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grayfox
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Buy

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GoldenFinch
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Re: Buying and Spending Bitcoin

Post by GoldenFinch »

Interesting! Your description draws a mental picture of a potentially complicated future. Some people will be left behind (probably me).

Things are changing quickly. My husband has Apple Pay on his Apple Watch and I watched him pay for groceries the other day by getting his arm scanned.
Longtermgrowth
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Re: Buying and Spending Bitcoin

Post by Longtermgrowth »

I just looked up Mycelium on my phone, and the first app coming up is "Mycelium Bitcoin Wallet". I noticed in comments that miner fees are getting outrageous, and saw a comment about fees being listed as 3usd, but turning out to be 18usd. No clue what type of transactions they were doing though...
roy11
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Re: Buying and Spending Bitcoin

Post by roy11 »

Last day my son was talking about Bitcoin and Litecoin. He is a kind of tech guy. He was trying to make me understand how this thing works. But he failed terribly in making me understand. I guess it's just not me who doesn't understand the future.
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grayfox
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Kenkat
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Re: Buying and Spending Bitcoin

Post by Kenkat »

It may then shock you to find out that there are many iOS users who never use iTunes and always download apps from the App Store directly to their devices. I haven’t connected my iPad to iTunes in about 4 years and my Android phone has never been connected to a PC or similar device.
Fox
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Re: Buying and Spending Bitcoin

Post by Fox »

Before anyone starts buying bitcoin or cryptocurrency, you need to be prepared where to store it, since you essentially become your own bank. Most people will buy bitcoin, litecoin, etc from an online exchange rather than an ATM. Coinbase is a very popular US based exchange.

You can store bitcoin on mobile wallets, desktop wallets, hardware wallets, paper wallets and on exchanges.

Currently, bitcoin seems to be better used as a store of value rather than currency. There is work being done by the developers to scale the bitcoin network to increase transaction speed and reduce fees.

If you keep any bitcoin or other cryptocurrency on your smartphone, make sure you store your private key or recovery phrase that the app prompts you to create so you will still be able to recover your funds if you phone it lost or damaged.
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linenfort
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Re: Buying and Spending Bitcoin

Post by linenfort »

Excellent thread! Thanks for posting your experiences.
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Re: Buying and Spending Bitcoin

Post by nisiprius »

linenfort wrote: Thu Nov 16, 2017 11:08 amExcellent thread! Thanks for posting your experiences.
Ditto.

What happens if you lose the "master seed key?" Do you end up with a big wheel of bitcoin at the bottom of the sea... still there, "safe," can't be stolen by anybody else, just inaccessible to you?

This page says that the Subway sandwich chain accepts bitcoin: Who accepts Bitcoins[sic] As Payment? List of Companies because it is one of the few places on their list that I genuinely use already.

After you buy your coffee, if you have the time and the inclination, I'd be very curious to see whether you can actually buy a sandwich at Subway with bitcoin. I just actually went to a Subway website (figuring they would be more likely to accept it as an online order than in person at the store), placed an order, and this is what the payment screen looked like for me:

Image

I see PayPal. I don't see any bitcoin option, do you?
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HerbRight
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Re: Buying and Spending Bitcoin

Post by HerbRight »

wow , in the future we wont need money at all... thats creepy!
Valuethinker
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Re: Buying and Spending Bitcoin

Post by Valuethinker »

HerbRight wrote: Thu Nov 16, 2017 12:14 pm wow , in the future we wont need money at all... thats creepy!
Bitcoin isn't money?

Or did you mean simply no cash, just plastic?

Not sure where USA is on this, but in the UK "touch and pay" chip credit and debit cards are big. And having sworn I'd never use it, I use it (credit card) that way all the time. For very small purchases.
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grayfox
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Fox
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Re: Buying and Spending Bitcoin

Post by Fox »

Depending on the time it took to confirm the transaction, the price of bitcoin itself could have changed several hundred dollars too!

