[Maciano]

As many of you may have heard by now, Bitcoin is rising rapidly (again). I've been following the phenomenon for about two years, albeit the last year much more closely.

Most MSM finanz journalists keep saying: "Bitcoin is in a bubble", "Ponzi scheme", "Bitcoin has no intrinsic value", etc. I've been studying all these counter-claims and have come to the conclusion that most of them are talking nonsense. I could go on with very long rebuttals*, but I doubt many of you'd like that kind of Sperg stuff. Neither do many of you care about tech curiosities such as mining, blockchains, 51% attack, etc.

These are the facts of the moment:
- Bitcoin is only 5 years old. Think about that, it's like the internet in 1992.
- Searches in Google & Wikipedia are increasing, exponentially (interested people ~ potential users)
- Bitcoin wallets have increased YoY, exponentially (wallets ~ users)
- Bitcoin transactions have increased YoY, exponentially (transactions ~ liquidity)
- Bitcoin has continuously increased in price, exponentially. There have been manias (jun '11, apr '13), but these tend to be corrected. Right now, it's around $300; my suspiscion is that it will rise more, but will then crash and resume growth on a lower tempo for a while (just like before).
- Market cap is about 3 billion $ at its highest.
- Companies such as BitPay -- Bitcoin facilitators -- have connected tenfold amounts of merchants the past year. Circle, another big one, has just raised 9M venture capital.
- Exchanges are being established all over the world; China has the biggest exchange in the world right now.
- Entrepreneurial guys like Roger Ver, Erik Voorhees, Charlie Shrem, Adam Draper & many more have already become bitcoin millionaires by simply starting bitcoins businesses and reinvesting their bitcoins into new bitcoin startups. It's a self-accelerating virtuous circle. In a recession economy it's nice to be riding a wave of economic growth!

I believe that it's wise to buy a few bitcoins after the coming crash and keep them for a few years. In the worst case you lose a couple 100$; in the best case you will have very, very, very high ROI.

If you have questions, AMA.

___________________________________

* For those of you who want to know why bitcoin critics are wrong, I recommend the following articles & blogs

- http://konradsgraf.com/blog1/2013/11/7/h...-talk.html
- http://www.economicsofbitcoin.com/2013/0...about.html
- http://blockchain.info/en/charts
- http://bitcoincharts.com/charts/

[el mechanico]

I think us Roosh members should do our own alt coin pump and dumps on BTC-E

[Steve9]

(11-07-2013 04:41 PM)Maciano Wrote:  

I believe that it's wise to buy a few bitcoins after the coming crash and keep them for a few years.

My problem with Bitcoin is that the places to exchange or store them are very weak and often get hacked or shut down.

For example, last week hackers stole 4100 bitcoins worth $1.1million from Input.io, a Bitcoin wallet service :

http://venturebeat.com/2013/11/07/hacker...inputs-io/

[Maciano]

(11-07-2013 05:06 PM)Steve9 Wrote:  

(11-07-2013 04:41 PM)Maciano Wrote:  

I believe that it's wise to buy a few bitcoins after the coming crash and keep them for a few years.

My problem with Bitcoin is that the places to exchange or store them are very weak and often get hacked or shut down.

For example, last week hackers stole 4100 bitcoins worth $1.1million from Input.io, a Bitcoin wallet service :

http://venturebeat.com/2013/11/07/hacker...inputs-io/

1) It's true. You shouldn't store more than a few BTC on a 'hot' online wallet. All these affairs usually deal with hackers who cracked some unstable, semi-protected rookie exchange. But private wallets can be stored safely & encrypted on a USB-stick, laptop or harddisk. It's even possible to put in on the cloud (like Google Drive) or mail BTC (through Coinapult). In fact, after the Silk Road takedown, Dread Pirate Roberts' wallet first couldn't be decrypted, until he gave up the password. If he had given a trusted third party a copy of his wallet & told them to change the password as soon as he got arrested, his coins (worth $90M) would have been safe today. He couldn't have helped the Feds even if he had wanted to.

2) Also, I know that MPEx has a good exchange model where it's possible to connect to only if you buy in -- like 30 BTC -- and use a PGP key. But the owner seemed like a real weirdo, considering his blog, so I never bothered to inquire further; his website also looks like shit. Still, this is the exchange that handled the sale of SatoshiDice gambling website for ~11M $ -- btw, in under 2 years of existence! That's a lot of dough, a statement upon itself for the validity of MPEx. We'll see more closed off exchanges like MPEx in the future, safer for users.

[Hotwheels]

Do any legitimate sites accept them for payment?

Meaning other than Silkroad type sites.

If you can afford to hold them and pay expenses out standard currency one might be able to accumulate some at a discount.

