Buying bitcoins

brendan86 · 22-03-2013 11:14pm #1

Heh guys,

I've been doing a bit of research the last week into buying bitcoins.. I want to buy 1k worth, I know it's risky but I have it to spare and might just see how it goes for a year or so..

I have currently registered on mtgox.com and am awaiting approval on my Id verification.. Has anyone dealt with this site have any info for me?

If I put my money on mtgox that means I have to trust them with my bitcoins is this correct? I won't have to have a wallet on my computer?

I'm just basically asking for advice, it's what I want to do but if someone can explain the best way about it that knows more than me I would appreciate it

Thanks

Brendan

Cavehill Red · 22-03-2013 11:16pm

VERY volatile market. Recently spiked and fell back a little in the last week. Looking very bubblicious just presently. Only speculate with money you can afford to lose.

brendan86 · 22-03-2013 11:27pm

Cavehill Red wrote: »

VERY volatile market. Recently spiked and fell back a little in the last week. Looking very bubblicious just presently. Only speculate with money you can afford to lose.

Yeah I understand it is, It can go either way but every investment is a gamble maybe more so this one.. But I have it to spare and don't really mind, if it goes bad so be it.. I'm just wondering the best way to go about doing it..

Cavehill Red · 22-03-2013 11:43pm

It seems to me the only clear positive about bitcoins is their mobility. IE they can be accessed worldwide online. In the scenario you describe, where you merely have an allocated (or unallocated?) account, I don't see the point. If you're going to buy bitcoins, make sure you own them at least.

brendan86 · 22-03-2013 11:55pm

Cavehill Red wrote: »

It seems to me the only clear positive about bitcoins is their mobility. IE they can be accessed worldwide online. In the scenario you describe, where you merely have an allocated (or unallocated?) account, I don't see the point. If you're going to buy bitcoins, make sure you own them at least.

And what's the best way to buy them on your own? What sites recommended?

Thanks
Brendan

Cavehill Red · 23-03-2013 12:29am

brendan86 wrote: »

And what's the best way to buy them on your own? What sites recommended?

Thanks
Brendan

I took a look at them and decided against it. The US is already moving to regulate the trade, basing the decision on the significant anonymised use of bitcoins to trade in illicit substances. No one seems to know who is behind the architecture of the system. It appears to be artificially capped, which implies bubble possibilities. It is hackable.
There are sites I saw that seemed more credible than others, but I'm sorry to say I'm not prepared to recommend any form of this trade for you and suggest you do your due diligence.
If you decide to proceed, as with share ownership, or precious metals ownership, aim to ensure you are the nominal owner and can obtain sole access to your asset.

zonEEE · 23-03-2013 1:52am

I bought some a few weeks ago, bought them through mtgox and moved to my wallet on my PC, then I made a paper wallet and stored it in a safe place.

https://en.bitcoin.it/wiki/Securing_your_wallet#Paper_Wallets

Make sure you're PC is virus/spyware free and also encrypt you're hard drive.

The surge in price is due to recent events, (mtgox moving usa operations over to coinlab in silicone valley to gain credibility ) Started with 5000 customers on the 5th of march, goes live on the 29th of march.

And also the Cyprus saga.

I really don't see how governments can regulate Bitcoin. questions arise : If i store my bitcoin on a piece of paper in spain, would it be under spainish law? If i keep my bitcoins in the cloud hosted in another country are my Bitcoins regulated under that country?

Around the 55 euros at the moment. When was the fall back in the last week? Any time there is a big rally there's a market correction which drops a few dollars, this is to be expected, ive nearly doubled my money in less then a month.

Cavehill Red · 23-03-2013 3:09am

zonEEE wrote: »

ive nearly doubled my money in less then a month.

And if that doesn't scream bubble (or Ponzi) at you, I don't know what will.

zonEEE · 23-03-2013 3:53am

Cavehill Red wrote: »

And if that doesn't scream bubble (or Ponzi) at you, I don't know what will.

Its due to more and more people finding out about bitcoin. A month ago the 30-day Volume was 42 million USD its now 82 million USD on the mtgox dollar exchange, I cant remember the euro volume, its a lot lower, around 5 million now it was around 2 i think.

It will get a lot harder to mine bitcoins in the coming months with the introduction of ASIC mining (higher difficulty and the block reward has now changed to 25 from 50 which should all add value along with recent events, to the currency.