If you want to acquire bitcoin without any fees, then you can register on Coinbase, wire transfer from a checking account for free (takes 7 days), then move USD to GDAX.com (Coinbase's trading site), buy bitcoin, then send to a wallet. There are youtube video's on this.
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Oicuryy
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Re: Buying and Spending Bitcoin

Post by Oicuryy »

How much coffee can you buy with 0.006531 BTC? How many euros would it take to buy that amount of coffee at a regular coffee shop?

Ron
Money is fungible | Abbreviations and Acronyms
J_Markov
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Re: Buying and Spending Bitcoin

Post by J_Markov »

Forgive my ignorance on monetary policy, but can the Federal Reserve come up with a cryptocurrency? In other words, can they decide one day that they will substitute the dollar for their own cryptocurrency? In Europe many countries were switched to the Euro in the not so distant past, could they do the same in the future with a cryptocurrency?

I guess the point I'm getting is that it seems like a true possibility that the central banks can come up with their cryptocurrencies (or even they can agree on having a global currency). At that point the national currencies as we know it may disappear altogether. The central banks would still be in control though. Thoughts?
nova1968
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Re: Buying and Spending Bitcoin

Post by nova1968 »

Some people place more emphasis on being tech savvy vs saving money. Taking $2 out of your wallet or a credit card may be an easier way to buy a cup of coffee, but then again I've always been a late adaptor.
Valuethinker
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Re: Buying and Spending Bitcoin

Post by Valuethinker »

J_Markov wrote: Thu Nov 16, 2017 2:33 pm Forgive my ignorance on monetary policy, but can the Federal Reserve come up with a cryptocurrency? In other words, can they decide one day that they will substitute the dollar for their own cryptocurrency? In Europe many countries were switched to the Euro in the not so distant past, could they do the same in the future with a cryptocurrency?

I guess the point I'm getting is that it seems like a true possibility that the central banks can come up with their cryptocurrencies (or even they can agree on having a global currency). At that point the national currencies as we know it may disappear altogether. The central banks would still be in control though. Thoughts?
On CBs and Crypto Bank of England blog has had a couple of posts and links to papers they have produced. Yes, it could be used for settlement between CBs.

SDRs are a money created by the IMF that CBs use in this fashion. Not crypto, but an artificial currency.

Given the experiences of the Euro and Greece, and the confirmation of Robert Mundell's Optimal Currency Area theory, I doubt the world will be in a hurry to give up national currencies. Too many issues. Countries normally do it either for political reasons (the Euro) or to cure hyperinflation (Central American countries that dollarized etc.).

Tbf, the Eurozone says that it is the absence of fiscal integration and banking integration that is the issue, rather than a failure of labour markets (which is where Mundell's theory would point you).
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Redstorm
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Re: Buying and Spending Bitcoin

Post by Redstorm »

Valuethinker wrote: Thu Nov 16, 2017 12:25 pm
HerbRight wrote: Thu Nov 16, 2017 12:14 pm wow , in the future we wont need money at all... thats creepy!
Bitcoin isn't money?

Or did you mean simply no cash, just plastic?

Not sure where USA is on this, but in the UK "touch and pay" chip credit and debit cards are big. And having sworn I'd never use it, I use it (credit card) that way all the time. For very small purchases.
Apparently big in the UK, Australia & Canada, SE Asia, and parts of Europe ; the US not so much

From Visa (applies to MasterCard, American Express etc also)

Australia is leading the world in its adoption of contactless payments

 There are over 127 million Visa payWave transactions made each month
 75 per cent of face to face Visa transactions are contactless
 There are hundreds of thousands of contactless terminals in place across the
country – providing the acceptance footprint for Visa Mobile payWave.

PayWave is Visa’s contactless payment technology that enables consumers to make “wave and go” payments at the shop counter using their payment cards, without a PIN for purchases under $100 or with a PIN for purchases over $100.

Consumers in Australia are now able to make the same contactless payments using a growing range of mobile phones or wearable technology – by waving their device in front of a contactless terminal.
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grayfox
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Re: Buying and Spending Bitcoin

Post by grayfox »

nova1968 wrote: Thu Nov 16, 2017 2:34 pm Some people place more emphasis on being tech savvy vs saving money. Taking $2 out of your wallet or a credit card may be an easier way to buy a cup of coffee, but then again I've always been a late adaptor.
Impossible. They only take bitcoin or Litecoin.
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Valuethinker
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Re: Buying and Spending Bitcoin

Post by Valuethinker »

grayfox wrote: Fri Nov 17, 2017 1:30 am At about a quarter to eight in the evening, I check the iPhone for about the millionth time.
0.006531 BTC
Success! :sharebeer

The transaction was confirmed. I looked on Block Explorer and it had 1 confirmation.
Actually, it is never really complete. If you are selling something, they recommend that you wait until 3 or 6 Confirmations before you ship the item. Here is what the current information shows on Block Explorer:

Summary
Size 336 (bytes)
Weight 1344
Received Time 2017-11-15 11:33:55
Included In Blocks 494500 ( 2017-11-15 18:43:20 + 429 minutes )
Confirmations 243 Confirmations
Visualize View Tree Chart

As time goes on, you get more and more confirmations. Right now as I type this it is up to 243 confirmations.

The transaction was included in Block 494500 at 18:43:20. I think that is UTC.

And that is a really cool Block number. 494500 8-) Maybe I will get a vanity license plate with that number. Here is the block Information for Block 494500

Summary
Number Of Transactions 2543
Output Total 16,806.147834 BTC
Estimated Transaction Volume 1,009.66814472 BTC
Transaction Fees 3.24311612 BTC
Height 494500 (Main Chain)
Timestamp 2017-11-15 18:43:20
Received Time 2017-11-15 18:43:20
Relayed By F2Pool
Difficulty 1,364,422,081,125.15
Bits 402705995
Size 1080.159 kB
Weight 3998.082 kWU
Version 0x20000000
Nonce 1749989050
Block Reward 12.5 BTC

The transaction was started at 12:34:14 local time and was included in a block at 19:43:20.
That's a little over 7 hours (429 minutes), with a mining fee of about 5 Euros (4.94 EUR = $5.83).

:idea: Less than 6 Bucks for 7 hours of excitement! That's cheaper than a movie. (Still haven't bought any coffee yet.)
I just wanted to say how much I appreciated your dedication to empirical research.

You will laugh, but some of the best Analyst pieces from Wall Street or the City of London began in just this way. The analyst covering a product set out to buy & use that product.

I knew someone once who got to fly in the Airbus 380 before it was commercially launched (NOT the Quantas one where the Rolls Royce engine exploded). And also the Boeing Dreamliner. Can you think of a better job? ;-). :happy :happy
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Duckie
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Re: Buying and Spending Bitcoin

Post by Duckie »

nisiprius wrote:What happens if you lose the "master seed key?" Do you end up with a big wheel of bitcoin at the bottom of the sea... still there, "safe," can't be stolen by anybody else, just inaccessible to you?
I forgot my PIN: an epic tale of losing $30,000 in Bitcoin.
This article is by a guy who lost his master seed key words and forgot his PIN. It details what he went through.
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AstroJohn
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Re: Buying and Spending Bitcoin

Post by AstroJohn »

Fascinating discussion, but my understanding is that in the US the IRS considers bitcoin to be an asset not a currency. So, when you buy bitcoin you acquire an asset and must record the cost in US dollars. When you then buy something, say a sandwich at Subway, you are selling the asset and must record the value of the sale in US dollars. The gain or loss in the two transactions then needs to appear on your tax returns.
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Re: Buying and Spending Bitcoin

Post by jhfenton »

AstroJohn wrote: Sat Nov 18, 2017 6:08 am Fascinating discussion, but my understanding is that in the US the IRS considers bitcoin to be an asset not a currency. So, when you buy bitcoin you acquire an asset and must record the cost in US dollars. When you then buy something, say a sandwich at Subway, you are selling the asset and must record the value of the sale in US dollars. The gain or loss in the two transactions then needs to appear on your tax returns.
I think it's safe to say that grayfox lost money on his coffee purchase. :sharebeer It gives new meaning to complaints about small lots. Not to mention the wash sale questions!

