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Bitcoins, anyone?

Discussion in 'Off Topic' started by stealthology, Aug 30, 2013.

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  1. hcsharp

    hcsharp Active Member

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    You can convert your USD to EUR, and then back to USD and buy the sandwich. How are Bitcoins different? Is it because the exchange rate between major currencies is determined by methods that ultimately rely on open markets? And since so few merchants accept BTC it's hard to argue there's an open market? But can't you exchange BTC for USD any time you want? Just trying to understand... Maybe I'll go make a sandwich and think about it.:biggrin:
     
  2. Bound466

    Bound466 Member

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    I've bought Burger King gift cards with BTC. So, yes, you can buy a sandwich with BTC.
     
  3. UpstateElectric

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    Mt. Gox has not been a reliable establishment for years now. I have personally been avoiding them for at least 1.5 years, and any other serious bitcoin enthusiast has done the same. Their reputation as being "The Bitcoin Exchange" is purely the result of them being the first. Not the best, not the most competent, not the most transparent, etc. I say good riddance, the Bitcoin ecosystem will actually be much healthier when they're gone and forgotten.

    As far the loss/theft/etc of that many bitcoins all at once...I'm not sure what the facts are there. Will have to wait and see

    As far as anyone who purchased a tesla with bitcoins....time to buy those coins back at 1/2 the price! Woo-hoo, half price Model S!
     
  4. deonb

    deonb Supporting Member

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    Mt Gox has already been crippled about 8 months ago when they stopped allowing fiat transfers out of the exchange. They were on their own tiny little island with their own exchange rate that had no bearing in reality, since the counterparty to the exchange was a GoxUSD (not exchangeable out with US$), and MtGox didn't arbitrage their rate between GoxUSD and US$ (and nobody else could arbitrage it either, since that will require US$ withdrawal).

    And on the counter side, nobody would send fiat to them either, because why pay 30% over rates that you can get elsewhere?

    So for the last 8 months people could basically just send bitcoin there, sell it for GoxUSD, wait for the fake GoxUSD/BTC rate to drop, buy back GoxBTC and send it out again. That gets boring after a while. And everybody on that exchange was also running the risk everyday that MtGox may have re-initiated fiat transfers out, which would have caused an instant collapse of the GoxUSD/BTC rate. So you can imagine the level of speculative trader that was already on there.

    Anybody who wanted to use BitCoin for anything other than pure exchange rate speculation has already left Mt Gox quite a while ago. So when things finally collapsed it was more of a Bernie Madoff type collapse, rather than a Lehman brothers.


    It was Mark. Had to be. It is unfortunately one of the latest crazes in the Bitcoin world to defraud and cover up with incompetence, but I do not for one second believe that his balance sheet can go into the red by half a billion dollars without him noticing it. If this was an outside job he can just publish the wallet addresses used to steal from the exchange, and the community will track down the culprits very quickly. But he's not doing that.
     
  5. anticitizen13.7

    anticitizen13.7 Not posting at TMC after 9/17/2018

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    The critical problem I see with bitcoin is that it's too difficult for the average person to use in everyday life.

    I read an article in my local newspaper about a curious reporter who went though the process of buying bitcoin online and then trying to spend the currency. It was a complete pain compared to paying cash, swiping a card, or using PayPal.

    A big deal is made of bitcoin being a digital currency, but the reality is that most of our civilization's financial instruments, from dollars to stocks to derivatives, are already largely digital/virtual in nature. The key that's yet to be solved is how to make transfers easy, seemless, and secure along all transaction types. People can pay most of their bills electronically now, but certain types of transfers, like payments to an individual are often still done by paper check.
     
  6. deonb

    deonb Supporting Member

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    That's not technology though, that's adoption. Online, Bitcoin is probably the easiest form of payment. Easier than Paypal or VISA at least. It's a copy/paste of a code into a wallet.

    Offline however I would agree. Cellphones with QR codes are the best, but it's not quite seamless yet. Taking a picture of a screen from a cellphone screen is ... blah.

    No reason someone can't create an RFID or card-based payment system though.

    The bigger technological issue is that you have to wait for a confirm before you can finish the transaction, which can be 10 minutes of longer. (There are Altcoins that confirm faster though).

    In a lot of cases it doesn't matter - Amazon is anyway not going to ship your order for another hour etc. In the Starbucks drive-through case that would be unacceptable. EXCEPT, Starbucks has already opted to not ask for signatures on Credit Card transactions. I'm sure they'll get a few voids this way but it's worth for them the time they save.
    An organization like that will probably also just accept Bitcoin without confirmation, and just accept the occasional double-spend fraud.
     
  7. hcsharp

    hcsharp Active Member

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    What about transaction fees? It appears that there are no fees associated with a BTC transaction, unlike Visa, Amex, and PayPal. Reducing transaction fees makes for a more efficient marketplace resulting in lower prices. If it really takes 10+ minutes to confirm a BTC transaction, then I can't see it ever gaining widespread use.
     
  8. Bound466

    Bound466 Member

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    The transaction fees would typically not be zero, but you are right, they are much less than credit cards.

    Regarding the 10 minute confirmation period, it is up to the seller whether they wait for a confirmation, or more than 1 confirmations. Generally, they will decide that based on the checkout cost. If its small money (like a coffee), they will probably decide to just accept the payment without a confirmation. Low dollar amounts are low risk, and people are good and won't try to steal a coffee by double spending. In that case, the transaction would be instant, just like what you see with credit cards. But for higher dollar amounts (let's say over $50 or $100), they might require to see at least one confirmation. For really high dollar amounts, like the price for a car, they would want to wait for multiple confirmations. Six confirmations (~1 hr) is considered completely sufficient for any transaction, no matter how big.
     