[LowerCaseG]

When the other thread was going down, I went through Wikipedia, and read up on Bitcoins. I am a relatively smart guy though not computer wise. I still have no idea:
-What a Bitcoin is.
-How you make one.
-What they are used for. I mean practically, not as a currency. If it has no practical use, and is simply a currency, how is it any different than paper money?

[Maciano]

(11-07-2013 07:00 PM)Hotwheels Wrote:  

Do any legitimate sites accept them for payment?

Meaning other than Silkroad type sites.

If you can afford to hold them and pay expenses out standard currency one might be able to accumulate some at a discount.

Sure, lots of sites. And the number is growing very fast. You can see lists at BitPay & Circle of many merchants.

Bitmit.net (eBay for BTC) is a pretty good one.

[Maciano]

(11-07-2013 07:11 PM)LowerCaseG Wrote:  

When the other thread was going down, I went through Wikipedia, and read up on Bitcoins. I am a relatively smart guy though not computer wise. I still have no idea:
-What a Bitcoin is.
-How you make one.
-What they are used for. I mean practically, not as a currency. If it has no practical use, and is simply a currency, how is it any different than paper money?

1) I feel you, that's why I didn't pay attention 2 years ago, when they were still dead cheap. Big mistake on my part. It sure pays to get informed on crypto-currencies/altcoins.

Bitcoin may not be the end-product of virtual money, but the protocol is revolutionary and will create a parallel financial system, slowly eating the legacy banks away. Just like the media & music/movie industries are struggling/dying today.

2) You can mine with ASICs, but this is indeed for techies/nerds. I don't bother with it. On bitcointalk.org forum you'll find many people who do, if you're interested.

3) Bitcoin = digitized money.
- it's pseudo-anonymous (you can be anonymous if you're careful)
- decentralized mined & kept by owners (like up-/downloading torrents)
- cryptographically protected (unbreakable)
- opensource (you can check the code & suggest improvements)
A good place to start is here: http://bitcoin.org/

You can do many things with bitcoins, but mostly it's ideal for P2P transactions you don't want the government to snoop in on & a very good outcome for small businesses' profit margin, b/c of
- nihil transaction costs (contra interest of credit cards/banks),
- instantly (contra long time of cheques/ Western Union wire transfers) &
- irreversible (contra Paypal's chargeback)

Also, if you want to donate to WikiLeaks or someone locked out of the system by the system, like many Redpillers are, you can send them BTC. They can change it for money & carry on.

[Steve9]

(11-07-2013 07:46 PM)Maciano Wrote:  

You can do many things with bitcoins, but mostly it's ideal for P2P transactions you don't want the government to snoop in on

Thanks for starting this interesting thread Maciano.

If money laundering is being done via Bitcoin, won't the government authorities attempt to shut it down? This happened a few months ago with another one:

"Liberty Reserve, another virtual currency system based in Costa Rica, was shut down in May when the Justice Department charged the company with money laundering and used the Patriot Act to lock it out of the American financial system.”

http://www.forbes.com/sites/peterferrara...erability/

[El_Superbeasto]

Imo it's only a matter of time before a coalition of governments coordinate a crack down on bitcoin. They tend to not like things like people being able to freely move currency across their borders (real and virtual) without their knowledge or consent.

My guess is that there will be some media expose of "evidence" that "terrorists" are using it to clandestinely move money around to fund their terrorist shit. The exchanges are the weak point. All they have to do is make it a federal crime to either exchange bitcoin or transfer money to/from any entities that exchange bitcoin and *blam* bitcoin goes splat.

[Parlay44]

There's a lot of interesting bitcoin stuff on eBay. USB ASIC Bitcoin Miners. Looks like they're USB 3.0 and you load up a huge USB hub with them and they mine bitcoins for you.

[Emancipator]

There's already a big BTC thread

Chinese Gov is supporting BTC, I can only really see US and/or several Euro govs going against BTC.

I'm still having a giant difficulty trying to purchase BTC and other altcoins.

[cycliss]

As someone who has made thousands from Bitcoin as well as contributed code to the ecosystem, I can comfortably say that this guy knows very little and I would not follow his advice.

Bitcoin, aside from being one very cool piece of technology, has been a legitimate get-rich quick scheme for some people. However, for every get-rich quick scheme, there have to be a shitload of sheep out there. If you aren't sure whether or not you are a sheep, then you ARE the sheep. Its pretty cool and fun dipping your toes in and getting immersed in the world, but don't go in expecting to be Gordon Geckko if you don't know what the fuck you are doing.

[Maciano]

(11-07-2013 08:09 PM)Steve9 Wrote:  

(11-07-2013 07:46 PM)Maciano Wrote:  

You can do many things with bitcoins, but mostly it's ideal for P2P transactions you don't want the government to snoop in on

Thanks for starting this interesting thread Maciano.