Thanks again, grayfox, for your hard work.
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Re: Buying and Spending Bitcoin

Post by GoldenFinch »

Grayfox this is an extremely impressive documentation of your investigation into using bitcoin. I imagined it was a bit complex, but wow! Thanks!
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Re: Buying and Spending Bitcoin

Post by nisiprius »

AstroJohn wrote: Sat Nov 18, 2017 6:08 am Fascinating discussion, but my understanding is that in the US the IRS considers bitcoin to be an asset not a currency. So, when you buy bitcoin you acquire an asset and must record the cost in US dollars. When you then buy something, say a sandwich at Subway, you are selling the asset and must record the value of the sale in US dollars. The gain or loss in the two transactions then needs to appear on your tax returns.
And can you buy a sandwich at Subway with bitcoin? I still want to know. Has anyone done it and what, exactly is the procedure? I don't buy things at Subway oftener than once a month but I'll make a point of asking next time. I guess Grayfox isn't in the U.S. and can't easily try the experiment.
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therub
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Re: Buying and Spending Bitcoin

Post by therub »

I really appreciate your approach here :)

A few thoughts that might help clarify things if you want to actually have a good experience with using crypto currencies day-to-day.

Bitcoin is full of drama - the folks who maintain it would prefer it stays easy to run a "node", so that there are many of them available, and therefore are reluctant to raise the number of transactions that the network can handle (because then it may become more expensive to run a node). They want to see solutions outside of bitcoin handle the day-to-day transactions. As a result, fees are skyrocketing and Bitcoin is no longer at this time suitable for small transactions. For those of us who have watched this for a while, this is disappointing. Somewhat officially, Bitcoin is now for "storing value", not for performing transactions.

To get an idea of the number of bitcoin transactions pending, look at the mempool. These are all the transactions which are waiting to be confirmed. As it rises, delays increase, and higher fees result. This chart is color coded by fee amounts: https://jochen-hoenicke.de/queue/#2w. Miners, obviously, process higher fee transactions first (they get the fees). Also, fees aren't related the the dollar amount of the transaction, it's related to the size, in bytes, of the transaction. That means that you could theoretically transfer 100 bitcoin for less than .1 bitcoin; it just depends on how many inputs and outputs in the transaction.

Bitcoin wasn't always like this. The way the 'blocks' work is they are 1MB, and they are mined about every 10 minutes. So the capacity of the network is 1MB worth of transactions per 10 minutes. Back when there were fewer transactions than capacity, fees were optional, and your transaction would usually be in the next block available (10 minute wait or less). Now that every block is full, it can take some time and/or some expense to get a confirmation.

This is where Litecoin and other alternatives come in.

Litecoin is similar to bitcoin except its fees are low and it finds a block every 2.5 minutes. Its price has been quite stable over time compared to bitcoin (relative to crypto currency standards). If you had gone with litecoin instead of bitcoin, I dare say your experience would have been quite a bit more pleasant.

The other one I'll coin I'll mention that you may start seeing is "Bitcoin Cash". This was 'forked' from Bitcoin a few months ago by people who disagreed with how Bitcoin is being managed. They have increased the block size and to some extent restored the original vision of Bitcoin. Its price has not been stable, but it is gaining in popularity.
Fees are the rub.
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Re: Buying and Spending Bitcoin

Post by invest0 »

Well, you're not wrong that there are high fees and it's a bit slow yet. But two points.

1. It's still better than gold. What are people going to pay to ship their rocks to Amazon when they lose faith in fiat currency?

2. It's a protocol and protocols can be improved upon. Sort of like looking at a 1960s computer and saying that you'll stick with your abacus, because it's cheaper and you like that you can put one in your pocket.
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Re: Buying and Spending Bitcoin

Post by Nate79 »

Technology solving a problem that doesn't exist. I really enjoy using Samsung Pay and good cash back credit card. Bitcoin is really a joke.
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Re: Buying and Spending Bitcoin

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nisiprius wrote: Sat Nov 18, 2017 3:29 pmAnd can you buy a sandwich at Subway with bitcoin? I still want to know. Has anyone done it and what, exactly is the procedure? I don't buy things at Subway oftener than once a month but I'll make a point of asking next time. I guess Grayfox isn't in the U.S. and can't easily try the experiment.
Same as any bitcoin transaction, I imagine. They give you a QR square to scan on your phone if you have a phone wallet.