At the moment bitcoin is still very young, but it is growing and growing and with government decisions all around the world I can only see it growing in the future, sure it may be a rocky road, but as you said only gamble with what you can afford to lose.

Cavehill Red · 23-03-2013 4:00am

That volume issue could well be a product of both bubble mentality and a Ponzi structure.
The government decisions that would concern me about impacting on bitcoin would be the overtly stated desire by both US and UK politicians to introduce regulation. Anyone who thinks they won't be able to is being foolish, I believe.
If it's a Ponzi, getting in early will permit profit if you remember to get out before it pops. If it's a bubble, likewise, but you might have a little further to run.
Fundamentally, it's meaningless to talk about value in relation to bitcoin, as they are even more notional than fiat currency. Their primary value currently is that they facilitate anonymous purchase of illicit drugs via the internet.
Article from yesterday's Guardian makes some good points: http://www.guardian.co.uk/world/2013/mar/22/silk-road-online-drug-marketplace

moneymad · 23-03-2013 4:24am

Cavehill Red wrote: »

That volume issue could well be a product of both bubble mentality and a Ponzi structure.
The government decisions that would concern me about impacting on bitcoin would be the overtly stated desire by both US and UK politicians to introduce regulation. Anyone who thinks they won't be able to is being foolish, I believe.
If it's a Ponzi, getting in early will permit profit if you remember to get out before it pops. If it's a bubble, likewise, but you might have a little further to run.
Fundamentally, it's meaningless to talk about value in relation to bitcoin, as they are even more notional than fiat currency. Their primary value currently is that they facilitate anonymous purchase of illicit drugs via the internet.
Article from yesterday's Guardian makes some good points: http://www.guardian.co.uk/world/2013/mar/22/silk-road-online-drug-marketplace

it won't be long till you see a ticker on cnbc.

zonEEE · 23-03-2013 4:26am

Cavehill Red wrote: »

That volume issue could well be a product of both bubble mentality and a Ponzi structure.
The government decisions that would concern me about impacting on bitcoin would be the overtly stated desire by both US and UK politicians to introduce regulation. Anyone who thinks they won't be able to is being foolish, I believe.
If it's a Ponzi, getting in early will permit profit if you remember to get out before it pops. If it's a bubble, likewise, but you might have a little further to run.
Fundamentally, it's meaningless to talk about value in relation to bitcoin, as they are even more notional than fiat currency. Their primary value currently is that they facilitate anonymous purchase of illicit drugs via the internet.
Article from yesterday's Guardian makes some good points: http://www.guardian.co.uk/world/2013/mar/22/silk-road-online-drug-marketplace

There primary value at the moment is not for drugs, its been exaggerated by the media as is every other issue to do with drugs. Its the rarity of them, there will only ever be 21 million bitcoin. Around Half of them have been mined now. And mining has started to get more difficult.

Many online retailers have started to accept bitcoin.

If it didn't come back from the crash in 2011 I would have said bubble, however there was only one exchange back then now there's is many. http://bitcoincharts.com/markets/.

It has come back and doubled in value since the 2011 crash. It was purely a security issue which banks have the exact same issue. 2 years on and its growing growing growing.

Cavehill Red · 23-03-2013 5:01am

zonEEE wrote: »

It has come back and doubled in value since the 2011 crash. It was purely a security issue which banks have the exact same issue. 2 years on and its growing growing growing.

Classic bubble talk there: "Look at it's notional value increasing! Ignore the underlying problems in the market! Keep looking at it's notional value increasing!"

Whether bitcoin is primarily used to buy and sell drugs or not (and it has no other USP that I can detect), that will be the reason used by law enforcement to shut it down, presuming that it neither collapses under its own weight and that it is not actually a Ponzi. (Do YOU know who created and manages its architecture?)

zonEEE · 23-03-2013 5:23am

Cavehill Red wrote: »

Classic bubble talk there: "Look at it's notional value increasing! Ignore the underlying problems in the market! Keep looking at it's notional value increasing!"

Whether bitcoin is primarily used to buy and sell drugs or not (and it has no other USP that I can detect), that will be the reason used by law enforcement to shut it down, presuming that it neither collapses under its own weight and that it is not actually a Ponzi. (Do YOU know who created and manages its architecture?)

What underlying issues?

