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[JimH]

What do you think?  We're thinking we might accept Bitcoin payments for MC.

[Matt]

http://krugman.blogs.nytimes.com/2011/09/07/golden-cyberfetters/

[jmone]

Unless there is a compelling reason for anonymity to buy MC, everyone will just lose some value with the exchange from Local Currency --> BitCoin --> USD.... apart from that it is kinda cool.

[Matt]

Bitcoin is sort of a virtual gold standard, so it brings out the gold bugs.

For example, while reading news tonight, I saw this Forbes article, written today.  The author says:

I am a fan of virtual currencies in the longer-run as a means of hedging against incessant debasement of fiat or “paper” currencies

When I look at the last 25-years, I see reasonably stable, predictable inflation (ie. a working currency) and not incessant debasement:


So what problem is Bitcoin solving?

[KingSparta]

never heard of it.

[jmone]

As the bitcoin pool is finite, it gets rid of Monetary Policy and spin offs like Quantitative easing (QE).  It could be argued that Bitcoin is a neither Fiat or Representative Money as it fails to satisfy all the defn.
http://en.wikipedia.org/wiki/Fiat_money
http://en.wikipedia.org/wiki/Representative_money

It does have "real value" as there is a real cost (compute time) to "mine" each bitcoin but most of the bitcoins in circulation now trade above their original "cost" of production.  The real value is in it's ability to be exchanged for good, services, and other currencies.  One of it's current weaknesses is the response by Government and the legislation they may bring in terms of exchange within their jurisdictions.  Look at the impact today on China's Exchange changes and the impact of it's "value" - http://www.smh.com.au/business/markets/currencies/bitcoin-price-crashes-by-nearly-50-per-cent-in-china-20131219-2zls5.html

Imagine if MC introduced a distributed computing effort mining bitcoins with our spare CPU/GPU cycles... we could pay for our Licences but pay for it in our power bills!  

[jmone]

never heard of it.

http://en.wikipedia.org/wiki/Bitcoin

Basically a finite decentralised currency

[mwillems]

So what problem is Bitcoin solving?

I think the main real "problem" bitcoin is solving is the desire to be able to purchase things remotely without leaving a paper trail.  And while there are many legitimate reasons to seek anonymous transactions, bitcoins are used heavily in illegal transactions, which is how the U.S. government scooped up about two percent(!) of all extant bitcoins earlier this year (by virtue of criminal forfeiture in drug trafficking busts) see, e.g. http://www.wired.co.uk/news/archive/2013-12/19/fbi-wallet .

Also, for what it's worth, I think the "non-inflationary" character of bitcoin is a little oversold as Bitcoin has no enforced monopoly on digital currency; bitcoin only has value because of artificial scarcity, and because it can be used in ways "normal" currency can't.  Someone else could readily setup a similar digital currency tomorrow (finite or not), which would effectively debase the value of bitcoin, provided it served a similar function (facilitated anonymous transactions, etc.).  Fiat currency has one major thing going for it: a somewhat controlled rate of inflation; Bitcoin could be hyper-inflated out of existence at any time by a competing virtual currency, or (more likely) simply regulated out of useful existence by governments.

And speaking of regulation, there are developing tax issues: here's a pretty interesting (IMO) recent report from the U.S. Government Accountability Office on tax liability for virtual currency: http://www.gao.gov/assets/660/654620.pdf

[JimH]

I think the idea that the government can regulate everything and enforce its laws is becoming a little dated.  Think of media piracy or Edward Snowden, for example.  The digital domain has made a lot of things possible that were unthinkable 20 years ago.  I'm not saying that's a good thing.  I just think we've entered an era that is a lot more chaotic.  It borders on anarchy.

[mwillems]

I think the idea that the government can regulate everything and enforce its laws is becoming a little dated.  Think of media piracy or Edward Snowden, for example.  The digital domain has made a lot of things possible that were unthinkable 20 years ago.  I'm not saying that's a good thing.  I just think we've entered an era that is a lot more chaotic.  It borders on anarchy.

