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Bitcoins - anyone else mining? (1 Viewer)
- Thread starter Charlie Frown
- Start date
Jojo the circus boy
Footballguy
There's plenty of reasons to transact using it, I think you mean there is little reason to invest in bitcoins long term.
There's plenty of reasons why bitcoin is better to transact with over paypal, neteller, add your own high-fee centrally based payment provider.
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I mean what I said. You shouldn't have to evaluate your risk profile before deciding whether to spend or accept a currency. Currencies are not meant to fluctuate like commodities.
Politician Spock
Footballguy
If the volatility doesn't meet the risk profile of a merchant, there is no reason for them to accept it. In fact, business transactions by their very nature demand a no risk currency. While there is no such thing, that is hardly a reason for business to move to the opposite side of the risk spectrum. Your view of all this is very sophomoric, full of knowledge, but lacking wisdom.
Jojo the circus boy
Footballguy
Why do you assume merchants need to hold on to the currency at all? To fulfill international orders it is much cheaper for people from other countries to convert their local currency to bitcoin, transact business with you and then you immediately convert the bitcoin to your local currency, there are already 3rd parties that facilitate this for you risk-free. So again I ask where is the risk associated with price volatility that you as a merchant have to take on? You could sell something for $5 or a $1 million and the difference in fees associated with your transaction would be negligible.
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Politician Spock
Footballguy
It's not an issue of holding on to the bitcoins. If I quote a price to a customer, the quote is usually good for a certain period of time. The volatility of bitcoin can turn a profitable quote in to a sales loss. To avoid this, quotes need to be done in a stable currency. The use of bitcoin is then nothing more than a financial processing system. The amount of time it exists in the business transaction is limited as much as possible, which is the opposite of what currency is.
Listen, I am no fan of our Federal Reserve system. It has a lot of negative aspects. But the one positive I cannot deny about it is it limits volatility. It will produce a constant loss of value, but with limited volatility of that value. That's not an argument FOR the Federal Reserve system. It's an argument AGAINST bitcoin.
Tom Servo
Nittany Beavers
Jojo the circus boy
Footballguy
You are attributing your own definition of currency.
Currency
A generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy. Used as a medium of exchange for goods and services, currency is the basis for trade.
http://www.investopedia.com/terms/c/currency.asp
Times are changing, bitcoin is a disruptive technology. Bitpay did over $100 million in revenue last year, had a thousand online merchants signed this past September. Bitpay facilitates transactions using bitcoin and again I repeat: with no risk to the vendors using their service. The volatility in price of bitcoin, a relatively new currency, had no effect on the usage of bitcoin as a currency to transact business. I shouldn't say no risk, there's a risk bitpay would not honor their agreements but then they would be held liable.
Your definition of currency is something different. You are trying to equate store of wealth in place of currency and it is not accurate, or perhaps you are not and you are just arguing for the sake of arguing.
Transactions made with bitcoin happen faster than credit cards and with lower fees. Our credit card system is archaic and was not designed for an internet era.
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Maelstrom
Footballguy
I don't get why you say the credit card system is archaic or not designed for an internet era. Seems like it works just fine, sure, we'd like to get the fees down and we need to make sure we keep making it easier for merchants to accept cards (getting easier all the time). If you don't like the big banks, that is a valid reason to dislike credit cards. But they work just fine on the internet.
Services like bitpay can eliminate risk to vendors....until bitpay becomes insolvent when it gets on the wrong side of the volatility. And who will bail them out? The exchange risk is still there, just concentrated.
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Politician Spock
Footballguy
It is you that don't seem to understand the difference between a currency and the credit card system.
Bitcoin may be better than the credit card system. That doesn't make it a currency any more than credit cards are a currency. Both bitcoin and the credit card system require the buyer and seller to conduct business in a currency, like dollars, euros, yen, etc...
Jojo the circus boy
Footballguy
What you fail to acknowledge is bitcoin is both a currency and a payment platform, the credit card system is not.
Jojo the circus boy
Footballguy
Fraud. How many different merchants have a copy of your credit card information? Why do you think Europe moved to smart chip CC's?
You read the article on Target right?
This is what credit cards were designed for:
http://www.phonebooth.com/blog/wp-content/uploads/2012/12/credit-card-machine.jpg
Also, when you take a credit card transaction, how long do you need to wait for the money to hit your bank account and even after it hits your bank account how long before you don't have to worry about the credit card company reclaiming that money (see post #1167 in red)?
