Can you buy heroin with PayPal?Leeraar wrote:So, here's the question:
Bitcoin is better than USD on PayPal because ...?
L.
Bitcoin price plunges
Re: Bitcoin price plunges
Re: Bitcoin price plunges
Because no one ever got randomly rich investing in dollars.Leeraar wrote:So, here's the question:
Bitcoin is better than USD on PayPal because ...?
L.
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Re: Bitcoin price plunges
From page 1 of this thread:Leeraar wrote:So, here's the question:
Bitcoin is better than USD on PayPal because ...?
L.
Isn't keeping costs low part of the Boglehead philosophy?beammeupscotty wrote:...I am considering integrating BitPay into my web site's purchase options -- 1% (or less) fees and no chargebacks vs. around 3.5% for accepting credit cards or PayPal, and it can settle directly into your bank account in US dollars each day. I can see why overstock is excited about it.
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Re: Bitcoin price plunges
You hit the nail on the head. How excited would people be about Bitcoin if it was not making people wealthy? Satoshi knew it would spur fast adoption, but it also makes it fundamentally flawed as a transactional currency.roymeo wrote:Because no one ever got randomly rich investing in dollars.Leeraar wrote:So, here's the question:
Bitcoin is better than USD on PayPal because ...?
L.
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Re: Bitcoin price plunges
Investing in real assets is also part of the Boglehead philosophy.beammeupscotty wrote:From page 1 of this thread:Leeraar wrote:So, here's the question:
Bitcoin is better than USD on PayPal because ...?
L.Isn't keeping costs low part of the Boglehead philosophy?beammeupscotty wrote:...I am considering integrating BitPay into my web site's purchase options -- 1% (or less) fees and no chargebacks vs. around 3.5% for accepting credit cards or PayPal, and it can settle directly into your bank account in US dollars each day. I can see why overstock is excited about it.
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Re: Bitcoin price plunges
Is the porn industry overcoming its bitcoin shyness?
It is not credible that this was designed for the purpose of mediating ordinary consumer transactions. The purpose must be something else. It sounds as if recurring transactions would require the participation of a third party, that might not wish to provide the service for free. A trusted third party, like Mt. Gox.
What, the "programmable money" that includes some kind of scripting capability within its data structures can't handle recurring transactions?The instability of bitcoin's value, along with a lack of understanding about how the currency works, has kept porn's biggest names on the sidelines. But... one of the industry's larger studios—plans to embrace bitcoin fully in the near future and expects the competition to follow....
A few things are working against bitcoin's implementation by porn players, including the reluctance to do anything that might affect revenues. "Some of these people have been burned before by new payment transaction companies coming in and taking their money," said Tony Gallippi, founder of BitPay....
...the biggest hurdle is the inability to do recurring billing with bitcoin, which is designed as a one-time transaction service.
Online porn companies...make their money on monthly subscriptions. Users sign up once and don't have to think about it again (in fact often forgetting they're signed up for automatic billing)....
It is not credible that this was designed for the purpose of mediating ordinary consumer transactions. The purpose must be something else. It sounds as if recurring transactions would require the participation of a third party, that might not wish to provide the service for free. A trusted third party, like Mt. Gox.
Last edited by nisiprius on Wed Feb 26, 2014 8:25 am, edited 1 time in total.
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Re: Bitcoin price plunges
I put bitcoin in the gold category-youse take your chances.
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Re: Bitcoin price plunges
Actually it more like the depository receipts for gold. If MT gox reports are correct 6% of the bitcoin out there are "stolen". Just watch as holders of hot bitcoins try to dump them on the suckers.gerrym51 wrote:I put bitcoin in the gold category-youse take your chances.
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Re: Bitcoin price plunges
I thought this article did a good job of explaining some of the pitfalls of Bitcoin... http://www.caseyresearch.com/cdd/failur ... s-billions
It never ceases to amaze me how hard it can be for the media to separate hype from real-world potential in technology.
It is technically true that there is little to no cost to transfer bitcoins between parties. However, it is not true that it's the first way to do so with no or low fees.
To begin with, there is the Automated Clearing House (ACH) electronic funds transfer system between banks. Any developer can create its own ACH-based payment system—vacation rental startup HomeAway, for instance, made waves in sharing how it did exactly that—and utilize the system for free. A handful of startup platform providers have emerged too, charging only nominal fixed fees (usually between $0.10 and $0.25 per transaction) to make the process very simple for developers.
Then there's the debit card infrastructure in the US, and many similar systems globally. Accepting debit cards requires a payment processor in the middle, but typically fees for accepting debit cards run in the pennies; rarely are they ever based on transaction size.
Nor does it cost anything to authorize a credit card transaction in most cases. The moving of those bits across the Internet is free.
The charges these facilitators provide is ultimately for the transfer of funds between parties. This is a subtle but hugely important difference. Moving money is far more complicated than moving bits. It requires the credit card processor to verify availability, process transfers, and most important provide service when things go wrong.
With Bitcoin, if you send your digital money to a disreputable vendor, there is no recourse to get a refund. There is no "chargeback" system. The funds, once gone, are permanently gone.
(Which also raises the question about seized property, too. If that criminal is caught and, as Andreessen shares, "every transaction in the Bitcoin network is tracked and logged forever in the Bitcoin blockchain, or permanent record, available for all to see," then what's to stop the government from attempting to seize all those ill-gotten coins, even multiple stages down the line? Cash and gold have no ledger, and that provides each holder some assurance that it cannot be appropriated by others. Add a paper trail and that dynamic changes.
It introduces the "nemo dat" rule, a legal precedent that going back thousands of years through multiple legal systems, which holds that someone cannot ever own stolen property, even if he had no idea it was stolen when it was purchased. Through this rule, art, antiques, and much more has been returned to its original owners, sometimes after generations have passed. Imagine the effect of that on your bank account.)
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Re: Bitcoin price plunges
But you don't have to invest in bitcoin to use it as a low-cost e-commerce alternative. Like I said, it can settle directly into your bank account in US dollars each day.3CT_Paddler wrote:Investing in real assets is also part of the Boglehead philosophy.beammeupscotty wrote:From page 1 of this thread:Leeraar wrote:So, here's the question:
Bitcoin is better than USD on PayPal because ...?
L.Isn't keeping costs low part of the Boglehead philosophy?beammeupscotty wrote:...I am considering integrating BitPay into my web site's purchase options -- 1% (or less) fees and no chargebacks vs. around 3.5% for accepting credit cards or PayPal, and it can settle directly into your bank account in US dollars each day. I can see why overstock is excited about it.
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Re: Bitcoin price plunges
And how do you plan to use them for recurring transactions without requiring the customer to manually authorize them each time?beammeupscotty wrote:...you don't have to invest in bitcoin to use it as a low-cost e-commerce alternative. Like I said, it can settle directly into your bank account in US dollars each day.
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Re: Bitcoin price plunges
My business doesn't have a need for recurring transactions, but I believe that is possible.nisiprius wrote:And how do you plan to use them for recurring transactions without requiring the customer to manually authorize them each time?beammeupscotty wrote:...you don't have to invest in bitcoin to use it as a low-cost e-commerce alternative. Like I said, it can settle directly into your bank account in US dollars each day.
https://www.google.com/search?q=bitcoin ... ansactions
Re: Bitcoin price plunges
In Mt. Gox, yes. In your own wallet, exactly like gold, including being able to toss it in the dump.Professor Emeritus wrote:Actually it more like the depository receipts for gold. If MT gox reports are correct 6% of the bitcoin out there are "stolen". Just watch as holders of hot bitcoins try to dump them on the suckers.
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Re: Bitcoin price plunges
and EXACTLY how do you know the coins in your wallet were not "stolen" ?FNK wrote:In Mt. Gox, yes. In your own wallet, exactly like gold, including being able to toss it in the dump.Professor Emeritus wrote:Actually it more like the depository receipts for gold. If MT gox reports are correct 6% of the bitcoin out there are "stolen". Just watch as holders of hot bitcoins try to dump them on the suckers.
Re: Bitcoin price plunges
As in how I know they still "are" in my wallet? Somebody will need to crack my public key to do that.Professor Emeritus wrote:and EXACTLY how do you know the coins in your wallet were not "stolen" ?
Or as in how I know they were not stolen when I acquired them? Well, they are fungible in the wallets, so pinning down which ones are "stolen" and which ones are "clear" is going to be equally hard for whoever tries to recover them.
(Note: I don't own and don't plan to own any. But the experiment is nifty.)
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Re: Bitcoin price plunges
It certainly sounds as if Coinbase is a third party wallet provider.beammeupscotty wrote:My business doesn't have a need for recurring transactions, but I believe that is possible.nisiprius wrote:And how do you plan to use them for recurring transactions without requiring the customer to manually authorize them each time?beammeupscotty wrote:...you don't have to invest in bitcoin to use it as a low-cost e-commerce alternative. Like I said, it can settle directly into your bank account in US dollars each day.
https://www.google.com/search?q=bitcoin ... ansactions
That is,
a) you need to trust Coinbase, just like Mt. Gox, and
b) You need to pay Coinbase:
The article I cited, Is the porn industry overcoming its bitcoin shyness?, says that one of the things slowing down its acceptance is the inability to use bitcoin for recurring payments.