If money laundering is being done via Bitcoin, won't the government authorities attempt to shut it down? This happened a few months ago with another one:

"Liberty Reserve, another virtual currency system based in Costa Rica, was shut down in May when the Justice Department charged the company with money laundering and used the Patriot Act to lock it out of the American financial system.”

http://www.forbes.com/sites/peterferrara...erability/

Ofcourse, and just to be clear: I don't advocate blackmarket SilkRoad type stuff. I'm more into guarding capital that's already been taxed; daily trades with ebay; preventing Cyprus-style confiscation of assets; avoiding inflation; etc.

I haven't looked into that particular case, but I think the Feds were right they were mainly into laundering money made through illegal trades. While I disagree with the drugs laws as they are today, laws are still laws.

[Maciano]

(11-07-2013 11:56 PM)cycliss Wrote:  

As someone who has made thousands from Bitcoin as well as contributed code to the ecosystem, I can comfortably say that this guy knows very little and I would not follow his advice.

Bitcoin, aside from being one very cool piece of technology, has been a legitimate get-rich quick scheme for some people. However, for every get-rich quick scheme, there have to be a shitload of sheep out there. If you aren't sure whether or not you are a sheep, then you ARE the sheep. Its pretty cool and fun dipping your toes in and getting immersed in the world, but don't go in expecting to be Gordon Geckko if you don't know what the fuck you are doing.

For the record, I don't claim to be tech-wise on bitcoin. That's not something I care about much. I do know Austrian economics quite well and I that's why I believe bitcoin (or rather: cryptocurrency) is a viable concept.

My only advice is: buy a few, you probably won't regret it. It's cool tech, nice to trade & good to get familiar with it. Of course, I'm glad you wrote it: bitcoin is NOT a get-rich scheme. Those who think so will be disappointed.

My only goal is: to get some other guys interested in a phenomenon that seems to be getting some traction.

[Barada22]

"- Bitcoin is only 5 years old. Think about that, it's like the internet in 1992."

You'd be a sucker not to buy some!

[Parlay44]

What's a good place to buy and sell Bitcoins?

[el mechanico]

(11-08-2013 08:38 AM)Parlay44 Wrote:  

What's a good place to buy and sell Bitcoins?

BTC-E
https://btc-e.com/

[metalheadatheart]

This is indeed fascinating, and anyone who is interested in this should read the novel Cryptonomicon, by Neal Stephenson, if they haven't already.

I clicked the link to the exchange, and was shocked to see that a single bitcoin is over US$300.

This discovery is kind of like the realization that if I had bought gold in 2000 (doesn't matter, cuz I was 13) I'd be sitting pretty.

Made me think about setting up another computer and just having it sit there and mine bitcoins, although the cursory research I did on the process suggests that this is probably not feasible.

I see on ebay there are many of these ASIC's. The first one is listed at $257. So if I were to buy it, and it mines one bitcoin, it has paid for itself.

Anyone else done this?

[el mechanico]

This is where I monitor if it helps

[LowerCaseG]

What advantage does a bitcoin have over gold and other precious metals as an anonymous store of wealth? Why would I want 4 bitcoins over a 1 oz gold coin?

[DVY]

Id still rather buy productive assets than gold or bitcoin. The most liquid currency is still cash- specifically USA dollars. Have 10k in cash stashed somewhere and you'll probably survive almost any emergency type crisis.

[Barada22]

The advantage Bitcoin has over gold is purely momentum and demand. Intrinsically it has literally zero value, gold is similar but the demand for gold is also propped up by it being a physical asset.

Bit coins have so many different risks that it is only worth buying small amounts to play around with. If a government decides to regulate it you are fucked, if the algorithm that decides how many bitcoins are available changes you could get fucked, someone hacks a Bitcoin account and creates more out of thin air you are fucked, one hedge fund decides to manipulate the bitcoin market with huge inflows of capital and you are royally fucked,I could keep going on.

The regulation risk is the scariest, look at what happened to online poker once the government decided that money laundering was possible, accounts were frozen for years with people losing access to their money completely. Now imagine if the value of those frozen accounts could change and you have no ability to sell.

Bitcoins are a very cool idea, but in a world of overbearing governments and market manipulation I'd stay away.

[el mechanico]

(11-08-2013 01:10 PM)LowerCaseG Wrote:  

What advantage does a bitcoin have over gold and other precious metals as an anonymous store of wealth? Why would I want 4 bitcoins over a 1 oz gold coin?

Bitcoins are worth more per ounce than gold after today

[Laser]

I bought some yesterday and plan to just throw them in storage, not trade or use them for purchases. Any suggestion on the best wallet to store them in? I've heard good things about armory, but haven't investigated setting it up.