Actually, one of the earliest bitcoin transactions was a 10,000-bitcoin pizza in 2010. Almost $80,000,000 today.
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Re: Buying and Spending Bitcoin

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Nate79 wrote: Sat Nov 18, 2017 6:17 pm Technology solving a problem that doesn't exist. I really enjoy using Samsung Pay and good cash back credit card. Bitcoin is really a joke.
It solves plenty of problems. It sounds like they're just not yours right now.

* Making it difficult for your government to track you (illegal activities, dodging taxes, privacy concerns).
* Making it difficult for other governments to track you (like how the United Nations has recently been sending aid in Bitcoin to subvert political interference).
* As a hedge for when faith is lost in national currencies (like gold. maybe not happening in developed countries soon, but is relevant plenty of places).
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Re: Buying and Spending Bitcoin

Post by Nate79 »

invest0 wrote: Sat Nov 18, 2017 6:31 pm
Nate79 wrote: Sat Nov 18, 2017 6:17 pm Technology solving a problem that doesn't exist. I really enjoy using Samsung Pay and good cash back credit card. Bitcoin is really a joke.
It solves plenty of problems. It sounds like they're just not yours right now.

* Making it difficult for your government to track you (illegal activities, dodging taxes, privacy concerns).
* Making it difficult for other governments to track you (like how the United Nations has recently been sending aid in Bitcoin to subvert political interference).
* As a hedge for when faith is lost in national currencies (like gold. maybe not happening in developed countries soon, but is relevant plenty of places).
Of those 3 reasons what makes you use bitcoin in your day to day activities? I mean you do use bitcoin in all of your spending right?

I don't care about #1. I do not participate in illegal activity and if this is the purpose of bitcoin it has a bleak future.

#2 could be shut down if a govt wanted to.

#3 call me extremely skeptical that if we get in that position that bitcoin will remain stable enough to put food on the table.
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Re: Buying and Spending Bitcoin

Post by invest0 »

Nate79 wrote: Sat Nov 18, 2017 6:58 pmOf those 3 reasons what makes you use bitcoin in your day to day activities? I mean you do use bitcoin in all of your spending right?
I don't. But Bitcoin doesn't need to make USD obsolete to matter.
Nate79 wrote: Sat Nov 18, 2017 6:58 pmI don't care about #1. I do not participate in illegal activity and if this is the purpose of bitcoin it has a bleak future.

#2 could be shut down if a govt wanted to.
You don't participate in the government analyzing your every transaction and companies buying/selling your spending data? I disagree, we move gradually closer to an Orwellian society every day. Just very slowly. Privacy might not matter to you, but it matters to a lot of people right now. Maybe you're already in retirement. But for the rest of us, it will only matter more if we keep on the path we're on.

While I'm sure that both of these things are true otherwise, the market is bigger than just you.
Nate79 wrote: Sat Nov 18, 2017 6:58 pm#3 call me extremely skeptical that if we get in that position that bitcoin will remain stable enough to put food on the table.
Well, again, the market is bigger than you. This has already happened. Remember the financial crisis in Greece? I'm no economist, but I can see a heck of a lot of political appeal to a truly decentralized currency. Not much sense in every country supporting USD as a reserve currency if interests aren't aligned. But nobody (well, everybody) owns Bitcoin.

It's not replacing a good points card in 2017 or 2018. But it's certainly not a joke.
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Re: Buying and Spending Bitcoin

Post by Swelfie »

Nate79 wrote: Sat Nov 18, 2017 6:58 pm
invest0 wrote: Sat Nov 18, 2017 6:31 pm
Nate79 wrote: Sat Nov 18, 2017 6:17 pm Technology solving a problem that doesn't exist. I really enjoy using Samsung Pay and good cash back credit card. Bitcoin is really a joke.
It solves plenty of problems. It sounds like they're just not yours right now.

