Some parts are easy, like more is better. Even me and Gilby agreed on that, he just liked his shiny and I liked mine green. I sorta lost that debate by telling everyone to bail on gold at 800/z. Hey, I had my reasons, they just maybe weren’t so smart.
Now we got this new money in the news called Bit Coin. Apparently if you waste enough electricity and computer time in a (to me) pointless fashion, you can “mine” a bit of coin. Then trade it online for a bag of real nickles, or even real gold or silver coins.
Sounds like BS to me, but I don’t even like real gold, so what do I know. Comments please.
Bitcoin has appreciated rapidly over the past year; the value has increased more than 50-fold in November, with no ceiling in sight. Seems better than money for the moment.
The problem with ‘cryptocurrency’ is that it is almost entirely unregulated.
Whose problem is it if someone empties your bitcoin wallet. There is no guarantee that someone will cover the loss. In fact there have been several major online wallets hacked and emptied recently, turns out the security was pitiful.
Anything that inflates that much with no tangible support can only really be considered a bubble. It will rocket up and up until people realise just how little it is worth and then will bomb. If you can ride the bubble then get off before you get greedy, there is a lot to gain. Most people will get it very wrong and lose a lot of money.
Imagine it as someone can steal thousands of peoples wallets/purses stored together in a ‘vault’ in minutes and no-one is actually obliged to give a toss. The only way to recover the loss would be via insurance (most likely your own).
I confess limited understanding, so maybe I am missing something one of you can explain. Bit coins (currently trading for about 500 $ USDish/each ) are made by running a computer program for some time on a crunchy computer.
Doesn’t Moore’s law state that you can buy a twice as crunchy box for the same amount of $ in 2 years ? Why would this not lead to 50 % inflation loss of value/ yr for bit coins, compared to gold or fiat currency, or even the cars, every year?
Assuming the Fiat cars are driven carefully and well maintained.
I assume I am missing something, and thankfully it’s not my money. But why do so many people pay so much $ for these bit coins ?
Hey, I know something! When new bitcoins appear faster than a certain rate, either because computers got faster or more people have started mining or someone figured out how to use computers better (eg, using graphics card processors) then the standard goes up for what’s accepted as a legal new bitcoin and all the miners have to work harder. That slows it back down.
Either because they want use them to buy something and there are only so many or they’re betting someone else will pay even more for them in the future. And maybe some are hedging in case other currencies collapse, pretty much like any currency market.
Money has always been the most saleable commodity of the time and in history, people have used things such as seashells, cattle, tulips, tobacco, bank notes, and precious metals. Bitcoin is a new thing that may be considered money but only in a small community right now. History has shown over and over that precious metals – gold and silver – have consistently been returned to as the currency when all these others have failed. Why is that and does bitcoin have the qualities that make it a good money?
What makes a good money? A good money has all these qualities: finite, durable, divisible, portable, and tangible.
Seashells and tulips are not finite, durable or divible, but are portable and tangible.
Cattle is not finite, durable, divisible, somewhat portable, and is tangible.
Tobacco is not finite or durable, but is divisible, portable and tangible.
Bank notes are not finite or durable, somewhat divisible (depending on the notes), and are portable and tangible.
Bitcoin is not tangible, but is finite, divisible, portable, and somewhat durable.
Gold is finite, durable, divisible, portable and tangible.
No, we disagree on that. A good money should be finite, where no government or individual can create more on a whim. That’s why I like gold over greenbacks. Bitcoin is also good in that respect.
It is regulated by the protocol.
Whenever you give an asset to a third party you are always going to have that third party risk. Like any stolen asset, yes, insurance is an option. Legal action is another. You can at least use those methods for bitcoin… you can’t for the government’s bank notes, when they steal it from you Cyprus-style, steal from you when you convert your asset from one form to another (they call it capital gains tax), or steal by devaluing it (quantitative easing is what they call it now days).
Yes, the protocol is set up to make the problem of creating a new bitcoin harder so that on average, one new one is produced every 10 minutes until the maximum 21 million are created.
