World's First Bitcoin ATM 437
bill_mcgonigle writes "I just bought bitcoins from the World's first Bitcoin ATM at Liberty Forum. I created an account using an Android Bitcoin client and held up its QR code to the Raspberry Pi-based device's optical scanner. After I fed in a $20 Federal Reserve Note, I got back a confirmation QR code on its display, which I then scanned and checked the third-party confirmation URL. The machine can function on any wireless network and will soon be available for purchase by merchants, who can make a commission on customers' Bitcoin purchases."
You gave them cash and got bitcoins back? (Score:5, Funny)
Congratulations.
Comment removed (Score:5, Insightful)
Re:You gave them cash and got bitcoins back? (Score:4, Informative)
You make it sound like Bitcoin, a small but quickly growing experimental transaction system, has a similar volatility problem to the world's largest fiat currencies. This is clearly not true.
If you bought bitcoins 2 months ago and sold today you would have made 90-140% (depending on what you traded for, 120% for USD) of the invested capital. The could easily lose or gain 50% against most currencies/commodities over the next month. People holding bitcoins have to accept this serious volatility. Merchants need to change their prices rapidly as value rises or falls (there are tools to help with this of course). Users should not hold more than they can comfortably afford to lose suddenly and completely.
Right there. That's the reason why it's not prudent to exchange dollars for bitcoins.
Waiting for the other shoe (Score:4, Interesting)
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This one would be on you.. You control the security of the key that the money is sent to. Now if they don't send you the money, there's an issue you'll need to work out with them, but your risk is limited to: from the time you put the money in the machine, to the time you receive it.. Depending on how sure you want to be, that's anywhere from about 10 seconds to an hour.
Re:Waiting for the other shoe (Score:5, Interesting)
But, BTC is more or less indistinguishable from a Ponzi scheme. The early adopters get massive amounts of BTC for basically nothing and later adopters are the ones that pump up the price. It may not technically be a Ponzi scheme, but that would only be by technicality. It's still early investors being paid by later investors and ultimately nothing is produced to justify anybody profiting.
I'm going to laugh my ass off when BTC ultimately does collapse. At some point it's going to hit a deflationary spiral when the last blocks are unlocked and no more BTC come into existence.
Re:Waiting for the other shoe (Score:4, Insightful)
Re:Waiting for the other shoe (Score:5, Insightful)
What you've described applied to every business venture of earth, no matter what the legitimacy of the product or business model. Yes, early adopters of innovative ventures get the biggest shares in that ventures, which become the most valuable when the general public appreciates it.
The founders and early investors at Facebook, Google, Dell, Apple, Microsoft, etc etc etc all own the most of those respective and thus most of their capitalized values. Were they scams too? No, because at bottom, they all produced something useful.
You don't see the use in Bitcoin? Great, but that's a different argument than saying it's structured as a Ponzi scheme.
Re:Waiting for the other shoe (Score:5, Informative)
Can people please stop saying this? It's getting old. No transfer of money or assets takes place between new and old investors. The early coins are simply easier to get. In fact, you could argue that the early investors are hurt by more people jumping on board. The low hanging fruit is gone, and a larger pool means the time required per coin grows faster with more people activly mining them. Of course, they realisitically benefit more in the long run by having a large active community around the currency. (I'm not denying that early investors had it much better, but that does NOT equal ponzi scheme.)
Also, it is designed to work down to any number of decimal places. The hard cap on the number of BTC that can exist is designed to prevent endless money printing, which is far more likely to cause deflation. Once the coin cap is reached, the value of one BTC in "real" currency GROWS, but the consumer uses less of their coin to purchase the same goods. E.g. evnetually with sufficent growth in user base it may cost 10 bit-cents for a big mac rather than $1, then that falls to 1 cent, then .1 then .01 and so on. (Obviously it doesn't have to go in factors of 10.) This is hardly deflation - but yes it's also good for the early adoptors.
I'm far from a BTC expert and have nothing to do with them. I have no idea whether or not the stated goals will work out, but willful ignorance repeated over and over is annoying. Hopefully calling it out will do more good than blowing a mod point.
Collapse? (Score:3)
When the supply of BTCs stops increasing -- assuming demand for BTCs continues to increase -- you're correct, there will be deflation.
And deflation means that all existing BTCs will gain in purchasing power.
How exactly does that constitute the "collapse" of BTC?
Worth more when it goes both ways (Score:5, Insightful)
It will be a far more useful offering when I can both give it currency to be credited bitcoins, and transfer bitcoins to it to receive currency.