I think you're right, we're entering a very different era, especially when it comes to the digital actions of individuals. 

I think the government might have an easier time regulating bitcoin than piracy because federal and state governments have much more regulatory visibility and control over commerce than they do over individuals and their internet connections (for now).  I think the U.S. government is more interested in taxing bitcoin at the moment than eradicating it, but if that changed, all the government would need to do to take a big bite out of bitcoin would be to place the restrictions on businesses and financial institutions that make it illegal to accept bitcoins.  With music piracy, there are many more actors, who are much more anonymous.  It's much, much easier for the government to make life hard for a few commercial actors than for a large number of individuals.  Commercial enterprises have "hooks" by which the government can grab them: business licenses, and in the case of larger companies, public disclosures of assets, etc.  They're a lot easier to reach.  And, if such regulation were put in place, a currency that businesses couldn't legally accept would not be worth much. 

But we're not there yet (and may never get there), and I think that's probably for the best; I'm dispositionally in favor of innovation, even in something as prosaic as currency.  So far most of the U.S. actors who might be in a position to regulate it seem to find it more interesting than threatening: http://www.forbes.com/sites/kashmirhill/2013/11/07/federal-reserve-economist-on-bitcoin-small-phenomenon-but-growing/ .  Although there have been some troubling developments recently: http://www.forbes.com/sites/kashmirhill/2013/08/12/every-important-person-in-bitcoin-just-got-subpoenaed-by-new-yorks-financial-regulator/

I think the bigger real risk is market panics in response to milder government intervention: because the value of Bitcoins is consensus based, when governments try to get involved, the markets panic and bitcoin values plunge (check out the article jmone posted above). 

[jmone]

It borders on anarchy.

IMO - Humans are societal creatures, so anarchy tends to be a fleeting aberration when it does occur.  I can not find the link right now but I read an interesting article about the evolution of societies that postulated that as Humans in a group "survived" better than "loners", individuals with this genetic predisposition became the norm and loners continue to this day to be viewed as outsiders.  I'm sure there are plenty of other postulations arguing the reverse.

[Daydream]

Status: everybody's hashing at something nobody knows what it is (casually defined as "nothing"), with an algorithm designed by NSA.

Question: what is the Bitcoin project's goal?

If you come up with an answer in less than 5 minutes the next automatic question is "Do you really believe that?"

[JimH]

The goal seems to be to establish a new currency.

Do I believe it?  I do believe it's the goal.  I don't know if it's possible.  I definitely don't trust it yet.  But I didn't see the point of color monitors when they first came on the scene.

[KingSparta]

I had color monitors too, one had green text, the other had yellow text.

[Matt]

Overstock.com is going to accept Bitcoin:
http://www.latimes.com/business/hiltzik/la-fi-mh-overstockcom-20131220,0,6736525.story

For whatever it's worth, reading the comments from the CEO makes me less likely to order from Overstock.com in the future.

[toodooleedoo]

Yes please accept Bitcoins.  

Coinbase makes it really easy for anyone to accept payments in Bitcoins straight to your Bank account in USD.  

[glynor]

Dear lord no:
http://buttcoin.org/easy-like-sunday-morning

[mwillems]

Dear lord no:
http://buttcoin.org/easy-like-sunday-morning

That site is a treasure trove of (unfortunate) humor, which confirms my worst suspicions about bitcoin.

[KingSparta]

once government catches up to this, they will make it illegal like china did.

[Majikat]

You guys should definitely consider accepting Bitcoin. As a merchant you can use BitPay- no need to ask anyone for permission, no visa or mastercard fees. In the future, no need for visa or mastercard at all- priceless. It will open you up to entirely new sources of revenue. These days you can use services like coinbase to convert into USD if you not willing to take fluctuation risk (but in my opinion btc will be worth a lot more in the future). Best scenario is to start paying staff in btc, and using btc in the real world- there are loads of things you can purchase with btc already and every day more and more businesses are accepting them.

