Cryptocurrencies are changing the world

[Dien Rice]

Originally Posted by sandalwood

I've been reading about digital currencies (think Bitcoin) for several years. Sort of paying attention and sort of not. However, since major countries are now looking at Bitcoin and its counterparts with a favored eye it might be time to not sort of but to actually pay attention.

Hi Tom,

Great topic!

About a month ago I went to a presentation by Bitcoin Group, which recently changed its name to Blockchain Global http://www.blockchainglobal.com ... This is a company based in my city which makes money solely from Bitcoins and other cryptocurrencies...

It certainly opened my eyes!

Firstly, they make money from Bitcoins several ways...

For example, they make money by "Bitcoin mining"... That's where you have banks of computers doing complex mathematical calculations, and the reward for it is you get more Bitcoins. This is all built into the Bitcoin system.

While Bitcoin Group/Blockchain Global is an Australian company, they have many employees in China, along with many computers there, doing all the Bitcoin mining work.

They also make money from arbitrage of Bitcoins and other cryptocurrencies. I guess exchanges are still inefficient enough that you can sometimes buy Bitcoins at one exchange, then sell them at another instantly for a profit. (I don't know exactly how it works, but the market inefficiency makes it possible...) I wouldn't be surprised if what they do is automated or semi-automated...

Furthermore, there are many more opportunities in what's called blockchain, which is the technology underlying Bitcoin. There's the potential for blockchain, in future, to be applied to other industries, apart from currencies...

So I think there's a lot going on here. It's very complex stuff, though... I'm still in the process of getting my head around it!

Best wishes,

Dien

[unpinkpanther]

...It is complex stuff!

I understand a currency to be a medium of exchange to make transactions easier.

Why should I use a cryptocurrency instead of good ol' cash?

That's the part I don't get.

Originally Posted by Dien Rice

It's very complex stuff, though... I'm still in the process of getting my head around it!

Best wishes,

Dien

Originally Posted by unpinkpanther

...It is complex stuff!

I understand a currency to be a medium of exchange to make transactions easier.

Why should I use a cryptocurrency instead of good ol' cash?

That's the part I don't get.

It's easy not to understand. Most people don't know that the phrase "full faith and credit" is nothing more than a ruse. The government has NO source of value. Only people do. That means you are the backing for your currency. Look at Cyprus just to name one country in the news because of their finances.

Suppose you had money in a Cyprus bank and suppose you had Bitcoin. Which do you think the Cyprus government could/would take from you?

Which currency held its value in the world market?

If I understand correctly you are from Nigeria. What backs your cash?

That's a short and sweet answer. If I were inclined I'd educate myself on the blockchain technology. From what I read, the techie types w/knowledge of the programs/codes in this area are in demand and get paid accordingly.

Trouble is at 72 if it isn't handed to me I don't want it

“Gold is the currency of kings, silver is the currency of the educated,
barter is the currency of the working-class, and debt is the currency of slaves.”

If your country has a national bank (ours is the Federal Reserve) you are a slave. In this day and age, slave is a very politically incorrect word. In fact, say it on a college campus and you're likely to start a riot.

However one institution doesn't mind rubbing your nose in it. Yep, your friendly government. Might be another reason to think long and hard about digital currency.

Just saying...

[unpinkpanther]

Thanks, sandalwood. I'm enjoying this conversation.

Maybe I used the wrong word by mentioning "cash".

Yes, the Central Bank issues its IOU here too, just like the Federal Reserve.

But do you think all transactions must use these IOUs?

Barter is alive and well today. Many LEGIT transactions go on without government-issued fiat currency.

I agree that the government mustn't dabble into EVERY legal transaction. (And by definition, they can't; they're too tied up in red tape to do that)

However, much of what I hear of Bitcoin reminds me of the scare-mongering of LibertyReserve, a digital currency that was the rave some years ago.

But it's always good to be informed. Beats hiding one's head in the sand...

Thank you

Originally Posted by sandalwood

“Gold is the currency of kings, silver is the currency of the educated,
barter is the currency of the working-class, and debt is the currency of slaves.”

If your country has a national bank (ours is the Federal Reserve) you are a slave. In this day and age, slave is a very politically incorrect word. In fact, say it on a college campus and you're likely to start a riot.

However one institution doesn't mind rubbing your nose in it. Yep, your friendly government. Might be another reason to think long and hard about digital currency.

Just saying...

Originally Posted by unpinkpanther

Thanks, sandalwood. I'm enjoying this conversation.

Maybe I used the wrong word by mentioning "cash".

Yes, the Central Bank issues its IOU here too, just like the Federal Reserve.

But do you think all transactions must use these IOUs?

Barter is alive and well today. Many LEGIT transactions go on without government-issued fiat currency.

I agree that the government mustn't dabble into EVERY legal transaction. (And by definition, they can't; they're too tied up in red tape to do that)

However, much of what I hear of Bitcoin reminds me of the scare-mongering of LibertyReserve, a digital currency that was the rave some years ago.

But it's always good to be informed. Beats hiding one's head in the sand...

Thank you

Here you go brother: https://cointelegraph.com/news/austr...esses-no-taxes

Read that article and tell me you won't be using Bitcoin, or some other digital currency, in the next 5 years.

As for barter, it is taxable in the United States. I don't know about your country but here our great generous and kind Uncle wants a piece. As for legit transactions happening I agree. The kicker in that soup is the size of the transaction. Once you get beyond a certain amount, $600 sounds like the figure, bingo! you better be reporting your transactions. Please don't believe me. Google barter IRS manual and read it for yourself.

As for the red tape: Never forget the government has forever to get untied if they really want you. Again, don't believe me. Google collecting rain in a water barrel and read it for yourself.

I don't know this for sure but I would bet dollars against donuts that the intent of the founders of the program you cited differs from the intent of the founders of Bitcoin. Again, just my guess.

Venezuela. That's all I'll say about that particular jackpot and digital currency.

Have a great weekend.