No other USP are you mad? People all around the world have lost confidence in the banking system and governments management of money. Bitcoin is being seen as the way forward. No government control, no bank, no printing of money like the Americans are doing right now which is the biggest bubble that's going to burst.

Creator - https://en.bitcoin.it/wiki/Satoshi_Nakamoto

Bitcoin is open source software, the code is there for everyone to see and anyone can submit coding towards the software. This is what the Internets all about.

Cavehill Red · 23-03-2013 5:47am

zonEEE wrote: »

What underlying issues?

Security and credibility primarily.

zonEEE wrote: »

No other USP are you mad? People all around the world have lost confidence in the banking system and governments management of money. Bitcoin is being seen as the way forward.

By you and a small fringe perhaps. But it has no other USP. There are plenty of alternatives to the banking system when it comes to wealth preservation, and even when it comes to currency (remember the barbarous relics?)

zonEEE wrote: »

No government control

YET.

zonEEE wrote: »

no bank, no printing of money like the Americans are doing right now which is the biggest bubble that's going to burst.

No bank required to store wealth in property or shares. No bank required to conduct transactions in currencies with 5 millennia of credibility behind them either.

zonEEE wrote: »

Creator - https://en.bitcoin.it/wiki/Satoshi_Nakamoto

Where is he again?

zonEEE wrote: »

Bitcoin is open source software, the code is there for everyone to see and anyone can submit coding towards the software. This is what the Internets all about.

But not necessarily what wealth retention is about though. Recall the dot bomb?

B.A._Baracus · 23-03-2013 5:51am

Can anyone explain what a bitcoin is to me in simple english

I've read up about it, i know computers work together and all that ... what I just don't get is that how can money be born from nothing?

It's like if I was to print up a note with my face on it, it doesnt mean its worth 20 dollars. lol. I just can't wrap my head around how a bitcoin holds value.

zonEEE · 23-03-2013 5:54am

Cavehill Red wrote: »

Security and credibility primarily.

By you and a small fringe perhaps. But it has no other USP. There are plenty of alternatives to the banking system when it comes to wealth preservation, and even when it comes to currency (remember the barbarous relics?)

YET.

No bank required to store wealth in property or shares. No bank required to conduct transactions in currencies with 5 millennia of credibility behind them either.

Where is he again?

But not necessarily what wealth retention is about though. Recall the dot bomb?

.com bubble but yet what is the leading industry in today's world? Technology.

Me and a small fringe?? haha do you live in a bubble?

Please explain how governments could take over bitcoin?

Cavehill Red · 23-03-2013 5:55am

B.A._Baracus wrote: »

Can anyone explain what a bitcoin is to me in simple english

I've read up about it, i know computers work together and all that ... what I just don't get is that how can money be born from nothing?

It's like if I was to print up a note with my face on it, it doesnt mean its worth 20 dollars. lol. I just can't wrap my head around how a bitcoin holds value.

Like anything it has the value someone is prepared to pay for it. It is the same as fiat currency, in that it isn't backed by anything tangible, but lacks the credibility of a state support. Effectively, it's an online electronic fiat currency, primarily being used by drug dealers to evade detection, which has been historically extremely volatile and is in my opinion likely in a bubble.

zonEEE · 23-03-2013 5:57am

B.A._Baracus wrote: »

Can anyone explain what a bitcoin is to me in simple english

I've read up about it, i know computers work together and all that ... what I just don't get is that how can money be born from nothing?

It's like if I was to print up a note with my face on it, it doesnt mean its worth 20 dollars. lol. I just can't wrap my head around how a bitcoin holds value.

There will only be ever 21 million bitcoins.

Explains it all.

Cavehill Red · 23-03-2013 5:57am

zonEEE wrote: »

.com bubble but yet what is the leading industry in today's world? Technology.

I'd say pharma or mining. Tech stocks haven't done so well in recent times.

zonEEE wrote: »

Me and a small fringe?? haha do you live in a bubble?

That's the second time you've failed to debate without being abusive. Once more and I will report you.

zonEEE wrote: »

Please explain how governments could take over bitcoin?

They don't need to take it over, and don't want to. They'd likely just shut it down.

zonEEE · 23-03-2013 6:05am

Cavehill Red wrote: »

I'd say pharma or mining. Tech stocks haven't done so well in recent times.

Maybe in the stock market, but im talking about changing the world, the money system in the world right now doesn't work, it never did, it needs to be changed.