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Jojo the circus boy
Footballguy
What You Need to Know About Credit Card Processing
source
By PAUL DOWNS
STAYING ALIVE
The struggles of a business trying to survive.
Starting on Tuesday morning, I am going to publish a series of posts about my search for an honest and affordable processor of credit card transactions. It was not an easy search, but I learned a lot — much of which I never wanted to know but some of which I think may be helpful to other business owners.
As a warm-up to the series, I offer this primer on card-processing basics. I think this background information will be helpful if you read the series or, more important, if you, too, have struggled to arrange credit card processing. My own search began when I was tipped off that I was paying more than necessary for my transactions. Many years ago, I agreed to let my bank handle them, and since then, I had given the topic little thought.
I wrote about my issues with my bank in a previous post, including my feeling that my credit card processing — also known as merchant services — was costing me too much. That feeling was set off by a cold call last spring from a processor that was interested in seeing whether it could lower my transaction costs. That prompted me to do some research.
I soon learned that there are four parties involved with every credit card transaction: the merchant receiving the payment (“merchant”), the bank that the merchant uses to provide processing services (“acquiring bank”), the bank that issued the card to the customer (“issuing bank”) and the customer (“customer”).
The money in the transaction is lent by the issuing bank to the customer, who will either pay off the debt within 30 days or add it to a balance and pay interest on it. Technically, as I will explain in a moment, the acquiring bank is also making a loan to the merchant. Fees are deducted by both the issuing bank and the acquiring bank, so that the amount of money that ends up in the merchant’s account is less than the amount charged the customer.
The issuing bank’s fee is called the interchange fee. The acquiring bank’s fee is called the discount rate, and it might be supplemented with other fees. Both the interchange fees and the discount fees are expressed as percentages of the transaction, although a small fixed amount may be associated with each transaction.
Many banks issue credit cards to customers and act as issuing banks. These banks hand out cards of a certain brand, with Visa, MasterCard and Discover the most common. American Express is a little different — it acts as both the issuing and the acquiring bank and charges a single fee directly to the merchant but will administer the transaction through the acquiring bank so that a merchant can process American Express transactions through the same terminal as the other cards.
Those interchange rates are published information — you can see Visa’s fee structure here and MasterCard’s here. The exact interchange fee charged to the acquiring bank (and the merchant) is determined by several factors: whether the card is present at the transaction, what type of card is used (a rewards card? a card used by the government for purchasing?) and what type of merchant accepts the card.
Yes, the type of business you are in can affect the interchange rates. This is because the issuing bank wants to be compensated for the risk of the dreaded chargeback, which happens when a customer disputes a charge successfully. When a customer complains about the product or services you have provided, chances are good that the money you were paid by the acquiring bank, plus additional fees, will be taken out of your account. You can appeal this, but it will take a while and you will probably lose.
Some businesses are more likely than others to provoke chargebacks. The safest transactions, from the point of view of both issuing banks and acquiring banks, occur when the cardholder is physically present to swipe the card and sign the receipt and when the goods are inexpensive and unlikely to provoke complaints. Merchandise and services that are standard and used quickly are the safest, which is why gas stations, restaurants and car rental agencies get favorable rates.
The riskiest transactions are those that are done over the phone and Internet, especially if the transaction is large and the business is of a kind that tends to generate complaints. That’s why an important part of applying for merchant services is revealing what kind of business you are. To make sure everyone is speaking the same language, the processors employ MCC Codes, four-digit numbers issued for a wide variety of businesses as defined by the federal government. If you wade through the MasterCard interchange document I linked to above, you will see special interchange rates associated with different MCC codes. Visa works the same way.
If you need to accept credit cards for your business, you have to deal with the acquiring bank. It is common for the responsibilities of the acquiring bank to be split between two entities. The first, commonly called the merchant service provider, is in constant contact with the merchant. When a sales representative shows up at your door to try to sign you up for credit card processing, or when you interact with a Web site (such as Square) to investigate a deal, you are dealing with the merchant service provider, which can be an arm of a bank or a smaller independent company.
