When I can buy a sandwich with them, let me know.

Where do you live, Maniac?

You live in the UK. Hmm... are you willing to travel to Berlin for lunch? You can get some Tex Mex or Italian food there...

Can I get my train/plane/ferry ticket using bitcoins?

Only if you're willing to take a cab.
From Herefordshire.
(You may need a lot of BitCoins.)

I sold over 1000 bitcoins at $2 back in the day and was proud of myself for getting out at the top :)

I use them on a regular basis as a means of exchange/way of transferring money but even that is on hold at the moment because of the rampant volatility. I won't use them as a store of value unless they drop back down to around $10/coin or less.

I was involved in the BTC project near the beginning, grew disillusioned, still honestly don't know whether the rise of a cryptocurrency will have net positive or net negative effects on the world, but it's interesting. A very elegant solution to the doublespend problem. Now totally infested with conspiracy nutters (said with some affection) and get-rich-quickers.

I found a travel agency that will sell you a plane ticket to Pyongyang in BitCoins...

If you are interested, try a google search for "bitcoin site:webdiplomacy.net" to see webdip threads where this has been discussed before.

In particular, this thread is dedicated to the bitcoin discussion:
http://webdiplomacy.net/forum.php?threadID=947126

And then there are two other threads where bitcoin are mentioned.

"I found a travel agency that will sell you a plane ticket to Pyongyang in BitCoins.."

Great, where do I have to start from?

I couldn't really figure that out.
Special offer: buy now, get a FREE CIA file opened on you!

http://www.youngpioneertours.com/dprk-tours/

Combination of ponzi scheme and fiat currency secured by nothing.

Its an interesting idea, especially the way its made. I will say that as of right now there is too little you can legally spend it on, coupled with a ridiculous amount of volatility, (dropped half its value last week). Also Mining is no longer feasible unless your willing to drop something in the neighborhood of 30-50K on equipment.

Right now its principle use is in illegal or quasi-legal online exchanges. If for example you wanted to buy a slave, or forged U.S. Identity documents, or drugs over the internet, bitcoins is how you'll have to pay.

bitcoins are reasonable. maybe. but if you think you can hide from the powerful forces you are kidding yourself. although they may not share the information with law enforcement. so you may be able to hide from them. those cia/nsa whatever dont care about crime, may even prefer some domestic instability, so if you are just worried about the police then it could be ok.

I just don't get how BitCoins can be said to be anonymous. According to their site, each transaction is tracked in the Blockchain. And yeah, it's encrypted, but if this Blockchain is,. as it says, a public log that tracks every transaction using BitCoins, it seems to me it would be significantly less anonymous than using actual currency. That said, I'm an English major. Perhaps I'm being far too literal about how this works.

im somewhat unsure of it as well. but the police have almost nothing at their disposal, so they may never find you. particularly if you use a public computer with just a usb drive with money on it or something. like i said, the intelligence complex will know.

cash is a little bit traceable, there are codes on them that can at least say which bank it came from and the first person to get the cash, then the police can start from him and ask each person along the chain... but certainly there are items that can serve as money that are harder to trace, but those require in-person transactions, and bitcoin can happen online without ever having to meet face-to-face.

Haaa ha ha ha! Bitcoin is anonymous! lol Ohh ho ho ho ho...oh god, that's "rich", pardon the pun.

What? Do you have some super-secret private connection to the internet? lol Oh god...too funny.

As for bitcoin being reasonable, safe, etc...uh, it's some made up currency with no controls. Meaning the "market" for them could be maniuplated, flooded, etc at will. There is no law regulating it, meaning that it is unreliable, at best.

It may be an interesting idea. It might even be a good idea, in some ways -- allow people to barter, etc...but I would think any good Tax-Paying Democrat would *abhor* a system that allows you to escape "real" transactions and deprive your precious government of their tax revenue. It reeks of...YOU GUESSED IT....hypocrisy for any good liberal to advocate such a system.

i dont think you understand the technology krellin

Lack of domain knowledge has literally never stopped anybody from talking about something on the internet, Blankflag.