* Making it difficult for your government to track you (illegal activities, dodging taxes, privacy concerns).
* Making it difficult for other governments to track you (like how the United Nations has recently been sending aid in Bitcoin to subvert political interference).
* As a hedge for when faith is lost in national currencies (like gold. maybe not happening in developed countries soon, but is relevant plenty of places).
Of those 3 reasons what makes you use bitcoin in your day to day activities? I mean you do use bitcoin in all of your spending right?

I don't care about #1. I do not participate in illegal activity and if this is the purpose of bitcoin it has a bleak future.

#2 could be shut down if a govt wanted to.

#3 call me extremely skeptical that if we get in that position that bitcoin will remain stable enough to put food on the table.
#1 does not imply criminal intent. Say for instance I am selling a $50k car. You want to buy that car with your well earned $50k. Neither of us are criminals. With an open ledger it may come to light that a few transactions ago that $50k you gave me was involved in a major illegal drug transaction. That money may be confiscated from me and I'm out a car when neither of us did anything wrong. A unit of trade that is only traceable in the single trade at hand is inherently more valuable than an open ledger asset because it is truly fungible.

#2 cannot be shut down. That is one of the strengths of the protocol. The entire force of the US Gov could certainly destroy the entire asset with an attack and make all Bitcoin or other crypto currency worthless, but it cannot selectively stop transactions. This leaves them with only a scorched Earth retaliation option which would have massive collateral damage so it's unlikely it would be used unless their back was really against a wall.

#3 has been happening in developing countries with failing currencies. Whether it would happen in a developed nation is unknown and heavy scepticism is wise.

And no one is using solely Bitcoin for their daily activities right now. Bitcoin is broken at the moment and nigh unusable. In the developed world with trusted currency there is a lack of vendors for any crypto currency and what there are are tooled for Bitcoin and as I said, it's broken. In developing countries with failing currencies they are more likely to use coins that aren't broken such as Litecoin, Dash, Bitcoin Cash, Ethereum and Monero. The black markets are rapidly moving towards Monero because it is much more fungible than anything else. For play money spending amongst geeks, Litecoin is probably the most popular right now with Ethereum right behind.
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Re: Buying and Spending Bitcoin

Post by nisiprius »

therub wrote: Sat Nov 18, 2017 4:02 pm...Somewhat officially, Bitcoin is now for "storing value", not for performing transactions...
Which is a significant abandonment and retraction of claims formerly made for it, "somewhat officially." It is also a significant devaluing of its usefulness, because it isn't very good as a store of value (and was obviously not ever designed to be one). The point of a store of value is to be relatively stable, which bitcoin isn't, and nothing in its design even attempts to stabilize it. Bitcoin advocates make the same argument gold advocates do, which is "who cares if it's stable as long as I'm making money on it?" And the answer is that there are lots of volatile things, and just because they are going up doesn't make them a good place to store value.

A few years ago, the argument was "OK, we will grant that bitcoin is not a stable store of value, but that not important, because the real value of bitcoin is low transaction costs. They are far lower than for credit cards, and that is going to lead quickly to widespread adoption by merchants everywhere." That's not a straw man.

Why I Invest Almost 20% of my Net Worth in Cryptocurrency
Image

Claims of speed, "microscopic" transaction costs, and suitability for micropayments have now been thoroughly falsified. The only valid statement there is "if it scales effectively."

A proposed "solution" proves the existence of a problem, and bitcoin cash and Lightning Network prove the existence of a serious problem in bitcoin. The later is only a proposal that hasn't been implemented, and its pros and cons are controversial. And there's already been a$13 million bitcoin cash troublesome-event-not-unlike-a-loss, which of course isn't really the fault of bitcoin cash, just as the $130 million troublesome-event-not-unlike-a-loss in Ethereum wasn't really Ethereum's fault, and Mt. Gox wasn't really bitcoin's fault, etc. etc.
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nisiprius
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Re: Buying and Spending Bitcoin

Post by nisiprius »

So can we agree that, based on news accounts and on greyfox's experience, that, as of November 2017,

1) bitcoin is not a practical medium for ordinary consumers to use in everyday transactions with most well-known national retailers? bitcoin transactions are still a novelty and a hobby for early adopters?

