Topic: Watching amateur finance types flail - page 2. (Read 35339 times)

You just described all money systems. They all depend on another fool to accept them.
It is 100% true that BitCoins need more utility if they are to survive it's infancy.
People are working on that.

But it does have some utility as well for people wanting to hide money. It just is a bit risky for that. At this point I would not consider BitCoins as an investment vehicle at all. That's just crazy. As a short term method of transacting it is becoming more viable as time goes on.

But it is battling a perception by most sane onlookers as a pyramid or ponzi scheme. That's only if you are silly enough to think that putting your life savings into BitCoins is a good idea currently.

They're both equally meaningless - one is given value by decree, that you can use it to buy a shit-ton of things all across the country. The other is given value primarily through speculation, but also a miniscule but steadily growing market of things you can buy with it also. Without that steadily growing list of things you can actually buy directly with it, the only value it has is in your ability to find a greater fool to pass it on to.

Look at it another way - what do you think would happen to the USD if everyone outside the US's legal jurisdiction suddenly decided they didn't want to accept USD anymore? Even discounting the fact we'd still have a domestic market for them, there would suddenly by a whole load of people on the planet wanting to get rid of them in exchange for something more useful to them. Bitcoin's value is kind of like that, except you don't have the most powerful armed force in the world forcing you to use it.

Wait till Christmas. I'm selling toys for BTC.

Well, sure, but my point is, it's getting there.  Nearly every day, I see new services or products being sold for BTC.  There's more than 10,000 items indexed by some site that can be purchased using BTC.  And those are direct purchases too - no middlemen involved.

Value is in the eye of the beholder and is completely subjective. My point about cost to make is that it is not creating something from nothing like fiat currency which is faith based. Nagle can redeem his Federal Reserve Notes for lawful money and then we can talk. He knows he can't even though it is Federal Law. They are the biggest scam ever. You have no legal recourse for non-payment within the US.

As far as meaningless  bits... how meaningless is ink formed in the shape of 100 versus 1? The ink is no more valuable . Whereas 100 bitcoins versus 1 bitcoins means the network is that more secure and the transaction (regardless of what 2 people choose to make them represent) that much more real.

Nagle is a troll, don't inflate his ego by replying.

He's a Bitcoin outsider - what the heck makes you think he'd talk BTC when he says the word "revenue"?

He means no new value (currently being measured in USD) from the outside world unless it's through more investors - and at the present time he's mostly speaking truth. Mining secures the network, yes - but without some means of giving that network any sort of value it's all just meaningless bits... comparing e-penises in the form of GPUs.

My guess is you're alluding to that because mining costs you money your Bitcoins have to be worth something - no one gives a shit what Bitcoins cost to make, that's not what gives them their value.

John , with all respect , your flat out wrong. New coins are created by securing the authenticity AND accuracy of transactions. Bitcoins are NOT generated from dollars coming in. You obviously don't know how it works so why don't you stick to what you know or do some research.

Yes.

That's clearly not the same thing as being able to "buy anything on Amazon with bitcoins." It defeats the whole purpose of a decentralized economy to involve someone else in my commerce with a merchant.

but that doesn't detract from the fact someone is paying for a service in BTC - how the middle-man organises thier affairs is their business.

Similar example, I trade $ for gasoline - I don't care about refinery margins, import taxes, shipping or even the well-head production costs (probably six currencies in that chain for me domestically).  If I paid $ or BTC, someone converts it into USD, SGD, GBP (and others) along the way.  (I actually don't pay dollars, I use a piece of plastic and some electronic transaction occurs - actual currency becomes irrelevant)

There are importing businesses which work like that - you send them a wishlist and money, and they buy stuff for you in some foreign country and have it shipped over. That's useful because they can deal with sellers in another language, consolidate shipments into containers to save on shipping, deal with customs documentation, and physically get the stuff moved.

Going through some intermediary just to get a currency conversion isn't worth much. And it really complicates returns.

There's a few middlemen - you send them BTC and a wishlist, they buy it and (I'm guessing) sell the BTC. Amazon doesn't accept BTC directly.

This is news.  How?  Without first converting to USD?

You can buy anything on Amazon.com with bitcoins.

I was just looking thru the block explorer listings.
It seems pretty clear that the "change" address is always listed first as a destination. It may not be perfect but I think if you excluded that value in a transaction scan you could account for the actual "paid" amounts (mostly). I know there is no way to verify this but expect it would give a better picture of the real money flow. But the "purpose" would still be unknowable. It would at least allow reducing the "total value" to something more sensible.

You can't. In theory you might be able to compare currency trade volumes on Mt Gox with the amount of BTC actually withdrawn, but that's not really practical and no-one's done it. What you can do is consider information like which discussion topics are more common on the forum (buying and selling goods vs. mining and speculating) and how much of the for-sale section is Bitcoin-related items, or how the likely demand for the goods available for sale compares to the total value of bitcoins in circulation. That gives some idea of how speculation-driven Bitcoin is.

The red dots are just the actual Forex trades, which are published by the exchanges and are carried out entirely internally with no matching transfer in the blockchain. BTC transfers to and from exchanges just show up as blue dots.

The thing is you still can't buy much with bitcoins.  It's just a battle of who is going to waste money on electricity and who will buy their bitcoins to recoup that cost.  And don't tell me cause one restaurant in New York takes bitcoins that they are all of a sudden useful in reality.  I don't need drugs, dont' need web design, and I can buy my burritos with cash.

So how can you come up with any figure about what is merchant or personal trade vs. speculation?

It's impossible unless there is a useful algorithmic check that be applied to the block chain to differentiate. And what are the large value transactions you see floating consistently along the top of bitcoinmonitor.com? I've seen steady periodic transactions in the near million dollar amount (converted).

(And, actually if you look at that monitor it show Forex as blue dots and other trx as red dots. I guess they know which addresses are the exchange ones. There is a lot of red dots but I wouldn't say it swamps the blues, considering that people doing purchases do often use red dots too. Not just speculators.)

That figure is in fact completely meaningless. The vast - and I mean *vast* - majority of that figure always comes from people transferring their bitcoins from one address they own to another that they also own. Because of the way Bitcoin works you can only redeem complete transactions, so if you have an account that contains 50,000 BTC from a single transaction and you pay someone 0.1 BTC, the client automatically creates you a new address and sends the 49,999.9 BTC in change to that new address. It's intentionally impossible to distinguish change transactions from actual payments, so sites like bitcoinwatch report this as 50,000 BTC changing hands rather than the real figure of 0.1 BTC.

If you look at blockexplorer.com right now, you'll see the list of the biggest recent transactions is entirely made up of a series of transactions in which someone (181LntPGwi3fMEptutCwarxMNT1s1hEDws) with 44,600 BTC paid out about 800 BTC in total. Each of those transactions is reported as though the full value of his or her account changed hands, meaning the full series of transactions adds 880,000 BTC to the reported volume even though only 800 BTC actually went anywhere. (In fact, it's probably even worse - the account in question probably belongs to Mt Gox or another exchange and the payments are probably people withdrawing their BTC, in which case not a single cent really changed hands.)

Edit: In fact, it'd take less than a thousand typical withdrawals from exchanges for those transactions alone to push "volume traded" in the blockchain above 5 million BTC; the size of the withdrawals doesn't even matter.