@Puddle,

That was a bit pointlessly negative, my dear boy

@Krellin,
Who's advocating? I'm just curious about how it works. Some claim it to be more anonymous than using a credit card, but if this Blockchain thing is indeed a public transaction log upon which the entire use of the "currency" relies, it would seem to be that any information recorded therein would be vulnerable, regardless of the encryption used.

@hecks - oh, there are advocates here. And yes, it may be "more anonymous" than a credit card...until the government wants the data on all the transactions, in which case it will cease to be anonymous.

Nobody with any common sense can go around thinking they have some anonymous stash of "bitcoins" on the internet that can't be tracked if and when the need arises by the government....or hackers...either way.

I fully admit I am not 1005 up to speed on bitcoins...but I have yet to see anything to suggest *anything* happening on the internet is private. Hell, torrent sites get hosted off shore and are guaranteed to be anonymous, etc...they never are, never will be.

Further - taking any suggestion from blankflag -- the king of conspiracy theories -- such as suggesting the technology is sooooo advanced that nobody can track it is absurd.

I'd rather impale my eyeballs with rusty needles than listen to anything blankmind has to say.

Yeah, I guess that's my point. If I understand this Blockchain correctly, somebody's getting a whole lot of information on every Bitcoin you spend. Sure, maybe it's not the government, but it's somebody. It doesn't seem completely anonymous (with a little a), and it may in fact be Anonymous (with a big A) that gets your information. Does that make you feel more secure or less secure?

The very concept of "I am going to use <x> to purchase <y> from <z>" implies that at some point it ceases to be anonymous. Because X and Z are exchanging bitcoins to obtain Y. How do you recieve Y is you are to remain anonymous? How does Z get the coins from Y. Both ofyou must have access to the internet to do this...BOOM...you are no longer anonymous. You came on to the internet *somehow*...thus there is a trail.

The barter system is one thing, and has *some* degree of anonymity. You trade items with somebody, and you can realistically know more about the item than about the person you're exchanging with. But with a digital currency that relies on the integrity of the exchange record to prove that the person you're exchanging with actually owns the thing you're receiving... well, in that case, the integrity of the currency relies on recordkeeping, which I would think would preclude any anonymity. It's just that unlike paper currency, the guarantee is by an online authority rather than a national government.

Bitcoin is /not/ anonymous. It is in one sense totally public (in terms of what addresses made what transactions) but in another sense much more difficult to tie an address to a person. It is possible though. There are many good papers that have already been written (and a proposal for zerocoin to add total anonymity).

If you are using coins you mined, or putting coins in mixers and using Tor, I think bitcoins would be very very difficult to trace. There is no way to link accounts to people without serious surveillance that crosses international borders, uses packet sniffers, etc. Could it be done if bitcoin was being used to fund a terrorist network, yes probably. Could it be done by some sergeant or FBI agent looking for a $10k money launderer or someone buying weed? Def not.

For large scale purposes, say moving millions of dollars anonymously, cash is probably still king. For smaller scale movement of money, with effective coin mixing, multiple wallets, and/or mined coins, bitcoin is essentially extremely hard to track.

http://blog.cryptographyengineering.com/2013/04/zerocoin-making-bitcoin-anonymous.html

It is true that every transaction is public, that is what makes double spends impossible, but linking transactions to identities is a very non-trivial exercise. It is possible with surveillance and datamining, but the concurrent use of Tor, multiple wallets, coin mixers, transactions across international borders etc means that it would be vry hard for a single law enforcement agency with limited resources to track money. There are many places where a transaction history could "go dark".

@Swearington too negative? just describing it how it currently is.

It has some potential for a new type of fiat currency that may or may not (depending on what it is pegged to) allow for independence from a central bank, which could be a good thin depending on who you talk to. Also given its volatility there is a potential to make a tidy sum trading Bitcoins. There there something positive.