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Why would you want to give it anything when you could walk away with the machine and steal all their bitcoins instead?
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First, outright theft isn't compatible with my personal moral code.
Second, the bitcoins themselves are almost certainly stored in a wallet elsewhere.
Is this in Nevada or Atlantic City? (Score:3, Funny)
I thought gambling was illegal most other places.
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It's funny all the people calling anyone getting into Bitcoin suckers. It'd be fun to see if one of them would dare to mark the price of Bitcoin for each time they've made a comment link that. I'm one of those "Bitcoin suckers".... At this point, I've got about 30 grand to show for my original $19.50 investment.. Boy, you've really made me feel like a sucker now haven't you. There was a one month period (shorter actually) where you could have bought them and held them until now and lost some USD on them
Re:Is this in Nevada or Atlantic City? (Score:5, Insightful)
This is a zero sum game. In order for you to win money, other people have to lose money. And because there's nothing being produced, you're guaranteed that the early adopters will wind up profiting even as the late comers end up footing the entire bill.
And hell yes you're a fool. Even fools get lucky, but in total, the people getting lucky will be vastly outnumbered by the people who get screwed because of the way in which the BTC are created. And the early fools will reap more rewards individually than the later fools will pay out individually.
Also, if you've bothered to read up at all, and I mean at all, on the Ponzi scheme, this is exactly what it looks like. The early adopters crow about how it's money for nothing, when they're being paid by the people getting in later. At some point the money runs low and it falls apart. We haven't yet hit the point where it falls apart, but when the deflationary spiral hits the system, those BTC that people have will be effectively worthless as there's no upside to buying them, assuming you even can buy them. And general instability as small purchases cause huge changes in value because of low trading volume.
It's also likely to be illegal as I doubt very much that the SEC is being permitted to oversee all of this, nor the equivalents in other nations.
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It's true it's a zero sum game. The same goes for currencies died of an inflationary spiral. A zero sum game is actually what money is for. Making sure you're on the winners side is nice if you're going to play with money. So far it's working for me.
I was certainly lucky, but you explain to me why my luck is going to change? Your premiss only works if one day everyone dumps them all. I'll certainly keep an eye on it, but tell me why everyone's going to dump them tomorrow, or some other day, when the syste
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We hate BTC because it's indistinguishable from a scam.
The founders get to reap huge profits with little or no work at the expense of suckers that come late to the party. And your post just illustrates the problem. It's a token that's designed to allow for massive profits early on and eventual deflationary spiral when no new currency comes into existence and the liquidity dries up.
Re:Is this in Nevada or Atlantic City? (Score:5, Insightful)
Re:Is this in Nevada or Atlantic City? (Score:4, Insightful)
Time will tell...
http://en.wikipedia.org/wiki/Greater_fool_theory [wikipedia.org]
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I guess. He made a few buck along the way didn't he?
I spent my $19.50 after I saw an article on /. about bitcoin. I remember thinking, wow, that's an insane (but good) idea. I was fully expecting that it would get hacked the next week and disappear. It never even crossed my mind that it would survive to become anything substantial. More than a year later when I realized I had a substantial sum of the things, it took me about a week of double-taking and reading to realize that they were really for real, a
Re: Is this in Nevada or Atlantic City? (Score:4, Insightful)
uber-geek issues (Score:3, Interesting)
Most of those words mean nothing to the vast majority of the worlds population.
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and this is slashdot... not the vast majority of the world...
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I get that. And this is one of the most geeked out sites going. But holy crap. An article about "buying" bitcoins, via some arcane series of steps?
Why would yo do that?
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I guess it doesn't seem all that arcane to me.
1) Install an app
2) scan a qr code
3) insert money
4) scan a qr code
Re:uber-geek issues (Score:4, Informative)
It can be trivially optimized down to only one step:
3) insert money
Other steps are just to distract your attention.
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Perhaps. But that's not because of some technological arcaneness to the stories (which is all my rebuttal was about)
A bitcoin ATM? Awesome (Score:2)
An ATM in shopping centres which allows people to exchange actual paper money for digital currency? What vendor wouldn't jump at an opportunity to operate such a machine? And once the machines are in every bar and shopping centre, the vendors will naturally all fall into line and allow people to spend bitcoins. This is a WHOLE new way of exchanging money.
What's next? The Silk Road machine?
Re:A bitcoin ATM? Awesome (Score:4, Insightful)
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Have [part of] your income in BitCoins - since it is worthless (see 50% of comments on every BitCoin article), taxation on it would be 0.