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Re: Bitcoin price plunges
Other than the low fees, some are attrached to it because there' s no government involvement, no "Fed" etc.Leeraar wrote:So, here's the question:
Bitcoin is better than USD on PayPal because ...?
L.
Some have tried to make a case that inflation wouldn't occur with Bitcoin, because they are not "just printed on a printing press like the USD."
I don't agree, I'm just passing on the info since you asked.
Re: Bitcoin price plunges
Chaz |
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Re: Bitcoin price plunges
This argument is only interesting for a country with a banking system stuck in the mid-20th century. Almost everywhere else in the world fast, free, peer-to-peer transactions are routine, not something that requires a "crypto-currency", digital wallets or exchanges. I give you my IBAN number and you can send me money instantly, online, free (or essentially free), no chargebacks. Only a place where people still send each other checks by mail could marvel at something like bitcoins for legitimate purposes.beammeupscotty wrote:From page 1 of this thread:Leeraar wrote:So, here's the question:
Bitcoin is better than USD on PayPal because ...?
L.Isn't keeping costs low part of the Boglehead philosophy?beammeupscotty wrote:...I am considering integrating BitPay into my web site's purchase options -- 1% (or less) fees and no chargebacks vs. around 3.5% for accepting credit cards or PayPal, and it can settle directly into your bank account in US dollars each day. I can see why overstock is excited about it.
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Re: Bitcoin price plunges
I'm all ears -- please tell more more about an IBAN equivalent of PayPal or http://authorize.net with < 1% e-commerce fees.Wolkenspiel wrote:This argument is only interesting for a country with a banking system stuck in the mid-20th century. Almost everywhere else in the world fast, free, peer-to-peer transactions are routine, not something that requires a "crypto-currency", digital wallets or exchanges. I give you my IBAN number and you can send me money instantly, online, free (or essentially free), no chargebacks. Only a place where people still send each other checks by mail could marvel at something like bitcoins for legitimate purposes.
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Re: Bitcoin price plunges
What I don't understand about bitcoin investors is how can they store bitcoins at an unregulated exchange with no FDIC insurance where they can be stolen or hacked at will.FNK wrote:As in how I know they still "are" in my wallet? Somebody will need to crack my public key to do that.Professor Emeritus wrote:and EXACTLY how do you know the coins in your wallet were not "stolen" ?
Or as in how I know they were not stolen when I acquired them? Well, they are fungible in the wallets, so pinning down which ones are "stolen" and which ones are "clear" is going to be equally hard for whoever tries to recover them.
(Note: I don't own and don't plan to own any. But the experiment is nifty.)
Where can bit coins be stored other than exchanges? Its not like you can carry them in your pocket or deposit them in your FDIC insured checking account.
The inherent defect in bitcoin as a currency is that it is a virtual product that exists only in cyberspace that can disappear without a trace. There is no need in the financial markets for a private currency backed only by the creditworthiness of its investors that can vanish in a keystroke other that to engage in transactions that avoid the reporting/tracking requirements for currency transactions.
Re: Bitcoin price plunges
You can store them on exchanges...or you can store them on your computer, smartphone, hard drive, wherever you can store digital code.
Just like cash, it is subject to theft or damage (but it can be backed up to prevent loss from hard drive failure).
Just like cash, it is subject to theft or damage (but it can be backed up to prevent loss from hard drive failure).
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Re: Bitcoin price plunges
That sounds right, assuming that was a fiat money, of course.dumbmoney wrote:It can't be a commodity since you can't use it for anything. It's not a collectable either, since you can't put a bitcoin in a glass case and admire it. The best analogy I can think of is that it's like the money of a bank/nation that no longer exists.Valuethinker wrote:It might be a better analogy-- I like that. Bitcoin is a commodity not a currency.Random Musings wrote:I have now heard the comments that bitcoin is not really a "currency" in the true sense but more like a commodity (gold). With the volatility it has shown over the past year, that is still an understatement.
In theory, theory and practice are identical. In practice, they often differ.
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Re: Bitcoin price plunges
That was actually the analogy I used when I first heard about Bitcoin, so I at least did see it coming.Crimsontide wrote:Beanie Babies are closer to be a commodity than Bitcoin. Didn't we all see this coming?Oicuryy wrote:All currencies are commodities, but not all commodities are currencies.Valuethinker wrote:It might be a better analogy-- I like that. Bitcoin is a commodity not a currency.Random Musings wrote:I have now heard the comments that bitcoin is not really a "currency" in the true sense but more like a commodity (gold). With the volatility it has shown over the past year, that is still an understatement.