Cavehill Red wrote: »

That's the second time you've failed to debate without being abusive. Once more and I will report you.

Abusive? Please.....

Cavehill Red wrote: »

They don't need to take it over, and don't want to. They'd likely just shut it down.

How?

Cavehill Red · 23-03-2013 6:12am

zonEEE wrote: »

Maybe in the stock market, but im talking about changing the world, the money system in the world right now doesn't work, it never did, it needs to be changed.

Maybe, but that doesn't make bitcoin any solution.

zonEEE wrote: »

Abusive? Please.....

If you can't argue civilly, you may find the mods reduce your ability to argue at all.

zonEEE wrote: »

How?

Simply declaring it illegal in major jurisdictions would be one way. That would destroy all credibility in it as a global currency. There are also infrastructural weaknesses in the bitcoin model which could be exploited. Finally, such a tiny market is desperately prone to major market manipulation by the economic sharks. See the JP Morgan manipulation of the COMEX as a recent example.
US politicians first raised the Silk Road issue in 2011. You can bet that since then both law enforcement and legislators have been monitoring bitcoin extremely closely. If they need to move on it, they will, and there will be no warning.

brendan86 · 23-03-2013 6:19am

Cavehill Red wrote: »

Maybe, but that doesn't make bitcoin any solution.

If you can't argue civilly, you may find the mods reduce your ability to argue at all.

Simply declaring it illegal in major jurisdictions would be one way. That would destroy all credibility in it as a global currency. There are also infrastructural weaknesses in the bitcoin model which could be exploited. Finally, such a tiny market is desperately prone to major market manipulation by the economic sharks. See the JP Morgan manipulation of the COMEX as a recent example.
US politicians first raised the Silk Road issue in 2011. You can bet that since then both law enforcement and legislators have been monitoring bitcoin extremely closely. If they need to move on it, they will, and there will be no warning.

And why can't they just shut down the Silk Road website, if there shipping drugs to countries where it's illegal surely it's easier to shut them down?

Cavehill Red · 23-03-2013 6:22am

brendan86 wrote: »

And why can't they just shut down the Silk Road website, if there shipping drugs to countries where it's illegal surely it's easier to shut them down?

I can't speak for law enforcement. I'd say shutting down the Silk Road wouldn't be too difficult for them. The fact that it has not been shut down thus far would suggest to me that law enforcement has infiltrated it and uses it to identify vendors and purchasers of illicit drugs.

zonEEE · 23-03-2013 6:22am

Cavehill Red wrote: »

Maybe, but that doesn't make bitcoin any solution.

If you can't argue civilly, you may find the mods reduce your ability to argue at all.

Simply declaring it illegal in major jurisdictions would be one way. That would destroy all credibility in it as a global currency. There are also infrastructural weaknesses in the bitcoin model which could be exploited. Finally, such a tiny market is desperately prone to major market manipulation by the economic sharks. See the JP Morgan manipulation of the COMEX as a recent example.
US politicians first raised the Silk Road issue in 2011. You can bet that since then both law enforcement and legislators have been monitoring bitcoin extremely closely. If they need to move on it, they will, and there will be no warning.

I cant see them declaring it illegal. Cash has always been used to buy drugs. Should we ban cash? The drug market is always on the rise, there is no stopping it, billions has been wasted around the world on the war on drugs, if you cant keep them out of high security prison how can you keep them out of society? The problem can not be stopped, the only solution to it is legalisation, regulation, taxation, and education.

Cavehill Red · 23-03-2013 6:23am

zonEEE wrote: »

I cant see them declaring it illegal. Cash has always been used to buy drugs. Should we ban cash? The drug market is always on the rise, there is no stopping it, billions has been wasted around the world on the war on drugs, if you cant keep them out of high security prison how can you keep them out of society? The problem can not be stopped, the only solution to it is legalisation, regulation, taxation, and education.

That's a different debate entirely, and again, one to which the solution does not necessarily revolve around electronic fiat currencies.

zonEEE · 23-03-2013 6:26am

Cavehill Red wrote: »

I can't speak for law enforcement. I'd say shutting down the Silk Road wouldn't be too difficult for them. The fact that it has not been shut down thus far would suggest to me that law enforcement has infiltrated it and uses it to identify vendors and purchasers of illicit drugs.