Android, Raspberry Pi, Bitcoin in a single summary (Score:2, Funny)
Android, Raspberry Pi, and Bitcoin in a single summary? Just needs an Apple or 3D printing angle and it'll be slashdot buzzword bingo.
I don't mean to be picky but... (Score:2)
Isn't this more of a "deposit box" machine seeing as an ATM (automated teller machine) allows withdrawal of money, checking account balances, transferring funds from one account to another etc? (And technically shouldn't the machines that only dispense be MAC (money access center) machines?
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It's one of few anonymous ways to obtain bitcoins (Score:5, Interesting)
It is actually quite hard to obtain bitcoins anonymously.
The days of CPU-based mining are long over, and even the current "economy" of multi-GPU-based mining rigs is about to be eclipsed by the ASIC-based devices coming online this year.
There are effectively no services that will take anonymous payment for bitcoins. Paying via bank account ACH or check is certainly not anonymous, and the same goes for credit/debit card payment. Furthermore, any credit/debit based payment is potentially reversible via chargebacks, etc, so most places don't take that kind of payment due to the fact that bitcoin transfers are irreversible.
Services like Bitinstant claim to take cash for bitcoins, but what that really means is that they require payment via MoneyGram, which requires you to present government-issued ID when sending payment. This is linked to the Bitinstant anti-money laundering policy [bitinstant.com], which requires your real name, etc. Dwolla wants a name, SSN, government ID, etc, to setup an account. As for Mt. Gox? Heh, they require everything but a DNA sample in order to use the exchange. Any service registered as a "money services business" in FinCEN will have these kinds of restrictions.
Obtaining bitcoins locally requires finding someone offering them for sale, negotiating price each time, and likely a face-to-face meeting to hand over cash. If one is really patient and trusting, a deal might be able to be struck for sending cash in an envelope. However, the bitcoin market is extremely volatile, which tends to undermine these types of deals.
Anyway, this ATM seems very convenient and anonymous; ergo, it likely will fall afoul of the anti-money laundering laws in one way or another.
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Seems like payday loan and those "cash quick" places would be logical businesses to start offering bitcoin sales, assuming they could get enough inventory. Since not all users of the currency will care about anonymity, simply buying them for speculation or online use would be worth a 5-10% transaction fee. There's been a lot of press lately in magazines like Forbes which will catch the attention of Joe Public (and further fueling the BTC-USD bubble).
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Or there's another way: accept it as payment for a good or service. As (or "if", I suppose) Bitcoin grows and becomes a more legitimate currency, I expect that that will become a more common, or even primary way of obtaining them. (It wouldn't always be anonymously, but it would be possible to do it that way).
I mean, how do most people get Euros, or Dollars - by converting some other currency, or by working for them?
Re:It's one of few anonymous ways to obtain bitcoi (Score:4, Insightful)
Though that ultimately comes down to "in what ways are they better for anyone than traditional money". I guess I can see four answers to that: (illusion of) anonymity (see: Silk Road), speed of transfer over long distances (physical money beat this, but can't be used over the internet. Banks can take a long time to transfer money, if you count the time they can take them back), lack of censorship (Blocking payments to e.g. Wikileaks would have been much harder with bitcoins than with VISA/Mastercard), and moving money to and from places with little financial infrastructure (they are easier to use than the cell phone credits I hear are used to move money around certain African countries).
Whether this will make up for the downsides of Bitcoin depends on how big these downsides will be in the future, and how the well the banks will respond to the competition.
want can go wrong?? (Score:3)
It seems like there is a lot that can make this fail.
Can it refund your cash if there is any fault?
Can it run out of bit coins to pay out? and you end up losing cash?
How fast can it update the exchange rate?
What happens with a network lost midway though an transfer?
Can it store and transfer at a later time?
What about an power loss?
Hacking? and will be even be crime to hack it? and what will happen in a court if some one sues or they try to change some with breaking a law dealing with any to do with this?
They have answers to them though (Score:5, Informative)
"Can it refund your cash if there is any fault?"
Yes, or rather the bank can (and must under the law). I've had an ATM eat a check. You just call the bank and have them deal with it.
"Can it run out of bit coins to pay out? and you end up losing cash?"
If an ATM runs out of cash, it refuses to process your transaction. No money is debited from your account. Likewise if its in hopper is full it will refuse to accept your deposit.
"How fast can it update the exchange rate?"
Instantly. The ATM itself doesn't store any of that, the bank does. It just communicates with the bank. So it is always current to the rate the bank offers you. Also, this is not an issue with normal ATM operations since you access the same currency your account is denominated in. This only applies internationally, and then the rates shift slowly. BTC shift multiple dollars in a day.