I’ts not that the masses can’t be stupid, and run off the cliff like lemmings (though lemmings don’t really do that, sheep do, but lemmings were cheaper than sheep, so they used them in the fake documentary about lemmings jumping off cliffs)
Thank you to Large Eddie for his small explanation about how Moore’s law would not negate through inflation the value of computationally mined coins.We’re all all sitting at computers, and if he took longer to explain it, well, keeping on subject, that should be costly. I suggest from now on we all learn to type faster.
I’m sure some of you have seen the hit tv show “breaking bad”, if you haven’t, I suggest you lay off the blue meth for a bit and try to follow my logic.
In “breaking bad”, Mr white had several problems. #1 Making the product, #2 selling it and stacking the cash, then #3, his hardest problem, the one that brought him down.
Criminals who are good at solving problems 1 and 2 still can’t move into that mansion on the hill. Failure to wash your dirty $ right will get you real time in prison. Most of the really good at making dirty money have stacks of cash, but dodging the IRS is the 3rd challenge. Tough in a world where any transaction through a bank over 10K $ is automatically sent to the IRS.
Smuggling gold across the border undeclared is just as difficult as smuggling heroin, and less profitable and more risky.
Wire transfers of cash greater than 10,ooo$ may get you an IRS audit. So let’s say I’m sitting with Mr White and 100 mill in unwashed money. Buying Bit coins, even at a 30 % loss, may look good. You can move any amount instantly across any border without any government tax man getting a report. There is some value in that.
What are these other things you speak of? Chances are they were part of the money used, or they are less finite, less durable, less divisible, less portable, and/or less tangible.
Income tax is the worst of all. A 100% income tax means you are a slave. A 25% income tax means you are a 25% slave. Capital gains is not much different. Sales and property tax, if and only if they are confined to being local, are OK, as they are agreements entered into voluntarily by those that made the agreements to purchase and use a plot of land.
Who can I thank for my freedom? The government, media, and corporate shrills (do I repeat myself?) want me to thank their murderers for hire. Pretty sick that one can’t travel anywhere freely with their assets. When I flew into the US via Miami a couple months ago, I saw thugs with a dog sniffing for contraband… one would have thought it was for drugs (not that that should be illegal), but no, it was a dog sniffing for money. The guy next to me was carrying about $4000, and was harassed for a while by thugs hired by the local criminal protection racket because he was carrying a somewhat large sum of monetary instruments. Pretty sick. Welcome foreigner, to the country that claims to do everything in the name of freedom! I’ve travelled a fair amount internationally, but nowhere do I see things like that and get groped more than in the US… and people call this a free country?
Are sales tax just?
the poor chap next door who is a handyman with a family of 6 should pay 3 times more taxes than me (Engineer with a family of 2) just for the food?
All minerals are considered finite; they can all be all used up. In particular, I’m guessing the platinum group of metals (namely platinum, iridium, osmium, palladium, rhodium, and ruthenium) might be more obviously so, and 90% come from S. Africa.
The international “mint” is the guy who owns all the gold mines and silver mines, right? He produces wealth from cheap labor, because he owns real estate that is only more valuable because of the natural resources it contains.
If he spends 6 times as much to stuff his family on fois gras, caviar, and fine French chocolates, yes. He already grabbed more than his fair share by having too many children, all of whom will earn a fine retirement for him and are already consuming more of the community’s resources.
Just for your information in my home country (France’s south-west) foie gras is not really considered a “luxury” item. ok it’s for special events but even poor families indulge in it. The fact that California forbids it is regarded as a strange twist in Animal welfare theories (ok we also have bullfighting :o)
I highly recommend french chocolates of the Weiss brand (Weiss: Saint Etienne France)
(and I hate caviar)…
Fat duck liver is questionable, but the 2014 penny is nuts
I think the definition of inertia in physics was about conserving energy. OK in physics, but sorta lame at times in government. Political inertia means we just keep doing something stupid, that everyone knows is stupid, because we have always done it. It would take more political energy to nix the penny than to keep it, thus it remains.
The penny costs more than 1 cent to mint. The difference is paid by the taxpayer. Not to mention the hassle of handling near worthless coins, time wasted by cashiers etc. Don’t hold your breath until this changes.
(ok we also have bullfighting :o)