Topic: There's nothing wrong with trading Bitcoins - page 2. (Read 2199 times)

Yes, but if you are spending a lot of time or effort trying to make money on an essentially unproductive activity then I think you should ask yourself if there's something else you could be doing that would be more effective at making the world a better place.

I think a lot of buy-low-sell-high, there-is-always-a-bigger-fool, or high-frequency trading fits into the "isn't making the world a better place" category. If you're competing for a bigger slice of a fixed-sized pie, I think you should think hard about what you could do instead to make the pie bigger for everybody.

Mmmm.... pie......

While I agree with what you write. Balance is good. There seems to be a current lack of balance. It also appears that imbalance is growing. It is a really simple ratio to visualize.

Goods traded for Bitcoins
---------------------------------
Currencies traded for Bitcoins

As this ratio tends toward infinity, Bitcoin tends toward world domination.
As this ratio tends toward zero, Bitcoin tends toward a Ponzi scheme.


The big damper on Bitcoin adoption is that most non-bitcoin users understand the above intuitively. What they perceive is the above ration is tending toward zero. A predominance of speculation talk only reinforces that perception.

I wouldnt argue for isolating BTC if you can come up with a different way to keep speculation in check. There is a reason most countries have regulation that limits speculation, even the US, despite being ruled by bankers and speculators  just passed a law limiting at least individual speculative position in commodity markets. The reason is simple; excessive speculation kills the underlying economy by creating huge price swings.

In actual economies with functional governments, you can regulate or even impose taxes to try and reduce that problem. In bitcoin land, with its huge aversion of anything that even smells like government or regulation, let alone tax and because of its decentralized nature, I dont see a way. Ideally you would want to put a brake on fiat -> BTC -> fiat transactions that have no underlying economic activity, but how would you do that?

So its kind of ironic that government regulations and courts are (IMO) coming to the rescue by isolating bitcoin and thereby possibly allowing it a chance to grow. If nothing else, bitcoin is a great experiment, and one that should make hardcore libertarians think twice before claiming free markets can regulate themselves and intervention, regulation and taxation is always bad. Only bad regulation and stupid taxition is bad but if the commodity and real estates bubbles havent shown it to them yet, perhaps the bitcoin casino will make them reconsider some things.

I think this is the more important point. Merchants like us who are basically extraterritorial but legally liable face an uphill battle dealing with the conglomerated banking and payment processing interests. But Bitcoin only serves a utilitarian purpose for us as long as our customers are able to buy it with their paycheck and redeem it for bread, or something they can buy their bread with. We're wholly dependent on the functioning of the trading houses, they're the ones who absorb our risk and act as our interface with the world.

Now if it's not Bitcoin, it's gonna be something. Bitcoin didn't spring out of a void, it came out of a basic need that's developed to hold your value outside the government-controlled monetary systems. That demand is only going to increase as further corrupt regulation, sponsored by the banking sector and rammed through by their government cronies, continue to tighten the noose around the middle- and upper-middle class people who spent their lives playing by the rules only to see their life's savings swept up in the giant ponzi scheme that's playing itself out around the world. The further we sink into the crisis, the more people see they have no control over their own survival, the more realize they've been turned into slaves to these interests, the more people will turn to alternate currencies or anything that puts a little of their wealth off the grid for the future. The most productive land in Soviet Russia was the 10% that was set aside from collectivization for personal gardens in the '60s and '70s. [correction: it was 2% of the land, and it accounted for 1/4th the agricultural output. http://en.wikipedia.org/wiki/Agriculture_in_the_Soviet_Union]

Then and now there was a system of corruption masked by, and in the name of, social equality...where distribution from the able to the needy still turns out to be another way for parasites to rape the innovators and producers of value at the point of a gun. Yet the fact that the demand existed then, and exists now, for ways of storing personal wealth outside the crippling system of corruption, did not and will not make it a mainstream action. Even now, in North Korea, there are people privately producing what vegetables they can get away with growing and selling...they're basically in the same position as people who want something like Bitcoin to store their wealth in the Western world. A much worse day-to-day position, but not essentially different: Their product isn't their own.

"Fiat" isn't so much a description for currency as a description for the means by which governments disabuse citizens of their God-given rights as human beings. By fiat, they declare their collection of taxes on penalty of imprisonment. By fiat, they make it illegal to buy or sell outside of the channels they regulate, so they can take a piece of everything. By fiat, Steve Wynn can open as many casinos as he wants, although he personally could never do what we've done. By fiat, we're barred from taking bets in the US, or trading normally through other methods.

But we, and others, will make the most of the opportunity to blow this whole worm-ridden, corrupt corpse of a system sky-high. Maybe not us, maybe not Bitcoin, but the tighter they pull the noose on the ordinary man the more resistance they'll meet.

So fuck them. Bitcoin -- whatever else it might be -- is proof you can't keep humanity in a permanent state of oppression anymore. It might be a wild ride the next few years, and I'm sure it will be. We're gonna keep riding the waves.

Ummm it actually increases it me thinks 

Brilliantly stated.  The idea that Bitcoin must operate in a self-contained, self-sufficient ecosystem is foolish. As it grows in usage, we should expect to see greater exchange into and out of bitcoins for other goods, services, and monies. There is no reason to fear "cashing out" into any other currency - it harms Bitcoin's utility not at all.

It's not entirely true.

"About 70% to 90% of the foreign exchange transactions are speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency."

http://en.wikipedia.org/wiki/Foreign_exchange_market#Hedge_funds_as_speculators

So please just complain about human nature. It's not Bitcoin's fault.

Everything within reason.

Sure currency exchanges have a reason but in for example USD-EUR exchanges most of the trade is to facilitate commerce.  Sure speculators exist and they will always exist but the REASON for the exchange isn't to be a casino where speculators can win or lose it is to faciliate real commerce.

So:
USD-EUR 99% real commerce, 1% speculation
USD-BTC 1% real commerce, 99% speculation

Some guys on this forum keep saying that we urgently need people to sell goods/services in Bitcoins, preferably never exchange them to fiat throughout the production process. It's definitely good for the Bitcoin economy if finally many merchants are willing to do that.

However, one thing remains a clear, Bitcoin is still a currency even if this is not possible at the moment. We always talk about difference between Bitcoin and fiat currencies, but in order to Bitcoin to become a real currency, we should let go the term "fiat". Bitcoin, just like any other currencies, should be treated the same way in economic activities.

For example, if you buy an iPhone, even though you may be paying it in USD, the production process is not entirely in USD. The manufacturers in Japan, Korea and China will eventually exchange USD to their local currencies to pay for machines and wages.

This is the same for Bitcoin. It's entirely acceptable to sell a product, and then exchange to USD to buy raw materials.

The real world economy is highly inter-connected. The only way for a virtual economy to survive is to inter-connect with the real world. The death of Bitcoin is not marked by the provision of goods/services, nor by the value. The death of the Bitcoin economy is the isolation from the real world.

There's nothing wrong with trading Bitcoins, just like there's nothing wrong with exchanging USD to EUR to buy a glass of wine.