RM
Thank you.
Ron
In theory, theory and practice are identical. In practice, they often differ.
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Re: Bitcoin price plunges
Yes but if bit coin is hacked how does the investor recover the loss? There is no FDIC insurance if the funds are stolen.Rainier wrote:You can store them on exchanges...or you can store them on your computer, smartphone, hard drive, wherever you can store digital code.
Just like cash, it is subject to theft or damage (but it can be backed up to prevent loss from hard drive failure).
And what about the $400 million that was stolen from Mt Gox. Exchanges are not exactly Fort Knox which leads to the question of where can you store bitcoin with out any risk of theft or inability of the counter party to deliver the bitcoin you have entrusted to it. Seems that Bitcoin exchanges are like investment banks not regulated by the federal reserve (e.g., Lehman, MF Global). If they become insolvent then all investors who deposited bitcoins with the exchange are unsecured creditors. How can bitcoin be a currency?
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Re: Bitcoin price plunges
Actually that was quite different: the Hunt brothers wanted delivery of silver and there wasn't enough to deliver, so the shorts would have been bankrupted if the normal rules had been followed. My understanding, which may be wrong, is that at least some of the governors of the exchange were shorting silver, which would certainly explain their suspension of the normal rules.Leif wrote:It sort of reminds me of the run up and collapse of silver. The Hunt brothers tried to corner the market. Finally the commodity regulators introduced a special rule preventing any long position. With longs frozen and shorts free there is only one direction to go.
In theory, theory and practice are identical. In practice, they often differ.
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Re: Bitcoin price plunges
Yes, I had the same thought. What makes (made?) Bitcoin unique such that no one could create something just as "secure" and "cool"? Nothing. It is (was?) a fad.3CT_Paddler wrote:I am skeptical of Bitcoin the currency, but I think its far from dead. I don't see much panic on the main site Bitcointalk.org.
My biggest criticism of Bitcoin is that it's success is dependent on it being the dominant cryptocurrency. If something else comes along that sounds better to the tech/geek crowd, it would render Bitcoin almost worthless in a matter of weeks. That is what makes it fools gold... if for whatever reason it becomes unpopular, its price falls to its intrinsic value... zero.
In theory, theory and practice are identical. In practice, they often differ.
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Re: Bitcoin price plunges
They are not fungible. every single one has a unique blockchain Bitcoins are anonymous but not fungible.FNK wrote:As in how I know they still "are" in my wallet? Somebody will need to crack my public key to do that.Professor Emeritus wrote:and EXACTLY how do you know the coins in your wallet were not "stolen" ?
Or as in how I know they were not stolen when I acquired them? Well, they are fungible in the wallets, so pinning down which ones are "stolen" and which ones are "clear" is going to be equally hard for whoever tries to recover them.
(Note: I don't own and don't plan to own any. But the experiment is nifty.)
from bicoin wiki
Block chain
A block chain is a transaction database shared by all nodes participating in a system based on the Bitcoin protocol. A full copy of a currency's block chain contains every transaction ever executed in the currency. With this information, one can find out how much value belonged to each address at any point in history.
Every block contains a hash of the previous block. This has the effect of creating a chain of blocks from the genesis block to the current block. Each block is guaranteed to come after the previous block chronologically because the previous block's hash would otherwise not be known. Each block is also computationally impractical to modify once it has been in the chain for a while because every block after it would also have to be regenerated. These properties are what make double-spending of bitcoins very difficult. The block chain is the main innovation of Bitcoin.
Re: Bitcoin price plunges
FDIC insurance does not protect you from bank robbers! Regular insurance purchased by the bank covers that.
FDIC insurance protects you from an insolvent bank....not theft.
FDIC insurance protects you from an insolvent bank....not theft.
Re: Bitcoin price plunges
Sigh.
May I suggest that we ban bitcoin discussions at this forum? This thread sounds exactly like "Fed cabal evil fractional reserve banking". Bitcoin has huge problems, but not the ones we're discussing.
As fas as I understand, your wallet is literally your private key. As long as you keep the key secure, nobody will be able to pull your coins out.
May I suggest that we ban bitcoin discussions at this forum? This thread sounds exactly like "Fed cabal evil fractional reserve banking". Bitcoin has huge problems, but not the ones we're discussing.
The whole premise of bitcoin is that it's really hard to hack. If someone creates perfectly forged dollar bills and destroys the value of the dollar, FDIC insurance will not save you either.manwithnoname wrote:Yes but if bit coin is hacked how does the investor recover the loss?
As fas as I understand, your wallet is literally your private key. As long as you keep the key secure, nobody will be able to pull your coins out.
Convincing a crowd of people to run mining operations. The larger the mining pool, the more secure the currency. Whatever comes to displace bitcoin has to be 10x better.technovelist wrote:What makes (made?) Bitcoin unique such that no one could create something just as "secure" and "cool"?
Actually, the other way around. Bitcoins are pseudonymous, not anonymous (each deposit goes into a specific wallet). However, if you have 10 transactions each depositing a coin into a wallet, and 10 similar withdrawals, there's no way to associate which goes where. Combined with wallets being pseudonymous, stolen asset recovery is pretty much intractable.Professor Emeritus wrote:They are not fungible. every single one has a unique blockchain Bitcoins are anonymous but not fungible.
Re: Bitcoin price plunges
As Rainier said, you don't need to deposit bitcoins in an exchange; you can keep them locally without any counterparty. To prove you own bitcoins, you basically keep answers to really hard math problems that nobody knows how to solve. If you store those answers somewhere that isn't connected to the internet, then it's not realistically vulnerable to hackers. (I still would not put any of my money into bitcoins, this is just a technical explanation.) I can explain this in a more detailed post later.manwithnoname wrote:Yes but if bit coin is hacked how does the investor recover the loss? There is no FDIC insurance if the funds are stolen.Rainier wrote:You can store them on exchanges...or you can store them on your computer, smartphone, hard drive, wherever you can store digital code.
Just like cash, it is subject to theft or damage (but it can be backed up to prevent loss from hard drive failure).
And what about the $400 million that was stolen from Mt Gox. Exchanges are not exactly Fort Knox which leads to the question of where can you store bitcoin with out any risk of theft or inability of the counter party to deliver the bitcoin you have entrusted to it. Seems that Bitcoin exchanges are like investment banks not regulated by the federal reserve (e.g., Lehman, MF Global). If they become insolvent then all investors who deposited bitcoins with the exchange are unsecured creditors. How can bitcoin be a currency?
I would think FDIC insurance probably does protect you from bank robbers. Or rather, bank robbers don't threaten my bank deposits except insofar as they affect bank solvency.Rainier wrote:FDIC insurance does not protect you from bank robbers! Regular insurance purchased by the bank covers that.
FDIC insurance protects you from an insolvent bank....not theft.
Consider a bank without insurance against bank robberies. I have money deposited there. A bank robber comes in and steals a bunch of cash from the bank. The bank is now out $50 million. Did the bank robber steal my money? No, he stole the bank's money, because that money was on the bank's balance sheets. It's not my $50 million. The risk here is that the $50 million robbery could result in the bank not having enough money to return my deposit. The deposit is still rightfully mine, but if the bank is insolvent, it won't be able to return my deposit.
This is basically the situation MtGoX is in right now: they accepted a bunch of deposits, and now they have lost (or possibly stolen) a huge proportion of those deposits. As a result, they are no longer solvent and cannot make good on withdrawals. An FDIC-insured bank would be able to guarantee these deposits even if it became insolvent because of this sort of theft.
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Re: Bitcoin price plunges
If you'll admit that they are not investment productsFNK wrote:Sigh.
May I suggest that we ban bitcoin discussions at this forum?
Re: Bitcoin price plunges
But there is no other source for basic information about the bitcoin concept or how they work! How else will I get random pieces of third-hand knowledge intermixed with hyperbole?!?FNK wrote:May I suggest that we ban bitcoin discussions at this forum?
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Re: Bitcoin price plunges
Exactly.Wolkenspiel wrote:This argument is only interesting for a country with a banking system stuck in the mid-20th century. Almost everywhere else in the world fast, free, peer-to-peer transactions are routine, not something that requires a "crypto-currency", digital wallets or exchanges. I give you my IBAN number and you can send me money instantly, online, free (or essentially free), no chargebacks. Only a place where people still send each other checks by mail could marvel at something like bitcoins for legitimate purposes.
My sister lives in South Africa. She can go online and transfer money from her bank account to any other bank account in the country. Then, she e-mails proof of the transaction to the recipient and she is done. (To the recipient the bank transaction is only identified by a transaction ID, not by the sender's name or account number.) It costs nothing in bank fees to do this.
It is basically impossible for me to send money to a bank account in South Africa. (I am a book collector and also need to pay people to do research at the state archives.) Believe it or not, I have to resort to Western Union. Pay Pal does not work either.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Re: Bitcoin price plunges
FYI there is one Bitcoin storage startup that claims to be insured against loss by Lloyds of London: http://arstechnica.com/business/2014/01 ... oin-vault/Phineas J. Whoopee wrote:No Bitcoin exchange, nor if there are other Bitcoin repositories that aren't exchanges that I don't know the names of, has anything like FDIC insurance. There ain't none.
Re: Bitcoin price plunges
I posted a link to this article earlier. What you describe is susceptible to the "transaction malleability" bug with bitcoins.Leeraar wrote:She can go online and transfer money from her bank account to any other bank account in the country. Then, she e-mails proof of the transaction to the recipient and she is done. (To the recipient the bank transaction is only identified by a transaction ID, not by the sender's name or account number.)
From the article:
Edit: I misread your post. I thought she was doing this with bitcoins. Sorry.On the other hand, watching for a transaction ID is an easy mistake to make, and it is kind of odd to call something a transaction ID when it can be changed. This is certainly a rough edge in the Bitcoin design, which could have been avoided and will likely be fixed in the future. This was an avoidable error by the Bitcoin designers.
Last edited by adrift on Wed Feb 26, 2014 4:43 pm, edited 1 time in total.
Re: Bitcoin price plunges
If you want to trade coins, they need to be stored on an exchange. Trading coins in and out of fiat is one strategy to increase your coin holdings (if you do it well).manwithnoname wrote:What I don't understand about bitcoin investors is how can they store bitcoins at an unregulated exchange with no FDIC insurance where they can be stolen or hacked at will.
For example, recently when BTC went from $600 -> $400 -> back to $600, some people expanded their BTC holdings substantially. This possibility of return requires some risk. One of these risks is needing to trust the exchange.
Those who trusted Bitstamp/BTC-E/Bitfinex/Huobi/BTC China/Vault of Satoshi/CampBX/Cryptsy during this period were fine - they were able to trade their way to losses or gains purely based on the volatility. If you played your cards right, you made up to 50% return. Now most people probably didn't nail the exact bottom and the exact top, but it was possible.
Those who trusted MtGox got screwed. OTOH, MtGox was offering MASSIVELY higher returns ($90/BTC vs $400/BTC) than the other exchanges, so in theory their higher risk was compensated for by higher possible returns. And it didn't work out for them, but that's the nature of taking extreme risks for commensurately higher returns.
1. Self-managed electronic wallets (Electrum, Armory, etc.) & paper wallets (including the steel/porcelain/etc. ones)manwithnoname wrote:Where can bit coins be stored other than exchanges? Its not like you can carry them in your pocket or deposit them in your FDIC insured checking account.
2. Online wallets & cold storage startups (e.g. Elliptic Vault, Blockchain.info, Coinkite, Coinbase, etc.)
Every sentence in this whole paragraph applies equally to PayPal as it does to Bitcoin. But yet, the markets values PayPal. Why is Bitcoin different?manwithnoname wrote:The inherent defect in bitcoin as a currency is that it is a virtual product that exists only in cyberspace that can disappear without a trace. There is no need in the financial markets for a private currency backed only by the creditworthiness of its investors that can vanish in a keystroke other that to engage in transactions that avoid the reporting/tracking requirements for currency transactions.
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Re: Bitcoin price plunges
And the Elliptic website states:neofight wrote:FYI there is one Bitcoin storage startup that claims to be insured against loss by Lloyds of London: http://arstechnica.com/business/2014/01 ... oin-vault/Phineas J. Whoopee wrote:No Bitcoin exchange, nor if there are other Bitcoin repositories that aren't exchanges that I don't know the names of, has anything like FDIC insurance. There ain't none.
Everyone must judge what is "cheap" and what is "expensive," but that strikes me as non-negligible. It is starting to get into the same ballpark of costs as credit card transaction fees, isn't it?We charge a simple annual rate of 2% of the chosen Liability Limit, which is specified in GBP. We bill you at the end of each month, in bitcoins. To calculate the number of bitcoins due each month, we use the BTC/USD exchange rate on Bitstamp and the prevailing GBP/USD rate at the time payment is due. Please see the pricing calculator on our Vault page to get an idea of the Liability Limit you might require.
Also... by the way... how does one verify that they actually have the insurance they say they have? Can you check that independently with Lloyd's of London?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: Bitcoin price plunges
Bitcoin believers.....ever start to think that Mt. Gox was just a giant scam? Prices were higher on their exchange because they were trying to lure in deposits? They weren't robbed by hackers, instead they just robbed the depositors.
Re: Bitcoin price plunges
Agreed, that is why my original post used the phrase "...that claims to be insured by...".nisiprius wrote:Everyone must judge what is "cheap" and what is "expensive," but that strikes me as non-negligible. It is starting to get into the same ballpark of costs as credit card transaction fees, isn't it? Also... by the way... how does one verify that they actually have the insurance they say they have? Can you check that independently with Lloyd's of London?
