Bitcoin / Litecoin / Ethereum / alts discussion

[LiquidMidnight]

Actually, one of the problems I have in polite company is that I know little of literature, drama, or poetry (but I know what I like), and few want to talk economics or science at a dinner party.

I can quote all kinds of theorists, important books, and scholarly literature at dinner parties, but ain't nobody got time for that. I'd much rather talk economic theory at a dinner party than sports, a topic for which I couldn't care less.

 

[Gorn]

I went through checkout, selected "Pay with Bitcoin", which was just below "PayPal". Entered the required information and a few minutes later, had my confirmation. Very similar to any other checkout procedure. The best part was, with the spike in BTC price, the entire thing cost me exactly nothing in terms of USD.

That included sales tax? Was it based on the exchange rate at that moment? Can you turn bitcoins into dollars or you can only spend them on goods and services? You said it was an option under PayPal. So PayPal connects to either a checking account or card right? What's the source of the bitcoins? Like how a particular bank has my money, what's the source of the bitcoins that the seller withdraws from?
It all sounds so wacky to me but apparently, much to my surprise, it's legit.

 

[petrus61]

I went through checkout, selected "Pay with Bitcoin", which was just below "PayPal". Entered the required information and a few minutes later, had my confirmation. Very similar to any other checkout procedure. The best part was, with the spike in BTC price, the entire thing cost me exactly nothing in terms of USD.

Which airline and which hotel, if you don't mind sharing? If they were both privately owned, that's one thing, but I think knowing which public providers of goods and services that currently accept bitcoin would shed some further insight into the whole shebang.

 

[petrus61]

That included sales tax? Was it based on the exchange rate at that moment? Can you turn bitcoins into dollars or you can only spend them on goods and services? It all sounds so wacky to me but apparently, much to my surprise, it's legit.

The sales tax is likely included in the total and paid out by the business/service provider. They apparently have funds set up specifically for the bitcoin boom and are willing to hedge their bets in the event that it takes off, or take an initial investment loss if it doesn't. There's probably just enough people using it to make it a worthy risk, but not enough people doing it yet to make it a costly risk. The companies accepting it are essentially staking their claim and making an investment in bitcoin, with very little to lose in the near term. I could be way off, but that's what it smells like.

 

[petrus61]

Here's a rundown of some companies that accept:

5 Brand-Name Businesses That Currently Accept Bitcoin

Companies are being provided (sold) technical infrastructure platforms that protect them from the volatility that comes with it by some pretty big names, so at a glance it looks like it's eventually going to be a thing we're going to have to get used to. Big companies are essentially having their own custom servers built and tailored for its exchange, which is not the same as rolling the dice with Billy Bitcoin from Sheboygan.

 

[Downunderwonder]

How are they going to get around the 2 transactions / second limit?

 

[T_Bone_TL]

For something with a bit less insanity, that's not quite extant yet, but is being based on "real underlying value" in an interesting way, as well as attempting to limit speculation (in part by the real underlying value, in part by how they propose to run their ICO (which is not even open to the US, and won't start until 2018 anyway) look at:

Holo - Home

Disclaimer - I know a couple of the folks involved and I gave money to their crowdfunding proposal. While not deeply involved, I can't claim to be utterly disinterested - it's got the elements of a sound idea and I hope it works.

 

[Selta]

That included sales tax? Was it based on the exchange rate at that moment? Can you turn bitcoins into dollars or you can only spend them on goods and services? You said it was an option under PayPal. So PayPal connects to either a checking account or card right? What's the source of the bitcoins? Like how a particular bank has my money, what's the source of the bitcoins that the seller withdraws from?
It all sounds so wacky to me but apparently, much to my surprise, it's legit.

Yes, included all taxes, just as normal. By "under paypal", I meant the option in the list. It went down the list like Credit Card -> PayPal -> something I didn't recognize -> BTC. I clicked BTC, and continued on my way. It was "free" for me as I got into BTC awhile ago and just through growth, my investment is up a rather sizable amount.
The "source" of BTCs is the blockchain. Transactions are verified against it. Re: "hacking" - the exchanges certainly can be hacked, but with the way BTC is established, as long as you control your BTC wallet, it is safe. It's not at all like stealing a credit card number and running wild - that isn't possible.

The number of places accepting BTC directly are very few. I'm quite sure that none of them sit on it, either. They likely all convert it to USD (or whatever local currency) almost immediately.

Cheap Airline Tickets, Airfares & Discount Air Tickets | CheapAir is where I did this particular transaction. I've also used Invalid Link Removed in the past, but they seem to have gone slightly downhill in selection since last time.

 

[svtb15]

I guess so.. Im sure you guys are right on this.. I literally know NOTHING about Bit coin

I always saw the IRS as the collection agency for the FED..

Nope.

True, if "stout" means "volatile."

Fed is indifferent. IRS is justifiably concerned about money laundering and tax evasion. US money and bitcoin serve different purposes. People will choose the money system that's the most useful to them at any moment.

 

[fdeck]

I guess so.. Im sure you guys are right on this.. I literally know NOTHING about Bit coin

I always saw the IRS as the collection agency for the FED..

Maybe there's a bit of confusion over terminology. "The Fed" typically refers to the Federal Reserve Bank, which is the government institution that maintains the US money system and manages government borrowing.

"The Feds" is any agency of the federal government, typically engaged in enforcement, such as the FBI, DEA, etc.

The IRS manages tax collection and enforcement for the Federal government. Taxation is the main process by which the government obtains the money that it needs to operate. Borrowing is the other way.

