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Bitcoin

Bucky

Bucky

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I see bitcoin continuing to surge in value, well over $10,000. People that put money into this will be happy but I always get a sense its value is destined to fall eventually, perhaps crash under $1,000.

Any thoughts on this cryptocurrency?
 
Bucky said:
I see bitcoin continuing to surge in value, well over $10,000. People that put money into this will be happy but I always get a sense its value is destined to fall eventually, perhaps crash under $1,000.

Any thoughts on this cryptocurrency?
Click to expand...

Volatile and dangerous as **** to get into IMO, but I trade it with a small % of my capital via derivatives.

I don't recommend holding more than a very small portion of your assets in BC, and only as a gamble play, in that you should be prepared to lose that money, and be okay with drawdowns of 50%+ if you're going to buy and hold.

Personally I don't see it as being a true/legitimate currency or unit of trade so much as a playground for speculators, criminals and terrorists who use it for money laundering and transacting black market goods. I suppose one of the upsides is that it can be used to conceal/export wealth in the event of truly tyrannical governments like China, but a committed government can thwart such maneuvers by coming down on the exchanges.
 
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as legitimate a value holder as tulip bulbs
 
I use bitcoin quite often and my business even accepts it as a form of payment. I love it as a medium for online transactions. Investing in it isn't something I do as I have a low threshold for risk. That said, I have accidentally made a lot of money on the rise in value. On multiple occasions I have been paid in bitcoin and just forgot to cash them out. And then when I remembered to cash them out the price had raised significantly. I have pocketed several extra grand that way by accident.

It is depressing if I play "what if". A couple years ago at one point I had about 100 BTC in my wallet. If I had just sat on them they would be worth about $760,000 today. Insane.

Maybe I will invest some that I can afford to lose. But given Murphy's Law as soon as I do that the price will plummet. I'll probably just keep using it as a means of exchange and leave the investing to braver souls.
 
Surrealistik said:
Personally I don't see it as being a true/legitimate currency or unit of trade so much as a playground for speculators, criminals and terrorists who use it for money laundering and transacting black market goods. I suppose one of the upsides is that it can be used to conceal/export wealth in the event of truly tyrannical governments like China, but a committed government can thwart such maneuvers by coming down on the exchanges.
Click to expand...

It is a great form of payment especially from the perspective of the vendor. You can't reverse a transaction like you can with credit cards, so the vendor is far less likely to get ripped off. It is the online equivalent of cash.
 
Skeptic Bob said:
It is a great form of payment especially from the perspective of the vendor. You can't reverse a transaction like you can with credit cards, so the vendor is far less likely to get ripped off. It is the online equivalent of cash.
Click to expand...

It's also a great instrument for tax evasion and conducting all kinds of illicit business; cyber cash. Not a fan. And yes, it may be better for the vendor, but a raw deal for the buyer.

As a transacting tool I'm not sure how much true appeal it has given how unstable and volatile its value is; I wouldn't accept this as payment unless I'm getting a very considerable risk premium, unless I can somehow arrange a way to dump the stuff about instantly (even the intraday swings are ****ing huge), or at least a large % of it; if you could do that + easy, dynamic real time pricing to fix your price I could see it going places.
 
Bucky said:
I see bitcoin continuing to surge in value, well over $10,000. People that put money into this will be happy but I always get a sense its value is destined to fall eventually, perhaps crash under $1,000.

Any thoughts on this cryptocurrency?
Click to expand...