Would recommend you get in touch with the folks over at Bitpay.com so they can explain everything nicely.

As for the economics behind bitcoin, it's going to be an interesting story to tell one day when we see how this plays out. But in my opinion, earning BTC is going to be far better than USD because BTC holds purchasing power without the need to prop itself up through war and the petrodollar like USD. By accepting BTC you are not only making life easier for yourselves, reducing transaction costs, and opening up to all-new markets; you are inadvertently reducing the power of governments to go to war on the back of your productivity. Individuals and businesses should get behind BTC on this principle alone.

[Arindelle]

  missed Glynor's link before pretty funny site check out the mining rigs => http://buttcoin.org/bitcoin-mining-rigs-fire-and-electical-hazards BUTTCOINS HA

That’s a whole lotta words I’m not going to read, do you have an infograph for me to stare at and furrow my brow in a vain attempt to understand what you’re trying to say?
Sure!                                                               

[JimH]

Uh oh.

Bitcoin exchange owner arrested.
http://money.cnn.com/2014/01/27/technology/security/bitcoin-arrest/

[nitephlight]

Uh oh.

Bitcoin exchange owner arrested.
http://money.cnn.com/2014/01/27/technology/security/bitcoin-arrest/

that's nonsense, how people use bitcoins isn't bitinstants business (even if they wanted to, that's the point of crypto currency). wonder what charges will stick

[robgil]

What ever happened to the geezer who threw four million quids worth of bitcoin in the bin when he binned an old harddrive, did he ever get it back?

http://www.theguardian.com/technology/2013/nov/27/hard-drive-bitcoin-landfill-site

[kstuart]

IMO - Humans are societal creatures, so anarchy tends to be a fleeting aberration when it does occur.  I can not find the link right now but I read an interesting article about the evolution of societies that postulated that as Humans in a group "survived" better than "loners", individuals with this genetic predisposition became the norm and loners continue to this day to be viewed as outsiders.  I'm sure there are plenty of other postulations arguing the reverse.

I don't know of any scientists postulating the reverse.  Primates generally live in tribes.

At this point, the only characteristics still considered unique to human beings are complexity of society and "social learning".   Since other primates (like chimps) have tools, voting, wars, vocabulary and even burial rituals, that leaves social learning as the main difference (complexity of society seems like a result, rather than a cause).

Most of what we considered "uniquely human" in 1960s textbooks, are now known to long predate human beings.  There's a TED talk that identified a species of monkey that uses the same flawed economic decisions that caused the 2008 crash - so that instinct goes back at least about 50 million years to our common ancestor...

[astromo]

Mt Gox Avalanche? Or just a Minor Land Slip?

[glynor]

I like John Gruber's recent take on it:
https://twitter.com/gruber/status/438554129020227584

[JimH]

Jamie Dimon, CEO of JP Morgan Chase, says it's a "fraud" and "won't end well".

https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-s-ceo-says-he-d-fire-traders-who-bet-on-fraud-bitcoin

[JimH]

Fiat currency has one major thing going for it: a somewhat controlled rate of inflation; Bitcoin could be hyper-inflated out of existence at any time by a competing virtual currency, or (more likely) simply regulated out of useful existence by governments.

China just banned Bitcoin use.  https://slate.com/business/2021/09/china-bans-crypto-sec-regulations.html

[antenna]

What do you think?  We're thinking we might accept Bitcoin payments for MC.

You need to be aware of the volatility of Bitcoin and how that effects what you will actually be paid.

[antenna]

What do you think?  We're thinking we might accept Bitcoin payments for MC.

First and foremost:  You need to assure that "you" are capable of accommodating the fluctuations in the pricing of Bitcoin.

Stated differently:  When you accept payment via Bitcoin, you need to assure the payment you receive is worthy of the superior high-quality products J River proffers.

Jus' sayin' ...