"What happens with a network lost midway though an transfer?"
The transaction doesn't happen. The ATM only does things if the bank says it is ok. So if it loses connectivity before it is complete, the transaction is stopped. You either don't get your money in the case of a withdrawal, or it hands you back your deposit in that case.
"Can it store and transfer at a later time?"
No, ATMs are dumb terminals, after a fashion. While they run all their interface locally, they don't have any account data. They just contact the bank and say "This account number wants to do this, is this ok?" The bank then says yes or no, the transaction happens, everything is updated on the bank's computers.
"What about an power loss?"
Same deal as anything else, you call the bank. They'll have to come and get your card out, also if you had a deposit in the hopper but not processed they'll have to get that out too.
"Hacking? and will be even be crime to hack it? and what will happen in a court if some one sues or they try to change some with breaking a law dealing with any to do with this?"
It is a crime to hack an ATM though it is nearly impossible, since again they are dumb terminals. The crypto between them and the bank is top notch (IBM makes these real cool crypto cards for them). In the event the ATM is attacked and the money stolen, it is an issue for the bank, not you. The risk to the end user is skimming, someone capturing your account information and then using it, same basic deal as credit card fraud and the like.
That the same questions apply doesn't mean the same answers do. Really, there has been a lot of time to think about and work on answers with ATMs. The big reason they work well is that they are just terminals for the bank. They don't store anything, other than the physical cash they dispense. They just transact back to the bank. Also, there's rather a lot of tracking that goes on with regards to bank transactions at many levels. If something happens, there's logging, there's a record, it can almost always be undone.
Just what I always wanted! (Score:2)
Brilliant! An ATM that I put cash *into* to get magic numbers out --- for all those times when I've been standing in a market thinking "gee, it would be handy to have a bit less spending cash in my wallet right now."
What's with all the hostility? (Score:5, Insightful)
Get over the hype and take Bitcoin for what it really is: a fascinating experiment that has, so far, withstood the amazing barrage of publicity, hacking attempts, legal uncertainties, and remains valuable for reasons completely contrary to everyone that says it's worthless. It may become worthless one day, but consider the possibility that Bitcoin is disproving all your wildly oversimplified assumptions about what makes something valuable. It is completely different, and there's plenty of reasons to believe that it could succeed as much as it could fail.
Why does gold have value? Nothing is backing gold. Yet it has value, mainly because of its properties: scarcity, fungibility, density, beauty, etc. Bitcoin is really quite similar but with some different properties. Ease of transfer over the internet, fungibility, scarcity, storage efficiency, near-anonymity and built-in escrow.
I don't think it's any more ludicrous for Bitcoin to have value than it is for gold to have value. And in the end, when I want to sell WoW weapons, buy webserver space, or play a few games of poker online, why would I use gold, credit card or paypal, which all require me to remember log-in creditials, give away information and/or pay a bunch of third party fees. There's plenty of value in being able to pay people across the world, instantaneously, without sacrificing your privacy, and without paying any fees. Why is that not valuable? Seriously... quit focusing on the get-rich-quick kids, and start appreciating Bitcoin for it's unique properties and philosophy.
Because it is designed to fail (Score:4, Interesting)
It will never work as a currency because it has built in deflation, which if you've taken ECON 200 you'll know is a really, really bad thing for an economy.
Nor is it being used as a currency right now. A currency is something people hold, spend, get paid in, etc. Bitcoin is basically used only for three things:
1) Money laundering. Sites that do illegal things, like the Silk Road, use Bitcoin to launder money. They take payment in it but immediately convert that in to an actual currency. They are just using the payment system to launder the money from the client to them.
2) Speculation. Traders play the Bitcoin market to try and make a quick buck. Hence one of the reasons for the extreme volatility in price. If any actual currency had that kind of daily volatility it would be said to be in crisis, yet somehow the BTCtards want to act like it is perfectly ok for Bitcoins to fluctuate like that. It also, of course, makes it even less suitable as a currency for people to hang on to.
3) "Mining." People literally wasting CPU cycles and electricity to generate new Bitcoins. Most because they are bad at math and don't count the total cost of all their stuff and realize that they aren't actually making any money on it.
The inherent deflationary property of it makes it a failure as a currency out of the gate. There may be many other problems it would face on a large scale of usage, nobody has yet to convince me it has a good solution to timing attacks, but it doesn't matter because it fails as a currency.
