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Bitcoins

Discussion in 'General Chat' started by helloworld, Nov 18, 2013.

  1. snoopy

    snoopy Membership: VIP

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    How is that going to help?
     
  2. helloworld

    helloworld Membership: VIP

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    It's a decentralised currency so it really doesn't need the banks at all. The problem will arise with payment processors and I think that's still a little way off though they seem to be acting faster than they did with say online poker.

    Anyway, going to be interesting to watch. Any thoughts on what will send if to $0 ?

    I honestly don't think that will happen but wouldn't be phased either
     
  3. Chris.C

    Chris.C Membership: VIP

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    Unfortunately banks are very much required and that is why it was a big deal...

    :eek:

    Without banks being able to use bitcoins as reserves there is no way to offer bitcoin loans, because banks operate on a fractional reserve banking system.

    This allows them to lend out more money than they actually have in reserves - this is how they can pay depositors 5% on their money and then at the same time lend money out to borrowers at 7%. So that tiny 2% margin can be turned into a 20% gross margin if they only keep 10% in reserve (ie for every bitcoin they have in reserve they lend out 10).

    So if they can't use bitcoins as reserve this means they can't lend them out - so there will be no money in it for them - therefore they won't ever accept them.

    This is just how our modern monetary system is designed, so as I've said previously, without the acceptance of banks and government, bitcoins will always remain just a niche digital currency that is extremely exposed to going to $0 because they aren't backed by anything tangible to support it when a downward spiral begins.

    At present (and this may change) they are just a good "idea" or "story" supported by "greater fool theory" speculation.
     
  4. helloworld

    helloworld Membership: VIP

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    I get what you're saying. But I think you'e missed the point in that there is still no need for banks.

    This is the way I look at it.

    I have a product/service equal to $500 AUD. So on current value that's .5 btc. which I accept for my product/service.

    I can then trade my bitcoin with other sellers for their products/services or I can sell them on an exchange.

    I do not think they will bubble because even if they do go to say $300 each, $100 each, $30 each there are enough people to know about them to say, "shit, these are low, I am getting in on them now" so on and so forth.

    Maybe that actually needs to happen for the price to stabalise?

    Anyway, will be good to come back to this thread in years to come.
     
  5. Chris.C

    Chris.C Membership: VIP

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    I'm not saying you NEED banks to create a functional digital currency.

    Bitcoin has already proven that you don't.

    What I'm saying is your NEED banks and governments to create STABLE digital currency that isn't at risk of dissolving into nothing on a whim on a weekly basis.

    To understand why BTC won't last in it's current state (without agreement from banks and government) requires a fundamental understanding of what the purpose of a currency is.

    The main two utilities currency provide people are the ability to transaction and a STORE OF WEALTH for future transactions.

    BTC fulfills the first part moderately well (it obviously isn't so good for offline transactions).

    However, BTC, as has been shown recently, it is a horrific store of wealth because their is nothing to underpin confidence in it. And that isn't likely to change without major banks and government accepting it (which I'm arguing won't happen any time soon).

    That's like saying in the middle of the Tulip mania in the 1600s, "shit, these tulips are now only 10% of their peak value, what a bargain, I'm buying back in now!"

    ...Of course tulip prices went on to fall down to 1% of their peak values, which means even the "smart guys" who avoided the first 90% of the losses, still lost 90% of their capital by buying in when prices were at 10% of the peak prices!

    At least with tulips, they had something tangible.

    :cool:

    Stability will only come with volume and popular agreement.

    If people can't pay their taxes with BTC and banks can't make loans with BTC you'll never get stability. It's that simple.

    And whilst some companies will accept BTC for PR and gimmicks sake, real world business won't because they can't accept payment for good when a currency regularly has 5% valuation swings on a good day and a 25% swing on a bad day.

    You can't operate a business that has real world costs with that sort of volatility. I work in a business where a 10% movement in the AUD over 3 MONTHS is enough to force a change of supplier and business restructuring.

    Indeed...