In every deal I looked at, standing behind the merchant service provider was another company. I’m not sure if this is the correct term, but I’ll call it the processing company. This entity actually executes the mechanics of the transaction: transmitting information among the merchant, the issuing bank and the acquiring bank. In my dealings with four merchant service providers, I found it difficult to tell exactly how the duties of the acquiring bank were divided between the merchant service provider and the processing company. The sales representatives clearly worked for the merchant service provider. The monthly statement could come from either the merchant service provider or the processing company. The card readers were provided by the processing company. And somewhere in the middle were the underwriters.
Underwriters? Is someone evaluating risk? Yup. It is important to understand that when you sign up to accept credit card payments, you are actually borrowing money. When the acquiring bank transfers cash to the merchant, it is assuming the risk that there will be a chargeback. That risk will remain until the transaction (which may, for instance, include shipping time) is completed and the warranty on the goods (which may last a long time after delivery) has expired.
Despite that risk, the acquiring bank will put the transacted funds in the merchant’s account a couple of days after the transaction is reported. The acquiring bank sees this as a loan and that’s why when you apply for merchant services, your fitness to borrow the amounts that your business generates in credit card transactions will be evaluated. Every merchant services application I have seen has required a Social Security number and demanded that all card transactions be backstopped by my own assets. My house, my car and my savings are all up for grabs if things go wrong.
And as with any personal guarantee, this one is likely to affect your credit score and your ability to borrow money outside the business. At the very least, if you shop around for merchant services, as I did, your personal credit report will show multiple inquiries — with whatever effects that might have.
source
By PAUL DOWNS
STAYING ALIVE
The struggles of a business trying to survive.
Starting on Tuesday morning, I am going to publish a series of posts about my search for an honest and affordable processor of credit card transactions. It was not an easy search, but I learned a lot — much of which I never wanted to know but some of which I think may be helpful to other business owners.
As a warm-up to the series, I offer this primer on card-processing basics. I think this background information will be helpful if you read the series or, more important, if you, too, have struggled to arrange credit card processing. My own search began when I was tipped off that I was paying more than necessary for my transactions. Many years ago, I agreed to let my bank handle them, and since then, I had given the topic little thought.
I wrote about my issues with my bank in a previous post, including my feeling that my credit card processing — also known as merchant services — was costing me too much. That feeling was set off by a cold call last spring from a processor that was interested in seeing whether it could lower my transaction costs. That prompted me to do some research.
I soon learned that there are four parties involved with every credit card transaction: the merchant receiving the payment (“merchant”), the bank that the merchant uses to provide processing services (“acquiring bank”), the bank that issued the card to the customer (“issuing bank”) and the customer (“customer”).
The money in the transaction is lent by the issuing bank to the customer, who will either pay off the debt within 30 days or add it to a balance and pay interest on it. Technically, as I will explain in a moment, the acquiring bank is also making a loan to the merchant. Fees are deducted by both the issuing bank and the acquiring bank, so that the amount of money that ends up in the merchant’s account is less than the amount charged the customer.
The issuing bank’s fee is called the interchange fee. The acquiring bank’s fee is called the discount rate, and it might be supplemented with other fees. Both the interchange fees and the discount fees are expressed as percentages of the transaction, although a small fixed amount may be associated with each transaction.
Many banks issue credit cards to customers and act as issuing banks. These banks hand out cards of a certain brand, with Visa, MasterCard and Discover the most common. American Express is a little different — it acts as both the issuing and the acquiring bank and charges a single fee directly to the merchant but will administer the transaction through the acquiring bank so that a merchant can process American Express transactions through the same terminal as the other cards.
Those interchange rates are published information — you can see Visa’s fee structure here and MasterCard’s here. The exact interchange fee charged to the acquiring bank (and the merchant) is determined by several factors: whether the card is present at the transaction, what type of card is used (a rewards card? a card used by the government for purchasing?) and what type of merchant accepts the card.
Yes, the type of business you are in can affect the interchange rates. This is because the issuing bank wants to be compensated for the risk of the dreaded chargeback, which happens when a customer disputes a charge successfully. When a customer complains about the product or services you have provided, chances are good that the money you were paid by the acquiring bank, plus additional fees, will be taken out of your account. You can appeal this, but it will take a while and you will probably lose.