You do realise the people that run silkroad have the exact same technology as the government when it comes to hacking. Its not going anywhere any time soon. Also its traders that sell the drugs, they dont come straight from silkroad, kinda like ebay without the bidding.

zonEEE · 23-03-2013 6:27am

Cavehill Red wrote: »

That's a different debate entirely, and again, one to which the solution does not necessarily revolve around electronic fiat currencies.

Your the one that brought the drugs into it....

Cavehill Red · 23-03-2013 6:30am

What else do you invest in, ZonEEE? Because it sounds very like this is an ideological rather than an investment decision for you and all your posts are extremely emotional and lacking in diligence or critical distance.

zonEEE · 23-03-2013 6:52am

Cavehill Red wrote: »

What else do you invest in, ZonEEE? Because it sounds very like this is an ideological rather than an investment decision for you and all your posts are extremely emotional and lacking in diligence or critical distance.

Emotional? I really don't know where you getting that from? All the arguments I gave are all over the internet in much detail.

http://www.forbes.com/sites/timothylee/2013/02/28/the-bitcoin-bubble-that-wasnt/

I think your the one lacking in the critical distance... time will tell...

Cavehill Red · 23-03-2013 6:56am

zonEEE wrote: »

Emotional? I really don't know where you getting that from? All the arguments I gave are all over the internet in much detail.

I get it from responses such as where you asked if I was mad or in a bubble for having the temerity to disagree with you.

zonEEE wrote: »

I think your the one lacking in the critical distance... time will tell...

On the contrary, I have at least done due diligence on this. The risks I have detailed are why bitcoins do not make up part of my portfolio.
Further due diligence indicates that you are an undergraduate at Sligo IT with a significant interest in online gaming. Again I would ask, since this is the investments forum, what else have you invested in? Revealing your portfolio or your investing history would perhaps grant some much needed credibility to your proselytising for a highly speculative investment in a highly emotional manner.

zonEEE · 23-03-2013 7:19am

Cavehill Red wrote: »

I get it from responses such as where you asked if I was mad or in a bubble for having the temerity to disagree with you.

On the contrary, I have at least done due diligence on this. The risks I have detailed are why bitcoins do not make up part of my portfolio.
Further due diligence indicates that you are an undergraduate at Sligo IT with a significant interest in online gaming. Again I would ask, since this is the investments forum, what else have you invested in? Revealing your portfolio or your investing history would perhaps grant some much needed credibility to your proselytising for a highly speculative investment in a highly emotional manner.

I guess while you were looking through my post history you forgot to look at the dates. I had a significant interest in online gaming 4/5 years ago. I need an investment portfolio to post my opinion which is the opinion of many economists? You really need to get down off your high horse. I don't know where you are getting this emotional manner from? If you think the majority of people in the world trusts the government and banking system 100% then I don't think you live in the real world at all, until recently there hasn't been much of an alternative to cash.

You have deteriorated the debate into personal digs while avoiding the topic. Well done.

Cavehill Red · 23-03-2013 7:25am

zonEEE wrote: »

I guess while you were looking through my post history you forgot to look at the dates. I had a significant interest in online gaming 4/5 years ago. I need an investment portfolio to post my opinion which is the opinion of many economists? You really need to get down off your high horse. I don't know where you are getting this emotional manner from? If you think the majority of people in the world trusts the government and banking system 100% then I don't think you live in the real world at all, until recently there hasn't been much of an alternative to cash.

The longterm viability of bitcoin is certainly not shared by the majority of economists, most of whom view it as little more than an intriguing experiment on the fringes of the internet.
If you are unaware of alternatives to cash, may I introduce you to the concept of precious metals, which have functioned as money since long before cash was even invented.
Let me assure you that not only do I live in the real world, I invest in the real world too, and not in virtual worlds which have a hazard of exploding in nasty puffs of Ponzi bubbles.

zonEEE · 23-03-2013 8:33am

Cavehill Red wrote: »

The longterm viability of bitcoin is certainly not shared by the majority of economists, most of whom view it as little more than an intriguing experiment on the fringes of the internet.
If you are unaware of alternatives to cash, may I introduce you to the concept of precious metals, which have functioned as money since long before cash was even invented.
Let me assure you that not only do I live in the real world, I invest in the real world too, and not in virtual worlds which have a hazard of exploding in nasty puffs of Ponzi bubbles.

Sorry but I cant buy goods and services with gold. Like it or not virtual worlds as you call them are here to stay.