  9. Mario Kadastik

    Mario Kadastik Active Member

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    #90 Mario Kadastik, Mar 2, 2014
    Last edited by a moderator: Mar 6, 2014
    Well I got burned a bit. Think I had a couple of thousand USD in Mt Gox that were sitting there since the $1000 prices as I was planning to buy back when it dropped below my sale price. In the meantime I withdrew funds from Gox a couple of times over the past months (SEPA withdrawals worked nicely albeit took a month) and in fact had the latest withdrawal arrive on my bank account just days before the whole collapse of MtGox. The worst part is that ca 2 weeks ago I thought about converting the $ to BTC and withdrawing. The price was in the $500 and below range so I was seriously contemplating, but was busy so didn't do it. Dang.

    In any case there are other places and the price has returned upwards. I now still continue constant convert + withdraw scheme, no longer holding anything. It's a thing with possible future, but also ******** of issues tied to it at this point in time. And of course it sucks to lose money like this, but it's my own fault for not adhering to my own policy of NOT keeping my funds at an exchange. I used to have a policy that withdrawals were for every 1BTC or equivalent and held in private wallets with encrypted keys.
     
  10. wdstuff54

    wdstuff54 New Member

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    Even at $250/share I think investing in Tesla is still a good idea. Bitcoin though I'm not so sure. Another Bitcoin bank Flexcoin just went under.
     
  11. NigelM

    NigelM Recovering Member

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  12. spentan

    spentan Active Member

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    That sucks to hear, Mario.

    To contribute to the topic, I've been using/dealing with bitcoins for the past few years.

    I have miners still mining, have paid themselves off and even with current difficulty mining about 0.05btc a day.

    When they first started back in October, they were producing more than 0.5btc a day hehe
     
  13. Mario Kadastik

    Mario Kadastik Active Member

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    Did my first ever BTC for local goods at a store purchase today :D one of the sushi places offers that they accept payment in BTC so I ordered a royal party set (89€ equivalent, contains 92 items + bottle of sake or plum wine). Paid 0.2BTC for it and it worked :) they presented me with a phone with QR code, I scanned that one in my phone and sent the money on the way. 5s later they had the confirmation and I walked out with the huge plate of sushi :)

    definitely going to be buying far more sushi from them from now on :D
     
  14. hcsharp

    hcsharp Active Member

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    Wow! So much for not being able to buy a sandwich with BTC! I initially discounted Bound466's post (Burger King gift cards) because he effectively converted BTC to a different currency (gift cards) before buying the sandwich. But 89€ of sushi is quite something! And a confirmation in 5s is remarkable.
     
  15. hcsharp

    hcsharp Active Member

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    #96 hcsharp, Mar 27, 2014
    Last edited: Mar 27, 2014
    The IRS just provided guidance on how to treat bitcoin transactions. It is treated the same as property which is what I would have expected.

    irs-issues-bitcoin-guidance

    This creates a bit of a headache for bookkeeping and reporting. If your business receives payment in the form of BTC, you have to calculate the equal value in USD to determine your gross income. If you buy something later with the same coins, you have to calculate a gain or loss which has to be reported. It essentially requires you to track the basis of all your BTC, which is a pain, and realize gain or loss every time you spend BTC.

    Also not very taxpayer friendly is that if you buy or receive BTC outside of your business, and not for investment (in other words, use it for personal transactions), you have to report the gains but can't deduct the losses.
     
  16. Chris TX

    Chris TX Active Member

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    Welcome back to the Bitcoin thread, everyone. Is anyone else having a mega-fantastic week? ;)
     
  17. .ModelXD.

    .ModelXD. Banned

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    Great week thanks Chris!

    Rest in peace my ASIC miner though. Back to the 'ol AMD for now.
     
  18. bestellen

    bestellen Banned

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    Tried it, total waste of time now. You missed the boat by about 2 years.

    $400 a month is going to be incredibly difficult to accomplish as the difficulty has increased dramatically and will continue to do so. The long term viability for personal bitcoin mining is slowly reaching nil.

    Also that's Litecoins not Bitcoins, same thing...but Litecoins has absolutely no use right now on a retail level, unlike bitcoins. Litecoins will also mine "faster" than bitcoins...I say "faster" in that you will accumulate 1 LTC a lot faster than 1 BTC, but 1 LTC is worth something like 0.003 BTC. Litecoins also use a different crytographic process which slows down hashrates considerably. As the difficulty for LTC increases it's just going to need more and more hardware to keep up.

    BTC was a boon if you bought them 2 years ago when they were 5 cents each.

    Also once the ASIC miners start actually shipping, your AMD bitcoin miner is going to contribute exactly jack **** to your wallet.
     
  19. Lesifass

    Lesifass Member

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    Is that you, Marty McFly? Welcome to 2015, but this is not 2013! Please check BTC charts for Nov 2013 [Hint: All Time High]. :) And this article from 2014 about ASIC miners already shipping: MANIC MINERS: Ten Bitcoin generating machines • The Register

    I agree about the long term viability of mining. It was fun back in 2011 when my new 6870 GPU paid for itself within a few months. (I should have kept those coins and buy a nice car after selling them in 2013, but… Hindsight is 20/20)
     

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