Some businesses are more likely than others to provoke chargebacks. The safest transactions, from the point of view of both issuing banks and acquiring banks, occur when the cardholder is physically present to swipe the card and sign the receipt and when the goods are inexpensive and unlikely to provoke complaints. Merchandise and services that are standard and used quickly are the safest, which is why gas stations, restaurants and car rental agencies get favorable rates.
The riskiest transactions are those that are done over the phone and Internet, especially if the transaction is large and the business is of a kind that tends to generate complaints. That’s why an important part of applying for merchant services is revealing what kind of business you are. To make sure everyone is speaking the same language, the processors employ MCC Codes, four-digit numbers issued for a wide variety of businesses as defined by the federal government. If you wade through the MasterCard interchange document I linked to above, you will see special interchange rates associated with different MCC codes. Visa works the same way.
If you need to accept credit cards for your business, you have to deal with the acquiring bank. It is common for the responsibilities of the acquiring bank to be split between two entities. The first, commonly called the merchant service provider, is in constant contact with the merchant. When a sales representative shows up at your door to try to sign you up for credit card processing, or when you interact with a Web site (such as Square) to investigate a deal, you are dealing with the merchant service provider, which can be an arm of a bank or a smaller independent company.
In every deal I looked at, standing behind the merchant service provider was another company. I’m not sure if this is the correct term, but I’ll call it the processing company. This entity actually executes the mechanics of the transaction: transmitting information among the merchant, the issuing bank and the acquiring bank. In my dealings with four merchant service providers, I found it difficult to tell exactly how the duties of the acquiring bank were divided between the merchant service provider and the processing company. The sales representatives clearly worked for the merchant service provider. The monthly statement could come from either the merchant service provider or the processing company. The card readers were provided by the processing company. And somewhere in the middle were the underwriters.
Underwriters? Is someone evaluating risk? Yup. It is important to understand that when you sign up to accept credit card payments, you are actually borrowing money. When the acquiring bank transfers cash to the merchant, it is assuming the risk that there will be a chargeback. That risk will remain until the transaction (which may, for instance, include shipping time) is completed and the warranty on the goods (which may last a long time after delivery) has expired.
Despite that risk, the acquiring bank will put the transacted funds in the merchant’s account a couple of days after the transaction is reported. The acquiring bank sees this as a loan and that’s why when you apply for merchant services, your fitness to borrow the amounts that your business generates in credit card transactions will be evaluated. Every merchant services application I have seen has required a Social Security number and demanded that all card transactions be backstopped by my own assets. My house, my car and my savings are all up for grabs if things go wrong.
And as with any personal guarantee, this one is likely to affect your credit score and your ability to borrow money outside the business. At the very least, if you shop around for merchant services, as I did, your personal credit report will show multiple inquiries — with whatever effects that might have.
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Jojo the circus boy
Footballguy
I've since deleted that post. If you are accepting payment in bitcoin the funds go directly into your wallet. If you are having bitpay settle, they settle at the end of the day.A little more information on how their guaranteed exchange rate works:
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Jojo the circus boy
Footballguy
Pretty cool stuff, 60% discount for using bitcoin. They make a good point about the hassle and cost of always getting cashiers checks when renting a new apartment.
http://www.coindesk.com/new-york-property-firm-steep-discount-bitcoin-payments/
http://www.coindesk.com/new-york-property-firm-steep-discount-bitcoin-payments/
Politician Spock
Footballguy
Me either, but the bitcoin is actually making me realize that I might take some of the benefits for granted as well. Of course, a big part of this is probably because of how awful the design of bitcoin was outside of a few of the theoretical aspects.Politician Spock said:
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Maelstrom
Footballguy
Personally, I really don't think the fraud in credit card is any worse than that in Bitcoin right now.Jojo the circus boy said:
As far as the rest, Bitcoin and Credit Cards are fundamentally different. Credit Cards are designed for banks to help consumers borrow money to purchase things. Not to help merchants sell things, really, except in that it helps consumers borrow more money. Bitcoin is designed to "securely" transfer funds, but there are no protections built in for the purchaser, which is what makes it so easy to steal Bitcoins, as once transferred, they are gone.
Jojo the circus boy
Footballguy
40 million credit cards hacked from Target, something that could never happen at a merchant with Bitcoin where 1 single hit could result with such a large magnitude of fraud. In order to put fraud at the same mark with bitcoin you would need 40 million individual wallets to be hacked on their individual personal computers - there is no way you can say fraud with credit cards is not "any worse than that in Bitcoin right now."