A series of mistakes: I bought $1k worth of bitcoins in August of 2010, not really understanding how they worked. At the time, a bitcoin sold for 7¢ each. I had read kids were using them to pay for online gaming time, I bought them for my grandkids to use when they were staying here overnight or for a weekend. They weren't interested. They had their gaming consoles, and didn't spend all that much time with those either. They are more into physical sports, studying for school, doing chores, and learning how to make music, paint, sculpt, whatever. At the time I had 12 grandkids, now 16. My wife fell ill, and I basically forgot I had bought the bitcoins. My wife and my business received all my attention. Work was an escape from my wife's illness, and she encouraged me to tend to business and the family. She passed. I was extremely depressed and started setting a path for retirement, passing on most of my business interests and bitcoins, their growth and volatility were not on my radar. When I bought the bitcoins I registered them with an exchange that today is one of the leading American bitcoin exchanges, just in case I lost them in a computer crash. I retired about two years ago, remarried about a year ago, to my son's mother in law, who had lost her husband 8 years earlier, and we had been living together for about a year, dating before that for about 18 months. Bitcoins, the increases in value, the volatility of the marketplace, the scams, the successes, were the last thing on my mind.

This past January, I received an e-mail from a fellow who told me he was a bitcoin miner from China. I had no idea what a bitcoin miner was. He offered me $2,200 per coin. I was shocked by this offer out of the blue, and I thought it had to be some kind of scam, waited for the foot to drop. He claimed he had traced me down through the registry at the exchange where I had registered the purchase. I waited another day for the Nigerian shuffle, "if you send us $20k in good faith...." Never happened. I called my CPA for an opinion. He also knew nothing of bitcoins, having heard of them and not much more. He advised me to take the offer, pay the gains tax and take the balance and run. Instead, I did some research, learned the current going price was about $2,500 per coin, and the best way to sell in volume was by auction. Over the next month or so, I sold them at three auctions sites, averaging a return of $2,800 to $3,000 per coin. This was another mistake, not that I'm complaining, but I should have waited for the coming explosion in prices. Who knew? Bit coins almost doubled in prices within the next 4-5 months.

continued
 
I paid the gains taxes at the end of the second quarter, donated about 20% of the balance to philanthropies I was already familiar with. Set up trusts for my kids and all my grandkids with about 50% of the remainder. Bought my wife a red emerald necklace, with amethysts as red sapphires, matching earrings, for about $20k, and a used Lowden guitar for myself for about $11k. A beautiful guitar, made from African Blackwood, a redwood top soundboard, an ebony fretboard and a maple neck from wood harvested 500 years ago in Germany. True master tones from this work of art. It's slowly becoming my main everyday guitar, pushing my 35 year old maple Guild NJ45 212 aside, along with my 25 year old claw cut walnut Taylor auditorium 6 string, tho both please me very much. It doesn't take me much to get happy materially. I did buy myself a new pair of Minnetonka mocs for $39. And the dog got some new toys and a new bed. So did the cat. I'm spending about 6 hours per week checking into other philanthropies that meet my standards that can make good use of this windfall. I prefer children's philanthropies that spend less than 20% of revenues on administration and fund raising.

I was already wealthy enough to say I wouldn't spend what I had already accumulated before I die, and still leave a nice estate for those I love. That was the result of hard work, solid investments in real property, and a few other businesses run by friends and family over the years. When I play the market, it's strictly a gambling hobby with never than more than I can afford to lose. I've been overall fortunate with that as well, being a long time owner of Apple equities, that I already placed in family trusts and don't intend to sell. The dividends are a nice healthy kick. Don't think I didn't have my fair share of losers in every aspect of my business and investment ventures. I'm not particularly more astute than others, I seem to have good joss.

As for the future of bitcoin, I can't tell you anything. I'm not prescient, and I'm still not sure what drives the marketplace. But good hunting. Recently, both the Japanese government and the US Congress have recognized bitcoin currencies, but the SEC has not approved them for trading, yet. I would expect that if the SEC approves trading in bitcoins, the value could again rise exponentially. The Chinese government has placed bitcoin trading outside the law last year, but 80% of the bitcoin actions is by Chinese citizens. The EU hasn't made any moves, one way or the other. Just talking about investigations of bitcoins being used to hide wealth and evade taxes. Keep in mind I did not know what I was doing with bitcoins. Still don't.
 
Surrealistik said:
It's also a great instrument for tax evasion and conducting all kinds of illicit business; cyber cash. Not a fan. And yes, it may be better for the vendor, but a raw deal for the buyer.

As a transacting tool I'm not sure how much true appeal it has given how unstable and volatile its value is; I wouldn't accept this as payment unless I'm getting a very considerable risk premium, unless I can somehow arrange a way to dump the stuff about instantly (even the intraday swings are ****ing huge), or at least a large % of it; if you could do that + easy, dynamic real time pricing to fix your price I could see it going places.
Click to expand...

It can definitely be used for illicit activities. Just like cash. Just because most street crime is conducted in cash doesn't make cash any less legitimate.

You are correct in being able to cash out quickly to protect yourself from swings in the exchange rate. Fortunately there are tools for the savvy user that allow you to do just that. I have the ability to lock in the price the instant I receive a transaction. I don't always use it, which has played to my advantage lately, but I have it at my disposal.

Also, credit card payments don't typically get deposited to my bank account for a day or two whereas when I receive BTC I can have it deposited into my bank account as USD in less than one hour.

It certainly isn't for everyone as there is a learning curve to it. But accepting it as a form of payment has gotten me clients I wouldn't otherwise have. And more clients means more money for me. And that's a good thing. :)
 
Skeptic Bob said:
It can definitely be used for illicit activities. Just like cash. Just because most street crime is conducted in cash doesn't make cash any less legitimate.
Click to expand...

Well, I've stated my unfavourable opinion on cash previously, especially in light of superior modern day alternatives. The reasons are similar, besides the costs involved with circulating physical currency.

You are correct in being able to cash out quickly to protect yourself from swings in the exchange rate. Fortunately there are tools for the savvy user that allow you to do just that. I have the ability to lock in the price the instant I receive a transaction. I don't always use it, which has played to my advantage lately, but I have it at my disposal.

Also, credit card payments don't typically get deposited to my bank account for a day or two whereas when I receive BTC I can have it deposited into my bank account as USD in less than one hour.

It certainly isn't for everyone as there is a learning curve to it. But accepting it as a form of payment has gotten me clients I wouldn't otherwise have. And more clients means more money for me. And that's a good thing. :)
Click to expand...

Pretty cool; is there an existing pre-fab utility/service/bot for instantaneous exchange you can point me to?
 
Surrealistik said:
Well, I've stated my unfavourable opinion on cash previously, especially in light of superior modern day alternatives. The reasons are similar, besides the costs involved with circulating physical currency.



Pretty cool; is there an existing pre-fab utility/service/bot for instantaneous exchange you can point me to?
Click to expand...

Coinbase.com has merchant utilities that will allow you to do that.
 
RabidAlpaca said:
What in your opinion is the best / easiest place to casually buy a little bitcoin? Preferably something with PayPal.
Click to expand...

For casual buying that doesn't require a bunch of red tape to open an account, I would recommend Localbitcoins.com. It is a person-to-person exchange where private individuals buy and sell to each other using all manner of payment methods, including paypal. Just be sure to pick a vendor with a high rating and high volume of past trades. And always use the escrow feature.
 
Surrealistik said:
Well, I've stated my unfavourable opinion on cash previously, especially in light of superior modern day alternatives. The reasons are similar, besides the costs involved with circulating physical currency.



Pretty cool; is there an existing pre-fab utility/service/bot for instantaneous exchange you can point me to?
Click to expand...

https://www.coindesk.com/how-to-trade-bitcoins-bot-software-sleep/
https://bitcoinmagazine.com/articles/beginners-guide-claiming-your-bitcoin-cash-and-selling-it/
https://www.bitcoin.com/buy-bitcoin
 
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Surrealistik said:
I know how to trade bitcoins and do so, albeit through derivatives rather than actual ownership.

I'm more interested in the merchant utilities which SB kindly pointed to.
Click to expand...

