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El Grifo
16th May 2013, 08:42
Any ideas on exactly what this is ??

US seizes top Bitcoin exchange as crackdown begins ? RT USA (http://rt.com/usa/bitcoin-exchange-seized-crackdown-begins-334/)

Cacophonix
16th May 2013, 08:58
Heaven forfend that the State (or some overarching bureaucracy like the EU) does not have ultimate control over the regulation of a currency...!

I note that the Bitcoin thread rate is now two for one. Buy, buy, buy...

Caco

Standard Noise
16th May 2013, 09:07
You know the old saying 'he'd bet on two flies crawling up a wall'? Bitcoin seems to be a way of greedy idiots betting on something that doesn't actually exist. Virtual currency? Real lunacy!

dead_pan
16th May 2013, 09:50
They're not the only ones - I had dealings last year with a barter company that had devised its own currency. Some towns in the UK have done the same.

Hmm, now there's an idea. Maybe I could invent my own currency, design print a load of bank notes using my computer (featuring portraits of people I admire - the usual suspects i.e. Dale Winton, Dan Quayle, Nigel Farage etc), set up an 'exchange' on the net, ramp its value based on my outstanding credit history and economic prospects, then convert my holding to GBP. The FSA & SFO would be none the wiser.

El Grifo
16th May 2013, 09:54
Hey dead pan, there's an idea !

When you get up and running give me a call and I will chip in.

You can get me on 999.

El G.

Tankertrashnav
16th May 2013, 09:55
I listened to an item on Bitcoin the other day. The whole scheme seemed to depend on all the participants believing in an "item" that had no intrinsic worth other than the value potential buyers attributed to it.

A bit like gold really.

green granite
16th May 2013, 10:10
How does Bitcoin work? - Bitcoin (http://bitcoin.org/en/how-it-works)

dead_pan
16th May 2013, 10:13
The whole scheme seemed to depend on all the participants believing in an "item" that had no intrinsic worth other than the value potential buyers attributed to it

Or money .. at best its only bits of metal and paper (but don't tell anyone, we don't want the whole edifice which has been built on this little lie imploding).

Cacophonix
16th May 2013, 10:21
In essence all currencies are fungible and in this way BitCoin is no different to any other currency. What the Feds don't like is that they are unable to regulate the exchange rate and exchanges for a whole myriad of reasons... some to do with the annonymity of those using the exchanges.

Anonymous Internet banking - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Anonymous_Internet_banking)

BitCoin is not legal tender in any sovereign sense though.

A little bit like the way Mugabe didn't want to US dollar to be the de facto (and illegal - not legal tender) currency of his failed economy until even his government realised they couldn't fight against the tide...

Caco

dead_pan
16th May 2013, 10:25
When you get up and running give me a call and I will chip in.

Okay, the printer's ready to roll, the currency's called the Phut, currently trading on par with GBP. Shall I put you down for ten grands worth?

crippen
16th May 2013, 10:32
Will 10,000 Thai Baht do? For 10,000 gbp??

brickhistory
16th May 2013, 11:42
My son and a group of friends were/are incredibly talented regarding computer coding and attended a high school that specialized in science and technology. (There's a point to this paragraph, just hang on...)

During that period, he asked me about investing in the start-up of bitcoin (as he had no money and dumb Dad somehow did...).

I declined, but one of his friends sold nearly everything he possessed to buy hosting servers. Seems he got a tiny percentage of every transaction that passed through.

Kid rolls up our house in a Lotus several months later...

No regrets over not investing in something that isn't real, but good on him for being entreprenurial (sp?).

dead_pan
16th May 2013, 11:44
Its weakened now on account of poor balance of payments data. Just had to import a bulk quantity of orange printer ink - I should have put more thought more about my choice of bank note portraits...

birrddog
16th May 2013, 12:11
A bit like gold really.

Pretty much.

Bitcoins are finite. They are unique, and need to be "mined"

There is a central registrar to list all bitcoins and transactions with bitcoins.

It's not like folks can just print them, and mining them becomes cumalatively harder. So unlike a central bank that can just print money, it is a lot more tangible, like gold.

The part the feds dont like is that you can do a secure transaction outside of the reportable banking / money exchange system they have spent years trying to lock down globally.

Like many currencies, incl art, the value is in the eye of the beholder, and the trust in what one owns is theirs, and cant be knocked off; so in some ways it is more tangible than art, gold or currency.

So the two main issues with Bitcoins becomes can they keep stability in the exchange rate, and keep the government off long enough to establish critical mass.