You asked why the credit card system was archaic and not designed for the internet era, I think this pretty clearly shows why and highlights the advantages of Bitcoin, you are being stubborn if you can't tell the difference. Why would something that was invented in the 1890's have any chance of remaining secure in the internet era without major change?
Using Bitcoin is much more like spending cash and suffers from the same pitfalls of people not protecting their cash, they are subject to losing it. Finally your explanation of why "it is so easy to steal Bitcoins" is laughable at best, when someone steals your credit card info you are not preventing them from spending the money, you, the merchants and the credit card network just end up paying more in the long run to offset the loss which circles back to the higher fees charged by credit cards and higher costs from merchants - you are saying this isn't a problem because you are ok with the credit card's consumer base to pickup the loss and I guess you think it is ok to pay more from the merchants to have this peace of mind. If someone gets their wallet hacked it means they didn't follow proper procedure, something that is solved with hardware wallets, which even the simplest of minds can operate totally obviating any of the fraud risks you claim are on par with VISA/MC. VISA/MC has no comparable fix to their massive $200 billion a year* fraud problem.
Merchants lose $190 billion
Banks lose $11 billion
Consumers lose $4.8 billion
source
The main differences in fraud between credit cards and bitcoins is that the consumer can't do jack squat to prevent fraud with credit cards, often their information is stolen from one of the checkpoints that their credit card information is passed along after they have shared their information with a merchant. However when someone has their bitcoins stolen it is almost always due to their own mistakes. You know when someone gets a virus what everyone asks them, "what browser do you use?" since the majority of viruses are tansmitted via Internet Explorer. When someone has their gmail hacked and then loses their bitcoins the first question everyone asks is "why weren't they using 2FA?". As more people get educated about not making stupid mistakes, fewer bitcoins will be stolen from stupid people.
Another thing that will never happen with Bitcoin: Banks could sue Target to recoup losses
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Rohn Jambo
Footballguy
DrJ said it is possible for someone who holds a lot of Bitcoins to cause wild price fluctuations. But if one wants to stabilize prices, is there a way to do it? Some countries peg their currencies to the dollar to control trade deficits to their advantage, but that also allows them to fix the exchange rates. Since there is no such thing as Bitcoin Treasury Bonds, are there other methods available?
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Maelstrom
Footballguy
See, I believe that, for ease of use, most people will (if Bitcoin was to become popular) store their wallets online in some sort of exchange. Therefor, a mass theft could (and has) occurred. I know you say that isn't "best practice" but here's the thing. With the Target issue, none of the consumers will be out any money from this due to protections that are in place. If people where using their Bitcoin wallets to make purchases through a third party (as would be necessary in order to facility in-store shopping if you don't want to keep your BC wallet on you), the same thing could have happened except their would be no recourse for the consumer.
You can't claim that the way credit cards existed in 1890 has anything to do with the shape of that industry today. It has evolved over time, and if you don't accept that, it is you trying to be blind to make your point. There is nothing inherently insecure about credit cards, at least, not any more insecure than if people were buying with any other medium.
I'm not arguing Credit Cards ( or that industry) is perfect. Far from it, it is an industry in great need of a challenger. I just question the reasons you claim Bitcoin to be that challenger.
Bringing stability would destroy the currency. It has to rapidly deflate, there is basically no other choice. This is a "feature", not necessarily a bug.
Here's a look at the hash rate (the amount of power) on the network. It's basically a logarithmic curve, it's increasing exponentially: https://blockchain.info/charts/hash-rate?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=
Here's a look at the mining difficulty, also a logarithmic curve that's increasing exponentially: https://blockchain.info/charts/difficulty?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=
The number of coins coming out actually decreases over time, though. It's looked linear for the most part to this point, but will eventually flat line and be more or less reverse exponential: https://blockchain.info/charts/total-bitcoins?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=
And the number of coins coming out has nothing to do with the amount of people mining. That just reduces each of their share of the spoils and causes diminishing returns as more people compete. This is illustrated in the decisions people are making in buying this equipment (dumping 130K for 20K machines to be first), and also in the profitability calculators. Here's one, I'm going to use the defaults to start here: http://www.bitcoinx.com/profit/
My $2500 rig will take make 16.63 a day and take 167 days to pay itself off at today's rates of $800 a coin. What happens with this same rig if I bump the difficulty up a billion (slightly less than doubling it)? Now I'm making $8.84 a day and it takes 357 days. And mining difficuly is doubling about every 30 days at this point: http://www.coindesk.com/bitcoin-mining-difficulty-soars-hashing-power-nudges-1-petahash/
30 days in and I'm making half what I was? Either this guy is going to have to continually cut his profit margins, or the price is going to have to increase. And he can't cut profit margins forever - so the price simply has to increase.