The exchanges mentioned on the sites I referred you to, offer merchant utilities for accepting payments with bitcoins.
 
Surrealistik said:
Volatile and dangerous as **** to get into IMO, but I trade it with a small % of my capital via derivatives.

I don't recommend holding more than a very small portion of your assets in BC, and only as a gamble play, in that you should be prepared to lose that money, and be okay with drawdowns of 50%+ if you're going to buy and hold.

Personally I don't see it as being a true/legitimate currency or unit of trade so much as a playground for speculators, criminals and terrorists who use it for money laundering and transacting black market goods. I suppose one of the upsides is that it can be used to conceal/export wealth in the event of truly tyrannical governments like China, but a committed government can thwart such maneuvers by coming down on the exchanges.
Click to expand...

bit coin is 100% a gamble. it is highly unstable and kinda shady. governments are already cracking down on it.
I do believe that the US government has already labeled it a commodity not a currency so that right there was a huge blow
to it. it also makes sense and is consistent with other federal laws that the only organization that can issue currency is
the treasury department. what this also means is that you cannot buy anything with bitcoins. you would have to sell them off for
dollars just like any other commodity.
 
ludin said:
bit coin is 100% a gamble. it is highly unstable and kinda shady. governments are already cracking down on it.
I do believe that the US government has already labeled it a commodity not a currency so that right there was a huge blow
to it. it also makes sense and is consistent with other federal laws that the only organization that can issue currency is
the treasury department. what this also means is that you cannot buy anything with bitcoins. you would have to sell them off for
dollars just like any other commodity.
Click to expand...

I buy things with bitcoin all the time without exchanging them for dollars.
 
Skeptic Bob said:
I buy things with bitcoin all the time without exchanging them for dollars.
Click to expand...

then i would question the site. as a commodity bitcoins cannot be used as currency.

In the U.S.A, different states have adopted varying approaches to Bitcoins. Recently a U.S Magistrate in the state of New York ruled that Bitcoins are not money, while a contradictory stance was taken by a judge in Manhattan, who ruled that bitcoins are acceptable means of payment. The Internal Revenue Service in the United States, defines bitcoin as property rather than currency for tax purposes. The U.S. Treasury, by contrast, classifies bitcoin as a decentralised virtual currency.

https://fossbytes.com/what-is-bitcoin-2017-trends-legal/

seems to be some confusion in the courts, the IRS, and the Treasury.

i know they ruled it a commodity item.
which usually means you have to convert it to cash before purchase.
 
ludin said:
then i would question the site. as a commodity bitcoins cannot be used as currency.

In the U.S.A, different states have adopted varying approaches to Bitcoins. Recently a U.S Magistrate in the state of New York ruled that Bitcoins are not money, while a contradictory stance was taken by a judge in Manhattan, who ruled that bitcoins are acceptable means of payment. The Internal Revenue Service in the United States, defines bitcoin as property rather than currency for tax purposes. The U.S. Treasury, by contrast, classifies bitcoin as a decentralised virtual currency.

https://fossbytes.com/what-is-bitcoin-2017-trends-legal/

seems to be some confusion in the courts, the IRS, and the Treasury.

i know they ruled it a commodity item.
which usually means you have to convert it to cash before purchase.
Click to expand...

That is all about how they are treated for taxes. There is nothing prohibiting you from purchasing things with bitcoin, assuming the vendor accepts bitcoin. A vendor can accept gold or chickens or jars of peanut butter as payment for goods and services if they want.

Some well known companies that accept bitcoin as payment:

Wordpress
Overtsock.com
Subway
Microsoft
Reddit
Virgin Airline
Expedia.com
Wikipedia (for donations)
Steam
Etsy
Whole Foods
Bloomberg.com
Gap
Dish Network

I find it ideal for paying for VPN services. The different state laws have more to do with how the exchanging of bitcoin for currency is handled. For example, in New York it is next to impossible to legally exchange bitcoin for cash without meeting a bunch of strict requirement to be classified as a money trader. But you can still buy products and services there with bitcoin.