"It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."

Fukuyama · 23-03-2013 1:18pm

The way I see it, the black market is just as legitimate as any other market. If government don't want to recognise Tor and the Silk Road I'm not going to let it stand in my way of making money.

Right now the value assigned to BitCoin is that

a) They're an investment that seem to be on the rise. This is a bubble. It will burst. But people have gotten very rich of of bubbles in the past. When it does burst, they won't loose all value because of point b.

b) You can buy illegal stuff with them. Never the one to judge things at face value I've signed up to the Silk Road and checked it out. Quite a good set-up I must say with a pretty wide selection. Everything from weed, to heroin to pretty disturbing porn genres.

I leave my little values at the door. If somebody want to buy my over inflated currency from me to do with whatever they please, be it donate to Wikileaks or buy weed, then so be it.

Also, as far as saying that the BitCoin network could be destroyed :rolleyes::o If you hold that opinion then you really don't understand how a P2P network works. It'd be like trying to punch the ocean to death. The only thing that might take out BitCoin would be thousands of EMPs exploding in the atmosphere across the globe knocking out every computer, server and satellite.

martyoo · 23-03-2013 1:45pm

I've signed up to the Silk Road and checked it out.

I'm still waiting for a refund on that assassin I ordered months ago. :mad:

martyoo · 23-03-2013 1:57pm

Joking aside, the "deep web" is something that will continue to grow and people will continue to lose confidence in fiat currency so Bitcoin (or an alternative) will continue to grow in popularity.

Taken from Nassim Taleb's AMA on Reddit

Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative. But I am not familiar with the specific product to assert whether it is the best potential setup. And we need a long time to establish confidence. I only talk from skin-in-the-game. If I had money in bitcoin, I would have reported it. But I don't yet. I am waiting to understand it better, not with my brain, but with my experience...

Link

Cavehill Red · 23-03-2013 3:37pm

zonEEE wrote: »

Sorry but I cant buy goods and services with gold.

Of course you can.

zonEEE · 23-03-2013 6:42pm

Cavehill Red wrote: »

Of course you can.

Paying for your shopping with a bullion is real practical isn't it? Get with the times.

moneymad · 23-03-2013 7:38pm

Cavehill Red wrote: »

Like anything it has the value someone is prepared to pay for it. It is the same as fiat currency, in that it isn't backed by anything tangible, but lacks the credibility of a state support. Effectively, it's an online electronic fiat currency, primarily being used by drug dealers to evade detection, which has been historically extremely volatile and is in my opinion likely in a bubble.

It works fine as a medium of exchange.

Cavehill Red · 23-03-2013 9:05pm

zonEEE wrote: »

Paying for your shopping with a bullion is real practical isn't it? Get with the times.

You certainly should.

Cavehill Red · 23-03-2013 9:07pm

moneymad wrote: »

It works fine as a medium of exchange.

Only while people invest confidence in it. When it was hacked, confidence plunged its notional value to less than a sixth of what it had been previously. If people are comfortable with that sort of volatility and moral hazard, who am I to disagree?
You do your own due diligence and make your own investments. It wasn't for me, and I've explained why.

Tearwave · 24-03-2013 11:48pm

The slow and steady rise of bitcoin ($1 to ~$10) for roughly a 2 year period was probably based on the demand for them to carry out transactions on silk road. But what has happened over the last 6 weeks or so (jumping to ~$70) is an entirely different kettle of fish. Seems a lot of people saw BTC value rising and jumped on the bandwagon, looking to make a quick buck - and driving the demand up hugely. Jumping 700% in value in less than 2 months, without a (nowhere near) corresponding rise in silk road activity would set off alarm bells in my head.

The "people" actually using silk road (buyers and dealers) have the drug prices pegged to the USD at time of transaction so it doesn't make a blind bit of difference to them what BTC are worth. (Dealer sells ounce of weed for USD $100, buyer pays USD $100 for ounce of weed, done and dusted). Seller then sells BTC on exchange to another potential drug buyer and the wheel turns full circle.

TLDR version: you could have made a colossal lot of money investing before January 2013, but more than likely have missed the boat at this stage.

Tearwave · 24-03-2013 11:54pm

Cavehill Red wrote: »

Only while people invest confidence in it. When it was hacked, confidence plunged its notional value to less than a sixth of what it had been previously.