This also doesn't account for things like "halving day", which happened on Nov 28, 2012 will happen once every 4 years roughly. This calculator is based off of 25 coins per block, but this number was 50 until earlier this year and will be 12.5 per block in another 4 years. Those dates essentially cut a miner's output in half overnight. The coin has to double in price on that day for the miner to maintain the same level of profitability.
This is something that was done by design entirely. Here's a message from "Satoshi" in the initial discussion phases. This is from 11-08-2008. http://article.gmane.org/gmane.comp.encryption.general/12611/match=nakamoto
This clearly demonstrates that he's aware of many of the dynamics that would happen and feels a constant rate seems like the best. But when the alpha code is released on 01-08-2009 he opted to go with this formula where the supply actually decreases over time instead: http://article.gmane.org/gmane.comp.encryption.general/12776/match=nakamoto
So the currency simply has to deflate, you try and bring stability and you've pretty much destroyed it.
Because of this, the only rational thing to if you actually believe in the currency is to throw everything you can at acquiring it and never spend it. In fact, it seems many of the bitcoin enthusiasts (pawns) really only endorse spending them for marketing purposes. "They're going to be worth some giant amount each, but only if we actually spend a few of them". And I'm not joking with that quote - there's people on these boards actually saying stuff along these lines.
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Jojo the circus boy
Footballguy
Let's assume this statement is wrong. The currency doesn't deflate, what happens next which "destroys" the currency?
Jojo the circus boy
Footballguy
You are making a bunch of invalid assumptions. Before I get into that however the reason why the Credit Card system cannot change is due to the massive infrastructure that has already been created. Smart Chip credit cards are clearly more secure than the current system in place so why doesn't the U.S. switch over to that system? It can't because the current system is an albatross it is just too cost prohibitive to change it, this opens the door to new methods, new technologies, bitcoin.
The only reason people store their wallets on exchanges is if they intend to trade between btc and USD frequently as day traders. You are saying the exchanges will / have been hacked. I think you are reading into headlines a bit too much. Inside the Mega-Hack did you read this by chance (from 2.5 years ago)? It states that hackers logged into their accounts using user's login and passwords - obviously these users did not use the 2FA feature Mt.Gox offers or perhaps this was prior to rollout of that feature. So the exchange was not hacked, individual accounts were hacked - this is FAR DIFFERENT than the Target example. If you have recent examples of exchanges getting hacked and millions of dollars being stolen please share your source.
Now you are assuming bitpay is going to be hacked? If so you do realize that is the equivalent of VISA/MC getting hacked and people stealing directly from those companies, right? Or are you assuming Target is going to get hacked again? Just so we're clear the consumer has no exposure through bitpay, bitpay never takes control of anyone's wallet. Bitcoin is a decentralized designed architecture, I am really lost as to why you are trying to equate Bitcoin with a centralized architecture. If Target gets hacked again they get diddly squat from anyone using bitcoin since there is no information that can be stolen to steal the bitcoins from anyone's wallet. As far as Credit Cards: Payment processors either being hacked or intentionally doing malevolent things happens on a regular basis. I've had to change my credit card 3 times in a 6 month span since moving to Florida through no fault of my own.What are you talking about? You don't think the fact that all anyone needs to steal your credit card info is your digits, name, expiration and security code (which is printed on the back of the card) and maybe your address? And that there are already plenty of (relatively) unsecured databases at merchants ripe for the picking, you don't think that is insecure? There is nothing inherent in the design and architecture of VISA/MC which makes it secure in the internet era, nothing. Trying to say it is as secure as bitcoin is wishful thinking it wasn't designed that way, go back to my card swiper - not exactly rocket science to copy that information - there's no private key!