Hell, there are bitcoin ATMs around the country.
 
Surrealistik said:
It's also a great instrument for tax evasion and conducting all kinds of illicit business; cyber cash. Not a fan. And yes, it may be better for the vendor, but a raw deal for the buyer.

As a transacting tool I'm not sure how much true appeal it has given how unstable and volatile its value is; I wouldn't accept this as payment unless I'm getting a very considerable risk premium, unless I can somehow arrange a way to dump the stuff about instantly (even the intraday swings are ****ing huge), or at least a large % of it; if you could do that + easy, dynamic real time pricing to fix your price I could see it going places.
Click to expand...

I just remembered one advantage for the buyer. If you purchase something online with bitcoin, particularly a digital product that doesn't require shipping, there is no risk of identity theft. There is no third party with your name and credit card or debit card number out there that could be compromised.
 
Bucky said:
I see bitcoin continuing to surge in value, well over $10,000. People that put money into this will be happy but I always get a sense its value is destined to fall eventually, perhaps crash under $1,000.

Any thoughts on this cryptocurrency?
Click to expand...
To start with, looking at a currency as though it's an asset -- or worse yet, a lottery ticket, or a gold mine -- is downright moronic.

Currencies aren't supposed to fluctuate massively in value. No one who actually wants to use the currency should want it to go from $6400 to $8200 in the space of one week. That's an incredible level of deflation, the likes of which defeat its actual purpose as a currency.

For example, imagine that you want to purchase something using Bitcoin. If you used 0.0016 BTC to buy a movie ticket last week, that's the equivalent of spending $10 for it. However, today that same amount is worth $13 -- meaning that movie has effectively cost you an extra $3! And why? Because a bunch of speculators are jumping all over this, hypnotized by a chart that keeps going up.

Similarly, the technical barriers for using Bitcoin are quite high, meaning the only people who will actually use it as a currency are those who are highly motivated to do so, i.e. those who want to move money in a way that is difficult to trace. This basically means people engaged in criminal activity, and the super-paranoid. That's not a good look.

There is no way to know when, or even if, this bubble will burst. There are so few bitcoins, and the supply is so strictly limited, that it can keep going for who knows how long. When it does burst, it will be ugly for some time. And who knows, it could quickly recover (like it did in September 2017), or it could crater.

It is possible that more rational cryptocurrencies will be able to, well, act more like currencies. The more likely outcome, though, is that blockchain technology will separate from currencies, and be used far more widely than cryptocurrencies.
 
Skeptic Bob said:
I just remembered one advantage for the buyer. If you purchase something online with bitcoin, particularly a digital product that doesn't require shipping, there is no risk of identity theft. There is no third party with your name and credit card or debit card number out there that could be compromised.
Click to expand...

TBH, most credit card issuers are pretty good about thwarting and even preempting identity theft these days though, and the risk is pretty small if you know what you're doing, whereas the consumer protections involved with credit card use are consistently useful; in general credit cards are a better deal for the purchaser as opposed to bitcoin (to say nothing of those that have cash back incentives/rebates for purchases; one gives me a 2% credit for anything I buy with it!).
 
brothern said:
What service(s) and software would you recommend to convert hard currency to bitcoin and hold it?
Click to expand...

Well, buying bitcoin and holding bitcoin are two different things. I personally like the flexibility of buying bitcoin at localbitcoins.com. They have traders who take just about every form of payment.

Now, once you bought the bitcoin you could just leave them in your localbitcoins.com but that is the equivalent of trusting a third party with your money. If they go out of business and shut down without warning your bitcoin are gone. A more secure method is to use a software bitcoin wallet on your own computer. Make sure to back up your private keys in case something happens to your computer.

You can find a list of vetted software here:

https://bitcoin.org/en/choose-your-wallet

I have found that Electrum is a good balance of security and ease of use.
 
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