    :p
     
  6. helloworld

    helloworld Membership: VIP

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    lol I really hate the tulip analogy. It's not 1600 and these aren't tulips. The thing with the Tulip crash is that it was, wait for it 1600 and a limited market!

    Human nature dictates that people will buy in when they fall thus pushing the price right back up. The market is obviously a digital room instead of a tuplip ggrowers barn house.

    I still don't think we need to worry about the major banks BUT there are hedge funds involved with BTC as well as major banks investing in it, whether they say so or not.

    I love risk, especially while there are implied odds. I'm not saying it's a sure thing but is I'm reading this in 2020 let's hope I am looking down from my Ivory tower...avert your gaze
     
  7. snoopy

    snoopy Membership: VIP

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    Human nature does not dictate that at all. When something falls it it will either,

    • Rise again
    • Stay about the same, or
    • Fall further

    There is no "human nature" pushing the price back up. People will decide whether something is worthwhile or just a fad.

    There is lots of others,

    -Dot com bubble - most of those stocks never came back - Even now the Nasdaq is still 20% lower than its level 14 years ago.
    -Japanese realestate in the late 80's, 90's.
    -LLLL.com - 2008 crash - $60 down to basically $0 for the worst ones.
    -Gold price crash 2012 onwards (remember all the people on domain forums talking abut buying gold?)

    So there is plenty of other example of things that do just crash and burn or stagnate for years and years.
     
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  8. Chris.C

    Chris.C Membership: VIP

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    Well said Snoppy.

    Also the big difference between these bubbles and Bitcoins is that whilst these asset classes did become overvalued and crashed at least with stocks, real estate and gold there is something tangible behind them with real world utility, so their value is unlikely to ever go to $0 (though could obviously fall well past fair value as happens with most prices after their bubbles burst).
     
  9. helloworld

    helloworld Membership: VIP

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    Here's the squeeze. If you buy an apple for $1 and sell it for $2 you can buy yourself another apple at no cost.
     
  10. snoopy

    snoopy Membership: VIP

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    I think you are fooling yourself with all this. Most people missed it, that is fact, just like anything that does well. Buying in now won't make up for that.
     
  11. Shane

    Shane Membership: VIP

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    auDA Member:
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    Not if the price of apples is now $2.
     
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  12. James

    James Membership: VIP

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    Was talking to a guy at a BBQ on Sunday who purchased 330 bit coins when they were $6 each.

    I think he still has some holding but spent them on different things haha
     
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  13. helloworld

    helloworld Membership: VIP

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    Bitcoin arse is dropping out at the moment. Been steady at $1020-$1070 for a while.

    More info here on Apples announcement http://www.reddit.com/r/Bitcoin/

    Could be a good time to get in.
     
  14. helloworld

    helloworld Membership: VIP

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    Btc now at $586 aud.
     
  15. Rhythm

    Rhythm Membership: VIP

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    Why is it dropping?
     
  16. helloworld

    helloworld Membership: VIP

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    $640

    It dropped a little on apples news to remove btc qr scan app then tonight mt gox suspended withdrawals while they update software.
     
  17. dicardo83

    dicardo83 Membership: Community

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    There's a guy on Whirlpool who has created a thread called "Help me locate my bitcoins from 2008" when he purchased them on an old hard drive and now needs to relocate them after throwing out the hard drive! You have to feel sorry for him although he hasn't lost hope of finding them on a USB stick apparently.
     
  18. findtim

    findtim Membership: VIP

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    auDA Member:
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    i just got an email that fiverr dot com is now accepting bitcoin

    HTML:
    http://blog.fiverr.com/fiverr-now-accepting-bitcoins/?utm_source=el_ct&utm_term=n235
    tim
     
  19. helloworld

    helloworld Membership: VIP

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    Bitcoins are currently around $350 on mt gox. $650 other sites. If you can actually get the coins off the site thus could be a good in (or this could be the bubble)

    I say if as I haven't used mt gox
     
  20. asantha

    asantha Membership: Community

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    its 267 now. why its going down so fast... ?