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Jojo the circus boy
Footballguy
Politician Spock
Footballguy
As a currency it already has deflated in a major way.
Last year I could work a couple hours to earn one bitcoin. This year I need to work a couple days to one bitcoin. If I was a merchant, last year I could give up a few shirts in exchange for one bitcoin. This year I need to give up an entire wardrobe in exchange for one bitcoin.
When people have to give up more units of currency for the same amount of goods and services, that is inflationary. When people have to give up more goods and services for the same units of currency, that is deflationary.
Jojo the circus boy
Footballguy
DrJ is that you? The question remains unanswered, how is the currency "destroyed" when the currency no longer deflates.
It implodes. I've already explained this, and actually demonstrated what happened once before in the numbers. If you'd like to provide an alternate explanation along with some actual evidence to support it I'd actually welcome that. It'd be a nice change of pace for this thread.
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Tom Servo
Nittany Beavers
Econ 101 right there. Its not a hard concept to understand.
Tom Servo
Nittany Beavers
So you're saying BTC is the first currency that can't deflate? Please tell me more.
Jojo the circus boy
Footballguy
Link to your post where you prove Bitcoin "implodes" if it does not deflate. I find it hard to believe bitcoin has already been destroyed since that is what I am challenging - your top post in this reply.Better yet ELI5 it, explain to me like I'm 5 years old why you think Bitcoin as a currency is destroyed IF it does not deflate
.
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Jojo the circus boy
Footballguy
It's a hypothetical, never did I say it "can't deflate". DrJ has asserted that bitcoin has no choice but to deflate, using his words: if it does not deflate than the currency is destroyed.So you're saying BTC is the first currency that can't deflate? Please tell me more.
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Jojo the circus boy
Footballguy
Jojo the circus boy
Footballguy
Huh? The only thing I have gathered from your posts is you don't like the fact that the number of coins released by bitcoin is halved on a timed interval, you seem to think a "linear release" is preferable to you. Not sure if you meant to say linearly increasing (more coins are released at each interval) or linear in that the same amount is released over the same interval.
None of that matters to the question I am asking.
IF bitcoins do not deflate in value, if the value for example remains pegged at $100 USD to 1 Bitcoin for the next few years let's say +/- 10% - why would the currency be destroyed? You are asserting that Bitcoin HAS TO go up in value otherwise it becomes worthless, I have not read anything you have posted that backs this up.
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Jojo the circus boy
Footballguy
Li Ka-shing gets it, richest man in Hong Kong instead of buying bitcoin he invests in BitPay.
His profile:
A spokeswoman for Horizons Ventures declined to comment on the details of the investment. Bitpay said it was “fortunate to have the benefit of many supportive investors, including Horizons Ventures.”
BitPay, founded in May 2011, currently handles transactions for 14,000 companies across 200 countries. About half of the transactions take place in the United States, 25 per cent are in Europe and 25 per cent in the rest of the world. Asia is among the top regions where BitPay is signing up new companies.
His profile:
Asia’s richest businessman Li Ka-shing has invested in BitPay, the digital currency equivalent for PayPal, through his venture capital arm Horizons Ventures.
A spokeswoman for Horizons Ventures declined to comment on the details of the investment. Bitpay said it was “fortunate to have the benefit of many supportive investors, including Horizons Ventures.”
BitPay, founded in May 2011, currently handles transactions for 14,000 companies across 200 countries. About half of the transactions take place in the United States, 25 per cent are in Europe and 25 per cent in the rest of the world. Asia is among the top regions where BitPay is signing up new companies.
Alright,
Anyways, I like bitcointruth quite a bit. Any other suggestions? I should have a site up later today or tomorrow.
And this is one of my minor concerns with this whole thing. The bitcoin community is rabid in their support, so I'm not 100% certain what sort of attention I'm going to be inviting. I'm also not going to hide behind and internet alias, so a lot of very motivated people are going to be able to find me. It will also kill any FBG anonymity that I have, but that's something I've never been entirely concerned about. And our buddy Andy Dufresne once ran for political office and let people here know, so it should be alright on that front.
Anyways, I like bitcointruth quite a bit. Any other suggestions? I should have a site up later today or tomorrow.
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I did this in the last several pages, using my own words along with supporting evidence. You obviously didn't pay attention, so I'm not going to waste any more effort spelling it out for you. Feel free to review what I've posted and explain how the outcome can be different.