The encryption protecting bitcoins (Elliptic Curve DSA) is among the strongest in the world, even with all the computing power and time in the world it would be almost impossible to crack the bitcoin network. What you are referring to (I think) is an exchange being hacked in 2011 or earlier this year.

I would compare that to some idiot bank staff member, leaving a safe open overnight with a large amount of Euro banknotes inside. The cash gets stolen obviously. Doesn't mean the currency system itself caused the problem!

Cavehill Red · 25-03-2013 12:07am

Tearwave wrote: »

The encryption protecting bitcoins (Elliptic Curve DSA) is among the strongest in the world, even with all the computing power and time in the world it would be almost impossible to crack the bitcoin network. What you are referring to (I think) is an exchange being hacked in 2011 or earlier this year.

I would compare that to some idiot bank staff member, leaving a safe open overnight with a large amount of Euro banknotes inside. The cash gets stolen obviously. Doesn't mean the currency system itself caused the problem!

Yes, it was an exchange that was hacked. But since the currency is virtual, it is vulnerable to anything that interferes with the electronic mechanism of interaction, be it exchanges, or the internet going down, or the power, or whatever.
Its one positive attribute - mobility - is also its main negative in my mind (apart from its current bubblicious state). I might have difficulty moving cash or gold from A to B, running risk of robbery, which is not run by accessing my currency virtually. But if the method of access is compromised, the end effect is little different.

zonEEE · 25-03-2013 9:52pm

Cavehill Red wrote: »

Yes, it was an exchange that was hacked. But since the currency is virtual, it is vulnerable to anything that interferes with the electronic mechanism of interaction, be it exchanges, or the internet going down, or the power, or whatever.
Its one positive attribute - mobility - is also its main negative in my mind (apart from its current bubblicious state). I might have difficulty moving cash or gold from A to B, running risk of robbery, which is not run by accessing my currency virtually. But if the method of access is compromised, the end effect is little different.

The euro, dollar and every other currency in the world have the same vulnerability when it comes to computers/power etc...

Roonbox · 25-03-2013 10:52pm

Cavehill Red wrote: »

What else do you invest in, ZonEEE? Because it sounds very like this is an ideological rather than an investment decision for you and all your posts are extremely emotional and lacking in diligence or critical distance.

agreed

Roonbox · 25-03-2013 11:08pm

There is so much interest in Bitcoins that I think it may turn out to be a massive bubble very quickly..

But as far as I can see that's all it will ever be, any explanation I have heard so far does not sell it to me..

If somebody can give me a clear explanation as to where their value comes from apart from the fact that the are finite I would very much appreciate it...?

Liam.

Tearwave · 26-03-2013 12:05am

Roonbox wrote: »

There is so much interest in Bitcoins that I think it may turn out to be a massive bubble very quickly..

But as far as I can see that's all it will ever be, any explanation I have heard so far does not sell it to me..

If somebody can give me a clear explanation as to where their value comes from apart from the fact that the are finite I would very much appreciate it...?

Liam.

Primary factor is demand to carry out transactions on silk road marketplace (an underground website), basically buying and selling drugs. The dealers on these websites only accept bitcoins (for a variety of reasons - security, untraceable, irreversible transactions, etc). It's changing the face of the drug industry, people can rate dealers just like ebay sellers on things like quality and purity of product, time taken to deliver, etc. The buyer pays for the drugs in bitcoins then receives a package (usually with a fake return address) in the post a week later with the drugs, and the dealer has never been seen or identified during the whole process. The bitcoins are placed in escrow until the package is received so it's quite consumer-friendly too (a bit like paypal buyer protection).

Aaaaaaaaaaanyway to cut a long story short - this system is favourable to all parties involved, drug dealers never have to be seen, never have to launder banknotes, risk getting shot, etc. Drug users don't have to worry about getting ripped off, buying poor quality product, getting shot over debt, etc. So more and more people are turning to this site, coupled with finite amount of bitcoins in the world to buy drugs with = price increases.

Cavehill Red · 26-03-2013 7:55am

zonEEE wrote: »

The euro, dollar and every other currency in the world have the same vulnerability when it comes to computers/power etc...

Um, cash?

zonEEE · 26-03-2013 3:23pm

Cavehill Red wrote: »

Um, cash?

Are you serious??????????? Or is that some sort of a joke?

Buying bitcoins

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