I think the service is "too expensive", and also that if they were faced with catastrophic claims, one might then discover the level of coverage by Lloyds is less than an optimistic observer might expect. Who knows... But the secure storage of coins is a definite challenge for Bitcoin holders, and I do believe that there will be many more services created to solve this problem and capture a portion of the profit in exchange.
100 years of regulation and development of commonly accepted practices for financial institutions (including stuff like FDIC insurance) is not free, and is also a real value to consumers. Bitcoin diehards sometimes overlook or dismiss this value, and IMHO it is one of the things that the cryptocurrency services area needs to get better at, before mainstream adoption can happen.
Re: Bitcoin price plunges
I'm not a 'believer', though I'm not a 'denier' either.Rainier wrote:Bitcoin believers.....ever start to think that Mt. Gox was just a giant scam? Prices were higher on their exchange because they were trying to lure in deposits? They weren't robbed by hackers, instead they just robbed the depositors.
I don't believe someone came up with a scam and figured the best way to do it was to start with a Magic the Gathering trading site, etc. "This plan is perfect, we'll play on the popularity of an obscure subculture game and in several years this obscure electronic currency will be worth $1000!!!" Just doesn't cut it. Someone that creative has got to have an idea with better ROI/Risk. I think your statement could be plausible if you reworded it to "became a scam", etc. It makes a lot more sense to me that once it busted out and started doing a lot of business and basically becoming a ForEx site that someone saw an opportunity to run off with a bunch of it.
And after spending 5 minutes reading the top hits for MtGox, I see that the flaw in the system appears to be that you could fool their system into duplicating a withdrawl transaction. So with the knowledge of the loophole, people externally (and/or possibly internally) were able to play the software like an ATM/Slot Machine/Diebold Voting Machine into giving them twice as much money/money/votes. I can imagine an ATM that's been giving out 2x the money it's supposed to running dry even when it "shouldn't".
roymeo
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-- "Libra", Don DeLillo
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Re: Bitcoin price plunges
Which is exactly what all of the bitcoin advocates assured us was impossible. If I recall correctly, we were told that the bitcoin algorithm rendered such a thing impossible unless you could convince miners controlling more than half of all the computing power in the bitcoin ecosystem to collude together, and I don't think anyone has said that is what occurred.roymeo wrote:...And after spending 5 minutes reading the top hits for MtGox, I see that the flaw in the system appears to be that you could fool their system into duplicating a withdrawl transaction...
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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Re: Bitcoin price plunges
You sister is transferring South african RAND South Africa does have exchange controlsLeeraar wrote: My sister lives in South Africa. She can go online and transfer money from her bank account to any other bank account in the country. Then, she e-mails proof of the transaction to the recipient and she is done. (To the recipient the bank transaction is only identified by a transaction ID, not by the sender's name or account number.) It costs nothing in bank fees to do this.
It is basically impossible for me to send money to a bank account in South Africa. (I am a book collector and also need to pay people to do research at the state archives.) Believe it or not, I have to resort to Western Union. Pay Pal does not work either.
L.
You cant just send dollars to someone in South africa
I pay my south African travel agent every year on a secure payment site that will take paypal, credit cards debit cards or almost anything else. It acts as the foreign exchange compliance point.
Re: Bitcoin price plunges
I have no idea if Bitcoin will be viable long-term or not, but it is important to note that the flaw in this case is with Mt. Gox and their exchange system and not with Bitcoin itself.
I'm pulling for Dogecoin myself...
I'm pulling for Dogecoin myself...
Re: Bitcoin price plunges
My take is that even if it is completely isolated to Mt Gox, it puts serious doubt in my mind about the viability of the concept. It means that there is a very substantial risk of using any exchange, as there could well be other flaws that could be exploited by well-meaning or nefarious sources, including the exchanges themselves.kenschmidt wrote:I have no idea if Bitcoin will be viable long-term or not, but it is important to note that the flaw in this case is with Mt. Gox and their exchange system and not with Bitcoin itself.
I'm pulling for Dogecoin myself...
It's an interesting experiment, and maybe it (or another cryptocurrency) becomes mainstream someday - even relatively soon. I'm not planning on speculating on any of it, though.
Retirement investing is a marathon.
Re: Bitcoin price plunges
I would agree with all of that. It's a very immature technology. Doesn't necessarily mean it's 100% bad, but it's not exactly trustworthy either. But people used to lose money when the local bank went bust too and that doesn't happen now. Whether cryptocurrencies ever get to that point? I'd lean towards not - I sure wouldn't buy them right now with real money - but then stranger things have happened too.kenyan wrote:My take is that even if it is completely isolated to Mt Gox, it puts serious doubt in my mind about the viability of the concept. It means that there is a very substantial risk of using any exchange, as there could well be other flaws that could be exploited by well-meaning or nefarious sources, including the exchanges themselves.kenschmidt wrote:I have no idea if Bitcoin will be viable long-term or not, but it is important to note that the flaw in this case is with Mt. Gox and their exchange system and not with Bitcoin itself.
