And as of yesterday it looks like the main Bitcoin guy may be going off to prison for money laundering.

What is a bitcoin?

I found this;

http://www.cracked.com/video_18673_what-......oin.html

The other they said they had been busted for money laundering or somthing like that.

Is anybody going to tell me what a bitcoin is?

Investopedia explains 'Bitcoin'


The first Bitcoin specification and proof-of-concept was published in 2009 by an individual or individuals under the pseudonym Satoshi Nakamoto. Satoshi left the project toward the end of 2010, leaving the motivation behind setting up Bitcoin an enduring mystery.

Bitcoins are created through a “mining” process that involves complex number crunching by the computers in this network; this process currently creates 25 Bitcoins every 10 minutes. The limit of 21 million is expected to be reached in the year 2140, after which the total number of Bitcoins will remain unchanged.

A basic premise underpinning the Bitcoin is that because it is decentralized and not issued by government, it is supposedly free from interference and manipulation, in stark contrast to the world’s fiat currencies.

However, these same features confer significant disadvantages on the Bitcoin. It is a complex product that is difficult to understand, making its widespread acceptance doubtful. Since it is a virtual currency, it cannot be stored in physical form. As a result, if you have not stored a backup copy of your Bitcoin holdings, your digital hoard can be wiped out by something as mundane as a computer crash. Its anonymity has also made it a favored currency for illegal activities such as tax evasion, smuggling and weapons procurement. Additionally, Bitcoin prices are very volatile thanks to rampant speculation.


In a word, no!

Bitcoin = BitCON

Does the term snakeoil salesman come to mind? Well it should.

It is garbage now and will be garbage later. Of course you can buy some now and be cool. Just remember they are for buying not selling. In other words they are only worth what the fool will pay for them.

There is no legit supply therefore no demand. Unregulated theft by those smart enough to sell them to those dumb enough to buy them...that is what the bitcoin market is based on.

Is it like Skynet?

Yes just like Skynet and John Connors.

http://www.cracked.com/quick-fixes/4-rea......=fanpage

A system for / form of digital / electronic currency.

This is one of the best articles I've found explaining it (if you just read about half you will still know more than most):

http://www.michaelnielsen.org/ddi/how-th......y-works/

Then you have the technical papers here

https://en.bitcoin.it/wiki/Research

The first paper by Satoshi Nakamoto is the bitcoin origin paper.

Probably no more so than fiat currencies and the fractional reserve banking system are.


Actually, it can be. E.g. https://www.casascius.com/


Traditional money (e.g. U.S. dollar) deposited in a bank is converted into an accounting entry on an electronic register, it is not actually stored in physical form (i.e. money you deposit is lent out, it is not kept in your local bank's vault).


That is a mistaken belief, circulated and reinforced by those who do not understand bitcoin. And by stoners / druggies on Silk Road. Bitcoin is NOT anonymous. Quite the contrary. It is one of the most non-anonymous currencies there is.

"[T]here’s a public record of every transaction. Thus, every transaction is always recorded. It’s like an accountant’s wet dream – debits and credits everywhere."

http://www.forbes.com/sites/cameronkeng/......taxable/


Much less so than many other investments, though.

And a long ways to go before it would be as volatile as some traditional non-electronic currencies have been in the past. E.g. "Zimbabwe's peak month of inflation was estimated at 6.5 sextillion percent in mid-November 2008."

I found this in this week's "Providence Phoenix."

http://providence.thephoenix.com/news/15......rencies/

It seems to explain the situation from both points of view fairly well.

As I understand it, there are two basic uses for bit coins;

one, to purchase stuff online

two, to transfer money from one currency to another (transfer dollars to bitcoins, send bitcoins somewhere instantly, transfer bitcoins back to new currency) apparently it takes a lot of time to go through the protocol of changing currencies but less time to buy bitcoins or to sell bitcoins into your local currency.

As I've almost never bought anything online. (a couple of books, some magazines, that's about it) and I never transfer currency from one medium to another. I don't see where bitcoins would serve me at all.

It seems to me that if something catastrophic happens that destroys the dollar (and most of the world's currency) then one of the first things to go is going to be the internet and your storehouse of bitcoins.

As we've seen from their history, bitcoins may not be going anywhere, but they don't seem to be too stable.

If bitcoins are going for $100 and I buy a couple and then bitcoins skyrocket to $1,000 and you buy a couple and then we both buy the same online item for 1 bitcoin, did I pay $100 dollars for the same item you just paid $1,000 for?

I would think that you would be better served to sell your bitcoins for cash once they go from $100 to $1000 instead of buying something with the inflated bitcoin at the inflated price.

If the bitcoin becomes the "online" currency, then it seems to me that places won't take cash (a lot don't now) and you would have to use your bitcoins to conduct online transactions.

And if you're only buying bitcoins to sell them once they reach a certain point, you're engaging in speculation, which is not in and of itself a bad thing, but does seem to lead to bubble popping and financial ruin if you don't get out in time.

Is there some type of investment that isn't based on speculation?

just how low is the lowest common denominator?

3

I did say it's not in and of itself a bad thing.