2) bitcoin itself has not reached and probably will not reach even the acceptance of PayPal... or Apple Pay, Samsung Pay, Venmo, Google Wallet, etc.

3) The only things that can are completely new systems, some still in development, which might share the bitcoin "brand" and use bitcoin internally in some way... but to all intents and purposes are still completely new systems, with completely new spectrums of risks and vulnerabilities, starting fresh now with a current market penetration of zero?
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.
Swelfie
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Re: Buying and Spending Bitcoin

Post by Swelfie »

nisiprius wrote: Sun Nov 19, 2017 11:23 am So can we agree that, based on news accounts and on greyfox's experience, that, as of November 2017,

1) bitcoin is not a practical medium for ordinary consumers to use in everyday transactions with most well-known national retailers? bitcoin transactions are still a novelty and a hobby for early adopters?

2) bitcoin itself has not reached and probably will not reach even the acceptance of PayPal... or Apple Pay, Samsung Pay, Venmo, Google Wallet, etc.

3) The only things that can are completely new systems, some still in development, which might share the bitcoin "brand" and use bitcoin internally in some way... but to all intents and purposes are still completely new systems, with completely new spectrums of risks and vulnerabilities, starting fresh now with a current market penetration of zero?
#1 partially agree. It's certainly not consumer level tech at the moment due to complexity and high fees. High fees I'll address in #3. Complexity may never be simple enough for consumers. The lack of middleman can be a hindrance here. The concept that a "password reset" is impossible and that this electronic money is just like cash may never catch on because consumers may be unwilling to accept that they can lose all of f their money by misplacing their password or hardware failure causing it to be inaccessible. Consumers are not in the habit of airgapping their systems against malware attacks either. Chargebacks being impossible is another issue for them. Consumer level may just not be the right market. On the other hand, it's gone beyond hobbiest and novelty adoption. We are seeing CME launching futures against it and it is very useful for international transactions. As a reconciliation tech it's ready now aside from volatility.

#2 consumer level, very possibly will never attain heavy traction. However, between banks and large institutions it's possible it could even upset the USD as the world's reserve currency. It has some very attractive properties in that arena. (I'm speaking of crypto currency in general here, not Bitcoin per say. Bitcoin was just the first mover in this space and has the highest brand recognition but has fallen very behind in technology to the newer, more refined coins.)

#3 market penetration of the new coins is far from zero and they are not starting from scratch. Bitcoin is only about 50% of the market. Bitcoin can also change to adopt new technologies and it is doing so, so you can't discount Bitcoin altogether either. Bitcoin itself is vulnerable to many issues that have already been addressed by other coins and the high fees and slow transaction times are arguably a demonstration of this (Ethereum on average runs about 50% greater daily transaction volume than Bitcoin with no scaling issues in sight. It's quite a bit larger than Bitcoin in network, just not in market cap.)

Much of the problems we are seeing right now in Bitcoin is not inherent to the technology, rather it is market manipulation. The market is growing extremely rapidly, worth hundreds of billions of dollars today, and is completely unregulated. Activities that would have people thrown in prison in any other market are par for the course in crypto currency right now. Most of the information that trickles down to the layman is simply incorrect and designed to position the opinions of investors in favor of some cabal's investment.

As far as vulnerabilities in general go, the underlying tech has been rock solid in most applications. What we see are 1) vulnerability to psychological market manipulation which has new implications being that the tech itself is based on market game-theory making new meta-manipulation games possible that we have not witnessed in other markets. 2) platforms built on top of the tech have been vulnerable which have erroneously been attributed to the underlying tech. Most notably Ethereum has had multiple breaches publicized in the hundreds of millions of dollars loss range. These were not failures in Ethereum itself though, which has never been breached. These were vulnerabilities in applications built on top of the protocol. This is similar to saying the internet will never work because of the Equifax breach.

My thoughts at this time are:

1) The tech is useful and very promising and valuable and likely to increase in value in the long term. It does need to find it's niche though as it is immature. Like the invention of the internet though, this is a general tech with applicability to multiple markets.