The people who think deflation is good are people with no understanding of economics past their wallet. They think "Deflation means the money in my wallet is worth more so it is a good thing!" That is not the case, you have to look at the larger economic consequences, and then you discover deflation is very, very bad.
Re:Because it is designed to fail (Score:5, Insightful)
How many hyper-deflations have occurred? 0.
How many hyper-inflationary events have occurred? A lot. (Zimbabwe, Germany, Hungary, Former Soviet Republics, etc.)
The idea of this gigantic "deflationary spiral" is also a myth
http://mises.org/daily/1254 [mises.org]
Does a good job of explaining it.
Monkey learn, monkey repeat (Score:3, Interesting)
It will never work as a currency because it has built in deflation, which if you've taken ECON 200 you'll know is a really, really bad thing for an economy.
The funny thing about economics is that it's not scientific.
Sure, it uses math and all, in the manner that astrology uses math, but it's nothing more than feel-good storytelling.
In the case of inflation/deflation, there is no analytic theory which describes the situation - nothing based on conclusions from testable assumptions. It's all guesswork from historical evidence.
Don't believe me? Can you tell me the best value for inflation? If the answer is "it depends", then what does it depend on? Is the functio
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Well, to be honest, I think GP is not that far from truth. Economics is neither a law, nor a hard science. It is a grossly simplified model of human behaviour, and economists far too often operate on assumptions and even religious-like beliefs.
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1) There's a reason the bitcoin folks were invited to the LIBERTY forum. The concept of legal/illegal is a government fiction which has lost all correlation with the concepts of right or wrong / moral or immoral. Consider this a form of political protest against the criminal (but legal) actions of the banking cartel and the insanity of the "war on drugs".
2) What's wrong with speculation? As long as there are competing currencies, there will be speculation. This is also a relatively new phenomenon so th
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Vending machine, not ATM (Score:3)
This is not an ATM. It's a vending machine. It's like one of those machines that adds value to a transit card, or a gift card vending machine. If you could show it a QR code representing a Bitcoin on your cell phone screen, and it then dispensed currency, it would be an ATM. If people could do transactions in both directions, it would be taken more seriously. That would demonstrate that Bitcoins are worth something. As a one-way device, it's just another money-sucker.
It isn't even a deployable vending machine. It's a wooden prototype of one. Anything that takes $20 to $100 bills needs to be built up to money safe level.
Stopped quoting in US dollars several years ago (Score:3)
My company is located outside the USA and until a few years ago we would quote projects in USD and absorbed the diminished value of the USD over the term of the project. That changed a few years back because of the 2008 crash. We simply don't do business in USD. This means clients in the US are required to buy foreign currency and on a year by year basis drastically see our perceived cost go up in terms of funny money (USD)
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And I bet the US companies always quote in US dollars because when they quote prices to foreign markets (to customers or in suppliers agreements), their currencies fluctuate so much in respect to the USD that they have to adjust everything.
Same for anyone who doesn't use the native currency of the country where the majority of the work is done. Neither other currencies, nor Bitcoin, will stop that happening anyway.
And any company dealing in international deals will base their cost price in their own curren
Re:Ironic (Score:5, Insightful)
Actually the bitcoin is worth more because it's very difficult to expand the bitcoin supply while expanding the currency supply is trivial.
Meta Article (Score:3)
Re:Meta Article (Score:4, Funny)
"Meta post!"? Doesn't haven't the same ring, sorry.
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Why does artificial scarcity create value? Only if the items are "positional goods"; if they derive value from others not having it. But money should be a tool to help raise standard of living and improve conditions for everyone.
Re:Ironic (Score:4, Insightful)
There's no reason why gold has to be different than cash in how you store it. Assuming you don't have fractional-reserve banking (which is by definition fraudulent) you could have a gold-based debit card, gold-based ATMs, heck, you could even have gold-based paper money (like the US had in the form of gold certificates).
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you could have a gold-based debit card, gold-based ATMs, heck, you could even have gold-based paper money
There are already gold based ATMs [telegraph.co.uk], started a couple of years ago.
Phillip.
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No it's not (Score:5, Insightful)
This is quite common knowledge and can be found in 2 seconds by searching for "paper feels like money". You Sir, need to relax a little and appreciate the humour. No knowledge has been passed on that will result in any conterfeit notes being put into circulation that wouldn't have anyway. Put a bit RX into your TX.
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Er, it's never been South Korea? I've never once heard that.
