It's its own currency. Any transaction using bitcoins is written in a ledger and that ledger has to be checked a few times when the user attempts another transaction (to make sure they have the funds). This ledger is encrypted so other people have computers running to get past the encryption and check the ledger. This process is part of the mining. If your computer has gone through x number of these checks or calculations, then you earn y amount of bitcoin. At least that's what I think it is. As its own currency, it's now valued at a certain number of USD.
who is you guys? Its fine to talk about bitcoins as an investment, but what excites people about bitcoins is its potential. Its very possible bitcoins leads to the end of credit cards, paypal, and most functionality of banks. This isn't even considering what stems from the difficulty governments will have regulating it. China (the biggest country in the world) declared bitcoins illegal for financial institutions to trade in and bitcoins just kept on ticking. What do you think would happen to all other currencies if they were subjected to similar legislation?
I'm convinced the government will outlaw it within the next couple of years. The banks have been doing everything possible internally to squash it, shutting down accounts of merchants accepting it, for instance, but now that big businesses like Tiger Direct are accepting it, they'll have to pay off the politicians to do something about it. There will be some sort of manufactured "terror" excuse. Essentially, bitcoin takes control/monitoring of money from a whole range of people who are very powerful, and who's power comes from monitoring and controlling money. An alliance of interest between the NSA and Wall Street makes for a pretty powerful enemy.
How else am I going to buy my drugs or sell my hacked stolen credit card numbers? If there is a market it will be there.
Sure it can. When China's government basically declared themselves hostile to it, the currency crashed in value. When the US government had hearings about it and seemed open to it, it skyrocketed in value. What people seem to miss, in my opinion, is that while the currency is limited, it will eventually *shrink*. Bitcoins that get lost do so permanently. From my understanding, 500,000+ coins already are considered to have disappeared - this is out of a potential total market of 20 million. So the currency is essentially deflationary - and will, over time, disappear as you lose more and more coins to the void. Take this guy: http://www.forbes.com/sites/kellyph...bitcoin-wallet-on-hard-drive-worth-9-million/ He had 7500 bitcoins that he had on his HD which got destroyed. Those coins are permanently gone. Continue this over and over and the currency runs into a fundamental problem.
How do you propose the government is going to outlaw it? While they can't outlaw it, they can certainly manipulate it and make in so volatile that nobody will invest in it. As another poster mentioned, its a fad. Right now its an investment like the stock market. Price are too volatile to use as a currency.
Who cares if it deflates? It isn't fiat. There are two major flaws to the system, and you named one of them. If 1,000,000 bitcoins "disappear" out of the system and show up a few years later after the currency has stabilized, the currency can be manipulated. While the same can be said of gold, its much harder to hide that much gold and its much harder to destroy it permanently. Additionally, no matter how secure everyone claims it might be, its digital. Eventually a fatal flaw will be found.
I don't really understand exactly what you are asking. The simple smarmy answer is, they'll pass a law, just like they've done with everything else that is illegal. Are you asking the constitutionality? Right now, the banks cite Money Laundering when they close your bank account. I'm sure they'll play that up along with drugs and terror. Are you asking enforcement? Like drugs. I'm sure people will keep owning it, but businesses won't be able to accept BTC, and they'll drive it underground so that the only people who own it are the types who were early adopters.
What you are essentially suggesting is that all forms of currency must be approved by the US Government. Will this include barter and trading? Laws can't be haphazardly pulled out of your ass and deemed so, as you may suggest with simply outlawing bitcoins.
I still don't get your hangup with the mechanics. Hell, FDR made gold illegal with only an executive order . Do you really think they can't stomp on bitcoin if their mind to it. I'm not making any comment on the rightness or wrongness of making it illegal. Is that where you are coming from?
false, it went down for like 2- 3 days and bounced right back. 'crashed' is a total exaggeration. Bitcoins has always been very volatile.
Isn't this a slight problem for a supposed currency of the future? That's actually the point. Since it isn't fiat, there's no one who can get bitcoin out of its deflationary nature, and deflation in general is really, really bad.
I think it's a good thing. I don't own any myself, but I don't see any harm in it. If I had to go out on a limb and make a bold prediction, I'd say that it (or something like it) is the currency of the future. (It's a topic that has divided many libertarians, in fact. Many say that you have to base your currency on gold because... well... you just do! It seems that the older libertarians hold a view like this while the younger ones are more accepting of bitcoin. It has really become a dividing issue.) So I'm for it, but not very passionately. Until legal tender laws are abolished, I think this is the next best thing. Apoplithorismosphobia
It never bounced back all the way. Depending on your market, it went from 1200 to 500 to 900 or so. So it lost 25% of it's value due to a decision by the Chinese government. That's basically the definition of being subject to political pressures. You seem to have a pretty simplistic view of economics.
I think the government can just make it illegal for companies to accept it in transactions and/or for banks to process bitcoin-related transactions. That effectively makes it useless as a currency and even as an investment tool if you can't easily exchange it for cash that can be used to buy things.
I think the concern is that in the long run, you will end up with fewer and fewer bitcoins in the system as they slowly disappear. Liquidity is critical for any currency to work - what happens when there's only 1 bitcoin left and 19,999,999 have "disappeared"? (Or 0.00000001 or whatever the smallest divisible unit is)
Relatively, yeah it did suck. Unless you would like to go back to the standard of living we had over 70 years ago?
