Bitcoin making forum

Bitcointalk is a great resource for learning about what NOT to do. All the major scams are well documented there and preserved for future generations. If you are interested in chatting with users who aren't delusional idiots, you might want to check out #bitcoin-assets on irc.freenode.net (google freenode webchat).

Fake Currency???

All angles covered there!

Agree with Ron on the topic and feel if you're serious about conducting any kind of business to avoid it at all costs.

Those are the most critical elements though. With our current system of currency, the digital representation of money is backed by some authority or representation. A bank can't just type a number into a database and say that's how much money is in your account, there are checks and balances. If that number exists in your account, then the bank is either holding a physical representation of that somewhere, or there's an audit directly back to the Federal Reserve. In the meantime, while they're holding it, the only means of transfer is through them.

Supporters of Bitcoin say "It's like cash", but it's not - not by a long shot. Remember, Bitcoin doesn't actually "exist", all you're holding is a private key to a block chain, which is essentially a master ledger. If anyone has your private key, they have access to whatever you own in the block. Well... if I'm carrying cash, you have to physically assault me and "steal it". But if you can access my private key - either physically or digitally - you can transfer my BC anywhere, and there is no process for reversing it. So it isn't like cash at all, it's like a PayPal transfer with no procedure for reversal. That makes it a hacker's dream, and an ordinary consumer's nightmare.

A currency is legal tender, backed by the faith and credit of a government, and must be recognized as a standard for payment of any public or private debt. A commodity is any other object - something with a value that exists because of a demand. Gold, for example, is a commodity. It has a value in the marketplace that varies based on that demand, but has no value as currency. You can't walk into a grocery store and demand they take a lump of gold as payment for goods.

How's that "authority" working out for the people who had BC keys stored at MtGox? If that had been real money, at a real bank, no one would have lost a penny.

Sure, Fiat currency sucks - you won't get any argument from me about that. But having said that, there's a HUGE difference between something that's backed by the faith and credit of the US Government than something that's backed by... well, nothing. And I know Gold isn't backed by anything, gold is a commodity. See above.


Dude, if you don't see the flaw in everything you just said I don't know what else I can say about it. Technology improving DOES make a difference - BC are "mined" essentially based on a CPU's ability to solve math problems. This is why GPU's are so much more effective for mining BC, because graphics processing units are "laborers" that are designed to rapidly handle complex math. As that technology improves, the speed at which those calculations can be completed also improves. The guys who are making the most money with BC right now are the guys with rooms full of purpose-built machines.

The artificial limit is also a cause for concern, because the supply will never meet the circulation demand. Populations increase, and BC can be hoarded and lost. Again, a problem with the decentralized nature - DEFLATION is actually WORSE than inflation and will price the ordinary user out of the BC market. That's GUARANTEED to ensure its status as a commodity and not a currency.

Also, here's a hypothetical ... let's say an enterprising individual accumulates 5m BC - doesn't matter whether it's now, 20 years from now, whether he mined it, earned it, stole it, whatever, he has it. And he's storing it all on an encrypted SD card. Then his house catches on fire and his SD card melts.

Call him crazy, call him an idiot, but there's a bigger problem ... he just single-handedly destroyed 20% of the entire money supply. Since there is no central authority, those coins (keys) are PERMANENTLY out of circulation - they can't be re-created, period. So it's not even an issue of HIM getting his money back, but the fact that the SUPPLY is diminished. Had this happened with paper currency, the central government could create more.

And by the way, this has already happened... remember the article about the guy who threw out a hard drive a year ago, forgetting he had a few coins on it, and was kicking himself because when BC shot up to $1,200 he would have been a multi-millionaire if he still had it? How much BC is out there that has already disappeared into cyberspace, with no option for recovery? How would we even know? For all we know, half of the keys generated thus far have could have already been deleted. Even if it took 50 years to generate the rest, so what?

Also, consider this scenario ... you received some BC. You put it on an SD card and lock it in a gun safe that's nuclear bomb proof and think you're safe. However, before you did that, someone managed to sneak a peek at your keys. Now they're out there spending it, meanwhile you think it's still in your safe. By the time YOU get around to start spending it, it's already long gone and those keys are worthless. This could never happen with paper currency or money stored in a bank. In a bank, you would see it disappear from your account. In paper currency, if it was physically sitting there in your safe, then you still have it. But with Bitcoin, just because it's physically in your safe doesn't mean someone else hasn't copied it and spent it already. Technically I suppose that's a "user error", and I'm sure you'll revert to a buyer beware argument, but technology does exist that can read digital media without physical access. Rare... but possible. You could be holding worthless keys right now and not even know it until you try to use it.

I'm all for a "buyer beware" fiscal policy in general, but I draw the line at theft beyond reasonable control. If someone hacks my bank, there was nothing that I could have done as an individual to prevent that - I have no control over the bank's security. The bank has the power to reverse all of those transactions and reclaim what's theirs. With Bitcoin, even if the legal procedure existed to allow it, it wouldn't be POSSIBLE - once the key has changed hands, it's useless.

I know YOU get what I just said, but some people reading this might not understand what I mean by that, so think of it this way ... let's say you have an Amazon coupon code, and it's a single use code. If someone else sees that code - either by hacking YOU, or by hacking Amazon - and uses it before you do, that code will never work again. The fact that you still have a copy of the code is worthless.

Now take that situation, and pretend that Amazon has no ability what so ever to issue you a replacement code. It's gone, you lost it, too bad. Now pretend that instead of Amazon we're talking about your bank, and pretend that instead of a coupon code we're talking about all of the money in your account.

Still want to use Bitcoin? I'll pass...

You have a lot of trust in governments for someone who claims to be "pretty libertarian." But anyway, you're right: Bitcoin isn't for you. I don't care if you invest or not; I'm not one of those "must get mass adoption" evangelists. Bitcoin isn't for the masses.

P.S. When governments are collapsing, it's too late. Think: crowded theater and someone yells fire! Sure, many will get out. But, many will get trampled to death too.