Now, North Korea, that's frequently mentioned. I've never heard of any other nation, state, or organization having a sophisticated USD counterfeiting operation going..
http://www.nytimes.com/2006/07/23/magazine/23counterfeit.html?pagewanted=all&_r=0 [nytimes.com]
there's a link, it's been going on for a while.
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Bitcoin has no inherent worth; neither does "real" currency. The value comes from the promise that others will accept it in exchange for the things you want to get.
What you are describing is simply is a contract mediated by a mutually acceptable exchange medium. What distinguishes ""real" currency" (that is legal tender; aka money) is that mutually acceptability is not required for its use.
For traditional money, this guarantee is practically given ...
It's just a tad stronger than that. Money has (at l
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Realy? And how does the transaction between two parties work, when one party refuses to accept your "real" currency?
Refusing party goes hungry?
Party must accept legal tender in satisfaction of a debt or accept that the debt is unrecoverable.). Of course it may be in certain cases of contractual breach that a court will order some equitable remedy such as specific performance, but debt judgment will ring only in money.
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Which is why scalability issues would** eventually render Bitcoin useless as a currency. Metallic standards had the virtue that mining extraction rates reflect economic expansion of the general economy (up to the point that increasing economic complexity eventually requires abandonment of metallic standards.) Bitcoin supply reflects nothing more than the lack of understanding its creators had of what money is.
[** were it generally to be adopted]
What scalability issues are there that would be a major issue?
I think the guys who set up Bitcoin understood money very well and likely better than this AC poster. There are some scalability issues with the processing of work units and transmitting work unit information from one node to the next (nothing that hasn't been discussed with any other peer to peer network, but it is a problem). The thought was that there eventually would be a "central core" of "bankers" or at least very interested participants
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that's my thought.
The only thing holding value in the US dollar is ignorance. One of these days people will slowly realize that the USA has no money and can't pay it's debts as the USA like most of the western world don't know anything about virtual money.
You can't spend more than you take in, but we let governments guess at how much they are taking in and spend 10-20% more than that because they like thinking the GDP has some relevance to the government income of tax revenue.
One simple law could solve the
Re:Ironic (Score:5, Insightful)
Speaking of ignorance... the only reason ANY currency is worth ANYTHING is that people are willing to exchange it for something else.
Perhaps you could start by learning to spell "financial"?
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...but it's so much more fun to rant about the Big Bad Government doing everything wrong, and how one simple change can fix everything...
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He seemed to spell most everything else correctly.
No. He also used an apostrophe incorrectly, which demonstrates that everything else he says is based on incoherence and random mental noise. The correlation is unmistakable. In a response he will say that he "could care less" about punctuation, further demonstrating my point.
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That won't work, because the US government would just take out a shit pile of loans pro-actively instead of retro-actively.
Re:Ironic (Score:4, Informative)
Why can't you spend more money than you take it? In fact the US has done this since its inception, and predictions about its demise have gone unfulfilled. Grandchildren have continued to be better off than their grandparents, despite the hyperbolic paranoia of deficit hawks screaming that the sky is falling since Alexander Hamilton's doctrine of assumption created the first national debt.
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No, the thing holding together the US dollar is common acceptance. It has value because I can go to the store and be assured the man behind the counter will take it. We do that because it's better than a barter system, and we've all mutually agreed to use dollars. The only thing that could harm that would be a large number of people suddenly deciding not to accept it. The amount of debt the US government issues has no bearing on it, unless they decide to massively print money to pay off that debt. Nobo
Re:Ironic (Score:5, Interesting)
Actually I recently read a paper from Tim Morgan, a researcher at Tullett Prebon, that claims that the economy is basically just a dynamic balance between produced energy and consumed energy, and currency is just an intermediary state that loses meaning if there's no energy to buy with it (every product is as valuable as the energy used to craft it). This basically associated the economy to physics, and not to finance, and defines debt as a bet on future energy.
You can read the full paper here http://www.tullettprebon.com/strategyinsights/media_resources.aspx [tullettprebon.com]
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Repying to myself just to add the full link to the paper: http://www.tullettprebon.com/Documents/strategyinsights/TPSI_009_Perfect_Storm_009.pdf [tullettprebon.com]
Comment removed (Score:4, Insightful)
Re:Ironic (Score:4, Insightful)
(It's gotta be annoying that year after year the constant prediction of US hyperinflation stubbornly refuses to come true. But look on the bright side: if time is infinite, you'll be right eventually.)
While it's tempting to recast the economy (something we cannot predict well) as energy (which we understand well these days), I'm dubious that the predictive abilities will be recast as well.
