future. In fact, there are multiple reasons why Bitcoins can not survive in their current form.

Illegal fund-transfer Satoshi, while introducing this new currency, said its best feature is its ability to transfer money cheaply and fast without the intervention of any government or regulatory authority.

Unfortunately, this strength of Bitcoin has proved to be its greatest undoing. Money launderers, drug traffickers, arms dealers and other criminal elements have been quick to adopt this currency for their cross-border transactions, giving it notoriety. Ross William Ulbricht, also known as “Dread Pirate Roberts,” was arrested for operating the billion-dollar Silk Road website, where Bitcoins were used to buy and sell drugs.

No legal backing Virtual currencies such as Bitcoins, litecoins, bbqcoins and so on are not authorised as a medium of exchange by any central bank or monetary authority. These currencies are not registered in any country and exist only in cyber-space. You might say, “So what? I can still use it as a medium of exchange.” But consider this hypothetical situation: you sell a laptop to your friend for 1 Bitcoin. After a while you realise the digital wallet that stored the Bitcoin on your computer was accidentally deleted. Where do you lodge a complaint to reclaim your money? There is no recourse.

Similarly, if you exchanged $1,100 dollars for one Bitcoin in December last year, re-conversion into dollars will now fetch you only $754. In other words, you lost more than 25 per cent of your investment in under two months. Who’s to blame? No one?

What is the underlying asset? Bitcoins are earned through a process called "mining", in which complex mathematical problems are solved with resources available on the computer. The Bitcoin framework works on the premise the resource is limited in number, which gives them value. The programme defies duplication of the "currency". But there is no underlying asset. So how does one value Bitcoins? It is done mainly on the basis of demand and supply. This has resulted in intense volatility.

Bitcoins could be exchanged for $25 in March 2013. By November 2013, the exchange rate was $1,200. And by the end of December, the exchange value was $584. If you were a trader who had accepted payments for your goods or services in a currency that increases its value 47 times in eight months and then halves in one month, would you be able to sleep in peace? A currency this volatile can never become an accepted medium of exchange.

It is obvious that these currencies can not escape regulation for too long. They will either have to submit to some government or central bank and follow rules or choose to exist in no man’s land.

Choosing the first option will result in slowing down fund transfer times and also increasing the costs involved. This will also reduce their attractiveness to anti-social elements. Existence in no-man’s land will mean limited acceptance and increased skirmishes with regulators.

Even if Bitcoins are subject to regulatory purview, the platform software is designed so that it can mine only 21 million units of this currency. 12.3 million Bitcoins have already been mined. It’s value is likely to shoot to astronomical level as the upper limit is reached, making it the biggest joke of the 21{+s}{+t} century.

(This article was published on February 16, 2014)
Keywords: Charlie Shrem, buying Bitcoins for $5, money-laundering, Mt. Gox, Bitcoin exchange, use of Bitcoins is illegal, forex
 

BigAl

Gone But Not Forgotten
SUPER Site Supporter
Why not ???
Gold and Diamonds are only worth what a knucklehead is willing to pay for it .
Show me the difference with these two bitcoins you are talkin about .
Theres a sucker born every minute and 1 dies once a year . Someone will want them .
 

300 H and H

Bronze Member
GOLD Site Supporter
Why not ???
Gold and Diamonds are only worth what a knucklehead is willing to pay for it .
Show me the difference with these two bitcoins you are talkin about .
Theres a sucker born every minute and 1 dies once a year . Someone will want them .

I won't speak to diamonds, But Gold is quite different than bit coins. Fist it beautifull to look at because you can hold it in your hands. Bitcooin not so. Gold also has a history of value that is soo old that it is cosidered old testiment biblical...

Regards, Kirk
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
GOLD Site Supporter
Well now the question is, is it Bitcoin or Shitcoin?

Multiple stories . . . http://www.latimes.com/business/la-fi-bitcoin-collapse-20140226,0,5968430.story#axzz2uRwNfmYx

http://dealbook.nytimes.com/2014/02...&_php=true&_type=blogs&hpw&rref=business&_r=1

and
http://www.breitbart.com/Big-Peace/...rrency-Theft-Sparks-Debate-Bitcoin-or-Shtcoin
$380 MILLION VIRTUAL CURRENCY THEFT FROM MTGOX SPARKS DEBATE: BITCOIN OR ‘SH*TCOIN’?

The world’s largest bitcoin trading exchange shut down on Tuesday, sparking a massive sell-off that calls into question the long-term viability of the nascent virtual currency trade.

“This is extremely destructive,” risk-management expert and former Federal Reserve Bank Examiner Mark Williams told the Los Angeles Times. “What we’re seeing is a lot of the flaws. It’s not only fragile, it’s fragile as eggshells.”

The halt in trading occurred when reports hit the Internet that the Tokyo-based Mt. Gox bitcoin exchange suffered the theft of 744,000 bitcoins worth an estimated $380 million.

Internet currency forums are now asking the question whether “bitcoin” has morphed into “shitcoin.”

Others expressed optimism that the crisis will spawn better measures.

“I think it’s a significant event, but I think there’s a decent chance that it is part of what we would call this sort of shaking out of the industry as it matures and slowly becomes a little more regulated,” New York state’s top financial regulator Benjamin M. Lawsky told the New York Times.
 
Top