Assuming you use bitcoins with an account made using a browser such as Tor, from a public internet terminal, and are not apprehended during the actual time spent at that computer or not observed on security footage, then it would be anonymous. Assuming of course that the bitcoins were not purchased with a traceable currency (such as credit cards, debit cards, prepaid cards, etc).

What I don't understand about bitcoins is how whoever first invented them managed to convince anyone they had any value in the first place.

Can I just make my own currency now? Bytenotes - you can a hundred for one dollar. Get in now because the price is going to go up.

typo - you can *exchange a hundred *bytenotes for one dollar...

I'm not sure on the early days convincing people to adopt them, but they are currently a free floating currency who's value is determined by the exchange rate, primarily with the U.S. Dollar, and the Euro

In the early days they were worth fractions of a penny. People saw the value in a hard to trace deflationary currency (whether those people are fools or not is open to debate) and started acquiring them, building services around them, and selling them. There have been many alt currencies and bitcoin knockoffs. Some are currently worth some money for no apparent reason at all (litecoin), some have already collapsed, and some implement very different feature sets on the base of a blockchain (like freicoin, a demurrage currency or namecoin, which can be used to secure p2p domain names)

You for sure are free to fork the project and create spymancoin. But of course, difficult to get people to believe it is worth anything.

Pegging the bitcoin to anything wouldn't ork without a central bank though, how could you ensure its value? Eg; if you created silverbits, how are you going to ensure that someone will always pay one gram of silver for them without a central bank?

I approve of bitcoins. It seems evident that they are going to lead to some excellent subplots in future sci fi thrillers.

In the last BitCoin thread, I was perhaps unneccessarily harsh towards it, since I treated it as a full-fledged currency. BitCoin is a terrible full-fledged currency, its deflationary nature make it terrible at acting as money in circulation fulfilling the needs of the real economy. On the other hand, the same nature makes it very good at acting as a means of preserving value over time. Compare that to our current full-fledged currencies that are woefully inadequate in their roles as money as well and BitCoin comes across as useful in its niche. The problem with our current currencies lie in the notion that all purposes for using money have to be neatly packed in a single versatile currency. That simply isn't true. So in a hypothetical rectified monetary system, BitCoin could be use for storing value, some variant of high-tech Freigeld would act as a medium of exchange upheld by the government, supply side (producers etc.) would issue their own money in the form of vouchers (i.e. IOUs) which would breathe new life in the Say's law and an aggregate of this voucher-money would act as a measure of value. A very democratic, free market system that is also quite easy to use in our modern world (certainly not much of a stretch beyond e.g. how Sweden abolished cash).

Not to mention not subservient to the financial lobby and significantly less debt-ridden than our current system.

ulytau, you seem to be one of the best educated people about economics in this forum. Do you understand how it is that bitcoin came to be considered to have value in the first place. I get that it apparently it has value now... it seems to have value because people think it has value. But I can't comprehend how it came to be perceived to have value.

The worry for me is that just as somehow it mysteriously acquired some notion of having value, that at some point that it will cease to be perceived to have value. I get regular currency because these are backed by the government, but bitcoin I don't get. Isn't just a kind of pyramid scheme? Or if that is a bad example - what about things like deeds of title for blocks of land on the moon (which you can buy from some random guy who professes the right to sell them) - land on the moon is finite - why not these deeds of title as a new currency? But the trouble is at some point someone will say "you don't *really* have a deed of title on the moon" - and poof! The value disappears.

"The worry for me is that just as somehow it mysteriously acquired some notion of having value, that at some point that it will cease to be perceived to have value. I get regular currency because these are backed by the government, [...]"

Backed by the government with what, though? Certainly nothing else of value.

"Backed by the government with what, though? Certainly nothing else of value. "

This is a good point, and I don't completely understand that either, but at least governments are capable of decreeing what is "legal tender", moreover governments can provide goods and services in themselves and so long as the money issued can be exchanged for those goods and services it will have some value.

Below is a link to a theory about how fiat currency are back by the ability to pay your taxes with the government endorsed currency - thus endowing that money with value.

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

+1 for Spyman. The only value in bitcoin is that people think it has value. There will come a point when the bubble bursts, some government shuts it down or bitcoin simply disappears.

Also, if you think that governments, authorities etc. will be unable to determine who is doing what is dreaming. Also, if you think bitcoin is not going to give whatever information any authorities demand you are dreaming.

The only reason that bit coins would "increase" in value is the hope that others will pay even more later. A classic speculation bubble such as housing from a few years ago or any example of "irrational exuberance".

Can I short bitcoins?

In theory you should be able to, but I don't think any of the exchange markets offer that service.

CampBX offers shorting, but not naked shorting. Or at least they have offered it in the past, it depends on how much liquidity there is.

SuperSteve: It would be easier to take your doomsaying seriously if you didn't make statements like "Also, if you think bitcoin is not going to give whatever information any authorities demand you are dreaming."

Who is bitcoin? And how are they giving this information? Do you even understand the basics of how a p2p blockchain works?

Of course bitcoins are only and ever worth what people are willing to pay for it. They have no use value whatsoever, purely a means of exchange and/or a store of value. I don't think anyone has ever claimed that they have intrinsic value beyond whatever the market is currently pricing them at, only that they have a known and finite supply.

(Also you could always short by finding someone who is long on the other side and wants to trade futures with you)

SuperSteve, there are two ways of looking at any bubble. Either you think something is a bubble when its price seriously exceeds its value or something is a bubble when its price seriously exceeds its long-term average price. BitCoin can obviously never be the first kind of bubble because it has ZERO INTRINSIC VALUE just like any other non-commodity currency. And since BitCoin is not legal tender anywhere, it doesn't even gain value the way fiat currencies do. However, that doesn't mean it cannot have PRICE; after all, it meets the two crucial criteria of being both scarce and in demand. Why is it in demand? Because people find it useful. Money is useful, that's why we use money. As long as your counterparty is willing to accept payments in BitCoin, BitCoin is useful and has a price.

The reason why I think BitCoin skyrocketed is because people started to take it seriously. It reached the critical mass where people accepted that it has a future, that more and more businesses accept it as a currency and therefore that BitCoin is useful. What's more, the preconfigured amount of BitCoins in the circulation means it is beyond any "quantitative easing" shenanigans, which makes it in a way more stable than say US dollar. Of course, the question is whether this advantage outweighs the fact the price of say US dollar is artificially stimulated by it being a legal tender while BitCoin relies solely on the willingness of people to use it*. I don't think BitCoin will be very stable in the near future since its inner mechanics mean that it is very profitable to just hoard it now, when the mining is much easier than it will be in the future. This of course applied since it beginnings but since the fear of it not reaching the critical mass seems to be over, the risk of investing in it declined sharply while its expected return remained the same so speculants rationally flocked to it as fast as possible.

*One could argue that the government fiat, government guarantee that it will accept US dollar as a legal tender is not conceptually different from the willingness of people to accept a currency, you just replace people with the government. Nothing short of revolution prevents the government from saying "you know, US dollar sucks, let's introduce US peso instead". Governments did it in the past after all.

I don't disagree with any of the factual assertions that ulytau has presented.

I simply don't agree that because bit-coin has, by all accounts admittedly - ZERO INTRINSIC VALUE - that you should not analyze it ulytau's first definition of a bubble and only the second. I think that it means you should realize that you are trading something for nothing in hopes that someone else will give you even more of something for nothing down the road.

If everyone was going crazy buying pet rocks, marshmallow fluff or belly lint (all of which have infinitely more intrinsic value than bit coin) I would still say not to invest in any of these.

All the attacks on any sort of governmental fiat currencies relative to bit-coin might serve as a warning in regards to any fiat currency, such as bit coin. Perhaps an argument to invest in commodities or things that have value.

Regardless, governments can always resort to coercion or force to enforce their regime and try to prop up their currency. Bit Coin can not.