Jojo the circus boy
Footballguy
So you can't sum it up in 1 sentence? Is it really that hard for you to explain yourself? Your posts go off into wild tangents, if you expect anyone to take you seriously you should be able to concisely convey your point. I asked a simple question and you scoff at it, good luck with your
website.
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Wow, this thread has taken a turn. I find some of the postings interesting as I honestly thought there was some manipulation going on in the trading. That was back earlier in the year, way before it jumped a ton. There was lots of negative press after all of the media hype that made it jump over 200 and it went under 100. Then all of a sudden it jumped back up to 150 or so. It just seems like the price was fighting the news. Seeing the info on the trades doesn't surprise me at all. With the low volumes of trading back then, price manipulation seemed relatively simple to do, especially with such large stakes of ownership in a few hands.
I still believe what I believed before that bitcoin won't become a world currency because it was just created with nothing behind it. Here, I made a stbugscoin and while I own 40% of it, I value it overall at $10 trillion. I don't hear much about bitcoin like you did back earlier in the year when it got hot, but I still laugh when you see articles saying that each coin could end up being $1 million a piece. So, does every other currency in the world become worthless and 99% of the world becomes dirt poor?
It will be interesting to follow all of this. I definitely think this plus the Target breach will definitely start making some changes in the way credit cards and financial systems work.
I still believe what I believed before that bitcoin won't become a world currency because it was just created with nothing behind it. Here, I made a stbugscoin and while I own 40% of it, I value it overall at $10 trillion. I don't hear much about bitcoin like you did back earlier in the year when it got hot, but I still laugh when you see articles saying that each coin could end up being $1 million a piece. So, does every other currency in the world become worthless and 99% of the world becomes dirt poor?
It will be interesting to follow all of this. I definitely think this plus the Target breach will definitely start making some changes in the way credit cards and financial systems work.
Jojo the circus boy
Footballguy
That's a tall order based on the existing infrastructure that would have to change. The only change I can see coming is merchants like Target wise-up with regards to data security so that they don't open themselves up to liability.
Really? Dude is a multi-billionaire, he probably has investments in thousands of companies. Do you really think he oversees every single investment his venture capital firm does? His company has 260,000 employees. I would bet his venture capital firm has a lot of busts as well. That is what they do, they invest in tons of companies and all it takes is one hit in Facebook or Google or Netflix to make them a ton of money despite having a terrible hit rate. Invest $1000 in 100 businesses is $100k in the red. If Google's investment gives them a 100x return, then they broke even despite a 1% hit rate. Yes, a made up example, but venture capital firms are looking for huge returns from a small set of hits to offset more busts.
Just laughable that you equate a calculated chance on a hit (and an acceptance if it is worthless next year) by his venture capital firm equates to Li Ka-shing "getting it" and actually believing in bitcoins. This is the type of news blurb that con men use to milk more money out of whales.
Tom Servo
Nittany Beavers
I prefer the ServoCoin . I own 51% and I value it at $100 trillion. And, it never deflates!
Wait, you post that merchants are losing $190 billion a year, but you don't think they would want to change the existing infrastructure? Target just did a couple days at 10% off because they realized that they are going to get hit with a backlash because of this. My wife and I have our debit cards linked to Target Red Cards and I am going to have to take action because of the breach. I only did that because 5% off is a pretty nice deal, but consumers will make Target change and they obviously already admitted that this could affect their bottom line. Consumers are going to be wary of shopping opening them up to issues. Even if things are "covered" the inconvenience of it and the worry that it won't be covered could easily make people shop at Walmart instead of Target if Walmart accepts the more secure credit cards.
I believe that whether or not bitcoin fails (I am on the side that it will), it and the Target breach are going to start more secure financial mechanisms coming into the mainstream.
Give me a 5% cut and I will transfer 1% with you back and forth every day. We need to stabilize the price to ensure adoption, not to make ourselves rich, but to ensure stability as we can allow a farmer in Africa to support his son going to Rutgers. We pledge to be an altruistic organization and I promise that once worth $5 trillion that I will pledge to donate $1 billion to build a large ship to drag icebergs from the artic to bring clean water to Africa.I prefer the ServoCoin . I own 51% and I value it at $100 trillion. And, it never deflates!