I'm pulling for Dogecoin myself...
It's an interesting experiment, and maybe it (or another cryptocurrency) becomes mainstream someday - even relatively soon. I'm not planning on speculating on any of it, though.
Re: Bitcoin price plunges
Fundamental misunderstandings at play here.nisiprius wrote:Which is exactly what all of the bitcoin advocates assured us was impossible. If I recall correctly, we were told that the bitcoin algorithm rendered such a thing impossible unless you could convince miners controlling more than half of all the computing power in the bitcoin ecosystem to collude together, and I don't think anyone has said that is what occurred.roymeo wrote:...And after spending 5 minutes reading the top hits for MtGox, I see that the flaw in the system appears to be that you could fool their system into duplicating a withdrawl transaction...
MtGox's custom wallet software decided to re-issue withdrawals that it thought had failed, that had in fact not failed. They wrote code to detect if a transaction had succeeded or not, and their code was wrong. Since their code was wrong, it kept re-issuing withdrawals.
Blaming this on the "bitcoin algorithm" is like finding an ATM that has a bug and puts out too much cash, then blaming the US dollar for the issue.
One could complain that the bitcoin protocol has subtleties that led a sub-par engineering organization into making this mistake, then not detecting the problem for years *even when they were paying out more per month than their bookkeeping records should have said they were*, but again, this is crappy engineering and crappy bookkeeping, NOT a problem with the protocol - or in my analogy, the US Dollar.
That is, unless you feel the USD is to blame for Bernie Madoff or Enron.
Re: Bitcoin price plunges
Professor,Professor Emeritus wrote:You sister is transferring South african RAND South Africa does have exchange controlsLeeraar wrote: My sister lives in South Africa. She can go online and transfer money from her bank account to any other bank account in the country. Then, she e-mails proof of the transaction to the recipient and she is done. (To the recipient the bank transaction is only identified by a transaction ID, not by the sender's name or account number.) It costs nothing in bank fees to do this.
It is basically impossible for me to send money to a bank account in South Africa. (I am a book collector and also need to pay people to do research at the state archives.) Believe it or not, I have to resort to Western Union. Pay Pal does not work either.
L.
You cant just send dollars to someone in South africa
I pay my south African travel agent every year on a secure payment site that will take paypal, credit cards debit cards or almost anything else. It acts as the foreign exchange compliance point.
You are missing the point. It has nothing to do with exchange controls. It has to do with Paypal (until recently) not being able to send funds to ZA, and with the stupidly archaic attitude of the USA banking system to the rest of the world. My problem is sending ZAR 200 (USD 20) to some individual to buy a book, or ZAR 4000 (USD 400) for a week's research in the archives. In ZA (or, I believe, in Europe) I can just make a no-cost transfer to their bank account.
Let me ask: We are both in the USA, I presume. How do I send you an amount of about $20? In ZA, if I know your bank account number, it is done in a few seconds at no cost to either of us.
I could rant on: In the USA you pay to use an ATM. In other parts of the world they have figured out that ATMs are far cheaper than live tellers. At my local bank (I only ever go there to get signature guarantees) they have greeters and free coffee and donuts, but they charge for the ATM. Go figure.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Re: Bitcoin price plunges
kenschmidt wrote:I have no idea if Bitcoin will be viable long-term or not, but it is important to note that the flaw in this case is with Mt. Gox and their exchange system and not with Bitcoin itself.
I'm pulling for Dogecoin myself...
I think that is oversimplifying what really happened. The transaction malleability problem is just that - a problem. Yes, wallet implementations can be made to prevent it from causing issues but it is still a problem with the Bitcoin protocol that is likely to be fixed at some point.
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Re: Bitcoin price plunges
There's nothing to prevent a future crypto-currency from either convincing a crowd of miners or from being "10x better", whatever that means. That doesn't by itself mean that bitcoin is or will be a failure; it does mean that the hard limit on the number of bitcoins is not really a hard limit.FNK wrote:...
Convincing a crowd of people to run mining operations. The larger the mining pool, the more secure the currency. Whatever comes to displace bitcoin has to be 10x better.technovelist wrote:What makes (made?) Bitcoin unique such that no one could create something just as "secure" and "cool"?
My guess is that the NSA will figure out how to hack the algorithms in 5 years anyway