I also know very little about Bitcoin. I have somewhat of a mental block, which is that I want to understand the math before I can claim that I "understand" it. The same is true about things like machine learning and artificial intelligence. I'm in the process of studying machine learning, which means that I'm slowly working my way through the math via a series of online lectures and homework sets.

I've noticed a general trend: Some topics in science and technology have become complex enough that most people have no hope of understanding them. Math is the typical obstacle. Instead, people read popular articles and books, including science fiction. They memorize the talking points, whereupon they talk about the subject with the air of an expert or visionary. They're basically BS'ing. Sadly, I don't know if there's a shortcut to understanding these topics.

Another amusing observation is that a lot of people will express their opinions about bitcoin or economics in the same breath as statements that expose profound ignorance about basic math and finance. Again, they're BS'ing, but in addition, they're BS'ing themselves about their own money.

 

[GregC]

I've never sold anything short in my life, but I'm tempted in this case. What holds me back is the fuzziness of the fundamentals--it seems impossible to put a value on it.

 

[Downunderwonder]

I've never sold anything short in my life, but I'm tempted in this case. What holds me back is the fuzziness of the fundamentals--it seems impossible to put a value on it.

Big risk. Imagine if you had sold short 6 months back!

The proponents keep trying to sell BTC as having the same intrinsic value as a fiat currency. That's a nonsense as fiat currencies are only as good as the tax base of the government backing it.

 

[-Asdfgh-]

Maybe there's a bit of confusion over terminology. "The Fed" typically refers to the Federal Reserve Bank, which is the government institution that maintains the US money system and manages government borrowing.

Technically the Federal Reserve Bank is a private entity, but not so much in practice. There are similar hands-off fictions in the UK too.

There are some block chain technologies from other alt-coin suppliers that are of interest to me in a professional sense, which is related to reproducibility and trust chains required for scientific computing and data. Think of a tamper evident and tamper resistant lab notebook, but for experiments in the digital domain, that also allows you to run experiments forwards from any start point (assuming that the in silico experiment is deterministic, and there is a lot that are not). It's particularly useful as some intermediate results from large computer simulations can be in the range of petabytes, but the final result is a bit more than '42', but still relatively small. So you want to delete the petabytes, keep the final result, but be able to recreate the intermediate results if you need to in future, when the cost of the computation might be lower. A block chain means you know you can potentially ensure you have the correct and verifiable set of steps.

 

[-Asdfgh-]

I've never sold anything short in my life, but I'm tempted in this case. What holds me back is the fuzziness of the fundamentals--it seems impossible to put a value on it.

The big way to make money was to have bought $100 worth in 2010, sell last Thursday, take that as profit, pay the tax, then use half the profit to short from, I don't know, next Thursday?

I didn't buy in in 2010. The whole thing seems hard to judge now, and I still want to have a shirt by Christmas.

 

[fdeck]

Big risk. Imagine if you had sold short 6 months back!

The proponents keep trying to sell BTC as having the same intrinsic value as a fiat currency. That's a nonsense as fiat currencies are only as good as the tax base of the government backing it.

There's no such thing as "intrinsic" value.

 

[Downunderwonder]

There's no such thing as "intrinsic" value.

Yup.

If you mean a currency, it has no intrinsic value.

A dollar coin has value of one dollar while the economy backing it is in good health. The value of that dollar shifts with time but on a given day you could look at it as having intrinsic value of one icecream or whatever.

Intrinsic describes a quality as ''of the thing''.

 

[-Asdfgh-]

Yup.

If you mean a currency, it has no intrinsic value.

A dollar coin has value of one dollar while the economy backing it is in good health. The value of that dollar shifts with time but on a given day you could look at it as having intrinsic value of one icecream or whatever.

Intrinsic describes a quality as ''of the thing''.

Does a dollar have an intrinsic value given this? It's not a property of the dollar itself, but its ability to be exchanged for something of value, as decided by others, so extrinsic. It is an extrinsic value decided by a market. Gold is no different, and its convertibility to ice cream is dependent on external factors, such as whether there is ice cream.

Gold is a commodity, dollars are a currency that can be traded like a commodity, then banks go and employ physicists (my first degree) to pretend to see similarities (cf. Helmholtz) with physics and discover that if money is moving very quickly you know where it is (Panama).

 

[GregC]

Big risk. Imagine if you had sold short 6 months back!

The proponents keep trying to sell BTC as having the same intrinsic value as a fiat currency. That's a nonsense as fiat currencies are only as good as the tax base of the government backing it.

Oh, I understand completely that the risk is huge. Part of my day job is thinking about such risks. IF I were to do it, it would be with a small amount of money and I'd have to be prepared for the possibility of losing it all. But since I can't come up with a valuation, I can't really assess the degree of risk.

 

[Downunderwonder]

Does a dollar have an intrinsic value given this? It's not a property of the dollar itself, but its ability to be exchanged for something of value, as decided by others, so extrinsic. It is an extrinsic value decided by a market. Gold is no different, and its convertibility to ice cream is dependent on external factors, such as whether there is ice cream.

Gold is a commodity, dollars are a currency that can be traded like a commodity, then banks go and employ physicists (my first degree) to pretend to see similarities (cf. Helmholtz) with physics and discover that if money is moving very quickly you know where it is (Panama).

You miss the point. A silver dollar has intrinsic value for the one dollar worth of silver which you could make into jewelery. A fiat dollar coin has performed the trick of equivalence to the silver one, thus of itself (intrinsically) worth one dollar when it isn't.

BTC can't meet that standard well enough to jump into general use.

There isn't enough of it.
It is too expensive to make more.

 

[Downunderwonder]

Nutshell version. The trick of fiat currency is giving intrinsic value to bits of paper.