2) as with any new market, which player to invest in is unknown as most will not survive the long term.

3) there are thieves everywhere, it's unregulated, investors have no recourse and the market has extreme volatility. This is an extremely high risk market and you should not invest anything unless you are very comfortable with 100% loss of your investment.
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Re: Buying and Spending Bitcoin

Post by invest0 »

nisiprius wrote: Sun Nov 19, 2017 11:23 amSo can we agree that, based on news accounts and on greyfox's experience, that, as of November 2017,

1) bitcoin is not a practical medium for ordinary consumers to use in everyday transactions with most well-known national retailers? bitcoin transactions are still a novelty and a hobby for early adopters?
You'd be correct in saying that it's not practical for ordinary consumers right now. But I don't call the United Nations, the citizens of Greece, or basically every major financial institution at this moment, hobbiests, however.
nisiprius wrote: Sun Nov 19, 2017 11:23 am2) bitcoin itself has not reached and probably will not reach even the acceptance of PayPal... or Apple Pay, Samsung Pay, Venmo, Google Wallet, etc.
Has not reached, sure. In the 1990s, were you on the Luddite train re: the web? Coincidentally, HTTP and Bitcoin have something in common: they're both protocols. Both can be iterated. HTTP already has and that seemed to work out pretty well? As for simple, anonymous, international transactions, it already shows promise in overtaking PayPal in a lot of ways. There are still loads of countries that PayPal doesn't touch and their track record of poor policing through dispute/resolution policies have been suspect at best (basically, any consumer can have a 100% success rate at getting refunds if they know how to work that system).
nisiprius wrote: Sun Nov 19, 2017 11:23 am3) The only things that can are completely new systems, some still in development, which might share the bitcoin "brand" and use bitcoin internally in some way... but to all intents and purposes are still completely new systems, with completely new spectrums of risks and vulnerabilities, starting fresh now with a current market penetration of zero?
Not exactly. They'll be new in a manner not unlike how I really doubt you're surfing the web using HTTP 1.0 right now. Bitcoin is still being actively improved too (see: SegWit).

It *is* still possible that an altcoin overtakes Bitcoin at some point as well. That's been FUD'd into media profit so many times so far though and hasn't even come close to happening yet, despite performance advantages of Litecoin and others in the short-term. But that's not the only way that improvement can arise.
Swelfie
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Re: Buying and Spending Bitcoin

Post by Swelfie »

invest0 wrote: Sun Nov 19, 2017 2:36 pm It *is* still possible that an altcoin overtakes Bitcoin at some point as well. That's been FUD'd into media profit so many times so far though and hasn't even come close to happening yet, despite performance advantages of Litecoin and others in the short-term. But that's not the only way that improvement can arise.
It has come close. In June the Ethereum market cap was almost equal to Bitcoin. Some of the uncertainty resolution with their blocksize debate seems to have given them some breathing room, but that could change quickly again. Just 2 weeks ago the market cap of Bitcoin Cash spiked to about 60% of Bitcoin while Bitcoin was in free fall in the matter of a couple of hours.
furnace
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Re: Buying and Spending Bitcoin

Post by furnace »

Bitcoin is a casino right now. The house is pumping up the price to suck in new players. Once they run out of players, they will cash out, which will trigger a stampede for the door. The feeding frenzy is like what happens with the Powerball Lottery. The higher the jackpot, the more casual players you pull in, and the bigger the jackpot grows.

As for cryptos displacing the USD long term, that is wishful thinking. The US government will drop a nuke on anything that will remotely threaten the USD's dominance. Moreover, the underlying blockchain tech may not be as disruptive as people believe. Blockchain is just a recording system with some cryptography overlaid on it (distributed ledger). We have databases that do that job quite well now.
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Re: Buying and Spending Bitcoin

Post by GoldenFinch »

nisiprius wrote: Sun Nov 19, 2017 11:23 am So can we agree that, based on news accounts and on greyfox's experience, ...
I agree! And this has been one of the more interesting threads lately. Who do you know in real life that has used and understood bitcoin? I’m sure some of you have, but most people haven’t. I’ve learned a lot here. Thank you.
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