Re:Ironic (Score:4, Insightful)
every product is as valuable as the energy used to craft it
Maybe in the world where humans are perfectly rational and communism works.
In this world however, cognitive biases like endowment effect, [wikipedia.org] hyperbolic discounting, [wikipedia.org] loss aversion [wikipedia.org] and money illusion [wikipedia.org] don't allow such simplistic definition of value.
As such, grafting a human-invented concept like economy onto basic laws that run the universe is about as arrogant and fallacious as assuming that the entire universe was made just so the humans would have a place to stay - cause they are made in the image of the creator of the said universe.
And he was a white man.
Who died on a cross.
For our sins.
Cause a woman eat an apple.
A snake made her do that.
Long story.
Re:Ironic (Score:5, Informative)
Well he's wrong. Since it's not just energy we depend on and it's not just energy we _want_.
every product is as valuable as the energy used to craft it
Tell that to stamp collectors. Tell that to art collectors. Tell that to the buyers of luxury goods.
There are lots of scarcities in this world that are not determined by energy unless you really stretch things to the point that they are useless in predicting or understanding stuff.
As for the US currency, it's not actually holding value - it is actually depreciating because of inflation. But that's not necessarily a problem for the USA (see below).
Why some economists recommendation of "printing money" to solve financial problems works at least for the USA is because the US dollar is used by the majority of countries in the world to buy and sell petroleum, wheat, CPUs, edible oils, milk, manufacturing equipment, toys, etc from each other.
Because of that when the USA prints money, the USA is actually transferring wealth from the rest of the world that holds positive amounts of US dollars (whether as assets, cash, goods or loans to others).
Basically when the USA prints money it taxes the rest of the world. If the US Gov gives enough of the printed money to the US citizens the US citizens will benefit overall. And hence the US financial problems are solved at the expense of the rest of the world.
In contrast if you are Zimbabwe you can do as much Quantitative Easing as you want and the rest of the world will just laugh at you. BUT IF the Zimbabwe government printed money and invested it into projects that benefit Zimbabwe with good ROI then yes printing money would have helped Zimbabwe. It would just be like another tax on the Zimbabwe residents but used productively. The big problem is getting good ROI or at least better ROI than not taxing the residents. And that's not always easy.
So it should now be obvious that it is much easier to make your country wealthier if you can tax the whole world rather than just the residents of your country. Then you don't even need projects with good ROI. Just take wealth from the rest of the world and hand it to yourself and your people.
And that should help explain why printing money works in some cases and not others.
I see lots of clueless US people (not just economists ;) ) talking about going to the gold standard, the USA not being able to pay back debts, stupid stuff like China owns the USA, etc.
The USA owes most of its debts in US dollars. Not gold. It can create as much US dollars as it needs! The Federal Reserve loaned out trillions from
"thin air" in 2008+. But note that strangely some of the trillions went into bailing out foreign banks! The US people should realize that it only works for them if enough of the printed money goes to them...
You should now see why going to the gold standard or the other alternatives would hurt the USA a lot.
Re: (Score:3)
Scalar theories of value all break down in the end. I identify four fundamental quantities that aren't generally interchangeable: energy, mass, information, and computation power.
You may think that, for example, computation power is a function of energy, but instead it's a function of energy, resources arranged so as to do computation with that energy, and time to do the computation. If tomorrow you gave me enough energy to power all of the world's computers for a year, I still wouldn't be able to do two da
Re:Ironic (Score:5, Insightful)
Translation: you're super pissed that the dollar is holding its value regardless of the US debt.
Want a tissue?
p.s. You have no idea how currency works.
Re: (Score:3)
Translation: you're super pissed that the dollar is holding its value regardless of the US debt.
Want a tissue?
p.s. You have no idea how currency works.
The US dollar has been declining in value compared to foreign currency for a very long time. http://en.wikipedia.org/wiki/U.S._Dollar_Index [wikipedia.org]
Not sure if your post was in response to TheLink, but he/she certainly seems to understand how the Fed and Treasury are devaluing the US dollar by "printing money".
Re: (Score:3)
And really, bitcoin is Skype - for money...
One of the more interesting quotes I've seen recently is:
Bitcoin isn't a currency. It's a Money Over Internet Protocol.
Which is about right.
grnbrg.
Re:Ironic (Score:5, Funny)
Re:How does it feel? (Score:5, Funny)
Re:How does it feel? (Score:5, Informative)
You put primarily in the wrong place.
The currency primarily used by terrorists, druggies, and child pornographers is the US Dollar.
You may have intended to say the currency used primarily by those groups.
Re: (Score:2)
Hey, come on. TFA says after 4 years Bitcoin is being used by a "handful of businesses," including a sweets bakery in San Francisco. At that rate Henry Ford would have had about 105 cars in circulation by now! Look out for that Bitcoin juggernaut!
Re: (Score:2)
Yeah, well... I still use the US dollar despite that.
Kidding aside, I have to wonder why people such as yourself like to sling mud at the idea? If I didn't know better I'd suspect jealousy.
Re: (Score:2)
You just gave them real money and got a few hundred thousand web visits worth a few hundred dollars.
Re:Unreal (Score:4, Interesting)
There's nothing separating a bitcoin, a US dollar or a napkin that says $10000 1337 D0ll@rz on it. They all have next to no intrinsic value, although they all could be used as an exchange mechanism.
Historically, there's been a 100% failure rate for fiat currencies. Despite the conveniences of bitcoin it is still fiat currency just like the Zimbabwe Dollar, the US dollar and the napkin that I doodled $10000 1337 D0ll@rz on.
Re:Unreal (Score:5, Informative)
There's nothing separating a bitcoin, a US dollar or a napkin that says $10000 1337 D0ll@rz on it. They all have next to no intrinsic value, although they all could be used as an exchange mechanism.
One being a legal tender[*] is a significant difference.
You can pay your rent and taxes in bitcoins no more than you can pay it in promises against next year's harvest.
You may be able to sell your bitcoins or next year's harvest, so you can get real money to pay your bills with, but that part is all on you.
[*] "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts."
-- 31 U.S.C., paragraph 5103
Re:Unreal (Score:4, Insightful)
AFAICT Bitcoin IS legal tender in France. Most of us don't live in the USA.
YCT very little, then. Try paying a debt in France with Bitcoins and call the police if they refuse to accept it.
France has laws stating what's legal tender - since 2003, only Euros - and strict laws punishing those who refuse legal tender as payment for debt.
What has happened in France is that Paymium is allowed to run an exchange in partnership with Credit Mutuel (a real bank). They can do so whether they exchange bitcoins or dollars or zorkmids - they have to abide by regulations, and track all transactions in the Euro value, and for large transactions report them. This is like any other exchange, and does not make what they trade the legal tender (Euros) against legal tender, whether it's Yen, Bitcoins, Silver, future coffee crops or toenail clippings. Nor does it make it either legal or illegal currency (which is different from legal tender) - the authorization doesn't say anything about Bitcoin's legality as a currency, only the regulation of an exchange.
Re: (Score:3)
One significant difference: the $10000 1337 D0ll@rz napkin may not have required an approximately equal amount (by monetary value) of energy to be wasted in its creation. Bitcoin is an ecological disaster, because the market for Bitcoin creation means it is favorable to burn a nearly equal amount of money on hardware+energy to set up a mining rig. For a fiat currency by government mandate (or other convenient shared societal delusion), each $100 bill doesn't entail wasting $99 of resources to create (I bet
Re: (Score:3)
The US dollar is backed up with a very large military which enforces its use as the common currency of the world.
Re: (Score:2)
Don't let the Log out button hit you on the way out.
Re: (Score:2)
IGTT 2/10.
Re: (Score:2)
Bitcoin is still relatively unstable, but it's a lot more stable than it used to be.. Time and growth will make it more stable. Of course time and recession would make it less stable but at this point, it seems pretty unlikely that it'll go that way. So far, overall, Bitcoin has seen a lot of growth (exponential growth actually.. look at a graph using a log scale.)
Re: (Score:2)
It's every freedom fighter you want to be.
Re: (Score:2)
..so, a pyramid system then?
No. Nobody promises you that the bitcoins will increase in value or that they will magically multiply, or even buy them back from you, ever.
Re:Talking Points of bitcoins (Score:5, Informative)
You can buy drugs relatively safely on the internet. It's a pretty popular use.
Re:What gives fiat money value? (Score:5, Insightful)
No, the value of any currency (exchange medium, fiat or otherwise) is derived from the trust that currency-exchanging users place in it. This trust may be derived from trust in the issuer (government), but that is no requirement. The value of BTC is derived from a combination of its limited supply and the usefulness of anonymous exchange. Governments need not be involved until you want to convert BTC to a tangible currency (such as US$), but that is not a required feature for those who deal only in BTC. So long as BTC is difficult to come by and those who value it are willing to exchange it solely based on perceived (or real-world) value, then BTC will thrive, and with increasing scarcity, rise in value.