G&T ice n slice
16th May 2013, 14:23
Strange that the government arm involved isn;t the police, FBI, CIA, ATF, Treasury, but that delightfully name "Department of Homeland Security"

AKA "Das Abteilung der Staatssicherheit"

PAPIEREN BITTE!

Dont Hang Up
16th May 2013, 14:42
Originally Posted by Tankertrashnav

A bit like gold really.

Pretty much.

Bitcoins are finite. They are unique, and need to be "mined"

Gold has a physical desirability and also a real use as a commodity in manufactured goods.

Yes these me be only a small component of gold's tradeability which is dominated by more arbitrary valuation of its worth. However no-matter how small, this intrinsic value is real and that is the important distinction.

Similarly stocks, options or other complex derivatives all have some link to something of intrinsic value even if they are inflated way beyond that by market "confidence".

As I understand Bitcoin, its value is truly and fundamentally arbitrary. The extreme computer processing power required in "mining it" helps create the illusion of value and rarity. But the mining process is itself arbitrary and ultimately without worth - just like paying someone to walk backwards.

So I for one will steer clear of this economic bubble.

dead_pan
16th May 2013, 14:52
Similarly stocks, options or other complex derivatives all have some link to something of intrinsic value even if they are inflated way beyond that by market "confidence".

Not sure I agree about derivatives - how can what is essentially a bet have intrinsic value? Taking a punt on a future price of a stock or whatever has no intrinsic worth at all, since you often never end up owning the asset you're betting on.

Dont Hang Up
17th May 2013, 06:08
Not sure I agree about derivatives - how can what is essentially a bet have intrinsic value? Taking a punt on a future price of a stock or whatever has no intrinsic worth at all, since you often never end up owning the asset you're betting on.

Everything other than bartering of actual goods is a derivative of some degree.

Cash is the simplest; then shares; then futures; then a whole set of even cleverer things that financiers have dreamed up...

You could say that every one of them is a form of bet on future worth - just with varying risk. It is just a case of how many steps you can remove (and inflate) from the basic intrinsic value and retain a confidence in what you are dealing in.

My point about Bitcoin is that it is something with no underlying intrinsic worth at all. It is a derivative of exactly nothing.

Tankertrashnav
17th May 2013, 08:43
Anyone want to trade Bitcoins for tulip bulbs? ;)

El Grifo
17th May 2013, 08:51
After posing the original question, I have steered clear of that discussion.
The subject is not really my forte !

I now have a clearer understanding of what the "bitcoin" is and I thank everyone for that.

My enduring feeling is that the "markets" would sell packets of Sh*t if they thought there was people fool enought to buy.

Sadly, it appears that there are.

El G.

dead_pan
17th May 2013, 09:04
My point about Bitcoin is that it is something with no underlying intrinsic worth at all. It is a derivative of exactly nothing

So if its inventors linked its value to something of intrinsic worth, say water or mud, then it would be fine? If the market are willing to price and trade it, then all is well (until someone points out the emperor has no clothes).

The Phut has firmed today. In light of recent production problems, the MPC has decided that the next batch of banknotes will feature two of the titans of the finance world, namely Bernie Madoff and Fred Goodwin. Get 'em while they're hot!

Lon More
17th May 2013, 09:09
My enduring feeling is that the "markets" would sell packets of Sh*t if they thought there was people fool enought to buy

relabel it "Fertilizer" and make a fortune.

Dont Hang Up
17th May 2013, 20:10
My point about Bitcoin is that it is something with no underlying intrinsic worth at all. It is a derivative of exactly nothing
So if its inventors linked its value to something of intrinsic worth, say water or mud, then it would be fine? If the market are willing to price and trade it, then all is well (until someone points out the emperor has no clothes).

You know, I am honestly not sure if you have missed my point or have it summed up very neatly.

The inventors of Bitcoin are selling the mud in their garden. But you have to dig it up yourself, and with every scoop your trowel reduces in size. It seems that there are enough people around who think that, if it is so much effort, it must be worth something.

onetrack
18th May 2013, 01:34
dead pan - what's the going exchange rate today, between rare Dutch Tulips and the Phut? Or the rate between Bitcoins and the Phut? The rate is floating, too, I trust? No point in having fixed values, of course. :suspect:
I sense a deal coming on - can we do futures and derivatives with the Phut? If we get in on the ground floor, the sky's the limit for your great currency. I've got some great friends in top-shelf finance, who can really help you here. :suspect: